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Irvine's
Great Park boondoggle blows $200 million
- (www.ochousingnews.com) What happens when you give politicians $200 million with no
accountability? They blow it. So it was with the money the City of Irvine
extracted from developers to create the Great Park. So far, the City has
brought in about $250 million, yet only about 15% of the park is developed, and
what’s out there doesn’t look like $250 million worth of facilities. Most of
the money was simply wasted. Irvine taxpayers paid for a park and all they got
to show for it is a balloon, over-hyped and over-priced conceptual plans, and a
giant pile of runway rubble. The City of Irvine was given $200 million in cash.
What we got for this money is of dubious value, and if some private developer
would have done it, only a tiny fraction of that money would have been spent. Lennar
then began working on its plan to build thousands of homes and millions of
square feet of retail space in nearby Great Park Neighborhoods. But the plan to
build housing was put on ice after Lehman Brothers Holdings Corp., the
project’s main lender, failed in 2008, and the housing market crashed. In the
meantime, the city spent the $200 million Lennar gave it, as well as about
$50 million generated by leases on the land at the former base, on concerts,
fairs, architectural design, a free hot-air balloon ride attraction and some
construction. So far, only a fraction of the park is developed.
Fed
should get out of MBS, avoid overstimulating housing - (www.reuters.com) A recovery in the housing market means
the Federal Reserve should think about how to reduce its holdings of
mortgage-backed securities over time in order to avoid creating another bubble
in real estate, a top central banker said on Friday. "The housing market seems
like it is recovering quite well at this point. At some point, I think the
recovery we've seen in the housing market means we ought to be thinking about
shifting our portfolio away from mortgage-backed securities," said
Richmond Federal Reserve President Jeffrey Lacker. He said the timeframe for
this shift should be "a couple of years," and could involve using
payments from maturing MBS to buy U.S. Treasury notes, rather than rolling them
back into MBS, as well as reducing the pace of MBS buying.
Special
Report: Subprime bond bounces back, leaving behind a subprime borrower - (www.reuters.com) During the crazy days of the housing bubble in 2006, bankers created a
bond called MABS 2006-FRE1. The instrument gave buyers the right to payments on
the subprime housing loans of nearly 2,000 borrowers, including Stephen
Monzione, a professional wedding photographer in New Hampshire. Six months
after the security was issued, a trader called it a "crap bond."
Monzione, with a monthly income of about $900 and mortgage payments of $927.22,
eventually stopped paying. So did hundreds of other people. The bank that
originated the loans went bust. The bond's value crashed to 16 cents on the
dollar. Today, the subprime bond is rising from the ashes. The subprime
borrower isn't. A hedge fund manager in Colorado snapped up MABS 2006-FRE1 last
summer and more than doubled his money in four months, thanks to a surge of
investment into financial markets by the Federal
Reserve. The U.S. central bank hasn't been as helpful to Monzione. The
60-year-old lost a foreclosure battle and must be out of his home by the end of
July. "God bless them," Monzione marvels at the traders who flipped
the bond of which his loan was a part. "I don't have a clue about what the
hell that means to me personally."
Many
Americans say they can't retire until their 70s or 80s - (www.latimes.com) It’s the new retirement: More than four in 10 Americans think they’ll
have to work into their 70s or 80s because they can’t afford to retire,
according to a new survey. One in 10 people expects to toil into their 80s,
while 32% expect to be on the job into their 70s, according to the report by
insurer Northwestern Mutual. On average, those surveyed expect to leave work at
age 68. However, the report points out, that doesn’t jibe with reality. The
mean age of those already retired is 59, the study said. An increasing number
of people figure they’ll simply work longer to make up for inadequate nest-egg
savings these days, not realizing how layoffs, poor health or other forces
pushed their forebears out of the workforce far sooner than they wanted.
Kuroda
Stimulus Backfires as Mortgage Costs Rise: Japan Credit - (www.bloomberg.com) Bank of Japan Governor
Haruhiko Kuroda’s stimulus policies are backfiring in the housing market, where
mortgage rates are rising even as the central bank floods the financial system
with cash. While 35-year home-loan costs rose
one basis point to 1.81 percent this month from an all-time low of 1.8 percent
in April, any increase will be undesirable for the BOJ, according to Mizuho
Securities Co. Federal Reserve Chairman Ben S. Bernanke’s monetary easing
almost halved 30-year U.S. mortgage rates since
2008 to 3.35 percent on May 2. The BOJ’s April 4 announcement that it would
double bond buying to generate 2 percent inflation unleashed the highest
government-debt volatility in a decade and pushed 10-year yields up by 4 1/2
basis points. The benchmark lending rate for large corporations, known as the prime rate, increased five
basis points from its record low to 1.2 percent on April 10, despite the BOJ’s
aim of stoking the economy through cheaper funding.
Senate
passes bill letting states tax Internet purchases, siding with traditional
retailers - (www.washingtonpost.com)
As
red ink recedes, pressure fades for budget deal - (www.washingtonpost.com)
California Girds for Severe Fire Season as Dry Lands Burn - (www.bloomberg.com)
California Girds for Severe Fire Season as Dry Lands Burn - (www.bloomberg.com)
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