Thursday May 28 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Jeff Walser, FDIC Economist, Charged With Attempted Bank Robbery - (www.huffingtonpost.com) An economist on leave from the federal agency that insures bank deposits has been charged with the April 11 attempted robbery of a Kansas City-area bank. Jeff Walser said he had a bomb in his briefcase and demanded money at the Bank of America branch in Independence, but did not take $41,000 brought to him by an employee, according to an indictment filed Tuesday. Walser, 51, surrendered to police and was being held in federal custody, the U.S. attorney's office said. Walser told police that he has health problems and was "alone, discouraged and tired of working" and that his plan was to be arrested and not tell police he required thrice-weekly dialysis treatments to survive.

FBI Probes Possible Insider trading by SEC Lawyers - (www.cnbc.com) Federal prosecutors and the FBI have been investigating possible illegal insider trading by two Securities and Exchange Commission enforcement attorneys who were in a position to receive sensitive information about agency probes of public companies. The SEC's inspector general, David Kotz, found that the frequent stock trades over a two-year period by the pair raised suspicions of insider trading. Earlier this year, he referred the matter to the Fraud and Public Corruption Section of the U.S. attorney's office in Washington. That office, together with the FBI, "is conducting an investigation of possible criminal and civil violations," Kotz told SEC Chairman Mary Schapiro in a memo dated March 3. The memo and Kotz's report of his investigation were provided by the office of Sen. Charles Grassley, R-Iowa, who has been an active critic of the SEC's operations. Kotz's report also found that the SEC "has essentially no compliance system in place to ensure that ... employees, with the tremendous amount of nonpublic information they have at their disposal, do not engage in insider trading themselves." The agency's disclosure and compliance requirements is based on the honor system and there is no way to determine whether an employee fails to report a transaction. "We take seriously even the suggestion that any SEC employee would engage in insider trading," according to a statement from the agency.

NAR Shovels Shit To The Press - (www.nypost.com) WHO the hell would be stupid enough to pay to hear Alan Greenspan's opinion of anything! Notice, that isn't a question because I already know the answer. Rather, it's a statement with one of those exclamation points to show that my voice is being raised in a mix of bewilderment and anger. The National Association of Realtors, which is probably suffering from combat fatigue, asked the former Federal Reserve chairman and the chief suspect in the destruction of the US economy, to address its Washington conference Tuesday and tell real estate people what they want to hear -- that things are getting better. So Greenspan did just that. "We are finally beginning to see the seeds of a bottoming" in the housing industry, Greenspan told the gathering. Adding, according to Bloomberg News, that the US is "at the edge of a major liquidation" in the stock of unsold houses. Applause, applause. Here's your check, Alan. I figured it was worth knowing how much Greenspan gets these days for defending his own indefensible actions at the Fed while also trying to pull the wool over the eyes of would-be homeowners. So I asked someone named Lucien Salvant, managing director of the NAR's public affairs department. His answer in an e-mail: "None of your business. How much is the NY Post paying you to ask that question?" Whoa! Calm down, Lucien. Most p.r. people know better than to pick a fight with the press, especially when they don't know whether the media guy asking the question is an SOB who'll print the nasty response verbatim in a column that would have otherwise been pretty harmless. Now? Well, Lucien got my blood stirred. The fact is that The Post paid me nothing, per se, to ask that specific question. I was just sitting around on Tuesday watching the wire services when Greenspan's speech came out. Then stories followed saying how the stock market was reacting favorably to news that Greenspan had said the same thing he always says.

Barney Frank is a Genius -- Not - (www.freedompatrol.blogspotcom) Barney Frank is my personal hero. His latest crusade is one of his most admirable yet. He has determined that municipalities are paying too high an interest premium to borrow debt and that he Barney Frank is going to save them by reducing their borrowing costs. I'm not quite sure what it means when he says that rates are too high. I assume he doesn't like the way the free market works and is unhappy with the actual numerical interest rate municipalities are paying. I'm sure he is right too. Municipalities are being screwed. After all, everyone knows the private market has a vendetta against these municipalities and the fact that they are paying unfairly high rates has nothing at all to do with the fact that they are massively insolvent and therefore huge credit risks. But this is why Mr. Frank is so amazing and is my personal hero. He is able to act with 100% confidence without anything at all resembling logic. He, Barney Frank, hero of the people, is going to lower the cost to municipalities so all the corrupt, inefficient payments to his voting constituents can continue unabated. Now how is he going to do this you ask? How is he going to somehow magically lower costs without any unintended consequences? Well this is why Barney Frank is my hero and you are not. You are a skeptic who doubts the power of the almighty one. Just believe. Don't question. God knows you will be happier. Of course if you, like me, are still skeptical I'll give you the answer. He can't. He is a buffoon who has no idea what he is doing but views himself as a Messiah - a savior of those who can't defend themselves.

Cities to be beautified by shutdown of auto dealerships - (www.latimes.com) A wave of closures by GM and Chrysler is likely to leave many car lots sitting empty. Dozens of cities also depend on sales tax revenue from the dealerships to balance their budgets. With struggling automakers expected to announce the shutdown of thousands of dealerships starting today, cities are bracing for a wave of blight. The closings will dump thousands of large, oddly configured parcels into an already reeling commercial real estate market. Many are likely to remain empty for a long time, monuments to the decline of the U.S. auto industry and the intensity of this recession. Chrysler told a Bankruptcy Court today that it will break its contracts with 789 dealerships nationwide. General Motors Corp. will tell 1,000 to 1,200 dealers Friday that it will not renew their franchises. The automaker plans to eventually close a total of 2,600 operations. In California, the moves will have far-reaching implications for dozens of cities, which depend on sales tax revenue from the dealerships to fund substantial portions of their budgets. The dealerships join a growing list of retailers felled by the dour economy: Sites that once held Mervyn's, Circuit City and Linens 'n Things stores remain empty except for a few locations. And as difficult as it has been to sell or lease those properties, at least they can be easily adapted for other uses. Car dealerships, on the other hand, are special-purpose properties that are hard to adapt. "There are not a lot of uses that can go right back into a dealership," said Jodi Meade, director of the automotive properties group at real estate brokerage CB Richard Ellis. "Usually they have to scrape it" and start over to make way for another business. San Bernardino, for example, had 12 dealerships when the economy was booming. Now there are just seven -- and it's unclear whether more will be felled with the GM and Chrysler announcements. At an abandoned Cadillac dealership, weeds poke through cracks in the asphalt. Vandals have painted graffiti over the Chevrolet logo at another site. Windows are broken and dead grass from a once-tended lawn covers the ground. One of the car lots, now called Arrowhead Motors, is operating only because a credit union had so many repossessed vehicles that it decided to go into the auto business. "The whole model of auto sales through dealership networks is open to question," said Jim Morris, chief of staff to San Bernardino Mayor Patrick J. Morris. Finding a car seller for the Arrowhead Motors site was a coup for the city, which is struggling to figure out what to do with its empty car lots, Jim Morris said. Auto dealership sites have lost a third to half of their value compared with the peak about three years ago, Meade said.

Menlo Park Real Estate In Distress - (www.patrick.net) Wow, I was biking by and saw THREE houses for sale right near each other in a really rich neighborhood in Menlo Park. Here’s a photo: I think these are the listings, which of course each fail to mention that the neighbors are trying to sell at the same time: http://www.redfin.com/CA/Menlo-Park/800-Hermosa-Way-94025/home/890061; http://www.redfin.com/CA/Menlo-Park/866-Hermosa-Way-94025/home/1601197; http://www.realtor.com/realestateandhomes-detail/829-Hermosa-Wy_Menlo-Park_CA_94025_1107844310; One house for sale is normal. Two houses next to each other for sale is a bit odd. Three houses for sale by each other is an indication that the market is seriously hurting. There is no way each of them are going to get $3 to $4 million. I bet we have greater than 50% reductions in Menlo Park coming soon. It would be a disaster to buy at these prices when there is so much on the market, and more coming up for sale all the time. Just think, a buyer could easily lose a million dollars in the next year alone!

Most US houseowners still disconnected from reality - (www.reuters.com) Most American homeowners believe their home's value has declined over the past year, but a majority also think a bottom has been reached, real estate website Zillow.com said on Thursday. A majority, or 60 percent, believe their home lost value during the past 12 months, according to the Zillow Q1 Homeowner Confidence Survey. In reality, 80 percent of homes across the country lost value during the past 12 months, according to Zillow's first-quarter Real Estate Market Reports. Additionally, 18 percent believe their home gained value in the past 12 months, and 22 percent believe its value remained the same, according to the survey. That resulted in a Zillow Home Value Misperception Index of five -- the lowest it has been since Zillow introduced the index in the second quarter of 2008 and down from 10 in the fourth quarter of 2008. A Misperception Index of zero would mean homeowners perceptions' were in line with actual values. "The perception of American homeowners is finally catching up to reality, which is that 80 percent of all homes in the country lost value during this past year," Dr. Stan Humphries, Zillow's vice president of data and analytics, said in a statement accompanying the survey. "While homeowners are now more realistic when looking backward, they are still pretty starry-eyed when looking forward, with three out of four homeowners believing that their own homes' prices will increase or be flat over the next six months. Unfortunately, there are few markets we expect to perform this well," he said. Most homeowners -- 74 percent -- believe their home will not decline in value in the coming six months, effectively calling a bottom to their own home's housing slide, Zillow said. Specifically, one in four homeowners, or 27 percent, think their home's value will increase in the next six months, while nearly half, or 47 percent, believe its value will remain the same. Homeowners were similarly optimistic when it came to predicting home values in their local markets, the survey showed. About two-thirds of homeowners believe home values in their local markets will increase or stay the same, at 26 percent and 37 percent respectively, over the next six months. Thirty-seven percent believe home values will decrease, the survey showed. It also showed a significant number of potential sellers are holding back due to the current market. When asked about future plans to sell, 31 percent of homeowners said they would be at least "somewhat likely" to put their homes on the market in the next 12 months if they saw signs of a real estate market turnaround, the survey showed. "Also interesting is the information we have for the first time this quarter on the levels of 'shadow inventory' - homes that people would like to sell but that aren't currently on the market, and thus aren't captured in the official number of homes on the market," said Humphries. "With almost a third of homeowners poised to jump into the market at the first sign of stabilization, this could create a steady stream of new inventory adding to already record-high inventory levels, thus keeping downward pressure on home prices." With a Misperception Index of 2 -- down from 13 in the fourth quarter -- the perception of homeowners in the West was closest to reality, along with that of homeowners in the Midwest. Northeastern homeowners' perception of their own homes' values was the farthest from reality, with a Misperception Index of 11, up from 3 in the fourth quarter, the survey showed.




OTHER STORIES:

Suburban Housing Markets Are Unsustainable - (www.seekingalpha.com)
Decoupling From Reality - (www.jameshowardkunstler.typepad.com)
The Problem with Debt: Leverage - (www.finance.yahoo.com)
Foreclose and Work the System - (www.blog.youwalkaway.com)
Commercial Rents Crashing in London to 1991 Prices - (www.bloomberg.com)
Small-business credit card rates increase - (www.jan.freedomblogging.com)

On the road with the Airpod air-powered car - (www.guardian.co.uk)
SEC recommends civil fraud charges against Mozilo of Countrywide - (www.latimes.com)
Government Underestimates Fannie, Freddie Money Pits - (www.seekingalpha.com)
California treasurer requests TARP help - (www.marketwatch.com)
Economic-Stimulus Cash Is Moving Slowly - (www.online.wsj.com)
Geithner enriches speculators in "sham" bank bail-outs - (www.telegraph.co.uk)
Author Thomas Woods talking about the Fed - (www.booktv.org)

Stanford Investors 'Shocked' by $20 Million Fee Request - (www.cnbc.com)
Volkswagen Halts Talks with Porsche on Tie-Up - (www.cnbc.com)
Price of Gasoline Jumps 25 Cents in 3 Weeks - (www.cnbc.com)
Two Of The World's Richest Men Game Market - (www.cnbc.com)
Week's Top Videos: Dr. Doom, Otellini, Cohen & More - (www.cnbc.com)
Buffett's Berkshire Boosts Stakes in J&J, Wells Fargo - (www.cnbc.com)
Economic Recovery Still Months Away: Roubini, Rogoff - (www.cnbc.com)