KeNo's Housing and Economic Portal: Thursday October 14 Housing and Economic stories

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TOP STORIES:

University of Oregon President Richard Lariviere asks legislators for $800 million in bond money - (www.oregonlive.com) An impassioned University of Oregon President Richard Lariviere made his pitch before legislators today for funding his university with $800 million in state-issued bonds. If the university does not find a new way to raise money, tuition will keep climbing an average 7.5 percent per year, as it has for the past 38 years, he said. That means annual tuition will hit $17,000 by 2020, he said, a price tag that will squeeze out middle class students. "It is not fair," he told a legislative work panel reviewing a variety of proposals to overhaul the state's higher education system. "We have to do something." Lariviere's controversial funding plan, which he says has never been tried anywhere in the country, will be introduced as a bill in the 2011 Legislature, said Sen. Mark Hass, D-Beaverton, co-chairman of the work group, which met at Portland Community College. "This is one of the most significant proposals in higher education we have had in decades," Hass said.

New York Times To Pay Back Mexican Overlord Carlos Slim -- Who Made $150+ Million Saving The Company - (www.businessinsider.com) The New York Times announced that it will pay back Mexican billionaire Carlos Slim in 2012, a few years before the $250 million loan is actually due. This will no doubt come as a relief to NYT shareholders, as the Slim loan carries an usurious interest rate of 14%+ per year. Once the money is paid back, Slim will still retain options to buy 10% of NYTCo at $6.36 a share. Felix Salmon calculates that in return for saving the New York Times from bankruptcy--an outcome toward which the company was hurtling when Slim loaned it $250 million at the 11th hour in January 2009--Slim will make $150+ million in profit over three years. It doesn't suck to be the lender of last resort.

The IMF Issues Devastating Report On What Will Happen If Every Country Cuts Spending - (www.businessinsider.com) What seems clear by this point is that anyone who naively assumes the US economy can cut its way to the promised land -- simply slash spending to reduce the deficit and reduce "uncertainty" -- is mistaken. The experience in Europe show that austerity is no panacea--not because economies are contracting, but because deficits aren't even shrinking, in many cases. And the IMF has issued a new report warning about the challenges to developed countries when governments contract. Ambrose Evans-Pritchard discusses it: Normally, tightening of 1pc of GDP in one country leads to a 0.5pc loss of growth after two years. It is another story when half the globe is in trouble and tightening in lockstep. Lost growth would be double if interest rates are already zero, and if everybody cuts spending at once. "Not all countries can reduce the value of their currency and increase net exports at the same time," it said. Nobel economist Joe Stiglitz goes further, warning that dam may break altogether in parts of Europe, setting off a "death spiral". The Fund said damage also doubles for states that cannot cut rates or devalue – think Spain, Portugal, Ireland, Greece, and Italy, all trapped in EMU at overvalued exchange rates.

Government Share of Personal Income Tops 30% - (Mish at globaleconomicanalysis.blogspot.com) Jeff Graham at the Capital Hill Blog explains how Government Propped Up Personal Incomes In August. News accounts are highlighting the fact that the 0.5% increase in personal income in August was the biggest of the year. But the data weren’t evidence of a healthy and sustainable private-sector expansion. Government transfer payments accounted for 60% of the increase, and the government share of personal income crept further into record territory at just over 30%. That’s up from just above 25% before the recession. Transfer payments include Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), Food Stamps - now called Supplemental Nutrition Assistance Program (SNAP) , medical insurance (Medicaid and Medicare), and housing assistance. Transfer payments are social schemes to redistribute the wealth. However, given the US is running an enormous deficit, one can argue these schemes are funded by the government printing money and giving it away. Regardless of how you look at it, government share of personal income at 30% is outrageous. Moreover, more than half of that 30% is transfer payments, an equally outrageous happening.

Commission starts budget debate - (www.miamiherald.com) In January, Miami-Dade County Manager George Burgess wrote commissioners that he expected property values to plummet 12 percent, a record drop that would significantly reduce government revenues.
Yet, Burgess -- along with the county mayor and commissioners -- subsequently agreed to give county employees salary and benefit increases totaling $132 million. Now, to help pay for it, Burgess is asking commissioners to support a tax rate increase on homeowners across Greater Miami that will bring in an additional $178 million in revenue. As the final budget hearing got under way at 5:14 p.m. [September 23, 2010], county commissioners were staring at what many expected to be a long and contentious night to finalize a new budget and property tax rate. At the outset, 179 people had signed up to speak at the public hearing and a long line of others waited to sign up in the lobby of County Hall. A grassroots group of property owners gathered in the ground floor of County Hall shouting ``No more taxes'' and waving signs opposing the proposed tax rate hike. ``We Pay Taxes For Services. Not For Bureaucracy,'' read another sign. A few feet away, police officers gathered in force to support the proposed budget. ``We've got our contract already. This is not about us.... This is about the residents of the community. We want them to be safe,'' said John Rivera, president of the Dade County Police Benevolent Association. One police officer estimated about 300 police officers and 200 corrections officer had turned out for the session. Across the hall was an equally strong turnout of county fire-rescue workers in pink T-shirts.

OTHER STORIES:

Las Vegas Faces Its Deepest Slide Since the 1940s - (www.nytimes.com)

Nurses Union Plans Ad Against Angle - (www.nytimes.com)

Pressure On China To Build Even More, As Nucor Steel CEO Calls For Brand New "Plaza Accord" - (www.businessinsider.com)

Supreme Court Term Offers Hot Issues and Future Hints - (www.nytimes.com)

House Majority Still Uncertain, Republicans Say - (www.nytimes.com)

Price of American dream home? - (money.cnn.com)

Home prices up, growth slows - (money.cnn.com)Bad News For Democrats: The Last Jobs Report Before Election Will Show Unemployment Rising - (www.businessinsider.com)

SEC Policy Advisor Rick Bookstaber Moonlights As A Science Fiction Parabalist, With No Idea How To Save The Economy - (www.businessinsider.com)

If Dollar-Yen Falls To 82, Watch For A Major Blowup In The FX War - (www.businessinsider.com)

As the Fed gets ready to launch a second round of Quantitative Easing (buying debt) to save the economy, here's a helpful look back at the timeline for the first round > - (www.businessinsider.com)

America's highest property taxes - (money.cnn.com)