Tuesday June 1 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Fannie, Freddie aid cost unclear: regulator - (www.reuters.com) It is unclear how much U.S. taxpayers will eventually have to shell out to help mortgage finance giants Fannie Mae and Freddie Mac, the regulator of the two companies said on Tuesday. "The actual cost I do not know," Federal Housing Finance Agency Acting Director Edward DeMarco said in response to a question from Kentucky Republican Senator Jim Bunning at a Senate Finance Committee hearing. Fannie Mae said on Monday it would need an additional $8.4 billion from the U.S. Treasury. The two firms have now tapped about $145 billion from the government and the Obama administration has said it will backstop losses, no matter how high they go, through 2012. As a result, some Republican lawmakers are pushing for Fannie Mae and Freddie Mac to be included among firms subject to a tax aimed at financial institutions that received government money during the financial crisis. Congress approved $700 billion in late 2008 for the Troubled Asset Relief Program (TARP), often referred to as the bank bailout. Many financial institutions have repaid their TARP commitments, and losses from TARP are now estimated to be around $90 billion. The proposed fee is designed to get that money back.

Illinois Budget Woes Come to a Boil - (online.wsj.com) Illinois lawmakers were in disarray Thursday as they groped for stopgap measures to address a $13 billion deficit equaling nearly half of the state's general-fund revenue. The state faces one of the nation's worst budget crises, spilled over in part from the broader national economic crunch, and its current bond ratings lag only California's. But the confusion in the legislature indicates that serious steps to fix state finances won't be taken until after the November elections—if then. House Minority Leader Tom Cross said "We are lucky in that we still can borrow," noting that lawmakers responded to rating-agency concerns last month by reducing pension benefits and lifting the retirement age for new state employees to 67 from 60. Lawmakers also are weighing the idea of postponing pension payments for the first half of the fiscal year until January, Mr. Trotter said. Mr. Quinn presented a budget in March that would still leave the state with a $10.6 billion deficit. His plan projected a deficit of $4.7 billion for the coming fiscal year beginning July 1—which he planned to cover through borrowing—and a $5.9 billion deficit carried over from the current budget. The governor also proposed cutting expenses by $1.5 billion and raising the state income tax 1.5 percentage points, to 4.5% from 3%. He said the tax hike would be used to avert tens of thousands of teacher layoffs. A different proposal to raise income-tax rates passed the state Senate last year but has stalled in the House.

Unionizing Your Home - (www.illinoispolicy.org) Does Governor Quinn work for the citizens of Illinois or for the union bosses? With free legal aid from National Right to Work Foundation attorneys, a group of home-based personal care providers filed a class-action lawsuit in federal court against Governor Pat Quinn and union officials for their efforts to force Illinois personal care providers under unwanted union boss control. The National Right to Work Foundation press release reads: The additional 4,500 home-care providers who are not yet under union control rejected union membership by a two-to-one margin in a mail-in vote. However, per Quinn’s executive order, the home-care providers may again be subject to out-of-state SEIU and American Federation of State, County, and Municipal Employees (AFSCME) union organizers making “home visits” attempting to organize the home-care providers through coercive “card check” unionization tactics. I spoke to Pam Harris (listen to that interview here), one of the home-care providers who filed the suit. She said, "The election should have been enough. I was told that the governor did not see any reason to withdraw or rescind the executive order." Harris was concerned before the workers voted that no one was responsible for informing the voters of their rights nor did the material informing them of the election tell the home health care workers that one option was to vote for no representation at all. She says it appeared that they had only to choose which union they wanted. "Now if I were working in a factory, there would be posters and meetings. There is nothing like that because we all work in individual homes in Illinois," Harris said. She took it upon herself to contact all of the homes with a two page flyer. She was also adamant that she contacted the National Right to Work Foundation and they assist, but do not lead, this effort. Harris claims that it would cost $140,000 annually to institutionalize her son, but that through a Medicaid program she gets $25,000 to look after him at home. Out of that she says she pays for his therapies and developmental training. The teacher's union, among other groups, is also against the withdrawal of the governor’s executive order. She wants the order rescinded and does not see that as an anti-union measure, but said of Quinn, “I am not going to see this man on my television saying, ‘Early to bed, early to rise, work like hell and organize.’”

Contractor wants to foreclose on PH Towers Westgate; developer disputes claims - (www.lasvegassun.com) The developer of the new PH Towers Westgate timeshare and hotel development in Las Vegas on Tuesday disputed allegations it owes the general contractor $19.3 million for construction costs — and said it’s the builder that owes the developer millions of dollars. Tutor-Saliba Corp. filed a foreclosure lawsuit in Clark County District Court on Monday against Westgate Planet Hollywood Las Vegas LLC, charging $19.3 million is due under a 2007 contract valued at about $495 million for the 52-story, 1,200-room development linked to the Planet Hollywood resort and Miracle Mile Shops mall. The lawsuit says Tutor-Saliba on April 8 filed a lien against the property for the $19.3 million, that the lien was served upon Westgate and that Tutor-Saliba is now entitled to foreclose on the project and that its claim is superior to claims of lenders against the project. Clark County Recorder Office records show the Tutor-Saliba lien is one of at least five active liens filed against the project since November 2009.

Morgan Stanley’s Gorman Says No Substance to CDO Allegations - (www.bloomberg.com) Morgan Stanley Chief Executive Officer James Gorman denied allegations the U.S. bank misled investors about mortgage derivatives it sold them. The firm is being probed by U.S. prosecutors over whether the bank misled clients when it sold them collateralized debt obligations as its own traders bet that the value of the securities would drop, the Wall Street Journal reported today. The New York-based firm hasn’t been contacted by the Justice Department, Gorman told reporters in Tokyo today. Wall Street firms are facing unprecedented scrutiny from lawmakers and prosecutors over whether they improperly sold CDOs linked to the subprime mortgages that caused the credit crisis. Goldman Sachs Group Inc. is fighting a lawsuit from the U.S. Securities and Exchange Commission, which alleges the firm misled investors about a mortgage-linked security in 2007.

U.S. Probes Morgan Stanley - (online.wsj.com) Federal prosecutors are investigating whether Morgan Stanley misled investors about mortgage-derivatives deals it helped design and sometimes bet against, people familiar with the matter say, in a step that intensifies Washington's scrutiny of Wall Street in the wake of the financial crisis. Morgan Stanley arranged and marketed to investors pools of bond-related investments called "collateralized debt obligations," or CDOs, and its trading desk at times placed bets that their value would fall, traders say. Investigators are examining, among other things, whether Morgan Stanley made proper representations about its roles.

Schwarzenegger Preps ‘Terrible Cuts’ to Close Deficit - (www.bloomberg.com) California Governor Arnold Schwarzenegger will seek “terrible cuts” to eliminate an $18.6 billion budget deficit facing the most-populous U.S. state through June 2011, his spokesman said. Schwarzenegger, 62, who will introduce his revised budget plans on May 14, has said he won’t seek tax increases to bolster California’s finances. The Republican’s forecast for the budget gap may rise after revenue fell short of his targets last month. “We can’t get through this deficit without very terrible cuts,” Schwarzenegger spokesman Aaron McLear told reporters in Sacramento. “We don’t believe that raising taxes right now is the right thing to do.” California’s revenue in April, when income-tax payments are due, trailed the governor’s estimates by $3.6 billion, or 26 percent. The gap wiped out gains from the previous four months, leaving collections $1.3 billion behind projections for the budget year that ends in June. Schwarzenegger’s newest plan will revise the proposals introduced in January to account for the tax-collection shortages. In January, the governor said California may have to eliminate entire welfare programs, including the main one that provides cash and job assistance to families below the poverty line, without an influx of cash from the federal government.

Governments up the stakes in their fight with markets - (www.ft.com) Governments are playing double or quits in their game with financial markets. The package they announced last weekend is dramatic. But the question is whether it is more than a temporary solution. The answer is: no. As initially designed, the eurozone has failed. It will succeed only if radically reformed. What is the plan ? First, European governments have committed €500bn (€440bn in loan guarantees to eurozone members in difficulties, and a €60bn increase in a balance of payments facility). Second, the International Monetary Fund will, it appears, put up an additional €250bn ($320bn, £215bn). Third, the European Central Bank has, to the chagrin of Axel Weber, president of the Bundesbank, decided to purchase the bonds of members under attack. Finally, the US Federal Reserve has reopened swap lines, to provide foreign banks with access to dollar funding. This is a panic-driven response to market panic. It reminds us of the autumn of 2008. Will the plan work? On the assumption that it is ratified, the answer should be yes, as markets concluded (see chart). It greatly increases the cost of betting against the debt of weak governments. The public debt of the eurozone is slightly lower than that of the US, relative to gross domestic product. If the creditworthy governments decide to support the less creditworthy ones, they can do so, for now.

OTHER STORIES:

Hong Kong Stocks Fall as China Prices Prompt Tightening Concern - (www.bloomberg.com)

China analyst sees beginnings of unfolding credit bust - (www.marketatch.com)

Marc Faber on Bloomberg: China's Economy May Crash in Next 12 Months - (www.youtube.com)

Gold futures top $1,235 an ounce - (www.marketatch.com)

European Stocks Rise; Maersk, ING Gain After Reporting Earnings - (www.bloomberg.com)

European Debt Woes Punish Corporate Borrowers: Credit Markets - (www.bloomberg.com)

Gensler Lays Out Timeline for Wild Wall St. Trading - (www.nytimes.com)

Argentina warns Greek bail-out will fail - (www.ft.com)

Last week's stock plunge largely caused by big Wall Street firms, SEC chief says - (www.washingtonpost.com)

Germany, France May Hurt AAA Ratings in ‘Ponzi Game’ - (www.bloomberg.com)

FDIC Board Moves Forward Securitizations, Bank ‘Funeral Plans’ - (www.bloomberg.com)

Strauss-Kahn’s Greek Aid Plan Is Mission ‘Improbable’ for IMF - (www.bloomberg.com)

Cameron Seeks U.K. Coalition With Liberal Democrats - (www.bloomberg.com)

China’s Bubble Risk Adds Pressure to Tighten Policy - (www.bloomberg.com)

I.M.F. Plays Deal Maker in Europe - (www.nytimes.com)

In Greek Bailout, Russian Echoes - (www.nytimes.com)

ECB ‘Shock Troops’ Go It Alone as Investors Question EU Plan - (www.bloomberg.com)

Strauss-Kahn calls for eurozone reform - (www.ft.com)

India’s Industrial Production Grew 13.5% in March - (www.bloomberg.com)

IMF report predicts long, painful road ahead for Greece's recovery - (www.washingtonpost.com)

QE spectre looms as ECB tackles crisis - (www.ft.com)

Europe’s Economy Grows at Faster Pace Than Forecast - (www.bloomberg.com)

Budget office estimates health-care law could cost more than $1 trillion - (www.washingtonpost.com)

Senate votes to increase oversight of Federal Reserve - (www.washingtonpost.com)

Senate Backs Audit of Fed Bailout Role - (www.bloomberg.com)

Bernanke saw threat to U.S. banks from Europe: Shelby - (www.reuters.com)

Blackstone, THL Group’s Fidelity Bid May Exceed $15 Billion - (www.bloomberg.com)

4 Big Banks Score Perfect 61-Day Run - (www.nytimes.com)

Factbox: Chronology of Gulf of Mexico oil spill - (www.reuters.com)

Monday May 31 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Freddie Mac's Loss Is Ignored in Washington - (www.nytimes.com) IF you blinked, you might have missed the ugly first-quarter report last week from Freddie Mac, the mortgage finance giant that, along with its sister Fannie Mae, soldiers on as one of the financial world’s biggest wards of the state. Freddie — already propped up with $52 billion in taxpayer funds used to rescue the company from its own mistakes — recorded a loss of $6.7 billion and said it would require an additional $10.6 billion from taxpayers to shore up its financial position. The news caused nary a ripple in the placid Washington scene. Perhaps that’s because many lawmakers, especially those who once assured us that Fannie and Freddie would never cost taxpayers a dime, hope that their constituents don’t notice the burgeoning money pit these mortgage monsters represent. Some $130 billion in federal money had already been larded on both companies before Freddie’s latest request. But taxpayers should examine Freddie’s first-quarter numbers not only because the losses are our responsibility. Since they also include details on Freddie’s delinquent mortgages, the company’s sales of foreclosed properties and losses on those sales, the results provide a telling snapshot of the current state of the housing market.

Iceland arrests ex-chief of collapsed bank - (news.bbc.co.uk) The former chief executive of the collapsed Icelandic bank Kaupthing has been arrested, authorities say. Hreidar Mar Sigurdsson is suspected of embezzlement, trading irregularities, and other breaches of banking laws, the special prosecutor's office has said. It is the first high-profile arrest since the country's financial collapse in 2008. Mr Sigurdsson is being held by police until a bail hearing on Friday at the Reykjavik District Court. Kaupthing, once Iceland's biggest bank, collapsed under a mountain of debt at the height of the country's banking crisis. It was taken over by the government in October 2008, along with Iceland's two other biggest banks, Landsbanki and Glitnir. Prosecutor Olafur Hauksson said Mr Sigurdsson was suspected of falsifying documents, embezzlement, breach of trading laws, market manipulation, and other laws.

Fighting the Deficit By Selling Military Land - (www.nytimes.com) IN a previous column, I introduced the concept of a “paid lunch.”It’s better than a free lunch — which is often thought not to exist — because you’re paid to devour it. But what qualifies as a paid lunch for the government? The answer is a proposal that will stimulate the economy and create tangible benefits while — drum roll, please! — reducing the deficit. My initial suggestion was to sell off some of the radio spectrum now used for television broadcasts. And I’m happy to say that the Federal Communications Commission recently proposed a version of this idea to support its national broadband initiative. So here’s another paid-lunch idea. This one is intended to increase the efficiency of the military and its ability to serve the country — all while reducing military spending. Similar in spirit to the spectrum proposal, it boils down to a simple principle: To allocate resources efficiently, decision makers must make choices based on true market values. For the military, that means taking land prices into account in choosing sites for bases. It may be time to sell off some prime real estate.

High-end pain and suffering - (www.csbj.com) A Colorado Springs defense contractor whose firm lost a government job lost his million-dollar North End home to foreclosure last year. A real estate developer who borrowed on his Broadmoor home to finance new projects ended up in the same boat. And the owner of a Penhurst Park Estates home lost his income and his home in the gated community to the bank. All are among the latest casualties of the foreclosure crisis that has swept the country in the last couple of years. What’s different about them is the value of the homes they’ve lost. Million-dollar home owners have joined their less-affluent counterparts on the El Paso County foreclosure firing line. Their numbers are small but nonetheless dramatic, if only because of the rarity in which high-end homes ever fall into foreclosure. Homes priced at $500,000 and up in foreclosure account for 3.3 percent of the 5,450 foreclosure filings of 2009, said El Paso County Public Trustee Tom Mowle. Since January 2008, at least 100 homes with a loan balance of $700,000 or more have fallen into foreclosure.

Is Your Senator A Member Of The Bankster Party? - (www.dailybail.com) The one main benefit to the financial reform effort so far is that it helps further do away with the false paradigms of "left" or "right" and "Democrat" or "Republican" - fewer and fewer people are falling for those lies anymore. Try to get an ideological conservative to explain why Republicans love spending and so eagerly give welfare to banks. Try to get your local liberal to explain why it was a good idea to make backroom deals with abhorrent corporations and drill, baby, drill. Heck, even try to get a Tea Partier to explain choosing bailout-lover Sarah Palin to keynote their convention, especially when that movement once had at least some pre-astroturf roots in protesting government giveaways. What we have now is a group of politicians with shifting alliances on a case-by-case basis to the special interests who fund them. And currently, the most damaging one to our nation is the rise of the Bankster Party. Thankfully, we can now better identify its members.

OTHER STORIES:

Federal Reserve opens credit line to Europe - (finance.yahoo.com)

U.S. Debt Shock May Hit In 2018, Maybe As Soon As 2013: Moody's - (www.investors.com)

Goodbye, stimulus. Hello, state budget cuts - (money.cnn.com)

Europe prepares nuclear response to save monetary union - (www.telegraph.co.uk)

E.U. Details $957 Billion Rescue Package - (www.nytimes.com)

Expensive houses are falling prey to foreclosure - (www.usatoday.com)

Housing Prices Are Falling Again - (www.newobservations.net)

Shiller: "Renting is very attractive right now" - (www.capitalgainsandgames.com)

L.A. cities still in housing bubbles - (www.doctorhousingbubble.com)

4 biggest lies in real estate - (www.finance.yahoo.com)

White House Should Support Three Critical Banking Reforms - (www.robertreich.org)

Sen Shelby: Bank bill should include Fannie and Freddie - (www.news.ino.com)

Roubini Urges Goldman Sachs Breakup, Possible CDO Ban - (www.bloomberg.com)

Greenspan Arrogance Set Up U.S. for Big Fall - (www.bloomberg.com)

Why is the Federal Reserve so afraid of openness and accountability? - (www.slate.com)

What goes around comes around for banks - (www.finance.yahoo.com)

U.S. Market-fraud Enters New Era - (www.benzinga.com)

Harvard study of interest and housing finds mortgage deduction worse - (www.patrick.net)

The Subprime Rhyme with U.S. Debt Debacle - (www.prudentbear.com)

U.S. Debt Shock May Hit In 2018, Maybe As Soon As 2013 - (www.investors.com)

Sunday May 30 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Rep. Alan Grayson: You Own the Red Roof Inn, Thanks to the Fed; Why the Fed Does Not Want an Audit; America is Wall Street's Sucker - (Mish at globaleconomicanalysis.blogspot.com) Please play this must-see video by Alan Grayson explaining in great detail exactly why the Federal Reserve does not want to be audited, and thus why it absolutely needs to be audited. "Let's find out once and for all who owns the hotels, who owns the houses, and let's try and put this wild beast that creates money out of nothing and jams it in the pockets of special interests like Maiden Lane, like Bear Stearns, like JPMorgan, like all their friends. Let's put them under some degree of restraint before it all comes crashing down, on us." Please play the video!

What hit the market? - (money.cnn.com) New York Stock Exchange efforts to stabilize Thursday's stock market had the opposite effect, triggering a momentary market collapse. It wasn't a goof. It wasn't human error. Rather, it was an instant that displayed the hazard of new markets that handle billions of dollars' worth of trades each day. During yesterday's fast-moving midday market, NYSE specialists -- who oversee trading in individual stocks -- used their authority to call a momentary time out. The idea was to bring together buyers and sellers, and get their prices more in line with each other. It happened in five Dow stocks, including 3M (MMM, Fortune 500) and Procter & Gamble (PG, Fortune 500), according to the NYSE, and in a good number of the listed stocks. The NYSE did not have a tally of exactly how many. Years ago, when the NYSE dominated trading, such "time-outs" worked well at stabilizing stock prices. But today, the NYSE accounts for only about 25% of the volume in its listed stocks. Much of the rest comes from computerized markets run by private companies -- and some of those systems did not take a time out yesterday. So, as the NYSE paused for a minute or two at about 2:40 p.m. ET, the off-exchange computers kept searching to execute trades. They hit the best bids still standing, which in many cases were far below the prior price. And in some cases, the off-exchange computers found no bids at all. When that happens, market-making computers see a zero bid, then offer a penny higher to capture the trade and collect a commission -- hence the trades of just one cent for several stocks, including Accenture (ACN), Boston Beer (SAM), Exelon (EXC, Fortune 500). "Computers are looking for the best bids. The real best bids shut themselves down," one trader told CNNMoney.com. "You had penny prints. The bid was zero. The algorithms were designed to penny the bids," said another trader. The attempt to stabilize the market by timing out the human bidders made matters worse. The computers reacted by bidding $.01 when there were no other bids. This was not a planned conspiracy. Rather, it was a natural occurrence after all the sell stops and buy stops executed, the NYSE paused, and the only game in town was computers bidding against computers finding no bids.

EU's Barnier Calls For Tougher Sanctions On Market Speculators - (online.wsj.com) The European Union's internal market commissioner Sunday called for tougher sanctions on stock market speculators. Speaking on French radio Europe 1, Michel Barnier said sanctions against speculators will take various forms "including legal action, when there is proof." "We are ready to increase the sanctions against abnormal speculative action," he said. "Regulatory authorities need to be extremely severe with those that are launching rumors to manipulate stock prices in order to make money on the back of the suffering of the people," Barnier said. "I think that all inquiries made by the European authorities need to be rigorous, fast and coordinated...and the sanctions need to be exemplary," he said, adding that he will discuss the matter during his trip to New York and Washington, D.C., which starts Sunday. Tasked with improving regulation in the wake of the global financial crisis, Barnier is due to meet with senior U.S. regulators and U.S. financial industry executives, including Goldman Sachs Group Inc. (GS) chief Lloyd Blankfein and Kohlberg Kravis Roberts & Co. head Henry Kravis during his trip to the U.S. He is in charge of numerous legislative efforts that will have a profound impact on the industry. Among these are proposals to tighten regulation of derivatives, hedge funds and private-equity firms, bank leverage and credit-ratings agencies.

French President Nicolas Sarkozy Vows to "Confront Speculators Mercilessly" via Secret Plan he cannot Reveal - (Mish at globaleconomicanalysis.blogspot.com) Every time officials in Europe starts yapping about containing the European debt crisis, the market makes complete fools of them. The latest comments from French President Nicolas Sarkozy may take the cake. Please consider a few snips from the New York Times article Europeans Move to Head Off Spread of Debt Crisis: Leaders from the euro zone countries signed off on a support package for Greece on Friday night and pledged to take steps to stanch a spreading debt crisis before markets opened on Monday morning. During a late-night meeting at European Union headquarters, the leaders described the debt crisis as “systemic,” but President Nicolas Sarkozy of France insisted that the bloc could defend the euro by directly attacking speculators. Speaking at a news conference, Mr. Sarkozy vowed to “confront speculators mercilessly” and warned them that they would soon “know once and for all what lies in store for them.” The leaders said they would create a so-called European stabilization mechanism, but Mr. Sarkozy declined to give details of the plan on the basis that doing so could undermine its effectiveness.

San Diego Sues Its Pension System - (www.signonsandiego.com) The city of San Diego is suing its retirement system in a dispute regarding how much financial responsibility, if any, city workers should bear for a pension deficit topping $2 billion. If successful, the lawsuit could lead to city workers helping pay for the pension fund’s investment losses rather than the current practice of having taxpayers make up for any deficiencies. The potential taxpayer savings have been estimated at $40 million for the fiscal year that begins July 1. The lawsuit is based on City Attorney Jan Goldsmith’s interpretation of the city charter. He says that document, essentially a city constitution, states that the city and its employees shall contribute “substantially equal” amounts to pension obligations each year. Labor leaders strongly disagree with Goldsmith and say his theory runs contrary to how past city attorneys have interpreted the charter for decades. They fear that Goldsmith’s reading could result in lower-level workers being hit with an extra $4,000 bill for their pensions in years when investments slump. The City Council unanimously approved the lawsuit in closed session last week, and Goldsmith filed it Monday in Superior Court. He is asking Judge Joan Lewis to force the San Diego City Employees’ Retirement System to increase employee contribution rates so workers will pay what he says is their fair share of $80 million. That is the portion of this year’s $232 million city pension payment that Goldsmith estimates can be attributed to investment losses.

British taxpayers ordered to bail out euro - (www.telegraph.co.uk) Britain faces paying out billions of pounds under a European Union deal intended to prevent another financial crisis like the one in Greece. All 27 EU finance ministers have been summoned to Brussels on Sunday to sign up to a “European stabilisation mechanism. Britain will be unable to veto this as it will be put through under the “qualified majority voting” system. The deal, effectively to shore up the euro, was denounced as a “stitch-up” last night after it emerged Nicolas Sarkozy, the French President and Angela Merkel, the German Chancellor, had devised it behind closed doors and were attempting to push it through at a time when there is no clear government in Britain. It was declared a "done deal” by the 16 euro zone leaders who met in the early hours of Saturday morning. The decision was taken as David Cameron was locked in talks with the Liberal Democrats to try to form a government. Alistair Darling, the Chancellor, will fly to Brussels for the meeting after promising to keep George Osborne and Vince Cable, his Tory and Lib Dem counterparts, informed. EU finance ministers have been given the deadline of midnight tonight to agree the highly sensitive but rushed proposals to protect the single currency from financial turbulence from the Greek debt crisis. “When the markets reopen Monday we will have in place a mechanism to defend the euro,” said President Sarkozy yesterday. “This is a full-scale mobilisation.” Euro-zone leaders are attempting to get round objections from countries such as Britain by invoking Article 122 of the Lisbon Treaty, intended to enable a collective response to natural disasters. This does not need unanimous agreement.

Gamble Sours for Many Kentucky Horse Breeders - (www.nytimes.com) The for-sale signs on horse farms are as common as the bluegrass and the limestone fences here, and breeders have grown accustomed to sending horses through the auction ring and feeling fortunate when they fetch half of their asking price — or anything at all. The run-up to the Kentucky Derby is normally an exciting time for lawyers playing matchmaker between deep-pocketed clients and owners of can’t-miss stallion prospects. No more. “The rails are quiet,” said Mike Meuser, a Lexington lawyer who is usually in the forefront of such deals. “Collecting, or trying to collect money, is the bulk of my business these days.” The bankers have disappeared here as well. Lending to buy horses, the grease in the deal-making machine for many years, has dropped 60 percent to about $400 million from an estimated $1 billion in 2007, according to the Kentucky Thoroughbred Association. The decline is no small matter here in bluegrass country, where horses, all kinds, are responsible for 100,000 jobs and $4 billion in economic impact, according to association figures, and are the cornerstone of Kentucky’s $8.8 billion tourism trade. It is one reason the racing industry has lobbied for casinos in the state’s racetracks, a position that would have been unthinkable not too long ago. Kentucky is also the heart and soul of the nation’s thoroughbred industry, and when it hurts, so do farms across the country.

OTHER STORIES:

Goodbye, stimulus. Hello, state budget cuts - (money.cnn.com)

Europe prepares nuclear response to save monetary union - (www.telegraph.co.uk)

E.U. Details $957 Billion Rescue Package - (www.nytimes.com)

Ignoring the Elephant in the Bailout - (www.nytimes.com)

British taxpayers ordered to bail out euro - (www.telegraph.co.uk)

FDIC closes twice as many banks so far this year - (finance.yahoo.com)

Freddie Mac asks U.S. for $10 billion as losses pile up - (www.washingtonpost.com)

Republicans seek vote on future of Fannie, Freddie - (www.reuters.com)

President Obama's Cooper Union speech and the Goldman case - (www.nypress.com)

Cronyism and gambling of financial sector - (www.doctorhousingbubble.com)

Stock market trouble, Fed impotent - (www.patrick.net)

Greece bailout just the beginning? - (www.edition.cnn.com)

Land rezoned for 800,000 more houses than needed in Ireland - (www.independent.ie)

As England Votes, Economic Clouds Hover - (www.nytimes.com)

Bailed out homebuilders collect fat paychecks - (www.reuters.com)

Big mystery is economists' failure to see housing bubble - (www.interest.co.nz)

Was It Really a Bubble? - (www.Economist still in denial!) - (www.economix.blogs.nytimes.com)

ML-Implode Wins Reversal In Court Case; Re-Posts Censored Materials - (www.blog.ml-implode.com)

Prior restraint - (www.en.wikipedia.org)

Real Estate Rescue Scammers Tortured - (www.laweekly.com)

Va. launching portable housing for aging relatives - (www.washingtonpost.com)

Saturday May 29 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Congress members bet on fall in stocks - (finance.yahoo.com) Some members of Congress made risky bets with their own money that U.S. stocks or bonds would fall during the financial crisis, a Wall Street Journal analysis of congressional disclosures shows. Senators have criticized Goldman Sachs Group Inc. for profiting from the housing collapse. And Congress is considering legislation to curb Wall Street risk-taking, including the use of financial instruments known as derivatives and of leverage, or methods that amplify returns. According to The Journal's analysis of congressional disclosures, investment accounts of 13 members of Congress or their spouses show bearish bets made in 2008 via exchange-traded funds—portfolios that trade like stocks and mirror an index. These funds were leveraged; they used derivatives and other techniques to magnify the daily moves of the index they track. There's no evidence the legislators and their spouses used privileged information or failed to follow rules on disclosure. Congressional rules permit lawmakers and their families to invest in—or bet against—publicly held companies they oversee through committee assignments, as well as broader markets or indices. While some made money, others lost. Some of these legislators have publicly criticized practices such as short-selling, or betting on a security to decline. In February, Sen. Johnny Isakson (R., Ga.) argued on the Senate floor that "we don't need those speculating in the marketplace to take unfair advantage of the values of equities that are owned by Americans all over this country for the sake of making a buck on a short sale."

SEIU Head Sets Sights on New Sectors - (online.wsj.com) The newly elected head of the powerful Service Employees International Union pledged to focus more on private-sector organizing, including workers in banking and biotechnology, as well as on gubernatorial elections and mending ties with other unions. Mary Kay Henry, head of the union's health-care division, was elected by the SEIU's board Saturday to succeed Andy Stern, who retired last month after 14 years as president. In her first moves as president of the 1.8-million-member union, Ms. Henry said SEIU would create a $4 million "innovation fund" focused on finding new targets and ways of organizing in the private sector, and would set aside another $4 million for campaigns related to 2010 gubernatorial races in Arizona, California, Connecticut, Illinois, New York, Ohio and Florida, on top of $10 million proposed earlier. An SEIU spokeswoman said the union targeted states where it has an active and growing membership and that the SEIU and its locals spend roughly $250 million a year on organizing. The union said it has organized 22,000 workers since early April, including 5,500 home-care providers in Wisconsin. "We are renewing our union's incredible commitment to organizing," said Ms. Henry, 52 years old. "We are deeply committed to the low-wage economy and changing that." Business groups see more organizing campaigns in which the union uses pressure tactics to get employers to agree to unionization without holding secret ballot elections overseen by the National Labor Relations Board.

Massive bank fraud still unacknowledged - (www.dailybail.com) PBS Video. MASSIVE BANK FRAUD: Bill Moyers With William K. Black (VIDEO & Transcript). On Thursday, April 22, President Barack Obama made the case for increased regulation of the financial industry in a televised speech at Cooper Union in New York City. It was widely billed as President Obama's chance to harness the momentum behind reforming Wall Street and move forward the bills being considered in the House and Senate. Those measures face stiff opposition from most of the Republican Party and an army of lobbyists from Wall Street who have the ear of members of Congress on both sides of the aisle. William K. Black thinks President Obama didn't acknowledge a key component in the financial crisis that the bills before Congress won't address — fraud. A former regulator who helped crack down on massive fraud during the savings and loan crisis in the 1980s, Black tells Bill Moyers on THE JOURNAL that, despite evidence of fraud at the top banks, prosecutions seem far away. "If you go back to the savings and loan debacle, we got more than a thousand felony convictions of the elite. These are not, you know, tellers or something. We today have zero convictions, zero indictments, zero arrests of any of the elite, non-prime lenders that, through their fraud, drove this crisis."

Special Interests Continue Federal Lobbying Blitz, New Reports Indicate - (www.opensecrets.org) As President Barack Obama works with the Democratic Congress to advance his ambitious legislative priorities, lobbying efforts by special interest groups continue unabated. Lobbying reports for the first three months of 2010 were due to the Clerk of the House and Secretary of the Senate by midnight last night, and a preliminary Center for Responsive Politics analysis of these reports shows many major players continuing to shell out big dollars on their lobbying operations. The U.S. Chamber of Commerce, a leading opponent of the Democrats' plans for health care reform, Wall Street reform, climate change and unionization efforts, once again this quarter ranked as the top dog on K Street. According to a Center for Responsive Politics tally, the Chamber and its subsidiaries spent nearly $30.9 million on federal, state and grassroots lobbying activities. This is nearly double what it spent during the first quarter of 2009 -- although it represents about a 60 percent decrease over the whopping $79 million it spent during the fourth quarter of 2009. No other company, trade association, union or other group reported spending a figure in that ballpark, although the Chamber does voluntarily include state-level and grassroots lobbying data that most other companies and organizations do not. Other high-profile entities, such as the American Beverage Association and investment bank Goldman Sachs, have also increased their lobbying considerably this past quarter compared to the same time period last year. Here is an analysis of some of the companies and groups most active in high-profile legislative fights:

Overthrow a Sign of Tea-Party Clout - (online.wsj.com) Republican officials sought to unify the party after Saturday's tea-party driven ouster of three-term Utah Sen. Robert Bennett. Mr. Bennett became the year's first victim of the anti-incumbent fervor sweeping through the Republican Party when he lost his bid for his party's nomination at a state GOP convention here. GOP activists blasted him as a Washington insider who had lost touch with Utah's conservative ideals and will instead nominate a tea party-backed populist candidate who promises to reduce the scope of the federal government. The GOP candidate hasn't yet been chosen, but it will be one of Mr. Bennett's two challengers, businessman Tim Bridgewater and lawyer Mike Lee, both favored by the tea party and who will face off in a June 22 primary. The winner will be favored to win the general election in this heavily Republican state.

OTHER STORIES:

US Banks Heavily Exposed: Bove - (www.cnbc.com)

Countries Most Exposed to the 'PIIGS' - (www.cnbc.com)

Europe's Weekend Will Determine Wall Street's Week - (www.cnbc.com)

You Would Have to Be Fool to Buy a House Now - (www.theaffordablemortgagedepression.com)

Foreclosure is hitting well-off families, too - (moremoney.blogs.money.cnn.com)

Euro Will Collapse Like Tower of Babel: Economist - (www.cnbc.com)

BP Battles Problem That 'Doesn't Have Human Access' - (www.cnbc.com)

Moody's Says It Received Wells Notice From SEC - (www.cnbc.com)

Drowning in mortgage debt - (money.cnn.com)

Mortgage interest deduction not healthy for housing market - (www.cnbc.com)

US Government Now 96.5% of the Mortgage Market - (www.smirkingchimp.com)

Rich farmers get most cash - (news.yahoo.com)

European Union Strikes $670 Billion Crisis Deal - (www.cnbc.com)

IMF Approves 30 Billion Euro Loan for Greece - (www.cnbc.com)

What Washington Needs To Learn From Greece - (finance.yahoo.com)

Budgets full of pain - (www.theautomaticearth.blogspot.com)

Disorganization at Banks Causing Mistaken Foreclosures - (www.propublica.org)

The Fed: Bubble spotting - (www.economist.com)

Fed transcripts stoke debate on rates - (www.goupstate.com)

Mortgages Could Be Free If Interest Rates Were High Enough - (PDF - Vince Loughnane)

Red flags over China's hot property market - (business.asiaone.com)

Don't fall victim to a lying house seller Amy Hoak's House Economics - (www.marketwatch.com)