Tuesday, June 2, 2015

Wednesday June 3 Housing and Economic stories


Greece's new currency would be 'rubbish': Citi's Buiter - (www.cnbc.com) There would be "havoc" if Greece left the euro zone and adopted an alternative currency, Willem Buiter, global chief economist at Citi, told CNBC. "I really think the notion that Greece exits with or without a shadow currency or a proper currency (is ridiculous). Greece has not, historically, been good at managing an independent currency. This time, if they were to move towards that from a situation of extreme weakness it would be havoc for Greece so I wouldn't recommend that." Asked whether Greece could exit the 19-country single currency group with some kind of alternative currency tied to the euro, Buiter rebuffed the notion, saying "that would be rubbish." The comments by Buiter – a Citi economist believed to have been the first to have coined the now well-known phrase "Grexit" (alluding to a Greek exit from the euro zone) -- come as negotiations between Greece and its international lenders and euro zone partners over reforms, aid and the future of the country's international bailout program, drag on.

Greece's 'endgame' in sight; bond yields soar - (www.cnbc.com)  As Greece enters a new week with no imminent signs of securing a deal with creditors to unlock much-needed aid, talk that a debt default is "inevitable" has grown.  News emerged on Monday that Greece came so close to defaulting on a 750-million-euro ($855-million) repayment to the International Monetary Fund (IMF) last week that Greek Prime Minister, Alexis Tsipras, warned that the repayment could not be made without help from the European Union. Concerns that IMF debt will not be repaid sparked a sell-off in Greek bonds, with the yield on two-year bonds surged more than 250 basis points to 23.68 percent. "A default event by Greece is inevitable," Carl B. Weinberg, chief economist at High Frequency Economics, wrote in a note published Monday. Euro zone governments are willing to lend Athens cash but only in return for strict reforms such as pension cuts, which the anti-austerity government says is a "red-line" that cannot be crossed. The stalemate has dragged on for weeks, hurting the country's economy, business sentiment and raising the prospect of a debt default and Greece's possible withdrawal from the single currency club.

High Ranking Connecticut Fraud Investigator Busted For Giving Lender Fake Paystubs - (www.mfi-miami.com) Lynwood Patrick, Jr., 39, East Hartford, Connecticut, was arrested on a federal criminal complaint charging him with wire fraud in connection with his submission of a fraudulent application for a personal mortgage modification. Patrick was arrested at his residence. He appeared before U.S. Magistrate Judge Donna F. Martinez in Hartford and was released on a $150,000 bond. According to the criminal complaint, Patrick is employed as the Director of Investigations for the State of Connecticut Department of Social Services, Office of Quality Assurance. The complaint alleges that, from approximately November 2012 through May 2013, Patrick applied for a mortgage modification under the Making Home Affordable program, a federal initiative designed to assist homeowners who have experienced a decline in income access secure loans at lower rates. When applying for mortgage relief through JP Morgan Chase, Patrick fabricated State of Connecticut paystubs and lied about his assets in order qualify for the program. Specifically, Patrick claimed total assets of $500 in one checking account to show that he had experienced a loss of income causing a hardship when, in fact, he had thousands of dollars spread out over multiple accounts at several institutions and his rate of pay had not diminished.

Our $58 trillion love affair with debt, in one crazy chart - (www.cnbc.com) Those having a hard time finding growth in the U.S. economy are looking in the wrong places. Forget about real estate, technology or manufacturing: The real American growth industry is debt. While gross domestic product has lingered in the 2 to 2.5 percent growth range for years, the level of debt as measured through credit market instruments has exploded. As the nation entered the 1980s, there was comparatively little debt—just about $4.3 trillion. That was only about 1.5 times the size of gross GDP. Then a funny thing happened. The gap began to widen during the decade, and then became basically parabolic through the '90s and into the early part of the 21st century. Though debt took a brief decline in 2009 as the country limped its way out of the financial crisis, it has climbed again and is now, at $58.7 trillion (Tweet this), 3.3 times the size of GDP and about 13 times what it was in 1980, according to data from the Federal Reserve's St. Louis branch. (The total debt measure is not to be confused with the $18.2 trillion national debt, which is 102 percent of GDP and is a subset of the total figure.)

Once a sure bet, taxi medallions becoming unsellable - (www.usatoday.com)  Until recently in America's big cities, purchasing a taxi medallion—the city-issued license to operate cabs —was about as sound of an investment as they come. But with the rise of Uber and other ridesharing services, the value of taxi medallions are plummeting, leading cabbies and fleet owners throughout the USA worried that their industry will be decimated if local and state government doesn't intervene. "I have had a pretty successful thing," said Gary Karczewski, 65, a Chicago cabbie who inherited his medallion from his father 28 years ago and earned enough to purchase two homes and help send his two daughters to college by driving the equivalent of 80 times around the world. "My hope was to wind down soon and give whatever I could sell the medallion for to my mother. But I am not confident there's a market now." In Chicago, which has the country's second biggest fleet with roughly 7,000 taxis, the median sale price for a medallion hovered around $70,000 in 2007 before reaching a median sales peak of $357,000 in late 2013. Since reaching that high point more than a year ago, the value of medallions in the Windy City have sharply declined and sales have ground to a near halt—with the city recording only seven medallion transfers in the first quarter of 2015—as the median sale price fell to about $270,000.


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