KeNo's Housing and Economic Portal: Monday November 22 Housing and Economic stories

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TOP STORIES:

San Francisco Bans The Happy Meal - (www.huffingtonpost.com) Talk about a city with screwed up priorities, SF supports legalizing drugs but banning happy meals. Luckily, the mayor has vetoed this...

San Francisco has banned the Happy Meal, on the day of the return of the McRib no less. The San Francisco Board of Supervisors earlier today passed an ordinance requiring meals that included toys with their purchase to meet specific nutritional guidelines. The vote, achieved with a Gavin Newsom veto-proof majority of 8-3, effectively bans the Happy Meal. Joe Eskenazi at the San Francisco Weekly reports: It seems the San Francisco Board of Supervisors has accomplished what the Hamburglar never could. They've made off with McDonald's fare. The supes today passed an ordinance that will require meals to meet nutritional guidelines if restaurants wish to include a toy with the food purchase. More importantly, the supes passed the so-called "Happy Meal Ban" by an 8-3 vote -- meaning it can survive a promised veto from Mayor Gavin Newsom. That's right: San Francisco done banned the Happy Meal. Robble robble.

Bernanke's Stimulus Plan Pummels Northrop, Wal-Mart Bonds - (www.bloomberg.com) Federal Reserve Chairman Ben S. Bernanke’s latest plan to stimulate the U.S. economy is pummeling investors owning the longest-maturity corporate bonds.

The price of 30-year debt from Northrop Grumman Corp., the largest U.S. Navy shipbuilder, has dropped 5.2 percent since Nov. 2, the day before the Fed’s announcement. Wal-Mart Stores Inc. bonds due in 2040 have slipped 3.8 percent in the period to about the lowest level since the Bentonville, Arkansas-based retailer sold the securities last month. U.S. corporate bonds due in 15 years or more have lost 2.5 percent since the Fed committed to buying $600 billion of Treasuries, compared with a decline of 0.4 percent for the investment-grade market overall, according to Bank of America Merrill Lynch index data. That signals investors believe the Fed will succeed in bolstering growth and avoiding deflation, leading to higher interest rates. Longer-dated debt is being hurt by the Fed’s policy of so- called quantitative easing, “particularly high-quality names that have issued at very tight spreads,” said Norval Loftus, chief investment officer of Allegra Asset Management in London. “Even the slightest hint that inflation could pick up is enough to send these names into a tail spin.”

California Governor Declares Fiscal Emergency - (www.bloomberg.com) California Governor Arnold Schwarzenegger, citing a $25.4 billion budget gap over the next 19 months, declared a fiscal emergency and called lawmakers to a special session next month to begin dealing with the problem. Schwarzenegger, a Republican whose term ends in January, late yesterday ordered the session to start Dec. 6, the day newly elected legislators are sworn in. He wants to take steps to erase an officially estimated $6.1 billion gap that has already emerged in the budget enacted last month. In addition to the gap forecast for the fiscal year through June, the nonpartisan Legislative Analyst’s Office yesterday projected a $19 billion gap in the following 12 months. By Jan. 10, Governor-elect Jerry Brown, a Democrat who will be sworn in Jan. 3, must propose a plan to erase the next year’s deficit.

As Fed Policy Sinks the Dollar, Prices of Essentials Soar - (www.dailyfinance.com) Intended or not, the Federal Reserve's policy of quantitative easing has crushed the U.S. dollar. (The second round announced Nov. 3 is called "QE2"because it's the second round of easing since the financial crisis of late 2008.) Intended or not, the Fed's destruction of the dollar's value has pushed prices of commodities that Americans need -- such as instance food, cotton and oil -- higher. Whether the Fed's QE2 policy will actually spark renewed growth in the economy is not yet known, but what is known is that the producer costs for essential commodities such as grain and cotton are skyrocketing, and those increased costs will soon appear on store shelves.

7 Million Noncurrent Loans, 2 Million Foreclosures - (Mish at globaleconomicanalysis.blogspot.com) The LPS Mortgage Monitor has a nice series of 33 slides that shows delinquent loans had stabilized in the first half of 2010 but new problem loans are once again picking up. Over 4 million homes are 90 days late or in foreclosure. Total Delinquent and Foreclosure Rates: Delinquent loans still at troubling levels. Expect foreclosures to rise. Noncurrent Loans: There are 7 million noncurrent loans but that is down from 8.1 million at the beginning of the year.

Trump to sell California estate at huge loss: paid $27M, asking $12M - (www.housingwatch.com) After almost a decade of tumultuous relations, Donald Trump has put his Rancho Palos Verdes, Calif. estate on the market at $12 million. When he first surfaced on the Rancho Palos Verdes scene in 2002, Trump was welcomed. A half dozen years later, The Donald was complaining that the community outside of Los Angeles "tries to stymie everything I do." Rancho Palos Verdes responded by saying that Trump just doesn't like to follow rules that aren't his own. Let's just say Donald Trump wasn't likely to be voted president of the neighborhood association. Rancho Palos Verdes is a genteel place on the Southern California coast with rolling hills and manicured lawns. I think they've removed all of the lawn jockey statues, but they've probably just stashed them in the four-car garages above which the staff lives. There were battles with Trump over pretty much everything -- from his wanting to name a street after himself to his 12-foot ficus trees. At one point, Trump sued the town for $100 million over "fraud and civil rights violation" because it blocked his efforts to maintain the "Trump image."