KeNo's Housing and Economic Portal: Tuesday November 15 Housing and Economic stories

Monday, November 14, 2011

Tuesday November 15 Housing and Economic stories

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TOP STORIES:

Regulators Investigating MF Global for Missing Money - (www.nytimes.com) Federal regulators have discovered that hundreds of millions of dollars in customer money has gone missing from MF Global in recent days, prompting an investigation into the brokerage firm, which is run by Jon S. Corzine, the former New Jersey governor, several people briefed on the matter said on Monday. The recognition that money was missing scuttled at the 11th hour an agreement to sell a major part of MF Global to a rival brokerage firm. MF Global had staked its survival on completing the deal. Instead, the New York-based firm filed for bankruptcy on Monday. Regulators are examining whether MF Global diverted some customer funds to support its own trades as the firm teetered on the brink of collapse. The discovery that money could not be located might simply reflect sloppy internal controls at MF Global.

California Rail Cost Estimate Doubles to $98.5 Billion in Business Plan - (www.bloomberg.com) California’s planned high-speed rail line between San Francisco and the Los Angeles area will cost $98.5 billion, more than twice the previous estimate, and take until 2033 to complete, according to a revised business plan. Construction will begin next year on a 130-mile “spine” through the Central Valley, according to the plan released today by the California High-Speed Rail Authority at a news conference in Sacramento, the state’s capital. The authority had estimated a cost of $43 billion and construction duration through 2020. The plan “represents a departure from past efforts of the authority,” Dan Richard, an authority board member, said at the event. “In many ways, it responds to public criticisms of the high-speed rail program and we have taken those to heart and listened and reevaluated the program.”

Greek Referendum Decision Blindsided European Partners, Merkel Allies Say - (www.bloomberg.com) Greece’s decision to call a referendum on its five-day-old bailout blindsided its European partners and placed another hurdle in the way of efforts to staunch the debt crisis. The announcement came “out of the blue, it’s surprising, very risky,” Norbert Barthle, the ranking member of German Chancellor Angela Merkel’s Christian Democratic Union party on parliament’s budget committee, said in a telephone interview. “There’s an enormous amount at stake. Do we know how the Greek people will treat their government in this referendum? No. We have a new unknown.” French President Nicolas Sarkozy will call Merkel at midday today to discuss the Greek referendum that sent stocks and the euro tumbling, the Elysee said. Sarkozy is “dismayed” by the Greek plan, Le Monde newspaper reported, citing unnamed people close to Sarkozy.

Selling More Insurance on Shaky European Debt Raises Risk for U.S. Banks - (www.bloomberg.com) U.S. banks increased sales of insurance against credit losses to holders of Greek, Portuguese, Irish, Spanish and Italian debt in the first half of 2011, boosting the risk of payouts in the event of defaults. Guarantees provided by U.S. lenders on government, bank and corporate debt in those countries rose by $80.7 billion to $518 billion, according to the Bank for International Settlements. Almost all of those are credit-default swaps, said two people familiar with the numbers, accounting for two-thirds of the total related to the five nations, BIS data show. The payout risks are higher than what JPMorgan Chase & Co. (JPM), Morgan Stanley and Goldman Sachs Group Inc. (GS), the leading CDS underwriters in the U.S., report. The banks say their net positions are smaller because they purchase swaps to offset ones they’re selling to other companies.

The Inevitable Has Happened: Occupy Foreclosures - (www.businessinsider.com) Last night Occupy Oakland's General Assembly did something that is likely to catch on with occupations across the country. They voted to encourage the occupation of foreclosed properties across their city. After all, the bursting of the property bubble is part of why they're on the streets right now. There is a movement similar to this under the overall Occupy umbrella, It's called Occupy Vacant Properties, and it has been most visible in San Francisco, where families are even reclaiming their old homes post-foreclosures. Fire Dog Lake via The Home Defenders League: My family has been in this neighborhood for 50 years, and since I’ve been evicted, the place has been vacant, like so many homes in the Bayview. Families have been ripped off by banks, scammed by brokers and nothing’s done to them. It’s time for the families and the community to stand up and take back what’s theirs.