Saturday July 25 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

FHA To Start Insuring Hospital Refinance Loans – (online.wsj.com) -The Federal Housing Administration will now allow hospitals in the U.S. to obtain mortgage insurance for refinancings, the U.S. Department of Housing and Urban Development said Monday. This may be a welcome move for hospitals that have struggled with rising interest rates and fewer financing alternatives due to the credit crisis. Previously, hospitals were able to get FHA mortgage insurance only for loans to finance renovations or the replacement of existing structures. "This refinance program will help hospitals struggling with skyrocketing interest rates and limited credit options," HUD Secretary Shaun Donovan said. "The savings provided through FHA refinancing should also help hospitals decrease the cost of health care, which is a major priority of the Obama administration," Donovan added. And although analysts see the move as a positive, how big an effect the program will have is yet to be determined. "The program provides a kick-start to lending activity, which has fallen off a cliff," said David Aubuchon, analyst at Robert W. Baird & Co. "But with a lot of these [government] programs, it's very early to tell if anyone will take advantage of them." Aubuchon said the program is likely to benefit more rural hospitals and not necessarily publicly traded health-care real-estate investment trusts. He said the program adds liquidity into the market and could provide the "momentum" for other lenders to follow suit. HUD said it expects hospitals will submit applications by August and that the agency would begin issuing commitments for refinancings in October.

Chicago Cubs Bankruptcy Looms - (www.bloomberg.com) The Chicago Cubs may become the first Major League Baseball team in 39 years to file for bankruptcy as Tribune Co. seeks to sell the franchise after months of negotiations. Tribune sought Chapter 11 protection in December. It is contemplating a separate filing for the Cubs to expedite the team’s estimated $900 million sale to interested bidders, including Incapital LLC Chairman Tom Ricketts, according to four people familiar with the plan. A brief Cubs bankruptcy would be a legal maneuver to clear the team from any future liability in the Tribune bankruptcy, according to two of the people familiar with the matter. Sam Zell, chief executive officer of Chicago-based Tribune, pledged the company’s interest in the Cubs as collateral when he negotiated the deal to take the publisher private in 2007, according to one of those people. “You take it in the front door, and it’s just like you’re getting radiation,” said Michael J. Cramer, a former president of the Texas Rangers who teaches sports business at New York University. “It comes out the other door about a half minute later. It’s clean.” Richard Levin, a spokesman for Major League Baseball, and Ricketts through a spokesman, Dennis Culloton, both declined to comment. “The company doesn’t comment on any potential transactions,” Gary Weitman, a Tribune spokesman, said in an interview yesterday. The Cubs weren’t a part of Tribune’s bankruptcy filing. The people familiar with the matter said it remained possible the sale would close without the team filing as well. Millions of Fans: While Denise Brown, a Tribune spokeswoman, said the company doesn’t disclose the finances of individual units, the club is one of the most popular franchises in baseball. It drew more than 3 million spectators to 95-year-old Wrigley Field in each of the past five seasons. Sale of the Cubs is subject to approval by Major League Baseball. The move could guarantee that the Cubs are sold free and clear of Tribune’s creditors, Cramer said.

California ills could give US headache - (www.ft.com) California’s fiscal crisis is in danger of becoming a serious headache, not just for the state and its feuding politicians in Sacramento, but for the entire nation. California is not the only state facing dire financial straits, as our interactive graphic shows in a coast-to-coast analysis of their budgets. In public, federal government officials talk about California’s problems as if they were ringfenced – a crisis for the state but with few national ramifications. They know the slightest whiff of federal intervention would take away the incentive for California’s politicians to agree on tough spending cuts and tax increases. But they know they cannot ignore a fiscal crisis in the most economically important state in the middle of a global financial crisis. So they are keeping a careful eye on events and it would be surprising if they were not also reviewing the options at their disposal to mitigate the damage. California has a budget deficit of $26.3bn (€18.85bn, £16.18bn) on revenues of just $113bn, according to Keefe, Bruyette and Woods, a broking firm. It has a balanced budget rule that forces it to eliminate the deficit but no agreement as to how. It has already effectively decided to selectively default – paying vendors with IOUs rather than cash. Worse could follow if the impasse is not resolved soon. The worst case scenario would be a default by the state which has $59bn in general debt, $8bn in bonds linked to securitised revenues such as tolls and $2bn commercial paper, according to Standard and Poor’s, the rating agency. A California default would be a shock for fragile financial markets. While no other state is in quite as difficult a position, there would be danger of widespread contagion in US markets and beyond. Default still looks like a so-called “tail risk” – a high cost but low probability event. California’s constitution makes debt service a high priority. Its main constraint is cash flow. The decision to pay bills in IOUs saves cash for debt servicing and that should be enough for now. But it is not sustainable indefinitely. In the absence of a fix for the underlying deficit, vendors and banks will eventually lose faith in the value of the IOUs, forcing California to pay for vital services in cash instead. Moreover, there are institutional reasons why the budget gap is proving difficult to close. Aside from the absurdity of having to balance the budget in the midst of the worst recession in half a century, California’s fiscal flexibility is diminished by other statutory restrictions, mostly imposed by state referendums known as propositions. These restrictions make it exceptionally difficult for the state to raise property taxes or cut basic education spending. About 25 per cent of revenue is, meanwhile, ringfenced. If the gridlock continues for months and the risk of default escalates, it would take a brave Treasury secretary not to step in with some kind of guarantee, credit line or outright bail-out for California. The immediate outlays involved would not be vast compared with federal bail-outs for banks and carmakers.

CIT Group Says Its Failure Risks Demise of Customers - (www.bloomberg.com) CIT Group Inc., the century-old lender that hasn’t been able to persuade the government to back its debt sales, says its demise would put 760 manufacturing clients at risk of failure and “precipitate a crisis” for as many as 300,000 retailers. A collapse would ripple across the “small and medium-sized businesses who rely on CIT to operate -- to pay their vendors, ship goods to their customers and make their payroll,” the New York-based lender said in internal documents obtained by Bloomberg News that make the case for its importance to the U.S. economy. CIT spokesman Curt Ritter declined to comment on the documents. CIT executives spoke with regulators during the past two days, according to a person familiar with the talks, after its bonds and shares tumbled on concern that the Federal Deposit Insurance Corp. won’t allow the lender into its bond-guarantee program created last year to unfreeze debt markets. CIT may default as soon as April, when a $2.1 billion credit line matures, according to Fitch Ratings. “A CIT default would create liquidity issues for the corporate sector,” Ed Grebeck, chief executive officer of debt consulting firm Tempus Advisors in Stamford, Connecticut. “If CIT isn’t doing trade finance and lending, its customers will look to other banks for replacement and from what I’ve seen, they aren’t willing to step up.” Bonds, Shares Fall: A failure of CIT, run by Chief Executive Officer Jeffrey Peek, would be the biggest bank collapse since regulators seized Washington Mutual Inc. in September. CIT reported $75.7 billion in assets and $68.2 billion in liabilities, including $3 billion in deposits, at the end of the first quarter. CIT’s $656 million of 5.125 percent notes due in 2014 fell 4.5 cents on the dollar to 53 cents as of 9:21 a.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The debt yields 20 percent.

US mulls tax on rich to pay for healthcare - (www.ft.com) The Obama administration is open to the idea of taxing the wealthiest Americans to pay for healthcare reform, health secretary Kathleen Sebelius suggested yesterday as the House of Representatives prepares to incorporate such a plan in its draft healthcare bill. Congress is gearing up to tackle healthcare before it leaves for recess in August, although the timetable has been slipping amid wrangling over how reform should be paid for and whether it should include a public insurance option. Democrats in the House will present a bill as soon as today proposing a 1 per cent surtax on couples with a joint income of more than $350,000, rising to as much as 3 per cent on those earning more than $1m. They estimate this will raise about $540bn over 10 years – half the expected cost of reforming the system. The rest would be covered by lower spending on Medicare, the programme for the elderly, and other savings. The plan has drawn heavy fire from Republicans, and Democrats in the Senate will probably propose a different plan. But Ms Sebelius said on CNN: “I think everything is on the table and discussions are under way,” adding: “I think the bottom line is: it’s got to be paid for.” President Barack Obama’s goal is to get a fully funded bill passed this year to expand coverage to the nearly 50m un­insured Americans. Charles Rangel, chairman of the House ways and means committee, said the tax on the wealthy would be the simplest way to fund reform. But Kent Conrad, chairman of the Senate budget committee, disagreed: “I don’t think the House proposal as I’ve heard it will be what’s part of the final package.” The administration’s goal is to have a fully funded bill passed this year but it has left the details to Congress to thrash out. Many are waiting for the president’s team to draw lines in the sand, particularly on whether or not it will insist on a public option. Rahm Emanuel, the president’s chief of staff, last week said that was only one way to get cheaper and broader coverage. “The goal is non-negotiable,” he told the Wall Street Journal. “The path is not.” That worried liberals who fear the president is backing away from comprehensive reform. Mr Obama last week said he still believed “one of the best ways to bring down costs, provide more choice and assure quality is a public option that will force the insurance companies to compete and keep them honest”. The House is expected to present a draft bill as soon as Monday. The Senate is also preparing to release a draft, but it is likely to be very different. Mr Conrad has said he does not believe a public option could win enough votes in the Senate, where there is a strong cadre of moderate Democrats unhappy about the idea. He has suggested a network of co-operatives instead that would compete with private insurers. Republicans argue the timetable has slipped too much and the divisions within the Democrats are too great, particularly in the Senate. But Mr Conrad insisted on Sunday: “I think we’ll be through the finance committee by the August recess and I think that’s a realistic goal. There really is plenty of time.”

NYC Comptroller Sees 400,000 Jobless By 2010, Most Since 1993 - (www.bloomberg.com) New York City’s unemployment rate will reach 9.5 percent by 2010, leaving 400,000 jobless for the first time since 1993, city Comptroller William Thompson said. Thompson, the frontrunner for the Democratic nomination to challenge Mayor Michael Bloomberg this year, said the number of unemployed New Yorkers more than doubled to 361,100 in May from 169,700 in February 2008. By 2010, the jobless tally will swell to the most in more than 15 years, he said. “The severity of the current recession raises fears that the city’s job losses will match or exceed those of previous downturns,” Thompson said in a statement accompanying a report on the city’s economy. The mayor, a political independent seeking a third term on the Republican and Independence Party ballot lines, has said his citywide economic plan helped place 10,500 city residents in jobs in the first six months of this year, a 26 percent increase over the same period of 2008. “Last year, we provided free training to more New Yorkers and placed more of them in jobs than ever before,” Bloomberg said during his regular Sunday radio address, referring to the city’s “Workforce1 Career Centers,” which provide training and job-placement counseling in each of the city’s five boroughs. Although Thompson didn’t challenge these job-placement assertions, he said the mayor exaggerated when he said a $174.4 million federally-funded infrastructure contract to rehabilitate ramps at the St. George Ferry Terminal on Staten Island would create 4,865 jobs. “They will no way approximate the exaggerated number of jobs claimed by your administration,” Thompson wrote in a July 12 letter to the mayor. “It is a disservice to the public to publish such an inflated statistic and then claim it as an accomplishment.” Second Most: New York City’s unemployment rose a full percentage point to 9 percent in May compared with April, the second-biggest jump in the past 33 years after February’s record, the state Labor Department reported June 18. The city has lost 108,000 jobs since August 2008, according to Thompson’s report. Seventy percent of the increase in unemployment between the first quarters of 2008 and 2009 affected men. Among African-Americans, the jobless rate more than doubled to 14.7 percent from 5.7 percent, the report found. Between March 1 and May 31, the city’s income tax withholding, an indicator of worker earnings, fell 3.8 percent from the same period of 2008, Thomson’s report said. General city sales tax collections declined 7.8 percent for the first five months of 2009, compared with the same period in 2008. The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.

OTHER STORIES:

Emerging Markets Priciest Since 2007 When Shares Fell - (www.bloomberg.com)

Geithner to reassure Gulf allies on dollar assets - (www.reuters.com)

BRIC Currencies Resemble ‘House of Straw’: Technical Analysis - (www.bloomberg.com)

US jobless rise hits migrants’ home countries - (www.ft.com)

China Widens Investigation of Steel Industry - (www.nytimes.com)

China’s Central Bank Pledges to Guide Loan Growth - (www.bloomberg.com)

DPJ’s Nakagawa Says Japan Should Diversify Reserves - (www.bloomberg.com)

Japan CMBS Loan Defaults Reach ‘Unprecedented High,’ Fitch Says - (www.bloomberg.com)

U.S. Budget Gap Exceeds $1 Trillion for Fiscal Year - (www.bloomberg.com)

U.S. Commercial Construction to Drop 16% This Year, Report Says - (www.bloomberg.com)

California Politicians Negotiate to Close Deficit - (www.bloomberg.com)

Bernanke May Explain Fed Exit Strategy in Testimony Next Week - (www.bloomberg.com)

Rattner Steps Down, Bloom to Run Auto Task Force, Treasury Says - (www.bloomberg.com)

U.S. Ad Revenue May Drop 14.5% This Year, Magna Says - (www.bloomberg.com)

Lawmakers Predict Delay For Health Reform Plan - (www.washingtonpost.com)

Bernanke Sees Possibility of 'Jobless' Recovery: Shelby - (www.cnbc.com)

Some Americans Work for Free - (www.cnbc.com)

Banks Stronger But Outlook Is Clouded by Jobs: Whitney - (www.cnbc.com)

Credit Pendulum at 'Stupid' - (www.cnbc.com)

Cramer: Kudos, Meredith Whitney? - (www.cnbc.com)

Rattner Leaves US Autos Force, Probe Intensifies - (www.cnbc.com)

Wednesday June 11 Housing and Economic stories

Top Stories:

Pending CA Legislation Addresses Foreclosure/Servicing Issues - (www.mortgageorb.com) The mortgage bills raise not only critical policy questions, but also political issues. The failure of a state senator to vote for a major bill on foreclosures, for example, was cited as one reason for submitting recall signatures for a ballot vote which could end the senator's career. Probably the most visible proposal - and the most likely to be enacted - is S.B.1137. The author, Sen. Don Perata of Oakland, is one of the most powerful legislators in California. His proposal first attempted to require lenders to conduct in-person meetings with borrowers at least 30 days prior to recording a notice of default to begin a foreclosure. When that proposal was defeated, real estate groups began an intense round of negotiations to determine if common ground could be reached on foreclosure issues.
NAFTA Superhighway and North American Union a Scary Reality - (www.economyincrisis.org) While most other major national newscasters have blindly accepted the government’s line that the “NAFTA Superhighway” is a “myth,” Lou Dobbs has refused to be fooled. In search of the truth, Mr. Dobbs sent investigative reporter Bill Tucker to Texas to see for himself. The evidence Mr. Tucker uncovered was powerful, compelling, and shocking. It confirms everything we here at the NAU War Room have been saying about the government’s hidden drive to absorb America into a “North American Union” (NAU) with Canada and Mexico, anchored by a massive “NAFTA Superhighway” designed to speed cheap Red Chinese and foreign goods from Mexico into the U.S. and Canada.
Banks Will Share Bond Insurers' Pain to the Tune of Another $10bln - (www.ml-implode.com) - Citigroup, Merrill Lynch and UBS, the banks most exposed to Ambac and MBIA, could face further write-downs of up to $10bn after the bond insurers last week lost their fight to retain their triple A credit ratings.
Schwab Signals Subprime Claims Will Sacrifice 50% Quarterly Net - (www.bloomberg.com) - Charles Schwab Corp., the largest U.S. online brokerage, may pay the equivalent of half a quarter's profit, or about $260 million, to win public-relations points by settling investors' claims over losses in a bond fund with subprime holdings
FHA Loses $4.6 Billion - Denies Insolvency - (Mish at globaleconomicanalysis.blogspot.com) - The Federal Housing Administration expects to lose $4.6 billion because of unexpectedly high default rates on home loans, officials said Monday. The projected loss is the highest in the home loan program since 2004, and officials said the F.H.A. had to withdraw $4.6 billion from its $21 billion capital reserve fund in May to cover the costs. They said the agency, which is self-sustaining, would not need appropriations from Congress to remain solvent. But Mr. Montgomery warned that the F.H.A. would have to renew its efforts to end the seller-financed down payment program, which accounted for 35 percent of its loans in 2007.
Hi, My Name Is Fred, And I'm Addicted to Credit Cards - (online.wsj.com) - Meetup.com, a Web site that organizes physical and virtual meetings, says it now serves 138 groups who gather in person to talk about debt management, up from 24 a year ago. Debtors Anonymous -- a cousin of Alcoholics Anonymous -- reports greater demand particularly in Southern California and Arizona, areas hit hard by the downturn. Activity is rising online: Postings are up 81% this year on the debt-related message boards of iVillage, a women-oriented site owned by General Electric Co.'s NBC Universal.
Derivatives Trading Is Scrutinized - (www.nytimes.com) - The Federal Reserve moved Monday to overhaul the financial apparatus behind derivatives trading, a regulatory step intended to assure that the failure of a major bank or investment firm would not create the systemic threat seen in March after the collapse of Bear Stearns.
Mortgage Bonds Resume Stumble; Some Debt Nears Lows - (www.bloomberg.com) - The Federal Reserve moved Monday to overhaul the financial apparatus behind derivatives trading, a regulatory step intended to assure that the failure of a major bank or investment firm would not create the systemic threat seen in March after the collapse of Bear Stearns.
Zillow Banned in Arizona - (www.mashable.com) – Leave it to the NAR and other real estate special interest groups to stifle competition. I am sure this site is still more accurate than the pathetic appraisals initiated by lenders, realtors and appraisers during the past 10 years.
Florida at the Precipice of Depression - (www.activerain.com)
Owners Demand Tax Reassessments As Values Plummet - (www.efinancedirectory.com)
Wealth Evaporates as Gas Prices Clobber McMansions - (www.bloomberg.com)


Other Stories:

The Next Real Estate Crisis - (www.businessweek.com)
Banks vs. Consumers Guess Who Wins - (www.businessweek.com)
Banks Say Mortgage Bond Investors Can't Have Money - (www.bloomberg.com)
Anatomy of a Bank Failure - (www.charleston.net)
Credit crisis hitting all kinds of consumer loans - (www.mcclatchydc.com)
Greenspan Conundrum In Reverse - (Mish at globaleconomicanalysis.blogspot.com)

Key, Wells, Chase ... Picking Up WaMu's Castaways in Seattle - (www.ml-implode.com) - Rising defaults and delinquencies on loans, houses staying on the market longer and fetching less-than-hoped-for prices when the...
Wachovia's Insiders' Buzz and more - (www.ml-implode.com) - Read the latest full scoop -- premium members only (cheap, $10/mo subscription required. Cancel at any time).
Intuition tells me people are going mad - (www.intuitiveblogger-intuition.blogspot.com)
4 great reasons to rent - (realestate.msn.com)
How to craft a lowball bid - (www.mcall.com)
Mortgage Bonds Slipping Back to their Worst Levels Ever - (www.ml-implode.com) - "In a nutshell, reality has returned, the Kool-aid has worn off and it is all crumbling once again with the most risky paper typ...
Golden West Not Wachovia's Main Problem, Sandler Says - (www.ml-implode.com)
Subprime criminal probes yet to catch big fish - (www.ml-implode.com)
The Solution to the Subprime Crisis - (www.ml-implode.com)
AIG chief under pressure as investor dissent grows - (www.ml-implode.com)
Decoys - (www.ml-implode.com)
FHA Repudiates Housing Rescue Bill - (www.ml-implode.com)
Downsizing the American House - (finance.yahoo.com)
Frank-Dodd Rescue Prolongs Housing Crisis - (www.bloomberg.com)

Bernanke Says Fed to Resist Price Expectations Surge - (www.bloomberg.com)
Why It’s Worse Than You Think - (www.newsday.com)
US sees a shadow of the Bundesbank - (www.ft.com)
U.S. hiring seen weaker in third quarter: Manpower - (www.reuters.com)
Housing crunch, 90210 - (money.cnn.com)
CFTC in talks to plug the 'London loophole' - (www.ft.com)
Corn Deluged by Iowa, Illinois Rain Cuts Yields, Boosts Prices - (www.bloomberg.com)
Fed Must Tackle Inflation This Year - (www.nytimes.com)
Interest Rates Will Rise Regardless of the Fed - (Charles Hugh Smith at www.oftwominds.com)
Mortgage fraud burgeoning with new twists - (www.sfgate.com)
REO Speedwagon - (www.sbhousingbubble.blogspot.com)
How much is it now? How about now? - (www.telegraph.co.uk)
Warren Buffett’s Hedge Fund Wager - (www.nytimes.com)
Buffett bets S&P 500 will beat hedge funds - (www.signonsandiego.com)
Gazprom predicts oil at $250 - (www.ft.com)
Farrell: Breaking Down Oil Demand - (www.thestreet.com)

Worries Mount as Farmers Push for Big Harvest - (www.nytimes.com)
F.H.A. Faces $4.6 Billion in Losses - (www.nytimes.com)
Gannett to take $2.5B to $3B write-down - (www.forbes.com)
Soaring costs are squeezing gas station owners too - (www.latimes.com)
More Telecom Deals Hardly a Sure Thing - (www.thestreet.com)
TI Can't Escape Cell-Phone Slump - (www.thestreet.com)
AT & T hit by lower price tag on iPhone - (www.chicagotribune.com)
Plastics producer 'hit from all sides' - (www.ft.com)
Out of the frying pan and into the power grid - (news.cnet.com)

ECB shrugs off Fed concern on dollar - (www.ft.com)
The Weak-Dollar Threat to World Order - (online.wsj.com)
Mexico inflation rises to 4.95% - (www.latimes.com)
UK industrial output defies economic gloom - (www.ft.com)
World Bank sees inflation threat to poor nations - (www.ft.com)

Tuesday May 20 Housing and Economic stories

Top Stories:

No English? No income? No problem! - (news.bostonherald.com) - During the frenzied days of no-down-payment loans and cursory credit checks in the early 2000s, two out-of-state lenders gave more than $1 million in mortgages to a Dorchester woman who lives in public housing and barely speaks English, the Herald has learned. The loans, originated by New Jersey-based Equity One Inc. and the now-defunct Meritage Mortgage Corp., foreclosed last year, making 243-245 Washington St. and 16 Dacia St. among the 233 foreclosures to hit Dorchester in 2007, city and land records show. The foreclosures have also left the borrower, Angela M. Torres, 47, a mother of two who speaks only Spanish, in financial ruin and under scrutiny from the Boston Housing Authority, which subsidizes her Dorchester apartment. “I have nothing,” Torres told the Herald in Spanish last week. “I don’t have a business. I don’t have a car. I don’t have a house. I don’t have anything.” Torres said a Boston real estate broker, Eloy C. Mariluz, helped her buy the properties. Mariluz said he had nothing to do with the loans, even though he took a commission on the property sales.
Banks Hide $35 Billion in Writedowns From Income, Filings Show - (www.bloomberg.com) - May 19 (Bloomberg) -- Banks and securities firms, reeling from record losses resulting from the collapse of the mortgage securities market, are failing to acknowledge in their income statements at least $35 billion of additional writedowns included in their balance sheets, regulatory filings show. Citigroup Inc. subtracted $2 billion from equity for the declining value of home-loan bonds in its quarterly report to the Securities and Exchange Commission on May 2 without mentioning the deduction in the earnings statement or conference call with investors that followed. ING Groep NV placed 3.6 billion euros ($5.6 billion) of negative valuations in its capital account, while disclosing only an 80 million-euro depletion to income.
Auction-Rate Collapse Costs Taxpayers $1.65 Billion - (www.bloomberg.com) - The Culinary Institute is among hundreds of borrowers facing an unexpected rise in financing costs. Across the country, local governments and operators of hospitals and schools that issued about $166 billion of auction-rate bonds -- about half of all such securities -- have paid an estimated $1.65 billion in additional interest since the market soured in September, according to data compiled by Bloomberg. That money comes right out of the pockets of taxpayers, from New York to California, and organizations such as the Culinary Institute that are allowed to borrow in the municipal market.
Bill for taxpayers swells by trillions - (www.usatoday.com) - The federal government's long-term financial obligations grew by $2.5 trillion last year, a reflection of the mushrooming cost of Medicare and Social Security benefits as more baby boomers reach retirement. That's double the red ink of a year earlier. Taxpayers are on the hook for a record $57.3 trillion in federal liabilities to cover the lifetime benefits of everyone eligible for Medicare, Social Security and other government programs, a USA TODAY analysis found. That's nearly $500,000 per household. When obligations of state and local governments are added, the total rises to $61.7 trillion, or $531,472 per household. That is more than four times what Americans owe in personal debt such as mortgages.
Times Are Tough, Except in the Repo Business - (www.nytimes.com) - When a boat owner defaults on his loan, the bank hires Jeff Henderson to seize its property. The former Army detective tracks the boat down in a backyard or a marina or a garage and hauls it to his storage facility and later auctions it off. After nearly 20 years in the repossession business, Mr. Henderson has never been busier. “I used to take the weak ones,” he said. “Now I’m taking the whole herd.” Boating was traditionally the pastime of the well-off, but the long housing boom and its gusher of easy credit changed that. People refinanced their homes and used the cash for down payments on a cruiser, miniyacht or sailboat. From 2000 to 2006, retail sales for the recreational boating industry rose by more than 40 percent, to $39.5 billion, while the average loan amount more than tripled to $141,000.
What a Deal: Trash for Treasuries - (www.nytimes.com) - To grease the gears of the nation’s seized-up credit markets, the New York Fed in recent months created three new lending entities. Together, they allow banks and financial firms to swap up to $350 billion of securities they cannot sell for cash or United States Treasuries.
Angry Renter Dissed By WSJ - (www.angryrenter.com)
$10,000 Atlanta Houses - (www.lewrockwell.com)
Barney Frank's Bailout Mostly Benefits Banks - (www.prospect.org) – Clueless Frank falling hook, line and sinker to the bailout which primarily benefits lenders and banks.
Fed's Direct Loans to Banks Climb to Record Level - (bloomberg.com) - The Federal Reserve's direct loans of cash to commercial banks climbed to the highest level on record in the past week as money-losing lenders increasingly turn to the central bank for funds. Funds provided through the so-called discount window for banks rose by $2.8 billion to a daily average of $14.4 billion in the week to May 14, the central bank said today in Washington. Separately, the Fed's loans to Wall Street bond dealers rose by $75 million to $16.6 billion.
Fannie dropping standards, gov't looks other way - (money.cnn.com) – Yes, government simpletons/politicians scolding lenders and government for letting current mess happen. As the scold, they are turning the other cheek again.
Beazer's losses continue to mount; restates losses - (www.ml-implode.com)
Nothing Down and Banana Republic Loans Make a Comeback back by Government Sponsored Entities! - (www.ml-implode.com)


Other Stories:

Bush Administration Touts Current FHA Program - (www.ml-implode.com) - Called FHASecure, housing officials last week said that the product has helped 200,000 homeowners refinance their mortgages and avoid foreclosure."
California Luxury Home Prices Fall for Second Straight Quarter - (www.ml-implode.com)
Fannie Mae: Building The Underwater Mortgages Of Tomorrow - - (www.ml-implode.com)
The Real Alternative To Walking Away Is A “Back Door Cram Down” - (www.ml-implode.com)
The “Psychological Trauma” Of Foreclosure - (www.ml-implode.com)
Bail Out Housing to Salve Damaged Psyches - (www.ml-implode.com)

Lenders shedding foreclosed houses - (www.bcbr.com) - Financial lenders have found themselves in the home-selling business. "The biggest thing for a bank is that they want to sell the properties as quickly as possible because it's a nonearning asset," Peyok said. "Even if they take a slight loss it's better to take the money and invest it elsewhere, rather than have it sit idle in a home."
FDIC chief Bair Warns of Greater Housing, Credit Woes - (blogs.wsj.com)
Fannie Mae to institute very lax policy on down payments - (bizjournals.com)
Foreclosures Climb 65% as Loan Workouts Fall Short - (bloomberg.com)

Gold, Silver Futures Gain on Demand for Hedge Against Inflation - (www.bloomberg.com)
Dream of free trade becoming a dream - (www.theglobeandmail.com)
Do bank failures have to be so painful? - (www.econimist.com)
Don't believe Paulson - (www.seekingalpha.com)
Default on Your Mortgage and Stay in Your House - (www.seekingalpha.com)
Does this guy look like an Angry Renter? - (latimesblogs.latimes.com)
Another Alternative To Walking Away - (www.sandiegopredatorylending.com)
What’s next for the economy? Look at California - (www.financialweek.com)
It's going to cost more to make things - (www.financialweek.com)
Post-Subprime Economy Means Subpar Growth as New Normal in U.S. - (www.bloomberg.com)
The Valley is too dependent on housing - (www.azcentral.com)
More Atlanta homes at risk - (www.ajc.com)
Foreclosures hit ritzy houses, too - (www.rockymountainnews.com)
Subprime Meltdown Has Not Hit Cemetery Property - (www.cemeteryspot.com)

Is AIG the Citigroup of insurance? - (www.econimist.com)
Corporate deleveraging underway - (www.financialweek.com)
Emerging Market Stocks Erase 2008 Loss After Commodities Rally - (www.bloomberg.com)
California Luxury Home Prices Fall for Second Straight Quarter - (www.bloomberg.com)
Lenders provide incentives to not steal the furnace - (www.thestreet.com)
Pump price soars 17 cents in 2 weeks - (seattletimes.nwsource.com)

Fuel costs may thrust airlines into bankruptcy - (www.chicagotribune.com)
Retailers Downscale Their Luxury Lines - (online.wsj.com)
When a Loss Is a Gain - (online.wsj.com)

UBS $100 Billion Wager Prompted $24 Billion Loss in Nine Months - (www.bloomberg.com)
Slowdown causes Lowe's profit to slide 18 percent - (www.chron.com)
Banks want more retail funding. Easier said than done - (www.econimist.com)
Surf wear makers hit rough waters - (www.latimes.com)
Pain in store for shopping centers - (www.latimes.com)
Dairy Co-Op Faces Price Probe - (online.wsj.com)
Developers marketing home efficiency - (www.azcentral.com)
Colo. casinos report another revenue drop - (www.rockymountainnews.com)
Business aviation growth slowing, warns NetJets - (www.ft.com)

China Faces Economic Aftershocks - (www.washingtonpost.com)
Commercial market heading for 30% slump, warn property gurus - (www.independent.co.uk)
Vietnam raises interest rates to fight inflation - (www.forbes.com)
Australian dollar hits 24-year high - (www.ft.com)
Emerging Market Stocks Erase 2008 Loss After Commodities Rally - (www.bloomberg.com)

Financial Bettors May Be Making a Capital Blunder: David Pauly - (www.bloomberg.com)
Making ends meet on less than $15,000 a year - (www.chron.com)

Thursday May 15 Housing and Economic stories

Top Stories:

How does State of California deal with $20B deficit? Of course, by borrowing against future lottery profits. Again, the politicians in CA are bankrupting the future so they can get re-elected in the present.
Guv Defends Lottery Plan - (www.sfgate.com) – Obviously, the steroids have shrunken the gov’s cohones as he obviously has none. He has given in to all the special interest groups. Schwarzenegger says using future lottery profits to pay off the $15B deficit is necessary because cuts alone will not balance the budget.
Vallejo Schools Feel The Pain - (www.sfgate.com) – Feel free to blame your city unions (fire department and police department) as they are sucking up 75% of the city budget. City's decision to declare bankruptcy has adversely affected the district, which is a separate governmental entity.
Congress Votes to Stop Stockpiling Oil - (www.nytimes.com) – Yes, both republicans and democrats are buying votes for this fall, even though everyone agrees it will do little except reduce prices by a few pennies. This is not a long-term solution to the underlying problem.
House OKs $290B Farm Bill – (www.sfgate.com). More vote buying by our cohones-less politicians. Veto-proof legislation includes an unprecedented $3 billion to support California fruit and vegetables.
As Condo Dues Dry Up, The Neighbors Pay - (online.wsj.com) – Good reason why you shouldn’t own a condo or townhouse in this market. Even if you are financially stable, you never know about your neighbors. The association at Monaco Place, a community of single-family homes and condominiums in Denver, is short $250,000 of its $9.3 million annual operating budget. It can't pay for needed roof and siding repairs to homes. Potholes in the streets haven't been filled in order to save money to keep electricity running in common areas, says Dee Tyler, CEO of Colorado Association Services, which manages the association. Monaco Place was already suffering from a high rate of foreclosures before the credit crunch hit. In the past three years, about a third of its 193 units have been foreclosed on.
1,000 Foreclosure auctions per day in California - (latimesblogs.latimes.com) - California's foreclosure crisis passed another ominous milestone in April, when more than 1,000 foreclosed homes were auctioned off every weekday at courthouses across the state, the auction tracking firm ForeclosureRadar reported today. The April total of foreclosure sales at auction -- 22,838 for the state -- represents a jump of 44% over March totals and the highest level ever in California, ForeclosureRadar reports
Deflating house prices leave little equity to borrow against - (biz.yahoo.com) – What a concept, people will actually have to save money for the purchases.
FHA Chief Criticizes Bailout Plan - (www.usnews.com) - As one colleague described it, it is "on steroids" because it throws sound underwriting out the window. It moves us toward a federalization of the mortgage market, forces taxpayers to pay for bad loans, and doubles FHA's portfolio, adding hundreds of thousands of risky loans in a Byzantine process that will take years to sort out and create a regulatory nightmare.
Get ready for more bank failures - (money.cnn.com)
Lawsuit targets mortgage brokers - (www.lvrj.com) - An attorney representing a homeowner has filed the first local lawsuit in what could be a wave of litigation targeting mortgage companies and other real estate professionals.
Robert Cottle, a partner in the Las Vegas law firm Mainor Eglet Cottle, filed the lawsuit May 1 in Clark County District Court on behalf of homeowner Brad Cohen, who refinanced his southeast Las Vegas home with an adjustable-rate mortgage in 2005 and can no longer afford his monthly housing payment. In the lawsuit, Cohen accuses eight defendants of fraud, negligence, breach of fiduciary duty, negligent misrepresentation, intentional misrepresentation, and breach of covenant good faith and fair dealing. Named in the lawsuit are Countrywide Financial Corp.; Countrywide Home Loans; HSBC Mortgage Corp.; Direct Equity Mortgage Corp.; Alex Burke, an employee of Direct Equity Mortgage; Countrywide Tax Service; Rob's Tax Service; and National Title Co.
Honest Appraisal Regulations Opposed - (www.latimes.com) - Who's not happy? Major financial and banking trade groups, for starters. In a joint letter, eight groups, including the American Bankers Assn., Mortgage Bankers Assn. and the Consumer Mortgage Coalition, called the whole idea "bad policy" and demanded that Fannie's and Freddie's federal regulator withdraw its support for the agreement, effectively killing it.
The Latest Twist in Student Loans - (www.businessweek.com)
Brunswick cites economy in decision to close boat factory - (www.chicagotribune.com) - Because its big-ticket pleasure boats are a "discretionary' purchase which consumers can easily defer, Brunswick's results are sensitive to the economy's cycle. "The U.S. marine industry has been in a prolonged slowdown since late 2005," noted Chairman and Chief Executive Officer Dustan McCoy.


Other Stories:

Latest CA Foreclosures Stats - (mrmortgage.ml-implode.com)
Libor Credibility Doubted; Real Interest Rates Much Higher - (www.bloomberg.com)
What Will Happen to Your Money When Your Bank Fails - (www.homeguide123.com)
Ron Paul on the Housing Bubble - (www.pressmediawire.com)
Housing Bailout Backlash - (Mish)
Call Senator Shelby - (patrick.net)
Incomes predict 40% further decline in San Diego - (www.californiahousingforecast.com)
Foreclosures looming for the Hamptons' poshest pads - (www.nypost.com)
The Housing Bust: Worst yet to Come - (Charles Hugh Smith at www.oftwominds.com)
NAR's Lawrence Yun Continues to Lie - (www.seekingalpha.com)
The cheaper housing option in Bangalore, India - (bangalore.craigslist.co.in)
About exponential growth - (www.chrismartenson.com)

Volcker Warns of Precedent Set by Fed Moves - (online.wsj.com)
Volcker Says Fed Interventions Risk Political Battles - (www.bloomberg.com)
Condo Life: Foreclosures, Higher Fees and Mowing the Lawn - (www.nytimes.com)
Most Americans don't expect the economy to improve soon, poll finds - (www.latimes.com)
Consumer Credit Crisis Showing up in the Cards - (www.nypost.com)
Survey: 1 in 10 boomers borrowing for everyday expenses - (www.ajc.com)
Opposition Builds to $300 Billion Government Mortgage Bail Out - (www.forbes.com)
State foreclosure sales hit record high - (www.mercurynews.com)
Away from the Strip, Vegas land values plunge - (www.lvbusinesspress.com)

Banks turned markets into "monster": German president - (www.reuters.com)
Home prices fall across the country in first quarter - (www.latimes.com)
FBI warns of escalating mortgage fraud - (www.usatoday.com)

Bank analyst pans Citi turn around plan - (www.nypost.com)
Freddie Mac Posts Loss, Plans to Raise $5.5 Billion - (www.bloomberg.com)
Toll Brothers preliminary 2Q sales fall 30 percent - (www.chicagotribune.com)
GM May Look to Raise Additional Cash - (online.wsj.com)
More Companies Sell Off Assets - (online.wsj.com)
Fannie and Freddie capital alert - (www.ft.com)
Deere 2Q profit rises, but warns of cost trouble ahead - (www.forbes.com)
Fewer fliers for summer, packed planes persist - (www.azcentral.com)
UK inflation woe 'set to worsen' - (news.bbc.co.uk)
Economic woes begin to hit UK jobs - (www.ft.com)

The great asset price controversy - (www.ft.com)
The Water-Industrial Complex - (www.forbes.com)

Monday May 5 Housing and Economic stories

Top Stories:

Is the credit crisis over, as many are saying? Not according to Martin D. Weiss, Ph.D., founder and president of Weiss Research, Inc. and a leading advocate for investor safety, is a nationally recognized expert on domestic and international financial markets
Wall Street pundits would have you believe that the Fed has saved the day, that the worst of the credit crisis is behind us, and that there's nothing more to worry about. My view: They're full of baloney! And for the evidence, look at what's just hit the fan on Friday:

· First, Standard & Poor's downgraded America's largest mortgage lender — Countrywide Financial — to "junk." The reason: Bank of America, which was supposed to be gung-ho about saving Countrywide from bankruptcy, is getting cold feet. In its latest filing with the SEC, Bank of America says it may not want to back up all of Countrywide's debts after all. Instead, it may decide to put $31.8 billion of Countrywide's debts in a separate corporation. And analysts now suspect Bank of America may later take that corporation into bankruptcy, stiffing Countrywide's bondholders. So you can easily see why even S&P, typically slow to act, promptly downgraded Countrywide's bonds to junk! But I ask you: Is this a sign that the credit crisis is behind us?

· Second, the Fed just announced that it's greatly expanding its Term Auction Facility (TAF). This is the new facility the Fed inaugurated last December to funnel money to big banks in exchange for shakier-than-normal collateral. At the time, they made it sound like a temporary, emergency measure, with biweekly auctions of up to $20 billion. Then, earlier this year, they expanded this facility to $50 billion. And on Friday, they've just bumped it up — again — to $75 billion per auction, or nearly FOUR times the original level. So I ask again: If the credit crisis were truly behind us, why would the Fed need to be dishing out so much more money to the banks? It makes no sense.

· Third, the Fed also announced on Friday that it's expanding its Term Securities Lending Facility (TSLF). This is the newer, more radical, program whereby the Fed gives big brokers its high-quality Treasury securities in exchange for inferior quality, toxic paper. Until now, the Fed was accepting only securities based on home and commercial mortgages. And given the sorry state of U.S. real estate, that was bad enough. However, the Fed's new rules, effective immediately, make it possible to take in a lot of other garbage, including securities backed by credit cards and student loans that may be going sour. Is this the type of thing the Fed does when credit conditions are improving? Or is this the sign of a Fed with its back against the wall, still desperately searching for ways to put the crisis behind us?


S&P cuts Countrywide to junk status after BofA filing Markets ... - (www.reuters.com)
Bernanke Answers S.O.S. Call - (Mish at globaleconomicanalysis.blogspot.com) – Another crisis created by US Fed and US politicians. Now Bernanke answers Senator Dodd's request to bailout the Student Loan Program.
No Assets? No Problem. Crap loans continue. - (www.forbes.com) - many Americans can still buy homes with nothing down thanks in large part to the federal government and a legal loophole that lets builders and bankers ensure a steady stream of asset-challenged borrowers for taxpayer-insured loans. With quietly expanded powers, the Federal Housing Administration is already offering the next-best thing to nothing down on a house: a payment of just 3.0% will get practically any American with a pulse and a job a mortgage of up to $729,000, at least until the end of this year.
Baseball star Canseco loses house to foreclosure - (news.yahoo.com) – The latest athlete/celebrity to lose their home or walk-away.
Bush vs Olbermann - (www.ml-implode.com) - Bush, world’s most famous failed oilman and the dumbest guy in the room, tries to spin his way out of the housing crash and high gas prices. Olbermann is there to smack him down.''
What do you do when you're the most tasteless and tactless person in the world? - (www.ml-implode.com) – Mukesh Ambani net worth is estimated at $43 billion by Forbes in March. Reliance Industries was founded by Mukesh's father, Dhirubhai Ambani, in 1966, and is India's most valuable firm by market capitalization. The couple, who have three children, currently live in a 22-story Mumbai tower that the family has spent years remodeling to meet its needs, at a cost of $2B.
Credit crunch expands to cash-out refinancing, investment properties and vacation homes - (www.latimes.com)
Fed Moves to Loosen Tight Credit - (www.nytimes.com)
Government Intensifies Mortgage Investigation - (www.nytimes.com)
Desperate house sellers start swapping - (www.9news.com)
Arab States May Drop Fixed Dollar Exchange Rates - (www.bloomberg.com)
Financial Crisis Protest - New York, April 25, 2008 - (www.ml-implode.com) - Love some of the posters.
U.S. Sees First Sales Tax Revenue Drop in 6 Years - (www.ml-implode.com)


Other Stories:

Condo Flipper Rental Woes - (www.ml-implode.com) - "The Washington Post finds two fresh victims of the RE bust, condo owners whose mean, nasty condo boards won't let them rent out...
Waking Up From The American Dream - (www.ml-implode.com)
Is the Credit Crisis Really Over? Minsky Would Say No - (www.ml-implode.com)
Accelerating Housing Declines - (www.ml-implode.com)
3 Aides Ousted; AG Admits Affair - (www.ml-implode.com)
Slowly I Turned - Foreign Financing of US Faltering - (www.ml-implode.com)

Credit Crunch Sends More Consumers To the Sidelines - (online.wsj.com)
Americans cutting back for Mother's Day - (www.latimes.com)
Downgrades Show Storm Isn't Over - (online.wsj.com)
Say goodbye to the specialized mortgage options - (www.chicagotribune.com)
Buffett Says Bond Insurers Don't Deserve AAA Rating - (www.bloomberg.com)
US art market beginning to feel strain - (www.ft.com)
Weaker confidence in retirement savings a good thing - (www.chicagotribune.com)
Precious-Coin Market May Lose Its Luster - (online.wsj.com)
What difference will +$1,200 make up against -$100,000 - (www.ml-implode.com) - "With home price in parts of the country dropping by $100,000 per year or more, is $1,200 in rebates from the government going t...
Housing Bust Duration - (www.ml-implode.com) - "This is an update to a previous post using the February Case-Shiller Price Indices."


Microsoft Walks Away From Yahoo After Fight on Price - (www.bloomberg.com)
UBS May Cut 8,000 Jobs After SF12 Billion First-Quarter Loss - (www.bloomberg.com)
Corn Ethanol Loses More Support - (online.wsj.com)
Asia fears lost decade, unrest from food price shock - (www.reuters.com)
How to Clear a Road to Redemption - (www.nytimes.com)
US art market beginning to feel strain - (www.ft.com)

The Fed and you: don't bet on cheaper mortgages - (www.schwabinsights.com)
Fed running out of room - (www.nypost.com)
Fed Rate Cuts Won't Stop Housing Plunge - (www.bloomberg.com)
Is The Bottom Really In? No! - (Charles Hugh Smith)
Another Full Year Of Housing Pain? - (online.wsj.com)
FED Up - (www.fedupusa.org)
Discounted Houses, Going, Going - (promo.realestate.yahoo.com)
12 Observations on Residential Housing - (www.seekingalpha.com)
House Rabies - (www.oxfordamericanmag.com)