KeNo's Housing and Economic Portal: Saturday January 16 Housing and Economic stories

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TOP STORIES:

Man pleads guilty to selling house already in foreclosure - (www.wenatcheeworld.com) A Wenatchee man pleaded guilty to third-degree theft for taking more than $22,000 in payments from a couple for a home he had no title to. Felix Hernandez Martinez, 25, originally charged with first-degree theft in January 2008 in Douglas County Superior Court, pleaded guilty Dec. 21 to the amended charge and was sentenced to 365 days imprisonment with 362 days suspended. Hernandez was also sentenced to two years probation and must pay $1,300 in fines and fees. A restitution hearing has been set for Jan. 25, to determine how much Hernandez must pay to the East Wenatchee couple. The husband and wife in July 2007 signed a purchasing agreement with Hernandez for an East Wenatchee home for $180,000, according to an investigation report, compiled by Detective Dan Dieringer with the East Wenatchee Police Department. Dieringer wrote that the couple gave Hernandez $700 in earnest money, and between July and December of that year, had paid Hernandez $22,500 total in cash payments. The report said no documents from the sale were filed or recorded with the court or the auditor’s office.

Beware the Taxpayer Bailout of Underfunded Teamsters Pension Funds - (Mish at globaleconomicanalysis.blogspot.com) Troubled trucker YRC to seek $1 billion pension bailout. Struggling No. 1 U.S. trucking company YRC Worldwide Inc plans to seek $1 billion in bailout money from the Troubled Asset Relief Program to help it cover pension obligations, a move analysts say is unlikely to succeed as the company has no financial charter. YRC, which has been shedding jobs and closing facilities to cut costs in the face of the U.S. recession, faces an estimated $2 billion in pension obligations over the next four years. YRC will submit an application to the Treasury as early as Friday, a move that was first reported by the Wall Street Journal. Pension Fund Problems: Company Chief Executive Bill Zollars complained in the WSJ article that the Central States multi-employer pension fund that it pays into is unfair because YRC ends up paying for truckers who never worked for the company. Multi-employer pension funds were set up decades ago prior to the deregulation of the trucking industry to ensure that workers' pensions were protected even if they changed companies. Over the past 20 years, thousands of trucking companies have collapsed, leaving their pension obligations to be funded by those left in the fund. The Central States fund has been in trouble for years as a result of this problem. The world's largest package delivery company United Parcel Service Inc (UPS), which had more than 40,000 employees in Central States, paid a $6.1 billion fee to withdraw from the fund in 2007 and have those employees covered by a single-employer fund jointly managed by UPS and the Teamsters union. UPS' move was widely regarded by analysts as a smart one, given the poor condition of the Central States fund. YRC Terminates Pension Contributions: Flashback Jul 21, 2009: Central States Pension Fund Drops YRC Worldwide. Trustees 'terminate' carrier's participation; Move won't affect accrued benefits. The largest Teamsters pension fund dropped YRC Worldwide, the largest unionized trucking company, as its Teamster employees prepare to vote on whether to accept a 15 percent wage cut and a suspension of company pension contributions. The Central States Southeast and Southwest Areas Pension Fund notified the principal officers of Teamster union locals last week that its trustees had decided to “terminate the participation” of YRC and USF Holland in the fund, effective July 9.

Candid remarks by developers - (www.urbansurvival.com) Every so often, a group of major real estate developers get together for a conference where folks try to look ahead. In order to protect my source, I won’t tell you which real estate/developer conference it was, but I’ve been given permission by my source to post this high-level view of what the people who put up real dough to develop properties are seeing. This is the info that I talked about with Jeff Rense on his radio program last night — Read it and weep: “This week I attended the [serious players] fall conference. [serious players] is the top real estate industry group in the world. All the most senior people in the industry.

1. Not one expert was willing to predict what things will look like in 3 years other than they think it will be better.

2. One top economist said if you are a developer find another career for the next 3 years-there is nothing to do and it may be 5 years.

3. Recovery will be slow. Unemployment will not drop back to more normal levels until 2014. First they will bring back people on 4 day weeks to 5 days, then they will increase hours form the average 33 hours now, then part timers will become more full time, then they will start to hire.

4. Real estate values are down generally 40% and there is a huge need for value reset to occur.

5. Nobody knows what debt will look like when it returns other than it will be far more conservative. Nobody knows what securitization will be when it does return.

6. – 26. Read story for more predictions by developers.

TSA nominee misled Congress about accessing confidential records ... - (www.washingtonpost.com) The White House nominee to lead the Transportation Security Administration gave Congress misleading information about incidents in which he inappropriately accessed a federal database, possibly in violation of privacy laws, documents obtained by The Washington Post show. The disclosure comes as pressure builds from Democrats on Capitol Hill for quick January confirmation of Erroll Southers, whose nomination has been held up by GOP opponents. In the aftermath of an attempted airline bombing on Christmas Day, calls have intensified for lawmakers to install permanent leadership at the TSA, a critical agency in enforcing airline security. Southers, a former FBI agent, has described inconsistencies in his accounts to Congress as "inadvertent" and the result of poor memory of an incident that dates back 20 years. He said in a Nov. 20 letter to key senators obtained by The Post that he had accepted full responsibility long ago for a "grave error in judgment" in accessing confidential criminal records about his then-estranged wife's new boyfriend. … Southers's admission that he was involved in a questionable use of law enforcement background data has been a source of concern among civillibertarians, who believe the TSA performs a delicate balancing act in tapping into passenger information to find terrorists while also protecting citizens' privacy. Southers first described the episode in his October affidavit, telling the Senate panel that two decades ago he asked a San Diego Police Department employee to access confidential criminal records about the boyfriend. Southers said he had been censured by superiors at the FBI. He described the incident as isolated and expressed regrets about it.

Ben Bernanke Looks In Mirror, Sees Barney Frank - (Mish at globaleconomicanalysis.blogspot.com) - Fed chairman Ben Bernanke is back at it again, pointing the crisis finger at everyone but himself. To be sure there are plenty of congressional clowns deserving of a Babe Ruth style "big point", but the biggest point belongs straight at himself. Please consider Bernanke Blames Weak Regulation for Financial Crisis. Regulatory failure, not lax monetary policy, was responsible for the housing bubble and subsequent financial crisis of the last decade, Ben S. Bernanke, the Federal Reserve chairman, said in a speech on Sunday. “Stronger regulation and supervision aimed at problems with underwriting practices and lenders’ risk management would have been a more effective and surgical approach to constraining the housing bubble than a general increase in interest rates,” Mr. Bernanke, whose nomination for a second term awaits Senate confirmation, said in remarks to the American Economic Association. Technical models based on historical trends in United States housing prices and monetary policy show that home prices rose much faster than interest rates alone would have predicted, Mr. Bernanke said. He also argued that trends in other countries demonstrated a “quite weak” connection between housing price appreciation and monetary policy. Monetary Policy and the Housing Bubble: If you want to wade through 36 pages of self-serving claptrap, please consider Monetary Policy and the Housing Bubble by Ben Bernanke. U.S. Monetary Policy, 2002-2006: The aggressive monetary policy response in 2002 and 2003 was motivated by two principal factors. First, although the recession technically ended in late 2001, the recovery remained quite weak and "jobless" into the latter part of 2003. Real gross domestic product (GDP), which normally grows above trend in the early stages of an economic expansion, rose at an average pace just above 2 percent in 2002 and the first half of 2003, a rate insufficient to halt continued increases in the unemployment rate, which peaked above 6 percent in the first half of 2003. Second, the FOMC's policy response also reflected concerns about a possible unwelcome decline in inflation. Taking note of the painful experience of Japan, policymakers worried that the United States might sink into deflation and that, as one consequence, the FOMC's target interest rate might hit its zero lower bound, limiting the scope for further monetary accommodation. FOMC decisions during this period were informed by a strong consensus among researchers that, when faced with the risk of hitting the zero lower bound, policymakers should lower rates preemptively, thereby reducing the probability of ultimately being constrained by the lower bound on the policy interest rate.

Garfield County, CO foreclosures to top 400 this year - (www.aspendailynews.com) GLENWOOD SPRINGS — The region’s souring real estate market and sagging economy combined to send foreclosures in Garfield County skyrocketing to more than 400 for the year — as many as the previous four years combined. It’s the highest foreclosure rate in at least the past 30 years, and 64 percent higher than 1985, the last big spike, when foreclosures soared in the aftermath of the oil shale bust that rocked Garfield County. As bad as this year’s foreclosure rate was, though, next year could be as bad or worse. “Everybody I’ve talked to and my own opinion is, I don’t think we’re out of the woods,” said Public Trustee Bob Slade, who oversees foreclosures for the treasurer’s office. “I think we could have as many or even more [next year].”