Tuesday April 6 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Gov. Chris Christie plans to cut N.J. school aid by $800M - (www.nj.com) Gov. Chris Christie's budget includes an across-the-board cut in state aid to school districts that will equal up to 5 percent of their budgets for the current fiscal year, a move the administration expects to be challenged in court, according to three state officials familiar with the plan. By basing the aid calculation on districts' budgets, the overall reduction of about $820 million is at odds with New Jersey's school funding formula, which dictates that more money go to districts with the neediest children, officials said. That formula, which survived a Supreme Court challenge last spring, replaced the longstanding "Abbott" system that sent the bulk of the aid to 31 poor urban districts. The cuts to schools come on top of $475 million that Christie sliced from school aid in the current fiscal year. Those cuts were based on districts' excess surplus. In addition to schools, Christie's first budget will make major cuts in aid to towns and colleges while skipping a $3 billion payment to the struggling state pension system, said four officials who spoke on the condition of anonymity ahead of Christie's speech.

Struggling Governments Get Creative to Raise Income - (www.bloomberg.com) France, promising to improve the environment, is planning to introduce a carbon tax. In Finland, where the government says it wants to improve diets, taxes are back on candy and soft drinks. Similarly, Denmark has added tobacco and some fatty foods to the list of taxed products. Britain is taking a different tack, considering a so-called horse tax. All these taxes may be presented as serving virtuous ends, but they also have something else in common: they help plug budget holes deepened by the recession, bailouts and billions in stimulus spending. At a time when political leaders in Europe and the United States are committed to no additional income-tax burden on the middle class, they also share the advantage of raising revenue without drawing too much attention to the tightening fiscal noose. As a result, analysts say, taxpayers from California to Copenhagen should brace themselves for more “stealth taxes” — indirect levies like sales taxes, or microcharges on services once provided free, like registering a pet. Such charges can have many benefits for tax collectors. For one thing, they are less volatile and less dependent on the economic cycle than corporate or income taxes. For another, they are less prone to avoidance and cheaper to collect. Finally, analysts say, they are generally easier to enact.

Fed Affirms Plan to End Mortgage Intervention - (www.nytimes.com) he Federal Reserve on Tuesday affirmed its plan to stop buying mortgage-backed securities, expressing a degree of confidence that it could eliminate that pillar of support without undermining the nation’s economic recovery. The move came as the Fed voted to keep its benchmark interest rate unchanged, at nearly zero percent, citing evidence of economic weakness and little sign of inflation. The Fed’s purchases of mortgage-backed securities, which will total $1.25 trillion and end March 31, have helped hold mortgage rates to near-record lows, and the Fed left open the possibility that the purchases might have to be resumed, particularly if the housing recovery stalls. The Fed said it would “continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability.”

Fed to leave interest rates near zero a little longer - (www.washingtonpost.com) The Federal Reserve stood by its policy of keeping interest rates at rock-bottom levels for the foreseeable future at its policymaking meeting Tuesday even as central bank officials took a more positive tone about the economy. The Federal Open Market Committee left its target for short-term interest rates near zero, where it has been for the past 15 months. Fed officials also repeated language from previous statements that rates are likely to remain "exceptionally low" for an "extended period," which they have said means at least six more months. The Fed will also go forward with a plan to end its support for the mortgage market at the end of March. By then, the central bank will have completed the purchase of $1.25 trillion in mortgage-backed securities, a key factor in keeping interest rates low for those buying a house. On balance, the Fed's assessment of the economy seemed slightly better than it had been at the last policy meeting, in late January. Recent data suggest that "the labor market is stabilizing," the statement accompanying the rate decision said. At the January meeting, the Fed had said that "deterioration in the labor market is abating."

Jobs Bill Passes in Senate With 11 Votes From Republicans - (www.bloomberg.com) In a rare bipartisan vote, the Senate approved and sent to President Obama on Wednesday a bill intended to spur employment by providing businesses with incentives to hire new workers — an approach that Congressional Democrats hope to repeat. The legislation, approved 68 to 29, would give employers an exemption from payroll taxes through the end of 2010 on workers they hire who have been unemployed for at least 60 days. It also extends the federal highway construction program, shifts $20 billion to road and bridge building and takes other steps to bolster public improvement projects. Democrats hope to follow up with legislation by extending more than $30 billion in corporate tax breaks and aid to small business. At a St. Patrick’s Day luncheon on Capitol Hill after the vote, Mr. Obama thanked the 11 Republicans who backed the measure and said he would like to see that trend continue on emerging economic initiatives.

Greece Keeps IMF Option Alive as Merkel Urges Caution on EU Aid - (www.bloomberg.com) Greek Prime Minister George Papandreou kept alive the possibility of requesting International Monetary Fund aid as German Chancellor Angela Merkel cautioned against “hasty” decisions on European Union assistance for the country. As long as “Greece is still borrowing at an unreasonably high interest rate, over 6 percent,” the country will keep “all options open” while preferring an EU solution, Papandreou said at a press conference in Brussels today with European Commission President Jose Barroso. European finance ministers this week approved a framework for emergency aid to Greece, while leaving the final go-ahead to government leaders who meet next on March 25-26 in Brussels. Papandreou has called on the EU to spell out how the mechanism would work to help Greece fend off the investors who have been dumping the country’s bonds and driving up its borrowing costs. Germany may also favor an IMF role rather than committing taxpayer money to Greece, an option that has been dismissed by European Central Bank President Jean-Claude Trichet and French President Nicolas Sarkozy.

OTHER STORIES:

A second deflationary tidal wave may hit the US early as April - (www.madhedgefundtrader.biz)

Producer prices post biggest drop in 7 months - (www.reuters.com)

Japan's 20 year fight against DEFLATION continues - (www.nytimes.com)

Embattled Health Care Reform Plan Picking Up Steam - (www.cnbc.com)

Thursday: Stocks May Get Lift from Quadruple Witching - (www.cnbc.com)

BOJ Doubles Lending Program to Combat Deflation - (www.bloomberg.com)

Japan Eases Monetary Policy to Fight Deflation - (www.nytimes.com)

Four Ways to Profit When Market Volume Takes a Plunge - (www.cnbc.com)

Jim Rogers Sizes Up Two Global Bubbles - (www.cnbc.com)

China in Midst of ‘Greatest Bubble in History,’ Rickards Says - (www.bloomberg.com)

China unyielding on yuan as U.S. raises pressure - (www.reuters.com)

Producer Prices in U.S. Dropped More Than Forecast - (www.bloomberg.com)

Fed Unconvinced Recovery Yet Warrants Higher Rates - (www.bloomberg.com)

Bernanke Says Fed Doesn’t Want to Be ‘Too Big to Fail’ Overseer - (www.bloomberg.com)

Bernanke Will Tell Congress Bank Oversight Aids Monetary Policy - (www.bloomberg.com)

Monday April 5 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Foreclosure starts up nearly 20 percent in California - (www.centralvalleybusinesstimes.com) After reaching the lowest level in a year in January, Notice of Defaults, the start of the foreclosure process, increased by 19.7 percent in February, according to a report Monday from ForeclosureRadar Inc., a Discovery Bay-based foreclosure information company that says it tracks every California foreclosure. The number of properties scheduled for foreclosure sale remained near record levels in February, yet foreclosure sales, either “Back to Bank” or “Sold to Third Parties,” dropped by 11.9 percent total. “The disconnect between delinquencies and foreclosure sales continues to widen,” says Sean O’Toole, founder and CEO of ForeclosureRadar. “While efforts to slow foreclosures are clearly working, it remains unclear that anything has yet addressed the core problem of excess household mortgage debt,” he says.

Short sale tax shortchanges ex-houseowners - (www.sfgate.com) Tara Blackwell and her husband sold their Fairfield house in December for about half of its original $825,000 price as a short sale, in which the bank agrees to accept less than is owed on the mortgage. The couple and their two children moved in with Blackwell's parents and thought the situation was behind them. Then it came time to pay their 2009 taxes. To their dismay, they discovered that California would count the $412,000 difference between their original price and the sale price as part of their income, resulting in a hefty state income tax bill. "We lost our down payment of $70,000, we lost our home and now California wants $38,000 (in extra taxes) from us," Tara Blackwell said. "It's like kicking you when you're down." California legislators last week passed a bill that would fix the situation. It mirrors a federal law that excludes "forgiven debt" on a principal residence from being considered taxable income. It covers short sales, foreclosures, deeds in lieu of foreclosure and loan modifications that reduce the principal due.

Builders get $2.30B in tax benefits for foolish house construction - (www.snl.com) Recent legislation that increased the net operating loss carryback provision to five years from two years added billions of dollars to homebuilders' earnings reports during their most recent quarters, turning losses into profits for several builders. And according to some industry observers, the provision was so lucrative that it might have kept a pair of weaker builders out of bankruptcy court. In all, homebuilders recorded $2.30 billion in income tax benefits during their most recent quarters, according to SNL Financial. That figure does not represent the net operating loss carryback benefits alone; rather, it shows all income taxes and benefits combined. It includes some builders that actually paid taxes, such as NVR Inc., which reported a loss during just one quarter in the last three years — meaning the company did not have many losses to carry back. The tax benefit was so large that it might have been the only reason two builders did not go under, Vicki Bryan, a senior high-yield analyst at Gimme Credit, told SNL. "This is so important that it might have saved the weakest ones, Hovnanian [Enterprises Inc.], Beazer [Homes USA Inc.] They looked like they were headed to bankruptcy," she said.

Metro Atlanta foreclosures set new monthly record - (www.blogs.ajc.com) Metro Atlanta’s foreclosure problem keeps getting worse. The number of foreclosure notices this month — 12,568 — set a new record for metro Atlanta, according to data just released by Equity Depot. Foreclosure notices in the 13-county metro area jumped 22 percent when compared with February and 24 percent compared with March of last year, Alpharetta-based Equity Depot said. This month’s number also is greater than the previous monthly record of 12,318 notices, set in September of last year. Barry Bramlett, president of Equity Depot, said in an e-mail that the number of foreclosures is “obviously impacted by both the lingering sub-prime [mortgage] mess and [the] economy.” He said there are “increasing commercial [real estate] foreclosures of every business nature.”

Bankruptcy Court Gives Prichard Alabama 2 More Months To Figure Out How To Pay Pensioners - (Mish at globaleconomicanalysis.blogspot.com) Prichard Alabama declared bankruptcy on October 28, 2009 over pension obligations. Since then pensioners have not been paid. Now a bankruptcy court has given the city two more months to figure out how to do so. Let's backtrack to the beginning. Please consider Prichard files for bankruptcy protection again. Wednesday, October 28, 2009: The city of Prichard filed for bankruptcy Tuesday in an attempt to cope with the debt created by fighting lawsuits and addressing the demands of unpaid and agitated retired city employees. The Chapter 9 filing marks the second time in a decade that the city declared it was out of money. Mayor Ron Davis, who just two years ago helped the city pay off its creditors from the 1999 bankruptcy, blamed the latest financial crisis in part on a flawed municipal pension plan. The filing came a day before Davis and the city Finance Director Rex Williams were slated to be deposed by attorneys representing the pensioners in a lawsuit filed in August…… Pensioners Have Received No Checks For Six Months: Please consider Still no money for Prichard pensioners: A bankruptcy court judge has given the City of Prichard two more months to figure out how they will pay retired city workers. Prichard pensioners have gone six months without a pension check. Prichard is operating under the protection of Title IX Bankruptcy, and for many people, that means no promised pension payments. After six months with no pay, Prichard pensioners put their faith into the courts. They hoped a judge would force the city to pay some, if not all, of the pension money it owes.

New Real Numbers - (www.usawatchdog.com) It appeared one of the President’s top economic advisors, Larry Summers, was trying to do a preemptive strike against what may be some bad unemployment numbers. If unemployment is up, blame harsh winter weather! John Williams, an economist from shadowstats.com (also known as Shadow Government Statistics), feels just the opposite. In his latest bulletin, Williams says, “Reuters reported that Larry Summers, in a CNBC interview (Monday, March 1st), claimed “winter blizzards were likely to distort February jobless figures.” I take such comments from an Administration official — in the week of the employment report release — as an effort to alter market expectations and to soften potential negative market impact from worse than expected results.” Whether or not unemployment creeps up, it is outrageous that a top administration official would blame the weather for a less than desirable employment statistic. That sounds like a grade school excuse on the same level as “the dog ate my homework.” SGS points out the straightforward idea “People generally do not lose their jobs due to snow days.” This morning Bureau of Labor Statistics reported unemployment remained steady at 9.7% as 36,000 jobs were shed from the economy. (SGS unemployment now stands at 21.6%, up .4% )

OTHER STORIES:

Corporate Debt Coming Due May Squeeze Credit - (www.nytimes.com)

Is your country the next Greece? - (www.money.cnn.com)

The Real-Time Indicator That Says The Consumer Is Already Rolling Over - (www.businessinsider.com)

Foreclosure filings up dramatically in Aspen - (www.aspendailynews.com)

Hawaii foreclosures up 81% from year ago - (www.nytimes.com)

Obtaining Due Process in Non-Judicial Foreclosure States - (www.rismedia.com)

Central Valleys Stanislaus County tops for mortgage fraud - (www.modbee.com)

Ex-NY bank president first accused of TARP fraud - (www.reuters.com)

Fragile riches depend on market manipulation - (www.blogs.reuters.com)

The $2 Trillion Public Pension Hole and What You Can Do About It - (www.Mish)

Is it time for Canadians to bottom fish for US real estate? - (www.montrealgazette.com)

Avalanche of Maturing Junk Bonds Looms for Markets - (www.nytimes.com)

Moodys Warns U.S. Debt Could Test Triple-A Rating - (www.nytimes.com)

Inflation: GOD is the ultimate hedge - (www.theautomaticearth.blogspot.com)

Pain of dot-com crash lingers in current financial decisions - (www.jsonline.com)

Why Tech Companies Gained But Investors Lost - (www.online.wsj.com)

Fun Global Protest Site - (www.bemecollective.com)

Millions Spent to Sway Democrats on Health Care - (www.nytimes.com)

Sunday April 4 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Florida, 4 other states rush $1.5B in cash to worst real estate gamblers - (www.sun-sentinel.com) The five states hardest hit by the foreclosure crisis have been given only weeks to plan how to spend $1.5 billion in federal funding announced by the Obama administration last month. Guidelines issued under the U.S. Treasury Department's Fund for Hardest Hit Housing Markets on March 5 gave housing finance agencies in California, Arizona, Florida, Nevada and Michigan just six weeks to come up with plans on how to spend their share of the money. The rush could be problematic for the states, especially because Treasury is seeking "innovative" measures to help families facing foreclosure. But some experts have been urging the administration to try the approach, believing it will be helpful and that it can be done quickly. "This is long overdue, allowing the use of more innovative techniques," said Ken Rosen, a real estate professor at University of California at Berkeley's Hass School of Business. The guidelines give wide leeway to the state Housing Finance Agencies charged with doling out the money to design programs tailored to their region's circumstance. The money can be spent, for example, to help families who can't pay their mortgages because of job losses, unable to refinance because plunging home values have left them "underwater," or to give relief from second mortgage payments. California's Housing Finance Agency, for example, is looking at areas of the state that have been hardest hit, like the Central Valley and Inland Empire area southeast of Los Angeles, spokesman Ken Giebel said. The agency is getting the most cash, $700 million.

It's Official: The US Housing Downturn Has Resumed in Earnest - (www.huffingtonpost.com) The year 2009 was the year of reflation theories and bubble blowing. Theses of "Green Shoots", catching the bottom, and QE reigning supreme were the order of the day. Sure enough, asset prices (nearly all of them) went one direction, straight up. We all saw it coming, but guys like me who actually count the money and rely on the fundamentals didn't believe it was a sustainable gain. It wasn't a bull market, but a bear market rally. After nearly one year, the reflationists have had their hay day, or have they? One thing that I have been proven correct on thus far is the housing market. Despite what was probably at least a trillion dollars of effort directed at suspending real estate and real estate related assets, prices are resuming their downward slide after falling 28% nationwide, peak to trough, and over 50% in some areas.

$35 million house assessed at $3.2 million - (lagunahomes.freedomblogging.com) A home currently asking $35 million in South Laguna Beach has a strange history, according to the Southern California MLS.

The home, located at 31887 Circle Drive, was listed March 17, 2006 with the following listing prices:

· $33.9 million

· $31.9 million

· $33.5 million

After 575 days on the market, the listing was canceled on October 18, 2007. The home was listed again January 21, 2008 for $2.9 million. Then the listing expired May 21, 2008. Then, it was listed Feb. 17 at $35 million. Offering only 3 bedrooms, 3 baths and a 5,640-square-foot lot, the position on the promontory and panoramic views are the driving force behind the price of the home. The assessed property value of this oceanfront home is $3,289,744.

Young couples must work 3 times longer to pay off house than 50 years ago - (www.nzherald.co.nz) The average Kiwi has to work nearly three times harder to pay off the average house than they did 50 years ago. Figures compiled by Bernard Hickey of interest.co.nz show that to pay for the average home of $350,000, someone on the average wage has to work for 17,680 hours. Based on a 40-hour working week and not allowing for spending on anything else or taking interest into account, that works out to about eight-and-a-half years' hard slog. In 1960, by comparison, the average home cost just $6639. Although the average wage was a measly $1.05 an hour, compared with $19.79 today, paying off a house would take 6332 hours, or just a little over three years. The numbers prove that "those people who say 'in the old days, we had it much tougher than you young punks' are wrong," Hickey points out.

FHA challenged on projected risk to taxpayers - (www.washingtonpost.com) The Federal Housing Administration will need taxpayer money because it failed to properly project how borrowers with FHA-backed loans are affected by job losses and diminished equity in their homes, New York University professor Andrew Caplin told a House panel Thursday. The agency, which insures lenders against defaults, has nearly depleted the cash it must set aside to deal with unexpected losses. But a recent audit of FHA's finances concluded that the agency will not need taxpayer money except in two catastrophic scenarios. Caplin said the audit ignored the risks posed by FHA borrowers who owe far more than their homes are worth and yet managed to refinance into new FHA-backed loans. It treated those borrowers as if they were trouble-free, even though they would be vulnerable to foreclosure if they suffered a financial setback, said Caplin, who co-wrote a study on this topic with the Federal Reserve Bank of New York. Also at the hearing, FHA officials said the higher fees and tougher credit requirements that it plans to impose on new borrowers in fiscal 2011 will generate $5.8 billion for its cash reserve. But the Congressional Budget Office estimate is closer to $1.9 billion. The FHA said it is confident about its projections.

Greek riots: People take to streets to protest government - (www.dailymail.co.uk) Street clashes broke out between rioting youths and police in central Athens today as tens of thousands demonstrated during a nationwide strike against the cash-strapped government. Hundreds of masked and hooded youths punched and kicked motorcycle police, knocking several off their bikes, as police responded with volleys of tear gas and stun grenades. The violence spread after the end of the march to a nearby square, where police faced off with stone-throwing anarchists and suffocating clouds of tear gas sent patrons scurrying from open-air cafes. Police say 16 suspected rioters were detained and two officers were injured. Rioters used sledge hammers to smash the glass fronts of more than a dozen shops, banks, jewelers and a cinema. Youths also set fire to rubbish bins and a car, smashed bus stops, and chopped blocks off marble balustrades and building facades to use as projectiles. Organisers said some 60,000 people took part in the protest. But an unofficial police estimate set the crowd at around 20,000 - including those that took part in a separate, peaceful march earlier Thursday. Police do not issue official crowd estimates for demonstrations. Thursday's strike - the second in a week - brought the country to a virtual standstill, grounding all flights and bringing public transport to a halt.

OTHER STORIES:

New round of foreclosures threatens housing market - (www.washingtonpost.com)

Houseowners take cash for keys to escape debt - (www.msnbc.msn.com)

How Strategic Default Could Save Our Economy - (www.blog.youwalkaway.com)

Swiss Central Bank Openly Discourages Mortgage Lending - (www.irvinehousingblog.com)
Something From Nothing - (www.Mish)

Realtors lie about when to buy - (www.mobile.nytimes.com)

The Foreclosure Shadow Market Grows - (www.motherjones.com)

Kern County, CA Property Value Per Sqft Back to 2002 - (www.kerndata.com)

Wall Street: Inside the Collapse - (www.cbsnews.com)

Planet Money Tracks Its Very Own Toxic Asset - (www.npr.org)

Rental investors braving a dismal apartment market - (www.latimes.com)

The Going Gets Tougher For Borrowers - (www.nytimes.com)

The higher the price range, the worse the market - (www.ocregister.com)

Nicolas Cage: One-Man Real Estate Bubble - (www.nbcnewyork.com)

Saturday April 3 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

California Assembly speaker OKs $132,000 in staff pay hikes, promotions - (www.sacbee.com) New Assembly Speaker John A. Pérez handed out pay increases or promotions totaling nearly $132,000 per year the day he was sworn in this month, including a $65,000 raise to his chief of staff.

Junk Bond Avalanche Looms for Credit Markets - (www.nytimes.com) …..2012 also is the beginning of a three-year period in which more than $700 billion in risky, high-yield corporate debt begins to come due, an extraordinary surge that some analysts fear could overload the debt markets. With huge bills about to hit corporations and the federal government around the same time, the worry is that some companies will have trouble getting new loans, spurring defaults and a wave of bankruptcies. The United States government alone will need to borrow nearly $2 trillion in 2012, to bridge the projected budget deficit for that year and to refinance existing debt. Indeed, worries about the growth of national, or sovereign, debt prompted Moody’s Investors Service to warn on Monday that the United States and other Western nations were moving “substantially” closer to losing their top-notch Aaa credit ratings.

States Hope for a Rich Uncle - (online.wsj.com) Strapped states, facing up to $180 billion in budget deficits in the next fiscal year, are going hat in hand to Washington. California wants $6.9 billion in federal money for the next fiscal year, and Republican Gov. Arnold Schwarzenegger says he'll have to eliminate state health and welfare programs without it. Illinois, facing a $13 billion deficit that equals roughly half of the state's operating budget, has what it dubs a stimulus team and a group in Washington pressing for additional state aid. Among other things, Illinois is hoping the federal government will keep paying a higher share of Medicaid costs. "That's $600 million we desperately need," said Kelly Kraft, a spokeswoman for Democratic Gov. Pat Quinn's budget office. Those funds already are counted in the governor's budget proposal. But in Congress, members are balking at further subsidies amid an election-year outcry over the U.S. deficit and federal involvement in the economy. That tension sets up fierce battles as states work out budgets for the fiscal year beginning July 1. Because they can't run deficits, most states face yet more tough choices: raise taxes, cut services, lay off workers or trim employees' wages and benefits over union opposition. "Our demand for services continues to grow, especially with underemployment and high unemployment—and we expect this trend to continue as we enter what is expected to be a slow-growth recovery," said Anna Richter Taylor, a spokeswoman for Democratic Gov. Ted Kulongoski of Oregon.

Sacramento business owner settles 4-cent IRS tab amid media frenzy – (www.sacbee.com) Midtown business owner Aaron Zeff has settled his beef with the IR, resolving an issue that drew national media attention after we wrote about it Saturday. "We're moving forward," he says, after sending the feds a check for 4 cents – and additional checks to cover $202.31 in interest and penalties. Zeff, the owner of Harv's Metro Car Wash, was upset last week after two IRS agents visited his business to collect on the debt. He couldn't understand how a 4-cent debt could generate so much in penalties and interest. He now thinks he may know the answer. It didn't. What most likely happened, he says, is Harv's was late on a large quarterly payroll tax filing. Penalties and interest then were assessed. When the late payment was received, it wiped out all but 4 cents of the payroll obligation, but left the interest and penalties in place. What's still a mystery is why Zeff was never informed about the tardy payment (and resulting fees) before last week's visit by agents. One possibility: He changed payroll services several years ago, and the old firm may have received notices but didn't forward them. In any case, he still thinks the agents' visit was "inappropriate – whether it was for 4 cents or $500."

Nicolas Cage: One-Man Real Estate Bubble - (www.nbcnewyork.com) Funny link to a variety of properties Nicolas Cage is currently selling. You may sorta like Nicolas Cage as an OK actor, but real estate agents absolutely adored him, at least until recently, when he began unloading some 15 homes around the world.

· Somehow, Cage found himself in Bath, England, where he promptly bought three homes, including the Midford Castle, for $7.74 million in July, 2007. Maybe he found it a bit drafty: He sold it for a $3 million loss earlier this year. He still reportedly owns a place in nearby Baltonsborough he snapped up in 2006 for $1.425 million.

· Cage sold off two adjacent units in Manhattan's Olympic Tower on Fifth Avenue in October. Although the condos were listed for $9.7 million, he sold units 48G and 48H for $7.5 million.

· Sure, The LaLaurie House in New Orleans' French Quarter is supposedly haunted, but that didn't stop ol' Nick. In April 2007, he bought the 10,300-square-foot-home for $3.45 million. Last month, the Regions Bank of Birmingham snapped it up out of foreclosure for $2.3 million.

· Maybe Cage was passing by in his absurd yacht when he saw a "For Sale" sign on this undeveloped, 45-acre Bahamas island called Leaf Cay. He paid $3 million for it, but he's now trying to sell it for $7 million.

OTHER STORIES:

Moody's warns nations to cut spending or risk AAA ratings - (www.bloomberg.com)

China, Japan Reduced Holdings of U.S. Treasury Debt in January - (www.bloomberg.com)

Reform Bill Adds Layers of Oversight - (www.nytimes.com)

European Union Puts Off New Rules for Hedge Funds - (www.nytimes.com)

Hedge Funds May Get $222 Billion Inflows in 2010, Survey Says - (www.bloomberg.com)

CLOs to End 12-Month Drought in Citigroup Deal: Credit Markets - (www.bloomberg.com)

EU Lays Groundwork for Greek Lifeline to Bolster Euro - (www.bloomberg.com)

China's scramble for water; one section of huge project halted - (www.washingtonpost.com)

Questions remain over Greece rescue - (www.ft.com)

FCC plan would greatly expand broadband Internet connections - (www.washingtonpost.com)

Citigroup Bolsters Trading Unit as Volcker Rule Spurs Defectors - (www.bloomberg.com)

Friday April 2 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Detroit family homes sell for just $10 - (www.telegraph.co.uk) The once thriving industrial city has suffered a dramatic decline following the global economic crisis. According to Tim Prophit, a real estate agent, the crisis has led to a unprecedented portfolio of homes, but they are failing to sell. He said there were homes on the market for $100 (£61), but an offer of just $10 (£6) would be likely to be accepted. Speaking on a BBC 2 documentary, Requiem for Detroit, to be screened on Saturday, Mr Prophit said: "The property is listed by the city of Detroit as being worth $35,000 (£22,000), but the bank know that is impossible to ask. "This part of town has got a lot of bad press in the media because it featured in Eminem's film 'Eight Mile', but that particular road is fifteen minutes up the road and that is a long way in Detroit." Homes offered in viewing brochures as early 1920s example of colonial architecture would once have made handsome homes but are no longer sought after. Mr Prophit, of The Bearing Group, said: "This house was foreclosed by the bank a couple of months ago and was offered to us to sell. "But we can only put the boards up on the windows to protect the property, we can't be here 24 hrs a day to stop the squatters and the crack addicts from moving in.

Bank sued for seizing Pa. woman's house and parrot - (www.miamiherald.com) Bank of America has apologized to a Pittsburgh-area woman after one of its contractors allegedly trashed her house and took her parrot while wrongly repossessing her home. Forty-six-year-old Angela Iannelli sued the bank Monday. She claims her mortgage was up-to-date when one of the banking giant's contractors damaged furniture, took her pet parrot, Luke, and padlocked her Allison Park door in October. In a statement, the bank says it "sincerely apologizes" and has tried for months to resolve the issue. The bank says it has "zero tolerance for this kind of error" and says it will quickly review the lawsuit's allegations and consider any hardship that resulted. The woman says she eventually got her bird back after repeated calls to the bank.

Readers Share Tales of Foreclosure Schemes, Mortgage Misfortune - (www.huffpostfund.org) That nearly half of the tips we received dealt with loan modification or foreclosure rescue schemes came as no surprise -- complaints about advance-fee loans and credit repair schemes ranked 9th among those compiled in 2009 by the Federal Trade Commission, and the agency noted a 12 percent spike in fraud-related cases last year. Loan Modification, Foreclosure Schemes: In one case, a woman from Mesa, Ariz. , was persuaded by a direct-mail advertisement to pay a lawyer up front for loan modification assistance. "The fee was $3800 to submit a home modification loan package... He did (at least he said he did) and I never heard anything more until about six months later I received a letter saying he was out of the home modification business and that I had $137.50 coming to me over and above the expenses it took him to submit. I was declined."

Germany is tired of paying Europe's bills - (www.slate.com) Sometimes they cut to the essence of the story, those tabloid headline-writers, even when they haven't got the quotation exactly right. What the German politician being quoted in the Bild article cited above actually said was, "A bankrupt party must use everything he has to make money and serve his creditors. … Greece owns buildings, companies and several uninhabited islands, which can now be used to repay debt." What he meant, though, was more accurately reflected in that Bild headline: The Germans are fed up with paying Europe's bills. They don't want to bail out the feckless Greeks with their flagrantly inaccurate official statistics; they resent being Europe's banker of last resort; they object to the universal demand that they plug the vast holes in the Greek budget deficit in the name of "European unity"; and for the first time in a long time they are saying it out loud. Not only are tabloids demanding the sale of the Acropolis,Frankfurter Allgemeine Zeitung, Germany's deeply serious paper of record, has pointed out that while the Greeks are out protesting the raising of the pension age from 61 to 63, Germany recently raised its pension age from 65 to 67: "Does that mean that the Germans should in future extend the working age from 67 to 69, so that Greeks can enjoy their retirement?'

Big Unfinished House Is in Foreclosure - (www.voiceofsandiego.org) A few details emerged about the unfinished house in Point Loma I wrote about yesterday. It looks like the project on Plum Street is in the first stages of foreclosure. The owner, Francisco Mendiola, was hit with a notice of default Feb. 19, according to public property records. I tried calling Mendiola on Tuesday but none of the numbers I could find for him were in service. It doesn't appear to be the first major project that's run into trouble for Mendiola. He and another architect, Jess Gonzales, led a development team that built a lavish manor called "Essencia" on La Jolla's Hillside Drive, listing it in 2006 for $21.5 million. San Diego Magazine gushed over the six-bedroom, seven-bath, spec house -- meaning the developers built it with no particular buyer in mind -- in a spread in 2007. That wasn't the only time the house made headlines. In a 2008 article, the Union-Tribune's Roger Showley revealed that the home -- by then a "beautiful white elephant" -- had fallen into foreclosure. [T]he ultramodern house has ... a wine cellar, home theater, saltwater vanishing-edge pool, high-tech wiring and the curvilinear architectural form that Concepto Design Group specializes in. ... Proud of their work, the partners rejected several offers they considered too low and held out for the gold. That turned out to be a major blunder.

U.S. Taxpayers on the Hook for $5 Trillion of Fannie, Freddie Debt - (www.dailybail.com) House Financial Services Chairman Barney Frank caused a bit of an uproar Friday when he suggested the U.S. government does not guarantee the debts of Fannie Mae and Freddie Mac. Rep. Frank later recanted and backed a Treasury Department statement reassuring investors that, yes, Fannie and Freddie Mae debt is guaranteed by the U.S. government. "Going forward," he said in a statement, we "will make sure that there are no implicit guarantees, hints, suggestions, or winks and nods...we will be explicit about what is and is not an obligation of the federal government." But after years of winks and nods, there's no doubt that Fannie and Freddie now enjoy an explicit guarantee, according to most observers. The U.S. government placed Fannie Mae and Freddie Mac in conservatorship in September 2008: "This means that the U.S. Taxpayer now stands behind $5 trillion of GSE debt," according to the Congressional Research Service. The problem is that $5 trillion of so-called agency paper is not treated as if it is a debt of Uncle Sam for accounting purposes, says Richard Suttmeier, chief market strategist at Niagara International Capital and ValueEngine.com. "Get it on the balance sheet - that's where it belongs," Suttmeier says. "Add it to the $14.2 trillion in [federal] debt and let's move on."

OTHER STORIES:

The Real-Time Indicator That Says The Consumer Is Already Rolling Over - (www.businessinsider.com)

Eurozone could risk 'sovereign debt explosion' - (www.telegraph.co.uk)

Financial Chaos Will Last Many Years - (www.newsmax.com)

Are Shipping Numbers Masking A Stealth Commodities Selloff? - (www.businessinsider.com)

The Dark Side of House Subsidies - (www.nytimes.com)

Banks captured government, robbing taxpayers to pay private housing debts - (www.doctorhousingbubble.com)

The myth of mortgage interest deduction - (www.articles.moneycentral.msn.com)

Mortgage Principal Writedown Won't Save Housing - (www.cnbc.com)

Rising interest rates and balloon payments can make loan modifications unacceptable - (www.sun-sentinel.com)

Remodeling? It's a waste of money - (www.articles.moneycentral.msn.com)

Are unemployment benefits no longer temporary? - (www.washingtonpost.com)

The Trade Deficit and Chronic Unemployment - (www.beforeitsnews.com)

Blame it on the housing bubble - (www.guardian.co.uk)

Georgia banks shedding 'hot money' - (www.americanchronicle.com)

Buyers: Does it matter if your agent can't afford to buy? - (www.sfgate.com)
The two sides on the debate over spending - (www.themessthatgreenspanmade.blogspot.com)

UC Tuition Hikes and Public Employee Pensions - (www.online.wsj.com)

U. of Illinois Salary Guide - (www.data.illinimedia.com)