Friday August 8 Housing and Economic stories

Top Stories:

How Andrew Cuomo Gave Birth to Crisis at Fannie and Freddie - (www.villagevoice.com) Andrew Cuomo, the youngest Housing and Urban Development secretary in history, made a series of decisions between 1997 and 2001 that gave birth to the country's current crisis. He took actions that—in combination with many other factors—helped plunge Fannie and Freddie into the subprime markets without putting in place the means to monitor their increasingly risky investments. He turned the Federal Housing Administration mortgage program into a sweetheart lender with sky-high loan ceilings and no money down, and he legalized what a federal judge has branded "kickbacks" to brokers that have fueled the sale of overpriced and unsupportable loans. Three to four million families are now facing foreclosure, and Cuomo is one of the reasons why.

Citigroup To Pay Billions To Settle Securities Probe - (www.cnbc.com) Citigroup will buy back more than $7 billion in auction-rate securities and pay $100 million in fines as part of settlements with federal and state regulators, who said the bank marketed the investments. Citigroup will buy back the securities from tens of thousands of investors nationwide under separate accords announced Thursday with the Securities and Exchange Commission, New York Attorney General Andrew Cuomo and other state regulators. The buybacks must be completed by November. The nation's largest financial institution also will pay a $50 million civil penalty to New York state and a separate $50 million civil penalty to the North American Securities Administrators Association, which represents securities regulators in the 50 states and the District of Columbia. The SEC also will consider levying a fine on Citigroup, the agency's enforcement director Linda Thomsen, said at a news conference. In addition, New York-based Citigroup agreed to make its best efforts to liquidate by the end of next year all of the roughly $12 billion of auction-rate securities it sold to retirement plans and other institutional investors.

Citigroup May Pressure Other Firms With Deal on Auction-Rate Securities - (online.wsj.com)

US property dream in Stockton, CA has turned into a nightmare - (www.telegraph.co.uk) Just five minutes walk from the lush green lawns that surround the city hall is a street on which each of the five houses lies empty.
With boarded-up windows on two of the houses and no windows on the rest, the buildings would appear to be at odds with street signs which purport the area to be part of the "Historic Magnolia District". A crumbling sign on the first house boasts it is "For Rent" but, given that it doesn't even have a door, it seems unlikely the owner, if there is one, will be getting too many inquiries. From one of the other houses the sound of dogs barking becomes louder and, as the apparently ownerless hounds appear at the open door, I make a hasty retreat. Welcome to Stockton, California, the foreclosure capital of the United States. Here, in this city some 80 miles to the east of San Francisco, one in every 25 homes is in the process of being repossessed by mortgage lenders, more than any other city in America.

Tempest for a Bank That Bet on Risky Loans - (www.nytimes.com) - A cheerful sign outside the glistening offices of Bank United beckons consumers to tap into “Mortgage-ade.” Another promises a “59 Minute Mortgage.” But easy money, it turns out, has created enormous problems at Bank United, Florida’s biggest regional bank. By aggressively peddling a popular type of high-interest loan to risky borrowers, the bank tripled its profits in 2006 as real estate on Florida’s Gold Coast peaked, only to lose nearly $100 million in late 2007 and early 2008 as the market cratered. Now, its chief executive, Alfred R. Camner, is scrambling to raise $400 million in capital, an amount nearly eight times the bank’s shriveled value on the stock market. Analysts and a corporate governance group are monitoring the bank’s asset quality and asking why Mr. Camner was allowed, with board approval, to amass a pool of volatile loans that at one point represented 75 percent of the bank’s mortgage portfolio, despite what has since proved to be great risk.

'Accounting Games' Mask True Financial Pain, Says Housing Seer Rosner - (finance.yahoo.com) Good video. The huge loss announced last night by AIG and Citigroup's pending settlement over auction-rate securities (to be announced later today) show again the credit crunch remains very much alive. It's likely to get worse before it gets better, says Joshua Rosner, managing director at Graham Fisher & Co., an independent research firm, who predicts national home prices will fall another 13%-15% before bottoming in early 2010, "unless they overshoot." Rosner, whom Fortune dubbed a "prophet of the credit crisis" for his early warnings about problems in mortgage-backed securities, believes companies are still slow to take losses and are "still playing games" with accounting. For example, Freddie Mac's dismal results this week would have been even worse if not for $18 billion in deferred tax assets. Rosner says that $18 billion figure is questionable, based on Freddie's own admission in the appendix to its filing: "The company does not maintain a tax basis balance sheet to support deferred tax accounting under GAAP, which could result in balance sheet misclassifications and potential income statement adjustments." Rosner also noted recent agreements where Ambac paid Citigroup $850 million to cancel insurance on $1.4 billion of CDOs, and SCA paid Merrill $500 million to cancel insurance on $3.7 billion of mortgage-backed securities. In both cases, Ambac and SCA booked paper gains by marking up the value of the underlying securities, which had previously been written down. Meanwhile, Citi and Merrill were able to book the payments to cancel the insurance as income. Rosner says the slowness of management to really take losses is contributing to the market's "manic-depressive" state (heading back to "depressive" Thursday) because investors keep thinking the "worst is over" and then get hit by the next round of announced losses. (For the record, Rosner does not own or short financial services stocks and his firm does no investment banking.)

Housing values propped up by wishful thinking - (www.marketwatch.com) While there's little doubt that the economy's problems are hitting home for most Americans, there is no question that most people just don't want to admit it. The latest proof came in the second-quarter "Homeowner Confidence Survey" released by real-estate research Web site Zillow.com, which showed that consumers are inclined to believe that their neighbor's house is losing value, but that the crisis isn't happening in their own backyard. According to the Zillow survey of homeowners, conducted by Harris Interactive, nearly two-thirds of U.S. homeowners think that the value of their own home has increased or remained stable over the last 12 months.

North Dakota's real-life Jed Clampett - (www.cnn.com) "Oil," he says, "it's amazing. You don't have to work at all. You just walk to the mailbox and there it is." The 74-year-old grandfather receives whopping checks at the end of every month for the oil. He'll never forget the time the first check came in January. "Thousands, I guess you'd call it," he says. Geving chuckles when asked if it was for $2,000. Was it closer to $10,000?
"You can keep going up and up and up," he says from his home, decked out with a massive fire pit in the living room, semi-circular leather couch and bright orange shag carpet. He had worked on the home for more than 40 years. Now, he's expanding it -- just because he can. Stanley, North Dakota, might seem an unlikely boomtown located in the northwest part of the state about 50 miles from the Canadian border. But the town is teeming with activity -- all thanks to rich oil deposits sitting deep below the surface. The town has grown from 1,250 people to more than 1,600 since the start of the year, says Mayor Mike Hynek. The oil has brought better paying jobs, raised real estate values and spawned millionaires. Watch North Dakota town strikes it rich »
"Practically everyone is being affected by it," Hynek says. It's not uncommon to hear stories of 20-year-olds with no job experience getting hired to work in the oil fields with starting salaries of $70,000 a year. Gary Dazell makes more than $100,000 a year hauling water to and from the oil fields.

Media Gets Pending Home Sales Wrong (Again!) - (bigpicture.typepad.com) - There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons. That's not my definition, that comes straight from the NAR's release. Its the annual changes that matters more.

Pimco's Gross Says U.S. Will Rescue Fannie, Freddie - (www.bloomberg.com) Bill Gross, who manages the world's biggest bond fund, said the U.S. Treasury will probably be forced to buy as much as $30 billion of preferred shares in both Fannie Mae and Freddie Mac to help shore up their capital.
``By the end of the third quarter, the preferred stock in Fannie and Freddie will be issued, the Treasury will have bought it,'' Gross, co-chief investment officer at Pacific Investment Management Co., said today in an interview on Bloomberg Television. ``We'll be on our way toward a joint Treasury-agency combination.''

Mortgages Made in 2007 Go Bad at Rapid Clip - (online.wsj.com) - Mortgages issued in the first part of 2007 are going bad at a pace that far outstrips the 2006 vintage, suggesting that the blow to the financial system from U.S. housing woes will be deeper than many people earlier estimated. An analysis prepared for The Wall Street Journal by the Federal Deposit Insurance Corp. shows that 0.91% of prime mortgages from 2007 were seriously delinquent after 12 months, meaning they were in foreclosure or at least 90 days past due. The equivalent figure for 2006 prime mortgages was just 0.33% after 12 months. The data reflect delinquencies as of April 30.
Evidence that lax lending standards were leading to higher mortgage delinquencies first emerged in late 2006. The first major casualty of the subprime credit crisis, New Century Financial Corp., imploded in early 2007. Yet the data from the FDIC and others suggest that lenders didn't substantially tighten standards until at least July or August 2007, when credit jitters hit Wall Street and financial stocks began to swoon.

Almost Half of Indiana’s Mortgage Brokers See Licenses Yanked - (www.housingwire.com) More than 40 percent of mortgage brokers in Indiana no longer have a license to do business in the state, after Indiana Secretary of State Todd Rokita said Tuesday that his office had revoked licenses for 393 of the state’s 950 mortgage brokerages for failure to comply with a new state law. To be sure, some of the firms are simply out of business — the Indianapolis Star reported Wednesday that 79 of the state’s notices to offending companies were returned as undeliverable — but the fact that so many of the brokers operating in the state literally failed to meet basic licensing criteria introduced by a 2007 law should be eye-opening. Rokita worked with leaders in the state’s General Assembly to pass a law last year requiring each licensed mortgage office doing business in the state to employ a so-called principal manager to supervise the business affairs of the office and the staff, defined as a mortgage professional with at least three years experience in the industry. Furthermore, the reforms mandate that each principal manager take and pass a practice standards examination based on Federal regulation, Indiana statute and industry best practices.


Other Stories:

Conservatives give up on personal responsibility, fund government bailouts - (finance.yahoo.com)
Builder decries elimination of seller-funded down-payment aid - (www.marketwatch.com)
Houseowners delusional on value of property - (www.sfgate.com) It could never happen to me. That's the common attitude whether the subject is shark attacks, black market organ theft or, apparently, housing price declines.
Despite plummeting values across the nation, 62 percent of homeowners believe their property's worth has actually climbed or stayed the same during the past year, according to a confidence survey commissioned by real estate Web site Zillow. In reality, the market price on 77 percent of properties has dropped and only about 24 percent have risen or held firm, the Seattle company estimates.

Pending Home Sales Number NOT Positive - Explained - (www.ml-implode.com) - "June Pending Home Sales were up! Not really. They were at the exact same level in April, took a dip in May and went back to Ap...
Mortgages Made in 2007 Go Bad at Rapid Clip - (www.ml-implode.com) - "Mortgages issued in the first part of 2007 are going bad at a pace that far outstrips the 2006 vintage, suggesting
Budget Showdown In California - (Mish at globaleconomicanalysis.blogspot.com)
Florida property values face unprecedented decline - (www.hosted.ap.org)
Hawaii median house sale prices drop 3.1 percent on Oahu - (www.honoluluadvertiser.com)

The last hurrah for the banking system - (www.onlinejournal.com)
Morgan Stanley Said to Freeze House-Equity Credit Withdrawals - (www.bloomberg.com)
Countrywide sued by Connecticut over loans, fees - (www.reuters.com)
Greenspan Almost Childlike - (www.istockanalyst.com)
Economists Plumb the Depths of the Downturn - (www.nytimes.com)
Invest In Defence In A Housing Crash - (www.anorak.co.uk)

U.S. Stocks Retreat on AIG's Loss, Wal-Mart's Sales Forecast - (www.bloomberg.com)
Crude Oil Rises as Turkey Says Pipeline Repair May Take 2 Weeks - (www.bloomberg.com)
Treasuries Gain After Unemployment Claims Reach Six-Year High - (www.bloomberg.com)

U.S. Jobless Claims Rose Last Week to Six-Year High - (www.bloomberg.com)
40% of U.S. homeowners say their houses have risen in value - (www.dallasnews.com)
Inflation fears persist as Fed holds rates - (www.ft.com)
Highest Unsold Home Supply Since '82 Seen Needing 50% Reduction - (www.bloomberg.com)
Pending Home Resales in U.S. Unexpectedly Rose 5.3% - (www.bloomberg.com)

Mortgage Failure Rate Rises - (online.wsj.com)
Wall Street Report Tries to Dissect Financial Meltdown - (www.nytimes.com)
Mortgage Delinquencies Accelerated During 2007 - (online.wsj.com)
Hedge Funds Chalk Up Losses - (online.wsj.com)
Big banks seek to limit their own risks - (www.ft.com)
Big banks prepare to scale back business - (www.ft.com)

AIG Posts Third Straight Quarterly Loss on Housing - (www.bloomberg.com)
Chrysler, Nissan May Team Up - (online.wsj.com)
Freddie Needs Equity Lift - (online.wsj.com)
Retailers slash prices in back-to-school fight - (www.chicagotribune.com)
Shoppers buying more store brands as budgets get tight - (www.dallasnews.com)
High Costs, U.S. Sales Hurt Toyota - (online.wsj.com)
Freddie Mac’s Big Loss Dims Hopes of Turnaround - (www.nytimes.com)
Freddie Mac's negative net worth raises questions - (www.reuters.com)
CarMax to slow growth after seeing sales drop - (www.signonsandiego.com)
GM Presses Ad Agencies on Costs - (online.wsj.com)
Tempest for a Bank That Bet on Risky Loans - (www.nytimes.com)

Credit crisis taking toll on European insurers - (www.iht.com)
Bank of Korea Raises Rate to 5.25% to Curb Inflation - (www.bloomberg.com)
Food price inflation spirals to 9.5 per cent - (business.timesonline.co.uk)
UK dealers cut car prices as sales fall - (www.ft.com)
Defaults to Rise in Europe a Year After Crunch Began - (www.bloomberg.com)
Barclays profits plunge on huge credit-related losses - (news.yahoo.com/s/afp)
U.K. July Home Values Fall Most Since 1983, HBOS Says - (www.bloomberg.com)
As Mexican inflation soars, President Felipe Calderon shakes up Economic Ministry - (www.latimes.com)
The Big Freeze part 4: How to build a US recovery - (www.ft.com)

Wednesday July 9 Housing and Economic stories

Top Stories:

Market leaves housing flippers flopping - (www.tampabay.com) - Someone, please put this guy in a Turkish prison for the rest of his life. This guy should not be allowed to continue working in Real Estate or keep his existing properties and 401K account: As the market began to cool in 2006, it became harder to flip houses, and questionable transactions began to surface. Lepzinski and his wife Peggy, 49, sold several houses to the elderly father of a St. Petersburg loan officer who had done prison time for fraud and theft. The father, who lives in New York, said he knew nothing about the transactions or how his name ended up on high-interest mortgages that required no down payment. Last summer, a Lepzinski-owned home in St. Petersburg that had sat vacant for months with no buyers suddenly sold for $630,000 — far more than comparable sales — to an 82-year-old retired trucker living on Social Security. Lepzinski declined to talk about that or other transactions. On Feb, 23, the Lepzinskis filed a Chapter 7 liquidation bankruptcy. Their petition listed nine properties on which the lenders had foreclosed, repossessed or taken the deed in lieu of foreclosure. Contrary to the image Lepzinski cultivated of successful real estate investor, his petition showed no income for 2007 and negative income of $151,577 in 2006. Even at the peak of the boom in 2005, his income was minus $218,320. In all, the Lepzinskis owed $1,547,705, including nearly $190,000 in credit card debt to American Express, Target, Home Depot and others. Among their individual creditors was a neighbor who had loaned them $97,800. "You make me out to be evil and I'm the victim — am I not the one who went into bankruptcy?'' Lepzinski asks a reporter.

Good Video: We're All Homeowners Now, Nationalization of Fannie, Freddie Unavoidable - (finance.yahoo.com) The two mortgage lenders are simply too big to fail and too critical to the housing market, Depew says. Given Fannie and Freddie own or guarantee 50% of all housing debt, according to the WSJ, continued stress on their balance sheets means higher borrowing costs for the firms, and ultimately higher mortgage rates for individuals. It also means another round of write-downs for the battered financial sector generally, which owns a lot of Fannie and Freddie-backed paper. But nationalizing the firms, each created by an act of Congress, would mean a wipeout for equity holders, who have already seen their holdings decimated in the past year. The nationalization of Fannie and Freddie and would put U.S. taxpayers on the hook for the socialization of the housing market, but Depew says we're already there whether we know it or not.

3,200 Martial Arts Studios Went Out Of Business In May - (Mish at globaleconomicanalysis.blogspot.com) 3,200++ Martial Arts Studios went out of business in the month of May alone. In the history of Martial Arts in the United States - nothing like this has ever happened. In one month about 20% of all studios closed their door. Most will never reopen! Most should never been in business to start with. Starbucks is closing 600 locations this year because people cannot afford to pay $3 for a cup of coffee. How do studio owners - especially those with 90% kids expect parents to pay $100 per month plus testing fee's? Now they have the added expense of $4 a gallon gas.

We're All Homeowners Now, Nationalization of Fannie, Freddie Unavoidable - (Mish at globaleconomicanalysis.blogspot.com) Unsurprisingly, the lie of the day today is Fannie, and Freddie are Adequately Capitalized. Mortgage financiers Fannie Mae and Freddie Mac are adequately capitalized and continue to be active in the mortgage market, said James Lockhart, director of the Office of Federal Housing Enterprise, which regulates the two enterprises. "Both of these companies are adequately capitalized, which is our highest criteria," Lockhart said in an interview with CNBC. "They have been very active in the mortgage market, and they are continuing to be. And, in fact, Congress has put on them the requirement to do jumbo mortgages and they have been doing those as well."
Fannie Mae holds or guarantees over $5 trillion in mortgages. A mere 1% decline would wipe them out. Is that adequately capitalized? I do not think so and neither does Minyanville's Kevin Depew.

A massive taxpayer bailout of the GSE's, banks and lenders is now upon us. - (www.ml-implode.com) Having the nations' housing 'wealth' destroyed is catastrophic, especially since we're a nation of spenders and not savers. And having home values plummet 20% to 50% or more is devastating.
But having the banks fail, that's a whole different ballgame. Having Fannie and Freddie collapse, that's financial Armageddon.

Toxic CDOs Renamed - (Mish at globaleconomicanalysis.blogspot.com) Collateralized debt obligations that helped drive banks to $400 billion of writedowns and credit losses are finding buyers under a different name: Re-Remics. Re-Remic stands for "resecuritizations of real estate mortgage investment conduits,"the formal name of mortgage bonds. They are composed of AAA rated bonds backed by so-called Alt-A mortgages, issued to borrowers with higher credit scores who don't prove their incomes, seek higher debt ratios or buy investment properties.

Imprisoned Vick files for bankruptcy protection - (news.yahoo.com/s/ap) – I guess this is partially real estate related. According to the filings, Vick's other debts include $4.5 million owed to Richmond-based Joel Enterprises Inc., and $550,0000 owed to Radtke Sports Inc. for breach of contract. In May, a federal judge ordered Vick to repay about $2.5 million to a Canadian bank for defaulting on a loan. The Royal Bank of Canada had sued Vick in September, arguing his guilty plea to a federal dogfighting charge — and the resulting impact on his career — prevented him from repaying the loan. A default judgment for $1.08 million also was entered in January against Vick and a business partner in a lawsuit brought by Wachovia Bank over a loan for an Atlanta-area wine shop and restaurant.

IndyMac admits deposit run at ‘elevated levels’ - (www.ft.com) Shares fall almost 50 per cent on Tuesday (down to 40 cents). IndyMac said on Tuesday that depositors had continued to withdraw money at “elevated levels” since June, when a senator urged regulators to monitor closely the bank’s condition. The disclosures, which were made in a regulatory filing, came a day after the beleaguered US mortgage lender said it was shrinking its business drastically because it was was no longer well capitalised, raising concerns it could fall victim to the credit crisis.
Struggling Indymac says depositors pulling cash - (www.reuters.com)
Former mortgage lending giant IndyMac faces its grim future - (www.fortune.com)

Emergency mortgage aid bogged down - (www.ml-implode.com) - "Emergency legislation intended to help as many as 500,000 homeowners on the brink of foreclosure to renegotiate their mortgages...



Other Stories:

Fannie and Freddie, One Day Later - (www.ml-implode.com) - "Fannie Mae and Freddie Mac have a few defenders among analysts after Monday’s sell-off. Some aren’t exactly mounting spirited d...
Fannie Mae and Freddie Mac hit at a new 52-week-low - (money.cnn.com)
Freddie Mac, Fannie Mae Plunge on Capital Concerns - (www.bloomberg.com)
Fannie, Freddie Capital Concerns Send Bond Risk to 14-Week High - (www.bloomberg.com)
Bank losses from credit crisis may run to $1,600bn, warns Bridgewater - (www.telegraph.co.uk)
Fed plans new rules to protect future homebuyers - (www.ml-implode.com) - The Federal Reserve, trying to stabilize a shaky U.S. financial system, may give squeezed Wall Street firms more time to tap t...
Desperation Phase - (www.ml-implode.com) - "In another whodathunk moment comes developments that Fannie Mae and Freddie Mac will need to raise $75 billion in new capital. ...
House Prices Fall in 23 of 25 U.S. Metro Areas - (www.bloomberg.com)
The Continuous Housing Free Fall - (www.washingtonindependent.com)
Sellers balk at low bids at auction - (www.palmbeachpost.com)
Indymac Says "No Bids On Its Mortgage Loan Portfolio" - (Mish at globaleconomicanalysis.blogspot.com)
U.S. Pending Home Sales Fall 4.7% in May - (www.ml-implode.com) - "U.S. pending home sales resumed their decline in May, falling 4.7% in the month after an upwardly revised 7.1% bounce in April,...
GSE's Saw Lowest Share Prices In 14 Years On Capital Concerns - (www.ml-implode.com)
Real Estate Agent Shot Dead After Home Declines In Value - (www.ml-implode.com)
Hundreds of Indiana Mortgage Brokers May Have Licenses Revoked - (www.ml-implode.com)
Rubin: Economy Facing `Extended Difficulties' - (www.ml-implode.com)
Buy & Bail: FNMA Looking To Stop The Latest In Mortgage Fraud - (www.ml-implode.com)
Loan Pains Turned Site Into a Hit - (www.ml-implode.com)
Subprime Fallout Spreading to Private Mortgage Insurers - (www.ml-implode.com)
IndyMac Woes Could Spell Trouble For Regional Banks - (www.ml-implode.com)
And Now, To Screw In Some Light Bulbs! - (www.ml-implode.com)
An oldie but a goodie - (www.ml-implode.com)

S&L Redux: Men in Black at IndyMac? - (optionarmageddon.ml-implode.com)
Crisis wipes $1 trillion from financial stocks - (news.yahoo.com)
U.S. Stocks Now Worth Less Than Rest of G-8 - (www.bloomberg.com)
The Declining U.S. Dollar - (www.politicalcortex.com)
Will gas prices drive housebuyers away from suburbs? - (seattletimes.nwsource.com)
The House-Equity Door Slams Shut - (www.washingtonpost.com)
Bailout Will Send 140,000 Families To Second Foreclosure - (www.talkingpointsmemo.com)
Building Portfolios for a World of 2.5% Gains - (online.barrons.com)
Morningstar Gives Up on Builders and Financials - (www.1440wallstreet.com)
Avoiding Foreclosure. Trading Down. - (www.chatmag.com)
Rent signs filling front yards - (www.dailybulletin.com)Debt collectors on the rampage - (money.cnn.com)

Crude slumps over $5 amid broad commodity sell-off - (www.marketwatch.com)
Stocks down again on more evidence of weak housing market - (www.marketwatch.com)

Bernanke says Fed may extend Wall Street lending - (www.reuters.com)
Pending U.S. Home Resales Decline More Than Forecast - (www.bloomberg.com)
Home Prices Fall in 23 of 25 U.S. Metropolitan Areas - (www.bloomberg.com)
Fed's Yellen says rate policy at crossroads - (www.signonsandiego.com)
G-8 Says Oil, Food Prices Pose Risk to World Economy - (www.bloomberg.com)
Fed, SEC to work more closely - (www.latimes.com)

Mortgage Fears Depress Global Shares - (www.nytimes.com)
Fed, SEC Team Up On Bank Oversight - (www.washingtonpost.com)
Suburban office space losing occupancy and value - (www.chicagotribune.com)

Mortgage Giants Take Beating On Fears Over Loan Defaults - (online.wsj.com)
Time for Fannie, Freddie? - (online.wsj.com)
Airlines Cut Long Flights - (online.wsj.com)
Auto Makers Resist Steel Firms' Surcharges - (online.wsj.com)
Retailers Start to Get Ready for School - (online.wsj.com)
GM contemplating selling brands to generate cash - (www.chicagotribune.com)
P&G to hike prices 16% - (www.newsday.com)
IndyMac to exit most home lending, slash 3,800 jobs - (www.latimes.com)
Output plummets at huge Mexican oilfield - (www.ft.com)
Vacancies Rise at Retail Centers - (online.wsj.com)
Airlines' staffing in a steep descent - (www.chicagotribune.com)

U.K. Economy Faces `Serious' Recession Risks, BCC Survey Shows - (www.bloomberg.com)
High oil prices are a game changer for Asia - (www.telegraph.co.uk)
Global markets shudder after new worries about U.S. financial institutions - (www.iht.com)
UK annual mortgage lending slumps 44% - (business.timesonline.co.uk)
Economists See No End to U.K. Layoffs - (online.wsj.com)
Bradford & Bingley shares crash - (www.telegraph.co.uk)
Property squeeze spreads to Europe, says Savills - (www.ft.com)
Oil: The New Reality - (www.businessweek.com)
As food costs soar, it's back to basics for meal planners - (www.usatoday.com)

Thursday May 22 Housing and Economic stories

Top Stories:

Congresswoman Walks Away - (www.ml-implode.com) - "The story of the foreclosure of Long Beach Democrat Laura Richardson's Sacramento home is a tale of a real estate market gone s...
Mortgage Applications & Fundings Are Surging. But… - (www.ml-implode.com) - In a nutshell, all increased mortgage volume is great. But, when exotic interest only programs and high loan-to-value FHA programs make up the lion’s share of the volume, you have to be skeptical about the numbers and the quality of the business.
Mortgage Application Volume Sinks as Rates Rise - (www.ml-implode.com) - mortgage application volume fell 7.8 percent on a seasonally adjusted basis for the week ending May 16, according to the latest weekly survey from the Mortgage Bankers Association
Shortage fears push oil futures near $140 - (www.ft.com). Current price near $135/barrel but futures are pushing $140.
Oil Powers to Record, Above $135 as Supplies Fall - (www.cnbc.com)
Countrywide CEO Mozilo's E-mail Bumble Sparks Furor – (www.cnbc.com) – Yes, the tan-man we all love to hate ruining shareholder value and pissing off more customers. Let’s give him another $100M bonus.
Sen. Dodd: Housing Bill Not a Bailout - (www.cnbc.com). Yes, I am saving all Senator Dodd stories saying this is not a bailout so that when it comes out that taxpayers are covering this, we can go back to him and politely correct him.
Commodity collapse coming - (www.news.com.au) - The commodity boom may be turning into a bubble that could burst around the end of the year, according to a special report from Lehman Brothers in New York.
Soros warns global boom is over - (news.bbc.co.uk) - He warned the "financial bubble" of the last 25 years could be drawing to an end and the post World War II "super-boom" era could also be over.
He predicted a "more severe and longer" US slowdown than most people expect. And he said that the UK was worse-placed than America to weather the coming economic storm, because it had such a large financial sector and has had the biggest increase in house prices.
Fannie CEO sees steep house-price drop - (ap.google.com)
Soaring Foreclosure Numbers Mean More Prey for Vulture Funds - (www.sdbj.com)
American cuts flights as oil rises - (www.ft.com). American Airlines said it would eliminate flights, cut thousands of jobs and charge most passengers $15 to check a single piece of luggage, as surging oil prices exacerbated the crisis in the US airline industry
Former AIG chief could face SEC charges - (www.ft.com). Greenberg served with Wells notice. Hopefully the crooked ex-AIG CEO and smarmy rat will stop bothering the existing board (as he is the root cause of many of the problems). Hopefully, they will collect back the money he shuffled to his wife. And hopefully he will get what he deserves - jail time. Last week, a federal judge presiding over a criminal trial that led to convictions of former AIG and Gen Re executives said there was “sufficient evidence” to show that a conspiracy began with a phone call from Mr. Greenberg. Mr. Greenberg had not been previously charged by federal prosecutors or the SEC over the transactions that allegedly inflated AIG’s reserves by $500m and he has always denied any wrongdoing.
Has the Fed really flooded the world with dollars? - (blogs.telegraph.co.uk) - It reinforces my fear that we are heading into a deflationary crunch. No doubt the Fed, ECB, the Bank of England, et al, will ultimately flood the system with money and set off another asset bubble. We are not there yet. The professor warned that yields on 10-year Treasuries (now 3.79pc) have shot up so much on inflation fears since the Fed bail-out in March that the effect risks short-circuiting the whole monetary rescue. “They may find that they don’t benefit after all from cutting rates,” he said. Well, yes, this is the great fear. The Fed may now be trapped. The argument is that the US 10-year rate - set by market forces, and increasingly by the actions of Chinese and Mid-East governments - is the key price setter for the US housing market and corporate debt.
Analyst Meredith Whitney on U.S. banks - (www.businessweek.com) - Oppenheimer analyst Meredith Whitney believes the credit crisis will extend well into 2009, perhaps beyond. She sees three years of multi-billion dollar revenue reversals.
Moody’s launches review in wake of errors - (www.ft.com) - Charles Schumer urges SEC probe


Other Stories:

Crackdown on Foreclosed Kids? - (www.ml-implode.com)
US economy in ‘uncharted waters’ - (ww.ft.com)
US corporate property prices take hit - (www.ft.com)
Citigroup to close down branches in UK - (www.ml-implode.com) - Citigroup announced plans to extricate itself completely from new sub-prime lending in Britain, with the loss of up to 700 jobs,...
Home loan failures rise for 37th straight month, extending record - (www.ml-implode.com) - "Home loan failures in San Diego County continued to set new records in April, the 37th consecutive month of year-over-year incr...
A trying time to lead a bank - (www.mlive.com)
Hedge Funds in Swaps Face Peril With Rising Junk Bond Defaults - (www.bloomberg.com)
Mr Mortgage - ‘Short-Refinances’ Gaining Popularity.. - (www.ml-implode.com)
World Savings Option ARM Training Video - (www.ml-implode.com)
Delta Financial Execs Plan New Mortgage Venture - (www.ml-implode.com)
Impac Mortgage reports loss of $2B for 2007 - (www.ml-implode.com)

Government's 'numbers racket' is about to blow up in our faces - (www.marketwatch.com)
Ownership costs outpacing rental costs by as much as 300% - (www.brokeragentpro.com)
Foreclosures 4 in 10 SoCal house sales - (lansner.freedomblogging.com)
UBS $100 Billion Mortgage Wager Caused $24 Billion Loss - (www.bloomberg.com)
U.S. bank shares sink after Oppenheimer cuts outlook - (www.reuters.com)
60,000 second houses could be sold off in English slump - (www.guardian.co.uk)

U.S. Stocks Drop on Credit Concern, Producer Prices; Banks Fall - (www.bloomberg.com)
Minutes of Federal Open Market Committee, April 29-30, 2008 - (www.federalreserve.gov)
The Risks of Rescuing Borrowers - (www.nytimes.com)
AAA expects fewer Americans to travel over Memorial Day - (www.azcentral.com)
Wealthy consumers cut back on spending, sort of - (www.latimes.com)
Georgia Power bills to go up $2.93 for fuel costs - (www.ajc.com)
NY Times Still Does Not Understand the Housing Crash - (www.prospect.org)
Economic Tide Is Rising for Repo Man - (www.nytimes.com)
US and Canada Demographic Time Bomb - (Mish at globaleconomicanalyst.blogspot.com)Things Are Heating Up - (Mike Morgan at realestateandhousing2.blogspot.com)
Four Overlooked Houseownership Costs - (biz.yahoo.com)

Banks still tough on buyouts - (www.chicagotribune.com)
Why a Housing Bailout Won't Help - (online.wsj.com)
Are commodity traders bidding up food, fuel prices? - (www.latimes.com)
Oil for 2016 Delivery Nears $140 on Supply Concern - (www.bloomberg.com)
Plunge in US commercial property - (www.ft.com)

Target 1Q profit drops, cites higher costs - (www.chicagotribune.com)
Saks profit jumps, but misses expectations - (www.chicagotribune.com)
Less Shopping = Fewer Malls - (online.wsj.com)
Trouble Hid in the Hedges - (online.wsj.com)
Airlines’ Cuts Making Cities No-Fly Zones - (www.nytimes.com)
Shoppers Stick to Buying Only Basics, Retailers Say - (www.nytimes.com)
Banking's Bear Roars Again - (www.portfolio.com)
Customer satisfaction with airlines lowest since 2001 - (www.latimes.com)
Chrysler extends gasoline offer - (www.chicagotribune.com)
AIG Hits 10-yr. Low On Capital Woe - (www.chron.com)
Southern casinos feeling economic pinch - (www.ajc.com)
Local governments rethink municipal Wi-Fi initiatives - (www.chicagotribune.com)

BOE Voted 8-1, Defeating Blanchflower's Call for Cut - (www.bloomberg.com)
German Business Confidence Unexpectedly Increased in May, Ifo Survey Shows - (www.bloomberg.com)
U.K. Rentals See a Boom As House Purchases Cool - (online.wsj.com)
Tice Proves Every Bear Has Its Day With 9.5% Return as He Invokes `D' Word - (www.bloomberg.com)

Wednesday May 21 Housing and Economic stories

Top Stories:

Fannie CEO sees steep home-price drop - (www.ap.com) - Fannie Mae's CEO told shareholders Tuesday that the housing market is "about halfway through" its crisis and home prices could fall as much as 25 percent before the worst is over.
Overpaying For House Cripples Families - (www.eastvalleytribune.com) - In addition to dropping their asking price by $250,000 (now at $600,000), they've shelled out nearly $30,000 in landscaping, new kitchen countertops, a bathroom remodel and other improvements. They also offered a $10,000 bonus to the buyer's agent and $10,000 in closing costs, though they eliminated that incentive after the latest price cut. And at one point, they also tried lowering the price $1,000 a week.
Dodd, Shelby reach housing aid deal - (money.cnn.com) – According to these clowns (uh, key lawmakers): Taxpayers will not be on the hook if loans go bad. Ken comment: When government finally admits to a taxpayer bailout and begins forcing taxpayers to pay, remember these 2 names when considering people to blame.
As houses foreclose in U.S., squatters move in - (www.reuters.com) - Squatting is on the rise across the United States as foreclosures surge, eviction notices mount and homes go unsold for months, complicating the worst U.S. housing slump in a quarter century and forcing real-estate brokers to enlist the help of law enforcement and courts to sell empty houses. In some regions, squatting is taking on new twists to include real-estate scams in which thieves "rent out" abandoned homes they don't own. Others involve "professional squatters" who move from one abandoned home to another posing as tenants who seek cash from banks as a condition to leave the premises -- a process known by real-estate brokers as "cash for key."
Banks Falsify Income Statements - (www.bloomberg.com) - 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.
Jevic Transportation shutting down - (www.philly.com) - The trucking firm Jevic Transportation Inc., of Delanco, announced today that it was ceasing operations after 27 years, a victim of high diesel and insurance costs as well as the tightened economy. The 1,500-employee national firm, with about 1,000 in Burlington County, making it one of the county's largest employers, said it would deliver all freight already within its system before closing entirely.
Citigroup Hedge-Fund Loss Weighs on Three Banks - (online.wsj.com) – Problems at Citi far from over, as they are still causing havoc across the industry.
Fears of longer credit crisis set to hit Wall St - (www.ft.com) - "We believe the real harrowing days of the credit crisis are still in front of us and will prove more widespread in effect than anything yet seen," Ms Whitney said.
Moody's error gave top ratings to debt products - (www.ft.com)
Accounting Errors at Franklin Bank Corp. Draw SEC’s Attention - (www.ml-implode.com) - "...,the audit found that Fanklin did not properly account for certain single family mortgage loan modification programs develop...
A Real Countrywide Email From Angelo Mozilo - Calls Homeowner Disgusting - (www.ml-implode.com)
Gen X, Gen Y, debt, and savings - (www.ml-implode.com) - Generally defined as those individuals now 27 to 43 years old, Gen Xers are far better represented by the millions of 40-year old spendthrifts who are just now realizing that their home isn't going to do all the heavy lifting for their retirement savings. Consumer debt is one of the main reasons. Nine out of 10 consumers in their 30s are in debt, compared with 76% of those in their 20s, according to the Federal Reserve's Survey of Consumer Finances. In a recent Charles Schwab study of more than 2,000 Gen Xers nationwide, 45% of respondents said they had too much debt to think about saving.


Other Stories:

NexCen shares plummet on going-concern warning - (www.ml-implode.com) - Consumer discretionary buyout firm NexCen Brands swoons. This was entirely predictable. Their last acquisition was last fall. ...
Thornburg to Announce Substantial First Quarter Loss - (www.ml-implode.com) - Thornburg Mortgage announced Monday that it will file its delayed first quarter earnings by June 2, with the company expecting a...
Mom forced to live in car with dogs - (www.ml-implode.com)
SEC Probes Franklin Bank; CEO Replaced - (www.ml-implode.com)
Avoiding financing a big black hole - (www.ml-implode.com)
NYT Editorial Promotes Bailout - (optionarmageddon.blogspot.com)
Low-Income Renters to Pay for Housing Bailout - (www.truthout.org)
No Bottom in Sight, Says NYU Prof - (finance.yahoo.com)
Far From Normal - (jameshowardkunstler.typepad.com)
Weak economy even if housing improves - (news.yahoo.com)
Housing Correction In U.S. Spreads Around Globe - (query.nytimes.com)
Foreclosure Buyers Frustrated By Banks - (www.9news.com)
Post-Subprime Economy Means Subpar Growth - (www.bloomberg.com)
Teeing Up the Next Mortgage Bust - (nytimes.com)
Real Estate Alarm in Taiwan - (au.news.yahoo.com)
Senator estimates "$1.4 quadrillion" loss - (www.denninger.net)
Gambling On Housing - (sbhousingbubble.blogspot.com)

Oil Rises to a Record After Pickens Says Prices May Reach $150 - (www.bloomberg.com)
U.S. Stocks Drop on Credit Concern, Producer Prices; Banks Fall - (www.bloomberg.com)
Dollar Falls on Oil Surge, Speculation ECB Will Keep Rates High - (www.bloomberg.com)

Producer Prices in U.S. Excluding Food, Energy Increase More Than Forecast - (www.bloomberg.com)
Only six S&P 500 companies have overfunded retiree health benefit plans - (www.financialweek.com)
Economic Tide Is Rising for Repo Man - (www.nytimes.com)
Bleak picture for economy - (www.chicagotribune.com)
Soros Sees Recessions Looming as `Acute Phase' of Crisis Passes - (www.bloomberg.com)
Food prices forecast to rise 5% in 2008 - (www.latimes.com)
Government Again Raises Forecast for Food Prices - (online.wsj.com)

Senate Leaders Agree on Housing Aid - (www.nytimes.com)
Buffett says effects of crisis ‘far from over’ - (www.ft.com)
At the luxury end, home prices are falling - (www.latimes.com)
CPDOs expose ratings flaw at Moody's - (www.ft.com)
Americans worry about funding a long retirement - (www.chicagotribune.com)
Convertible bond issuance hits year high - (www.ft.com)

Auto Slump May Have Broad Reach - (online.wsj.com)
Airlines now get lower ratings than the IRS, survey finds - (www.financialweek.com)
Lowe's profit drops 18% on housing slump - (www.latimes.com)
Campbell's Cools - (www.forbes.com)
Home Depot reports 1Q profit drop - (www.startribune.com)
New Cellphone Purchases Decline in U.S. - (online.wsj.com)
AIG Increases Plan to Raise Capital to $20 Billion - (www.bloomberg.com)

Hard times starting to hit euro area - (www.startribune.com)
Australian Central Bank Debated Rate Increase in May - (www.bloomberg.com)
German Investor Confidence Unexpectedly Fell in May - (www.bloomberg.com)
Asia exporters find ways round US storm - (www.ft.com)
George Soros: worst to come for UK economy - (www.telegraph.co.uk)
Doubt cast on Bank’s inflation credentials - (www.ft.com)