Sunday November 13 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

MF Global Files for Bankruptcy Protection - (www.bloomberg.com) MF Global Holdings Ltd., the holding company for the broker-dealer run by former New Jersey governor and Goldman Sachs Group Inc. co-chairman Jon Corzine, filed for bankruptcy after making bets on European sovereign debt. The New York-based firm listed total debt of $39.7 billion and assets of $41 billion in Chapter 11 papers filed today in U.S. Bankruptcy Court in Manhattan. Its finance unit, MF Global Finance USA Inc., also filed, with debt of as much as $50 million and assets of as much as $500 million. “The boards of directors of both entities authorized the filing of the Chapter 11 petition in order to protect their assets,” the companies said today in a statement.

Jon Corzine's Overconfidence and MF Global Demise - (www.cnbc.com) Jon Corzine may not be the wild risk taking trader that some media accounts portray, but the downfall of MF Global can be laid squarely upon his shoulders. Corzine reshaped the trading operations of MF Global, hiring thousands of new employees while laying off long-termers. And he made the transformation in a short period of time. The model he was trying to impose, very clearly, was Goldman Sachs of the 1990 and early 2000s. And during that time traders often operated as if the firm was just a big hedge fund. But Corzine’s weakness was not an undue appetite for risk. He wasn’t a guy who looked for the riskiest tranches of debt or got his thrill with long odds. His weakness seems to be something more like overconfidence. In his head he holds something that is almost the opposite of the efficient capital market hypothesis. It’s what one former co-worker called the “efficient Corzine hypothesis.”

Call MF Global' s CEO Jon Corzine the $325 Million ... - CNBC.com - (www.cnbc.com) We all know about MF Global's troubles . We all know about CEO Jon Corzine's struggles since taking the helm. Less well known is that back in August, the commodities giant sold $325 million of five-year unsecured bonds that included a provision that would offer higher interest rates if Mr. Corzine left the firm for a government job. Given the lackluster share performance since Mr. Corzine took over, such covenants probably seem odd, but at the time of the debt sale, it was considered crucial to closing the transaction. "Corzine was a huge selling point," said one of the senior bankers at Jefferies who brought the offering public. "It went from a deal that was not getting done, to a deal that got done." So what happens if shareholders give Mr. Corzine's the boot? Well, according to that banker, an involuntary departure would not trigger the so-called Corzine covenants.

Beacon Power bankrupt; had U.S. backing like Solyndra - (www.reuters.com) Beacon Power Corp filed for bankruptcy on Sunday just a year after the energy storage company received a $43 million loan guarantee from a controversial U.S. Department of Energy program. The move comes about two months after solar panel maker Solyndra also filed for bankruptcy, setting off criticism of the government loan program. The department guaranteed $535 million in loans to Solyndra, and Congress is investigating whether political influence played a role. Beacon Power used the government-guaranteed-loan to build a 20-megawatt flywheel energy storage plant in Stephentown, New York. The company said in documents filed with Delaware's bankruptcy court that it had $72 million in assets and $47 million in debts.

Draghi in Battle Mode on Day One as Debt Crisis Torments ECB - (www.bloomberg.com) Jean-Claude Trichet had almost four years to settle into the role of European Central Bank president before being thrown into crisis-fighting mode. Mario Draghi goes to battle on day one. Draghi, who succeeds Trichet tomorrow, becomes chief guardian of the euro with its 17-nation economy facing the risk of recession, a victim of the two-year-old sovereign debt crisis politicians are struggling to fix. As ECB president, he will be the second most powerful central banker in the world after Federal Reserve Chairman Ben S. Bernanke, and a key figure in the struggle to restore investor confidence in Europe’s monetary union. “This will be a baptism of fire for Draghi,” said Nick Kounis, head of macro research at ABN Amro Bank NV in Amsterdam. “It is challenging to be ECB president in any environment, let alone in the midst of a serious crisis.”

OTHER STORIES:

Japan intervenes to tame yen ahead of G20 - (www.reuters.com)

Draghi Takes ECB Helm in Battle Mode as Debt Crisis Torments Policy Makers - (www.bloomberg.com)

China Won’t Get Extra Incentives for EFSF Help, Guaino Says - (www.bloomberg.com)

Draghi over-interpreted on bond buys, says Trichet - (www.reuters.com

Europe Seeking Crisis-Fighting Funds Faces Resistance Before Cannes G-20 - (www.bloomberg.com)

China to ‘Firmly’ Maintain Property Curbs: Wen - (www.bloomberg.com)

Berlusconi Defiant as EU’s Focus Shifts to Italy - (www.bloomberg.com)

Euro area growth to slow sharply; debt crisis key: OECD - (www.reuters.com)

Eurozone inflation remains above target at 3 percent in October - (www.washingtonpost.com

Chicago Purchasing Managers Index Dips - (www.bloomberg.com)

MF Global Faces Pivotal Days as Firm Mulls Sale - (www.bloomberg.com)

Commentary says China not a "savior" for Europe - (www.reuters.com)

Fukushima Plant Released Record Amount of Radiation Into Sea - (www.bloomberg.com)

Saturday November 12 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Italy's Borrowing Costs Rise Amid Uncertainty About Rescue - (www.nytimes.com) Italy’s borrowing costs rose sharply at an auction of government debt Friday, raising fears that the luster was already coming off the euro-zone bailout announced less than two days earlier. European Union and International Monetary Fund officials hoped that the deal announced early Thursday would soothe market anxiety by easing the terms of Greece’s debt repayments enough to avoid default, as well as by building a war chest for safeguarding the larger Italian and Spanish economies against possible contagion. Italy was supposed to help its own case this week by producing concrete evidence that it was streamlining its economy and cutting public debt.

Europe's rescue euphoria threatened as Portugal enters 'Grecian vortex' - (www.telegraph.co.uk) Monetary contraction in Portugal has intensified at an alarming pace and is mimicking the pattern seen in Greece before its economy spiralled out of control, raising concerns that the EU summit deal may soon washed over by fast-moving events. Data released by the European Central Bank show that real M1 deposits in Portugal have fallen at an annualised rate of 21pc over the past six months, buckling violently in September. "Portugal appears to have entered a Grecian vortex and monetary trends have deteriorated sharply in Spain, with a decline of 8.4pc," said Simon Ward, from Henderson Global Investors. Mr Ward said the ECB must cut interest rates "immediately" and launch a full-scale blitz of quantitative easing of up to 10pc of eurozone GDP. The M1 data - cash and current accounts - is watched by experts as a leading indicator for the economy six months to a year ahead. It has been an accurate warning signal for each stage of the crisis since 2007.

Bank's collapse in Europe points to global risks - (www.nytimes.com) As Europe’s debt crisis has deepened, a recurring question is how much risk it poses to the United States economy, and especially American banks. While American financial institutions have sought to limit any damage by reducing their loans and thus lowering their direct exposure to Europe’s problems, the recent rescue of the Belgian-French bank Dexia shows that there are indirect exposures that are less known and understood — and potentially worrisome. Dexia’s problems are not entirely caused by Europe’s debt crisis, but some issues in its case are a matter of broader debate. Among them are how much of a bailout banks should get, and the size of the losses they should take on loans that governments cannot repay.

Marine Scott Olsen Will Undergo Brain Surgery, And OccupyMARINES Are Making Demands - (www.businessinsider.com) After being struck by a projectile at Tuesday's Occupy Oakland evictions, Iraq war veteran Scott Olsen is lucid and awaiting brain surgery. The Guardian reports Olsen "responded with a very large smile" when his parents arrived from Wisconsin to visit him at the hospital. Medical officials say Olsen's able to write and hear, but is having trouble speaking. Meanwhile, Oakland's Mayor Jean Quan who left town after authorizing the raid, has separated herself from the police. Quan said, "I only asked the chief to do one thing: to do it when it was the safest for both the police and the demonstrators."

Greek Credit Default Swaps Are A Sham And It's No Surprise - (www.businessinsider.com) At least it's not a surprise to any financial professional that has paid attention to the false reassurances that the International Swaps and Derivatives Association, Inc. (ISDA) has given over the years to naive participants in the credit derivatives market. "Customers" that accepted ISDA documentation when buying credit default protection on Greece are now discovering that ISDA defends the position that a 50% discount on Greek debt is "voluntary" and therefore not a credit event for credit default swap payment purposes according to its documents. This makes the ISDA "standard" credit default swap (CDS) ineffective as a hedge for the widened spreads (reduced price) of Greek debt, and it makes it ineffective as a protection against default using reasonable standards of impairment to define default. ISDA can defend ambiguous definitions so that payment on the credit default swap is virtually impossible

OTHER STORIES:

Americans ‘Hooked on Government’ as Record Number Get Benefits - (www.businessweek.com)

Why the summit to end all summits solves nothing - (www.telegraph.co.uk)

Unemployment claims fall (a little) - (money.cnn.com)

US Economy Shows Modest Growth - (www.nytimes.com)

Euro deal leaves much to do on rescue fund, Greek debt - (www.reuters.com)

EU crisis talks in limbo after crucial summit is cancelled - (www.telegraph.co.uk)

Friday November 11 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Americans ‘Hooked on Government’ as Record Number Get Benefits - (www.bloomberg.com) Political dysfunction is often blamed for Congress’s inability to curb the U.S. budget deficit. An even bigger obstacle may be the American public. A record 49 percent of Americans live in a household where someone receives at least one type of government benefit, according to the U.S. Census Bureau. And 63 percent of all federal spending this year will consist of checks written to individuals for which the government receives currently no services, the White House budget office estimates. That’s up from 46 percent in 1975 and 18 percent in 1940. Those figures will climb in coming years. The 75 million baby boomers have only begun their long march into retirement, while President Barack Obama’s health-care overhaul will extend insurance coverage to more than 30 million additional people.

Argentina Tightens Foreign Exchange Rules as Capital Flight Accelerates - (www.bloomberg.com) Argentina stepped up its efforts to stem capital flight and shore up the peso by tightening restrictions on foreign-exchange purchases in South America’s second-biggest economy. Investors purchasing companies or real estate will be required to deposit the full amount of the sale in Argentina, according to a statement sent by the central bank yesterday. In addition, individuals purchasing more than $250,000 per calendar year will need to demonstrate the origin of the funds. The measures target the unregulated foreign exchange market, which investors and companies use to skirt currency limits. The move came one day after President Cristina Fernandez de Kirchner, who won re-election on Oct. 23, issued a decree requiring energy and mining companies to keep all of their export revenue in the country as capital flight accelerates to $3 billion per month, according to estimates by Banco de la Ciudad de Buenos Aires.

MF Global Draws Down on Credit Lines - (www.bloomberg.com) MF Global Holdings Ltd. (MF), the futures broker run by Jon Corzine, drew down on its revolving credit lines this week as the firm reported its biggest quarterly loss and Moody’s Investors Service and Fitch Ratings cut its ratings to junk. The company tapped the entirety of two bank lines, said three people with knowledge of the matter, speaking on condition of anonymity because the move wasn’t disclosed. New York-based MF Global said in an Oct. 25 investor presentation that it had $1.3 billion in unused credit facilities, without giving a date for the tally. MF Global has declined about 65 percent this week and its bonds issued in August are trading at distressed levels as the firm seeks a buyer for its futures brokerage to raise capital. In its second downgrade this week of the firm, Moody’s said “weak core profitability” drove the broker to increase risk buying European sovereign debt.

Europe Looks to IMF, China for Rescue-Fund Cash - (www.bloomberg.com) European officials are studying the idea of an International Monetary Fund channel for money for their enlarged rescue fund, as China said it needed more detail on any potential plan before deciding whether to contribute. The European Financial Stability Facility may explore setting up a special purpose vehicle with the IMF, Klaus Regling, the EFSF’s chief executive officer, said at a briefing in Beijing today. Separately, Chinese Vice Finance Minister Zhu Guangyao said his government wants to hear about particulars such as the extent of loan guarantees to countries including Italy, and how the senior-debt portion would be structured. European leaders aim to tap China, holder of the world’s largest foreign-exchange reserves, for help after moving yesterday to contain the crisis by writing down Greek debt and targeting an expansion of the EFSF to about $1.4 trillion. China may seek to increase its influence at the IMF, a global lender of last resort, as a quid pro quo for contributing, said Tomo Kinoshita, an economist at Nomura Holdings Inc.

Whirlpool to Eliminate 5,000 Jobs, Lowers Forecast as Charge Is Increased - (www.bloomberg.com) Whirlpool Corp. (WHR), the world’s largest maker of appliances, sank the most since 2008 after saying it will cut 5,000 jobs and lowering an annual profit forecast by as much as 36 percent as consumers rein in spending. The shares dropped 12 percent to $53.14 at 10:19 a.m. in New York after earlier touching $52.03 for the largest intraday decline since Oct. 28, 2008. The stock had declined 32 percent this year before today.

OTHER STORIES:

Spanish Unemployment Rises to Highest in 15 Years, Undermining Recovery - (www.bloomberg.com)

Some see China’s future in debt-ridden city of Wenzhou - (www.washingtonpost.com)

Bank of Thailand Lowers Economic Forecast as Floods Increase Rate-Cut Odds - (www.bloomberg.com)

Consumer Spending in U.S. Rises 0.6% in September - (www.bloomberg.com)

Inside Deutsche Bank Debate on U.S. Sliding Into Japan Malaise - (www.bloomberg.com)

Greece Will Leave Euro Even With Pact: Rogoff - (www.bloomberg.com)

Calling Bankers’ Bluff, Merkel Got Europe a Debt Plan - (www.nytimes.com)

Thursday November 10 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

EU Banks Warn of Credit Drought Amid Push to Raise Capital - (www.bloomberg.com) A top lobbyist for France’s largest bank says European lawmakers will have only themselves to blame if pressure to bolster capital too quickly results in more Boeing Co. planes at the expense of European rival Airbus SAS. “In the case of the French banks, activities where they were leaders like aircraft leasing or shipping financing will be partly taken over by U.S. or Chinese banks,” Dominique Graber, co-head of BNP Paribas SA’s public and prudential affairs, told the European parliament’s committee on economic and monetary affairs in Brussels on Oct. 11. “One will also not be surprised if later on more Boeings than Airbuses get funded.” European banks say they have to cut assets to help satisfy a government push to boost capital faster than planned to insulate them against the sovereign debt crisis. That may trigger a credit crunch for companies and consumers throughout the 17-nation euro zone, helping to push its economy into recession, say Citigroup Inc. and Deutsche Bank AG analysts.

Europe Struggles for Crisis Remedy - (www.bloomberg.com) European leaders “have risen to the challenge,” German Chancellor Angela Merkel said. French President Nicolas Sarkozy proclaimed their July 21 summit a “historic turning point” and Luxembourg Prime Minister Jean- Claude Juncker called it the “final package, of course,” to extinguish the debt inferno. Then they went on vacation. Before they returned to work, the deal fizzled. The euro’s stewards are back in Brussels today for an emergency summit struggling to heed the world’s calls to once and for all eradicate what U.S. Treasury Secretary Timothy F. Geithner called the “catastrophic risk” of the debt crisis. A potential Greek default threatens shockwaves that could engulf Italy and France, jolt the banking system and spell havoc for the global economy. “Buck up, this crisis is going to be with us still for a while,” Barry Eichengreen, an economics professor at the University of California at Berkeley, said on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt. “I fear they’re not going to take the kind of steps to resolve it.”

Why Politicians Dont Want to Touch the Housing Crisis - (www.theatlantic.com) Barack Obama would have you believe that Mitt Romney is a heartless zillionaire who doesn't think the government should do anything about Americans losing their homes to foreclosure. Romney would have you believe that the foreclosure problem is yet more evidence of Obama's failure to heal the economy. Meanwhile, when the GOP candidates were asked about housing in last week's debate, they all basically dodged the question. And Obama's plan, announced Monday in Las Vegas, is being criticized as too little, too late, by some Democrats. The housing issue, it seems, is a political hot potato -- one every candidate can't wait to toss to the next guy before it burns him up. It's one of those issues that confounds partisan equations and eludes easy messaging, because voters basically want to hear politicians say two contradictory things. They want the government to act to stem the tide of foreclosures. But they don't want their money going to help those they see as irresponsible.

Living 'La Vita Bella': Italians Leave Fears of Debt Crisis to Others - (www.spiegel.de) "We currently pay more in interest than we spend on our schools," says Matteo Renzi, who makes the Palazzo Vecchio his home as the mayor of Florence. Renzi, only 36, was voted into office on the strength of his reputation as a "bulldozer" -- and his pledge to finally clean house in Florence. He is the youthful face of his party, the center-left Democratic Party (PD), a mayor who wears jeans and has Apple stickers on his oak desk. "Our fathers walked into the restaurant, and we inherited the bill." The bill -- at least for his city of Florence -- currently amounts to €518 million. Many see Florence as the embodiment of the euro-zone nightmare, with massive government debt, close to zero growth and a government led by a man who has been charged with tax evasion. No other European country, except Greece, is as deeply indebted as Italy. The country's debt level has reached 120.3 percent of its gross domestic product (GDP). At the same time, Italy has one of the lowest birth rates in the Western world, which means that there will be fewer and fewer people to pay off its debts in the future.

Occupy DC Emphasizes Corporate Money in Politics - (www.opensecrets.org) Though the locales and agendas of the Occupy movement have widened, its origins in the financial district of New York City suggest a central theme: the undue influence of Wall Street corporations. To influence Washington, corporations have to spend money. And Occupy protesters say, what better place to organize against corporate money's sway over Washington lawmakers than on K Street, home to many of Washington's lobbyists, and, as of October 7, the Occupy DC organization. "On Wall Street, it's about banks, but those decisions on who to bail out go through here," Kelly, a 25-year-old Virginian, told OpenSecrets Blog. (He did not give his last name to avoid negative consequences from prospective employers.)

OTHER STORIES:

EU Talks With Banks on Greek Bondholder Losses Are Said to Be Deadlocked - (www.bloomberg.com)

German Bundestag passes EFSF motion with large majority - (www.reuters.com)

Conclusive deal on euro zone crisis looks elusive - (www.reuters.com)

Merkel Puts Rescue Fund to German Vote - (www.bloomberg.com)

Latin America’s Most Volatile Currency Erodes Cetes Demand: Mexico Credit - (www.bloomberg.com)

Italy Sells 10.5 Billion Euros of Debt as Borrowing Costs Rise in Auction - (www.bloomberg.com)

China’s Wen Fuels Easing Speculation - (www.bloomberg.com)

China Boom-to-Bust Concerns Revealed in Agricultural Bank Slide Since IPO - (www.bloomberg.com)

Berlusconi’s Fraying Coalition Fuels Demands for Early Elections in Italy - (www.bloomberg.com)

Italy keeps Europe on tenterhooks over reform - (www.reuters.com)

Turkey More Than Doubles Banks’ Overnight Borrowing Cost to Curb Inflation - (www.bloomberg.com)

Berlusconi reaches deal on pensions - (finance.yahoo.com)

Orders for U.S. Goods Advance, Beat Forecasts - (www.bloomberg.com)

Sales of New U.S. Homes Hits Five-Month High - (www.bloomberg.com)

Fed considers its stimulus options - (www.washingtonpost.com)

Mortgage applications bounced last week: MBA - (www.reuters.com)

Wednesday November 9 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

US States Are Facing Total Debt of Over $4 Trillion - (www.reuters.com) The total of U.S. state debt, including pension liabilities, could surpass $4 trillion, with California owing the most and Vermont owing the least, a new analysis says. The nonprofit State Budget Solutions combined states' major debt and future liabilities, primarily for pensions and employee healthcare, unemployment insurance loans, outstanding bonds and projected fiscal 2011 budget gaps. It found that in total, states are in debt for $4.2 trillion. The group, which follows state fiscal conditions and advocates for limited spending and taxes, said the deficit calculations that states make "do not offer a full picture of the states' liabilities and can rely on budget gimmicks and accounting games to hide the extent of the deficit." The housing bust, financial crisis and economic recession caused states' tax revenue to plunge, and huge holes have emerged in their budgets over the last few years. Because all states except Vermont must end their fiscal years with balanced budgets, states have scrambled to cut spending, hike taxes, borrow and turn to the federal government for help.

Bankers fear political moves will kill off CDS - (www.ft.com) It has been blamed by politicians for causing the eurozone debt crisis and attacked as the favoured asset of “evil speculators”. Now, politicians are seeking to take their revenge: not just with the recent introduction of bans on some trading of credit default swaps but also in their attempts to ensure that any haircut on Greek government bonds does not trigger a credit event. Combined, these two events could spell the end of the credit default swaps market, say bankers. Sovereign CDS – used to protect creditors against defaults – have been bought by hedge funds and other investors as protection against possible default. But concerns over this market are rising following the latest plans to hit holders of Greek debt with punitive haircuts of 60 per cent and the European Union wide ban on naked trading, or the buying or selling the assets without owning underlying bonds.

Banks Flooded With Cash They Can’t Profitably Use - (www.nytimes.com) Bankers have an odd-sounding problem these days: they are awash in cash. Droves of consumers and businesses unnerved by the lurching markets have been taking their money out of risky investments and socking it away in bank accounts, where it does little to stimulate the economy. Though financial institutions are not yet turning away customers at the door, they are trying to discourage some depositors from parking that cash with them. With fewer attractive lending and investment options for that money, it is harder for the banks to turn it around for a healthy profit. In August, Bank of New York Mellon warned that it would impose a 0.13 percentage point fee on the deposits of certain clients who were moving huge piles of cash in and out of their accounts.

Shanghai Owners Protest as Developers Slash Prices - (www.nytimes.com) Property owners in Shanghai and other big Chinese cities are protesting as measures to cool the once-overheated real estate market prompt developers to slash prices. The trend suggests authorities are making progress with a years-long effort to cool prices that had surged beyond affordable levels for many families. But some worry the market could collapse — angering many middle class owners who put their savings into property, expecting prices only to rise. Upset home buyers gathered outside a developers' sales office in downtown Shanghai over the weekend demanding refunds after learning of the discounts now being offered, said Tang Minzhi, a spokeswoman for China Overseas Property (Group). Protesters also besieged offices of at least two other property developers in the city's eastern suburbs, some holding up signs demanding refunds. State media on Tuesday reported similar gatherings in other cities as property companies have begun trying to trim inventories of unsold homes by offering discounts of up to 40 percent from recent prices.

Trust In Government Falls To All Time Low And Everyone Hates Congress, But Obama Sees Slight Poll Bump - (www.businessinsider.com) Americans' approval of Congress dropped to an all-time low in a new poll from CBS News and The New York Times. Just nine percent of those polled approve of the way lawmakers in Washington are doing their jobs, compared to 46 percent for President Barack Obama. Obama's approval rating is up from 43 percent in September, while his disapproval rating has fallen from 50 percent to 46 percent. American's trust in their government reached a new low — even below Watergate levels — with just 10 percent of those polled believing government will do what is right "all" or "most of the time." Only 20 percent of Americans believe congressional Republicans have a clear plan for creating jobs, just over half the number who believe Obama has one.

OTHER STORIES:

Eurozone crisis fund ‘may be weeks away’ - (www.ft.com)

Hard line adopted on Greek debt loss - (www.ft.com)

After Talks, Aides Try to Iron Out Euro Rescue - (www.nytimes.com)

Thai Floodwaters Threaten to Overwhelm City’s Defenses as Levee Work Slows- (www.bloomberg.com)

India Increases Key Rate, Signals End of Tightening Cycle as Growth Slows - (www.bloomberg.com)

Italian Consumer Confidence Drops to Three-Year Low Amid Sovereign Crisis - (www.bloomberg.com)

U.S. Consumer Confidence Unexpectedly Drops to Two-Year Low - (www.bloomberg.com)

Home prices flat in August: S&P - (www.reuters.com)

U.S. throws lifeline to underwater homeowners - (www.reuters.com)

Fed could target housing to help economy: Dudley - (www.reuters.com)

Fisher: Fed is giving Congress an excuse to do nothing - (www.usatoday.com)

Fed Official Backs New Growth Push - (online.wsj.com)

Corzine’s MF Global Drops by Most Since 2008 - (www.bloomberg.com)

Tuesday November 8 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

New York Faces Pension Cost Bulge From Budget-Paring Incentives - (www.bloomberg.com) New York state and more than 100 local governments face at least $600 million in extra pension costs after thousands of workers grabbed one-time incentives meant to shave former Governor David Paterson’s last budget. About 12,000 public employees seeking to retire early fueled a pension-application record in 2010, according to a report from state Comptroller Thomas DiNapoli. The state processed 30,772 requests for retirement benefits that year, about 50 percent more than average, according to the report. Lawmakers passed the plan in May 2010, as Paterson, a Democrat, estimated fiscal 2010 and 2011 budget savings of $320 million. Combined, the extra cost to state and local governments that offered the inducements will be almost $650 million, and more if municipalities spread out their payments to the New York State Common Retirement Fund, according to officials in Albany. About $50 million of the added expense will be in interest.

U.S. Plan Expands to Underwater Borrowers - (www.bloomberg.com) U.S. regulators will let qualified homeowners refinance mortgages regardless of how much their houses have dropped in value, expanding a government effort to chip away at one of the economy’s most unyielding problems. The Federal Housing Finance Agency will also enhance the Home Affordable Refinance Program by eliminating some fees, reducing others and waiving some risk for lenders, Edward J. DeMarco, the agency’s acting director, said today. HARP, which was introduced in 2009 to help homeowners get lower interest rates, was initially limited to borrowers whose mortgages were no greater than 125 percent of the value of their homes. To qualify, borrowers must be making on-time payments on loans owned or guaranteed by Fannie Mae or Freddie Mac, the mortgage-finance firms taken into U.S. conservatorship in 2008.

Swiss Banks Said Ready to Pay Billions to U.S. - (www.bloomberg.com) Swiss banks will probably settle a sweeping U.S. probe of offshore tax evasion by paying billions of dollars and handing over names of thousands of Americans who have secret accounts, according to two people familiar with the matter. U.S. and Swiss officials are concluding negotiations on a civil settlement amid U.S. criminal probes of 11 financial institutions, including Credit Suisse Group AG (CSGN), suspected of helping American clients hide money from the Internal Revenue Service, according to five people with knowledge of the talks who declined to speak publicly because they are confidential. Switzerland, the biggest haven for offshore wealth, wants an end to new U.S. probes while preserving its decades-old tradition of bank secrecy, the people said. The U.S. seeks data on Americans who have dodged U.S. taxes and a pledge by Swiss banks to stop helping such clients, according to the people. The Swiss reached accords this year with Germany and the U.K. on untaxed assets.

Irish officials' 2005 warnings on property market were edited to be weaker - (www.irishtimes.com) A NUMBER of officials in the Department of Finance consistently warned about an over-heating property market during 2005 but their warnings were rejected by more senior officials. Documents seen by The Irish Times disclose that draft speeches and parliamentary answers reflected the concern of some commentators about the introduction of 100 per cent mortgages and about house price inflation. But these were edited by more senior officials to reflect a more benign view that the market would experience a “soft landing”. The Nyberg commission, which examined the causes of the banking crisis, also noted that some officials in the Department of Finance had raised concerns but their views were ignored. Documents show that early drafts of replies to dozens of parliamentary questions, as well as ministerial speeches, on over-heating in the housing sector as well as 100 per cent mortgages included material that forecast an outcome other than a soft landing.

Millions Cut Off Without Unemployment Extension - (online.wsj.com) 2,153,700: The number of jobless people currently receiving unemployment benefits who will lose them by Feb. 11, 2012 if an extension isn’t enacted by Congress by the end of the year. While Republicans and Democrats continue to spar over the best way to inspire job creation, millions of recipients of unemployment benefits may get caught in the cross-fire. In 2010, Congress approved an addition of up to 73 weeks of unemployment benefits backed by the federal government to the traditional 26 offered by the states. The duration of benefits varies from state-to-state, as regions with lower local unemployment rates get less than the full 73 weeks. The extension expires at the end of the year and President Barack Obama‘s jobs plan — shot down in the Senate this week — seeks to keep it going through 2012. The proposal doesn’t extend the maximum beyond 99 weeks, but it would allow those unemployed beyond 26 weeks to continue accessing the current program next year.

OTHER STORIES:

Merkel Seeks German Backing to Leverage EFSF as Banks Squabble Over Losses - (www.bloomberg.com)

EU Revamping Plans to Contain Debt Crisis- (www.bloomberg.com)

Greek Bond Swap Accord Hinges on Collateral to Avoid Default: Euro Credit- (www.bloomberg.com)

Hedge Funds Face Investor Pruning - (online.wsj.com)

EU Manufacturing, Services Output Shrinks - (www.bloomberg.com)

China flash PMI rebounds to ease hard-landing fears - (www.reuters.com)

Fed’s Dudley Calls for Breaking ‘Vicious Cycle’ in Housing - (www.bloomberg.com)