KeNo's Housing and Economic Portal: Sunday October 23 Housing and Economic stories

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Where Post Office Is the Town’s Heart, Fears of Closings - (www.nytimes.com) While checking for mail on her daily visit, Susan Reid regaled the town postmaster with news of the wonderful swimming lessons enjoyed by her two home-schooled children. Suddenly, her 9-year-old son began tumbling around, ever so playfully, on the floor, as if he were at home. Janet Blackburn, Neville’s postmaster for 39 years, paid him no mind, wondering aloud: “Do you know what happened to the plaques on the war monument?” Part of the town memorial to two dozen soldiers who died in the world wars, the brass plaques, Ms. Reid said with regret, had been badly damaged by a cleaning man using the wrong chemicals. Meanwhile, the door of the white clapboard building opened and in walked Norma Bowling, a retired nurse’s aide, carrying a plastic bag. “Here are the bell peppers I promised you,” she said, handing the gift to Ms. Blackburn. In Neville, and in many towns around the country these days, homespun conversations over post office counters are often turning from the latest gossip to a worrisome, newly pressing issue: the United States Postal Service has warned 3,700 communities, many of them in rural areas, that it is considering shuttering their local offices over the next few months.

Paulson loses more in September, fund now off 47 percent - (www.reuters.com) Hedge fund manager John Paulson lost more money in September thanks to ill-timed bets on an elusive economic recovery that left one of his biggest funds off 47 percent, two people who saw the numbers said on Saturday. Paulson & Co, one of the world's five biggest hedge funds, released the numbers to investors late on Friday just hours before many on Wall Street headed off for a holiday weekend. The Advantage Plus fund, which uses some borrowed money to help boost returns, tumbled 19.35 percent last month, leaving it off 46.73 percent for the year, the firm told clients. A spokesman for Paulson did not immediately respond to a request for comment on Saturday. September's double digit drop at Paulson ensures him a spot as one of the industry's very biggest losers this year. While many other fund managers, including Lee Ainslie and Leon Cooperman, are also nursing losses, none are as dramatic as the Paulson drop, investors said. The average hedge fund lost 2.81 percent last month and is now off 4.74 percent for the year, according to data from Hedge Fund Research.

Despair and resignation in Greece as more pain looms - (www.reuters.com) The slogans on the street are about storming the barricades, but when you talk to Greeks about the financial crisis that has brought their country to its knees, their anger quickly gives way to resignation and despair. With news on Monday that the recession will last at least a fourth year -- and the government promising ever tougher reforms that will bring even more hardship -- labor unions have vowed to call Greeks out into the streets. They will turn out in their thousands, but despite escalating rhetoric and the prospect of unrest, Greeks express little hope that their public expressions of outrage can change their fate. "What can you do? Throw stones? Throw oranges? Even if you spat on the politicians all day long it would accomplish nothing," said Amalia Dougia, a 45-year-old single mother, resting wearily on a bench in downtown Athens, where she was waiting to see a lawyer to find a way out of debt. She has been unemployed for two years since the economic crisis forced her to close down her shop selling household goods, leaving her with nothing but unpaid bills and a benefit check of 175 euros ($250) a month.

Dexia Inches Toward Breakup as France Joins Belgium, Luxembourg in Salvage - (www.bloomberg.com) Dexia SA (DEXB)’s board meets this weekend to study options to dismantle the French-Belgian bank that has brought Europe’s sovereign debt crisis to the heart of the region’s financial system. While France and Belgium have rushed to protect their local units, hurdles to an agreement remain as they wrestle over responsibility for assets hit by the crisis that has caused the bank’s short-term funding to evaporate. Dexia’s troubled assets are being folded into a “bad bank” and could amount to as much as 190 billion euros ($256 billion). Rescuing Dexia -- the first victim of the debt crisis at the core of Europe -- has become critical to preventing contagion in the region’s banking industry. Dexia’s balance sheet, with total assets of about 518 billion euros at the end of June, is about the size of the entire banking system in Greece and larger than the combined assets of financial institutions bailed out in Ireland in the last 2 1/2 years. “The governments have to reach a deal this weekend or we’ll see trouble on the interbank market next week,” said Michael Rohr, a banking analyst with Silvia Quandt Research GmbH in Frankfurt. “Investors are looking at which banks have large public finance operations like Dexia.”

Checking Account Wars, Behind the Scenes - (www.nytimes.com) This week, Senator Dick Durbin took to the Senate floor and called for a run on Bank of America. The Illinois Democrat had pushed legislation, which went into effect a week ago, that limits the fees big banks collect from merchants, and he now finds himself the fall guy for Bank of America’s new $5 monthly debit card fee. His response? He ranted and raved and suggested that consumers “get the heck out of that bank.” But even as Bank of America and other institutions are adding fees and other restrictions, a company called PerkStreet, which you may have read about in this column before, is hoping that those Bank of America customers will run to its Web site. PerkStreet gives checking account customers as much as 2 percent back on their purchases when they use its debit cards. Meanwhile, a company called BancVue works with community banks and credit unions to offer checking accounts that can yield more than 3 percent in interest on deposits for people who use their debit cards a lot. Soon, the company asserts, the total number of branches among all of the institutions that offer its rewards checking accounts will equal that of the 10th-largest bank in America.