KeNo's Housing and Economic Portal: Tuesday May 10 Housing and Economic stories

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TOP STORIES:

At the world's largest port, China's inflation problem boils over - (www.theglobeandmail.com) At the world’s busiest container port, China’s inflation problem is becoming an obstacle to global trade. Incensed by spiking fuel costs and consumer prices, truck drivers hauling goods to and from the Port of Shanghai went on strike Wednesday, triggering a major confrontation that drew hundreds of police officers after truckers reportedly blockaded the entrance to a local logistics company. Even as the crackdown turned violent, the truckers vowed to continue their protest at the port, which moved almost 80,000 containers a day in 2010 and overtook Singapore to become the busiest container port on the planet. The standoff, which is already making an impact on the flow of goods in and out of Shanghai, highlights the challenge that worsening inflation poses to policy-makers in China. Spurred by a 12-per-cent jump in food prices, China’s annual inflation rate surged to 5.4 per cent in March, the highest in more than two-and-a-half years. The potential for runaway inflation is a serious concern for the Chinese government because, in the past, major consumer price increases have led to civil unrest.

Even bail bonds are being affected by the housing market - (www.sfgate.com) The big slump in the housing didn't just cause home prices to plummet. The damper in residential real estate has had a big effect on many other areas, dragging down home related industries and changed the daily habits of many. The Home Depots and Lowes aren't seeing as much traffic with homeowners concerned about plowing money into an underwater asset. Sales have trended down at stores like Pottery Barn. People are eating out less and saving more. And believe it or not, the crush in home prices have even affected the bail bond business, as described in a Wall Street Journal article today. The housing bust has put homeowners in debt, damaged credit ratings and devastated property values across the nation. It also has made it harder to post bail. When someone has a run in with the law, bail bonds are used to get out of jail as they await a trial. The bail bond posted guarantees that the individual shows up for their trial. If that person skips town, the entire bail amount is forfeited and naturally, an arrest warrant is issued.

Ill housing markets trump ideology for many in GOP - (www.google.com) Shutting down Fannie Mae and Freddie Mac should fit seamlessly into the Republican drive to shrink government. After all, keeping the ailing mortgage giants afloat has cost taxpayers $150 billion and many in both parties want private lenders to finance a bigger share of the nation's $11.3 trillion residential mortgage market. But House and Senate Republicans pushing bills to phase out both federally run companies are learning how fear, politics and old-fashioned lobbying can trump ideology. Even in the GOP-run House, leading proponents of doing away with Fannie and Freddie aren't predicting victory. As a precaution, they're advancing eight bills taking bite-sized swipes at the issue. In the Democratic-led Senate, a sister measure by 2008 presidential candidate Sen. John McCain, R-Ariz., faces long odds, and the Banking Committee's top Democrat and Republican are wary of quickly reshaping the market for financing home purchases. "There's no consensus on it," House Financial Services Committee Chairman Spencer Bachus, R-Ala., conceded in an interview this month about a sweeping overhaul bill by Rep. Jeb Hensarling, R-Texas. "I can't promise we will build consensus."

New House Sales At Record low for March - (www.calculatedriskblog.com) The Census Bureau reports New Home Sales in March were at a seasonally adjusted annual rate (SAAR) of 300 thousand. This was up from a revised 270 thousand in February. The first graph shows New HomeSales vs. recessions since 1963. The dashed line is the current sales rate. Sales of new single-family houses in March 2011 were at a seasonally adjusted annual rate of 300,000 ... This is 11.1 percent (±21.7%)* above the revised February rate of 270,000, but is 21.9 percent (±10.3%) below the March 2010 estimate of 384,000. And a long term graph for New Home Months of Supply: Months of supply decreased to 7.3 in March from 8.2 months in February. The all time record was 12.1 months of supply in January 2009. This is still higher than normal (less than 6 months supply is normal).

Feds say identitiy scam covered up real estate scam - (www.ocregister.com) At first, Rebecca Smith was relieved when she got a phone call from an FBI agent. It was October, just a few months after Smith had spent $30,000 on a real estate investment. The woman who sold her the deal, Karen Hanover, hadn't come through on any of her promises, and Smith was worried. Smith noticed the caller ID read "US Gov." The male voice identified himself as an FBI agent and said he was working on an investigation into Hanover's dealings. But the agent quickly became angry, scaring Smith. "I was trying to explain something and he said, 'Just shut up and answer the questions!'" Smith recalled. "So now I'm shaking." The agent demanded the names of other people who had invested with Hanover, people Smith had been talking to about how they, too, hadn't received anything Hanover had promised. The conversation went from bad to worse. "He says, 'You better watch your back!' He says, 'I'm going to throw your ass in prison. I'm going to testify against you.' He says, " 'You're a psycho.' You're this, you're that," Smith said. "Then I got mad." She didn't know it yet, but Smith had been "spoofed," by the very woman the faux FBI agent said he was investigating, federal officials would later say in court papers.