Friday July 4 Housing and Economic stories

Top Stories:

California senators upset by limit in foreclosure bailout bill - (www.mcclatchydc.com) Earlier this year, Congress temporarily set the loan limits at $729,750. But the Senate is now proposing to reduce it to $625,000, which would make it harder for struggling homeowners to refinance loans in California, Florida, Hawaii and other states with high property values. "These provisions are a serious blow to California," said California Democratic Sen. Barbara Boxer. The limits will determine who can cash in on a $300 billion program aimed at paying for new mortgages for homeowners facing foreclosure. It would allow the Federal Housing Administration to help an estimated 400,000 borrowers who would otherwise not qualify for new and cheaper 30-year fixed-rate mortgages that would be guaranteed by the U.S. government.

Analyst sees 'ghost town' in Inland Empire - (www.latimes.com) A financial analyst fresh from a tour of construction sites in the Inland Empire is warning Wall Street of a "ghost town" where finished homes sit vacant and additional homes are still under construction.
"At several properties, there were a significant number of fully built homes sitting vacant along with a large number of additional homes still under construction," Sandler O'Neill & Partners analyst Aaron Deer wrote today after touring developments in Corona and Ontario. "At one master plan community, the entire development appeared to be vacant -- with the exception of crews working on new construction, it was a ghost town."

Ghost Towns In California - (globaleconomicanalysis.blogspot.com) More from Deer's note: "The homes all appeared to be empty, and there were no prospective buyers anywhere to be found. Surprisingly, the sales office was open ... but the woman working there had questionable English fluency. When asked how many homes had been sold in the past month she simply responded, 'Uh huh. Thank you. Yes!' and handed us some additional literature on the property." More: "Perhaps the most interesting aspect to the development was what it revealed about the nature of the housing boom: that at the peak even the most undesirable and remote locations were worthy of expensive, high-end homes."
The bank financing this project will own the entire subdivision when it is complete.

Santa Cruz prices breaking down - (patrick.net) Zillow shows house is worth $1.55M but it is listed at $650K

Regulators to Schumer on IndyMac: Please shut up - (www.latimes.com) Sen. Charles E. Schumer publicly taunted bank regulators last week about IndyMac Bancorp's financial condition, which helped trigger a sudden outflow of deposits from the Pasadena thrift. Now the New York Democrat is getting some harsh blowback from one current and one former regulator. "Leaking his IndyMac letter to the press was reckless and grossly irresponsible. I don't see how he can be trusted with confidential information in the future. What this incredibly stupid conduct does is put at risk the willingness of regulators to share any information with the [congressional] oversight committees. After this, you'd be crazy to share information with Schumer."
Regulators to Schumer: We’ve got a Whole Bag of Shhh With Your Name on It - (www.housingwire.com) Our industry sources have gone so far as to suggest that Schumer was paid off to leak the letter to the press, although it’s unclear if the suggestion is anything more than idle speculation. The conspiracy theory goes like this: IndyMac has been privately negotiating for new capital for at least the last few months, and a Large Investor offered a deal that CEO Michael Perry balked at; Large Investor decided to pay a few bucks to a Senator in New York to force the issue

Spain, Ireland `Thrown to the Wolves' After ECB Move - (www.bloomberg.com) - For homeowners in Spain and in Ireland, struggling to stay afloat amid the wreckage of a decade-long real-estate boom, those prayers are going unanswered. The European Central Bank yesterday increased its benchmark rate to 4.25 percent to fight inflation, pushing both economies a step closer to recession

States face dwindling unemployment insurance funds - (www.sfgate.com) Thirty-three states have funds below recommended levels, meaning they're at risk of running out in less than a year unless they're replenished as required under federal law. Nearly half the states could run out in less than six months. The funds, totaling about $38 billion today, are in worse shape than before the last recession, when the total was about $54 billion. States can't skip paying unemployment insurance benefits to out-of-work employees, meaning they must borrow money if the funds get too low.

Live bombs haunt Orlando neighborhood - (www.cnn.com) Multiple lawsuits have been filed, accusing builders of gross negligence and seeking unspecified monetary damages. John K. Overchuck, a lawyer representing homeowners, is suing one builder, Lennar. "They're the ones who made the money off this property. They're the ones who bought this for dirt, and built these houses for up to a half a million dollars," he says. "They're the ones who made the profit, they're the ones who are responsible because they've got these people suckered into these houses." Lennar would not consent to an interview to CNN, but did provide a written statement. Lennar says it relied on studies that "made no mention of ... a military range," and claims the military did not show up in property ownership records because, "it had leased the land." But at the same time, it was no secret that the military once used the property. Nearly two decades ago, the 1989 development order, in which the county granted the permission to develop the land, shows that builders and developers knew "of the site's history of military use."

Never Let Them See You Sweat - (bigpicture.typepad.com) – Funny video. Dana Milbank is a Washington Post reporter, and is very funny. Think you're worried about the economy? Phillip Swagel is a wreck. The assistant Treasury secretary for economic policy, Swagel came out for his monthly economic briefing yesterday, 90 minutes after the Labor Department reported that the country had shed jobs in June for the sixth straight month.

Merrill says GM bankruptcy possible – (news.yahoo.com) - General Motors Corp (GM.N) will need to raise as much as $15 billion in cash to shore up liquidity and bankruptcy is "not impossible" if the U.S. auto market continues to slump, Merrill Lynch said. Other analysts
have suggested GM, whose shares fell to a new 54-year low on Wednesday, needs to raise funds to ride out the downturn in the U.S. auto market through 2009. But Merrill's estimate of GM's financing needs is the highest yet. It also carried the most stark warning of the bankruptcy risk for the largest U.S. automaker. If conditions continue to deteriorate, we would consider other operating measures," GM spokeswoman Renee Rashid-Merem told Reuters.

Barclays warns of a financial storm - (www.telegraph.co.uk) - Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the US Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall "below zero". "We're in a nasty environment," said Tim Bond, the bank's chief equity strategist. "There is an inflation shock underway. This is going to be very negative for financial assets. We are going into tortoise mood and are retreating into our shell. Investors will do well if they can preserve their wealth."

India Bans Corn Exports to Control Domestic Prices - (www.bloomberg.com)

American workers brace for thousands of job cuts - (www.ap.com) Many more job cuts, likely totaling more than 6,000, are likely at American Airlines as the nation's biggest airline hunkers down and tries to survive record high fuel costs. American notified its flight attendants union on Wednesday that it will cut up to 900 jobs starting Aug. 31, but that appears to be the tip of the iceberg. Although American has not given a total figure, the airline says it expects to shed 8 percent of its work force. With about 85,500 workers, including those at sister airline American Eagle, that would represent more than 6,800 jobs. "The mood is fairly glum," said Karl Schricker, an American pilot and union spokesman. "They brought back 30 furloughed pilots in June. Those guys quit other jobs to come back ... and now they wonder if they'll be out the door."
Employers Cut Workers for a Sixth Month - (www.nytimes.com)
New Jobs Magically Vanish - (www.minyanville.com) - The birth-death "adjustment" added 177,000 jobs to the latest report, which put the total adjustment for the year at 600,000 new jobs - or so the government claims.
Of course, they arrived at this number through a completely flawed methodology: At the end of the year, these numbers will quietly be backed out - just as they were last year.


Other Stories:

Big Builders At Odds with NAHB - (www.bigbuilderonline.com) A rift between the nation's largest home building companies and the National Association of Home Builders regarding lobbying strategy is threatening to grow into a schism that could greatly weaken the organization. The rift is evident on both sides. Earlier this year, an ad hoc group of financial executives from big builders, including Beazer, Centex, Hovnanian, KB, Lennar, M.D.C., M/I, Meritage, Orleans, Pulte, Shea, Standard Pacific, Toll and TOUSA hired an independent lobbying firm, C2 Group in Washington, to represent them, a move which angered NAHB CEO Jerry Howard.
Mortgage ruling could shock U.S. banking industry - (www.reuters.com)
Resets Peaking on Subprime Loans - (www.washingtonpost.com)
Struggling with the mortgage? Get out now - (www.news.com.au)
Pick-A-Pay Goes Away - (www.businessweek.com)
When Will Housing Market Bottom? - (www.istockanalyst.com)
Housing fuels bankruptcies in Hawaii - (www.starbulletin.com)
Freddie Mac shares fall as housing troubles worsen - (biz.yahoo.com)
IndyMac bank denies that it's close to collapse - (www.latimes.com)

Foreclosure mix-up means new buyer's possessions given away - (www.statesman.com)

Paramax vs. UBS: "CDO Insurance Was Just A Joke Anyway" - (www.ml-implode.com)
Goldilocks is dead, CSI looking for the body, says Wells economis - (www.ml-implode.com)
Lehman Deleveraging Smoke-and-Mirrors? - (www.nakedcapitalism.com) Readers may recall that this humble blog, thanks to the information provided by a former senior person at Lehman, reported that some of the investment bank's wondrous deleveraging (it was well distributed across products, geographies, and credit quality) was due to asset sales to newly formed hedge funds, R3 Capital Partner and One Williams Street, which had former Lehman MDs at the helm and in which the firm was a significant investor.
That of course begged many questions: were the sales really arm's length? Were there any financed? And if either of these funds got into difficulty, would Lehman wind up rescuing them?
Mr Mortgage on Mortgage Modifications: You May Qualify! - (www.ml-implode.com)
Deutsche Bank’s Jain: Crisis is Solvency, Not Liquidity - (www.ml-implode.com)
Servicers Not Doing Enough for Troubled Borrowers, Consumer Group Says - (www.ml-implode.com)
HOPE NOW on Pace For Record; So, Too, Are Foreclosures - (www.ml-implode.com)

Oil prices fall more than $1 a barrel - (www.ap.com)
European Stocks Fall, Led by Banks, B&B; British Airways Drops - (www.bloomberg.com)
Canada Stocks Drop, Led by EnCana, Goldcorp; BCE Soars - (www.bloomberg.com)
Most Asian Stocks Drop on Record Oil; Kansai, Bumiputra Decline - (www.bloomberg.com)
China's Stocks Fall for Seventh Week as Oil Climbs to Record - (www.bloomberg.com)
Gold Falls in London on Reduced Hedge Demand; Silver Also Drops - (www.bloomberg.com)

Fed Cuts Bear Stearns Asset Estimate to $28.9 Billion - (www.bloomberg.com)
Gas prices hit another high for holiday weekend - (www.ap.com)
Service Sector Data Adds to Inflation Anxiety - (www.nytimes.com)
Payrolls Shrank Again in June; Jobless Rate Steady at 5.5% - (online.wsj.com)

LBO Defaults May Rise as About $500 Billion Comes Due, BIS Says - (www.bloomberg.com)
S&P, Moody's Must Be Clearer on Asset-Backed Ratings, BIS Says - (www.bloomberg.com)
Bearish battalions - (www.economist.com)
Housing market seen getting worse - (www.reuters.com)

Lax Real Estate Decisions Hurt Starbucks - (www.nytimes.com) Starbucks would not comment for this article. But it appears that the company strayed from the exacting real estate science that it had perfected and guided it through its first expansion wave. Though the flagging economy and soaring gas prices are responsible for at least some of Starbucks’s woes, interviews with commercial real estate brokers nationwide who work with the chain suggest another aspect of the story. These people say that the company was so determined to meet its growth promises to Wall Street that it relaxed its standards for selecting new store locations. In some cases, brokers say, Starbucks misjudged the risks of putting stores close to each other, leading to the decline in same-store sales that the company started reporting for the first time in its history this year.

Merrill Lynch in talks to sell Bloomberg stake: report - (www.marketwatch.com)
Lehman's Hedge-Fund Deals Leave Public in Dark: Jonathan Weil - (www.bloomberg.com)
A window to a new world - (www.economist.com)

European Banks May Need EU90 Billion, Goldman Says - (www.bloomberg.com)
Yuan Falls Most in a Month as China Seeks to Curb `Hot Money' - (www.bloomberg.com)
British economy falling into American-style slump - (www.iht.com)
Weak dollar is global concern: EU's Barroso - (www.reuters.com)
Inflation could hit 12% on costlier edible oil, food & steel - (economictimes.indiatimes.com)
Eyes on Inflation, European Bank Raises Rate - (www.nytimes.com)
Philippines inflation highest in 14 years - (www.ft.com)

To Find a Bubble, Follow the Young - (www.nytimes.com)
Settling scores - (www.economist.com)
Whip Inflation Now, Before It Whips You - (www.washingtonpost.com)
The Economy? Words Fail Me. - (www.washingtonpost.com)

Wednesday July 2 Housing and Economic stories

Top Stories:

Conspiracy theory? Congress Secret Session March 13, 2008 and Imminent Collapse of the US Economy - (www.dailypaul.com). I am usually not a conspiracy theorist but this one is very interesting and the question is posed to Ron Paul on the Ron Paul website. The March 13, 2008 Closed Door Session was only the 4th time in 176 years that Congress has closed its doors to the public. Word has begun leaking from the special, closed-door session of the United States House of Representatives. Not only did members discuss new surveillance provisions as was the publicly stated reason for the closed door session, they also discussed:
- The imminent collapse of the U.S. economy to occur by September 2008,
- The imminent collapse of US federal government finances by February 2009,
- The possibility of Civil War inside the USA as a result of the collapse,
- Advance round-ups of "insurgent U.S. citizens" likely to move against the government,
- The detention of those rounded-up at "REX 84" camps constructed throughout the USA,
- The possibility of retaliation against members of Congress for the collapses,
- The location of "safe facilities" for members of Congress and their families to reside during expected massive civil unrest
- The necessary and unavoidable merger of the United States with Canada (for its natural resources) and with Mexico (for its cheap labor pool),
- The issuance of a new currency - THE AMERO - for all three nations as the proposed solution to the coming economic armageddon.
Members of Congress were FORBIDDEN to reveal what was discussed. Several are so furious and concerned about the future of the country, they have begun leaking info.

Fortis Bank Predicts Meltdown Of U.S. Financial Markets In Coming Weeks - (www.dft.nl ) – TRANSLATED FROM DUTCH: Fortis expects a complete collapse of the US financial markets within a few days to weeks. That explains, according to Fortis, the series of interventions of last Thursday to retrieve € 8 billion. “We have been saved just in time. The situation in the US is much worse than we thought”, says Fortis chairman Maurice Lippens. Fortis expects bankruptcies amongst 6000 American banks which have a small coverage currently. But also Citigroup, General Motors, there is starting a complete meltdown in the US”

Barclays warns of a financial storm - (www.telegraph.co.uk) - Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the US Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall "below zero". "We're in a nasty environment," said Tim Bond, the bank's chief equity strategist. "There is an inflation shock underway. This is going to be very negative for financial assets. We are going into tortoise mood and are retreating into our shell. Investors will do well if they can preserve their wealth."

Ron Paul Speaks Out Forcefully Against War with Iran - (www.dailypaul.com ) Another Ron Paul must watch video.
MUST SEE: Startling Images from Iran You Don't See Every Day - (www.lucasgray.com)
Preparing the Battlefield: The Bush Administration steps up its secret moves against Iran - (www.newyorker.com) Late last year, Congress agreed to a request from President Bush to fund a major escalation of covert operations against Iran, according to current and former military, intelligence, and congressional sources. These operations, for which the President sought up to four hundred million dollars, were described in a Presidential Finding signed by Bush, and are designed to destabilize the country’s religious leadership.The Joint Chiefs of Staff, whose chairman is Admiral Mike Mullen, were “pushing back very hard” against White House pressure to undertake a military strike against Iran, the person familiar with the Finding told me. Similarly, a Pentagon consultant who is involved in the war on terror said that “at least ten senior flag and general officers, including combatant commanders”—the four-star officers who direct military operations around the world—“have weighed in on that issue.”
What War With Iran Would Mean - (www.globalresearch.ca) We bring to the attention of our readers David DeBatto's scenario as to what might occur if one of the several contingency plans to attack Iran, with the participation of Israel and NATO, were to be carried out. While one may disagree with certain elements of detail of the author's text, the thrust of this analysis must be taken seriously. It’s no secret that the U.S. is currently putting the finishing touches on several contingency plans for attacking Iranian nuclear and military facilities. With our ground forces stretched to the breaking point in Iraq and Afghanistan, none of the most likely scenarios involve a ground invasion. Not that this administration wouldn’t prefer to march into the seat of Shiite Islam behind a solid, moving line of M1 Abrams tanks and proclaim the country for democracy. The fact is that even the President knows we can’t pull that off any more so he and the neo-cons will have to settle for Shock and Awe Lite. If we invade Iran this year it will be done using hundreds of sorties by carrier based aircraft already stationed in the Persian Gulf and from land based aircraft located in Iraq and Qatar. They will strike the known nuclear facilities located in and around Tehran and the rest of the country as well as bases containing major units of the Iranian military, anti-aircraft installations and units of the Revolutionary Guard (a separate and potent Iranian para-military organization).

IndyMac denies that it's close to collapse - (www.latimes.com ) Battling rumors that it may collapse, Pasadena-based IndyMac Bancorp (whose stock is down 90% this year) acknowledged Monday that its financial position had deteriorated but described the fears as overblown and said it was working with regulators to improve its "safety and soundness." IndyMac, a national home lender burned by the mortgage meltdown, went public after depositors lined up at San Gabriel Valley branches starting Friday to pull out their money. Striving to reassure them, the thrift said nearly all their deposits were insured by the Federal Deposit Insurance Corp. Nonetheless, Elizabeth Brown closed four accounts totaling $200,000 Monday at an Arcadia branch where about 20 customers were lined up at noon, saying: "The only reason I'm panicking is if anything happens, my money is tied up.

Lehman speculation blamed on short-sellers - (www.ft.com ) – As usual, the banks are blaming everything. Maybe it has something to do with Lehman being leveraged to the hilt (over 50 to 1 ratio) on mortgage garbage and are now trying to get bailed out by the Fed???? According to Lehman, “the problem for Lehman is that similar rumours circulated about Bear Stearns (NYSE:BSC) in the weeks leading to the investment bank's collapse and emergency sale to JPMorgan Chase. Those rumours, mainly that the bank had run out of cash, were also untrue until they became a self-fulfilling prophecy. People close to Lehman say the bank is now convinced that it is the target of an orchestrated campaign by short-sellers attempting to force it into sharing the same fate as befell Bear. “

A Cringing Quarter for Venture Capitalists - (www.nytimes.com ) venture capitalists experienced a very poor second quarter. The industry’s trade association said Tuesday that for the first time since 1978, not a single venture-backed company went public in the quarter. From the perspective of the venture capital industry, it turns out that the news was worse than I reported. The other bad news was the industry’s disclosure early Monday morning that acquisitions of venture-backed companies are down sharply, too. In the second quarter, 50 mergers or acquisitions of venture-backed companies were completed. That’s down from 70 in the first quarter. In the first half of 2008, there were 120 such deals altogether, down 28 percent from the 169 in the first half of 2007.

Slowdown Squeezes Vegas Casinos - (online.wsj.com) The gambling slowdown that began early this year is taking a serious toll on Las Vegas, with banks, investors and private-equity funds growing as tightfisted as the consumers who are gambling less in the slumping economy. Once believed to be recession-proof, casinos are proving to be highly vulnerable to the economic downturn, which is striking the industry at a bad time. Several casino companies have defaulted on debt or have sought bankruptcy protection, tripped up by costly land acquisitions and ambitious new development. Kentucky-based Tropicana Entertainment LLC filed for Chapter 11 bankruptcy protection in May, defaulting on $2.67 billion in bank and bond debt. Greektown Holdings LLC of Detroit and Illinois-based Legends Gaming, which has casinos in Louisiana and Mississippi, have also sought bankruptcy protection. Shares of several gambling companies have tumbled dramatically this year, washing out billions of dollars in market valuation. Las Vegas-based Boyd Gaming Corp. has fallen to about $12 a share, a five-year low, from a high of $54 last summer. After topping $98 last fall, shares of casino giant MGM Mirage now trade below $35. The public debt of Harrah's, which is highly leveraged after a $17 billion private-equity buyout last year, has traded as low as 52 cents on the dollar. Mr. Loveman, the chief executive, says Harrah's is profitable and is not in danger of default or a bankruptcy filing. The company, he says, is spending money to expand and improve existing properties, and is boosting visits to its regional casinos by chartering airplanes to fly in loyal customers.

PIMCO bond guru Bill Gross, a Republican, writes an open letter to President Barack Obama - "You have inherited a mess" - (housingpanic.blogspot.com) “You have inherited a mess. Your predecessor, fixated on emulating a former Republican icon from a far different economic era, chose to emphasize tax cuts for the rich and excessive consumption for all Americans. He promoted deregulation and free markets when, in fact, the markets and their institutions needed tough love. Over eight years, he failed to put forth a coherent energy policy. He needlessly invaded Iraq and lowered worldwide esteem for this nation as a symbol of freedom and benevolence."

BIS slams central banks, warns of worse crunch to come - (www.telegraph.co.uk) The central bankers' bank renews fear of second depression, writes Ambrose Evans-Pritchard. A year ago, the Bank for International Settlements startled the financial world by warning that we might soon face challenges last seen during the onset of the Great Depression. This has proved frighteningly accurate.



Other Stories:

GM Shares Near 54 Year Low - (money.cnn.com) Will GM survive this downturn without filing for bankruptcy? Shares of General Motors fell Monday, at one point trading at their lowest level since 1954, on the eve of what's expected to be a dismal report on June vehicle sales. GM stock ended down 5 cents to $11.50 a share after hitting a low of $10.57 earlier in the session. That was the lowest level for the company's stock since Sept. 22, 1954, when it traded at $10.49 on a split-adjusted basis, according to data from the University of Chicago's Center for Research in Security Prices.
Chrysler to Close Another Plant, Reduce Output - (www.nytimes.com) Both plants affected by the announcement are in Fenton, Mo., 20 miles southwest of St. Louis. About 2,400 of the company’s 3,500 hourly jobs in Fenton will be eliminated within four months, Chrysler said. Thomas W. LaSorda, one of Chrysler’s two presidents and vice chairmen, said in a conference call that the minivan plant, which opened in 1959 and was closed for several years in the early 1990s, would be idled “indefinitely,” meaning there was no expectation that it would reopen.
Detroit's Mood Grim as Automakers Face the Brink - (ww.reuters.com) Martinez, 50, must choose between retiring and making a long and expensive commute across state lines to stay with General Motors Corp (GM.N). Any future he can imagine is going to be costly and tough. "My whole family is under stress," he said. With four kids, retirement is not an option for Martinez. But driving more than 100 miles daily between home in the Detroit suburb of Lincoln Park and Toledo, Ohio -- where GM has a job for him -- is going to hurt with gas over $4 a gallon. Moving from Detroit, one of the markets hit hardest by the ongoing housing slump, could prove impossible.
"I can't probably sell my home for what it's worth," said Martinez. "I will owe more than I sell it for." When Martinez joined GM in the late 1970s, it controlled 46 percent of the U.S. vehicle market. A union job in the U.S. auto industry was seen as steady work with good wages and rock-solid benefits -- for life.

Ron Paul on Federal Reserve and Inflation - (www.youtube.com)
Crash not be an altogether bad thing - (www.atimes.com)
Next Victim of Real Estate Bubble: Government - (www.businessweek.com)
Who owns my mortgage? - (msnbc.msn.com)
OPEC pres sees oil at $170 this year, blames Fed - (www.marketwatch.com)

Whodathunk - (www.wallstreetexaminer.com) - In the Whodathink Department we now see bank credit quantity in a major free fall. The reason for this is straightforward, the bank system as a whole simply does not meet capital requirements even with all the fictitious capital accounting and lack or proper reserving being employed. And they know it, so loans are being called, and new ones capped. The latest report from the Fed of assets and liabilities of commercial banks in the U.S. showed the sharpest 13-week contraction in bank credit - loans and investments - in the history of the series, which dates back to January 3, 1973. In the 13 weeks ended June 18, bank credit contracted at an annualized rate of 9.14%.
Fitch: Non-Agency REO Volume Jumps 441 Percent - (www.ml-implode.com) - "Unprecedented growth of U.S. real estate-owned property volumes and the costs needed to maintain these assets are hindering rec...
IndyMac: Mini Bank Run, Thanks to Schumer - (www.ml-implode.com) - "IndyMac Bancorp, Inc. felt the pain of a mini bank run this past week, thanks to a leaked letter from New York Senator Charles ...
MBA Says Home Construction Loan Delinquency Rate Misleading - (www.ml-implode.com) - "Constructions loans for single and multi family projects in the United States are incorrectly included in commercial real estat...
Subprime, Alt-A Bonds to Extend Drop as Banks Retreat - (www.ml-implode.com)
Same As It Ever Was - (www.ml-implode.com)
Lender Clears Out Possessions Of Home Not In Foreclosure - (www.ml-implode.com)
Australia Home Lending At Lowest Level Since 1991 - (www.ml-implode.com)

BIS: Global economy could face deeper downturn - (www.chicagotribune.com)
Manufacturing in U.S. Unexpectedly Expanded in June - (www.bloomberg.com)
Global slowdown could be the next crisis for business - (www.financialweek.com)
Broad Says U.S. Economy in Worst Recession Since World War II - (www.bloomberg.com)
At Midyear, the Economic Pain Persists - (www.nytimes.com)

SAC's Bad News for Bankers - (online.wsj.com)
Regulators mull letting PE firms take stakes in U.S. banks - (www.financialweek.com)
IPOs Fall to Five-Year Low as Economy Slows, Loan Losses Climb - (www.bloomberg.com)
Fears for US disclosure rules after CSX ruling - (www.ft.com)
Few signs of deals returning to table - (www.ft.com)

Starbucks Plans to Close 600 U.S. Stores, Fire 12,000 - (www.bloomberg.com)
Chrysler to close 1 plant, cut production at 2nd - (www.chicagotribune.com)
Fortune Brands issues earnings warning - (www.chicagotribune.com)
CIT to sell home lending business for $1.5 billion, shares jump - (www.financialweek.com)
Honda, Hyundai Motor Avoid Slump as Asians Again Top U.S.-Based Automakers - (www.bloomberg.com)
Wachovia quits offering risky mortgage loan - (www.signonsandiego.com)
Airlines try to hedge against soaring fuel costs - (www.signonsandiego.com)
Promise of Biofuel Clouded by Weather Risks - (www.nytimes.com)
Doctors get temporary reprieve on Medicare cuts - (www.chicagotribune.com)

Stagflation grips Eurozone as interest rates look set to rise - UK (www.telegraph.co.uk)
Hot money floods China - (www.economist.com)
Soaring Asian commodity costs feed worldwide inflation - (www.iht.com)
Recession Clips Denmark - (online.wsj.com)
Subprime Losses Hit Japan - (online.wsj.com)
U.K. House Prices Drop Most Since 1992, Manufacturing Contracts - (www.bloomberg.com)
U.K. June Manufacturing Contracts Most Since 2001 - (www.bloomberg.com)
Japan's Tankan Sentiment Falls; Profits to Drop 7% - (www.bloomberg.com)

Tuesday July 1 Housing and Economic stories

Top Stories: Do these look like healthy bank/lender stock charts? (click on chart for larger view)

Ron Paul on Federal Reserve and Inflation - (www.youtube.com) New Ron Paul video from 6/25/08 on Fed Reserve meeting results.

Is IndyMac on the verge of Bankruptcy? Stock falls below $1 after being hit with a run on the bank on Saturday
· After some depositors pull funds, IndyMac responds to latest rumors about its health; says it's working with regulators - (latimesblogs.latimes.com) Pasadena-based mortgage lender IndyMac Bancorp, battling fresh rumors that it is near collapse, conceded today that its financial position "has deteriorated since last quarter," and said it was working on a plan with its regulators to improve "the safety and soundness" of the bank.
· Late Day Update: Indymac Closes Commercial Unit, Depositors Withdrawing Funds - (www.ml-implode.com) - At 5:45 pm (EST), the following email was sent to customers of Indymac's commercial lending unit, Indymac Commercial Lending Corp.:
"ICLC, due to the current market and capital constraints has ceased lending operations as of 7/1/08. A formal announcement from ICLC will be coming out tomorrow regarding details and loans in process." Referring to today's press release on The IMB Report, Indymac's company web site, an LA Times report refers to "a weekend that saw depositors line up at some of its San Gabriel Valley branches to pull their money, as they reacted to news reports questioning the company's survival." Indymac's article responds with "while branch traffic is somewhat elevated this morning, it is substantially lower than on Saturday, and we are hopeful that this issue appropriately abates soon..."
· Schumer: concerned over IndyMac stability - (www.ap.com)
· [$$] Schumer Asks Regulators For Greater IndyMac Scrutinyat - (us.rd.yahoo.com/finance/external/wsj)
· CRL: Indymac Dug Its Own Grave - (www.thetruthaboutmortgage.com) - The Center for Responsible Lending has impeccable timing, considering the fact that Indymac is trading at its lowest point ever amid mounting solvency concerns.The group released a 22-page report today outlining the Pasadena, CA-based mortgage lender’s failings, accusing the company of “unsound and abusive lending” during the recent boom. The report includes interviews with former employees, which among other things, claim Indymac padded borrower income, used bogus appraisals, worked with misleading mortgage brokers, and treated minorities and the elderly unfairly.
· IndyMac Update: Shares Down On More Bad News - (www.ml-implode.com)


Will Lehman Brothers suffer the same fate as Bear Stearns? It will likely (within next month) be bailed out by the Fed or Barclays
· Lehman falls on talk of possible sale to Barclays - (www.ap.com) - Lehman Brothers Holdings Inc. shares fell sharply (over $2.4/share) Monday amid speculation that the nation's fourth-largest investment bank might be acquired by Britain's Barclays PLC at a discount price.
· Lehman up after Morgan Stanley's overweight rating - (www.reuters.com) – Yet Morgan Stanley changes rating to “overweight”. We should know in less than a month if MS was unethically trying to protect their interest or if Lehman gets acquired at $31/share.
· [$$] Lehman Hits Lowest Level Since 2000 Amid Buzz - (us.rd.yahoo.com/finance/external/wsj)









And how about Wachovia. Prediction is Wachovia will be acquired (or liquidated) in the next 2 months:
· Wachovia Drops On News of Possible $5 Billion Buyback - (www.bloomberg.com) Wachovia Corp., the fourth-largest U.S. bank, fell the most in two months after the New York Post said the company may have to buy back Prudential Financial Inc.'s stake in their joint retail brokerage venture.
· Wachovia halts mortgages with negative amortization featuresat MarketWatch(Mon 5:28pm) – (www.marketwatch.com)
· Wachovia eliminates pick-a-pay loansat bizjournals.com(Mon 5:25pm) – (www.bizjournals.com)
· ALERT! Wachovia Cries ‘UNCLE’ on the Pay Option ARM - (www.ml-implode.com)

Court Ruling Could Shock Entire U.S. Mortgage Industry - (www.ml-implode.com) - A lawsuit filed by a Wisconsin couple against their mortgage lender could have major implications for banks should a U.S. appeals court agree that borrowers can cancel their loans en masse when their lenders violate a federal lending disclosure law.
BIS slams central banks, warns of worse crunch to come - (www.telegraph.co.uk) A year ago, the Bank for International Settlements startled the financial world by warning that we might soon face challenges last seen during the onset of the Great Depression. This has proved frighteningly accurate. The venerable body, the ultimate bank of central bankers, said years of loose monetary policy had fuelled a dangerous credit bubble that would entail "much higher costs than is commonly supposed". In a pointed attack on the US Federal Reserve, it said central banks would not find it easy to "clean up" once property bubbles have burst. If only we had all listened to the BIS a long time ago. Ensconced in its Swiss lair, it has fired off anathemas for years, struggling to uphold orthodoxy against the follies of modern central banking. Bill White, the departing chief economist, has now penned his swansong, the BIS's 78th Annual Report, released today. It is a disconcerting read for those who want to hope the global crisis is over. "The current market turmoil is without precedent in the postwar period. With a significant risk of recession in the US, compounded by sharply rising inflation in many countries, fears are building that the global economy might be at some kind of tipping point," it said. "These fears are not groundless. The magnitude of the problems yet to be faced could be much greater than many now perceive," it said. "It is not impossible that the unwinding of the credit bubble could, after a temporary period of higher inflation, culminate in a deflation that might be hard to manage, all the more so given the high debt levels."
Next Victim of Real Estate Bubble: Government - (www.businessweek.com) - State and local governments were flush with tax revenue during the five-year housing boom. They pulled from bulging pools of property, income, and sales tax to expand education, law enforcement, health care, and infrastructure programs without needing to burden residents and corporations with tax hikes. Those days are over. Home prices are falling, and foreclosures, gas prices, unemployment, and inflation are on the rise. At least 29 states, plus the District of Columbia, reported budget shortfalls that total about $48 billion as they finalized their 2009 fiscal budgets, which typically begin July 1, according to the Center on Budget & Policy Priorities.
Credit crisis fallout to limit houseowner spending - (www.reuters.com) "(U.S.) household spending now seems likely to weaken in response to high debt and service burdens, falling employment and the general tightening of credit conditions," it said.
A growing trend of negative equity -- where falling house prices leave homeowners with a mortgage bigger than their property's value -- is also expected to corset the borrowing ability of U.S. households. In some parts of the United States, houses have halved in value over the last two years as the property bubble has popped and mortgage defaults surge while builders flood already saturated markets with new properties. "As housing prices fall and credit conditions tighten, (more) such loans are likely to default because borrowers have few alternative financial resources," BIS said.
The Greenspan Gamble - (www.rgemonitor.com) it appears to me that the "Super Fed" could actually happen. Many of the other changes require consolidation of regulatory agencies, and bureaucracies seldom go gently into that good night. They and their constituents will fight for survival and probably win. But the Fed expansion is likely to be seen as the solution the problem of risk that the housing bust has made apparent. But wait. Isn't this the same Fed whose 1 percent fed funds rate helped inflate the great Housing and Mortgage Bubble that is now popping? Didn't this lead to massive losses, illiquidity, and panic? Wasn't the bubble exactly the sort of systemic risk that the new, more powerful Fed is expected to effectively manage?



Other Stories:

Deflationary Hurricanes to Hit U.S. and U.K. - (Mish at globaleconomicanalysis.blogspot.com) British households are now more indebted than those of any other major country in recorded history, it has emerged. Families in the UK now owe a record 173pc of their incomes in debts, official figures have shown. The ratio of debt to income is higher than any other country in the Group of Seven leading industrialised economies, and is sharply higher than the 129pc of incomes it was five years ago.
OPEC pres sees oil at $170 this year, blames Fed - (www.marketwatch.com)
28 in Michigan Charged With Mortgage Fraud - (www.ml-implode.com)
The end of the superbubble - (articles.moneycentral.msn.com)
FL Joins List Of States Lining Up With Suits Against Countrywide - (www.ml-implode.com) - Florida sued mortgage lender Countrywide Financial Corp for predatory lending practices on Monday, alleging the company at the c...
Central Bank Schizophrenia - (www.ml-implode.com) - "What is Ben Bernanke to do? Since his job is simultaneously to avoid recession while protecting against inflation, and right no...
Is Any Company Safe from Subprime Related Lawsuits? - (www.ml-implode.com)
California Under Schwarzenegger Underperforms Davis Debt Burden - (www.bloomberg.com) As the most populous U.S. state, with a gross domestic product that's No. 8 in the world, California is so strapped for cash that it must consider a short-term, $10 billion loan to cover its bills. The widening deficit means the financing may be about 0.85 percentage point more expensive than five years ago, when Davis lost his job over a budget gap twice as large as the $17 billion deficit the state now faces. That's an added $8.5 million on every $1 billion borrowed.

Consumers fail to save despite the gloom - (www.ft.com)
Subprime, Alt-A Bonds to Extend Drop as Banks Retreat - (www.bloomberg.com)
Homeowners Fall Further Behind on Mortgage Payments, Group Says - (www.bloomberg.com)
Engineering the Housing Bubble Through Monthly Payments - (mrmortgage.ml-implode.com)
Lenders create a bankruptcy monster - (articles.moneycentral.msn.com)
Crash not be an altogether bad thing - (www.atimes.com)
Lehman Selling Archstone - (patrick.net)
Second-Largest New England City Seeks Foreclosure Moratorium - (www.ml-implode.com)
Is Oil Having an Impact on Housing? Taking a Look at Los Angeles County - (www.ml-implode.com)
Mr Mortgage: Engineering the Housing Bubble Through Monthly Payments - (www.ml-implode.com)
Who owns my mortgage? - (msnbc.msn.com)
You ain't seen nothing yet - (www.informationclearinghouse.info)
Gloom and Doom? Nah; Just for the U.S. - (online.barrons.com)
One bullish American economist amid growling bears - (www.telegraph.co.uk)
Is Oil Impacting Housing? Look at Los Angeles County - (www.mybudget360.com)
Will the USA Invade Canada For Its Oil? - (www.sandersresearch.com)
Economist describes why inflation hits harder now - (www.marketwatch.com)

Hoarding Nations Drive Food Costs Ever Higher - (www.nytimes.com)
One Rebate Isn’t Enough - (www.nytimes.com) , Shiller
World needs tough monetary policy to tackle inflation - (www.reuters.com)
Northeast braces for home heating oil increases - (www.usatoday.com)

Banks seek market-based pricing scheme - (www.ft.com)
MBIA Has Sufficient Assets to Meet Collateral Call - (www.bloomberg.com)
Legg Mason Support for Money Funds to Cut Earnings by 64 Cents - (www.bloomberg.com)
Businesses Scramble To Offset Rising Cost Of Transportation - (online.wsj.com)
Small US banks feel the pinch - (www.ft.com)

European Prices Rise More Than Forecast as Oil Surges - (www.bloomberg.com)
China Stocks Fall; Benchmark Index Completes Worst Month Ever - (www.bloomberg.com)
Eurozone inflation jumps to 4% - (www.ft.com)

Friday May 16 Housing and Economic stories

Top Stories:

US consumer confidence at lowest since 1980 - (www.ft.com) – The US consumers are no longer buying the bogus understated inflation numbers being provided by the government. US consumer confidence sank to its lowest level in 28 years this month as anxious shoppers grappled with surging food and fuel costs, according to a new survey published on Friday. The Reuters/University of Michigan consumer confidence index plunged from 62.6 to 59.5 in May, the lowest reading since June 1980.
Record condo numbers to saturate downtown area - (www.chicagotribune.com) - Nearly 6,000 condos, by far a record number, are expected to come on the market in downtown Chicago this year at a time when mortgages are tougher to get and sales have slowed dramatically, according to a report. Sales of newly built downtown condominiums plummeted by about 83 percent during the first quarter, to 201 units from 1,207 units a year earlier, according to a report to be released Wednesday by Appraisal Research Counselors.
Electricity retailer won't honor fixed-rate contracts - (www.chron.com)
Scenes of monkeys running around during the greatest housing crash in human history - (www.ml-implode.com) - The monkeys are "congress critters." Some good C-Span fodder.
Foreclosures moving up the Housing Chain - (www.ml-implode.com) - "The foreclosure signs that have been sprouting up in less-affluent communities since 2006 are beginning to appear in the well-o...
Is the Noose Tightening Around Countrywide? - (www.ml-implode.com) - "One of the reasons for Bank of America to walk from the Countrywide deal is the rising tide of legal costs and potential for si...
Democrats Face BAILOUT Backlash - (online.wsj.com) - Democrats may be risking a backlash at the polls in November by pushing hard to use taxpayer money to rescue homeowners who can no longer afford their mortgages in the face of stiff resistance from President Bush and many other Republicans.
FHA scam mortgages still happening at taxpayer expense - (msnbc.msn.com) - No down payment? No problem. Loophole still allowing risky mortgages by disguising money as a gift
Lehman to Cut 5% of Staff, Starting Next Week: Source - (www.cnbc.com)
'Stealth Layoffs' Sweep Across Wall Street - (www.cnbc.com)
Luxury Foreclosures - (www.washingtonpost.com)
Americans' money worries are growing, L.A. Times/(www.bloomberg.com) poll finds - (www.latimes.com)
Judge Says Countrywide Officers Must Face Suit by Shareholders - (www.nytimes.com)
Boone Pickens project buys 667 GE wind turbines - (www.chron.com)
Who Will Buy the Condos? - (www.chicagomag.com)
As Condo Dues Dry Up, The Neighbors Pay - (online.wsj.com)


Other Stories:

Goldman Forecasts $141 Oil For Second Half of Year - (www.cnbc.com)
Oil Soars to Record Near $128 Before Backing Off - (www.cnbc.com)

Barclays Profit Falls After $3.3 Billion Writedown - (www.ml-implode.com) - "Barclays Plc, the U.K.'s third-biggest bank, reported a drop in first-quarter earnings because of 1.7 billion pounds ($3.3 bill...
Sorry Greenspan, But I’m Not Seeing It - (www.ml-implode.com) - "According to Marketwatch yesterday, "Greenspan sees U.S. house price hit bottom in 2009". I think he’s seeing things. "
FHA Chief Criticizes Rescue Plan - (www.ml-implode.com)
Strength in Unity: PA Lenders Gateway and Arlington Unite - (www.ml-implode.com)
Flood of Foreclosures Prove Loan Modification Isn't Working - (www.ml-implode.com)
Food Stamps and The Un-Adjusted Economy - (www.ml-implode.com)
CDOs Flicker to Life With Babson, Deutsche Takeovers - (www.ml-implode.com)
Phoenix: April Home Sales Up But Median Down 21% - (www.ml-implode.com)
Freddie Mac Reports Better Than Expected First Quarter Results - (www.ml-implode.com)
For IndyMac, Another Ratings Cut; Capital Raise Looming? - (www.ml-implode.com)

U.S. Industrial Production Drops More Than Forecast as Consumers Cut Back - (www.bloomberg.com)
Manufacturing in New York Contracted in May, Orders Dropped - (www.bloomberg.com)
Food Costs Jump Most in 18 Years - (www.washingtonpost.com)
U.S. Initial Jobless Claims Rose to 371,000 Last Week - (www.bloomberg.com)
Manufacturing in Philadelphia Region Shrank in May - (www.bloomberg.com)
Inflation may be worse than consumer price index shows - (www.usatoday.com)

Is Debt Thaw on Borrowed Time? - (online.wsj.com)
Private equity: Year of the vulture - (money.cnn.com)
10 private-equity deals gone bust - (money.cnn.com)
Critics: SEC no match for investment banks - (www.financialweek.com)
Rate rise flattens money funds - (www.financialweek.com)
Hedge Funds Under Scrutiny - (www.forbes.com)
Paulson Should Act to Stop Dollar Slump - (www.bloomberg.com)
Gaffe reveals English ministers' fears of housing slump - (www.independent.co.uk)

Fast-Rising Steel Prices Set Back Big Projects - (online.wsj.com)
FedEx and UPS Still Wait For Recovery to Arrive - (online.wsj.com)
WaMu COO: We're Not Done Hemorrhaging - (www.thestreet.com)
GE could sell appliances unit - (www.ft.com)
Barclays Profit Falls After $3.3 Billion Writedown - (www.bloomberg.com)
Jack in the Box shares tumble on revised outlook - (www.latimes.com)
Sony has 4Q profit, but expects decline this year - (www.chicagotribune.com)
Distressing time for furniture retailers - (www.latimes.com)
Guilty plea in Monterey house-sale scam - (www.montereyherald.com)
Housing market flooded by sellers - (www.reportonbusiness.com)
House Price Erosion Will Continue - (www.seekingalpha.com)
What Garage Sales Tell Us About Our Economy - (www.thetrumpet.com)

China's fixed-asset investment steams ahead 25.7% - (www.marketwatch.com)
European Expansion Accelerates More Than Forecast - (www.bloomberg.com)
Japan's machinery orders fall in March - (www.latimes.com)
Petrobras Hires 80% of Deepwater Drilling Rigs, Drives Up Costs - (www.bloomberg.com)
England Q1 housing starts down 24 percent year-on-year - (www.forbes.com)
New Zealand Spending Report Another Sign Economy Has Contracted - (www.bloomberg.com)
Keep hold of the basic rules of finance - (www.ft.com)

California Prices Still Plummeting - (patrick.net)
House prices Keep Getting Better For Patient Buyers - (biz.yahoo.com)
No inflation if you don't eat or drive - (money.cnn.com)
US foreclosure filings surge 65 percent in April - (news.yahoo.com)