Wednesday June 18 Housing and Economic stories

Top Stories:

Luxury builders stuck with pricey houses - (www.kgw.com) - The builders came to attract future customers, and they were optimistic about selling the show houses that stretched to $3 million. Normally, two or three homes sell during the show and most are sold within a year. But nine months after the Street of Dreams show, none has sold. The show opened just as the U.S. mortgage market tumbled, triggering the Portland region's biggest home price decline in at least two decades. One Street of Dreams builder tried unsuccessfully to auction his home. Two builders now own their homes and one of them lives in his. Subcontractors who worked on four homes have filed liens to get paid. "The timing was probably about the worst ever," said builder Ray Derby, a Street of Dreams veteran who is still trying to sell his $1.9 million home. "We just hit a bad market."
Colin Powell Slams Bush - (www.canada.com) - Might vote for Obama; Former U.S. secretary of state says presidential voting decision will be based on passion and policiesHome Builders Confidence Touches Record Low; Calls for Congressional Action Mount - (www.ml-implode.com) - Home builders continued to call for Congressional action to bolster the faltering U.S. housing market Monday afternoon, as builder confidence in the market for newly-built single-family homes during June matched a record low seen last December. According to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), the index slipped to 18 in June; that’s off from 19 one month earlier.
The Bubble - (www.ml-implode.com) - "How the housing bust started a panic in Florida, felled a storied bank and raised the specter of recession."
Ohio homeowners need help - (money.cnn.com) - U.S. Rep Maxine Waters, head of housing subcommittee, wants foreclosure rescue package by July 4; calls Countrywide exec 'poster child' for housing mess.
Plan to clarify mortgage disclosures opposed - (money.cnn.com)
What?s The Difference Between Lehman Brothers & Bear Stearns? Lehman?s CEO Sits On the Board Of The NY Fed - (www.globalresearch.ca). Unlike Bear Stearns, which got decimated by the JPM buyout using Federal Reserve money, Lehman Brothers is probably in line for a massive bailout from the Fed. At least, that’s what its CEO Richard Fuld seems to believe. The June 4, 2008 Financial Times of London quoted him as stating, "The Federal Reserve’s decision earlier this year to lend directly to investment banks should take questions about Lehman’s liquidity off the table." Whether Lehman can come up with the "liquidity" to meet its debts is no longer an issue, because it expects to be feeding at the trough of the Federal Reserve, just as JPM did when it bought Bear Stearns at bargain-basement prices. The difference between the two "bailouts" is that Lehman Brothers, unlike Bear Stearns, will actually get the money. Why is Fuld so confident of this rescue operation? Olagues notes that Fuld, like Dimon (and unlike Bear CEO Alan Schwartz), sits on the Board of the New York Federal Reserve. A conflict of interest? It certainly looks like it. Indeed, Olagues points to a statute defining this sort of self-dealing as a criminal offense. 18 U.S.C. Chapter 11, Section 208, makes it a felony punishable by up to 5 five years in prison for members of the Board of Directors of a Federal Reserve Bank to make decisions that benefit their own financial interests. That would undoubtedly apply here:
Bankruptcy Rising Among Seniors - (www.usatoday.com)

Notice how CNBC typically spins bad news into good. Every story on the main page (except one) spins some bad news into good.
· Housing Starts Fall: Why That's A Good Thing - (www.cnbc.com)
· Core Inflation Slows, Even as Producer Prices Rise - (www.cnbc.com) – Even as PPI hits a 6 month high, they discount the energy and food aspect as non-core.
· JPMorgan Chase: We Got Bear Stearns on the Cheap - (www.cnbc.com) Sounds like JPMorgan Chase is trying to proactively nip anyone implying that the Bear Stearns acquisition is hurting their earnings. JPMorgan’s top investment banking execs said yesterday that their acquisition of Bear Stearns was worth far more than what they paid, but that market turmoil is still taking a toll on investment-banking profits and may result in further layoffs, CNBC has learned.
· Regulators Moving to Curb Speculative Oil Trading - (www.cnbc.com) – Again, politicians trying to temporarily knock down the symptoms but not the cause of high oil prices.
· Oil Trading Below $134 - (www.cnbc.com)
· Market Full of Oil, Price Trend 'Fake': Iranian President - (www.cnbc.com)
· Goldman's Profit Drops 11% But Is Above Expectations - (www.cnbc.com)


Other Stories:

BIS Warns Of Great Depression – (www.bankingtimes.co.uk)
Corporate Bond Yields Hit Six-Year High - (www.cfo.com)
Renters, Soldiers Feel the Pain of Foreclosure - (news.yahoo.com/s/nm)House price drop means $4 trillion in lost capital - (biz.yahoo.com)
Hard hit cities are set for more steep house-price losses - (money.cnn.com)
NJ NAR fudges numbers - (patrick.net) - NAR sales calculation resulted in the reported New Jersey first quarter sales being
revised from +4% to -30%. While the pundits were busy spinning the positive numbers, blogs were sounding the alarm. Proof once again that popular media is not adding much value to the debate.
Foreclosures Make Up Majority of Sales in Sacramento - (blogs.wsj.com)
Contrasting housing quotes by same guy - (patrick.net)
FBI Halts Some Cases to Investigate Mortgage Frauds - (www.bloomberg.com)

Congress takes on oil speculators Oil prices flat - (money.cnn.com)
Bond yields up on inflation fears Dollar weakens - (money.cnn.com)
Housing rescue group steps up efforts - (money.cnn.com) – We have seen this one before: Life may get a little bit easier for troubled borrowers.
Hope Now, the alliance of lenders, mortgage servicers, investors and community advocacy groups put together to fight the foreclosure epidemic, announced new guidelines Tuesday that should help speed up the process of helping borrowers who are trying to hang onto their homes.
Builders' mood stays glum - (money.cnn.com)
6 real estate bargains - (money.cnn.com)
Study Confirms US Foreclosure Growth - (money.cnn.com)
Property-flipping rule suspended - (money.cnn.com)
Betting on a housing rebound - (money.cnn.com)
Record-breaking may CA foreclosure report - (mrmortgage.ml-implode.com)
Case for Abolishing the FHA and GSEs - (Mish at globaleconomicanalysis.blogspot.com)

Banks May Need $65 Billion in Capital: Goldman - (www.cnbc.com)
Dinosaur Sightings Redux - (www.ml-implode.com) - "Mad Max conditions for truckers are putting them out of business. Last week in the commentary we got into some kind of debate a...
Housing Slump Helps the Draw of Fixer-Upper TV - (www.nytimes.com)
Are People Smarter than Media Pundits? Yes - (Charles Hugh Smith at www.oftwominds.com)
Will Housing Provide a Hedge in Inflationary Times? - (Charles Hugh Smith at www.oftwominds.com)
"Real Property Lenders" gets permit suspended - (www.sanluisobispo.com) - Paso Robles-based Real Property Lenders gets permit suspended; it's the second NoCo firm to have investment activities curtailed by state regulators
“Second Magnus” Rises From The Ashes Of The First One - (www.ml-implode.com) - "It’s hard to say whether this counts as "un-imploded" or not…. The demise of First Magnus Financial Corp. last August wasn’t ev...
A Special Message for Angelo Mozilo - (www.ml-implode.com)

U.S. Stocks Retreat, Led by Financials; Regional Banks Tumble - (www.bloomberg.com)
Dollar Drops Versus Euro as Outlook for Fed Rate Increase Dims - (www.bloomberg.com)
Oil Falls a Third Day on Signs Demand to Drop, Field May Start - (www.bloomberg.com)
Treasuries Rise as Traders Scale Back Bets on Rate Increases - (www.bloomberg.com)

U.S. Producer Prices Climb 1.4%; Core Rate Rises 0.2%, Matching Forecasts - (www.bloomberg.com)
Fed Unlikely to Affirm Rate Increase - (online.wsj.com)
Housing Starts in U.S. Fell 3.3% Last Month to 975,000 Pace, a 17-Year Low - (www.bloomberg.com)
Fed divided on when to raise rates - (www.ft.com)
Obama Expands on Economic Plan - (online.wsj.com)
U.S. Pushes a European Method To Help Banks Make Home Loans - (online.wsj.com)
Health costs to see big jump - (www.startribune.com)
Employer Health Costs to Rise 10 Percent, Double Inflation Rate - (www.bloomberg.com)
Bankruptcy rising among seniors - (www.usatoday.com)
BIS continues to warn of depression - (www.bankingtimes.co.uk)

New guidelines for US lenders - (www.ft.com)
Goldman deal could point way for SIVs - (www.ft.com)
Gas prices latest worry for real estate market - (www.latimes.com)
Buyout firms limit debt - (www.chicagotribune.com)
Shakeout Roils Hedge-Fund World - (online.wsj.com)
Lenders Agree to Plan To Stem Foreclosures - (online.wsj.com)
Bond rate debacle - (www.nypost.com)
Despite Irish Vote, the Euro Remains Strong - (www.nytimes.com)

Goldman Earnings Decline Less-Than-Estimated 11% - (www.bloomberg.com)
Housing woes hit community banks - (www.latimes.com)
Rising fuel price is taking its toll on truckers - (www.dallasnews.com)
Morgan Stanley, Citi Lose Oil Analysts as Hedge Funds Hire - (www.bloomberg.com)
Goldman close to $7 billion SIV restructure: source - (www.reuters.com)
McClatchy slashes 1,400 jobs in cost-cutting drive - (www.signonsandiego.com)

U.K. Inflation Reaches Decade-High, King Predicts Acceleration - (www.bloomberg.com)
Booming, China Faults U.S. Policy on the Economy - (www.nytimes.com)
Russian Oil Dispute Renews Concerns - (www.nytimes.com)
King forced to explain surge in inflation above 3% - (www.ft.com)

The Bubble - (www.washingtonpost.com)

Friday May 30 Housing and Economic stories

Top Stories:

Senate Doesn’t Want Borrowers Walking - (www.ml-implode.com) - Buried in the proposed legislation is something new and revolutionary, an effort to stop mortgage walk-aways. The Senate legislation addresses the walk away issue by saying that before borrowers can get FHA financing they must certify that they have not intentionally defaulted on any debt, not just their current mortgage. Lying about this issue can be considered perjury, and perjury can result in a jail sentence. No less important, if a homeowner has walked away from an FHA loan, then the borrower would have to repay the government for any loss on the property — potentially tens of thousands of dollars. In the same way that we should hold lenders to certain standards, borrowers also have an obligation to meet certain requirements. Sending back the keys — creating so-called "jingle mail" — is not fair and it’s not right. The Senate committee has the correct idea: Walking away from a mortgage should not be a free pass to new financing, especially financing insured by the federal government.
Foreclosure is rarely fair - [2008-05-29] - "My take is that foreclosure has traditionally not been "fair". Credit scores are not designed to be a measure of borrower’s honesty, but a measure of the risk involved in lending to a borrower. Typical reasons for foreclosures in the past included illness, job loss, death of a spouse- not "failed flips". Lenders have looked at these incidences of financial stress and determined that these problems, however undeserved, raise the risk of default, and credit scores have been gauged accordingly."
JPMorgan Chase Shareholders Approve Bear Stearns Buy - (www.ml-implode.com) - Bear Stearns is gone, but the brokerage firm's near collapse will live on as the moment it became impossible to ignore the mortgage mess.”
Signs of Worsening Credit Conditions - (www.ml-implode.com) - Two UK columnists looked at the credit markets, and neither liked what he saw. And they wrote it up more colorfully than most of their American counterparts would have.
Bad Omens for Banks? - (www.businessweek.com) - News from KeyCorp suggests U.S. banks' loan losses may worsen. Is the credit crisis hitting a second, even scarier phase? Nobody was expecting an easy year for U.S. banks, but many observers thought the bulk of the industry's credit troubles would come in the first quarter. Now, it seems the rest of the year may be even worse. Case in point: A May 28 announcement from KeyCorp (KEY). Mounting loan losses at the regional bank company suggest the banking industry's troubles with bad loans are just beginning
Fed's Fisher: Rate hikes could come sooner vs later - (www.reuters.com)
Credit default swaps on Lehman Brothers and Merrill Lynch debt have risen - (www.telegraph.co.uk) – Could this be a sign that phase 2 of the credit crisis has begun?
The Fading of the Mirage Economy - (www.washingtonpost.com) - Suddenly, it seems, we're getting hit from all directions.
Energy and food prices are soaring. The housing market continues to collapse. Government revenue is falling, and taxes are rising. Airlines are jacking up fares and fees while reducing service. Banks are pulling credit lines. Auto companies are cutting production once again. Even investment bankers are losing their jobs. The tendency is to see these as separate developments, each with its own causes and dynamic. Fundamentally, however, they are all part of the same story -- the story of the global economy purging itself of large and unsustainable imbalances that for a time allowed many Americans to think they were richer than they really were.
You think your condo rules are bad? - (www.sun-sentinel.com) Ann Zucker, a teacher who has the summer off, was looking forward to spending time relaxing at her Weston condo's pool. Sorry, Ann. Her condo documents make four separate buildings responsible for maintaining the pool, which was closed for repairs more than a year ago. The problem, she said, is that representatives of the four buildings can't agree on an acceptable plan. So, because of the rules, she and her neighbors won't be able to use the pool, for the second summer in a row.


Other Stories:

Bear Neared Collapse -- Twice - (online.wsj.com)
Lenders, Borrowers Discuss Bad Loans - (www.npr.org)Investors Putting Bad Loans Back To Lenders - (www.mrmortgage.ml-implode.com)
Foreclosures Disguised As Ordinary Houses For Sale - (patrick.net)
Realtors to Stop Blocking Discount Web Listings - (www.nytimes.com)
The Housing Capital Trap Snaps Shut - (Charles Hugh Smith at www.oftwominds.com)

Mortgage Rates Rise as Inflation Jitters Grow; Treasury Yields Jump Above 4 Percent - (www.ml-implode.com) - "Average mortgage rates rose to an eleven-week high, with rates on a traditional 30-year fixed-rate mortgage averaging 6.08 perc...
Consumer Satisfaction with HE/HELOC Origination Increases - (www.ml-implode.com) - "Despite an economy affected by a stagnant housing market, decreasing home values and upheaval among lenders, overall customer s...
The Giant Pool of Money - (www.thisamericanlife.org)
BK Judge Rules Stated Income HELOC Debt Dischargeable - (www.ml-implode.com) - Judge Leslie Tchaikovsky ruled that a National City HELOC that had been "foreclosed out" would be discharged in the debtors' Chapter 7 bankruptcy. Nat City had argued that the debt should be non-dischargeable because the debtors made material false representations (namely, lying about their income) on which Nat City relied when it made the loan. The court agreed that the debtors had in fact lied to the bank, but it held that the bank did not "reasonably rely" on the misrepresentations.
Settlement could drive down real estate commissions - (www.nytimes.com)
U.K. Home Values Drop Most on Record, Nationwide Says - (www.bloomberg.com)
How to Call the Bottom: Cash Flow! - (Mike Morgan)
SoCal values off 15.4%, worst in 43 years - (lansner.freedomblogging.com)March S&P/Case-Shiller Figures - (www.seekingalpha.com)California House Sale Price Medians by County and City - (www.dqnews.com)House Prices Across the Nation - (www.nytimes.com)
Merrill's David Rosenberg on Economy, Housing, Employment - (www.ml-implode.com)
Credit Derivatives Clearing House Planned For September - (www.ml-implode.com)
"Voldemort Mortgage" and Its "Magical Mystery Mortgage" - (www.ml-implode.com)
Tumbling prices dog US housing market - (www.guardian.co.uk)US and UK Housing Bear Market Trends - (www.marketoracle.co.uk)Treasuries Decline as Stocks Rise; U.S. GDP May Beat Estimates - (www.bloomberg.com)
U.S. Economy Grows More Than Previously Estimated as Trade Deficit Shrinks - (www.bloomberg.com)
U.S. Initial Jobless Claims Rose Last Week to 372,000 - (www.bloomberg.com)
Food prices to keep hitting wallet - (money.cnn.com)
Chemical Prices Jump, Fueling Fear of Inflation - (online.wsj.com)
Jobless claims up; continued claims at 4-year high - (www.reuters.com)
Topeka utility wants 15% rate hike - (www.kcstar.com)
Atlanta home prices drop another percent - (www.ajc.com)
Inflation's Little Parts - (www.nytimes.com)
Death and Taxes - (www.zoomorama.com)
As food prices spiral, farmers profit - (www.chicagotribune.com)

Study Casts Doubt on Key Rate - (online.wsj.com)
Investors increase bets on US rate rise - (www.ft.com)
Lessons From the Housing Bubble - (online.wsj.com)
Investors increase bets on US rate rise - (www.ft.com)
Banks launch central clearer for derivatives - (www.ft.com)
Natural gas shipments to U.S. in pause mode - (www.iht.com)
Another Firm Gets Tangled in ARS Web - (www.cfo.com)

Oil Exporters Can't Match Demand - (online.wsj.com)
KeyCorp plunge sparks fears for smaller lenders - (www.ft.com)
Industry's woes trickle down to regional banks - (www.latimes.com)
GM plans more restructuring measures - (www.chicagotribune.com)
Ford plans involuntary layoffs of salaried workers - (www.signonsandiego.com)
Sears Posts Net Loss as Consumers Slow Spending on Clothing - (www.bloomberg.com)
American Axle to cut 2,000 U.S. hourly jobs - (www.chicagotribune.com)
Honda intent on saving US jobs by switching models - (www.chicagotribune.com)
In Stock Plan, Employees See Stacked Deck - (www.nytimes.com)
It's Wall Street, Without the Cash - (www.washingtonpost.com)

Wall Street worries come home to roost in Greenwich - (www.latimes.com)
Dow and US inflation - (www.ft.com)
New ethanol plant bets on a better method than corn - (www.chron.com)