KeNo's Housing and Economic Portal: Saturday April 16 Housing and Economic stories

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Why housing might be even worse than you think - (msnbc.msn.com) Two high-profile reports on home sales this week confirmed that the housing market is still mired in a deep slump with prices still falling and sales activity sluggish at best. In fact, the market may be in much worse shape than even those numbers suggest. Figures from the National Association of Realtors that are among the most closely watched indicators on the housing market have been called into question by economists who say they may overstate existing-home sales activity by up to 20 percent. The issue is more than just an academic dispute among economists. Without a working barometer, it's hard to see the next storm coming. "It's very important for the industry but also for policy makers," said Mike Fratantoni, head of research at the Mortgage Bankers Association, one of the groups that is challenging the Realtors' data. "Folks at the Fed and at the Treasury and anyone involved in economic policy throughout government are very concerned about the health of the housing market. So if your primary indicator is giving you an overly optimistic reading, that's cause for concern," he said.

Bogus letter tells man with refinanced mortgage to pay balance - (www.tbo.com) Two weeks before Glen Ables' new, modified mortgage payment was to go into effect, a mysterious letter arrived in the mail. It threatened to derail the plan to save his house from foreclosure. That letter, from a Tampa lawyer, said he and his wife had 30 days to send them the balance of their mortgage. And it came with what looked like a copy of a court document filed in the case. "I called BB&T the next morning," Ables said. "They were shocked I got this letter." Even more shocking is the document. The letter implies the document was filed in court. It even says, "13th Judicial Circuit In and for Hillsborough County" at the top. It lists the plaintiff as BB&T, and it's signed by a lawyer. The only thing missing is the case number, and no court document is filed without one. In fact, the form was never filed, and there has never been a foreclosure case filed against the Ables, according to a records request by The Tampa Tribune.

Sleazy and Easy: Corporations Corrupt Regulators With Cupcakes - (www.nytimes.com) IN this covetous town, the delicacies of the Georgetown Cupcake shop stand alone as symbols of wish fulfillment — heaping swirls of luscious confection atop rich, creamy pastry. Therefore: Operation Cupcake. As the Federal Communications Commissiondebated final rules last December on how Internet service providers should manage their traffic, AT&T delivered 1,500 of these opulent desserts to the F.C.C.’s headquarters here. Like many other big corporations, AT&T annually blankets power brokers with token holiday gifts, but the cupcake campaign was notable for its military precision. A three-page spreadsheet, stamped “AT&T Proprietary (Internal Use Only),” detailed how the desserts were to be deployed to each of the 63 commission offices: four dozen were assigned to the enforcement bureau, 10 dozen to the wireless divisions, 12 cupcakes to each of four commissioners, and 18 to the chairman, and so on. As it turns out, AT&T had begun its $39 billion courting of T-Mobile about the same time. The resulting deal, announced a week ago, would transform the industry if approved. It would narrow the field of major wireless providers to three and vault AT&T into the No. 1 spot, ahead of Verizon; consumer advocates say the combination will lead to higher prices.

Note to Banks: It's Not 2006 Anymore - (www.nytimes.com) NOSTALGIA is running high on Wall Street for the days when junk mortgage underwriting and opaque derivatives trading juiced bank profits. As regulators continue to devise the machinery of the Dodd-Frank regulatory reform law, major financial institutions are working overtime in Washington to bring the good times back again. Unfortunately for taxpayers, some of these efforts are gaining traction, particularly regarding the regulation of derivatives and mortgages. As you may recall, Dodd-Frank was supposed to shed light on derivatives trading so that the risks and costs of these instruments would be clear to regulators and market participants. To this end, the law required derivatives to be cleared and traded on exchanges or through other approved facilities. But Dodd-Frank contained a big loophole: the Treasury secretary can exempt foreign-exchange swaps from the regulation. Currency trading is enormous: on average, about $4 trillion of these contracts change hands each day. Major banks are huge in this market. According to the Comptroller of the Currency, trading in foreign-exchange contracts generated revenue of $9 billion in 2010 at the nation’s top five banks. That’s more than was produced by any other type of derivative.

Mortgaging Irish Independence - (www.monthlyreview.org) A Who’s Who of global finance descended on Dublin in November 2010 to “hoist their flags,” from the International Monetary Fund (IMF) and the European Central Bank (ECB), to NM Rothschild & Sons, Merrill, Barclays, J.P. Morgan, and Goldman Sachs. These power brokers arrived to prevent “contagion” from the financial crisis in the small country of 4.5 million people. The stakes are high: political backlash from austerity measures is threatening the most recent plan to recapitalize insolvent banks with tens of billions of euros. Investors want their money back, and Ireland’s regulatory free-for-all of the past decade has meant that much of the money on the block came from Americans and Europeans. It is no surprise, then, that they are leading the charge for repayment. Unfortunately for the Irish people, the ECB and IMF came armed with the same ideological and policy tools that caused this crisis: a commitment to neoliberal growth models, open markets, and the primacy of financial interests over those of labor, sovereignty, or independence. There is not much in the way of alternative ideas from Ireland’s two major parties, Fianna Fáil and Fine Gael, as both are devotees of free-market fundamentalism. Indeed, it was both parties’ desire, proclaimed loudly through the 1990s and 2000s, to be “closer to Boston than Berlin” in regulation and finance.