KeNo's Housing and Economic Portal: Wednesday December 22 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

JP Morgan Getting Squeezed In Silver Market? - (www.sfgate.com) It is widely known that J.P. Morgan (NYSE: JPM) holds a giant short position in silver. Furthermore, some observers are accusing the bank of acting as an agent for the Federal Reserve in the market - every tick higher in the price of silver undermines confidence in the U.S. Dollar. A lower silver price helps keep the relative appeal of the U.S. dollar and other fiat currencies high. By selling massive amounts of paper silver in the futures market, JPM has been able to suppress the price of the precious metal. It is believed that these short positions are naked (i.e. they are not backed by any physical silver). In fact, reports indicate that JPM is short more paper silver than physically exists in the world. An article by Max Keiser which appeared in the Guardian on December 2, 2010 claims that the size of the short position is 3.3 billion ounces of silver. In recent days, rumors have been swirling on the internet that JPM's massive short position is about to blow up in their face in the form of an almighty short squeeze and potential COMEX default as large traders demand physical delivery of silver that COMEX does not have in their vaults. J.P. Morgan is currently under investigation by the CFTC for allegedly manipulating the price of silver. The investigation into the bank can be traced back to November 2009 when London metals trader and whistleblower Andrew Maguire contacted the CFTC to report market manipulation prior to it actually occurring.

Tucson City Manager: 400 workers face layoff - (www.azstarnet.com) A day after a city sales tax hike was soundly rejected by voters, Tucson City Manager Mike Letcher and Mayor Bob Walkup announced an estimated 400 city workers could be laid off. He said those layoffs will include police officers and firefighters if there is not enough attrition in those departments. Both Walkup and Letcher said the public was clear that they wanted to see more cuts, and Letcher blamed the sales tax increase's failure on a national movement by voters who are demanding smaller government. Voters are not necessarily demanding fewer workers, they simply want more for their money. Not a single city worker has to be laid off. All that has to happen is for the unions to lower salaries and pensions to meet the budget.

Welcome to Zombieland: Ladera Ranch, California - (money.cnn.com) Joshua and Irene Vecchione are cleaning the dinner dishes one evening in October when Joshua's cellphone rings. It's Rhea from the Chase collections department, and she wants to know if he has $123,000 today. That's what it will take to get the Vecchiones current on their mortgage. Rhea is a new caller, but Joshua has been talking with Chase reps a lot since February 2009, when he and Irene stopped making the $8,000 monthly payment on their five-bedroom spread in Ladera Ranch, Calif., an upscale development in south Orange County. After a few months, they were allowed into a trial mortgage-modification program, which let them pay less than half as much and kept Joshua on the phone as Chase requested more and more documents. In July, though, the bank decided the couple didn't merit a permanent "mod." The Vecchiones, who own the toy store in Ladera, began negotiating with Chase to do a short sale, in which the lender allows the debtor to sell for less than what's owed and walk away. So what Rhea says troubles Joshua: They're still listed in Chase's system as an active foreclosure. "How am I in foreclosure?" he asks after hanging up. "I'm not in foreclosure." A few weeks after that call, the Vecchiones get another one, this time approving the short sale. They bought it for more than $1.1 million in 2006 -- the height of the bubble -- with a high-rate, interest-only mortgage. Paying it meant staycations and other cuts, but they figured they could refinance in a couple of years, as the house grew in value.

College students getting expensive lesson in debt - (www.doctorhousingbubble.com) One aspect of the housing market not discussed in the media is the extraordinary amount of student loan debt out in our country and how this will impact future buyers. As I noted in a previous articlestudent loan debt has now surpassed all outstanding credit card debt in our nation which is an incredible milestone in itself. Even this week, we heard head Fed honcho Ben Bernanke give one solution to the economic crisis on 60 Minutes where he discussed that “education” was the key to improving our economy. Like anything in life there is an ultimate cost to everything. At what point does formal education become overpriced? How much debt is too much? Many younger Americans are saddling themselves with so much debt that they will not be able to borrow enough to buy a home (at least not at current prices).

Irish taxpayers sacrificed to pay private bank debts to foreign investors - (www.guardian.co.uk) Ireland reluctantly began four years of tax rises and brutal cuts to social welfare after its parliament narrowly passed the harshest budget in the Republic's history.

As angry protests raged outside the Dáil, the country's finance minister Brian Lenihan announced that child benefit would be slashed, more workers taken into the tax bracket and petrol prices raised to save €6bn (£5bn) in the forthcoming year. The country's opposition, trade unions and poverty campaign groups all lined up to condemn the budget, branding the swingeing cuts as the last act of a "puppet government" and a "frontal attack" on the poorest strands of society. But Lenihan, whose government has come close to collapse during weeks of tumultuous events, said the measures necessary to save the Irish economy needed to be passed to meet the terms of Ireland's €85bn bailout agreed two weeks ago with the IMF and the EU.

OTHER STORIES:

Wanted poster: ASSANGE, JULIAN PAUL - (www.interpol.int)

Arrested WikiLeaks chief denied bail in U.K. - (www.msnbc.msn.com)

Chapman U. says prospects dim for Orange County housing - (lansner.ocregister.com)

Dramatic price drops in Mt. Vernon, NY - (www.dailyfinance.com)

At least 3 more years of good news for potential buyers - (www.reuters.com)

Euro collapse 'possible' amid divisions over bail-out - (www.telegraph.co.uk)

A Reasonable Budget Would Never Pass - (www.slate.com)

Corporate officers never go to jail - (dealbook.nytimes.com)

Corporate corruption of government: Taking Down America - (www.tomdispatch.com)

Foreclosure mess: Much bigger than you thought - (www.boston.com)

Rural Foreclosures: The Hidden Heartland Inventory - (www.upi.com)