KeNo's Housing and Economic Portal: Monday February 13 Housing and Economic stories

Sunday, February 12, 2012

Monday February 13 Housing and Economic stories

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TOP STORIES:

U.S. Banks Tally Their Exposure to Europe’s Debt Maelstrom - (www.bloomberg.com) After a hurricane, homeowners check nervously to see if their insurance will cover all of the damage. With the European financial crisis still threatening a trail of defaults, United States banks are betting that their insurance is going to pay out. Five large American banks, including JPMorgan Chase and Goldman Sachs, have more than $80 billion of exposure to Italy, Spain, Portugal, Ireland and Greece, the most economically stressed nations in the euro currency zone, according to a New York Times analysis of the banks’ financial disclosures. But these banks have made extensive use of a type of financial insurance, the credit-default swap, to help them offset any losses that might occur if defaults swamped the five troubled nations. Using these swaps, along with other measures, the five banks have cut their theoretical exposure to the troubled countries by $30 billion, to $50 billion. The analysis also shows thatCitigroup has the greatest percentage of its exposure potentially protected, at 47 percent, while Bank of America has bought the least protection, at 12 percent.

Money From MF Global Feared Gone - (online.wsj.com) Nearly three months after MF Global Holdings collapsed, officials hunting for an estimated $1.2 billion in missing customer money increasingly believe that much of it might never be recovered, according to people familiar with the investigation. As the sprawling probe that includes regulators, criminal and congressional investigators, and court-appointed trustees grinds on, the findings so far suggest that a "significant amount" of the money could have "vaporized" as a result of chaotic trading at MF Global during the week before the company's Oct. 31 bankruptcy filing, a person close to the investigation was cited as saying Monday. Many officials now believe certain employees at MF Global dipped into the "customer segregated account" that the New York company was supposed to keep separate from its own assets -- and then used the money to meet demands for more collateral or to unfreeze assets at banks and other counterparties as they grew more concerned about their financial exposure to MF Global.

This Woman's Awful Bank Of America Foreclosure Story Could Turn Into Another Viral PR Disaster - (www.bloomberg.com) About two and a half years ago, she and her son's father, Tim, realized their fixed-rate mortgage payments were going up like an adjustable rate. After calling the bank, she claims that Bank of America had tacked on charges for insurance and other products the couple had not requested. In the end, though, they decided to keep the insurance so that the house would still be paid for if something happened to Tim or Ramos. Sadly, Tim recently committed suicide. On top of that, she claims the insurance Ramos had paid on their home wasn't going through. When she called to find out what happened, the bank told her that since she wasn't the executor of Tim's estate, she had no right to see what was going on — and they had no record of her insurance payments either. In Ramos' own words. "But Bank of America, they don't care. They said it's our house now. They're going to foreclose on it. Forget that I paid for insurance to 2 1/2 years, forget that my name is on the mortgage..."

No relief in rising gasoline prices as refineries shut down - (www.latimes.com) American motorists may well be wondering when, if ever, they will again see a sustained and significant drop in retail gasoline prices. Not in the forseeable future, it seems. In California, the average price for a gallon of regular gasoline has risen another 3.3 cents in the last week, to $3.747, according to the AAA Fuel Gauge Report. That's 39.1 cents a gallon higher than the old record for Jan. 30, set just last year. Nationally, the average is $3.429, up another 4.3 cents over the past week. That's also 33 cents a gallon higher than last year's record for the date. Meanwhile, fuel supply sources continue to shrink, particularly in the eastern U.S., negating at least some of the effect of continuing low demand for gasoline in the U.S. In its most recent weekly petroleum report, for example, the Energy Department noted another refinery that was set to close.

P&G To Lay Off 1,600 After Discovering It's Free To Advertise On Facebook - (www.bloomberg.com) Reality appears to have finally arrived at Procter & Gamble, the world's largest marketer, whose $10 billion annual ad budget has hurt the company's margins. P&G said it would lay off 1,600 staffers, including marketers, as part of a cost-cutting exercise. More interestingly, CEO Robert McDonald finally seems to have woken up to the fact that he cannot keep increasing P&G's ad budget forever, regardless of what happens to its sales. He told Wall Street analysts that he would have to "moderate" his ad budget because Facebook and Google can be "more efficient" than the traditional media that usually eats the lion's share of P&G's ad budget.