KeNo's Housing and Economic Portal: Sunday March 14 Housing and Economic stories

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TOP STORIES:

Tracy Residents Now Have To Pay For 911 Calls (911 is socialist anyway...) - (www.cbs13.com) Tracy residents will now have to pay every time they call 9-1-1 for a medical emergency. But there are a couple of options. Residents can pay a $48 voluntary fee for the year which allows them to call 9-1-1 as many times as necessary. Or, there's the option of not signing up for the annual fee. Instead, they will be charged $300 if they make a call for help. "A $300 fee and you don't even want to be thinking about that when somebody is in need of assistance," said Tracy resident Greg Bidlack. Residents will soon receive the form in the mail where they'll be able to make their selection. No date has been set for when the charges will go into effect.

Realtors Want Taxpayers To Guarantee Realtor Commissions Via Fannie, Freddie - (www.online.wsj.com) An influential real-estate trade group is calling for the government to convert Fannie Mae and Freddie Mac into federally owned nonprofit corporations that would largely leave the mortgage-finance giants intact. The proposal from the National Association of Realtors is likely to meet stiff political resistance because the companies have required a $111 billion bailout, and lawmakers are under pressure to demand sweeping changes. But the recommendations also underscore how difficult it will be for policy makers to dramatically reshape the two companies, which own or guarantee half of the nation's $11 trillion home loans and are playing a critical role in providing liquidity to the battered housing market. The Realtors plan, which has been circulated among policy makers but hasn't been publicly released, is the latest to call for the government to make explicit guarantees for certain mortgage-backed securities. That would replace the longstanding implied guarantee on the companies' debt that allowed them to borrow cheaply until some foreign investors lost confidence in that guarantee as losses mounted two years ago. The policy proposal adds to a growing consensus among some academics, investors and housing analysts that the federal government should continue to play a role in the U.S. mortgage market. So far, few have called for as large a government ownership role as the Realtors.The White House hasn't weighed in over the long-term plans for the companies, though senior officials have said they don't favor resurrecting that assumed debt guarantee. On Tuesday, Rep. Barney Frank (D., Mass.) postponed a hearing on the future of the housing-finance system that had been set for next week, citing a scheduling conflict. The hearing was to feature testimony from top administration officials.

FDIC Deposit Insurance Fund Plunges By $12.7B To NEGATIVE $20.9B - (www.zerohedge.com) From Dow Jones: The U.S. banking industry continued to struggle in the fourth quarter, as the number of banks on the brink of failure continued
to rise and the government's fund to protect deposits fell sharply into the red. The Federal Deposit Insurance Corp. said Tuesday that its deposit-insurance fund fell to $20.9 billion at the end of 2009, a $12.6 billion drop in the final three months of the year, as bank failures continued at a pace not seen since the savings and loan crisis. The fund's reserve ratio was -0.39% at the end of the quarter, the lowest on record for the combined bank and thrift fund. The deposit insurance fund is unlikely to soon see a respite from a decline in the number of failing banks: The FDIC said the number of banks on its "problem" list climbed to 702 at the end of 2009 from 552 at the end of September and 252 at the end of 2008. The number of banks on the list, which have combined assets of $402.8 billion, is the highest since June 1993. "The continued rise in loan losses and troubled assets points to further pressure on earnings," FDIC Chairman Sheila Bair said in a statement. "The growth in the numbers and assets of institutions on our 'Problem List' points to a likely rise in the number of failures." Industry indicators deteriorated nearly across the board. The FDIC said loan losses for U.S. banks climbed for the 12th straight quarter, while the total loan balances for U.S. banks continued to fall. The agency said the quarterly net charge-off rate and the total number of loans at least three months past due both were at the highest level ever recorded in the 26 years the data have been collected.

Debt Dynamite Dominoes: The Coming Financial Catastrophe - (www.globalresearch.ca) The people have been lulled into a false sense of safety under the ruse of a perceived “economic recovery.” Unfortunately, what the majority of people think does not make it so, especially when the people making the key decisions think and act to the contrary. The sovereign debt crises that have been unfolding in the past couple years and more recently in Greece, are canaries in the coal mine for the rest of Western “civilization.” The crisis threatens to spread to Spain, Portugal and Ireland; like dominoes, one country after another will collapse into a debt and currency crisis, all the way to America. In October 2008, the mainstream media and politicians of the Western world were warning of an impending depression if actions were not taken to quickly prevent this. The problem was that this crisis had been a long-time coming, and what’s worse, is that the actions governments took did not address any of the core, systemic issues and problems with the global economy; they merely set out to save the banking industry from collapse. To do this, governments around the world implemented massive “stimulus” and “bailout” packages, plunging their countries deeper into debt to save the banks from themselves, while charging it to people of the world. Then an uproar of stock market speculation followed, as money was pumped into the stocks, but not the real economy. This recovery has been nothing but a complete and utter illusion, and within the next two years, the illusion will likely come to a complete collapse. The governments gave the banks a blank check, charged it to the public, and now it’s time to pay; through drastic tax increases, social spending cuts, privatization of state industries and services, dismantling of any protective tariffs and trade regulations, and raising interest rates. The effect that this will have is to rapidly accelerate, both in the speed and volume, the unemployment rate, globally. The stock market would crash to record lows, where governments would be forced to freeze them altogether.

Spanish City Has Persistent Unemployment, Without Lingering Pain - (www.nytimes.com) The song explains a lot about the situation here in Cádiz, in southern Spain just north of Gibraltar. Joblessness hasclimbed to 19 percent in Spain, the highest in the euro zone, after the collapse of a housing bubble. But here in Cádiz, it is at a staggering 29 percent — and has been in double digits for decades. Elsewhere in Europe, such high numbers would lead to deep social unrest. Not so in Cádiz. Here, as across the Mediterranean, life remains puzzlingly comfortable behind the dramatic figures, thanks to a complex safety net in which the underground economy, family support and government subsidies ensure a relatively high quality of life. “This is a place where you can live well, even when unemployed,” said Pilar Castiñeira, 30, as she attended a performance of carnival skits in a downtown theater. “Life is four days long,” she added, recounting a Spanish saying. “On one you’re born, on another you die, and in the two in between, you have to have fun.”

Banker Hid Negative Appraisals - (www.seattle.fbi.gov) DAVID S. KENNELLY, 49, of Vancouver, Washington, pleaded guilty today in U.S. District Court in Tacoma to a Scheme to Conceal Material Facts in connection with an audit of the former Bank of Clark County in the fall of 2008. The bank was shut down by the Federal Deposit Insurance Corporation in January 2009. Under the terms of his plea agreement, KENNELLY is prohibited from working for a financial institution regulated by the FDIC or the Federal Credit Union Act, without written approval of the agency. When sentenced on May 14, 2010, by U.S. District Judge Robert J. Bryan KENNELLY faces up to five years in prison, three years of supervised release, and a $250,000 fine. According to the plea agreement filed today, KENNELLY attempted to hide property appraisal records that called into question the solvency of the Bank of Clark County. In 2004, KENNELLY was hired as the Vice President and Chief Lending Officer for the bank. During the course of 2008, KENNELLY and bank leaders became concerned that the bank had made loans to various development projects that now had a much lower appraised value. As a federal examination to check the soundness and safety of the bank approached, KENNELLY identified various appraisals that he did not want bank examiners to see. KENNELLY instructed staff to exclude the appraisals from both the bank’s loan files and its computerized record system. After receiving these instructions, one of the bank employees hid recently received appraisals under his desk. The appraisals revealed that the collateral the bank had taken for the loans had depreciated in value by millions of dollars.

OTHER STORIES:

Big banks own government, small banks die - (www.finance.yahoo.com)

Bank lending plummets by $587B in 2009 - (www.washingtonpost.com)

24% of residential properties upside down - (blogs.reuters.com)

Shiller Says Government Support Is Tied to Housing Recovery - (www.businessweek.com)

Broken Government: Middle class fed up? - (amfix.blogs.cnn.com)

Rehearsals for a Civil War - (www.kunstler.com)

Citigroup Says Feds Ordered 7 Day Restriction On Bank Withdrawals - Nationwide - (www.prisonplanet.com)

Harvard's Rogoff Sees Sovereign Defaults, Painful Austerity - (www.bloomberg.com)

Australia's mortgage debt blow-out - (www.brisbanetimes.com.au)

Kenya: As Nairobi Property Prices Rise, House Buyers Suffer Low Returns - (www.allafrica.com)

Mass Layoffs Summary - (www.bls.gov)