KeNo's Housing and Economic Portal: Tuesday February 1 Housing and Economic stories

Monday, January 31, 2011

Tuesday February 1 Housing and Economic stories

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TOP STORIES:

Camden, NJ braces for deep police, fire cuts - (www.finance.yahoo.com) Yet another crisis is upon this burdened city, among the most impoverished and crime-ridden in the country. Deep layoffs of city workers go into effect on Tuesday -- cutting up to 383 jobs, or one-fourth of the city's employees. The exact number depends on whether public workers' unions make last-minute concessions. In any case, the cuts are likely to be deep -- and could be a blow to the quality of life in a city where more than half the 80,000 residents, mostly black and Hispanic, live in poverty. Worst case, the layoffs could slash half the police force and one-third of the fire department for this city just across the Delaware River from Philadelphia. Practically every other job in the city is likely to be affected. "The fear quotient has been raised," said the Rev. Heyward Wiggins, pastor of Camden Bible Tabernacle in a rough neighborhood on the city's north side, who constantly hears from his congregants about the layoffs. His Fellowship Choir of adults from their 20s to their 50s, used to practice on Thursday or Friday evenings. Now, Wiggins said, he's moving rehearsals to Sunday after worship services because members are afraid of being out after dark when the police force is cut.

`Citi Weekend' Shows Too-Big-to-Fail Endures - (www.bloomberg.com) Last week’s report by Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, suggests that the views of both sides are likely at odds with future financial realities. The report, titled “Extraordinary Financial Assistance Provided to Citigroup Inc.,” focuses on the “Citi weekend” in November 2008 when the bank received additional financial assistance from the government -- just weeks after the U.S. had injected capital into all the big banks in the first wave of TARP bailouts. The report reveals fresh details about who made the key decisions and on what basis. The most interesting quotes are from Tim Geithner, who was both president of the Federal Reserve Bank of New York and President Barack Obama’s pick as Treasury Secretary (his nomination, announced that Monday, was leaked to the market the previous Friday.) Geithner is refreshingly frank that too big to fail hasn’t necessarily been ended. ‘Just Don’t Know’: “In the future we may have to do exceptional things again if we face a shock that large,” he said, according to the report. “You just don’t know what’s systemic and what’s not until you know the nature of the shock.”

EMU policies are pushing Southern Europe into systemic political crisis - (www.telegraph.co.uk) Let us assume for the sake of argument that Europe succeeds in containing the immediate EMU debt crisis, with help from Asia, and that Germany’s fractious coalition actually agrees to a bail-out fund big enough to make any difference. What does this achieve, other than allowing banks to buy time by offloading liabilities onto European and Chinese taxpayers? The 30pc gap in labour competitiveness that has built up between Germany and Club Med since the eurozone currencies were locked together in perpetuity will remain. Greece, Portugal, Spain, and Ireland will stay trapped in structural depression through this year, and well into next, rotating from a liquidity crisis to a chronic political and social crisis that exposes the inability of elected governments to counter 1930s job wastage. Unemployment is 28pc in Andalucia, and 30pc in Cadiz.

1 million homes repossessed in 2010 - (money.cnn.com) Foreclosures were at a record high in 2010, and more than 1 million people lost their homes, even as notices started leveling off during the end year.

In total, there were nearly 2.9 million foreclosure notices filed during the year, according to report released Thursday by RealtyTrac. That was a record high, but just 1.7% above 2009. It most certainly would have been higher had notices not plunged in November and December as banks halted tens of thousands of foreclosures in the face of the robo-signing scandal. "Total properties receiving foreclosure filings would have easily exceeded 3 million in 2010 had it not been for the fourth quarter drop in foreclosure activity," said James Saccacio, RealtyTrac's CEO.

For Greece, Buyback Of Bonds Is Floated - (www.nytimes.com) “It’s the first time we’ve got an indication Europe is starting to think outside of the box,” said Jacques Cailloux, chief European economist at Royal Bank of Scotland. “Ultimately, it’s the return to some kind of stable debt path that will provide the biggest turnaround in confidence,” he said. Talk of a restructuring has been taboo among European leaders, who fear that a default by a euro country could permanently undermine the credibility of the common currency. The latest speculation about a Greek restructuring was prompted by a report in the national weekly Die Zeit on Wednesday, as well as statements by two ministers of the Greek government who said Tuesday that extending debt repayments would be a good idea. The Greek government denied it was in talks with private creditors to restructure its debt, Bloomberg News reported. Greek bonds already trade on open markets at a steep discount to their face value.