KeNo's Housing and Economic Portal: Friday November 5 ousing and Economic stories

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Out of Work, Out of Options and Over the Hill - (finance.yahoo.com) After 20 months without a job, 55-year-old Henry Dietz has nearly drained his 401(k) retirement plan. He already has used up his personal savings, borrowed extensively, switched to a catastrophic health plan, which only covers medical emergencies, and even skipped family funerals because of travel expenses. If he doesn't find a job soon, he may not be able to make his mortgage payments and the family may have to "move back with Mama," says the married father of three from Raleigh, N.C., who was laid off from an advertising agency. Mr. Dietz's situation may be extreme, but many people are facing a similar dilemma: over 50, unemployed and running out of options. With no job prospects long before they can afford to retire — and Social Security benefits still years away — many unemployed workers in their 50s and early 60s are struggling to pay the bills, the mortgage, health-care expenses and college tuition. It's a scenario that was unimaginable to many just a few years ago.

Mortgages to Drop Below $1 Trillion to Low Since 1996 - (www.bloomberg.com) Home lending in the U.S. will fall below $1 trillion next year to the lowest level since 1996, according to the Mortgage Bankers Association. Originations will decline to $996 billion in 2011, from a projected total of $1.4 trillion this year, the trade group said today in a statement released during its annual conference in Atlanta. Lending reached a record $3.8 trillion in 2003 as refinancing soared, with new loans remaining elevated over the next few years as home prices and sales boomed. Rates that are unlikely to go lower even if the Federal Reserve buys more U.S. debt will cause refinancing to dissipate by the second half of next year, Jay Brinkmann, the mortgage group’s chief economist, said. A rush by U.S. homeowners to refinance at near record-low interest rates has marked a rare bright spot for the mortgage industry, under attack for choking the economy with shoddy loans and botched foreclosures.

Insider Selling Volume at Highest Level Ever Tracked - (www.cnbc.com) The overwhelming volume of sell transactions relative to buy transactions by company insiders over the last six months in key leading sectors of the market is the worst Alan Newman, editor of the Crosscurrents newsletter, has ever seen since he began tracking the data. The strategist looked at insider trading activity amongst the top ten companies that make up the Nasdaq such as Apple, Google and Amazon. Then he analyzed the biggest members of the Retail HOLDRs ETF like Gap, Target and Costco, as well as the top insiders in the semiconductor industry at companies such as Altera,Broadcom and Sandisk. The largest companies in three of the most important leading sectors of the market have seen their executives classified as insiders sell more than 120 million shares of stock over the last six months. Top executives at these very same companies bought just 38,000 shares over that same time period, making for an eye-popping sell to buy ratio of 3,177 to one.

Irish Bondholders in Pain Again as Cost Cuts Bite: Euro Credit - (www.bloomberg.com) Bond investors are losing faith in Ireland’s plan to lower the deficit as spending cuts threaten to undermine economic growth, reducing government revenue. Irish 10-year bond yields climbed within 50 basis points of the 454 basis-point record spread, set Sept. 29, relative to similar-maturity German bunds. Portugal’s spread fell about 1 percentage point against the German benchmark in the past month, the Greek-German yield gap narrowed 102 basis points and the Spanish spread was close to the lowest level since Aug. 10. Ireland was the first euro-region nation to announce budget reductions in 2008 in response to the sovereign debt crisis. The bond market responded with yields on 10-year Irish securities falling to a low of 4.43 percent in April. Investors now question whether austerity measures will push the economy back into recession. Yields have increased to 6.45 percent.

Want to get away with murder? Become a bank. - (money.cnn.com) The biggest danger to the U.S. capitalist system doesn't come from communists or community activists or left-wing academics. It comes from some of the nation's biggest financial institutions. These companies, which helped create the financial meltdown that touched off the Great Recession, have now found yet another way to undermine the public's faith in capitalism and markets: the foreclosure fiasco. Even before the foreclosure problem appeared, the level of public distrust of our financial and political systems was approaching the pathological. It's going to get even worse when the true lesson of this episode sinks in. To wit: If you screw up big-time when you deal with a giant bank, you're toast. If the giant bank screws up when it deals with you, it gets a do-over. Sure, many -- probably most -- of the people whose mortgages are being foreclosed got in trouble because they overreached or lost their jobs, not because anyone cheated them. But if we're going to have rules, they ought to be binding on everyone. If I'm supposed to obey the law and pay my bills, the people I'm paying ought to have to obey the law too. You miss a payment on your credit card or send it in a few days late, you get whacked. Forget to make a loan payment, your credit rating gets vaporized. But if a bank doesn't do its job properly -- for example, if you can't get a knowledgeable and competent human on the phone to deal with a loan modification or a paperwork screwup because the bank is holding down back-office costs to save money -- it ends up being your problem, not the bank's.