Thursday February 5 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Manager's luxe life on the line in Madoff case - (finance.yahoo.com/s/ap) Walter Noel Jr. and his wife Monica had it all: Luxurious houses on Connecticut's wealthy coast, Palm Beach and the Hamptons, a Park Avenue pied-a-terre and, most of all, a hilltop retreat on an exclusive island in the Caribbean named after a goddess. They hobnobbed with Mick Jagger and Tommy Hilfiger, who sounded a bit jealous of their view. The couple's five tall, attractive daughters mostly married foreign men in high social circles, adding to an extraordinary network of international connections that along with remarkably consistent returns helped Noel expand his New York-based money management firm with billions of investments from the elite around the world. "They almost were like a fashion magazine version of a very wealthy, prosperous attractive family," said David Patrick Columbia, who runs New York Social Diary.com, a site that observes the lives of the rich. "They're very well liked, very popular." That world is now in jeopardy as investors line up to sue over the $7 billion in client funds that Noel's Fairfield Greenwich Group invested with Bernard Madoff, the alleged architect of what investigators say may be the largest Ponzi scheme in history. Madoff is accused of duping investors out of as much as $50 billion by paying returns to certain investors out of the principal received from others. The lawsuits filed against Noel and his company accuse them of ignoring obvious red flags with Madoff and unjustly enriching themselves of at least $1 billion, and say Fairfield Greenwich Group failed to provide even minimal scrutiny of Madoff. Investors say the firm misled shareholders about monitoring the investments, all while collecting lucrative investing fees.

Global Crisis Destroys 40% of World Wealth; Bailout to Hit $4 Trillion - (globaleconomicanalysis.blogspot.com) The world Economic Forum is reporting Global crisis 'has destroyed 40pc of world wealth'. The past five quarters have seen 40pc of the world's wealth destroyed and business leaders expect the global economic crisis can only get worse. Steve Schwarzman, chairman of private equity giant Blackstone, said an "almost incomprehensible" amount of cash had evaporated since the financial crisis took hold. "Business will be very different," he added. His comments came on a day of the World Economic Forum characterised by the gloom of its participants and warnings that the crisis will endure for some time. News Corp chief executive Rupert Murdoch kicked off the meetings by warning that the atmosphere was worsening – despite global economic confidence plumbing the lowest depths on record. "The crisis is getting worse," he said. "It's going to take drastic action to turn it around, if it can be turned around, quickly. I believe it will take a long time."

x-Goldman lobbyist now Geithner's right-hand man – (www.ap.com) The White House on Wednesday defended Treasury Secretary Timothy Geithner's choice of Mark Patterson — an ex-lobbyist from Goldman Sachs — to be his chief of staff. The selection is at least the third high-profile exception to a policy by President Barack Obama that says no one who has lobbied on a set of issues within the past two years can take a role in his administration that deals with the same subject matter. White House press secretary Robert Gibbs reiterated his claim that that rule is the "strongest that any administration in the history of our country has had." Until last April, Patterson, a Goldman vice president for government relations, acted as a lobbyist on a wide range of issues that could come under his purview in his new job. Under Obama's restrictions, Patterson would be severely hampered in the new job unless he gets a waiver from the White House on grounds that it is in the public interest. Patterson's former Wall Street firm has benefited from $10 billion in government bailouts in the current recession. The issues on which Patterson acted as a lobbyist until last April appear to cover a large swath of his duties at Treasury, according to a lobbying disclosure report filed with Congress last July. Issues Patterson lobbied on included covered bonds, tax treatment of corporate reorganization transactions, nonbinding shareholder votes on executive compensation, continuation of the industrial loan company charter for Goldman Sachs, over-the-counter energy derivatives, tax patents, extension of tax credits for cellulosic ethanol and market disruptions regarding auction rate securities, a Treasury official said Wednesday night. Patterson only monitored legislation on mortgage issues and did not lobby, added the Treasury official, who was not authorized to speak about the matter on the record. His appointment follows two other prominent exceptions to Obama's rule covering former lobbyists.

Allied Capital Tries to Avert Defaulting on Debt Terms - (www.washingtonpost.com) Buyout firm Allied Capital yesterday said the value of its investments in companies has declined so dramatically that it might default on its debt agreements, creating uncertainty over Allied's hefty dividend and its ability to borrow money in the future. The District firm, which has been an anchor in the region's finance industry for 50 years, said it will open discussions with its lenders to try to get a waiver allowing its assets to go below 200 percent of its current debt. Allied said in a news release that if it cannot obtain a waiver, it would not be able to pay dividends or make other distributions to shareholders. The company would also be unable to borrow. Allied's high dividend, pegged at 65 cents for the last quarter of 2008, is one of its most attractive qualities for investors. Allied stock closed at $1.91 yesterday, down 47 percent. Founded in 1958 and operating as a public company since 1960, Allied Capital invests in small and mid-size businesses in return for equity. Allied has about 117 companies in its portfolio. It employs 132 people, including 112 at its Northwest Washington office on Pennsylvania Avenue, 19 in New York and one in Dubai. Business development firms such as Allied and its Bethesda-based rival American Capital Strategies have seen their investment portfolios drop and have had difficulty raising capital in the financial crisis.

Americans receiving jobless benefits hits record - (finance.yahoo.com) The Labor Department released figures Thursday showing that the percentage of the workforce receiving unemployment benefits reached a 25-year high in mid-January. The raw numbers were the highest since the government started keeping records in 1967, although the workforce was much smaller then. Adding to the grim picture were separate government reports that showed December home sales plunged to their lowest rate since recording began in 1963. And orders for big-ticket manufactured goods dropped more than expected, capping the worst year for manufacturers since 2001. But the jobless numbers were the worst -- with more layoffs on the way. The Labor Department reported Thursday that a seasonally adjusted 4.78 million Americans claimed unemployment insurance for the week ended Jan. 17. That's an increase of 159,000 from the previous week and worse than economists' expectations. As a percentage of workers covered by unemployment insurance, the tally is the highest since August 1983.

"Unprecedented and shocking" Decline in Air Cargo – (www.calculatedriskblog.com) From the International Air Transport Association: Cargo Plummets 22.6% in December. In the month of December global international cargo traffic plummeted by 22.6% compared to December 2007. The same comparison for international passenger traffic showed a 4.6% drop. The international load factor stood at 73.8%. For the full-year 2008, international cargo traffic was down 4.0%, passenger traffic showed a modest increase of 1.6%, and the international load factor stood at 75.9%. “The 22.6% free fall in global cargo is unprecedented and shocking. There is no clearer description of the slowdown in world trade. Even in September 2001, when much of the global fleet was grounded, the decline was only 13.9%,” said Giovanni Bisignani, IATA’s Director General and CEO.” Air cargo carries 35% of the value of goods traded internationally.

CRE Tax Bills Due, Will Anyone Pay? - (globaleconomicanalysis.blogspot.com) In a harbinger of things to come, Austin officials are nervous about tax bill for 10 office buildings. Local tax officials are concerned as uncertainty looms over whether Austin's biggest office landlord will be able to pay $17.8 million in property taxes that are due Monday. The money is due from Thomas Properties Group Inc. and Lehman Brothers, which, along with the California State Teachers' Retirement System, own 10 office buildings in Austin, including the Frost Bank Tower downtown. Thomas Properties has gone to court in an attempt to force Lehman Brothers Holdings Inc. to release money from a $100 million revolving loan to pay the property tax bill. But the lawsuit is entangled in Lehman Brothers Holdings Inc.'s complex bankruptcy case in New York, and it's not clear when the Thomas matter might be resolved. City and county budget and tax officials have met twice in the past two months to discuss the outlook for tax collections generally, as well as the potential impact if the Thomas Properties/Lehman money isn't forthcoming, said Dusty Knight, chief deputy of the Travis County tax assessor/collector's office.

Truck Tonnage Index: Cliff Diving – (www.calculatedriskblog.com) From the American Trucking Association: ATA Truck Tonnage Index Plummeted 11.1 Percent in December. The American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index plunged 11.1 percent in December 2008, marking the largest month-to-month reduction since April 1994, when the unionized less-than-truckload industry was in the midst of a strike. December’s drop was the third-largest single-month drop since ATA began collecting the data in 1973. In December, the seasonally adjusted tonnage index equaled just 98.3 (2000 = 100), its lowest level since December 2000. The not seasonally adjusted index edged 0.6 percent higher in December. Compared with December 2007, the index declined 14.1 percent, the biggest year-over-year decrease since February 1996. During the fourth quarter, tonnage was down 6.0 percent from the same quarter in 2007.

U.S. Draft Law Would Ban Most Trading in Credit Swaps - (www.nytimes.com) Draft legislation that would change how over-the-counter derivatives are regulated might prohibit most trading in the $29 trillion credit-default swap market. House of Representatives Agriculture Committee Chairman Collin Peterson of Minnesota circulated an updated draft bill yesterday that would ban credit-default swap trading unless investors owned the underlying bonds. The document, distributed by e-mail by the committee staff in Washington, would also force U.S. trading in the $684 trillion over-the-counter derivatives market to be processed by a clearinghouse. “This would basically kill the single-name CDS market,” said Tim Backshall, chief strategist at Credit Derivatives Research LLC in Walnut Creek, California. “Given the small size of many issuers’ bonds outstanding, this would make it practically impossible for the CDS market to exist.” U.S. regulators and politicians are stepping up pressure on banks to use clearinghouses and agree to increased oversight of the OTC markets to improve transparency amid the credit crisis. Bad bets on credit-default swaps led to the U.S. takeover of American International Group Inc. in September.

France braced for mass strikes - (www.ft.com) At least a million striking workers held demonstrations across France on Thursday in protest at the government’s reform programme and its response to the economic crisis, demanding extra help for ordinary families in place of state aid for the banks. Union leaders said at least 2.5m people took part in 200 demonstrations in what they said was the biggest protest by employees for 20 years. The interior ministry said the number was 1m. Nicolas Sarkozy, the president, on Thursday night acknowledged the “legitimate worries” triggered by the downturn. He also offered a concession to union leaders in the form of talks “to agree the programme of reforms to be introduced in 2009”, suggesting the government might be prepared to put on ice its efforts to overhaul the public sector during the recession. The one-day strike was the most widely observed since Mr Sarkozy became president in 2007, with a large turnout among teachers and civil servants. But it caused less disruption to public transport, public services and businesses than anticipated, and participation in the private sector was low. Traffic was quiet in Paris, with many workers choosing to take the day off.

Global Worries Over U.S. Stimulus Spending - (www.nytimes.com) Even as Congress looks for ways to expand President Obama’s $819 billion stimulus package, the rest of the world is wondering how Washington will pay for it all. Few people attending the World Economic Forum question the need to kick-start America’s economy, the world’s largest, with a package that could reach $1 trillion over two years. But the long-term fallout from increased borrowing by the United Stated government, and its potential to drive up inflation and interest rates around the world, seems to getting more attention here than in Washington. “The U.S. needs to show some proof they have a plan to get out of the fiscal problem,” said Ernesto Zedillo, the former Mexican president who helped steer his country through a financial crisis in 1994. “We, as developing countries, need to know we won’t be crowded out of the capital markets, which is already happening.” Mr. Zedillo said that Washington, unlike most other countries, had the option of simply printing more money, because the dollar was a reserve currency for the rest of the world.

Weill to End Citi Consulting Job, Giving Up Millions - (www.bloomberg.com) Former Citigroup Inc. Chairman Sanford “Sandy” Weill will end a 10-year consulting contract with the bank that gave him millions of dollars in perks, including an office, car and driver and the use of company jets. Weill, who retired as chairman and started the consulting job less than three years ago, told Citigroup in August 2008 that he wanted to terminate the arrangement, Shannon Bell, a spokeswoman for the New York-based bank, said today. He and the company “mutually agreed to stop” the benefits, starting in April, Bell said. Weill didn’t return a call to his Citigroup office. Weill, 75, is distancing himself from the financial colossus he built over 17 years as Chief Executive Officer Vikram Pandit, 52, begins dismantling it following a last year’s record $18.7 billion loss. Two weeks ago, Pandit marked the bank’s CitiFinancial consumer-finance and Primerica insurance units as “non-core” and said they would eventually be sold.


OTHER STORIES:

U.S. Durable Goods Orders Decline for Fifth Month - (www.bloomberg.com)
Fed Warns of Global Slowdown That Adds to U.S. Deflation Risk - (www.bloomberg.com)
The Fed hangs on to its last bullet - (money.cnn.com)
GE’s AAA Rating Starts Slow Trip to Graveyard - (www.bloomberg.com)

U.S. Pumps $1 Billion Into Credit Unions to Shore Up Confidence - (www.bloomberg.com)
New bank bailout could cost up to $2 trillion: report - (www.reuters.com)
Senators Bid To Regulate Hedge Funds - (www.nytimes.com)
U.S. Commercial Paper Falls Most on Record as Fed Buying Drops - (www.bloomberg.com)
Sweden offers lessons for US toxic clean up - (www.ft.com)
Trichet warns on capital hoarding - (www.ft.com)
German jobless rate jumps to 8.3 percent - (finance.yahoo.com/s/ap)
New Zealand slashes rates to record low - (www.ft.com)
Indian Exporters Cut 1 Million Jobs as Orders Decline - (www.bloomberg.com) Indian exporters have shed as many as 1 million jobs, more than 15 times a December estimate, amid the most protracted decline in overseas sales in a decade, the commerce ministry said. “The job losses are very substantial and are likely to be of the order of 700,000 to 1 million, including temporary staff,” Commerce Secretary G.K. Pillai told Bloomberg News in an interview in New Delhi yesterday. Exports fell 1 percent in December and any recovery “is likely only by June,” he said.
Russia and China Blame Capitalists - (www.nytimes.com)
German January Unemployment Rises Twice as Much as Forecast - (www.bloomberg.com)
IMF Sees $2.2 Trillion in Losses Slowing World Growth - (www.bloomberg.com)
Wen and Putin lecture western leaders - (www.ft.com)
Ireland’s Cowen Says Economy May Shrink 10% by 2010 - (www.bloomberg.com)
New-home sales fall to record low in Dec. - (www.marketwatch.com)

U.S. Durable Goods Orders Decline for Fifth Month - (www.bloomberg.com)
Geithner Says Plan for Banks Is in the Works - (www.nytimes.com)
Obama slams Wall Street over bonuses - (www.ft.com)
Americans receiving jobless benefits hits record - (finance.yahoo.com/s/ap)
Stimulus Components Vary in Speed and Efficiency - (www.nytimes.com)
Fed Warns of Global Slowdown That Adds to U.S. Deflation Risk - (www.bloomberg.com)
Ford Burns $5.5 Billion in Cash, Taps Revolving Loan - (www.bloomberg.com)
Kodak Says It Will Eliminate 3,500 to 4,500 Jobs - (www.bloomberg.com)
Ford to draw bank credit of $10.1bn - (www.ft.com)
Technology Companies Cut Most Jobs in Five Years - (www.bloomberg.com)

Airlines group says industry lost $5BN in 2008 - (finance.yahoo.com/s/ap)

What Red Ink? Wall Street Paid Hefty Bonuses - (www.nytimes.com)
Sony sinks into Q3 loss, Nintendo cuts outlook - (www.reuters.com)
The game changer - (www.ft.com)
World Facing ‘Enormous’ Food Challenge as Water Scarcity Looms - (www.bloomberg.com)

Wednesday February 4 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Desperate car dealerships leaving liens on used autos purchased from customers - (www.insidebayarea.com) Proposed Legislation would shield customers from paying liens on used autos if dealership folds. As more failed auto dealerships continue to close down, they're leaving behind unpaid bills for unaware car buyers to pay. Last year, Chastity Young was one such unlucky consumer, swept up in what has become yet another indicator of the state's economic downturn. The San Francisco resident traded in her 2003 Kia for a 2007 Kia at the now-defunct Kia of Hayward dealership, satisfied that the dealer had promised to pay off the $2,700 still owed on her old car. When the dealership abruptly went out of business last October, her lender, CPS Financial, demanded that she continue to pay off the car she no longer had, leaving her with two car payments totaling $645 a month. "I should not have to pay for two cars just because a dealer went out of business and left its consumers holding the bag," Young said through tears Tuesday at a Capitol news conference. "This has caused me and my family a lot of stress. It's not like we have money to throw away." The bill, SB95, introduced Tuesday by Sen. Ellen Corbett, D-San Leandro, would make it more difficult for dealers with shaky finances to sell cars by boosting the bond amount they'd have to pay to operate, and would require dealers to pay off liens on used cars before reselling them. "Consumers should not be those that have to finance the failures of car dealers in California," Corbett said. "This is a practice that must stop. It's not fair. We should not be balancing the economic downturn of dealerships on the backs of consumers." In California alone, 480 licensed car dealers went out of business last year, with just as many expected to falter this year, Corbett said. When dealers fail to pay off the liens on cars the results can be catastrophic — from damaged credit ratings to repossession of cars to bankruptcy. As national leaders have tried to grapple with the home foreclosure crisis, "there hasn't been nearly enough attention to the problems of car buyers," said Rosemary Shahan, president of Consumers for Auto Reliability and Safety. "People are still buying cars in this market, and they really need to be able to go to a dealership with some confidence that if they trade in their car, and it has negative equity and the dealer says they will pay off the lien, they will follow through and do that." Car dealers say the bill will punish above-board dealers and likely force hundreds of otherwise strong dealers out of business, said Peter Welch, president of the California New Car Dealers Association. The bill would raise the dealer bond from $50,000 to $250,000 for franchised new car dealers and to $100,000 for independent car dealers. Bond companies act as insurers in that they cover the first $250,000 of a company's losses. It is not clear how much more dealers would have to pay in premiums. Currently, the most a dealer has to pay for a $50,000 bond is $1,500 a year.

Lupoe family was awash in debt - (www.insidebayarea.com) Los Angeles police say a man who apparently shot himself after killing his wife and their five children was awash in debt and planning to leave California. Detective David Cortez said Wednesday that Ervin Lupoe was at least one month behind on his mortgage. He says the 40-year-old Lupoe owed at least $15,000 to the Internal Revenue Service and thousands more on a line of credit. Lupoe and his wife, Ana, recently were fired from their hospital jobs after being investigated for lying about their income to qualify for cheaper child care. Cortez says Lupoe planned to take his family to his brother-in-law in Garden City, Kan. The family's vehicle was packed with children's clothing and snow chains. The bodies of Lupoe and his family were found Tuesday.

Financial troubles mounted for Wilmington family - (www.insidebayarea.com) Lupoe, who left behind hundreds of thousands of dollars owed to banks, creditors and the Internal Revenue Service, talked briefly with the 911 operator, who asked him to check whether his family members were breathing and had pulses. "He stops and he breaks down a little - 'I can't check them. I can't check.' Then he breaks down and cries a little bit and shortly thereafter he disconnects," Cortez said. Lupoe, a retired Marine, was lying. He had not come home from a graveyard shift to find his family dead. Police believe he killed them on Monday, likely sometime around 6 p.m. Earlier, he had called his Long Beach attorney, Bob Pierce, and left a message saying his wife had committed suicide during the day, Cortez said. Lupoe had no job. He and his wife had been fired from their jobs as medical technicians at Kaiser Permanente Medical Center in West Los Angeles. In his rambling and grammatically incorrect suicide letter, Lupoe wrote that he and his wife "were being investigated for misrepresentation of our employment to an outside agency for the benefit to ourselves's, childcare."

$600,000 San Francisco House Falls to $371,699 - (healdsburgbubble.blogspot.com)

Million Dollar Meltdown in Pacific Palisades, CA - (westsideremeltdown.blogspot.com) It appears we have a significant meltdown in Pacific Palisades that shaved over $1,000,000 in 17 months. This is in a gated community called "The Enclave" located in the Palisades Highlands. Here is the information about the house: 16850 Calle de Sarah, 90272, 5Br+4.5Ba, 5697 sqft, YB 1995, Sold for $2,200,000 on 12/11/08, $386/sqft, 14,266 sqft LotWhat is interesting is, the past sales history:2/25/99 $1,375,0007/10/07 $3,320,00012/11/08 $2,200,000 (-33.8%)This takes us back to 2003 - 2004 pricing.

Fulton Homes seeks protection from creditors, files Chapter 11 - (www.azcentral.com) A home-building company founded by one of the Valley's most generous philanthropists sought legal protection from creditors Tuesday by filing for Chapter 11 bankruptcy reorganization. Tempe-based Fulton Homes Corp. is one of the largest home builders based in Arizona, with 21 subdivisions selling homes in the Valley. Like many builders, Fulton has struggled to keep up with its debt payments as banks demand additional capital so their loan values don't exceed the builders' declining property values, market analysts say. Fulton Homes was founded 35 years ago by Chairman and Chief Executive Officer Ira Fulton, a prominent community figure and one of the state's best-known philanthropists. The engineering college at Arizona State University bears Fulton's name, and its Mary Lou Fulton College of Education was named after his wife in May. The couple's Fulton Foundation has contributed more than $160 million to ASU. Doug Fulton, Ira's son, is the company president. Neither the Fultons nor company bankruptcy attorney Mark Roth returned calls seeking comment. Court documents show that Fulton Homes owes $100 million to $500 million to more than 100 individual creditors, including lead creditor Bank of America. The company's estimated assets are listed as $100 million to $500 million, the documents show. The company is scheduled to have its court-mandated meeting with creditors on March 3. Companies filing for protection under Chapter 11 of the U.S. Bankruptcy Code typically remain in operation while the court reviews creditor claims and resolves debt issues.

Another Geithner Ethics Compromise (Let Them Eat Cake Edition) - (www.nakedcapitalism.com) This blogger was troubled by Geithner's demeanor during the Senate hearings on the Bear Stearns bailout, when he was dismissive and conveyed the impression that he thought the appearance was a waste of his valuable time. Then we have the issue of Geithner's failure to pay payroll taxes. Perhaps he did somehow miss the IMF memo warning that he was indeed liable for the employer and employee portion (as someone who has run a business for 20 years, I cannot fathom ho Geithner would be ignorant on this front). Nevertheless, in 2006 he was audited for 2003 and 2004 and had to pony up (but was not required to pay penalties, would mere moretals ever get such white-glove treatment?). What really does not pass the smell test is that Geithner had been employed by the IMF in 2001 and 2002 and had not paid payroll taxes then either. He did not clear up that issue when he learned he had filed incorrect returns via the 2006 audit; instead, it was Team Obama that connected the dots and got him to satisfy the older (but unassessed) tax deficiency. Geithner is clearly an ambitious man. Even if he though he could get away with it, good judgmenet (and ethics, but we'll put that aside for now) would have argued for cleaning up 2001 and 2002 sooner rather than later. But guess what, his gamble paid off, he did get away with it (as he didn't pay until forced to, and did not suffer as a result). Willem Buiter has repeatedly charged with the Fed being a victim of what he called "cognitive regulatory capture" by Wall Street, The latest Geithner incident illustrates both that he is literally too close to the Street and has absorbed the industry's attitude that rules don't apply to players.

CD rates at failed banks supported by FDIC guarantee - (optionarmageddon.ml-implode.com) If enacted, these proposals would be a decent first step in the battle against moral hazard. Bloomberg: The Federal Deposit Insurance Corp., which is selling failed U.S. banks at the fastest pace in 17 years, probably will propose limits on interest rates paid by lenders with less than adequate regulatory capital, industry consultant Bert Ely said. The FDIC at a meeting today will consider risk-based deposit insurance premiums on institutions that fall below regulatory requirements for adequate capital, a step to prevent banks from paying too much to boost revenue, Ely said yesterday. Banks also may be limited on higher-cost sources of funds, such as brokered deposits, if they miss regulatory targets, said Ely, chief executive officer of Ely & Co. in Alexandria, Virginia. As banks get more desperate for funding—often because they are at risk of failing—they tend to offer higher interest rates. See, for instance, GMAC offering 3.0% on CDs. Like WaMu before it, GMAC can still attract deposits by offering above market interest rates despite its high risk of failure. Depositors couldn’t care less if the bank is at risk of failing, since it has FDIC insurance, they are protected. Might as well take advantage of those high interest rates while you can, right?

Royal Bullsh!t - (www.bankimplode.com) - ROYAL BANK OF SCOTLAND is preparing a grand slamming of the barn door after the horses are gone. This is no ordinary exercise of the age old ploy, in his one Royal Bank of Scotland has seen to it that the stalls have been cleared and there’s time enough for odor to waft away. The Royal Bank of Scotland is getting ready to clear out their boardroom, purging the business of directors that are linked with Sir Fred Goodwin, the bank’s former Chief Executive. The change comes while the bank is getting ready to put between £50 billion and £100 billion in loans into the new bank insurance scheme of the government. The so-called purge is pure window dressing, coming too late to prevent the 70% government take over of the Royal Bank, but soon enough to effectively nationalize the remaining banks. as Peter Thal Larsen of the financial Times puts it. The British government is about to write a huge insurance contract for the banking sector. For ministers, the gamble is that their willingness to protect banks against big losses will in itself make it less likely the insurance will ever be needed. Is Peter kidding us? I suggest that the Britts and Hank Paulson play with that bazooka together, you know the one, that did not save Fannie or Freddy. In July, Congress gave [Paulson] authority to come to the aid of Fannie Mae and Freddie Mac. “If you have a squirt gun in your pocket you may have to take it out. If you’ve got a bazooka, and people know you’ve got it, you may not have to take it out,” Paulson said. (Translation: if the market knew the companies had a federal backstop, investors would be more likely to give them more time to work out their troubles.) Paulson was forced to use the bazooka sooner rather than later. By the end of August, the weakened financial state of the two giants was threatening both domestic mortgage markets and the value of hundreds of billions of dollars’ worth of bonds they had issued that were owned by central banks around the world. (Daniel Gross, “The Captain of the Street,” Newsweek, September 20, 2008)

Could Silicon Valley become another Detroit? - (www.washingtonpost.com) Could Silicon Valley become another Detroit? It's hard to imagine as you crawl along the traffic-choked lanes of Routes 101 and 280 between San Francisco and San Jose, past office parks and gleaming campuses still buzzing with energy despite the recent recession-related layoffs and cutbacks. Yet some who work here see trouble on the horizon. These include top executives at Hewlett-Packard, who are ringing an alarm bell about what they see as a looming disaster, not just for HP, but for the entire U.S. tech industry. They say that unless we boost government spending on science, technology, engineering and math -- STEM, in industry jargon -- we will be unable to keep up with countries such as China and India. At some point, companies such as Apple, Cisco, HP, IBM, Microsoft and Oracle could be eclipsed by foreign rivals, just as Ford, General Motors and Chrysler have been. This may sound farfetched or hysterical. But HP isn't a place given to hysteria. This is the world's largest tech company, an outfit that did $118 billion in sales last year and earned a net profit of more than $8 billion, one that employs 321,000 people worldwide, about 100,000 of them in the United States. HP also operates one of the world's leading industrial research labs, with 600 scientists working under the direction of Prith Banerjee, an Indian-born computer scientist with a background in academia and start-ups. Banerjee says the rest of the world has been rapidly boosting spending on science and technology, while the United States has been, in effect, scaling back. "There is a perfect storm headed toward our tech industry," he says.



OTHER STORIES:

Ron Paul Grills Fed Governor 1/13/09 - (www.ml-implode.com) - "Congressman Ron Paul questions Donald L. Kohn, Vice Chair of the Federal Reserve Board of Governors, at the House Financial Ser...
Mountains of Doom - (www.ml-implode.com) - A video on the bad bank idea.
Mortgage Application Volume Plummets - (www.ml-implode.com) - " A reading of raw mortgage application volume plummeted a seasonally-adjusted 38.8 percent for the week ending Jan. 23, accordi...
First Horizon Continues Mortgage Pullback - (www.ml-implode.com) - " Memphis-based First Horizon National Corp. , the bank holding company for First Tennesse Bank, said Wednesday morning that it ...
Credit Weakness Spreads from Subprime to Alt A to Jumbo - (www.ml-implode.com)
Waiting For A Real Estate Miracle To Happen - (www.ml-implode.com)
"Bad bank" plan "gaining momentum" - (www.ml-implode.com)
Bankers' Worst Nightmare Materialize - (www.ml-implode.com)

Fed Keeps Rate as Low as Zero, Says Prepared to Buy Treasuries - (www.bloomberg.com)
FDIC May Run ‘Bad Bank’ in U.S. Plan to Remove Toxic Assets - (www.bloomberg.com)
Deluge of layoffs hits U.S. economy - (www.latimes.com)
Fed Shift Leaves Experts Blind, Complicates Central Bank’s Job - (www.bloomberg.com)
Mortgage applications dropped 38.8% last week - (www.marketwatch.com)
California home foreclosures top 236,000 in 2008 - (www.latimes.com)
California Home Prices Fell 42% as Slump Worsened - (www.bloomberg.com)

"Skyrocketing" house sales news is utter bullshit - (bespokeinvest.typepad.com)
Bottom? Not at all. Prices are about to start dropping - (huffingtonpost.com)
California Housing Market - Foreclosure Surge to Hit - (mrmortgage.ml-implode.com)
Worst U.S. housing market in 2008? California! - (lansner.freedomblogging.com)

More record house price declines - (themessthatgreenspanmade.blogspot.com)
U.S. house price index fell again in November - (www.iht.com)
Where Housing Is Headed, By City - (online.wsj.com)
November Case-Shiller Chart Extravaganza - (www.voiceofsandiego.org)
Layoffs Spread to More Sectors of the Economy - (www.nytimes.com)
A Red-Letter Day for Layoffs - (www.businessweek.com)
Consumer Confidence index sinks to all-time low in January - (money.cnn.com)
Economic Cures Are Like Booze for an Alcoholic - (www.bloomberg.com)

Court mortgage-modification bill passes House committee - (www.marketwatch.com)
Mortgage Cramdowns Will Drive Up Interest Rates - (www.cnbc.com)
Twenty-five people at the heart of the meltdown - (www.guardian.co.uk)

Tuesday February 3 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

There are no words to describe the following. – (www.dailybail.com) Funny rant on the stimulus bill. This is the possibly the funniest RANT ever made. It's the best we'ver ever come across, for sure. Watch the entire video to the end! It takes him about 30 seconds to get sufficiently warmed up. You will not be sorry. Wallstreetpro, as he is known on youtube, welcome to DailyBail. ABSOLUTELY, COMPLETELY NOT SAFE FOR THOSE WHO DON'T LIKE EXPLETIVES

A Tale of Two Squatters - (www.sfgate.com) Three guys dressed in black sit with me on the steps of the Basilica of Mission Dolores in San Francisco's Mission district. It's past midnight on a clear winter night, and the stone stairs are numbingly cold. I suggest we go to a cafe, but Tim, Sasha and Steve -- they don't want to give their last names -- are squatters; they live in abandoned, unheated buildings where they don't pay rent and are used to being out in the elements. Plus, they are nursing bottles of Newcastle beer, so we stay outside to talk about how the economic downturn is affecting them. Millions of foreclosed properties have flooded the housing market and more are coming every day. There are 6.2 million vacant housing units in the United States, according to a recent study by the Joint Center for Housing Studies at Harvard University. Paradoxically, some estimate there are 3.5 million homeless people in America. Grim news, and yet the squatters see these statistics as an opportunity. "In the avenues, there are foreclosures on every block," says Tim, a soft-spoken man wearing a wool fishing cap. For squatters like him, that could mean a free home for a while. In fact, he's been squatting in an abandoned house in the Mission district for the last two years.

Bankruptcy Lawyers Seek $18.50 a Minute as Creditors Get Less - (www.bloomberg.com) Lawyers at Kirkland & Ellis LLP, home to former Whitewater prosecutor Ken Starr, are asking as much as $1,110 an hour for bankruptcy work while creditors are recovering less of their loans through company restructurings. Kirkland requested a top rate equal to $18.50 a minute for advising Tronox Inc. in its bankruptcy, according to court papers filed Jan. 26. Chicago-based Sidley Austin LLP and New York’s Skadden, Arps, Slate, Meagher & Flom LLP also requested hourly rates exceeding $1,000 in the past two months in separate bankruptcy cases, as lenders’ recoveries are forecast by ratings company Moody’s Corp. to drop 22 percent in the recession. Professionals’ fees in bankruptcy cases are growing at four times the rate of inflation, estimated Lynn LoPucki, a professor of bankruptcy law at the University of California, Los Angeles. Total fees paid for lawyers, accountants and other professionals in bankruptcies from 1998 to 2007 doubled, while the consumer price index rose about 25 percent, he said. “As the economy gets worse, the bankruptcy lawyers are charging more,” LoPucki said. “It seems that each month one sets a new record for hourly billing rates. $1,110 is, to my knowledge, a record for the debtor’s bankruptcy counsel.”

Cosmo, Accused of Ponzi Scheme, Raised $370 Million, U.S. Says - (www.bloomberg.com) Nicholas Cosmo, founder of Agape World Inc. in Hauppauge, New York, swindled investors out of more than $370 million and used the money to pay for limousines, fund a baseball league and pay off a restitution order from an earlier fraud, U.S. authorities said. Cosmo, 37, operated a Ponzi scheme at least from October 2003 to December 2008 that victimized more than 1,500 individual investors, putting the money into Agape World bank accounts, according to a 51-page affidavit by U.S. Postal Inspector Richard Cinnamo detailing the government’s allegations. “By paying investors partial returns -- represented to be profits from interest-generating loans -- Cosmo persuaded current investors to invest additional funds in Agape and AMA, and also encouraged new victims to invest in the two companies,” U.S. Attorney Benton J. Campbell’s office said in a statement today.

Lehman's Fuld sold Florida mansion to wife for $100 U.S. most likely to protect from shareholder lawsuit or bankruptcy filing - (www.reuters.com) Fallen Lehman Brothers Chief Executive Richard Fuld sold his $13.3 million mansion to his wife for just $100 last November, according to Florida real estate records. The 62-year old executive, who could face civil lawsuits after overseeing the storied investment bank's collapse into Chapter 11 proceedings last September, transferred ownership of the 3.3 acres seaside home to Kathleen Fuld on November 10, records show. The couple had jointly bought the home for $13.75 million in March 2004, as first reported by Cityfile.com. Fuld has been blamed for Lehman's collapse on September 15 after it was weighed down by bad assets leading to the largest-ever U.S. bankruptcy when it was unable to find a buyer to come to its rescue. He was widely criticized for not acting quickly enough to save the 158-year old bank. Though Fuld told U.S. lawmakers he took full responsibility for his actions and felt "horrible about what has happened to the company," he insisted he shared the blame with U.S. regulators and Congress.

The Next Real Estate Crisis: Shuttered Stores and Empty Malls - (www.alternet.org) For a picture of the US real estate crisis, imagine New Orleans wrecked by Hurricane Katrina, and before the waters even begin to recede, a second Katrina hits. The 1,120,000 lost US retail jobs in 2008 are a signal that the second stage of the real estate bust is about to hit the economy. This time it will be commercial real estate -- shopping malls, strip malls, warehouses, and office buildings. As businesses close and rents decline, the ability to service the mortgages on the over-built commercial real estate disappears. The over-building was helped along by the irresponsibly low interest rates, but the main impetus came from the slide of the US saving rate to zero and the rise in household indebtedness. The shrinkage of savings and the increase in debt raised consumer spending to 72% of GDP. The proliferation of malls and the warehouses that service them reflect the rise in consumer spending as a share of GDP. Like the federal government, consumers spent more than they earned and borrowed to cover the difference. Obviously, this could not go on forever, and consumer debt has reached its limit.

The Banks Have Stolen Enough; It's Time to Take Them Over - (www.huffingtonpost.com) Hold onto your wallets. The bankers are coming back for more money. They burned through the $350 billion that we gave them in the first round of the Troubled Asset Relief Program (TARP) and they are worried that even the second $350 billion will not be enough money to keep them solvent. The selective leaks from Treasury tell us that the banks will need far more money to cover their bad debts. The latest story is that the banks want to sell us their bad assets at above market prices, which was the original plan that Treasury Secretary Paulson proposed, except the banks want to push off their junk on an even bigger scale. In one version, the government would set up a Resolution Trust-type corporation (RTC), like we did with the bankrupt Savings and Loans in the 80s, which would hold all the garbage and then gradually resell it to the private sector to recover a portion of what the government paid. This is a reasonable course, except there is one big difference between what we did with the S&Ls in the 80s and the leaked plan being floated. The S&Ls were taken over by the government and then resold to the private sector. These were bankrupt institutions that were put out of business. The stockholders were wiped out, which is what is supposed to happen to stock holders when their company goes bankrupt.

Paying in Ameros – (www.marketwatch.com) The financial crisis may have all kinds of unintended consequences, including, possibly, a single North American currency. In 2006, it seemed counterintuitive to forecast a "prolonged socioeconomic malaise entirely more depressing than a recession." For years, the notion of an "invisible hand" was conspiracy theory until we learned that the Working Group on Financial Markets was a central policy tool. And now, as we gaze across our historically significant horizon, we must open our minds to thoughts and ideas that may seem foreign to folks conditioned by the past and stunned by the present. As governments take on more risk -- as they price assets on behalf of the market and transfer debt from private to public -- the common denominator, or release valve, becomes the currency. If our economic condition is allowed to take medicine in the form of debt destruction, the greenback will appreciate, and asset classes as a whole will deflate. If we continue to inject drugs that mask symptoms rather than address the disease, the likelihood of a seismic readjustment increases in kind. The deflationary forces in the marketplace are pervasive, and the "other side" of our current equation, hyperinflation, may be years away. Given the magnitude, breadth and pace of the global financial epidemic, however, we must explore each side of the twisted ride. Years ago, the Federal Reserve wrote a "solution paper" regarding the need to combat zero-bound interest rates. The concern was the flight of capital from the U.S. and an option discussed was a two-tiered currency, one for U.S citizens and one for foreigners. Canadian economist Herbert Grubel first introduced a potential manifestation of this concept in 1999. The North American Currency -- called the "Amero" in select circles -- would effectively comingle the Canadian dollar, U.S. dollar and Mexican peso.




OTHER STORIES:

Rents Drop Nationwide - (finance.yahoo.com)
Bloody Monday: Over 71,400 jobs lost - (money.cnn.com)
Fannie Mae Could Need $16 Billion From You - (www.cnbc.com)
Freddie Mac may need another $35 billion from you - (mortgage.freedomblogging.com)
Bank failures in 2009 on track for historic highs - (money.cnn.com)


Geithner Sets Limits on Lobbying for Bailout Money - (www.nytimes.com)
Confidence evaporates, currency row brews - (www.reuters.com)
Capital flows to developing world at risk - (www.ft.com)
OPEC Calls for Curbing Speculators, Blames Hedge Funds for Rout - (www.bloomberg.com)
Troubled Times Bring Mini-Madoffs to Light - (www.nytimes.com)

How to rescue the bank bailout - (www.cnn.com)
Nationalization Gets a New, Serious Look - (www.nytimes.com)
Media's Role In The Financial Crisis - (tpmcafe.talkingpointsmemo.com)
Taxpayers supporting the lemons - (tpmcafe.talkingpointsmemo.com)
The Housing Endgame - (Charles Hugh Smith at www.oftwominds.com)
Just plane despicable - (www.nypost.com)
Thain Strikes Back: Bank of America Knew Everything - (www.finance.yahoo.com)
Stoned Southerner Has More Sense Than Most Economists - (www.dailybail.com)
Credit Crunch provokes instability in China - (www.youtube.com)

FDIC May Run ‘Bad Bank’ in U.S. Plan to Remove Toxic Assets - (www.bloomberg.com)
Consumer Confidence in the U.S. Fell to Record Low - (www.bloomberg.com)
November Home Prices in 20 U.S. Cities Fall 18.2% - (www.bloomberg.com)
Layoffs Spread to More Sectors of the Economy - (www.nytimes.com)
New York Fed Said to Name Dudley as President Today - (www.bloomberg.com)
For Fed Policy-Making, Murky Era Lies Ahead - (www.nytimes.com)
Layoffs Cut Deeper Into Economy - (www.washingtonpost.com)
Geithner Sworn in at Treasury; Dudley May Get Fed Job - (www.bloomberg.com)
Fannie, Freddie may tap U.S. Treasury for $51 billion - (www.reuters.com)
Valero shuts refinery as slowdown bites - (www.ft.com)
Dow considers first dividend cut since 1912 - (www.ft.com)
Corning to Cut 3,500 Jobs After Profit, Sales Plunge - (www.bloomberg.com)
Obama moves to force automakers to produce more fuel-efficient vehicles - (www.latimes.com)
Madoff Enablers Winked at Suspected Front-Running - (www.bloomberg.com)

Monday February 2 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Family murder-suicide blamed on firings - (www.latimes.com) Suspected Wilmington gunman, wife had lost jobs at Kaiser Permanente. A man who had recently been laid off from a local hospital opened fire at his Wilmington home today, killing his five young children as well as his wife, police said. The gunman then took his own life, according to authorities. Police said the children were an 8-year-old girl, twin 5-year-old girls and twin 2-year-old boys. LAPD Deputy Chief Kenneth Garner said police found notes inside the house in which the gunman referred to "work-related issues." "In these tough economic times, there are other options," Garner said. "In my 32 years, I've never seen anything like this." Police discovered the bodies after a bizarre series of events this morning that included, authorities said, the gunman faxing a letter to KABC Channel 7 shortly before killing himself. Someone, possibly the gunman, called the LAPD about 8:20 a.m. saying, "I just returned home, and my whole family has been shot," according to Garner. According to Channel 7, the faxed letter detailed workplace problems both the man and his wife were having at a Kaiser Permanente hospital in West Los Angeles. The letter said that an unnamed administrator told him one day that he shouldn't have come to work and said "you should have blown your brains out." The man said in the letter that he complained to his union to no avail. Then both he and wife were fired, Channel 7 reporter Gene Gleeson said in summarizing the letter. The couple, Ervin Antonio Lupoe and his wife, Ana, were both former employees of Kaiser Permanente West Los Angeles Medical Center. "They were recently terminated," a spokesman for the hospital group confirmed. "We are deeply saddened to hear of the tragic deaths of Ana, Ervin and their five children," Kaiser said in a statement, extending the hospital group’s sympathies to their family and friends. "We are providing support to Kaiser Permanente employees." Kaiser officials said they are cooperating with the ongoing LAPD investigation.

L.A. County Supervisors to transfer $29.1 million in reserves to cover welfare, building costs - (www.latimes.com) Los Angeles County supervisors voted this morning to transfer $29.1 million from county reserves to cover an upsurge in welfare and construction costs, saying they still may have to cut services and jobs next month if state leaders follow through on plans to defer health and social services payments. Supervisors voted 4 to 1 to approve the proposal by County CEO William T. Fujioka after removing $5 million in proposed spending for solar energy and other construction projects. Supervisor Gloria Molina voted against the plan after questioning several expenses, including $2 million earmarked for a county television channel. “I just can’t support a whole series of budget adjustments that do not make sense to me at a time when a whole lot of people might miss out on services because of issues that are not of our doing from the state,” Molina said. The state controller is expected to delay $105.6 million in payments to Los Angeles County next month, and the governor has proposed deferring $1.4 billion in such payments during the following six months. “We do not have the cash flow to deal with this,” Fujioka told supervisors this morning. “We would have to go on the market to borrow the money.” Supervisor Zev Yaroslavsky said borrowing “is not an option.” “How much are we going to have to pay in interest — if we can get a loan?” Yaroslavsky said, adding that tapping reserves and borrowing are simply “deferring the inevitable.” “This is ridiculous,” he said. “The state deferring its responsibility so it can defer balancing the budget.” Supervisor Don Knabe, who chairs the board, questioned whether the county can transfer legal responsibility for welfare payments back to the state or refuse to cover the state portion of payments.

Faking Your Own Death for Dummies - (www.cnbc.com) Another fugitive, suicide-faking fraudster is in police custody and all I can say is — I'm appalled! Wall Street guys like to make you think they're the smartest guys in the room. And they talk a lot of trash that money management is risky business and if you can't run with the big dogs, you'd better get your assets back on the porch. And then they deliver these ridiculous fake suicides like Florida's Art Nadel, who left a suicide note for his wife and then vanished for a month before turning himself in to police. For such "smart" guys, these fake suicides are getting ridiculous! The previous one-hit wonder, Marcus Schrencker, gets points for style — faking a plane crash, parachuting out and making a getaway on a motorcycle. (Let's just say it's got a lot more made-for-TV potential than, writing "Suicide is painless" in the dust and getting your girlfriend in trouble. I'm talking to you, Sam Israel.) But the fact that Schrencker sent a "By-the-time-you-get-this-I'll-be-gone" email to a neighbor the day before, turned the light off in the cockpit before he jumped, issued a “distress” call early enough for military jets to escort the empty plane to its crash site, then picked a red—RED!—motorcycle to make his getaway is an insult to the collective IQ of Wall Street. Don't you people watch CSI? I may not know much about forensics but I can tell you this much: You always pick the gray Yamaha, not the red. You wait to make the distress call until just before the plane crashes — IN THE OCEAN. (Sharks are excellent accomplices.)

Consumer confidence darkens further in January – (www.latimes.com) Americans' mood about the economy darkened further in January, sending a widely watched barometer of consumer sentiment to a new low, a private research group said today, as people worry about their jobs and watch their retirement funds dwindle. The Conference Board said its Consumer Confidence Index edged down to 37.7 from a revised 38.6 in December, lower than the reading of 39 that economists surveyed by Thomson Reuters had expected. In recent months the index has hit its lowest troughs since it began in 1967, and is hovering at less than half its level of January 2007, when it was 87.3. "It appears that consumers have begun the new year with the same degree of pessimism that they exhibited in the final months of 2008," Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement. "Looking ahead, consumers remain quite pessimistic about the state of the economy and about their earnings."

Newest Corporate Worry: Pension Under-Funding - (www.cnbc.com) Well, we knew that this was a problem despite what companies have been saying. Since the 2001 tech bubble implosion, they have been taking on more risk to make up for lost returns back then. Only they started using leverage and more aggressive tactics. Pension under-funding is becoming the latest problem for corporations. In the last couple days, Hershey, U.S. Steel, Delta, and Canadian Pacific have noted that their company pensions were underfunded. This means more cash will have to be put into them in 2009 (barring an amazing turnaround in the markets), which will be an additional hit to earnings. It's not a minor amount, either. For example, in the case of Hershey, pension expenses might cost $70 million in 2009, a hit of $0.20 per share to earnings (they are expected to earn $1.90). There's no doubt pension fund managers have been stunned by the rapid decline in the value of assets under management. The question is, what do they do? Remember, they have to match their assets with liabilities. Aside from getting more cash from their parent companies, they have to decide whether they want to:

State Farm to exit Fla. homeowner insurance - (money.cnn.com) In the face of clueless politicians who are trying to micro-manage the economy and the companies who operate in their state. They are beginning to make it impossible for companies to make a profit in certain states so I applaud State Farm. State Farm Florida says it will no longer renew policies for 1.2 million customers after request for a 47% rate hike was denied. Florida's largest private insurer is pulling the plug on homeowners' policies in the state, citing the losses suffered since the brutal 2004 hurricane season. The decision by State Farm Florida comes two weeks after state insurance regulators rejected the company's request to raise rates by more than 47%. The decision means State Farm Florida - a subsidiary of national insurance giant State Farm Mutual - will no longer renew policies for its roughly 1.2 million customers in the Sunshine State. "This is not an action we wanted to take, but one we must take given the realities of the Florida property insurance market," company President Jim Thompson said in a statement announcing the decision. The company said it has paid out $1.21 in claims for every dollar of premiums it has collected since 2000 and suffered billions in losses after the 2004 hurricane season, when four major storms hit the state. And it said its net worth had dropped by nearly 25% since 2006 even with no major disasters.

Layoffs aren't the answer - (money.cnn.com) Clueless media economists don’t realize that companies have no other choice if they have no access to credit and can’t borrow money from TARP. Corporate America is trying to downsize itself back to health. But mass job cuts are just going to make the recession worse. Another day, another job cut announcement by a major company. Corning (GLW, Fortune 500) joined the pink slip parade Tuesday, saying that it would cut 3,500 jobs. The news follows a brutal Monday, where companies such as Home Depot (HD, Fortune 500), Caterpilliar (CAT, Fortune 500), Sprint Nextel (S, Fortune 500) and Pfizer (PFE, Fortune 500) combined to announce more than 70,000 job cuts. The reason that companies are rushing to reduce their headcount is obvious. Businesses are faced with sagging demand for their products and services in the wake of this global recession. That's causing sales, earnings and stock prices to dip. So one way to try and preserve profits is to lower costs -- and payroll is usually one of the first places a company looks at to slash expenses.



OTHER STORIES:

Delta reports loss; shares plunge – (www.latimes.com) Delta Air Lines Inc., the world's biggest carrier, said today it lost $1.4 billion in the final three months of 2008 as it recorded a massive charge related to employee stock awards and wasn't able to fully benefit from the decline in oil prices because of bad bets on fuel hedges. Delta shares nearly 18 percent. The results, when one-time items are excluded, fell short of Wall Street expectations. The airline operator also projected that 2009 consolidated passenger unit revenue would be down 4 percent. It reiterated its previously announced plans to cut systemwide capacity 6 percent to 8 percent this year.
Citigroup Names Interim CEO of Citi Holdings Unit - (www.cnbc.com)
Treasury 'Pressured' Citi To Stop Jet - (www.cnbc.com)
Geithner's Assets Are Notably Lower than Paulson's - (www.cnbc.com)
Geithner: Patience Needed for the Economy - (www.cnbc.com)
Former Merrill CEO Thain Subpoenaed Over Bonuses - (www.cnbc.com)
Wall Street Bonuses Shrink - (www.cnbc.com)
Slideshow: Decorate Like Thain - (www.cnbc.com)
Missing Fund Manager Nadel Is Arrested in Florida - (www.cnbc.com)
Regulators: We Probed Madoff - (www.cnbc.com)
Investment Boss Surrenders - (www.cnbc.com)
Former AIG Exec Slapped with Four-Year Sentence - (www.cnbc.com)

Stocks inch higher Bonds bounce off lows - (money.cnn.com)
Recession realities: Back to school - (money.cnn.com)
Unemployment sweeps nation - (money.cnn.com)

Coming soon: Electric band-aids - (money.cnn.com)
Love your job? Then save it! - (money.cnn.com)
All eyes on Wells Fargo - (money.cnn.com)
Home prices fall at record pace - (money.cnn.com)
Get your economic questions answered - (money.cnn.com)

State Jobless Rates Top 10% Map - (online.wsj.com)
Financials Spark Small Rally - (online.wsj.com)
Regulatory Holes in Madoff Case - (online.wsj.com)
Target Cuts 9% of Headquarters Staff - (online.wsj.com)