Friday February 10 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Banks Reduce French, Italian, Spanish Lending, Pile Into Bunds, BIS Says - (www.bloomberg.com) International banks cut their loans to fellow lenders and governments inItaly, France and Spain in the third quarter, hoarding German, Japanese and U.S. bonds instead, data from the Bank for International Settlements show. Cross-border claims on the Italian state, mainly bonds and loans, declined by 23 percent, or $67.7 billion, in the quarter ended Sept. 30 at banks in the 24 countries for which the Basel, Switzerland-based BIS reports those data. The same measure dropped 21 percent for France and 10 percent for Spain. It also fell for emerging economies including Brazil, Mexico and Poland, while $65.3 billion went into German government debt and $77.2 billion into U.S. Treasuries, the BIS said in a statement.

For Greece, the Outlook Is Still Grim - (www.nytimes.com) Even as Greece tries to convince creditors that its debt-reduction efforts are on track, gloomy new International Monetary Fund forecasts about its long-term economy are threatening to derail talks meant to secure the nation’s next big installment of bailout funds. The concerns, stemming from an analysis that the I.M.F. has been quietly sharing with European officials and Greece’s creditors in recent weeks, come at a crucial time for Athens. The new Greek government is in dual-track talks with private and public sector creditors, trying to make the case that its program for reducing long-term debt is working. The government seeks to persuade private creditors to provide relief by taking some losses on their bond holdings, and to persuade its public sector lenders to release a scheduled allotment of bailout money, possibly as much as 30 billion euros ($39 billion).

Citigroup sued for fraud over $1 billion of CDOs - (finance.yahoo.com) Citigroup Inc (NYSE:C - News) was sued for fraud by Loreley Financing over nearly $1 billion worth of collateralized debt obligations purchased in 2006 and 2007. Citigroup is accused of defrauding Loreley into purchasing "fraudulent investments that are now worthless," Loreley said in a complaint filed Tuesday in New York State Supreme Court in Manhattan. Citi used the CDOs to offload the risks of toxic mortgage-backed securities on its books and to help preferred clients "short" the housing market, the lawsuit claims.

Invisible Bond Vigilantes Attack the White House - (www.cepr.net) In short, the economy was clearly in much worse shape than was implied by the projections that the Obama Administration used in crafting its stimulus. In fairness to the Obama Administration, these projections were in keeping with the consensus among economists at the time. The other striking part of this memo is the concern with “bond market vigilantes.” The memo discusses the need to focus on the medium-term deficit with the idea of reaching deficit targets by 2014. The highest deficit target listed in the memo for this year was 3.5 percent of GDP. The memo also includes calculations with a deficit target of 2.5 percent of GDP, and a balanced budget. The deficit for the fiscal year that ended last October was 8.5 percent of GDP. Depending on how the payroll tax debate, the extension of unemployment benefits and a few other issues get resolved, the deficit is not likely to be very much lower in 2012.

Who is Sheldon Adelson and What Has Newt Promised Him? - (www.robertreich.org) Sheldon Adelson, the billionaire casino owner, is now the poster boy for what’s terribly wrong with our campaign-finance system. Adelson, you may recall, had, before the South Carolina Republican primary, donated $5 million to the pro-Gingrich Super Pac “Winning Our Future” – giving Newt a pile of money for negative advertising against Mitt Romney in South Carolina. Adelson has done it again. He and his wife Marian have cut another $5 million check for Gingrich to go negative on Romney in Florida. The money won’t go as far as it did in South Carolina – TV ads cost a lot more in Florida – but it’s enough to give the Grinch a solid footing. And, who knows? The Adelsons are billionaires. They might decide to put in another $5 million or perhaps $20 million into Gingrich’s Super Pac. The point is, there’s no limit. Do you know who Sheldon and Marian Adelson are? Do you know what Gingrich has promised them, or what they think they’ll get out of a Grinch presidency? I don’t. But if Newt becomes President of the United States, they’ll be singularly responsible. And we better find out, because Newt will owe them big time.

OTHER STORIES:

Europe Risks 'Balkanization' From Crisis: UK Chancellor - (www.cnbc.com)

Europe Avoided 'Major Credit Crunch': ECB Official - (www.cnbc.com)

U.S. Economy Grows 2.8%, Less Than Forecast - (www.bloomberg.com)

Fed Easing May Harm Long-Term Economic Growth, Warsh Says - (www.bloomberg.com)

Lacker Says Fed May Need to Raise Rates Before Late 2014 to Stop Inflation - (www.bloomberg.com)

Ford Falls Short of Estimates While Reporting Biggest Profit in 14 Years - (www.bloomberg.com)

Meet the Bundlers Behind the Money - (www.opensecrets.org)

US has more people in prison than were in Stalin's gulags - (www.newyorker.com)

Florida's Housing Mess Puts GOP Hopefuls on Uncomfortable Turf - (www.nationaljournal.com)

In Florida, Facing the Political Implications of Housing Crisis - (www.nytimes.com)