Thursday February 9 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

US Postal Service 'Unsustainable' Situation, Leader Says - (www.cnbc.com) U.S. Postal Service officials understand it needs major cutbacks to survive and are willing to work with Congress to do whatever's necessary, including ending Saturday service, Postmaster General Patrick Donahoe told CNBC Friday. “The situation we have is unsustainable,” Donahoe said in reaction to comments earlier this week from Rep. Darrell Issa, who said more than 200,000 postal jobs need to go. In fact, the USPS itself has put forward a broad plan that includes terminating Saturday mail delivery, closing more than 3,600 facilities across the country, and addressing the $5.5 billion hole in the service's pension plan and the $5.1 billion operating deficit from 2011. Most recently, the service reached an impasse with two unions that have been working without a contract since November. The USPS has sought authority to lay off workers and reduce benefits.

Why Foreclosure Crisis Will Last Longer Than Expected - (www.cnbc.com) The number of new foreclosures in 2011 dropped nearly 40 percent, according to year-end numbers just released by Lender Processing Services; there is, however, little cause for celebration. The fall is largely due to moratoria and process reviews stemming from the so-called “robo-signing” foreclosure paperwork scandal. Mortgage delinquency rates were largely unchanged from last year, which means all that distress will be pushed forward to 2012 and beyond. To give you an idea of just how much the “robo” scandal is toying with the numbers, LPS compared states that require foreclosures to go through the courts versus states that don’t (judicial versus non-judicial) and found the following:

- 50 percent of loans in foreclosure in judicial states have not made a payment in two years, as opposed to 28 percent in non-judicial states.

- Foreclosure sale rates in non-judicial states are about four times those in judicial states.

Greek Debt Wrangle May Pull Default Trigger - (www.bloomberg.com) Opposition to payouts on Greek credit-default swaps from European Union policy makers is softening as disputes over a voluntary debt exchange threaten to push the nation into default. Any agreement between the Greek government and the Washington-based Institute of International Finance on debt write-downs will only bind 50 percent of investors in the 206 billion euros ($270 billion) of notes being negotiated, Barclays Capital estimates. Hedge funds may resist a deal, seeking to get paid in full or compensated from insurance contracts. Greece must repay 14.5 billion euros of bonds in March and an agreement that triggers as much as $3.2 billion of default insurance may be necessary unless all bondholders approve, said Marco Buti, head of the European Commission’s economics division. EU Economic and Monetary Affairs Commissioner Olli Rehn said today in Davos that a deal is “very close.”

Banks Face Bind Over Cash Pile - (online.wsj.com) After receiving nearly half a trillion euros in cheap loans from the European Central Bank last month, the Continent's banks face a dilemma: to invest the money in lucrative but potentially risky government bonds or hoard the cash at a loss. The choice reflects the uncertainty surrounding Europe's financial system at a time when dark clouds continue to hover over the euro-zone economy and its common currency. Regardless of whether banks use the money to buy bonds or simply stash it at the central bank for safekeeping, consumers and businesses are unlikely to see much of the funds pumped back into the economy in the form of loans. The ECB in December extended about €489 billion ($640.88 billion) in three-year loans to hundreds of banks that operate in the euro zone. The loan program was primarily designed to fend off a potential cash crunch. European banks face hundreds of billions of euros of debt coming due this year and, with funding markets shut to all but the strongest institutions, some banks faced the prospect of serious liquidity problems.

FITCH GOES ON RAMPAGE: CUTS SPAIN, ITALY, BELGIUM, CYPRUS, AND SLOVENIA - (www.businessinsider.com) Boom!!! Fitch just cut the long-term issuer ratings of 5 EU sovereigns: Belgium: AA+ to AA.. Spain: AA- to A… Italy: A+ to A-… Cyprus: BBB to BBB-… Slovenia: AA- to A… It affirmed Ireland's BBB+ rating with a negative outlook. While Fitch says that it supports EU leaders actions to address the crisis so far, a lot more has to happen before these countries are out of trouble:

OTHER STORIES:

Greece's Outlook Still Grim - (www.cnbc.com)

EU, IMF press Greece on reforms before aid flows - (www.reuters.com)

Central Banks Diversify Their Arsenals - (online.wsj.com)

Spanish Unemployment Rises to 22.9% - (www.bloomberg.com)

Monti Takes on Italy Bureaucracy in Policy Push - (www.bloomberg.com)

Japan prices fall, mild deflation to persist - (www.reuters.com)

China Home Prices Must Fall 30% to Reach ‘Reasonable’ Level, Lawmaker Says - (www.bloomberg.com)

Wednesday February 8 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Banks Hoarding ECB Cash May Double Company Defaults - (www.bloomberg.com) Corporate defaults may almost double in Europe as companies struggle to refinance debt and banks hoard cash borrowed from the European Central Bank or use it to buy government bonds. Europe’s default rate may soar to 8.4 percent or more, from 4.8 percent at the end of 2011 as the recession bites and company financing dries up, according to Standard & Poor’s. Petroplus Holdings AG (PPHN) became the latest victim of the tough stance banks are adopting when the region’s biggest independent oil refiner said this week it will file for insolvency after losing access to $2.1 billion of credit lines. “It’s very challenging for anyone to raise money from lenders right now,” said Andrew Cleland-Bogle, a Frankfurt- based director at corporate finance specialist DC Advisory Partners. “Combine that with increased bank capital requirements and you can see that although banks are getting money they’re very selective when it comes to lending it. 2012 is going to be a very, very tough year.”

Principal reductions fail to reduce future default rates - (www.ochousingnews.com) Reducing mortgage balances is a risky idea that hasn’t been shown to keep borrowers who owe more than their property’s worth in their homes, according to Credit Suisse Group AG. Of the 11 million of “underwater” homeowners, about 6.5 million have never missed a payment and 2 million more are making on-time payments after a delinquency, said Dale Westhoff, the bank’s global head of structured products research. Let’s pause for a moment and contemplate those numbers. If only 6.5 million out of 11 million underwater loan owners have not missed a payment, then 4.5 million have. That means 41% of underwater loan owners are or have been delinquent on their mortgage. Wow! That deserves its own headline. Widespread principal reductions may drive defaults “much, much higher” as borrowers seek the aid, he said.

=Private Equity is a heavily Subsidized Industry - (www.bloomberg.com) The real reason that private equity executives need to be full taxpayers -- paying 35 percent of their income in federal tax as opposed to the 15 percent capital-gains rate they have enjoyed for years -- is not because, generally speaking, they make so much money. Nor is it because the return they get on what personal capital they risk is dwarfed by the profits they get on their investors’ capital. Nor is it so they will pay the same tax rates as their secretaries (although this is a good reason, too). No, the real reason the tax loophole for private equity mavens must be closed once and for all is that American taxpayers subsidize the private-equity industry -- and its outsize paychecks -- and simple fairness demands that they don’t also get an additional break in the form of lower tax rates.

A Government Overwhelmed by Corporate Money - (www.robertreich.org) According to the New York Times, Apple Computer employs 43,000 people in the United States but contracts with over 700,000 workers abroad. It makes iPhones in China not only because of low wages there but also the ease and speed with which its Chinese contractor can mobilize their workers – from company dormitories at almost any hour of the day or night. An Apple executive says “We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.” He might have added “and showing a big enough profits to continually increase our share price.” Most executives of American companies agree. If they can make it best and cheapest in China, or anywhere else, that’s where it will be made. Don’t blame them. That’s what they’re getting paid to do.

Buffett Blames Congress for Romney's 15% Rate - (www.bloomberg.com) Warren Buffett, the billionaire calling for more taxes on the rich, saidMitt Romney’s U.S. rate of about 15 percent reflects poor laws rather than failings by the candidate for the Republican presidential nomination. “It’s the wrong policy to have,” Buffett told Bloomberg Television’s Betty Liu in an interview today. “He’s not going to pay more than the law requires, and I don’t fault him for that in the least. But I do fault a law that allows him and me earning enormous sums to pay overall federal taxes at a rate that’s about half what the average person in my office pays.” Buffett, chairman and chief executive officer of Berkshire Hathaway Inc. (BRK/A), supports Democratic President Barack Obama and said Congress needs to raise taxes on the wealthiest Americans to close the budget deficit. Romney has agreed to release his 2010 tax return tomorrow, under pressure from Republican opponents, after saying he pays about 15 percent. Romney co- founded Boston-based private-equity firm Bain Capital LLC.

OTHER STORIES:

Greek Debt Talks to Resume as Policy Makers Squabble - (www.bloomberg.com)

Gold Proves Safest as Goldman Forecasts Record: Riskless Return - (www.bloomberg.com)

Italian Consumer Confidence Stays at Lowest Level for 16 Years in January - (www.bloomberg.com)

Sarkozy Presidential Rival Hollande Would Split Retail, Investment Banking - (www.bloomberg.com)

China's housing market is set for a hard landing - (www.cnn.com)

Crony Capitalism and the Entitled Class of Wall Street Financiers - (www.blogspot.com)

Money, power, and Congress: how lobbyists will determine fate of SOPA - (www.theverge.com)

SOPA Opera Update: Congressmen flip-flop - (www.propublica.org)

India bought oil from Iran using gold - (www.forexcrunch.com)

Car-sharing networks flourish in the Bay Area - (www.contracostatimes.com)

Tuesday February 7 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

MF Global Clients May Lose in $700 Million Bankruptcy Fight - (www.bloomberg.com) MF Global (MFGLQ) Holding Ltd.’s clients may be the losers no matter who wins a $700 million dispute between bankruptcy administrators inLondon and New York that threatens the return of money locked in customer accounts. The trustee of MF Global Inc., the New York brokerage unit, is seeking the return of money used as margin for American customers trading in Europe. It wants U.K. administrators KPMG LLP to tap into $1.2 billion it had set aside for customers with segregated accounts, which are supposed to be protected. MF Global Inc. trustee James Giddens “is prepared to use all legal avenues available to him in recovering the customer funds, including litigation,” Kent Jarrell, a spokesman for Giddens, said in an e-mailed statement. If successful, the trustee’s claim would significantly reduce KPMG’s client money pool and lower returns for U.K. customers, said two people with knowledge of the discussions who declined to be identified because they are confidential. Should KPMG win, U.S. customers will be treated as unsecured creditors and face a lengthy wait for any payout.

Foreclosures made up 20% of home sales in 3Q - (money.cnn.com) Sales of homes in foreclosure comprised 20% of all U.S. residential sales during the third quarter, according to RealtyTrac. That share is a significant decline from the same period in 2010, when foreclosed homes made up 30% of residential sales, but it's still a far cry from levels seen during healthier housing markets when foreclosures comprised less than 5% of sales. In total, 221,536 distressed properties were purchased during the quarter, down 11% from the previous quarter and 5% lower than the same quarter a year earlier, RealtyTrac said. One reason for the year-over-year decline is that fewer homes are making it through the foreclosure pipeline, said Daren Blomquist, a spokesman for RealtyTrac.

Japan Records First Trade Gap Since 1980 - (www.bloomberg.com) Japan’s first annual trade gap since 1980, driven by an energy-import surge as nuclear plants shut down and by a shift of manufacturing overseas, threatens to undermine the nation’s status as the world’s largest creditor. A third straight monthly merchandise trade deficit in December capped an annual shortfall of 2.49 trillion yen ($32 billion), the finance ministry said in Tokyo today. The data reflect the impact of the record earthquake in March, which sparked a nuclear crisis that shut most reactors, as well as longer-term shifts such as Nissan Motor Co.’s decision to move some production to lower-cost Thailand. “This is more than hollowing out -- the government hasn’t found any solutions to electricity and at this point I don’t see that we’re going to have nuclear power back again,” said Masaaki Kanno, chief economist in Tokyo at JPMorgan Securities Japan Co. The deficit will “expand in coming years,” he said.

Merkel casts doubt on saving Greece from financial meltdown - (www.guardian.co.uk) Angela Merkel has cast doubt for the first time on Europe's chances of saving Greece from financial meltdown and sovereign default, conceding that Europe's first ever multibillion euro bailout coupled with savage austerity was not working after a two-year crisis that has brought the single currency to the brink of unravelling. In an interview with the Guardian and five other leading European newspapers, the German chancellor also insisted – against widespread resistance elsewhere in the eurozone and in the UK – that the European court of justice (ECJ) be empowered to police public spending and budget policies of the 17 countries in the euro. She also called for the eventual creation of a European political union, with many more national powers ceded to a central government, a strengthened bicameral European parliament, and the ECJ assuming the role of Europe's supreme court.

Bernanke has "finger on trigger" for new bond buys - (www.reuters.com) The Federal Reserve has moved closer to embarking on a new round of its controversial money-pumping after the central bank and its chairman Ben Bernanke highlighted a grim outlook for the U.S. economy. Bernanke on Wednesday opened the door a bit wider for the Fed to return to buying securities in the months ahead to buttress a weak recovery and keep inflation from slipping too far below its newly adopted 2-percent target. "It sounds like the finger is on the trigger," said Thomas Simons, a money market economist at Jefferies & Co. The Fed's announcement that it was unlikely to raise interest rates until at least late 2014, more than a year beyond its previous guidance, immediately pushed down Treasury bond yields and Bernanke's comments to the media raised expectations of a further round of so-called quantitative easing, or QE3.

OTHER STORIES:

Jobless Claims in U.S. Increase on Seasonality - (www.bloomberg.com)

Fed Signals That a Full Recovery is Years Away - (www.nytimes.com)

U.K. Moves Closer to Recession as GDP Falls - (www.bloomberg.com)

Global bosses are gloomy about the economic future - (www.bbc.co.uk)

New Home Sales in U.S. Fell in December - (www.bloomberg.com)

Jobless Claims in U.S. Increase 21,000 - (www.bloomberg.com)

U.S. Durable Goods Orders Beat Expectations - (www.bloomberg.com)

Bernanke Makes Case for Further Asset Purchases as Fed Sets Inflation Goal - (www.bloomberg.com)

Fed Sees Low Rates to 2014 - (online.wsj.com)

Fed Signals That a Full Recovery Is Years Away- (www.nytimes.com)

Cooling China worries some multinationals - (www.reuters.com)

Monday February 6 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Fears Mount That Portugal Will Need a Second Bailout - (online.wsj.com) Investors, economists and politicians are increasingly concerned that Portugal will need a second bailout as fears mount that it won't be able to return to markets for financing next year. While the Portuguese government's finances are covered this year as long as it abides by its bailout agreement, Portugal must regain full access to capital markets next year to help repay €9 billion ($11.64 billion) in debt coming due in September 2013. While that date is still far off, the International Monetary Fund could require Portugal to present its financing plans a full year ahead before releasing more aid, as it did with Greece. And as with Greece, the IMF may demand fresh bailout terms if it becomes clear the country won't be able to return to market in a year. Given the yields demanded by investors on Portugal's bonds, economists fear that may become the case.

Notorious Market Timer Joe Granville Predicts A 50% Plunge – (www.businessinsider.com) The man who sparked the crash in 1981. Notorious market timer Joe Granville predicted a 50% market plunge yesterday on Bloomberg Television: Joseph Granville, whose “sell everything” call in 1981 sparked a decline in U.S. stocks, said the Dow Jones Industrial Average (INDU) will drop toward 8,000 this year because of waning momentum and volume. “Volume precedes prices,” Granville, 88, a technical analyst who has been publishing the Granville Market Letter from Kansas City, Missouri for about 50 years, said in an interview on “Street Smart” on Bloomberg Television. “You are seeing much lower volume. That tells you that prices are going to go much lower, much lower than most people think possible and very few people have projected.” Art Cashin noted the significance of Granville's call (via Zero Hedge): Calamity Joe Is Back - Last week, we wrote that various cycles and technicians were pointing to a possible market top, on or about January 23rd. The “causes” ranged from sophisticated oscillators to the new moon to astrological confluences. Yesterday, one more “cause” was added and it came from a somewhat controversial Wall Street legend - Joe Granville.

Petroplus filing for insolvency, halts supplies - (www.reuters.com) Swiss-based oil refiner Petroplus (PPHN.S) is filing for insolvency, putting over 2,000 jobs across Europe at risk, after banks called in debts, triggering a $1.75 billion default. Europe's largest independent refiner by capacity has been teetering since its lenders restricted credit late last year, a victim of thin refining margins and high debt that was a result of its private equity-backed, acquisition-based business model. In an email to customers seen by Reuters on Tuesday, Petroplus said it has halted all supplies from its Coryton refinery in southern England. However, a spokesman for the Department of Energy and Climate Change said the Coryton refinery remains operational. The plant is a major fuel supplier to the South East.

Eurozone finance ministers reject Greek debt offer - (www.telegraph.co.uk) Talks to restructure Greece's debt hit a new impasse after eurozone finance ministers rejected an offer from private bondholders because the cost of sweeteners on new Greek bonds were too high. The blow came after a day in which European markets had risen on hopes that attempts to resolve the latest phase of the Greek debt crisis would be successful. Eurozone ministers have demanded that negotiations between the Greek government and Institute of International Finance (IIF) reach agreement on a lower average coupon, or interest rate, on new Greek bonds issued in return for a haircut on existing debt held by private investors. "The ministers have sent the offer back for negotiations," said an official last night. "The ministers want a lower coupon than presented in the offer."

Greek default is essentially a given: S&P - (money.cnn.com) Greece is facing an increasing likelihood of default, even if creditors reach an agreement on a deal aimed at reducing the nation's massive debt load. Even with the writedowns being discussed, Greece's debt burden would still be "very high" and the nation's credit rating will remain "very low," said John Chambers, head of sovereign ratings at S&P. Speaking at a Bloomberg sovereign debt conference in New York Tuesday, Chambers said any deal between Greece and private sector investors would "in all likelihood" qualify as a default. The aim of the deal is to slash the nation's debt load to 120% of gross domestic product by 2020 from its current 160%. Last week, officials from the European Union, International Monetary Fund and European Central Bank were in Athens to review Greece's finances and start negotiating a second bailout.

OTHER STORIES:

Bank of Japan Cuts Growth Forecasts for Fiscal 2012 as Global Growth Slows - (www.bloomberg.com)

IMF cuts world growth forecast - (money.cnn.com)

EU Seeks Bondholder Concessions on Greece - (www.bloomberg.com)

Permanent Rescue Fund Seems Nearer in Europe - (www.nytimes.com)

Bank of Japan Cuts Growth Forecasts for Fiscal 2012 as Global Growth Slows - (www.bloomberg.com)

Euro-Area Manufacturing Unexpectedly Expands - (www.bloomberg.com)

India Unexpectedly Cuts Reserve Ratio as BRIC Nations Act to Shield Growth - (www.bloomberg.com)

Federal Reserve to disclose more details on plans for low interest rates - (www.washingtonpost.com)

The 4 new voting members on Fed's policy committee - (finance.yahoo.com)

Lagarde, in Berlin, tells Germany — and the rest of Europe — to pay up - (www.washingtonpost.com)

Friday February 3 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Judge refuses to toss CalPERS suit against credit rating agencies - (www.sacbee.com) CalPERS has won the right to pursue a $1 billion lawsuit against two Wall Street heavyweights, beating back their efforts to have the case thrown out of court. A judge Wednesday denied a motion by Moody's Corp. and Standard & Poor's to dismiss the lawsuit by the California Public Employees' Retirement System. Judge Richard Kramer in San Francisco Superior Court didn't rule on the merits of CalPERS' claim. But he ruled the lawsuit is "legally sufficient" to go forward. The case stems from a huge CalPERS investment loss. In 2006, when the financial markets were booming, the pension fund poured $1 billion into a series of three deals known as "structured investment vehicles." Such vehicles are generally a blend of mortgage-backed securities, car loans and other assets. CalPERS later said it knew very little about the specifics of the deals – except that they were given the "highest credit ratings" by Moody's, S&P and Fitch Ratings.

Italy and Spain call for eurozone rescue fund booster - (www.telegraph.co.uk) Political leaders in Italy and Spain have called for a massive boost to the EU rescue fund and a blast of monetary stimulus by the European Central Bank (ECB), putting them on a collision course with Germany over the handling of the eurozone crisis. taly's premier Mario Monti has told Berlin that the new European Stability Mechanism (ESM) must be doubled to €1 trillion (£828bn) to restore investor confidence in southern European debt, according to Der Spiegel. The move comes days after Mr Monti warned German Chancellor Angela Merkel that austerity fatigue is growing in the debtor states and there will be a "powerful backlash" unless the creditor powers led by Germany do more to correct North-South imbalances and lower borrowing for the whole eurozone. In what appears to be a coordinated move by the Latin bloc, Spanish foreign minister José Manuel García-Margallo y Marfil backed the plan for a bigger rescue fund. He called for an EMU debt union and sweeping changes to the structure of the eurozone.

Spanish central bank predicts big drop in economy - (finance.yahoo.com) Spain faces more unemployment misery and needs serious labor market reforms, the country's central bank warned Monday as it slashed its economic forecasts for this year. The Bank of Spain predicted the country's economy will contract 1.5 percent this year, rather than expand by that same amount as per its forecast until now. In a report, the bank said that since last summer the eurozone debt crisis has sapped business confidence and choked off bank credit. This has caused a major drop in domestic demand, only partially offset by strong exports. In 2012, household spending will contract because of euro15 billion ($19 billion) in tax hikes and spending cuts already enacted by the new conservative government to chip away at the budget deficit, it said. The economy will expand in 2013, but only by 0.2 percent, the central bank forecast.

SF Bay Area prices fall again; San Mateo County falls most - (www.contracostatimes.com) December real estate activity in the Bay Area mirrored the rest of the year's activity -- sales slowly gained while prices dropped. Home sales increased 4.4 percent from December of 2010, market researcher DataQuick reported Wednesday, marking the sixth consecutive month Bay Area home sales rose on a year-over-year basis. In the same period, the median price declined 6.3 percent, falling to $351,500. The loss of value in Bay Area homes has been a developing trend since the mortgage crisis struck in 2007. From the beginning of that year to the end of 2011, the loss in home value in five Bay Area counties was $387 billion, a 33 percent decline. That figure -- calculated by DataQuick for the Bay Area News Group based on the average price per square foot paid for housing -- is necessarily an estimate, because it's based on the value of houses sold, and the types of homes sold in both periods.

Ron Paul Clearly Won the Debate, Fox News Caught Excluding Ron Paul - (www.prisonplanet.com) After huge volume of complaints, Fox reporter was forced to do-over post debate breakdown revealing that Ron Paul blitzed the debate in every category. The dirty tricks campaign against GOP presidential candidate Ron Paul reached new heights during the South Carolina debate last night, with virtual exclusion from the first 40 minutes of the program, poisonous questions in the second half, and a cringe inducing situation during the post debate analysis where Fox pundits were forced to admit that Paul had completely wiped the floor with the other candidates. During the post debate commentary, Fox reporter John Roberts blatantly excluded Paul from the charts and graphs he presented representing feedback from viewers.

Why buy a house now? Buy later for 65% less - ( www.patrick.net)

OTHER STORIES:

Fed Begins an Effort to Remove Doubt About What it's Doing - (www.nytimes.com)

Premature obituaries for the dollar - (www.safehaven.com)

Quelle Surprise! The Fed knew about the housing bubble in 2004. - (www.nakedcapitalism.com)

Foreclosures: America's hardest hit neighborhoods - (money.cnn.com)

Stock Market Rally Still Missing One Thing: A Crowd - (www.cnbc.com)

Hazard insurance with its own perils - (www.nytimes.com)

UC eyes plan to eliminate tuition altogether - (www.sfgate.com)

Senators change course on SOPA after protests - (www.nytimes.com)

Southern California house sales, prices fell in December - (www.latimes.com)

High-end sales down 8% last year in Chicago area - (www.chicagorealestatedaily.com)

Obama sued over indefinite detention and torture of Americans act - (www.rt.com)

Thursday February 2 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Senator Rand Paul Has Been Detained By The TSA After Refusing A Pat-Down - (www.businessinsider.com) Showdown at the Nashville airport. On the list of stupid things the Transportation Security Administration could do for their public image: detaining Kentucky Senator Rand Paul, the politician most anxious to abolish them, is probably right near the top. But that's exactly what just happened, his Communications Director, Moira Bagley has confirmed it in a tweet. Kelly O'Donnell is reporting that aides say Paul was detained when he refused a full-body pat-down, after the scanner went off. Paul lifted his pant-leg to show he had no metal, and asked to be re-screened. He was denied this request. O'Donnell further reports that U.S. officials say that they didn't 'detain' him, though that is the word Paul's office is using. Bagley has now told Politico, “I spoke with him five minutes ago and he was being detained indefinitely... The image scan went off, he refused patdown.”

Soros: Collapsing US Economy to Spark Street Violence - (www.newsmax.com) As the U.S. economy worsens, protests such as those carried out by the Occupy Wall Street movement will turn ugly, breaking down into waves of violent unrest across the nation, says billionaire financier George Soros. "It will be an excuse for cracking down and using strong-arm tactics to maintain law and order, which, carried to an extreme, could bring about a repressive political system, a society where individual liberty is much more constrained, which would be a break with the tradition of the United States," Soros tells Newsweek. Unrest in the United States will serve as one of many symptoms of a worsening global economy, which makes wealth preservation a priority over getting rich.

Spanish central bank predicts big drop in economy - (finance.yahoo.com) Spain faces more unemployment misery and needs serious labor market reforms, the country's central bank warned Monday as it slashed its economic forecasts for this year. The Bank of Spain predicted the country's economy will contract 1.5 percent this year, rather than expand by that same amount as per its forecast until now. In a report, the bank said that since last summer the eurozone debt crisis has sapped business confidence and choked off bank credit. This has caused a major drop in domestic demand, only partially offset by strong exports. In 2012, household spending will contract because of euro15 billion ($19 billion) in tax hikes and spending cuts already enacted by the new conservative government to chip away at the budget deficit, it said.

Strikes Paralyze Transport in Italy - (www.bloomberg.com) Striking truckers and cab drivers disrupted traffic and commerce across Italy in protests against Prime Minister Mario Monti’s policies as he presents a plan to spur competition and growth to European Union allies today. Truck drivers parked their vehicles across highways throughout the country in a wildcat strike that is backing up traffic for miles. Cab drivers are also striking, choking traffic in cities from Milan to Rome and leaving thousands of travelers stranded at airports and train stations. Pharmacists and gas-station operators threaten to protest in the next week. “The resistance to these reforms at a time when the economy is contracting is likely to be fierce,” said Nicholas Spiro, managing director of Spiro Sovereign Strategy in London. “Opposition to structural reform in Italy is legendary. Mr. Monti knows these measures will be fiercely resisted, but is under enormous pressure to present an agenda for growth.”

US GEOLOGICAL CHIEF: The White House Gave Misleading Info About The BP Spill Size - (www.businessinsider.com) Part of a major whitewash campaign. The White House gave misleading information about the BP oil spill and pressured scientists to do the same, according to a new report from Public Employees for Environmental Responsibility (via Kate Sheppard at Mother Jones). PEER tracked down an email from US Geological Survey director Marcia McNutt, who said the White House repeatedly misinterpreted her data: I cannot tell you what a nightmare the past two days have been dealing with the communications people at the White House, DOI, and the NIC who seem incapable of understanding the concept of a lower bound. The press release that went out on our results was misleading and was not reviewed by a scientist for accuracy. It was based on a brief report that Bill, Vic, and I had prepared, and the communications people "thought" that it reflected our results, but it didn't because they don't understand what a lower bound is. PEER also accused NOAA scientist William Lehr, who lead a team that analyzed the plume flow rate, of downplaying divisions within his team. Lehr was leader of one of the most important FRTG teams, the “Plume Team” which analyzed videos of the oil leaks to produce the first estimates. Three of the 13 Plume Team experts used a technique called Particle Image Velocimetry (PIV) to estimate a leak rate in the range of 25,000 bpd. But three other experts on the Plume Team reported that PIV was underestimating the size of the leak by more than 50%. Those three experts used a different technology to correctly peg the leak rate at 50,000 to 60,000 bpd.

Freddie Mac draws Republicans' attention - (money.cnn.com) The one thing Mitt Romney and Newt Gingrich seem to agree on about Freddie Mac is that it played a significant role in the housing bubble -- and the subsequent financial meltdown that followed when it burst. But many experts in the field question that view, saying Freddie Mac and fellow mortgage financer Fannie Mae were relatively small players in the rapid growth of subprime and other risky home loans while the housing bubble inflated -- and were relatively late to the game at that. "An easy way to sum it all up is if Fannie and Freddie never existed we still would have had the housing bubble, the subprime crisis and the collapse of the housing market," said Guy Cecala, CEO of Inside Mortgage Finance, which publishes trade publications following the different part of the mortgage market. "That being said, as the two single largest players in financing of mortgages, it's hard to say they (Fannie and Freddie) had no involvement because, of course, they did," he added.

OTHER STORIES:

Euro Leaders Seek Crisis Fix as Greek Talks Drag On - (www.bloomberg.com)

EU Banks May Deepen Dependence on ECB - (www.bloomberg.com)

Fed Forecasts Could Awaken Treasurys - (online.wsj.com)

RIM Replaces CEOs as BlackBerry Maker Struggles to Answer Apple Challenge - (www.bloomberg.com)

Fewer U.S. Companies Plan to Boost Hiring in 2012, Survey Shows - (www.bloomberg.com)

Fed Begins an Effort to Remove All Doubt on What It’s Doing - (www.nytimes.com)