KeNo's Housing and Economic Portal: Thursday September 23 Housing and Economic stories

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DMV workers pay big time for 'Missed Monday' - (www.sfgate.com) Heads are rolling at the Department of Motor Vehicles' San Francisco office over the "Missed Monday" we told you about a couple of weeks back. In all, 19 of the Fell Street office's 34 staffers were no-shows Aug. 23 - the Monday that followed a forced "Furlough Friday" without pay. The mass no-shows created a huge backup at the office, with the lines going around the block. Sources tell us that two of the "ringleaders" have been canned and seven others with histories of taking unauthorized days off have been suspended for 15 days without pay. Ten first-time offenders were given 10 days without pay. An office insider tells us replacement workers from outside the city were brought in to cover while the accused had their disciplinary hearings. DMV spokesman Mike Marando said the department was barred from discussing personnel actions, but said, "We do look at each case very seriously." The Service Employees International Union Local 1000, which represents the DMV workers, promised to get back to us just as soon as it got to the bottom of the case. We're still waiting.

Union vs. Union in a Battle in California - (www.nytimes.com) During his two decades building one of the largest union locals in California, Sal Rosselli earned a reputation as a cunning strategist and street fighter — someone who often vilified hospital chains during contract battles. These days, he is using those brass knuckles on his former colleagues at the Service Employees International Union in a battle that threatens to rip a giant hole in the most powerful union in the nation’s largest state. The S.E.I.U.’s national leadership ousted Mr. Rosselli last year after a power struggle that ended with a jury finding that he had improperly used member dues to form a breakaway union. Shortly after being ousted, Mr. Rosselli did create a rival union, and now he is trying to lure many of his former members — 43,000 workers at Kaiser Permanente, the largest health care provider in the state. On Monday, workers at 331 Kaiser facilities across California began voting by mail on whether to bolt the S.E.I.U. and join Mr. Rosselli’s group, the National Union of Healthcare Workers. A victory would give a vital boost to Mr. Rosselli’s fledgling 6,000-member union, all but assuring its long-term survival. It would also be a huge blow to the 1.9-million-member service employees union, since Mr. Rosselli’s group would gain the stature and dues money to finance a broader war for far more S.E.I.U. members.

PG&E backs bid to bill public for disasters - (www.sfgate.com) State regulators will take their first look Tuesday at a proposal backed by Pacific Gas & Electric Co. that would require customers to pay all costs of catastrophic fires, such as last week's gas line explosion in San Bruno, that exceed a utility's insurance coverage. It's not clear whether the plan, if approved by the state Public Utilities Commission, would trigger a PG&E rate increase to help pay the utility's cost from Thursday's disaster. In a filing Monday with the U.S. Securities and Exchange Commission, the utility said it has $992 million in fire insurance and a $10 million deductible, and "believes that most of the costs related to the San Bruno event will be covered." Even if the company has enough insurance, however, the proposal would make rate hikes more likely if PG&E caused fires in the near future. Under current rules, utilities in California can seek a rate increase if the costs of a disaster exceed their insurance coverage. But the PUC can veto the request and force utility shareholders to pay the bill.

Broke Los Angeles Spent $578 Million On This Extravagant Public School - (www.businessinsider.com) The largest city of the brokest state in America just opened the doors on the $578-million RFK School. Built on the site of the historic Ambassador Hotel, the K-12 facility is now the most expensive public school in the country. So how did LA spend that much money? They gave the school a state-of-the-art swimming pool, underground parking, historically recreated sections of the hotel, "talking benches" that describe the site's significance, a teacher's lounge modeled after the famous Cocoanut Grove Night Club -- and they got in a bidding war with Donald Trump. Poor taxpayers! We've got designs of the gorgeous school from architectural firm Gonzalez Goodale.

The Subprime Of Europe May Be About To Blow, And Once Again Banks Are Caught Red-Handed - (www.businessinsider.com) This is a buzzy topic that gets talked about in th niche financial press, but probably hasn't gotten as much attention as it ought to... Homeowners across Europe's periphery are saddled with mortgages denominated in foreign currencies -- like the Swiss Franc -- and could easily explode in expense as their home currencies fall. So, for example, Hungarian homeowners are in big trouble if the Forint falls hard against the Swiss Franc, since that sends the cost of mortgages soaring. At VoxEU, Martin Brown Karolin Kirschenmann Steven Ongena have published a study of 100,000 foreign currency mortgage made at a Bulgarian bank between 2004-2007. What they've found is that banks aggressively pushed these loans: Looking at the supply of FX loans we find striking evidence that our bank is “pushing” euro loans. Roughly one-third (32%) of all loans extended in euros in our sample and nearly one-quarter of the euro loan volume (23%) are loans that were initially requested in lev. Examining the sub-sample of loans which were requested in lev, we find that the bank is more likely to switch the loan to euros if the firm is of lower observable credit risk. Worryingly though, we also find that the bank is hesitant to offer large and long-term loans in local currency. Further, the bank is more likely to switch a loan to euros after it has received additional customer funding in euros. However, we do not find that the bank pushes FX loans after it has received more wholesale funding in euros. The latter results suggest that while FX lending may be driven by customer funding in FX, the causality between FX lending and wholesale FX funding might go the other way.