Thursday October 1 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

SAUDI BANKS READY TO TOPPLE - (socioecohistory.wordpress.com) Saudi banks are beginning to topple, soon to cause deep ripples across the globe. Meanwhile, Saudi royals are under threat of assassination. The Saudi Arabian central bank announced it will not purchase the debts from two family businesses after a major default. The Saudi Arabian Monetary Agency will not cover the debt from Ahmad Hamad Algosaibi & Brothers and Maan al-Sanea’s Saad Group. The debt is owed to local banks. Units of the two groups have borrowed at least $15.7 billion from more than 80 regional and international banks. About $5 billion of that is owed to Saudi banks, Standard Chartered stated in an August 26th report. ….. …. On August 30th, a suicide bomber injured Saudi Prince Mohammed bin Nayef, son of the interior minister and nephew of King Abdullah. The incident took place in Jeddah Saudi Arabia. Reports indicate the motive might be tied to Saudi involvement in the civil war in Yemen. A check reveals that Ramadan ends on September 19th. Expect all hell to break loose in the Persian Gulf after its end. Mayhem will be permitted at that time.

Saudi Central Bank Won’t Buy Algosaibi, Saad Debt From Banks - (www.bloomberg.com) Muhammad al-Jasser, Saudi Arabia’s central bank governor, said the bank won’t buy up debts from two family businesses that defaulted after borrowing more than $15 billion. “Absolutely not,” al-Jasser said when asked whether the Saudi Arabian Monetary Agency would buy up the debt of Ahmad Hamad Algosaibi & Bros. and Maan al-Sanea’s Saad Group from local banks. He spoke to Bloomberg News at a meeting of central bank governors and finance ministers of the Group of 20 countries in London yesterday. Units of the two groups have borrowed at least $15.7 billion from more than 80 regional and international banks, including Paris-based BNP Paribas SA, New York-based Citigroup Inc. and Arab Bank Plc in Amman, Jordan, according to documents provided by lenders. About $5 billion of that is owed to Saudi banks, Standard Chartered Plc said in an Aug. 26 report. Al-Jasser’s comment comes after the Economist Intelligence Unit said in a report this month that the “fall-out for local banks may be limited as the Saudi Arabian Monetary Agency is expected to help local banks to cover losses.” International and regional banks are suing the Al-Khobar- based Saudi groups after both missed payments due from their Bahraini-based banking units, which are now under the administration of the Bahraini central bank. Court cases are also taking place between the two after the Algosaibi group said in a May 22 New York filing that al-Sanea, the owner of Saad Group, used “falsified documents” to obtain $10 billion. Saad Group will respond to the claim through the judicial process, according to an Aug. 1 e-mailed statement from the company. ‘Debt Restructuring’: The Saudi government has set up a special committee to look at the debt defaults by the groups. The Algosaibi group, a holding company with a broad range of interests from financial institutions to hotels, shipping and a bottling company, said in May it hadn’t made payments to creditors of its Bahrain-based lender, The International Banking Corporation BSC, “pending a debt restructuring exercise.” The Saad group, which engages in a range of businesses from construction to health care, said in June it was planning an “orderly restructuring” of its debt. Qatar, a neighboring Gulf state, has bought up portfolios of local banks to boost the banking industry through the financial crisis. To date, Saudi Arabia’s central bank has cut interest rates, reduced the reserve requirements for banks and placed deposits with banks. ‘Stressed Financially’: Saudi Arabia’s economy will contract 1 percent this year as the debt problems of family-run businesses dissuade banks from lending, Riyadh-based Jadwa Investment Co. said in a July 28 report. In addition to these two Saudi conglomerates, “several other family groups are stressed financially,” Jadwa said. Al-Tuwairqi Group hired HSBC Holdings Plc to oversee a restructuring of its bank loans after the Saudi steelmaker was hurt by falling prices, a person familiar with the situation said on June 24. The Dammam-based company is restructuring as much as 7 billion riyals ($1.9 billion) in debt, the person said.

Ghost Towns May Haunt Ireland in Property Loan Gamble - (www.bloomberg.com) The skeleton of an eight-story Dublin office block lays deserted on the north bank of the River Liffey, just next to the financial district that less than two years ago was the heart of Ireland’s economic boom. Four cranes stand idle at the site, one of at least 35,000 unfinished or empty new offices and homes that dot Ireland’s landscape after the collapse of its real estate market. Finance Minister Brian Lenihan will detail tomorrow how much Ireland will pay for about 90 billion euros ($131 billion) of real estate loans now crippling what as recently as 2006 was one of Europe’s most dynamic economies. In what may be the biggest financial gamble in 87 years as a sovereign state, the government will become the owner of loans for property developments that have plunged in value. “Short of declaring war, this is the most important decision these guys will ever make,” said Brian Lucey, associate professor of finance at Trinity College Dublin, who opposes the plan. “Our entire economic credibility and independence is at stake.” Ireland is suffering the worst economic slump of any developed nation since the Great Depression, according to the Economic & Social Research Institute in Dublin. The banking system came close to collapse after the bankruptcy of New York-based Lehman Brothers Holdings Inc. a year ago today froze global credit markets and swelled bad debts. Ireland’s banks are now in a “vegetative state,” according to RBC Capital in London. The government is hoping that by purging toxic assets, the banks will revive lending and reignite the economy. Seize Land: “If we don’t take that basic step, our banks are going to evolve into zombie banks” that won’t support the economy, Lenihan said in an interview in Athlone, central Ireland, late yesterday. The National Asset Management Agency, known as NAMA, will buy 18,000 loans at a discount from lenders led by Allied Irish Banks Plc and Bank of Ireland Plc. The agency will manage the loans, which amount to about half of Ireland’s gross domestic product. Should any of the 1,500 borrowers default, the agency can seize the land or other security put up. Most of the property-related loans of the biggest Irish banks are being taken over by the agency, excluding residential mortgages. Finding Right Price: For Lenihan, it’s a tightrope: pay too much, and he risks damaging the taxpayer, opponents of the plan say. Pay too little, and he wipes out the banks. Bank of Ireland fell 2.2 percent to 2.78 euros in Dublin trading, while Allied Irish advanced 3.7 percent to 2.70 euros. NAMA may pay more than current market prices for some loans as it seeks to place a “long-term economic value” on the debt, Lenihan told a parliamentary committee on Aug. 31, a strategy which could keep the banks alive. The agency may discount the loans of Allied Irish by 23 percent and Bank of Ireland by 18 percent, according to an estimate by Merrion, a Dublin-based securities firm. The loans taken over by the agency may include those given to developer Liam Carroll by Anglo Irish Bank Corp. to build its new headquarters on the north bank of the Liffey. With Carroll now seeking protection from creditors amid debts of 1.3 billion euros, the building lies unfinished. Anglo, owed about 30 million euros, is offering another 8 million euros to allow the developer to complete the building.

Madoff versus Stanford: Allen Stanford Gets Public Defender for Criminal Case - (www.bloomberg.com) Regulators and investors have fought attempts to unlock legal defense funds from Stanford’s seized assets, which were frozen by court order on Feb. 17 when the U.S. Securities and Exchange Commission accused him of investor fraud. Stanford is also being denied access to his company’s liability insurance policy, after the court-appointed receiver claimed those funds may be needed to defend Stanford’s companies against lawsuits. Caminiti, Washington, Hannon. Marjorie Meyers, head of the federal public defender’s office in Houston, said it has a staff of seven. Schaffer is a partner in the Houston law firm Bires & Schaffer. A biography on his firm’s Web site describes him as having more than 25 years of experience in criminal law, including white collar crime, bank fraud, government contract fraud and homicide. His clients have included one-time Houston Astros baseball player Ken Caminiti, who is deceased, as well as U.S. Congressman Craig Washington and former Enron Broadband Services Inc. executive Kevin Hannon, according to the site. Asked for a comment on his client, Schaffer said, “Let me talk to him first.” During the hearing, Hittner asked Stanford if he had money to hire a lawyer. ‘Insurance Policy’: “I think I have funds in an insurance policy,” said Stanford, who appeared in court in an orange jumpsuit and looking thinner than his last appearance in late June. The judge cut him off, saying “That has not been resolved. I’m talking right at this moment. Do you have sufficient funds at this moment?” “I don’t have an answer to that,” Stanford said. Hittner replied, “I’ll take that as a no.”

Celente: Revolution next for U.S. - (www.youtube.com) Gerald Celente (good but radical trends forecaster) sits down for an exclusive interview with RT's Anastasia Churkina to talk about what the future holds for America during and after the Great Recession, gives advice to Obama, and forecasts the unexpected.

Pelosi Rewarded By Lobbyists For Backing Off Public Option - (www.openleft.com) House Speaker Nancy Pelosi for the first time yesterday suggested she may be backing off her support of the public option. According to CNN, Pelosi and Senate Majority Leader Harry Reid "said they would support any provision that increases competition and accessibility for health insurance - whether or not it is the public option favored by most Democrats." When "asked if inclusion of a public option was a non-negotiable demand - as her previous statements had indicated Pelosi ruled out any non-negotiable positions," according to CNN. This was also corroborated by the Associated Press, and by Pelosi's own words, as quoted in those stories. This announcement came just hours before Steve Elmendorf, a registered UnitedHealth lobbyistand the head of UnitedHealth's lobbying firm Elmendorf Strategies, blasted this email invitation throughout Washington, D.C. I just happened to get my hands on a copy of the invitation from a source - check out this OpenLeft exclusive:

From: Steve Elmendorf [mailto:steve@elmendorfstrategies.com]
Sent: Friday, September 11, 2009 8:31 AM
Subject: event with Speaker Pelosi at my home

You are cordially invited to a reception with

Speaker of the House
Nancy Pelosi

Thursday, September 24, 2009
6:30pm ~ 8:00pm

At the home of
Steve Elmendorf
2301 Connecticut Avenue, NW
Apt. 7B
Washington, D.C.

$5,000 PAC
$2,400 Individual

To RSVP or for additional information please contact
Carmela Clendening at (202) 485-3508 or clendening@dccc.org

Steve Elmendorf
ELMENDORF STRATEGIES
GOVERNMENT AFFAIRS SOLUTIONS
900 7th Street NW Suite 750 Washington DC 20001
(202) 737-1655

Again, Elmendorf is a registered lobbyist for UnitedHealth, and his firm's website brags about its work for UnitedHealth on its website (Elmendorf was also a chief of staff for Democratic Minority Leader Dick Gephardt). The sequencing here is important: Pelosi makes her announcement and then just hours later, the fundraising invitation goes out. Coincidental? I'm guessing no - these things rarely ever are. I wrote a book a few years ago called Hostile Takeover whose premise was that corruption and legalized bribery has become so widespread that nobody in Washington even tries to hide it. This is about as good an example of that truism as I've ever seen.

Many mortgage modifications push payments .... higher - (www.usatoday.com) Tens of thousands of financially strapped homeowners who have asked lenders to lower their mortgage payments are instead winding up with higher monthly payments and larger debts on their homes. Homeowners who were hoping for lower payments are discovering to their dismay that lenders roll late fees, back taxes or other costs into the principal, sometimes turning a difficult payment into an impossible one. That is one reason that many reworked mortgages are sliding back into default. It's too early to know if this pattern will continue under theObama administration's $75 billion initiative to get lenders to reduce monthly payments for homeowners struggling to make their mortgages. A total of 360,165 mortgage modifications are now in a three-month trial period under the government's plan announced in March. But the initiative focuses on reducing interest rates rather than cutting principal, which has been found to be one of the most effective modifications for helping homeowners avoid defaulting a second time (known as a "re-default"). Of loans modified from Jan. 1, 2008, through March 31, 2009, monthly payments increased on 27% and were left unchanged on an additional 27.5%, according to a recent report by banking regulators. Many modified mortgages fall delinquent — 25% to 40%, depending on the type of mortgage — often because of homeowners' loss of income or additional outstanding debt, according to a report last month by CreditSights, a financial research firm. "Payments have gone up …. (and) the payment relief can last for the first few years and then go up (again)," says Alan White, assistant professor of law at the Valparaiso University School of Law in Valparaiso, Ind. He has studied the subprime mortgage situation for 10 years. "(The lenders) focus on today and not on the future." Even under the Obama plan, they don't focus on permanent debt reduction, White says. The majority of borrowers who've gotten mortgage modifications have seen their overall principal balance go up, according to an analysis by CreditSights and ICP of about 660,000 mortgages modified this year. In about 90% of the modifications, the principal balance after a modification was larger, CreditSights said.

OTHER STORIES:

Economic Obsolescence of Large Houses - (www.blogs.usc.edu)

Hard Times In Suburban Wastelands - (www.newgeography.com)

Condo Speculators Unclear Rent vs Buy - (www.wcvarones.blogspot.com)

Wells Fargo fires executive accused of using bank-owned Malibu house - (www.latimes.com)

The Final Demise of A Speculative Housing Bubble - (www.Charles Hugh Smith)

Seven New Rules for the First-Time House Buyer - (www.nytimes.com)

Bernanke says recession 'very likely over' - (www.news.yahoo.com)

Taleb: Recession definitely not over - (www.theglobeandmail.com)

The Continuing Disaster of Wall Street, One Year Later - (www.robertreich.blogspot.com)

'We're going to have zombie capitalism for the next 15-20 years,' says Jim Rogers - (www.bi-me.com)

Investor says bank let him borrow too much - (www.heraldtribune.com)

Break Up The Big Banks - (www.blogs.reuters.com)

Insurers, HMOs spending $700,000 a day to influence lawmakers - (www.huffingtonpost.com)

Majority Of Doctors Back Public Option - (www.huffingtonpost.com)

What Is Socialism in 2009? - (www.roomfordebate.blogs.nytimes.com)

Socialist Europe Overtakes North America as World's Wealthiest Region - (www.bloomberg.com)

DC Tea party footage with interviews - (www.youtube.com)

Wednesday September 30 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Stiglitz Says Banking Problems Are Now Bigger Than Pre-Lehman - (www.bloomberg.com) Joseph Stiglitz, the Nobel Prize- winning economist, said the U.S. has failed to fix the underlying problems of its banking system after the credit crunch and the collapse of Lehman Brothers Holdings Inc. “In the U.S. and many other countries, the too-big-to-fail banks have become even bigger,” Stiglitz said in an interview yesterday in Paris. “The problems are worse than they were in 2007 before the crisis.” Stiglitz’s views echo those of former Federal Reserve Chairman Paul Volcker, who has advised President Barack Obama’s administration to curtail the size of banks, and Bank of Israel Governor Stanley Fischer, who suggested last month that governments may want to discourage financial institutions from growing “excessively.” A year after the demise of Lehman forced the Treasury Department to spend billions to shore up the financial system, Bank of America Corp.’s assets have grown and Citigroup Inc. remains intact. In the U.K., Lloyds Banking Group Plc, 43 percent owned by the government, has taken over the activities of HBOS Plc, and in France BNP Paribas SA now owns the Belgian and Luxembourg banking assets of insurer Fortis. Obama’s Plan: While Obama wants to name some banks as “systemically important” and subject them to stricter oversight, his plan wouldn’t force them to shrink or simplify their structure. Stiglitz said the U.S. government is wary of challenging the financial industry because it is politically difficult, and that he hopes the Group of 20 leaders will cajole the U.S. into tougher action. “We aren’t doing anything significant so far, and the banks are pushing back,” said Stiglitz, a Columbia University professor. “The leaders of the G-20 will make some small steps forward, given the power of the banks” and “any step forward is a move in the right direction.”

Pension Plan Shocker Dead Ahead! – (www.moneyandmarkets.com) I’ve talked about corporate pension plans before, but in a few short weeks I think we’re going to get some shocking news. Namely, that the government backup for failed pension plans is more underfunded than it has ever been before. Back in April, I told you a bit about the Pension Benefit Guaranty Corporation and its decade of running in the red. But just to recap: The PBGC is there for workers when their companies break retirement promises, and yet ironically, the PBGC itself has been underfunded every year since 2002! To its credit, the organization was doing a decent job of getting back toward the black lately. It cut its deficit slightly in 2005, then made major strides in 2006 … 2007 … and 2008. Now that streak looks ready to end — in a BIG way — when the PBGC reports its full-year financial results at the end of this month. I’m basing that on what the group’s acting director Vince Snowbarger told a Senate Special Committee on Aging back in May. At that point, he said the PBGC was running a $33.5 billion deficit in 2009. "But really … the PBGC simply needs to get more money into its coffers. A lot of experts are calling for higher premiums being charged to member pension plans. And that may certainly happen. Yet there are two big drawbacks to this approach, as I see it: First, as previously noted, there are already fewer and fewer companies offering defined benefit pension plans. Second, charging the good plans higher premiums will only give companies one more reason to STOP providing defined benefit pension plans, which would exacerbate the existing problem. That leaves just one place for the PBGC to get its money … you and me!"

The Disappearance of America's Middle Class - (www.nytimes.com) Millions of Americans have lost homes, jobs and savings to the financial crisis and recession. While greed and extravagance played roles, many lived beyond their means because their paychecks shrank. This article is adapted from “Past Due: The End of Easy Money and the Renewal of the American Economy,” by Peter S. Goodman, a reporter for The New York Times. The book, to be published Tuesday by Times Books, explores the origins of the crisis and suggests ways to reinvigorate the economy. ONE afternoon in November 2006, a policeman spotted an expired license plate on Dorothy Thomas’s 10-year-old Toyota Corolla as she drove through San Jose, Calif. He ordered her to pull over. Struggling under the weight of thousands of dollars in credit card bills, Ms. Thomas was perpetually short of cash. She had not bought a $10 auto registration sticker. The officer checked his database and recognized that she had already been ticketed once before for the same thing. He arranged to have her car towed away. “I got down on my knees and begged that officer,” Ms. Thomas recalled. As she watched her car being hauled off, she sensed that this was the beginning of a descent into a crisis from which she might not easily escape. Without money to pay the towing and storage fees, she could not extract her car from the lot, and the tab soon grew to $1,600. Without a car, she could not reach the hospital where she worked in the administrative offices, so she lost her $16-an-hour job. Without a paycheck, she could no longer pay the rent on her modest home. She moved to Oakland, where a friend lived in a beaten-down, rented house on a street they called Crack Avenue. By year’s end, Ms. Thomas, then 49, was occupying a bunk at a homeless shelter, searching in vain for a job in an economy plagued by unemployment. Across the United States a sense has taken hold that the Great Recession and the financial crisis are predominantly a result of national profligacy, as if the economy had been undone by insatiable shoppers, foolhardy home buyers and greedy investment bankers. Extravagance and recklessness certainly played crucial roles, and yet they are only part of the explanation. Many have lived beyond their incomes simply because incomes have been outstripped by the costs of middle-class life. By the fall of 2008, most American workers were bringing home roughly the same weekly wages they had earned in 1983, after accounting for inflation. “For middle- and low-wage workers, the median wage basically went nowhere over these years,” said the economist Jared Bernstein. Spirited and eloquent, Ms. Thomas had worked her way up from rural Oklahoma poverty, enduring the strains of forcibly integrated schools, before settling in California. She had become one of the first African-Americans to sell cosmetics at a Sacramento department store. Then, she forged a career in medical billing, at one point making $22 an hour. She had lived beyond her means, but not out of decadence. For years, she had rented homes in better neighborhoods than she could afford in order to send her two daughters to quality schools. She had run up credit card balances to pay for summer science camps and school supplies. She had never earned more than a high school diploma, but one of her daughters already had a master’s in education; the other was about to start college.

Fannie, Freddie struggle a year after takeover - (finance.yahoo.com) A year after the near-collapse of Fannie Mae and Freddie Mac, the mortgage giants remain dependent on the government for survival and there is no end in sight. The companies, created by the government to ensure the availability of home loans, have tapped about $96 billion in government aid since they were seized a year ago this weekend. Without that money, the firms could have gone broke, leaving millions of people unable to get a mortgage. Many questions remain about Fannie and Freddie's future, but several things are clear: The companies are unlikely to return to their former power and influence, the bailout is sure to cost taxpayers even more money and the government will have a big role in the U.S. mortgage market for years to come. Fannie Mae was created in 1938 in the aftermath of the Great Depression. It was privatized 30 years later to limit budget deficits during the Vietnam War. In 1970, the government formed its sibling and competitor Freddie Mac. The companies boomed over the past decade, buying mortgages from lenders, pooling them into bonds and selling them to investors. But critics called them unnecessary, arguing that Wall Street could support the mortgage market itself. That argument has faded in the wreckage of the failed loans that led to the housing bust. Investors have fled any mortgage investment that doesn't have the government standing behind it. "No longer is anyone arguing that the private sector can handle this on its own," said Jaret Seiberg, an analyst at Washington Research Group. The government stepped in to take control of the two companies on the weekend of Sept. 6, after they were unable to raise money to cover soaring losses and their stock prices plunged. A year later, the government controls nearly 80 percent of each company, and their problems are growing as defaults and foreclosures continue to skyrocket. The percentage of homeowners who have missed at least three months of payments is normally under 1 percent for both companies. Now it's nearly 4 percent for Fannie and 3 percent for Freddie. Fannie had nearly $171 billion in troubled loans as of June and had set aside $55 billion to cover those losses, while Freddie had nearly $78 billion in troubled loans and reserves of only $25 billion."It's much worse than anybody thought," said Paul Miller, an analyst with FBR Capital Markets. It could be another year before the final taxpayer tab for Fannie and Freddie is known, and that outcome will depend on when delinquencies and foreclosures finally crest. Barclays Capital predicts the companies will need anywhere from $160 billion to $200 billion out of a potential $400 billion lifeline, which the Obama administration expanded from the original $200 billion set last fall. Most analysts don't expect the money to be returned anytime soon, if at all. "What will ultimately end up happening," said Barclays analyst Ajay Rajadhyaksha, "is that the U.S. taxpayer swallows the bill."

Big Corporations Want to Buy Your Congressman - (www.newsweek.com) Money talks. In Washington, it shouts. But the question is: do we have to let money jack itself into stadium-size loudspeakers? As I made my rounds in the capital the other day, I could hear the rustling of corporate cash everywhere I went. In the august hearing room of the U.S. Supreme Court, I listened to the conservative majority—Chief Justice John Roberts's Gang of Five—seethe with skepticism as they considered arguments about limiting corporate spending in elections. Later, across First Street in the U.S. Capitol, Senate Minority Leader Mitch McConnell explained to me how Barack Obama's health-care plan would ruin the health-care industry—an industry, not coincidentally, that McConnell believes should be set free to dump its treasury into the political campaigns of obliging politicians. In a White House briefing room later that day, I listened to a top official sketch his game plan for countering corporate clout in the health-care debate. And then I saw Obama himself try to do just that, at least rhetorically, in a speech to Congress. No, you are not reading a screed against corporations. I work for them, as do many of us. I give speeches to them. I am sort of one myself, sole proprietor of a boutique Beltway blab factory. Nor am I a foe of free speech; just the opposite. I am a devout believer in the sanctity—and even the economic utility—of the First Amendment. There's a reason why the Founders put it first. But do corporations have the same free-speech rights as individuals? Do they have the right, confirmed for real persons by the court in 1976, to spend as much as they want for or against a political candidate, as long as they do it "independently"? Is it constitutional for Congress, as it did in the McCain-Feingoldlaw, to limit when they can speak (not right before an election) and what media they can use (not TV or cable)? That's the issue the court wrestled with last week. I'm wrestling, too. I understand the arguments for unleashing corporations (and unions, which face the same limits). In this country we have a long history of honoring the legal prerogatives of corporations. Many of our earliest explorers and settlers were working for joint-stock companies founded in the coffeehouses of London and Amsterdam. And while corporations are legal fictions, created and sanctioned by law, they have long been considered to have some people like rights and responsibilities. They can borrow money and sign contracts; they have reputations that can be harmed and that they can sue to protect.

"Some didn't know they were getting a loan" - (news.bbc.co.uk) It would make some eye-popping reading. Loiacono was a mortgage underwriter - deciding who her firm should lend to - at the height of the subprime lending bonanza. What's more, she was working in Orange County in southern California, once the subprime capital of the US. Five years ago, most of the leading subprime lenders had their headquarters in the area. The county was stuffed with banks specialising in risky loans to people with little or no income and bad credit histories. Eileen Loiacono saw how they did it. It was her job to look at the prospective borrowers' files and assess whether they'd be able to repay their loans. Lending frenzy: How many of the applications that crossed her desk looked like good prospects? "About 30%," she says. As for the rest: "There were people who didn't even understand they were getting a loan. They couldn't read the documents, somebody had just approached them and said hey, do you want a home?" Now working for a bank in Corona, a small town in the parched brown hills east of Orange County, Ms Loiacono says she did her best to bring some sense to the lending frenzy. She would try to turn down loan applications that looked too risky but the pressure from mortgage brokers and bank bosses was overwhelming. They started offering incentives to the wavering underwriters. Promises of trips to resorts on the California coast were common. "They offered cars and watches and purses," she says, "the list goes on". Did she ever succumb to temptation? Eileen Loiacono throws back her head with a loud laugh. "I was probably threatened more than I was offered anything" she says. And not just threatened with losing her job. It was more menacing than that. She was told her car would be vandalised if she tried to reject an applicant. And worse. "They said things like 'if you decline this mortgage I'll have you taken care of'. And some underwriters cars were scratched and stuff like that". 'Chain of blame': Eventually the FBI were called in to investigate. Ms Loiacono left in disgust. But she says what she experienced was common in an industry she describes as having "no morals at all". It was an industry that thrived in southern California while a buoyant economy attracted new residents in search of homes. And in Orange County, one of the wealthiest parts of the state, there were plenty of entrepreneurs ready to give anything a try. According to Mathew Padilla, author of a book on the birth of subprime - Chain Of Blame - the East Coast had Wall Street and its established means of making money. The financial innovators of southern California were looking for their own cut of the action.

OTHER STORIES:

China Mulls Sanctions - (www.marketwatch.com)
Shift: Wall Street Goes to Washington - (www.washingtonpost.com)
How IRAs Can Tie Investors' Hands -- and What To Do About It - (www.elliottwave.com)
Jim Rogers: Zombie Capitalism for the Next 15-20 Years - (www.bi-me.com)
Interest Only Mortgage Time Bomb: $71 billion in Loans will Reset in next 12 Months. - (www.mybudget360.com)
Nobel Winner Stiglits: Bank Problems Now Bigger than Pre-Lehman - (www.bloomberg.com)

History suggests Florida real estate prices haven't yet hit bottom - (www.tampabay.com)

Recession may forge a housing shift in California - (www.courant.com)

Reluctant Landlords Better Off Selling -- Even at a Loss - (blogs.wsj.com)

Median household income fell during Bush years - (curiouscapitalist.blogs.time.com)

Japanese deflation: What does it mean for America and the world today? - (www.seekingalpha.com)

Brazil's tight bank rules a blessing in disguise - (www.reuters.com)

Wells Fargo exec partied in Malibu house lost by Madoff-duped couple - (www.latimes.com)

Wall Street's Math Wizards Forgot a Few Variables - (www.nytimes.com)

Flaw in Free Markets: Humans - (www.nytimes.com)

If You Think Corporations Run The Government Now... - (www.informationclearinghouse.info)

Teaparty Nazis Stoke Anger To Protect Corporate Profits - (edition.cnn.com)

Media Reluctant to Discuss Race as Factor Driving Obama Opposition? - (blog.newsweek.com)

McGovern's Health-Care Solution: Medicare for Everyone - (www.washingtonpost.com)

It's Time We Listen to Those Wanting to Shrink Government - (dadtalk.typepad.com)

Tuesday September 29 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

The ghost fleet of the recession - (www.dailymail.co.uk) The biggest and most secretive gathering of ships in maritime history lies at anchor east of Singapore. Never before photographed, it is bigger than the U.S. and British navies combined but has no crew, no cargo and no destination - and is why your Christmas stocking may be on the light side this year. The tropical waters that lap the jungle shores of southern Malaysia could not be described as a paradisical shimmering turquoise. They are more of a dark, soupy green. They also carry a suspicious smell. Not that this is of any concern to the lone Indian face that has just peeped anxiously down at me from the rusting deck of a towering container ship; he is more disturbed by the fact that I may be a pirate, which, right now, on top of everything else, is the last thing he needs. His appearance, in a peaked cap and uniform, seems rather odd; an o­fficer without a crew. But there is something slightly odder about the vast distance between my jolly boat and his lofty position, which I can't immediately put my finger on. Then I have it - his 750ft-long merchant vessel is standing absurdly high in the water. The low waves don't even bother the lowest mark on its Plimsoll line. It's the same with all the ships parked here, and there are a lot of them. Close to 500. An armada of freighters with no cargo, no crew, and without a destination between them. My ramshackle wooden fishing boat has floated perilously close to this giant sheet of steel. But the face is clearly more scared of me than I am of him. He shoos me away and scurries back into the vastness of his ship. His footsteps leave an echo behind them. Navigating a precarious course around the hull of this Panama-registered hulk, I reach its bow and notice something else extraordinary. It is tied side by side to a container ship of almost the same size. The mighty sister ship sits empty, high in the water again, with apparently only the sailor and a few lengths of rope for company. Nearby, as we meander in searing midday heat and dripping humidity between the hulls of the silent armada, a young European offi­cer peers at us from the bridge of an oil tanker owned by the world's biggest container shipping line, Maersk. We circle and ask to go on board, but are waved away by two Indian crewmen who appear to be the only other people on the ship. 'They are telling us to go away,' the boat driver explains. 'No one is supposed to be here. They are very frightened of pirates.' Here, on a sleepy stretch of shoreline at the far end of Asia, is surely the biggest and most secretive gathering of ships in maritime history. Their numbers are equivalent to the entire British and American navies combined; their tonnage is far greater. Container ships, bulk carriers, oil tankers - all should be steaming fully laden between China, Britain, Europe and the US, stocking camera shops, PC Worlds and Argos depots ahead of the retail pandemonium of 2009. But their water has been stolen. They are a powerful and tangible representation of the hurricanes that have been wrought by the global economic crisis; an iron curtain drawn along the coastline of the southern edge of Malaysia's rural Johor state, 50 miles east of Singapore harbour. t is so far off‑ the beaten track that nobody ever really comes close, which is why these ships are here. The world's ship owners and government economists would prefer you not to see this symbol of the depths of the plague still crippling the world's economies. So they have been quietly retired to this equatorial backwater, to be maintained only by a handful of bored sailors. The skeleton crews are left alone to fend off‑ the ever-present threats of piracy and collisions in the congested waters as the hulls gather rust and seaweed at what should be their busiest time of year. Local fisherman Ah Wat, 42, who for more than 20 years has made a living fishing for prawns from his home in Sungai Rengit, says: 'Before, there was nothing out there - just sea. Then the big ships just suddenly came one day, and every day there are more of them. 'Some of them stay for a few weeks and then go away. But most of them just stay. You used to look Christmas from here straight over to Indonesia and see nothing but a few passing boats. Now you can no longer see the horizon.' The size of the idle fleet becomes more palpable when the ships' lights are switched on after sunset. From the small fishing villages that dot the coastline, a seemingly endless blaze of light stretches from one end of the horizon to another. Standing in the darkness among the palm trees and bamboo huts, as calls to prayer ring out from mosques further inland, is a surreal and strangely disorientating experience. It makes you feel as if you are adrift on a dark sea, staring at a city of light. Ah Wat says: 'We don't understand why they are here. There are so many ships but no one seems to be on board. When we sail past them in our fishing boats we never see anyone. They are like real ghost ships and some people are scared of them. They believe they may bring a curse with them and that there may be bad spirits on the ships.'

Healthcare Reform is More Corporate Welfare - (Ron Paul at www.safehaven.com) Last Wednesday the nation was riveted to the President's speech on healthcare reform before Congress. While the President's concern for the uninsured is no doubt sincere, his plan amounts to a magnanimous gift to the health insurance industry, despite any implications to the contrary. For decades the insurance industry has been lobbying for mandated coverage for everyone. Imagine if the cell phone industry or the cable TV industry received such a gift from government? If government were to fine individuals simply for not buying a corporation's product, it would be an incredible and completely unfair boon to that industry, at the expense of freedom and the free market. Yet this is what the current healthcare reform plans intend to do for the very powerful health insurance industry. The stipulation that pre-existing conditions would have to be covered seems a small price to pay for increasing their client pool to 100% of the American people. A big red flag, however, is that they would also have immunity from lawsuits, should they fail to actually cover what they are supposedly required to cover, so these requirements on them are probably meaningless. Mandates on all citizens to be customers of theirs, however, are enforceable with fines and taxes. Insurance providers seem to have successfully equated health insurance with health care but this is a relatively new concept. There were doctors and medicine long before there was health insurance. Health insurance is not a bad thing, but it is not the only conceivable way to get health care. Instead, we seem to still rely on the creativity and competence of politicians to solve problems, which always somehow seem to be tied in with which lobby is the strongest in Washington. It is sad to think of the many creative, free market solutions that government prohibits with all its interference. What if instead of joining a health insurance plan, you could buy a membership directly from a hospital or doctor? What if a doctor wanted to have a cash-only practice, or make house calls, or determine his or her own patient load, or otherwise practice medicine outside the constraints of the current bureaucratic system? Alternative healthcare delivery models will be at an even stronger competitive disadvantage if families are forced to buy into the insurance model. And yet, the reforms are sold to us as increasing competition. What if just once Washington got out of the way and allowed the ingenuity of the American people to come up with a whole spectrum of alternatives to our broken system? Then the free market, not lobbyists and politicians, would decide which models work and which did not. Unfortunately, the most broken aspect of our system is that Washington sees the need to act on every problem in society, rather than staying out of the way, or getting out of the way. The only tools the government has are force and favors. These are tools that many unscrupulous and lazy corporations would like to wield to their own advantage, rather than simply providing a better product that people will willingly buy. It seems the health insurance industry will get more of those advantages very soon.

The New Israel Lobby‎ - (www.nytimes.com) In July, President Obama met for 45 minutes with leaders of American Jewish organizations. All presidents meet with Israel’s advocates. Obama, however, had taken his time, and powerhouse figures of the Jewish community were grumbling; Obama’s coolness seemed to be of a piece with his willingness to publicly pressure Israel to freeze the growth of its settlements and with what was deemed his excessive solicitude toward the plight of the Palestinians. During the July meeting, held in the Roosevelt Room, Malcolm Hoenlein, executive vice chairman of the Conference of Presidents of Major American Jewish Organizations, told Obama that “public disharmony between Israel and the U.S. is beneficial to neither” and that differences “should be dealt with directly by the parties.” The president, according to Hoenlein, leaned back in his chair and said: “I disagree. We had eight years of no daylight” — between George W. Bush and successive Israeli governments — “and no progress.” It is safe to say that at least one participant in the meeting enjoyed this exchange immensely: Jeremy Ben-Ami, the founder and executive director of J Street, a year-old lobbying group with progressive views on Israel. Some of the mainstream groups vehemently protested the White House decision to invite J Street, which they regard as a marginal organization located well beyond the consensus that they themselves seek to enforce. But J Street shares the Obama administration’s agenda, and the invitation stayed. Ben-Ami didn’t say a word at the meeting — he is aware of J Street’s neophyte status — but afterward he was quoted extensively in the press, which vexed the mainstream groups all over again. J Street does not accept the “public harmony” rule any more than Obama does. In a conversation a month before the White House session, Ben-Ami explained to me: “We’re trying to redefine what it means to be pro-Israel. You don’t have to be noncritical. You don’t have to adopt the party line. It’s not, ‘Israel, right or wrong.’ ” There appears to be an appetite for J Street’s approach. Over the last year, J Street’s budget has doubled, to $3 million; its lobbying staff is doubling as well, to six. That still makes it tiny compared with the American Israel Public Affairs Committee, or Aipac, whose lobbying prowess is a matter of Washington legend. J Street is still as much an Internet presence, launching volleys of e-mail messages from the netroots, as it is a shoe-leather operation. But it has arrived at a propitious moment, for President Obama, unlike his predecessors, decided to push hard for a Mideast peace settlement from the very outset of his tenure. He appointed George Mitchell as his negotiator, and Mitchell has tried to wring painful concessions from Israel, the Palestinians and the Arab states. In the case of Israel, this means freezing settlements and accepting a two-state solution. Obama needs the political space at home to make that case; he needs Congress to resist Prime MinisterBenjamin Netanyahu’s appeals for it to blunt presidential demands. On these issues, which pose a difficult quandary for the mainstream groups, J Street knows exactly where it stands. “Our No. 1 agenda item,” Ben-Ami said to me, “is to do whatever we can in Congress to act as the president’s blocking back.”

Happy Anniversary ! – (www.ritholtz.com) While everyone is so focused on the anniversary of Lehman Brothers (9/15) and AIG (9/16), today is a different sort of anniversary: Its been exactly one year months since the single dumbest column ever published in The Washington Post appeared: Quit Doling Out That Bad-Economy Line. Breathtaking in its ignorance, shocking in its fallibility, astonishing in its author’s perversely misperceived world view, it stands as a monument to sheer cluelessness in a single person: “There have been 11 recessions since the Great Depression. And we’re nowhere close to being in the 12th one now. This isn’t just a matter of opinion. Words — even words as seemingly subjective as “recession” — have meaning.” -September 14, 2008 It turned out that we were already in a recession for 9 months — and it was about to get a whole lot worse. The article goes on to deny the Housing slump, misreads the debt markets, recommends equities, states that bank capital was more than sufficient, looked at employment trends as proof there was no recession, applauds economic growth levels, decried the use of the terms crisis” and “meltdown” — and gets every single one exactly wrong. If you had a time machine, knew the future, and purposefully tried to write something where every word was literally wrong, you could not have done a better job. Be sure to read the whole embarrassing thing if you want to enjoy a good chuckle.

Wells Fargo fires exec in probe into use of bank-owned house - (www.latimes.com) Cheronda Guyton, a senior vice president responsible for commercial foreclosed properties, had been seen by neighbors using the Malibu Colony house lost by victims of Bernard Madoff's Ponzi scheme. Moving to contain a public relations mess, Wells Fargo & Co. fired a top executive accused of using a bank-owned Malibu beach house to entertain her family and friends. Cheronda Guyton, a senior vice president responsible for commercial foreclosed properties, broke company rules barring personal use of bank property, Wells Fargo said in a statement Monday. The Times reported last week that Guyton had been spotted by neighbors spending time at the Malibu Colony home with her family this summer. At a party in August, guests were ferried to the beach house from a yacht, residents of the enclave said. Guyton did not return phone calls or e-mails requesting comment. The property's former owners, Lawrence and Linda Elins, were among the victims in Bernard L. Madoff's massive Ponzi scheme. Because of their financial losses, the couple had been forced to sign over the property to Wells Fargo to help satisfy a debt, their former real estate agent said. As Wells Fargo investigated the employee's alleged improper conduct over the weekend, the reports of lavish frolicking in the wake of the foreclosure crisis drew widespread attention from organizations including the ABC, CNN and Fox television news networks, as well as the overseas wire service Agence France-Presse. In a statement Wells Fargo said its internal investigation concluded that "a single team member was responsible for violating our company policies. As a result, employment of this individual has been terminated." "We deeply regret the activities that have taken place as they do not reflect the conduct we expect of our team members," the statement added. Although the statement did not mention the fired employee by name, Wells Fargo spokeswoman Jennifer Langan confirmed that it was Guyton. Wells Fargo's investigation has concluded, Langan said, adding that "no other Wells Fargo team member was involved." Wells Fargo's quick action after The Times' report last week reflects the bank's recognition that the case could become a liability, especially in light of its acceptance of federal bailout money, ethics experts said. Wells Fargo is trying to "cut the story off rather quickly," said Mark Pastin, president of the Council of Ethical Organizations, an Alexandria, Va., nonprofit promoting ethics in business and government. "They might have acted differently if it was a lower-tier employee, but this was a senior vice president." Rapidly firing Guyton could also have been an attempt by Wells Fargo to present her conduct as the isolated action of an individual, Pastin said. If Wells Fargo let the situation drag on for weeks or months, other employees might have gotten the idea that Guyton's alleged behavior was tolerable. But by firing her, he said, it cuts off the "internal rot" that could have set in.

U.K. Banks to Post $215 Billion Losses, Moody’s Says - (www.bloomberg.com) .K. banks are less than half way through posting 240 billion pounds ($398 billion) of losses on loans and securities, a reflection of the country’s economic weakness, according to Moody’s Investors Service Ltd. British banks are likely to record losses of at least 130 billion pounds, in addition to 110 billion pounds lost since the beginning of the credit crisis in 2007, Moody’s said in a report today. The company “expects the sustained weakness of the U.K. macroeconomic environment to feed through into higher loan arrears with ensuing pressure on profitability and capital,” it said. British taxpayers have provided about 1.4 trillion pounds of support to banks, becoming the biggest shareholder of Royal Bank of Scotland Group Plc andLloyds Banking Group Plc, while seeking to shore up capital eroded by writedowns. British banks have raised about 120 billion pounds of capital from the beginning of the credit crisis to mid-2009, Moody’s said. “We have been underweight on the banks for some time,” said Dave Bradbury who helps manage $6 billion at Canada Life Ltd. in London. “We are still worried about bad debts and the possible need to raise more money.” Standard & Poor’s last month estimated British banks would record 97 billion pounds of loan losses from 2009 to 2011, with bad debts peaking in 2010. The estimate was for domestic loans and didn’t include the overseas operations of banks, like the U.S. units of HSBC and RBS.

New Kids on the Prime-Brokerage Block - (online.wsj.com) A stream of new players jumping into the business of servicing hedge funds shows how quickly Wall Street adapts and how rarely it allows an opportunity to make money go unexploited. The big Wall Street firms that lend to and provide trading and other services to hedge funds scaled back their exposure last year as their clients posted big losses or closed altogether. Lately, new and lesser-known players in the prime-brokerage business all are seeking a piece of lucrative fees generated by hedge funds that they see as up for grabs. FBR Capital Markets, the Arlington, Va.-based investment bank and brokerage firm, launched a prime brokerage Sept. 1. In July, New York investment bank Cantor Fitzgerald & Co. announced it was starting a prime brokerage. Jefferies & Co.'s prime brokerage, launched precrisis in early 2007, now has more than 300 hedge-fund clients, most with $300 million or less in assets. Division head Glen Dailey says Jefferies has roughly doubled the hedge-fund assets its prime brokerage unit serves from a year ago, to more than $10 billion. "With the meltdown that took place last year, we saw an opportunity," said Christopher Nealon, managing director in the institutional brokerage at FBR. Many niche financial firms such as FBR see a chance to serve smaller hedge-fund clients shunned by many big banks during the turmoil. Prime brokerage, which involves lending money and securities to hedge funds, clearing trades and managing cash accounts, boomed as a source of profits this decade as hedge funds raked in hundreds of billions of dollars from investors. The fund managers became fiercely coveted clients; by 2007, prime brokerages competed for a pile of fees analysts estimated worth $10 billion or more. But as crisis gripped the street last year, two of the biggest prime brokerage providers, Bear Stearns Cos. and Lehman Brothers Holdings Inc., collapsed. Lehman's bankruptcy filing one year ago tied up billions of dollars in assets that hedge funds had thought were readily available. Meanwhile, hedge funds in 2008 turned in their worst collective performance ever. Across Wall Street, big banks narrowed their focus to concentrate on hedge funds most likely to generate fees, primarily larger funds, effectively cutting off many funds with $500 million or less in assets. But this year, hedge funds are posting strong gains and investors are poised to channel money back to the funds, making smaller funds look more promising.

OTHER STORIES:

Cuomo preparing charges against BofA - (finance.yahoo.com)

Federal Judge rejects deal between SEC, BofA over bonuses - (finance.yahoo.com)

Dollar Diminishing Makes U.S. Favorite for High-Yield - (www.bloomberg.com)

Hedging loses its lustre for gold - (www.ft.com)

Obama Turns Efforts To Financial Changes - (www.washingtonpost.com)

BIS Says Longer-Term Bond Yields May Rise on Budget Concern - (www.bloomberg.com)

Same Old Hope: This Bubble Is Different - (www.nytimes.com)

Wheel of fortune turns as China outdoes west - (www.ft.com)

China Strikes Back on Trade - (online.wsj.com)

Ruble Devaluation Won’t Fix Russia’s Woes, EBRD Says - (www.bloomberg.com)

U.S. Is Finding Its Role in Business Hard to Unwind - (www.nytimes.com)

U.S. Economy May See Its Slowest Recovery Since 1945 - (www.bloomberg.com)

Court rejects SEC settlement with BofA - (www.ft.com)

Lilly cutting 5,500 jobs before Zyprexa lapse - (www.bloomberg.com)

Crisis has not altered Wall Street - (www.latimes.com)

Smart shopping set to change retail landscape - (www.ft.com)

A Dangerous Game of Trade 'Chicken' - (online.wsj.com)

China-U.S. Trade Dispute Has Broad Implications - (www.nytimes.com)

Monday September 28 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Buyers of Huge Manhattan Complex Face Default Risk - (www.nytimes.com) Three years ago, the sale of the 110 red-brick apartment buildings at Stuyvesant Town and Peter Cooper Village in Manhattan represented the most expensive American real estate deal in history. Now the buyers are running out of time and money. Jerry I. and Rob Speyer and their partner, BlackRock Realty, who paid $5.4 billion for the quiet middle-class redoubt near the East River, have seen the property lose more than half of its value, and the income from rent — down 25 percent from its peak — covers less than half of their debt payments. Real estate analysts say they expect that by December, the partnership will run out of an additional $890 million set aside for apartment renovations, landscaping and interest payments, and that the owners are at “high risk” of default on $4.4 billion in loans. Two real estate executives who have been briefed on the finances insist the owners can hold out, but only until February. On Thursday, the partnership will go before the Court of Appeals in Albany to try to overturn a lower court decision that could force them to pay hundreds of millions of dollars in rent rebates to thousands of tenants. Regardless of that outcome, Stuyvesant Town and Peter Cooper Village are in trouble. City officials have been monitoring the looming crisis and how it might affect a complex that has served as an oasis of affordability in Manhattan for middle-class New Yorkers. Some 6,875 of the 11,227 apartments at the complexes are rent regulated. “We are absolutely keeping an eye on it,” said Rafael E. Cestero, the city’s housing commissioner. “It’s an iconic complex.” Referring to the people who were part of the original real estate transaction, he went on, “Those folks are going to take their lumps. We are looking at how we can ensure that the rent-stabilized units and the families that live there and families that could live there in the future could be insulated from the unwinding of this deal.” Even with the partnership’s financial problems pointing to a possible default, tenants would not be likely to face high rent increases or eviction, but they may face a period of deferred maintenance and disinvestment.

As owners leave foreclosed houses, squatters move in - (www.mcclatchydc.com) The first time Carey Mitchell saw her, Tammy was standing at an intersection near the 16th Street off ramp from Highway 99. Her clothes looked dirty, her face tired. She held a cardboard sign asking for spare change. Without thinking, Mitchell pulled her car over. In an instant, Tammy was at her window. Mitchell rolled it down. “Do you need a place to sleep tonight?” she remembers asking. On a scrap of paper, Mitchell quickly sketched a map to a house a few miles away. It was Mitchell’s house, but she didn’t want it anymore. She'd decided to stop paying the home’s mortgage. As she walked away, she handed the keys to Tammy, who stayed for three months before she was formally evicted this May. The nights Tammy spent there were the first she’d slept inside in more than three years. When homes fall into foreclosure, former owners who won’t leave on their own are kicked out. The homes stand empty until banks sell to new owners — at least that’s the way it usually worked before the foreclosure crisis. But in its wake, a lot has changed. These days, it’s not uncommon to find foreclosed homes occupied by squatters, including homeless people, evicted former owners who move back illegally, and opportunists looking to live rent-free for as long as they’re able. Some are invited by people leaving the homes behind. Others aren’t. Along with loan modification firms and a host of new industries that have sprung up around the mess, such as foreclosure cleanup services, foreclosure squatters are among the few beneficiaries of the bust. Emboldened by the sheer number of vacant homes and the months that many of them go unsold, the squatters have become a nationwide phenomenon. And in Merced, where the foreclosure rate remains higher than anywhere else in California, they seem to be a growing population. In Tammy’s case, the foreclosure was an older one-story on Sonora Avenue. Mitchell, a real estate agent from Redwood City, had happily scooped it up as an investment property at the height of the housing boom in 2005. But by the time she met Tammy this spring, she was angry. She owed way more on the house than it was worth, and she claims the former owner, who financed the deal himself, had concealed evidence of roof damage. Mitchell was in town to try one last time to get him to take the house back and undo it all. He refused. So she stocked the fridge, dropped off a few towels and some dishes, then transferred the utilities to Tammy and gave her the keys. “I said, ‘I’m done,’” Mitchell recently explained. “I wrote Tammy a note saying she had a right to be there, and then I walked out the door.”

Tough times for job seekers - (money.cnn.com) The job market is showing signs of improvement, according to the latest economic reports. But for those out of work and pounding the pavement, there are few signs of a turnaround. After peaking in January, the pace of job losses has slowed dramatically, according to the Labor Department. Employerscut 216,000 jobs from their payrolls in August -- 22% fewer than the previous month. But even though job cuts have abated, hiring is close to a standstill, as most employers are still hesitant to add workers. The number of new hires remains near an all-time low, according to the Bureau of Labor Statistics. And job hunters aren't seeing much improvement either. "I've applied to over 80 positions and only gotten one callback from a company that 'wasn't hiring but was interested in me for future openings,'" said Shalon Brown, 27, who was laid off in December and has struggled to find something else in her field of landscape architecture. "I'd be willing to take any job that pays at least $30,000 and offers health insurance right now." But that might be harder than it sounds. One problem is that companies are trending away from filling full-time positions with benefits. For those businesses in need of extra help, employers are much more likely to bring on temporary workers to meet demand, explained Janette Marx, senior vice president of Ajilon Professional Staffing. "They are not quite sure of hiring full time yet," Marx said. In fact, almost 70% of U.S. companies surveyed expect no change in their fourth-quarter hiring plans, according to a recent study by employment services company Manpower Inc. Jo Prabhu, who runs placement firm 1-800-Jobquest in Long Beach, Calif., has no intention of bringing on any full-time workers in the year ahead. "We will be taking advantage of the new and acceptable methods of hiring, and will only be hiring independent consultants or contractors for 2010 on an as-needed basis." Prabhu also says the other companies she works with share her sentiment. "The old standards of hiring and retention have given way to the new concept of jobbing and outsourcing, and employers are seeking a greater percentage of 'at will' services without having to finance and support medical, retirement and other benefits." And that leaves many unemployed workers out of luck and still out of a job. Rebecca Natale, 42, is hopeful there will be more employment opportunities going forward, but is realistic that her situation might not improve until next year. Natale left her position as a human resources manager in May planning to start her own business or find another position in her industry. In the last four months, she says she has only received calls for commission-based sales jobs. "I applied for summer help to stay busy and nothing," she said. "I figure it will be the same response if I apply for upcoming seasonal positions." Natale views her job prospects as being "pretty nonexistent in my field until the middle to the end of next year." Some experts agree with that outlook. Many recruiters expect hiring to pick up again in 2010, albeit at a very slow pace. "I do believe we will start to create jobs again," although likely "after the first of the year," said Bob Damon, the president of North America for recruiting firm Korn/Ferry. But Shalon Brown is less optimistic. Even with lowered expectations, "I've got no job prospects," she said. "I'm expecting a long, cold winter ahead."

58 and no retirement savings - (money.cnn.com) Question: I'm 58 and have never opened any kind of a retirement account. Is it too late for me to do so now, or should I hope that Social Security will be there when I retire in a few years? --Vincent I., Denver, Colorado. Answer: Although the Social Security system definitely faces challenges, the program isn't just going to disappear. At some point, the government will have to shore up the program, which could include moves such as increasing payroll taxes, raising the retirement age for younger workers and dialing back benefits in some way. But, while there are no guarantees, I think the chances are remote that people in or nearing retirement will see a significant cut in benefits. So I don't think the question you should be focusing on is whether Social Security will be there, but how satisfying retirement will be if Social Security is your only source of income. You can judge that for yourself by going to Social Security's Retirement Estimator, which will show you the monthly benefit you're now projected to receive based on your work history. When you see that figure, I think you'll agree that while you might be able to live on Social Security alone, you won't want to unless you don't mind a real no-frills lifestyle. Which brings me back to the first part of your question: Is it too late to open a retirement account now? My answer is emphatically no. You're always better off doing something than doing nothing. That doesn't mean you can put yourself in the same position you would have been in had you saved and planned for retirement your entire career. That's not realistic.

US Foreclosure Filings Top 300,000 for 6th Straight Month - (www.bloomberg.com) Foreclosure filings in the U.S. exceeded 300,000 for the sixth straight month as job losses that boosted the unemployment rate to a 26-year high left many homeowners unable to keep up with their mortgage payments. A total of 358,471 properties received a default or auction notice or were seized last month, according to data provider RealtyTrac Inc. That’s up 18 percent from a year earlier, and down 0.5 percent from July, the Irvine, California-based company said in a statement. One in 357 households received a filing. Foreclosures rose from a year earlier as companies cut payrolls by 216,000 workers last month, boosting the U.S. jobless rate to 9.7 percent, according to Labor Department data released last week. The rise in unemployment is having a bigger impact than an effort by the U.S. government and banks to modify mortgages and prevent foreclosures, said Morris A. Davis, an assistant real-estate professor at the Wisconsin School of Business. “The foreclosure numbers are largely unemployment related,” Davis, a former Federal Reserve Board economist, said in an interview. “As long as 15 million Americans are unemployed, record foreclosures will continue.” Foreclosures aren’t abating even as demand is returning to the U.S. housing market after a three-year slump. The number of contracts to buy previously owned homes rose more than forecast in July and increased for a record sixth consecutive month, while mortgage buyer Freddie Mac said the average price rose 1.7 percent in the second quarter. Nevada Leads: Nevada had the highest foreclosure rate in August, with one in every 62 households receiving a filing, even with an 8.4 percent decrease in foreclosures from July, RealtyTrac said. August filings were up 53 percent from a year earlier, with 17,902 Nevada properties receiving a foreclosure filing.

Foreclosures remain at near-record pace in CA central valley - (www.centralvalleybusinesstimes.com) Foreclosure filings -- default notices, scheduled auctions and bank repossessions -- were reported on 358,471 U.S. properties in August, a decrease of less than 1 percent from July but still an increase of nearly 18 percent from August 2008, according to a report Thursday from RealtyTrac Inc., an Irvine-based foreclosure information company. The report also shows one in every 357 U.S. housing units received a foreclosure filing in August. Areas of the Central Valley had foreclosure rates far worse. Stockton posted the nation's second highest metro foreclosure rate -- one in every 74 housing units received a foreclosure filing -- followed by Merced at No. 3 (one in 78); Modesto at No. 6 (one in 84); and Bakersfield at No. 10 (one in 94). Six California metro areas documented foreclosure rates among the top 10 in August. The others were Riverside-San Bernardino-Ontario at No. 4 (one in 80) and Vallejo-Fairfield at No. 5 (one in 82). The nation’s highest foreclosure pace was in Las Vegas, Nev. Foreclosure filings were reported on 14,940 Las Vegas properties in August, one in every 53 housing units -- more than 6.7 times the national average and the highest foreclosure rate among metro areas with a population of at least 200,000. The city's foreclosure activity was down 11 percent from the previous month but still up 48 percent from August 2008. With one in every 86 housing units receiving a foreclosure filing in August, the Reno-Sparks metro area joined Las Vegas in the top 10, posting the seventh highest metro foreclosure rate. Two Florida metro areas documented foreclosure rates among the top 10: Orlando-Kissimmee at No. 8 with one in every 87 housing units receiving a foreclosure filing, and Cape Coral-Fort Myers at No. 9 with one in every 88 housing units receiving a foreclosure filing. "The August report demonstrates that there is still an ample supply of properties filling the foreclosure pipeline even while the outflow of bank-owned REO properties onto the resale market is being more carefully regulated," says James Saccacio, chief executive officer of RealtyTrac. "After hitting a high for the year in July, REOs dropped 13 percent in August, but we also saw a record high number of properties either entering default or being scheduled for a public foreclosure auction for the first time."

OTHER STORIES:

Obama's other fight: Fixing bank rules - (money.cnn.com)

China pushes back after U.S. sanction - (money.cnn.com)

When Wall Street nearly collapsed - (money.cnn.com)

Bailouts: The big windup - (money.cnn.com)

Foul play isn't suspected in O.C. financier's death - (www.nytimes.com) Foul play is not suspected in the death of indicted financier Danny Pang of Newport Beach, the Orange County coroner's office said Sunday.

Will U.S. learn its healthcare reform lesson from California? - (www.nytimes.com) The difference between a government program that works and one that fails spectacularly can be razor thin. A few words here, a loophole there, and you...

Grupo Televisa CEO Emilio Azcarraga Jean has a life like a telenovela - (www.nytimes.com) Practically since the day he was born, in 1968, Emilio Azcarraga Jean has owned one of the most famous names in Mexico.

224-story skyscraper would be high point for architect - (www.nytimes.com) A Santa Monica architect known for his high-rise designs is working on what may be the ultimate "spec" building -- a 224-story skyscraper with green...

Obama tries to coax the middle class into saving for college - (www.nytimes.com) Dismal college savings statistics among middle-income families have the Obama administration pushing for a series of changes to so-called 529 plans,...

U.S. sweetens tax credits for higher education expenses - (www.nytimes.com) Parents: Save those education receipts.

25 Best Places to Retire - (money.cnn.com)

Mortgage problems are walloping Americans' credit scores - (www.nytimes.com)

8 couples, 8 great retirement spots - (money.cnn.com)

Insiders sell like there's no tomorrow - (money.cnn.com)

What to do with $1 million - (money.cnn.com)

How we're saving big bucks - (money.cnn.com)