KeNo's Housing and Economic Portal: Sunday May 15 Housing and Economic stories

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TOP STORIES:

Greece Trying To Extend Payment Period On Bailout Loans In Last Gasp Attempt To Avoid Restructuring - (www.businessinsider.com) Greece may attempt to push back interest payments on its bailout loans in an effort to avoid restructuring its debt, according to Expansion. These payments make up a little more than a third of the country's 2012 interest charges. The country's officials hope to sort out a deal at the EU summit in Athens on June 25. One of Germany's top economic advisors, Lars Feld, says that restructuring is now "the only road to take." German official Clemens Fuest, who is a chairman at Germany's finance ministry, said that European Union officials were already discussing restructuring, according to Reuters. The result of such restructuring could be incredibly damaging to Greece's banking sector, which could lose billions as a result. Banks across Europe retain significant exposure to both Greek sovereign debt and its banking sector.

Food prices rise because of Fed's inflation, but Fed keeps your interest at 0% - (www.bloomberg.com) Global food prices may rise 4.4 percent to a record by the end of the year, driven by demand for meat, oilseeds and grains used to make ethanol, adding to costs that mean inflation is accelerating from the U.S. to China. The United Nations’ Food Price Index may climb to 240 points from 229.84 last month, said William Adams, a fund managerat Zurich-based Resilience AG, which has $22.2 million of assets. Global corn stockpiles are shrinking the most in seven years, inventories of nine edible oils will drop to the lowest since 1974 and U.S. beef stocks will be the smallest since 1999, the U.S. Department of Agriculture estimates. “The stockpiles are being severely depleted,” said Adams, who correctly forecast gains in heating oil and gasoline prices last year. “Eventually it gets to the consumer. The U.S. government isn’t subsidizing pork chops like it is ethanol.”

Avoiding the McMansion...here is why! - (finance.yahoo.com) An increasing number of Americans are opting to buy smaller homes or even rent, experts say, as uncertainty about the struggling housing market, energy prices, and a lackluster domestic economy persists. "Despite home prices that have really rolled back about 10 years and historically low interest rates, buyers are cautious for a variety of reasons," says Stephen Melman, director of economic services at the National Association of Home Builders (NAHB). Beyond general anxiety about the strength of the economic recovery and foundering home prices, concerns about rising energy prices and limitations on mortgage interest deductions have would-be home buyers reevaluating their priorities in potential homes. "Home buyers are thinking, 'Maybe we don't need that 7,000 square foot home like we thought we did in 2004 or 2005 when the market was approaching its top,'" says Paul Bishop, vice president of research at the National Association of Realtors (TSXV: NAR.V).

Home-Debtor Tax Breaks Questioned - (www.thefiscaltimes.com) While owning a home continues to be widely perceived as a good personal and financial decision, many Americans are now questioning whether encouraging home ownership should be a government priority, according to a new survey. An Allstate/National Journal/ Heartland Monitor poll released Thursday found that 51 percent of Americans believe that government tax policies and other incentives to encourage home ownership have destabilized many communities because of excess debt and soaring foreclosure rates. The poll focused on how Americans have been coping with the post-recession economy and how they view home ownership. Americans were divided — 46 percent on each side — over whether the federal government should continue funding home ownership programs such as tax incentives for first-time buyers and mortgage interest deductions. “The government’s role in the housing market was part of the problem,” said Jared Bernstein, chief economist and advisor to Vice President Biden, at a conference sponsored by the National Journal on Thursday. “It got way out of hand and that needs to be corrected. One of the most important parts of that correction is winding down of the GSEs [government-sponsored enterprises]. There is a role for government but it has got to be one that supports sustainable homeownership, not the kind we had.”

Chamber of Commerce Opposes Bribery Disclosure Plan - (www.nytimes.com) After a brief truce of sorts between the White House and business leaders, the top lobbyist at the U.S. Chamber of Commerce took aim at President Obama on Tuesday over an as-yet unannounced plan to force government contractors to disclose their political giving. The lobbyist, R. Bruce Josten, said in an interview that the powerful business bloc “is not going to tolerate” what it saw as a “backdoor attempt” by the White House to silence private-sector opponents by disclosing their political spending. “We will fight it through all available means,” Mr. Josten said. In a reference to the White House’s battle to depose Libya’s leader, Col. Muammar el-Qaddafi, he said, “To quote what they say every day on Libya, all options are on the table.” While no final decision has been announced, the White House has acknowledged that Mr. Obama is considering issuing an executive order requiring all would-be federal contractors to disclose direct and indirect political spending of more than $5,000. The order could, for instance, force a military contractor or an energy company seeking federal work to report money it gave to the Chamber of Commerce or another advocacy group to help finance political ads and expenditures.

Seattle house prices continue to fall - (www.komonews.com) Home prices are falling in most major U.S. cities, and at least 10 major markets are at their lowest point since the housing bubble burst, including Seattle. The Standard & Poor's/Case-Shiller 20-city index shows price declines in 19 cities from February to January. The index fell for the seventh straight month. High unemployment, stricter lending rules and fears that prices will fall further are among the reasons why few people are buying homes. A record number of foreclosures are forcing down home prices in most metro areas, and prices are expected to keep falling through this year. Detroit was the only market to show a monthly gain, although the Motor City is one of five cities where home prices are now below their January 2000 levels.