Saturday February 6 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Forclosed Whistler ski resort to be auctioned during Vancouver Olympics - (olympics.thestar.com) Lenders have seized the assets of Intrawest ULC, including the Whistler ski resort that will be home to the Olympic downhill races next month. Intrawest said it will be “business as usual,” despite the possibility the high-end B.C. resort will be on the auction block even as Olympic athletes grace its slopes. And Olympic organizers said they’re confident that the Games will go on. Dan Doyle, executive vice-president of construction for the organizing committee, known as VANOC, said the venues in Whistler are ready. “It doesn’t make very good business sense for people to put them out of business at the time of the year when they’re making their most earnings,” Doyle told reporters in Vancouver following the local organizing committee board’s final meeting before the Games. Doyle said bankruptcy doesn’t happen overnight. “It’s a long process, it’s a process that takes months. Given all of that, we’re very confident that the Games will go on at those two venues in Whistler, and they’ll go on with the co-operation of the people that are running the mountain,” he said, noting that Games organizers have sought legal advice on the situation. A public notice has been posted in newspapers by the company’s lenders saying that an auction to sell the assets will be held on Feb. 19, right in the midst of the Olympics, which begin Feb. 12. Vancouver-based Intrawest, which is owned by private equity firm Fortress Investment Group LLC, reportedly missed payments last month that were due on a $1.4 billion (U.S.) loan.

Escalating Pension Crisis Will Bankrupt San Diego – (Mish at globaleconomicanalysis.blogspot.com) he pension crisis is affecting budgets in city after city and in ever increasing amounts. Please consider the latest in San Diego: Millions needed for city pensions.

Just when San Diego city officials thought they had closed a $179 million budget gap, another has opened up because more money will be needed to pay for employee pensions. The city will have to contribute $231.7 million to the retirement fund in the fiscal year that starts in July. That’s up $19 million from the forecast used when the last budget gap was closed in December. The increase is a result of the fund’s investment losses and more employees signing up for pension benefits because of fears they will be cut. The higher payment most likely will be funded by cutting more services in the next few months, as opposed to the 18-month balanced budget promised when a deal was reached to reduce library hours, lay off 200 workers and end public-safety programs such as horse-mounted patrols.

Obama Wades Deeper Into Banking Debate - (www.nytimes.com) President Obama on Tuesday stepped into the middle of a fierce lobbying battle by reinforcing his support for an independent agency to protect consumers against lending abuses that contributed to the financial crisis. The president’s move also signaled a tougher line and a more direct role as Congress weighs an overhaul of banking regulation. The latest on President Obama, his administration and other news from Washington and around the nation. The financial industry and Congressional Republicans have singled out the administration’s proposed consumer agency in particular, hoping to greatly weaken if not kill it. With liberal Democrats and Web commentators fighting just as hard for a strong independent office, the issue is becoming the central flashpoint in the debate over regulation. Mr. Obama personally weighed in on Tuesday in a one-on-one meeting at the White House with Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Senate Banking Committee. Reports last week suggested that Mr. Dodd might drop the consumer agency from the emerging Senate bill in order to attract support from Republicans and some centrist Democrats on his committee, but Democratic aides disputed that.

Housing market's recovery to be slow, builder convention told - (www.signonsandiego.com) The nation’s economic recovery is under way, but the housing market still faces a long road back to normal, three industry economists said yesterday at the annual convention of the National Association of Home Builders. “Builders have been through tough times,” said David Crowe, the association’s chief economist. “I think the recession was over in the third quarter (of 2009). It won’t be a strong recovery, but it will be a recovery. It’s still fragile. “Housing prices have stopped declining nationally. The stage is set for the consumer to return.” Also helping the market will be government tax credits for first-time and move-up home buyers. Crowe appeared on a panel with David Berson, an economist with the PMI Group in Walnut Creek, and Frank Nothaft, chief economist for Freddie Mac. They spoke as the International Builders Show, the industry’s largest trade show, opened at the Las Vegas Convention Center to an expected crowd of 60,000 home builders and suppliers.

Failing Banks Offer Good CD Rates And FDIC Guarantee - (www.financemymoney.com) There is a fascinating phenomenon that occurs in the banking system when capital is running short. At least, this was the case before the government decided to be theultimate financial backup for the entire banking structure of our country. Places like Washington Mutual or Countrywide were offering stellar rates on various savings vehicles only days before their demise. How can this be? How can it be that a bank with a horrible balance sheet flooded with overpriced assets that have lost most of their value be offering above market interest rates? Well for one, banks are allowed to chase public capital and realize that the public will put money into a bank so long as the FDIC backs up the bank. As a saver, what do you care if the bank is insolvent so long as you don’t put more money over the insured deposit maximum which currently stands at $250,000 per account?

Foreclosures at 39% in Sedona, AZ - (www.redrocknews.com) Real estate agents in Sedona are hoping the housing market turns around soon, as more and more people are seeing their homes go into foreclosure. In 2009, of the 187 home sales, 73 were in foreclosure, according to reports from the Sedona Verde Valley Association of Realtors. Carolyn Huggins, a real estate agent for well over a decade, said the 39 percent foreclosure rate is the worst she has seen in her career. She said the market is definitely favorable for buyers. (Ken note: Another clueless realtor. What happens if the buyer gets in now and prices go down another 20-30%? Then it isn’t favorable for buyers). Figures show there was not a one or two month spike to skew the numbers and instead they stayed pretty steady from month to month, according to Huggins.

Obama to Nationalize Student Lending with Pending Budget Bill - (www.cnsnews.com) A bill currently before the Senate would empower the Obama administration to nationalize the student lending industry, eliminating the federally subsidized private loans millions of university students rely on to finance their educations. The Student Aid and Fiscal Responsibility Act – currently being considered by the Senate Health, Education, Labor, and Pensions (HELP) Committee – would eliminate the Federal Family Education Loan (FFEL) program. FFEL loans are federally subsidized and make up approximately 80 percent of the student lending industry. According to the Department of Education, 14.3 million of the 17.5 million student loans were federally subsidized for the 2009-2010 fiscal year. Under Obama’s plan, the government would consume the entirety of this industry – a total of $103 billion in 2009-2010. Under the current system, the federal government subsidizes private financial institutions in order to entice those institutions to provide low-interest loans to students.

OTHER STORIES:

Pittsburgh Prevailing Wage Bill Gains Support - (www.post-gazette.com)

Pittsburgh council debates prevailing, living wage bills - (www.post-gazette.com)

Fund manager sees another crash in house prices - (www.marketwatch.com)

Cut all public workers' pay, benefits - (www.ino.com)

Strength of Canadian housing market questioned - (www.albertalocalnews.com)

More bank failures expected in 2010 - (www.therealdeal.com)

Joseph Stiglitz: 'We're More Strict With Our Poor Than With Our Banks' - (www.huffingtonpost.com)

Poll Results from MA: Voters Think Obama Sides With Banks - (www.thepeoplesvoice.org)

Housing Starts, Vacant Units and the Unemployment Rate - (www.calculatedriskblog.com)

Market long way from recovery, says Portland Cement Assoc. - (www.axcessnews.com)

Economics focus: Digging out of debt - (www.economist.com)

China Chokes Credit while Euro plummets - (www.forexblog.oanda.com)

Two More Reasons to Sell Treasury Bonds - (www.dailyreckoning.com.au)

F.H.A. to Raise Standards for Mortgage Insurance - (www.nytimes.com)

Property prices in Nairobi are soaring, from pirate money - (www.progress.org)