Saturday June 20 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Fed hiring veteran lobbyist to keep secrecy - (www.reuters.com) The U.S. Federal Reserve is on track to hire a veteran lobbyist to help manage its relations with Congress at a time of heightened attention to its role in national affairs, a source familiar with the situation said on Friday. The Fed plans to hire Linda Robertson, who previously worked for now-defunct energy company Enron, as well as the Clinton administration. She is currently head of government, community and public relations at The Johns Hopkins University in Baltimore, said the source, who spoke on condition of anonymity because the hiring process was not complete. The Fed believes it will be useful to add to its resources at a time when there is great public and congressional interest in the institution, the source said. The U.S. central bank has been at the forefront of government actions to limit damage from the financial crisis that began in August 2007 and the impact of the deep recession that began in December of that year. Members of Congress have chafed at the Fed's bold use of its emergency powers and in particular its multibillion-dollar bailouts of investment bank Bear Stearns and insurer American International Group. Critics also bristle at the Fed's practice of maintaining the confidentiality of the companies that borrow directly from the central bank on the grounds that divulging their names would risk runs on those institutions. Many lawmakers and private analysts also fault the Fed for failing to stop risky lending and flawed market practices that laid the groundwork for the crisis. A non-binding budget bill approved by Congress in April opened the door for lawmakers to seek disclosure of the names of firms that receive emergency Fed loans and paves the way for a possible study of the Federal Reserve System's structure of 12 regional banks and a Washington-based board. Some officials believe lawmakers would like to go so far as to demand that the presidents of these regional banks -- or at least the head of the powerful New York Fed -- be subject to congressional approval. Currently, directors at these regional banks pick their presidents, subject to the approval of the Fed's Washington board.

Fed Trying to Combat Those Trying to Audit Them: Forbes Story: Fed policies are undermining its independence - (www.forbes.com) Extraordinary times require extraordinary actions. Nowhere is that more apparent than in the bold policy moves undertaken by the Federal Reserve over the past two years. The financial crisis forced the Fed to be aggressive and creative in its attempts to provide liquidity to credit markets that had frozen up. These were necessary steps, and mostly applauded. But the very boldness of its actions has put the independence of the Fed at risk. Congress is now clamoring to audit the Fed, and some of the policy proposals currently under discussion at the Federal Reserve will only increase the threat to its independence. Before we deconstruct these issues, let's focus on why it is important to have an independent central bank. The answer is quite obvious. An independent central bank can focus on monetary policies for the long term--that is, policies targeting low and stable inflation and a monetary climate that promotes long-term economic growth. Political cycles, alas, are considerably shorter. Without independence, the political cycle would subject the central bank to political pressures that, in turn, would impart an inflationary bias to monetary policy. On this view, politicians in a democratic society are short-sighted because they are driven by the need to win their next election. This is borne out by empirical evidence. A politically insulated central bank is more likely to be concerned with long-run objectives. A variant of the argument for central bank independence is that control of monetary policy is far too important to put in the hands of politicians. As a group, they have repeatedly demonstrated the lack of political will power to make difficult economic decisions. But now they want to assert control over the Fed. Bills H.R.1207 and S.604, introduced, respectively, by Rep. Ron Paul and Sen. Bernie Sanders (who brought you the "Employ Americans First Act"), would assert greater control over the Fed. As Ron Paul writes on his Web site: "Auditing the Fed is only the first step towards exposing this antiquated insider-run creature to the powerful forces of free-market competition. Once there are viable alternatives to the monopolistic fiat dollar, the Federal Reserve will have to become honest and transparent if it wants to remain in business." Great! Obviously, monetary policy is so falling-off-a-log simple that your elected representatives can insert themselves via the demand for transparency into decisions of true complexity and subtlety. Why am I not feeling reassured? To a large extent, the Fed backed itself into this problem, and it has to find its way out. In the heat of the financial crisis, the Fed created a number of additional lending facilities and took a wider variety of non-Treasury assets onto its balance sheet. The goal was to provide liquidity for the financial system. At first it sterilized these transactions by selling Treasury assets, but since September 2008 it has expanded its balance sheet dramatically from roughly $900 billion to over $2 trillion, as of May 6. This has had the effect of increasing the reserves in the system that are available for lending. The current plan is to continue to expand the balance sheet with the Term Asset-Backed Securities Loan Facility (TALF), the program designed to buy securities backed by credit card debt, auto loans, student loans, small-business loans and real estate loans.

If you cashed out all your equity, do you deserve help? - (mortgage.freedombloggingcom) Homeowners who treated their houses like cash machines, tapping the equity as home values rose, are among the most likely to end in foreclosure, even more than those who bought at housing’s peak, a new study finds. Often homeowners have had second, third and even fourth mortgages at time of foreclosure — a trend not adequately addressed by any of the federal or state foreclosure avoidance progams, said Michael LaCour-Little, a finance professor at Cal State Fullerton who authored the study. LaCour-Little tracked all houses and condos set for foreclosure auctions, known as trustee’s sales, in the first two weeks of November 2006, 2007 and 2008 in Orange, Los Angeles, Riverside, San Bernardino and San Diego counties. He is presenting his study today in Washington, D.C. at the mid-year conference of the American Real Estate and Urban Economics Association. I plan a bigger story on his findings, but wanted to share a few results now. For example, for the early November 2008 data sample, he tracked 2,358 properties. Here’s what he found: They were purchased at an average price of $354,000 and average year of 2002 (long before the housing peak of 2005). Total debt on the properties averaged $551,000 at time of foreclosure. That’s 56% more than the properties were worth when purchased, meaning at least that much was cashed out! An automatic valuation model estimated average value at time of foreclosure was $317,000, which suggests a combined loan-to-value at foreclosure of more than 170% ($551,000/$317,000). And that is a conservative estimate. Properties that banks later sold had an average resale price of $271,000! LaCour-Little is, well, diplomatic in his conclusion that “borrower behavior, rather than housing market forces, seems to be the predominant factor affecting outcomes.”

Oakland California Ponders Bankruptcy - (globaleconomicanalysis.blogspot.com) Oakland California has serious budget troubles. In a closed door city council session, Oakland Mulls Bankruptcy. "We have asked the (bankruptcy) question because we wanted to know the impact," said District 5 council member Ignacio De La Fuente. "In closed session, the question has been asked, and an answer was given." He would not elaborate. "It's a possibility," he acknowledged. "Things are that bad." Council President Jane Brunner was equally aloof. She ably acknowledged the city's dire financial problem while managing to avoid the b-word altogether. "We're going to try to avoid it, but am I going to say it would never happen? I can't say that," Brunner said. Consider the city's cash position: Out of next year's general fund of approximately $415 million, police costs are estimated at $212 million, fire protection service $103 million and $41 million in debt service payments. That leaves about $60 million to pay for everything else, from library services to recreation centers to public works. And that calculation doesn't include $50 million more in deferred debt service in a budget proposal presented to the council last month by Mayor Ron Dellums. Alameda County Assessor Ron Thomsen said tax assessments fell $13.6 billion in the fiscal year that will end June 30. "Our assessment roll will go down 2 percent, and we've never had a year-to-year drop ever in stats going back to 1958," he said. [The city council] is faced with three choices: drastic pay reductions across the board, including police and fire services; massive layoffs; or bankruptcy. It has been a great run for municipal employees in Oakland and across the state, who have been the beneficiaries of one of the most generous civil service systems in the nation. Since the late 1940s, California municipal governments traditionally have employed fewer employees, who have been paid substantially more than other civil servants, Ellwood said. Indeed it has been a "great run for municipal employees" who worked less for more pay and received more benefits than anywhere else in the nation. Oakland should do itself a favor and beat the rush by declaring bankruptcy now unless the unions come forth and voluntarily agree to lower benefits and stop all defined benefit plans going forward. The structural damage caused by ridiculous pension plans is staggering. A point of no return has been reached. Cities can no longer put off the problem and the public is not willing to put up with higher taxes. So what's it going to be? The article mentioned three choices. I have it at four.

RALPH NADER and ROBERT WEISSMAN: Obama's GM Plan Looks Like a Raw Deal - (online.wsj.com) Congress, not a secret task force, should decide the company's fate. Millions of people in communities across the country depend on the government getting the GM rescue right. That's why it is startling -- and mistaken -- for the future of GM to rest with a small, largely unaccountable, ad hoc task force made up of a handful of Wall Street expats. A congressional abdication of authority of historic proportions has left the executive branch with nearly complete discretion over how to handle GM and Chrysler's restructuring. President Barack Obama has further delegated authority, giving effective control to this task force, which operates under the titular authority of a top-level interagency group headed by National Economic Council Director Larry Summers and Treasury Secretary Tim Geithner. In the days before an avoidable June 1 bankruptcy filing, it is imperative that Congress honor its constitutional duties and demand that the GM restructuring deal be sent to it for deliberative review -- before any irreversible measures, such as a voluntary bankruptcy declaration, are taken. This means delaying any precipitous decisions until after Congress returns from its Memorial Day recess. The case for congressional involvement would be solid enough on constitutional and procedural grounds alone. But the secretive task force's plan raises red flags and requires Congressional examination in open hearings. With the government set to take a 70% ownership stake in GM, there are too many unanswered, troubling questions to proceed with a risky bankruptcy declaration. Here are 10 pressing issues among many: 1) Has the task force conducted any kind of formal or informal cost-benefit analysis on the costs of a GM bankruptcy and excessive closures? These may include the social effects of lost jobs (including more than 100,000 dealership jobs alone), more housing foreclosures, the government expense of providing unemployment and social relief, lost tax revenues, supplier companies that will be forced to close, damaged consumer confidence in the GM brand, and impacts on GM's industrial creditors. 2) Do GM and Chrysler really need to close as many dealerships -- which do not cost manufacturers -- as have been announced? Is the logic of closing dealerships to enable the remaining dealers to charge higher prices? If so, why is the government facilitating such a move? 3) Is the task force asking for too many plants to close and the elimination of too many brands? 4) Why is the task force permitting GM to increase manufacturing overseas for export back into the U.S.? Under the GM reorganization plan, the company will rely increasingly on overseas plants to make cars for sale in the U.S., with cars made in low-wage countries like Mexico rising from 15% to 23% of GM sales here. For the first time, GM plans to export cars from China to the U.S. in what is a harbinger of the company's future business model. What is the conceivable rationale for permitting GM to increase manufacturing overseas -- especially in dictatorships, for export back into the U.S. -- when preserving jobs and industry is the avowed goal of this immense taxpayer bailout? 5) Why is the task force supporting GM's efforts to devise a two-tier wage structure, whereby new auto jobs no longer provide a ticket to the middle class?

One owner's tale of mortgage-modification hell - (www.marketwatch.com) Trying to get a mortgage modified is a long and arduous process, leaving tens of thousands of borrowers in the same baffling position -- frustrated and concerned they're not being heard. This story, from a reader named Jim, is typical: "I currently have a first mortgage with one lender and a second mortgage with another. I meet the criteria for a loan modification per the Treasury Department's guidelines, which state that the payment on the first mortgage, plus taxes and insurance, must be greater than 31% of gross income. Housing coming out of the woods: "I applied for a loan mod with Lender A on March 17, stating specifically that I was doing so in accordance with the new rules. Eight weeks later, I was notified that I am being turned down because my payments vs. my ability to pay (income) were not acceptable. But that's exactly the reason I qualify. "I pushed the issue and after speaking with the branch manager, he elevated my calls to what I believe was a national customer service group in "Mortgage Mitigation." The first customer service rep I spoke with verified that the reason for my denial was as the branch manager told me. I pushed the issue again, indicating that I thought they were obligated to help me. His response was that they still did not fully understand the program and that I should try again in three to six months. "I was not happy with the answer, so I asked to speak someone more senior. I spoke to another individual who researched my case and said that in addition to the previously stated reasons, I was being turned down because I did not have a hardship (my mortgage is current). She said I needed to speak to my other creditors. I indicated that I had never been asked to substantiate a hardship at anytime in the process. She didn't seem to care about that, and said my file had been reviewed by senior management, which made the decision to reject my request for help. "I am in contact with a local organization referred by the Department of Housing and Urban Development, called Better Neighborhoods, and while that group has been helpful, the process is moving slowly because of the backlog. I really would like to get further legal council but don't know where to turn and am fearful of getting scammed.

OTHER STORIES:

Foreclosure: Now an Upscale Blight - (www.businessweek.com)

Coming: A 3rd wave of foreclosures - (articles.moneycentral.msn.com)

Foreclosure crisis spreads from subprime to prime mortgages - (www.usatoday.com)

Rising interest rates start to worry investors - (www.sfgate.com)

Economy Shows Cracks in European Union - (www.nytimes.com)

The Economy Is Still at the Brink - (www.nytimes.com)

Number of problem US banks soars - (news.bbc.co.uk)

Latvia Budget Cuts May Trigger IMF Tranche, Help Lats - (www.bloomberg.com)

Saudi Arabia set to launch new bond market - (finance.yahoo.com)

Bank "Profits" From Accounting Changes Mask Looming Loan Losses - (www.bloomberg.com)

Costly San Francisco area neighborhoods seeing biggest price cuts - (www.sfgate.com)

Key West High End Real Estate Equity Vanishes - (rocktrueblood.blogspot.com)

Increasing Numbers of Houseowners Withholding Mortgage Payments? - (www.rismedia.com)

Owner Of Upscale San Deigo W Hotel Walks Away From Mortgage - (www.dailybail.com)

Housing Recovery: Not So Fast - (www.businessweek.com)

Housing bubble caused Great Depression, too - (www.bellinghamherald.com)

Chase Mortgage Ad From 2005 - (www.businessinsider.com)

Fed Said to Retreat From Seeking Power to Sell Its Own Bills - (www.bloomberg.com)

Geithner Brings the Laughs In China - (www.realclearmarkets.com)

A Small College Struggles With Economics - (www.nytimes.com)

It won't stop where you would like it to - (theautomaticearth.blogspot.com)

House Prices Likely To Crash Through Fair Value - (www.businessinsider.com)

Parents Pulling Plug On Trust-Funders - (www.nytimes.com)

Good News Of Rising Rates Completely Ignored By Yahoo News - (www.finance.yahoo.com)

The Committee to Reinflate the Bubble Owns Your Senator - (nrd.nationalreview.com)

U.S. Lets 10 Banks Repay $68 Billion of TARP Funds - (www.bloomberg.com)

US warns on Chrysler liquidation risk - (www.ft.com)

Renting Is Not Throwing Money Away - (www.messymatters.com)

Amazing Debt Graph - (www.cotohousingblog.com)

Taxpayers gift of cash at closing to future foreclosees - (www.latimes.com)

Thought Experiment: Governing by Prediction Markets - (www.miller-mccune.com)

Rewriting The Oil Stock Story - (www.newgeography.com)

Vehicle fraud cases "heat up" amid economic downturn - (www.latimes.com)

The Learjet repo man - (www.salon.com)

Realtor Meets Reality - (www.images.ucomics.com)

Thursday June 4 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Audit the Fed, Then End It! - (Ron Paul at www.house.gov) I have been very pleased with the progress of my legislation, HR 1207, which calls for a complete audit of the Federal Reserve and removes many significant barriers towards transparency of our monetary system. This bill now has nearly 170 cosponsors, with support from both Republicans and Democrats. Senator Bernie Sanders has introduced a companion bill in the Senate S 604, which will hopefully begin to gain momentum as well. I am very encouraged to see so many of my colleagues in Congress stand with me for greater transparency in government. Some have begun to push back against this bill, and I am very happy to address their concerns. The main argument seems to be that Congressional oversight over the Fed is government interference in the free market. This argument shows a misunderstanding of what a free market really is. Fundamentally, you cannot defend the Federal Reserve and the free market at the same time. The Fed negates the very foundation of a free market by artificially manipulating the price and supply of money – the lifeblood of the economy. In a free market, interest rates, like the price of any other consumer good, are decentralized and set by the market. The only legitimate, Constitutional role of government in monetary policy is to protect the integrity of the monetary unit and defend against counterfeiters. Instead, Congress has abdicated this responsibility to a cabal of elite, quasi-governmental banks who, instead of stabilizing the economy, have destabilized it. It took less than two decades for the Federal Reserve to bring on the Great Depression of the 1930’s. It has also inflated away the value of our currency by over 96 percent since its inception. It has invisibly stolen from the poor and given to the rich through this controlled inflation, and now openly stolen through recent bank bailouts. It has predictably exacerbated the very problems it was meant to solve. Detractors have also argued that the Fed must remain immune from the political process, and that that more congressional oversight would distort their very important decisions. On the contrary, the Federal Reserve is already heavily entrenched in the political process, as the Fed chairman is a political appointee. High level officials routinely make the rounds between positions at the Fed, member banks, Treasury and back again, taking care of friends and each other along the way. As far as the foolishness of placing complex monetary policy decisions in the hands of politicians – I couldn’t agree more. No politician or central banker, no matter how brilliant, is smart enough to know more than the market itself. The failure of central economic planning has been witnessed over and over. It is frankly beyond me why we ever agreed to try it again. To understand how unwise it is to have the Federal Reserve, one must first understand the magnitude of the privileges they have. They have been given the power to create money, by the trillions, and to give it to their friends, under any terms they wish, with little or no meaningful oversight or accountability. Thus the loudest arguments against greater transparency are likely to come from those friends, and understandably so. However, it is the responsibility of every member of Congress to represent the interests of the people that sent them to Washington and find out what has been happening with our money. As the branch of government with the power of the purse, we really have no other reasonable choice when the economy is in the shape it is in.

Malls to Ghost Towns - (online.wsj.com) Malls, those ubiquitous shopping meccas that sprang up in the 1950s, are dwindling in number, with many struggling properties reduced to largely vacant shells. On the low-income east side of Charlotte, N.C., the 1.1-million-square-foot Eastland Mall recently lost a slew of key tenants, including a Dillard's and, next month, a Sears. Sales per square foot at the venue fell to $210 in 2008 from $288 in 2001. As the recession alters American spending habits, traditional shopping malls like Eastland Mall are deteriorating at an accelerating pace. The Metcalf South Shopping Center in Overland Park, Kan., is languishing after plans to redevelop it into an open-air shopping district fizzled. The stretch of shops that connects the two largest tenants -- a Sears and a Macy's -- stands mostly vacant, patrolled by security guards. With their maze of walkways and fast-food courts, malls have long been an iconic, if sometimes unsightly, presence in the American retail landscape. A few were made famous by their sheer size, others for the range of shopping and social diversions they provided. But the long recession is helping to empty out the promenades. Some analysts estimate that the number of so-called "dead malls" -- centers debilitated by anemic sales and high vacancy rates -- will swell to more than 100 by the end of this year. In the 12 months ended March 31, U.S. malls collectively posted a 6.5% decline in tenants' same-store sales, according to Green Street Advisors Inc., a real-estate research firm. The recent slump was led by an average 7.3% sales drop at Simon Property Group Inc., the operator with the largest number of mall locations. The industry's woes are worsening. Thinning customer traffic, and subsequent hits to tenants' sales and profits, prompted Standard & Poor's Corp. last month to lower the credit ratings of the department-store sector. That knocked Macy's Inc. and J.C. Penney Co. into junk territory and pushed others deeper into junk. Sears Holdings Corp., a cornerstone tenant at many malls, is expected to close 23 stores this month and next. General Growth Properties, which owns more than 200 U.S. malls, filed for bankruptcy protection April 16, due mainly to its failure to refinance billions of dollars of debt coming due. While the real-estate investment trust has said the filing will have no impact on its mall business, analysts say a prolonged bankruptcy proceeding could make retailers nervous about sticking around once their leases expire. The severity of the recession is turning some malls that were once viewed as viable into potential casualties. "Any mall that's sitting on life support is probably going to get its plug pulled" as the economy stalls, says Michael Glimcher, chairman and CEO of Glimcher Realty Trust, which owns 23 U.S. properties, including Eastland Mall in Charlotte.

Lifestyle Liquidation - Estates of the Fabulously Rich – Auction a Spectacular Failure - (Mish at http://globaleconomicanalysis.blogspot.com) It's not easy to go minimalist when you owe far more on your toys than anyone is willing to pay for them. Please consider Estates of the Fabulously Rich, Gilded Era Is Going, Going, Gone. VERO BEACH, Fla. -- Richard and Amanda Peacock spent five years building their dream home, a 10,000-square-foot, orange mansion overlooking the ocean here. They filled it with leopard-skin chairs, pinball machines, antique Coca-Cola signs and six sports cars. It had a room full of 100 hunting trophies -- including a hyena and the head of an elephant -- and an aviary out back housing eight rare parrots. On a recent Saturday, they held a one-day auction to try to sell it all. "Four million, do I hear four and a half?" shouted auctioneer Dean Kruse, as he took bids for the mansion. "Come on, people -- the good Lord stopped making oceanfront property a long time ago." Frank Burden, a local landscaper, picked up Mr. Peacock's Pennzoil sign for $75. Bidding on the scarlet Ferrari, with only 5,000 miles, reached $110,000, a steal compared with its $207,000 purchase price. Marie Davis, a Florida vacationer, picked up several exotic hunting trophies. "I got a wildebeest for $250!" she said. "What a deal." Mr. Peacock's auction marked a new moment in the fall of the latest Gilded Age. Fire-sale auctions of mansions, yachts, sports cars and other trappings of wealth have become increasingly common as the rich become less rich. But Mr. Peacock is in the vanguard in attempting to downsize in just one day. The event was less an auction than a lifestyle liquidation, a clearance sale on a decade's worth of conspicuous consumption. Mr. Peacock's selloff is among the most unusual. A 60-year-old commercial real-estate developer with a mustache and a dark tan, he built his fortune building and owning retail space in Miami's Coconut Grove area. They bought a piece of oceanfront property for $4 million and spent the next four years, and another $4 million, building the mansion. It has six bedrooms, seven-and-a-half baths, a gym and a barbershop and salon. Outside there's a waterfall, tiki bar and aviary. The couple designed much of the furniture themselves, including the gold and leopard-skin dining-room chairs. "Richard likes leopard skin, and I like gold, so it was the perfect match," says Mrs. Peacock. The sprawling "trophy/game room" is stocked with dozens of antique road signs, life-size statues of Muhammad Ali and Green Bay Packers quarterback Bart Starr, antique gas pumps and a cigar-store Indian. Stuffed hunting trophies spill throughout the house, including the fang-baring baboon in the guest room. Mr. Peacock says he doesn't hunt. Their fortunes began to turn last fall. Mr. Peacock was diagnosed with cancer. His commercial real-estate business, with 30,000 square feet of retail space in Miami, is facing rising vacancies. He also had to shut down his Vero Beach construction company, which was working on residential projects. The couple now has a $2.2 million mortgage on their mansion, Mr. Peacock says, and a $1 million mortgage on a four-bedroom oceanfront home nearby that they used while building the mansion. Maintaining the house is also costly: $50,000 a year in taxes, $25,000 for insurance and more than $100,000 a year for indoor and outdoor maintenance. That's not to mention the upkeep on their other home. Mr. Peacock says he is now cancer-free. He says it was the health scare, not financial problems, that inspired him to scale back. "We don't need all this stuff anymore," he says, adding that the couple plans to buy a cabin in the Blue Mountains. "It's time to simplify." On the morning of Mr. Peacock's auction, more than 100 bargain-hunters flocked to the auction tent along with dozens more bidding live online. The bids started strong, with the metal signs and animals selling. An online bidder bought the elephant head for $6,750. A bright yellow Honda motorcycle went for $9,500, and a 2003 Country Motor Coach fetched $150,000 -- far less than the $600,000 Mr. Peacock paid for it or the $200,000 he owes on it. When the six cars came on the block, however, the sale stalled. Only one -- a cloned 1970 Plymouth Hemi Cuda convertible -- reached Mr. Peacock's asking price. The Peacocks didn't accept the bids on the others, including the Ferrari. An Italian speedboat and a pair of jet skis also failed to sell. Bids on the house ground to a halt at $5.5 million. The Peacocks decided they couldn't let it go for that. Since they didn't want to live in an empty mansion, they pulled the other items, including the parrots, off the block. In all, 500 items sold for about $300,000. About $200,000 went to pay the auctioneer and other expenses. Both houses are still on the market. "Nobody's spending money right now," said Mr. Peacock, sitting under the tent with his head buried in his hands. "I guess we'll try to just keep hanging on." Auction a Spectacular Failure: Fittingly, the auction was a spectacular failure. The WSJ article mentioned two other auction failures if I can take the liberty of calling the sale of a $13 million estate for $3.5 million a failure. Mr. Peacock has more toys than he needs or can afford. Amazingly, he had a bid of $5.5 million for the house and only owed $2.2 million on it. That was enough to pay off his other oceanfront house and still have $2 million left over. By attempting to "hang on" the Peacocks risk losing it all. I suspect he will. In the meantime how the heck can he possibly get by without that wildebeest head?
Bush's "Hope for Homeowners" a failure by virtually every metric - (www.propublica.org) The Hope for Homeowners program [1] was created by Congress last summer to help an estimated 400,000 homeowners avoid foreclosure. But it could more aptly be called the Hope for A Homeowner program, given that just one has used it successfully since its October launch. But silver linings are hard to come by these days, so we might as well point out that she is one satisfied customer. “What a relief!” the lucky homeowner from Litchfield Park, Ariz., wrote to her mortgage bank, NationsChoice, in February. “An extra $542 in monthly savings and a $100,000+ principal reduction sure is a relief. Thank you!” Hope for Homeowners was designed to give people who couldn’t afford their mortgage payments a chance to refinance into a 30-year, fixed-rate loan insured by the Federal Housing Administration, even if they owed more than their home was worth. But the lender would need to reduce the amount the borrower owed before the FHA, a division of the Department of Housing and Urban Development, would insure the loan. The program has been a flop. But Congress and the administration are trying to rescue it, envisioning it as a key component of the government’s campaign to curb foreclosures. On Wednesday, President Obama signed a bill [2] that includes improvements to the program. Some think this is a mistake. “Hope for Homeowners has been a failure by virtually every metric,” Rep. Spencer Bachus (R-AL), ranking member on the House Financial Services Committee, said in a February press release [3]. “And rather than cut taxpayer losses, this legislation aims to fix a fundamentally unfixable program.” (Congress allotted the program $300 billion, but none of it has been spent since FHA hasn’t paid out any insurance claims.) Analysts think the fixes may not be effective. Guy Cecala, publisher of Inside Mortgage Finance Publications, says the program is salvageable only with “some major, wholesale changes, since no one is using it at all.” The legislative changes are “essentially patches,” he says, but combined with new efforts from the administration, they may help. Whether they’ll be enough to entice borrowers and lenders to participate is still unclear. He notes, however, that a refinancing program for underwater borrowers is something everyone is eager to see. An ‘Unusable’ Program: So why exactly has Hope for Homeowners been such a failure? According to Cecala, “One of the basic problems is it was designed by Congress. And they put in so many restrictions it was unusable.” Meg Burns, the director of FHA Single Family Program Development, points out some of these flaws. One, when all the different eligibility requirements are taken into account, “you’ve narrowed the pool of eligible borrowers to a handful,” she says. It’s also expensive for borrowers, who have to pay FHA a 3 percent fee upfront and another 1.5 percent annually. And if they ever decide to sell their homes, even 50 years down the road, they’ll owe the government at least half [4] of the equity created by the refinance. They’ll also have to fork over half of however much their home has appreciated in value since then.

Democrats Block Solar Farms, Wind Farms, and Guantanamo Shutdown Showing Many are All Talk, No Action and Part of NIMBY Crowd (not in my back yard):
· Feinstein Seeks To Block Solar Power From California Desert Land - (www.huffingtonpost.com) California's Mojave Desert may seem ideally suited for solar energy production, but concern over what several proposed projects might do to the aesthetics of the region and its tortoise population is setting up a potential clash between conservationists and companies seeking to develop renewable energy. Nineteen companies have submitted applications to build solar or wind facilities on a parcel of 500,000 desert acres, but Sen. Dianne Feinstein said Friday such development would violate the spirit of what conservationists had intended when they donated much of the land to the public. Feinstein said Friday she intends to push legislation that would turn the land into a national monument, which would allow for existing uses to continue while preventing future development. The Wildlands Conservancy orchestrated the government's purchase of the land between 1999-2004. It negotiated a discount sale from the real estate arm of the former Santa Fe and Southern Pacific Railroad and then contributed $40 million to help pay for the purchase. David Myers, the conservancy's executive director, said the solar projects would do great harm to the region's desert tortoise population. "It would destroy the entire Mojave Desert ecosystem," said David Myers, executive director of The Wildlands Conservancy. Feinstein said the lands in question were donated or purchased with the intent that they would be protected forever. But the Bureau of Land Management considers the land now open to all types of development, except mining. That policy led the state to consider large swaths of the land for future renewable energy production. "This is unacceptable," Feinstein said in a letter to Interior Secretary Ken Salazar. "I urge you to direct the BLM to suspend any further consideration of leases to develop former railroad lands for renewable energy or for any other purpose." In a speech last year, Republican Gov. Arnold Schwarzenegger complained about environmental concerns slowing down the approval of solar plants in California.
· Ted Kennedy says, Alternative Energy? Not in my Backyard ... - (www.americaswatchtower.com) Liberals have a way of telling people how they should live their lives for the betterment of the common good. However when it comes to these same liberals living the lifestyle they want us to lead that is another story. Speaking of another story, that leads me to this story. Liberals, such as Ted Kennedy are constantly talking about alternative energies, about renewable energies. They are telling us we need to invest in these energies as a country to reduce our dependency on foreign oil. We could reduce our dependency on foreign oil by drilling for more domestic oil, but liberals like Ted Kennedy can’t have that. We could put up wind-farms off shore, that sounds like a great idea to me. However I don’t live next to the ocean so the building of these farms will have no profound effect on my lifestyle. Do you know who does live on the ocean front where the wind-farms are supposed to be built? Ted Kennedy, who is for alternative, and renewable energy. So you would think he would be happy that an alternative energy source would be built so close to his house, wouldn’t you? He can lead by example. WRONG. Ted Kennedy suffers from the not-in-my-backyard mentality that he opposes when it doesn’t affect him. Sen. Ted Kennedy and many residents who own coastal property from where they could see the wind turbines on a clear day oppose the project. Ted Kennedy is a hypocrite. I thought he, and his other liberal friends have been telling Americans that we need to sacrifice in order to relieve America from her burden on foreign oil. This is the perfect opportunity for Ted Kennedy to lead by example and sacrifice a little bit by giving up some of his ocean view for the betterment of the common good. Isn’t that what he has been saying? Why should we listen to him when he tells us to sacrifice when he is unwilling to sacrifice himself? The wind-farms would help America become less dependent on foreign oil but Ted Kennedy is too worried his view might become obstructed.
· Senate rebukes Obama, blocks Guantanamo shutdown – (news.yahoo.com/s/ap) In a rare, bipartisan defeat for President Barack Obama, the Senate voted overwhelmingly Wednesday to keep the prison at Guantanamo Bay open for the foreseeable future and forbid the transfer of any detainees to facilities in the United States. Democrats lined up with Republicans in the 90-6 vote that came on the heels of a similar move a week ago in the House, underscoring widespread apprehension among Obama's congressional allies over voters' strong feelings about bringing detainees to the U.S. from the prison in Cuba. The president readied a speech for Thursday on the U.S. fight against terrorism, at a time when liberals have chafed at some of his decisions. Obama has vowed to close the prison by January 2010, and the Senate's vote was not the final word on the matter. It will be next month at the earliest before Congress completes work on the legislation, giving the White House time pursue a compromise that would allow the president to fulfill his pledge. But Obama's maneuvering room was further constrained during the day when FBI Director Robert Mueller told a congressional panel that he had concerns about bringing Guantanamo Bay detainees to prisons in the United States. Among the risks is "the potential for individuals undertaking attacks in the United States," said Mueller, who was appointed by President George W. Bush in 2001 and is serving a 10-year fixed term in office. Additionally, U.S. District Judge John Bates ruled this week that some prisoners — but not all — can be held indefinitely at Guantanamo without being charged, thus increasing the pressure on the administration to develop a plan for the men held there. After the Senate vote, White House press secretary Robert Gibbs said, "The president understands that his most important job is to keep the American people safe and that he is not going to make any decision or any judgment that imperils the safety of the American people."
· Kerry foe rips his anti-wind-farm stand; Windbags should pipe down on wind energy – (www.capecodtoday.com) Kerry foe rips his energy bidOgonowski: Senator's dragged heels on renewable resources. "Wind power can power Senator Kerry when he windsurfs or sails, but he's not sure he wants wind power to power a generator," quipped Ogonowski. Republican senatorial candidate Jim Ogonowski is calling opponent Sen. John Kerry a johnny-come-lately when it comes to his support of alternative energy. Ogonowski says Kerry has shown little leadership on alternative energy in his 24 years in the Senate. "Senator Kerry can't even take a position on Cape Wind," said Ogonowski, who unsuccessfully challenged Nikki Tsongas for the Fifth Congressional District seat last year and now is running against Kerry. Ogonowski was reacting to a speech Kerry gave to Greater Boston Chamber of Commerce members yesterday. The state's junior senator called on Massachusetts to take the lead in alternative energy development, an increasingly common theme among Bay State politicians. "We've got the ability in this state to create the next new thing and if it comes out of Massachusetts, we will benefit," said Kerry. "And we have to do this, because we have no alternative." Ogonowski has thrown his support behind Cape Wind, a $900 million project in Nantucket Sound, which would be the first offshore wind-energy plant in the United States... Herald.



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