Wednesday September 10 Housing and Economic stories

Top Stories:

GMAC in possible Bankruptcy mode – (www.ml-implode.com) - GMAC may file for Bankruptcy as early as Wednesday, September 10, 2008. We believe they are scrambling to move/sell assets prior to this tentative filing date, and we're attempting to find other sources to confirm the information received. Described on their web site

US Is "More Communist than China": Jim Rogers - (www.cnbc.com) The nationalization of Fannie Mae and Freddie Mac shows that the U.S. is "more communist than China right now" but its brand of socialism is meant only for the rich, investor Jim Rogers, CEO of Rogers Holdings, told CNBC Europe on Monday. "America is more communist than China is right now. You can see that this is welfare of the rich, it is socialism for the rich… it's just bailing out financial institutions," Rogers said. Stock markets jumped after the U.S. government's decision to launch what could be its biggest federal bailout ever, in a bid to support the housing market and ward off more global financial market turbulence. But Rogers said in the long term the move spelled trouble. "This is madness, this is insanity, they have more than doubled the American national debt in one weekend for a bunch of crooks and incompetents. I'm not quite sure why I or anybody else should be paying for this," Rogers told "Squawk Box Europe."

Fannie & Freddie Bailout Won't Cure Market's Ills - (www.cnbc.com) Market pros remain unconvinced that the rescue plan by itself will be enough to snuff out the Wall Street bears. The government bailout of Fannie Mae and Freddie Mac has given investors at least a short-term reason to believe the worst has begun to pass, but it's hardly a game-changer. Market pros remain unconvinced that the rescue plan by itself will be enough to snuff out the Wall Street bears. "This is another good piece of news to help us," says Nadav Baum, managing director of investments at BPU Investment Management in Pittsburgh. "Are we going straight up from here? No. But what it does is gives us a lot of confidence."
· Rescue Won't Solve Crisis
· Poll: What Do You Think?
· What It Means to You

WaMu (& BKUNA, & DSL) on the brink? - (optionarmageddon.ml-implode.com) - As reported at length by Mr. Mortgage, and more recently, on this blog: WaMu is in deep trouble. CEO Kerry Kilinger was fired this weekend and today the bank signed a “memorandum of understanding” with its chief regulator, the Office of Thrift Supervision. Basically, OTS has put WaMu on notice. Remember, WaMu has about $120 billion worth of toxic mortgage assets sitting on its balance sheet. Subprime, Option ARMs, Home Equity Loans, etc. Taken together, these securities are likely worth 50 cents on the dollar. It’s not easy deciphering their balance sheet, but WaMu probably has in the neighborhood of $40 billion of capital backstopping these losses. So if they actually write down their assets to reflect their current value, it could wipe them out. Is it any wonder WaMu is desperate for capital? With $140 billion in insured deposits, any prospect that WaMu might fail has to be stressing regulators, especially the FDIC. Remember, FDIC has only $45 billion in its reserve fund, meaning that a failure the size of WaMu could come close to wiping THEM out. After Fannie and Freddie, the march of the bailouts will surely continue…

Luminent Mortgage files for Chapter 11 bankruptcy - (www.reuters.com) - Luminent Mortgage Capital Inc (LUMCE.OB: Quote, Profile, Research, Stock Buzz), which has struggled with liquidity problems because of mortgage investments, has filed for bankruptcy protection. The Philadelphia-based company filed for Chapter 11 protection from creditors on Friday with the U.S. bankruptcy court in Baltimore. It had $13.4 million of assets and $486.1 million of debts as of July 31, according to the bankruptcy petition. Luminent once invested in billions of dollars of mortgages, including many rated "triple-A," but collapsed as investor demand for many fixed-income securities vanished. The company said this resulted in heavy margin calls and write-downs, and forced it to sell many assets at a loss.

Why is it the Bush and McCain Families Seem to Be the Kiss of Death for Banks? Maybe because they are idiots or crooks, or a bit of both?? Need some examples?

· Failed bank had McCain's son on board The Australian - (www.theaustralian.news.com.au) This is not new news, but here is some more information to de-bunk the spin (by the Republicans) that McCain was only on the audit board for 5 months. However, Mr McCain's ties to Silver State date to 2006, when he became a director of Choice Bank, a small Scottsdale, Arizona lender that Silver State acquired that year. Mr McCain's family was an early investor in Choice, according to people familiar with the matter. Choice was smaller than Silver State, but its finances deteriorated just as quickly and hurt the parent company. As of March 31, 2008, Choice was facing $US7.9 million worth of delinquent loans, up from $US1.6 million three months earlier. Silver State recently logged an $US18.8 million write-down, representing the full remaining value of its investment in Choice, to reflect the "continued deterioration" of the franchise's credit quality, according to securities filings.
· Where Was Jeb? - (www.forbes.com) A government money market debacle unfolding in Florida is raising questions about former governor and presidential brother Jeb Bush's possible involvement in the mess. Florida froze withdrawals from a state investment fund earlier this week when local governments withdrew billions of dollars out of concern for the fund's financial stability. In the past few days, municipalities have withdrawn roughly $9 billion, nearly a third of the $28 billion fund (which is similar to a money market fund) controlled by the Florida's State Board of Administration (SBA). The run on the fund was triggered by worries that a percentage of the portfolio contained debt that had defaulted. A majority of this paper was sold to SBA by Lehman Brothers (nyse: LEH - news - people ). Bush, as the state's top elected official, served on a three-member board that oversaw the SBA until he retired as governor in January. In August, Bush was hired as a consultant to the bank. Lehman spokesperson Kerrie Cohen, speaking on behalf of Bush, said they had no comment and would not say when the bank had sold Florida the paper. SBA did not return calls. While SBA wouldn't confirm, Bloomberg reported the amount of debt in default is around $900 million. Edward Siedle, a former Securities and Exchange Commission attorney who investigates money management wrongdoing and has worked on behalf of several Florida public pension funds, thinks this is just the tip of the iceberg. He expects problems with defaulting debt to crop up in public funds across the country, especially in states with disclosure laws weaker than Florida's.
· Keating scandal flies under radar in McCain's '08 bid - (www.bizjournals.com) What hasn't come up is the Arizona senator's involvement with banker and real estate developer Charles Keating in what was arguably one of the largest scandals in the state's history: "The Keating Five." Five U.S. senators, including McCain and former Sen. Dennis DeConcini of Arizona, were investigated by the Senate Ethics Committee in 1991 for their ties to Keating, whose Lincoln Savings & Loan was at the center of the S&L crisis of the late 1980s and early '90s. The committee investigated whether the five senators improperly pressured federal regulators to help Keating's business. Keating was a contributor to McCain's congressional campaign in the 1980s and the two vacationed together, according to the committee. The ethics panel ruled that McCain made some judgmental missteps in the Keating matter, but his actions were not illegal. The failure of Keating's S&L and parent real estate venture resulted in lost money for investors and a federal bailout, including the takeover of some Phoenix-area properties. Keating was convicted of fraud and spent time in prison. Those convictions were overturned on appeal. Today, he is involved in some real estate developments in the Phoenix market.
· The Austin Chronicle: News: O, Brother! Where Art Thou? Like Hugh Rodham, the Bush Bros. Have Capitalized on Family Ties – (www.austinchronicle.com) Unless you've been reading the Houston Chronicle society page, it's unlikely you've seen any current news about Neil Bush. Neil was either part of the late Maxine Mesinger's "crème de la crème crowd" at a Houston social event, or a stale S&L footnote: "the director of Silverado Banking, Savings and Loan when it crashed in 1988 at a cost of $1 billion to taxpayers." In 1990, Bush paid a $50,000 fine and was banned from banking activities for his role in taking down Silverado, which actually cost taxpayers $1.3 billion. A Resolution Trust Corporation Suit against Bush and other officers of Silverado was settled in 1991 for $26.5 million. And the fine wasn't exactly paid by Neil Bush. A Republican fundraiser set up a fund to help defer costs Neil incurred in his S&L dealings. Friends and relatives contributed -- but not then-President and Barbara Bush, which would have been unseemly.
· Update on Riggs Bank Scandal & Jonathan Bush - (www.washingtonpost.com and http://en.wikipedia.org/wiki/Jonathan_Bush ) President Bush's uncle, Jonathan J. Bush, is a top executive at Riggs Bank, which this week agreed to pay a record $25 million in civil fines for violations of law intended to thwart money laundering. Jonathan Bush, who is a major fundraiser for his nephew, was appointed in 2000 to run Riggs Investment Management Co. His association with Riggs began when he headed J. Bush & Co., a New Haven, Conn., company he created in 1970 and built to offer advice on money management. On May 15, 2004, The Washington Post published an item about Jonathan Bush which states: "A political Web site written by a Democratic operative drew attention yesterday to the fact that President Bush's uncle, Jonathan J. Bush, is a top executive at Riggs Bank, which this week agreed to pay a record $25 million in civil fines for violations of law intended to thwart money laundering."[2] The bank accounts under investigation may have been Saudi, though the article does not state that. It does, however, go on to say: "...a source familiar with the multiple federal investigations of the bank's Saudi accounts and other embassy accounts say Jonathan Bush's investment advice unit has "no relationship whatsoever" with any of the Riggs's Saudi accounts." Moreover, the newspaper quotes a spokesman for the Office of the Comptroller of the Currency as saying "any suggestion of political influence in the Riggs situation is 'preposterous.'" In 1991, Bush was fined $30,000 in Massachusetts and several thousand in Connecticut for violating registration laws governing securities sales. He was barred from securities brokerage with the general public in Massachusetts for one year.[3]


Other Stories:

Update: Washington Mutual Ousts Killinger; Signs Memo of Understanding with OTS - (www.ml-implode.com) - CNBC reports that CEO and former Board Chairman Kerry Killinger was fired over the weekend, replaced by Alan Fishman, chairman o...
TransUnion: Mortgage Delinquencies Rise, Should Taper off in 2009 - (www.ml-implode.com) - "The rate of mortgage delinquency increased more than nine percent from the first to second quarter, rising to a national averag...
Bloggers React: The Bailout - (www.ml-implode.com) - "“This maneuver is 100% consistent with the government grand plan to boil us like frogs in a pot of debt since, in the govie’s e...
Poor, poor Manhattan - (www.ml-implode.com)
Fannie, Freddie Bailout Necessary, But Not Enough - (www.ml-implode.com)
BankUnited Sees Regulatory Capital Status Downgraded - (www.ml-implode.com)
Washington Mutual announces Memorandum of Understanding with the Office of Thrift Supervision - (www.ml-implode.com)
Treasurys Drop on GSE Action - (www.ml-implode.com)
Mr. Mortgage: Phonie/Fraudie Thoughts - (www.ml-implode.com)
CDS Market: Did Fannie and Freddie Default ? - (www.ml-implode.com)
Taxpayers to the rescue! - (www.ml-implode.com)
World markets soar after Freddie, Fannie bailouts - (www.ml-implode.com)
Comparing Fannie to Bear - (www.ml-implode.com)

Treasuries Fall After U.S. Takes Control of Fannie, Freddie - (www.bloomberg.com)
Oil falls as traders eye the dollar, Gulf storm, OPEC - (www.marketwatch.com)
U.S. Stocks Jump, Joining Global Rally, on Fannie, Freddie Plan - (www.bloomberg.com)
As Crisis Grew, a Few Options Shrank to One - (www.nytimes.com)
U.S. Takeover of Fannie, Freddie Offers `Stopgap' - (www.bloomberg.com)
Treasury Extends Secured Credit Line to Federal Home Loan Banks - (www.bloomberg.com)
Paulson Engineers U.S. Takeover of Fannie, Freddie - (www.bloomberg.com)
No End Yet to the Capital Punishment - (online.wsj.com)
Hedge Funds Get Rattled As Investors Seek Exits - (online.wsj.com)
Asset-based borrowing on the rise - (www.ft.com)
Regulators to Help Banks With Fannie, Freddie Shares - (www.bloomberg.com)
US government takes on big role in mortgage market - (www.ap.com)
Active equity managers lose favour - (www.ft.com)
Borrowing Binge Weakens Europe's Companies as Recession Looms - (www.bloomberg.com)
Japan Real Estate Bankruptcies Surge in August - (www.bloomberg.com)
Russia aims to corner energy markets: U.S. official - (www.reuters.com)
U.S. Seizes Mortgage Giants - (online.wsj.com)
US takes control of Fannie and Freddie - (www.ft.com)
Federal Highway Trust Fund declared bankrupt - (www.azcentral.com)
Taxpayers take on trillions in risk in Fannie, Freddie takeover - (www.usatoday.com)
Financial Crisis Isn't Over Yet, Nobel Economist Granger Says - (www.bloomberg.com)
It's a hard time to get new credit - (www.sfgate.com)
Radical Options In Play for New Structure of Firms - (www.washingtonpost.com)
Lehman's Fuld Shuffles Top Management for Third Time - (www.bloomberg.com)
WaMu ousts CEO Killinger: report - (www.reuters.com)
Treasury to Rescue Fannie and Freddie - (www.washingtonpost.com)
Auto industry to press Congress for $50B in loans - (www.signonsandiego.com)
Foodmakers plan big ad campaigns in down economy - (www.boston.com)
Talks fail; Boeing machinists strike - (www.chicagotribune.com)
Manufacturers turn to US - (www.ft.com)
In Crisis, Paulson's Stunning Use of Federal Power - (www.washingtonpost.com)
Few Stand to Gain on This Bailout, and Many Lose - (www.nytimes.com)
The Dilemma of Fannie and Freddie - (www.nytimes.com)

Tuesday July 29 Housing and Economic stories

Top Stories:

Pimco's Gross approves of blowing up 1 million houses - (business.smh.com.au) Banks face trillion dollar meltdown: Pimco. Falling US home prices will force financial firms to write down $US1 trillion ($1.04 trillion) from their balance sheets, crimping bank lending and sparking sales of assets, says Bill Gross, who manages the world's biggest bond fund. A total of $US5 trillion of mortgage loans, or almost half of the nation's home loans, belong to "risky asset categories'' such as subprime and Alt-A, Pimco's Mr Gross wrote in commentary posted on the firm's website yesterday. About 25 million US homes are at risk of negative equity, which could lead to more foreclosures and a further drop in prices, he said. A home has negative equity when it's worth less than the mortgage with which it was bought. The government could boost housing prices by buying 1 million new or unoccupied homes, "blow them up, and then start all over again,'' Mr Gross wrote, adding that the suggestion comes from "one of the wisest men I know.'' Aside from that solution, the housing legislation "is the best way to begin the long journey back to normalcy,'' he said.

McCain's son resigns from Silver State Bank board - (globaleconomicanalysis.blogspot.com) - Silver State Bancorp, the Henderson-based holding company for the similarly named bank, reported that Andrew McCain, son of Republican presidential candidate John McCain, resigned today from the boards of directors of the bank and bank holding company. The company cited “personal reasons” for McCain’s resignation, and a Silver State spokesman declined further comment. Gettin' While The Gettin' Is Good? I was not even going to report on this until I looked up Silver State Bank on bankrate.com. Silver State Safe & Sound? In a word, No. (rated a 5 per CAEL ratings, with 5 being least desirable, 1 most desirable). Notes on Safe & Sound® star ratings, CAEL rating. The most desirable Safe & Sound® CAEL rating is one, the least desirable is five, in accordance with industry standards. Bankrate.com has reversed this order in its graphic rankings for easy visual recognition. The top star rating is five, the lowest star rating is one. Performing institutions will generally receive a rating of 3 or better stars with the majority of banks falling into the 3-4 star range. By contrast, the performing Safe & Sound CAEL range would be 1, 2 and 3 with the majority of institutions falling into the 2 range.

"Run On Bank" by David N. Vaughn, FSU Editorial 07/28/2008 - (www.financialsense.com) “Think about it. If someone entered into a mortgage with payments they could not afford based on refinancing later on (thanks to rising prices) this means they were speculating. Additionally, rising prices would not make their mortgages affordable. It would imply greater debt and higher payments. The only thing you can do with a home you can’t make payments on is to sell it. It is not up to the taxpayer to fund a bail-out. It is up to the mortgage brokers and bankers who benefited from the bubble. Billions of dollars were pocketed by builders, bankers, and brokers. They should pay for this mess. This plan is simply an indirect transfer of money from taxpayers to Wall Street. It will provide minimal aid to homeowners. It is a bad idea but typical of modern America.”

"More trouble for IndyMac customers" by Anthony Cherniawski, FSU ... - (www.financialsense.com) Many IndyMac customers who are moving their money to another bank won't be able to access all of their funds for more than a week. By law, the other banks must make IndyMac cashier's check deposits up to $5,000 available for withdrawal in one business day. But any amount over that can be held up to nine business days. It is reported that some banks are not taking IndyMac checks at all.

'Extreme Makeover' house faces foreclosure - (www.macon.com) More than 1,800 people helped demolish the Harper family's decrepit home and replace it with a sparkling four-bedroom mini-mansion that towered over ranch and split-level homes in their Clayton County neighborhood. But three years later, the Harper's home has become the latest victim of the foreclosure crisis after the family used it as collateral for a $450,000 loan. The two-level home is set to go to auction on the steps of the Clayton County Courthouse Aug. 5. The couple did not return phone calls Monday, but they told WSB-TV they received the loan for a construction business that failed. The finished product was a four-bedroom house with decorative rock walls and a three-car garage. The home's door opened into a lobby that featured four fireplaces, a solarium, a music room and a plush new office. The couple, which ABC chose from some 15,000 applicants, spent the week on vacation in Disneyland while their home was being revamped. Materials and labor were donated for the home, which would have cost about $450,000 to build. Beazer Homes' employees and company partners also raised $250,000 in contributions for the family, including scholarships for the couple's three children and a home maintenance fund. Meanwhile, some of the volunteers who helped build the house are infuriated. Lake City Mayor Willie Oswalt was among a handful of volunteers who helped vault a massive beam into place in the Harper's living room. He's less than thrilled with the couple's financial decisions.

Higher Interest Rates Last Straw for Foolish Houseowners - (www.fool.com) Over the past two years, homeowners have had to deal with falling prices, a glut of inventory on the market, and tightening credit standards. This week, though, another threat to home prices has come into view, and it could spell disaster for a housing market struggling to find bottom. This week, interest rates on mortgages rose toward the highest levels in six years. According to Freddie Mac (NYSE: FRE), the average rate on a 30-year mortgage rose to 6.63%, up sharply from just 6.26% the week before. Similarly, rates on adjustable-rate mortgages (ARMs) rose from 5.10% to 5.49% -- all in just one week. Tough times, steep moves: Of course, this wasn't just any ordinary week for the home-loan industry. Mortgage market-makers Fannie Mae (NYSE: FNM) and Freddie Mac went to the brink of oblivion and back again, as fears of insolvency were at least temporarily squelched by promises of liquidity from the Federal Reserve and further relief from the federal government.

Fannie Mae bailout: Taxing America's poorest to help the richest - (blogs.law.harvard.edu) The federal government is soon to be ladling out tax dollars to bail out Fannie Mae. Who will pay for this? Joe Sixpack, a guy who works hard at two jobs, rents an apartment, and tries to support a couple of kids. Who benefits? Stockholders in Fannie Mae. Holders of bonds issued by Fannie Mae. The 5,000 employees of Fannie Mae, including the CEO who helped himself to $13.4 million in salary this year. What do the stockholders, bondholders, and employees have in common? They are all richer than average Americans and they are all going to be sucking down tax dollars paid by poorer than average Americans (plus some tax dollars from the rich, of course). Joe Sixpack might have been thinking that he could finally afford to rent a nicer apartment or maybe even buy a place. But now Congress is giving the states $4 billion to buy up property in crummy neighborhoods. Joe won’t be getting any bargains because he will have to compete with the government when he goes home-shopping. Suppose he remains a renter? Higher real estate prices will result in higher rents, which aren’t going to be too affordable for Joe because he is about to be laid off from one of his jobs. In Roman times the employees of Fannie Mae would be decimated, i.e., they would draw lots and 90 percent of them would beat the unlucky 10 percent to death with clubs. What would be a modern equivalent? At the very least taxpayers should have the satisfaction of seeing the highest paid 100 Fannie Mae employees fired with two weeks of severance pay (it can’t be that hard to find replacements given that the current staff’s primary achievements have been accounting fraud and then insolvency). The newspapers say that it is important for foreigners to have confidence that the U.S. will pay its debt. Let’s pay foreign bond holders in full then, using tax dollars as necessary. After all, a guy in China could not be expected to understand that a bunch of crummy houses in Cleveland were not worth $250,000 each. Let the domestic shareholders get 10 cents on the dollar and let the domestic bondholders get whatever the bonds are actually worth.

Macon Mall faces foreclosure - (globaleconomicanalysis.blogspot.com) Foreclosure action has begun against Macon Mall because of nonpayment on a $141.2 million loan, and a new management company has been approved by the court to take control of the 1.4 million-square-foot facility. Since the loan was made, Parisians and the Piccadilly Cafeteria have closed at the mall, and Linens-N-Things - part of the mall property, even though it's not inside the main building - is in the process of closing. In a letter filed in the case, "Dillard's has apparently communicated its intent to close its store location at Macon Mall." Based on an appraisal "the value of the property has fallen approximately 60 percent since June 30, 2005." The Shopping Center Economic Model Is History. More mall foreclosures are coming. 50-60% writeoffs will be common, and dozens of already stressed banks will fail as a result.

Hedge Funds May Post Worst Month in 5 Years as Bank Bets Sour - (www.bloomberg.com) Hedge funds may post their worst month in at least five years after bets on financial stocks and crude oil backfired. Hedge Fund Research Inc.'s Global Hedge Fund Index of more than 55 funds slid 3.2 percent through July 24, heading for the biggest monthly drop since the measure started in 2003. Wagers on a decline in financial stocks and homebuilders, one of the most popular, soured after Fannie Mae and Freddie Mac shares more than doubled in the six trading days to July 23. Bullish bets on crude oil turned to a loss as oil slid 15 percent from a record $145.29 a barrel on July 3 after doubling in a year. ``You have to believe that everyone had the same trade on,'' said Paul Meader, co-managing director of Corazon Capital Management, a Guernsey, Channel Islands-based manager with about $1.2 billion, mostly invested in hedge funds. ``There will be a lot of people hurting and licking their wounds with a tough July to report to their clients.''

Worried Banks Sharply Reduce Business Loans - (www.nytimes.com) Notice the tone of the story implies that people and businesses have the god-given right to cheap access to credit. Well sorry to say, but borrowing depends on finding people to lend money. Well, sorry, but the rest of the world (and US banks) and hunkering down. People and businesses will have to live within their means for once. Banks struggling to recover from multibillion-dollar losses on real estate are curtailing loans to American businesses, depriving even healthy companies of money for expansion and hiring. Two vital forms of credit used by companies — commercial and industrial loans from banks, and short-term “commercial paper” not backed by collateral — collectively dropped almost 3 percent over the last year, to $3.27 trillion from $3.36 trillion, according to Federal Reserve data. That is the largest annual decline since the credit tightening that began with the last recession, in 2001. The scarcity of credit has intensified the strains on the economy by withholding capital from many companies, just as joblessness grows and consumers pull back from spending in the face of high gas prices, plummeting home values and mounting debt.

Funds for Highways Plummet - (online.wsj.com) An unprecedented cutback in driving is slashing the funds available to rebuild the nation's aging highway system and expand mass-transit options, underscoring the economic impact of high gasoline prices. The resulting financial strain is touching off a political battle over government priorities in a new era of expensive oil. A report to be released Monday by the Transportation Department shows that over the past seven months, Americans have reduced their driving by more than 40 billion miles. Because of high gasoline prices, they drove 3.7% fewer miles in May than they did a year earlier, the report says, more than double the 1.8% drop-off seen in April. The cutback furthers many U.S. policy goals, such as reducing oil consumption and curbing emissions. But, coupled with a rapid shift away from gas-guzzling vehicles, it also means consumers are paying less in federal fuel taxes, which go largely to help finance highway and mass-transit systems. As a result, many such projects may have to be pared down or eliminated.

Why millions just 11 days from financial ruin - (www.dailymail.co.uk) More than a third of adults could survive financially for only 11 days if they were to lose their job or be too ill to work, according to a survey.
The finding gives a worrying insight into the lives of millions who are living on a financial tightrope. Researchers looked at how much people spend every month and how much they have in savings. It found a massive gap between the two, which means most would be crippled by a sudden change in their circumstances.


Other Stories:

Housing Lenders Feel Heat - (online.wsj.com) Housing Bill Relies on Banks To Take Loan Losses. The housing rescue bill passed by the Senate Saturday hasn't been signed into law, but top Democrats already are putting pressure on regulators and bankers to make sure a major program to prevent foreclosures doesn't fall flat. For struggling U.S. homeowners, the success or failure of the program -- which would let roughly 400,000 owners refinance into affordable, government-backed loans -- depends largely on bankers' willingness to take a partial loss on the loans and to reduce the amount of money borrowers owe. Ken comment: You can bet these banks will be looking to dump/restructure their worst performing loans.

Chrysler Lending Arm In Weakened Position As It Refinances - (online.wsj.com) A critical deadline is approaching for Chrysler LLC, which must refinance $30 billion of its lending arm's working capital by Friday amid a shake-up in the unit's leasing strategy. The auto lending business, Chrysler Financial, has come under intense pressure in recent weeks, as resale values on leased cars fall and borrowing conditions tighten. Chrysler LLC on Friday decided to stop offering auto leases through Chrysler Financial beginning in August -- a move that could squeeze car dealers hoping to move Chrysler cars but could pacify the unit's restive lenders, who are worried about the value of Chrysler leases used ...

The repugnant bailout nation - (articles.moneycentral.msn.com)
'Stealth' Housing Bailout: It's Bigger Than You Think - (biz.yahoo.com)

What Does the Housing Bill Do? - (www.theconglomerate.org)
Bailouts are taxation without representation - (eyeonmiami.blogspot.com)
Why Housing Bill Won't Help Housing Market - (www.seekingalpha.com)
Government should get out of the business of assuming risk - (www.nytimes.com)
Why few decry Fannie-Freddie bailout's socialism - (money.cnn.com) For the second time this year, the government is considering the use of taxpayer money to rescue private companies. Sen. Jim Bunning warns of creeping socialism, but he seems to have found few allies. As financial skeptic James Grant recently mused, Why no outrage? There are plenty of theories, starting with the understanding that allowing the collapse of mortgage giants Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) - the government-sponsored enterprises that are the subject of the latest Washington bailout effort - could crush economic growth by strangling an already wheezing housing market. With inflation on the rise and the economy losing jobs, no one wants to steepen the slide toward recession - even at the cost of hearing Bunning say over and over, "Since when are we France?"
But another factor in the widespread acceptance of the housing bailout is the memory of how well investors have done in the last 25 years. The hope is that unusual measures can clear the way for still greater prosperity ahead - even if the near-term outlook for the economy remains muddled.
Official Senator Contact List - (www.senate.gov)
House Votes on Bill To Betray Responsible Savers - (www.govtrack.us)
68% Price Reduction in Los Banos Benefits Responsible Family - (patrick.net)
Average S. Florida house dropped $4,100 a month for 2 years straight - (www.cbs4.com)
U.S. regulators seize two more banks - (news.yahoo.com)
Why wasn't IndyMac on FDIC problem list? - (www.sfgate.com)
My experience at IndyMac - (www.appraisersforum.com)
Visualize the Dow at 6,000 - (www.onlinejournal.com)

Dumpy $625,000 house proves bubble not over yet - (www.ocregister.com)


U.S. Deficit to Hit Record $490 Billion in 2009 - (www.bloomberg.com)
That '70s Woe in Rerun - (www.nypost.com)
Retailers may pass rising costs on to consumers - (www.dallasnews.com)
Higher prices heading beyond gas, food - (www.ap.com)

US credit crunch set to last for months - (www.ft.com) The credit squeeze in the US economy is likely to persist for many months and might even get worse, Gary Stern, president of the Federal Reserve Bank of Minneapolis, has told the Financial Times. He said that with interest rates at 2 per cent the Fed was well-placed to cope with any negative surprises on growth. By contrast, he said, it was not as well positioned to deal with any negative surprises on inflation.

SEC's Assault on Illegal Short Selling Intensifies - (online.wsj.com)

Top equity firm KKR says it's ready to go public now - (www.chron.com)
After Delay, KKR Finds a Way to Go Public - (www.nytimes.com)
US home owners cut back refinancing - (www.ft.com)
SEC Focuses on Illegal Short Selling - (online.wsj.com)

Advertising slowdown weighs on media groups - (www.ft.com)
Banks Rally, but Demons Still in Vault - (online.wsj.com)
Slowing US auto-finance market hits lenders - (www.ft.com)
Toyota lowers 2008 global sales target - (www.boston.com)
Chrysler looks to drop high-end models - (www.chicagotribune.com)
Brown-bag lunches stealing business from fast-food - (www.ocregister.com)

Darling looks at new mortgage plan - (www.ft.com)
India's Deficit Is a Danger - (online.wsj.com)
Moody's warns on European credit quality - (www.ft.com)
Asian Nixonomics May Spell Subsidy-Driven Stagflation - (www.bloomberg.com)
German Consumer Confidence Declines to Five-Year Low - (www.bloomberg.com)
Japan considers sovereign wealth fund - (www.economist.com)
ANZ Bank Profit to Fall as Much as 25% on Bad Debt Provision - (www.bloomberg.com)
House price values drop 10 months in a row - (www.telegraph.co.uk)
Moody's warns on European credit quality - (www.ft.com)
Credit Quality Worsens in Poland, Eastern Europe, Moody's Says - (www.bloomberg.com)
Growth in Money Supply,Credit Slows in Euro Zone - (online.wsj.com)
China's Cars, Accelerating A Global Demand for Fuel - (www.washingtonpost)
Fannie Mae and Freddie Mac: Congress backs rescue package - (www.telegraph.co.uk)
A Deposit-Protection Primer - (online.wsj.com)