KeNo's Housing and Economic Portal: Wednesday June 23 Housing and Economic stories

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TOP STORIES:

Bundesbank Attacks ECB Bond-Buying Plan - (online.wsj.com) The European Central Bank's intervention in European debt markets is exacerbating tensions with Germany's Bundesbank, where officials worry that the bond buying program is being used for a stealth bailout of euro-zone banks holding Greek debt, according to people familiar with the matter. Senior Bundesbank officials have questioned the ECB's rationale for intervening in the Greek bond market instead of focusing its support on other vulnerable countries, such as Portugal and Spain, that unlike Greece still depend on debt markets to fund their budgets, according to the people. Greece received a financial rescue from other European countries and the International Monetary Fund of up to €110 billion ($135 billion) last month, ending its reliance on capital markets for funding until at least 2012. Since the European Central Bank began purchasing government bonds three weeks ago, it has spent about €25 billion on Greek debt, according to a senior Bundesbank official who declined to be named. An ECB spokeswoman declined to comment. The ECB said Monday that a total of about €35 billion in euro-zone bond purchases settled through Friday. It doesn't provide a country breakdown, but market participants say the ECB has also purchased bonds issued by Portugal, Spain, Italy and Ireland.

Gulf oil leak sets off 'unbelievable array' of legal issues - (www.usatoday.com) Fishermen and property owners along the Gulf Coast have filed hundreds of lawsuits since April against oil company BP and its contractors amid a legal landscape that has changed dramatically since the Exxon Valdez tanker spill sullied Alaska's Prince William Sound 21 years ago. The Valdez spill prompted Congress to pass the 1990 Oil Pollution Act — intended to give fishers and others harmed by such spills a quicker route for settling their claims — and nearly two decades of litigation over that spill also has redefined centuries-old maritime law on the issue. Now, as hundreds of spill victims test those laws, attorneys say many questions remain about how far the protections will go and how long it will take to compensate the fishers, landholders and beachside cities that have suffered from the spill. "There are an unbelievable array of issues in this case," said Stanford law professor Jeffrey Fisher, who argued the Exxon Valdez case for the commercial fishermen and other Alaska businesses before the Supreme Court. "One of the most painful things about the Exxon case was that it took us 20 years to get the case finished and get the money in the pockets of the victims. One can't help but wonder if the same thing is going to happen here."

Owners Stop Paying Mortgage ... and Stop Fretting About It - (www.nytimes.com) For Alex Pemberton and Susan Reboyras, foreclosure is becoming a way of life — something they did not want but are in no hurry to get out of. Foreclosure has allowed them to stabilize the family business. Go to Outback occasionally for a steak. Take their gas-guzzling airboat out for the weekend. Visit the Hard Rock Casino. “Instead of the house dragging us down, it’s become a life raft,” said Mr. Pemberton, who stopped paying the mortgage on their house here last summer. “It’s really been a blessing.” A growing number of the people whose homes are in foreclosure are refusing to slink away in shame. They are fashioning a sort of homemade mortgage modification, one that brings their payments all the way down to zero. They use the money they save to get back on their feet or just get by. This type of modification does not beg for a lender’s permission but is delivered as an ultimatum: Force me out if you can. Any moral qualms are overshadowed by a conviction that the banks created the crisis by snookering homeowners with loans that got them in over their heads.

States join the fight against proposed limits to credit card fees - (www.washingtonpost.com) State governments have become an unlikely ally of the banking industry in a fight against putting limits on the fees that credit and debit card issuers can charge to retailers. Treasurers from at least eight states are considering sending a letter to lawmakers this week over concerns that proposed limits on the fees card issuers charge for processing purchases could endanger state programs that use prepaid cards to dispense crucial benefits such as unemployment insurance. The limits are included in an amendment to the overhaul of financial regulations that passed the Senate last month. Nebraska's state treasurer, Shane Osborn (R), was the first to voice his worries to Congress last week. "The cost savings achieved as a result of moving from check to electronic distribution of benefits are significant to states and their taxpayers," Osborn wrote. The "amendment will drastically alter this equation." The amendment, sponsored by Sen. Richard J. Durbin, passed with bipartisan support in the Senate but was not in the bill passed by the House in December. Lawmakers must reconcile the two versions before sending the legislation to President Obama, and the fees -- known as interchange or "swipe" fees -- have become the focus of intense lobbying.

Fading Summer Jobs - (www.nytimes.com) This year is shaping up to be even worse than last for the millions of high school and college students looking for summer jobs. State and local governments, traditionally among the biggest seasonal employers, are knee-deep in budget woes, and the stimulus money that helped cushion some government job programs last summer is running out. Private employers are also reluctant to hire until the economy shows more solid signs of recovery. So expect fewer lifeguards on duty at public beaches this summer in California, fewer workers at some Massachusetts state parks and camping grounds and taller grass outside state buildings in Kentucky. Students seeking summer jobs, generally 16 to 24 years old, are at the end of the job line, behind the jobless baby boomers who are competing with new college graduates who, in turn, are trying to elbow out undergraduates and high school students.