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)

Tuesday April 29 Housing and Economic stories

Top Stories:

Condo is Tower of Solitude - (www.tampabay.com) – This is just a great story. Condo owner has almost the entire hi-rise to himself.
Maintenance is slow. Not long ago, Johnny clogged the garbage chute with pizza boxes, and when no one showed up to fix the problem, he dragged a concrete block five flights up and dropped it in the chute. When that failed, he tried another. "It just exploded," he says. The pool isn't heated. Johnny suspects it's because there aren't enough residents to justify the bills. He did figure out how to activate the waterfall, which pours down from Disneyfied bluffs. Still, instead of mingling beauties on lounge chairs and late-night Red Bull-and-vodka parties, the only real action on pool deck is the occasional Realtor networking social. Yay.
Raised in boom times, many Gen-X and Yers see their dreams go bust - (www.latimes.com) – Hmm, it’s just hard for me to feel sorry for these guys.
Jason Liebrecht used to write about his motorcycle adventures on his blog. But since early this month, the 36-year-old San Diego computer software engineer's daily musings have been about a less thrilling new experience: unemployment. "Do I find a job, or do I head to Central and South America on the motorcycle?" he wrote on Day 4. By Day 7, he had become more realistic. After selling some stock and applying for unemployment, Liebrecht figures he can pay his $2,300-a-month mortgage and other bills for just two months. When his company health insurance runs out in a few weeks, he'll go uncovered because he can't afford the premiums. "You have to just hope you land on your feet," Liebrecht said in an interview.
New Houses Turning Old as the Inventory Piles Up - (www.nytimes.com)
History Hints a Recession Would Hit City Hard - (www.nytimes.com) - The situation has worsened enough that the New York City Independent Budget Office, which said a month ago that it expected a brief and mild recession, is preparing a forecast that is likely to be significantly bleaker, said Ronnie Lowenstein, the director.
While You Weren’t Looking: FHA-Insured Jumbos on the Move - (www.ml-implode.com) - Under the Economic Stimulus Act of 2008, The Federal Housing Administration received a huge shot in the arm when it saw its lend...
Bank of America to Modify Mortgages, Help Homeowners - (www.ml-implode.com) - Bank of America Corp., seeking approval of its Countrywide Financial Corp. takeover, plans to modify at least $40 billion of mor...
Walkaways Are Over Already? - (www.ml-implode.com) - Alan Nevin, chief economist for the California Building Industry Association and San Diego-based MarketPointe Realty Advisors, predicted foreclosure sales could account for as many as 15,000 out of 25,000 total sales this year. But at some point, the foreclosures will drop off, he Nevin said. “Anybody who's going to walk away from a house or condo has already done it,” Nevin said. “Now it's just a matter of the pig going through the snake.”
Taxpayers Already Bailing Out Housing Market - (www.ml-implode.com)
S&P delivers blow to CDOs - (www.ft.com)
RBS May Cut 7,000 Investment Banking Jobs, People Say - (www.bloomberg.com)
Eos is Fourth U.S. Airline To Shut Down This Month - (online.wsj.com)
Greenspan, Bush to blame for U.S. crisis - (www.reuters.com)



Other Stories:

CA Median House Prices Down 29% In March - (Mish at globaleconomicanalysis.blogspot.com)
"Financial" Crisis? - (www.atlanticfreepress.com)
Good-Bye, Cheap Oil. So Long, Suburbia? - (www.businessweek.com)
Dealers see SUV glut as drivers trade in gas guzzlers - (www.nytimes.com)
Scholar threatened for warning of housing bubble in Taipei - (au.biz.yahoo.com)
'Estate agents' offer empty houses for squat - (www.dailymail.co.uk)

Pipeline Shock: Wells Wholesale adds 3 points - immediately!!! - (www.ml-implode.com) - "Due to secondary market execution risk, Wells Fargo Wholesale Lending has implemented a new 3.00 price adjuster." We were warn...
How the mortgage industry nurtured deceit - (www.slate.com)
Privatized profits and socialized risk - (www.nytimes.com)
Prosecute the Mortgage Sharks - (www.washingtonpost.com)
I wasn't wrong in '02, just early - (www.ocregister.com)
Mr. Mortgage: Gov’t Reports Record Number of Vacant Homes - (www.ml-implode.com) - ``What does this mean? It means the ’Month’s Supply’ figures, which the press and market get so hot and bothered over each month ...
The Shrinking Pie Effect - (www.ml-implode.com)
Iowa's Largest Home Builder Implodes - (www.ml-implode.com)
Will They Call FHA A Predatory Sub Prime Lender Too? - (www.ml-implode.com)
Investors pull out of mutual funds - (www.ml-implode.com)
The Brighter Side of Housing: LOWER PRICES - (online.wsj.com)
Housing Market is Nowhere Near Bottom - (www.huffingtonpost.com)
Brookfield Net Income Declines as Property Sales Fall - (www.ml-implode.com)
U.K. House Prices Decline the Most in Three Years - (www.ml-implode.com)
Too Many Houses, Not Enough People - (www.ml-implode.com)
Prices down 20% in Bangalore, India - (business.timesonline.co.uk)
Three Reasons Why Mortgage Bailout Is a Terrible Idea - (www.homeguide123.com)
Fed rates down, Mortgage rates up - (www.seekingalpha.com)
6.5 Million Foreclosures; Is There a Behavioral Problem? - (www.seekingalpha.com)

Gold Rises as Oil Costs Jump, Signaling Inflation; Silver Gains - (www.bloomberg.com)
Fed's Bailout Is Questioned By Ex-Staffer - (online.wsj.com)
Home vacancies rise to record 2.9% in first quarter - (www.marketwatch.com)
Truckers protest high gasoline prices - (www.ap.com)
Stimulus program rebates start today - (www.latimes.com)

Amid High Oil Prices, Danger Signs in Production - (www.nytimes.com)
Muni Auction Market Shrinks by 33%, Driving Down Interest Costs - (www.bloomberg.com)
S&P Lowers CDO Assumptions, Signaling More Downgrades - (www.bloomberg.com)
OPEC president sees $200 oil possible: report - (www.reuters.com)
Credit card rates hustle higher - (www.usatoday.com)
Resales of homes a house divided - (www.signonsandiego.com)

Loan Industry Fighting Rules on Mortgages - (www.nytimes.com)
Canadian economy stalling - (money.canoe.ca)
Trichet Says Beating Inflation Is Sole Aim of ECB - (www.bloomberg.com)
Turf wars hobble China's financial markets - (www.reuters.com)
Russian Central Bank Raises Rates by Quarter Point - (www.bloomberg.com)
Brazil Oil Trapped by 500-Degree Heat, Salt Barrier - (www.bloomberg.com)
Japan's Inflation: Bad Timing - (online.wsj.com)
Panel to Look at Foreclosure Practices - (www.nytimes.com)
Global adjustment will be long and painful - (www.ft.com)
Where Every Meal Is a Sacrifice - (www.washingtonpost.com)