Friday February 17 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

REPORT: Prepare For A Giant New Wave Of US Bank Failures - (www.businessinsider.com) Forget Europe — the weak U.S. recovery puts more than 750 domestic banks at risk of failure, according to a report from Invictus Consulting Group (via Business Wire). Invictus, which stress tested all FDIC-insured banks, says 758 lenders could collapse in the next three years, forecasting a new wave of borrower defaults in the absence of a strong economic up-tick. A disaster in Europe would probably make things much worse. Invictus says the at-risk lenders — mostly regional banks or subsidiaries of the majors — won't be able to sustain themselves on current earnings, and will likely fail if they don't merge or raise "significant" amounts of new capital.

Fed Bank Presidents Reveal Assets From Ranchland to Inflation-Linked Bonds - (www.bloomberg.com) Federal Reserve regional bank presidents revealed unprecedented details about their personal wealth, disclosing Citigroup Inc. (C) shares bought by accident and ownership of a Missouri farm and Texas ranchland. The regional bank chiefs, who manage Fed operations across the country ranging from bank supervision to emergency lending, disclosed the documents yesterday in response to requests from Bloomberg News under the Freedom of Information Act. The Fed banks said they weren’t subject to the terms of the act, even as they responded to the requests. The 12 regional banks and their presidents aren’t held to the same level of public scrutiny as the Washington-based Federal Reserve Board and its governors. While Chairman Ben S. Bernanke and Fed governors disclose information about their finances and are subject to the FOIA, the regional banks don’t routinely make personal financial information public.

Eurozone crisis triggers credit squeeze - (www.ft.com) All is not lost for small, struggling companies around Milan. The local chamber of commerce’s “Fondo Sbloccacrediti Milano” – literally, “Milan’s fund to Free up Credit” – is a sign of the gloomy times across parts of Italy’s business community. Set up by UniCredit, the country’s largest bank, and the local business lobby, the credit line offers a last ditch chance for small viable businesses with nowhere else to turn. With just €15m available, however, the fund may quickly prove inadequate. A European Central Bank survey on Wednesday showed the eurozone debt crisis has triggered a severe credit squeeze across the region with banks imposing significantly harsher loan terms on businesses and consumers. Demand for mortgages and loans to fund corporate investment was also falling sharply, the survey showed.

House prices hit post-bubble low - (www.washingtonpost.com) When it comes to the value of what many Americans consider their biggest financial asset, no such return appears in sight. Data released Tuesday showed that seasonally adjusted housing prices have reached a post-bubble low, as the minor surge that began in 2009 fizzled, to be followed by the almost continuous slide of the past 18 months. The housing bust, in other words, appears to be even worse than it was at the nadir of the recession. For millions of homeowners, that’s an unsettling reality, and potentially an issue in the presidential campaign. But the damage may be far more widespread. By making people feel less wealthy, according to economists, the decline in home values inhibits consumer spending and hampers the nation’s stop-and-start economic recovery.

We’re on the brink, warns Greece - (www.telegraph.co.uk) Lucas Papademos said that unless the country’s international backers agreed to a new bail-out, Greece would be unable to pay off its loans and be forced out of the eurozone. EU leaders will meet in Brussels tonight amid growing concern that Greece will fail to implement the austerity measures its international backers are demanding as a condition of the latest package of financial support. Without that bail-out, Greece will be unable to repay €15 billion of loans due in March. Amid doubts about Greek willingness to cut spending and raise taxes, Germany has suggested that a European commissioner should take effective control of Greek fiscal policy to ensure the country accepts austerity. Evangelos Venizelos, the Greek finance minister, rejected that plan, saying it would undermine Greece’s “national identity and dignity”

OTHER STORIES:

U.S. Companies Added 170,000 Workers: ADP - (www.bloomberg.com)

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

U.S. deficit to top $1 trillion, smallest since ’09 - (www.washingtonpost.com)

Employment Rising as Health Care Eclipses Factories With Aging Americans - (www.bloomberg.com)

MF Global's missing money traced: report - (www.reuters.com)

Facebook Said to Hire Morgan Stanley for IPO - (www.bloomberg.com)

Portuguese storm gathers as EU leaders fight over Greece - (www.telegraph.co.uk)

Short China: its commodities bubble is set to pop - (www.marketwatch.com)

Consumer Spending in U.S. Stalls - (www.bloomberg.com)

Home prices drop, and consumers turn gloomy - (www.reuters.com)

Thursday February 16 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Washington-Wall Street Revolving Door Keeps Spinning - (www.huffingtonpost.com) We've already made our choice for the best headline of the year, so far: "Citigroup Replaces JPMorgan as White House Chief of Staff."

When we saw it on the website Gawker.com we had to smile -- but the smile didn't last long. There's simply too much truth in that headline; it says a lot about how Wall Street and Washington have colluded to create the winner-take-all economy that rewards the very few at the expense of everyone else. The story behind it is that Jack Lew is President Obama's new chief of staff -- arguably the most powerful office in the White House that isn't shaped like an oval. He used to work for the giant banking conglomerate Citigroup. His predecessor as chief of staff is Bill Daley, who used to work at the giant banking conglomerate JPMorgan Chase, where he was maestro of the bank's global lobbying and chief liaison to the White House. Daley replaced Obama's first chief of staff, Rahm Emanuel, who once worked as a rainmaker for the investment bank now known as Wasserstein & Company, where in less than three years he was paid a reported eighteen and a half million dollars. The new guy, Jack Lew -- said by those who know to be a skilled and principled public servant -- ran hedge funds and private equity at Citigroup, which means he's a member of the Wall Street gang, too. His last job was as head of President Obama's Office of Management and Budget, where he replaced Peter Orzag, who now works as vice chairman for global banking at -- hold on to your deposit slip -- Citigroup.

New-house purchases fall, 2011 worst ever for sales - (news.yahoo.com) Fewer Americans bought new homes in December. The decline made 2011 the worst year for new-home sales on records dating back nearly half a century. The Commerce Department said Thursday new-home sales fell 2.2 percent last month to a seasonally adjusted annual pace of 307,000. The pace is less than half the 700,000 that economists say must be sold in a healthy economy. About 302,000 new homes were sold last year. That's less than the 323,000 sold in 2010, making last year's sales the worst on records dating back to 1963. And it coincides with a report last week that said 2011 was the weakest year for single-family home construction on record.

Occupy Oakland arrests reach 400; City Hall vandalized - (www.latimes.com) Officials surveyed damage Sunday from a volatile Occupy protest that resulted in hundreds of arrests the day before and left the historic City Hall vandalized after demonstrators broke into the building, smashed display cases, cut electrical wires and burned an American flag. Police placed the number of arrests at about 400 from Saturday's daylong protest — the most contentious since authorities dismantled the Occupy Oakland encampment late last year. Mayor Jean Quan condemned the local movement's tactics as "a constant provocation of the police with a lot of violence toward them" and said the demonstrations were draining scarce resources from an already strapped city. Damage to the City Hall plaza alone has cost $2 million since October, she said, about as much as police overtime and mutual aid.

The working class rises up across Latin America - (www.csmonitor.com) When parking attendant Hugo Enrique Vera was beaten by a wealthy client in Mexico, allegedly for refusing to show the man where to find the jack in his car, the surveillance camera captured a stereotype dating to colonial times: The wealthy resident asserts authoritarian control over the worker, who takes the beating without question. But there was a twist: Mr. Vera filed a criminal complaint and condemned his perpetrator on national news, unleashing a charged debate about callousness toward the working class. For two decades, social movements in Latin Americahave centered on indigenous rights. Today the indigenous have earned new political representation, and open mistreatment will draw complaints. Yet daily life across Latin America is replete with symbols of stubborn class inequality that go unchallenged, such as condominium buildings that have separate elevators for domestic workers.

OTHER STORIES:

Former MF Global Chief Jon Corzine Selling NJ Penthouse - (www.cnbc.com)

Health Insurance Deductibles Doubled in 7 Years, Study Finds - (www.nytimes.com)

Consumer bureau reviewing real estate appraisal fee disclosure - (www.latimes.com)

Millions of SOPA lobbying bucks gone to waste - (www.cnn.com)

S&P Warns of Cuts; Another US Downgrade Coming? - (www.cnbc.com)

How to Research a Slumlord - (www.drpop.org)

Has Petroleum Production Peaked, Ending the Era of Easy Oil? - (www.scientificamerican.com)

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

Wednesday February 15 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Treasury Investigates Freddie Mac Investment - (www.nytimes.com) The Treasury Department is investigating a report that Freddie Mac, the mortgage giant, bet against homeowners’ ability to refinance their loans even as it was making it more difficult for them to do so, Jay Carney, a White House spokesman, said on Monday. The report came just as the Obama administration had been escalating its efforts to push Fannie Mae and Freddie Mac to ease conditions for homeowners, including those who owe more on their mortgages than their homes are worth. Last Friday, the Treasury announced that it would offer increased incentives to lenders to forgive portions of homeowner debt, saying pointedly that for the first time the incentives would be offered on loans held by Fannie and Freddie. But Fannie and Freddie, which said they would review the increased incentives, have long declined to allow debt reduction on the loans it holds or guarantees, saying that it would create unnecessary losses for taxpayers. The companies, which are financed by taxpayers, have also maintained barriers to refinancing, like risk-based fees for homeowners, even as mortgage interest rates have dropped below 4 percent.

Moody’s warns of refinancing challenge - (www.ft.com) US companies with the lowest credit ratings could struggle to refinance about $80bn of debt maturing in the coming years as sovereign debt problems potentially threaten their access to the capital markets and banks in both Europe and the US look at retreating from speculative lending, Moody’s Investors Service has warned in a new report. The largest debt issuers in this category are some of the big buy-outs struck at the height of the credit boom, including Clear Channel Communications, with more than $16bn of debt due through 2016, Texas Competitive Electric Holdings, formerly TXU, with almost $11bn and Caesars Entertainment, formerly Harrah’s, with close to $8bn.

Banks set to double crisis loans from ECB - (www.ft.com) European banks are preparing to tap the European Central Bank’s emergency funding scheme for up to twice as much as the ECB supplied in its debut €489bn auction last month, providing further evidence of the sector’s liquidity squeeze. Several of the eurozone’s biggest banks have told the Financial Times that they could well double or triple their request for funds in the ECB’s three-year money auction on February 29. “Banks are not going to be as shy second time round,” said the head of one eurozone bank at last week’s World Economic Forum in Davos. “We should have done more first time.” Three bank chief executives, all of whom asked to remain anonymous, said they were planning to increase their participation twofold or threefold.

Volcker Rule Stirs Up Opposition Overseas - (www.nytimes.com) Now, it is foreign governments fighting against bank regulations in the United States. In the halls of last week’s annual meeting of the World Economic Forum here, Wall Street’s top bankers found a curious ally in their battle to end — or perhaps water down — the Volcker Rule, that part of last year’s Dodd-Frank financial regulation law that says that banks are not allowed to participate in “proprietary trading.” Translation: Banks can’t make risky bets with their own money. The idea, rooted in ending the too-big-to-fail phenomenon, is to separate the risky casino element of Wall Street from the utility role of helping finance the economy. Yet finance ministers from around the world lined up to whisper in the ear of Timothy Geithner, the Treasury secretary, who made the rounds in Davos on Thursday and Friday, about a specific element of the Volcker Rule that has them apoplectic: The rule says that United States banks — and possibly certain foreign banks that do business in America — would be restricted in trading foreign government bonds. Yet the rule, conveniently, provides an exemption for United States government securities. Every other country is out of luck.

Tracy Morgan's Mom Is Getting Foreclosed On And He Refuses To Pay Off Her Mortgage - (www.businessinsider.com) Tina Fey couldn't make this up. The Daily News reports that Tracy Morgan's mother is close to foreclosure but that her son has rebuffed her request to pay off her mortgage. Alicia Warden, Morgan's mother, says her son only offered a one-time payment of $2,000. Warden owes $25,000 on her home in northeast Ohio and says that unless she makes the minimum payment by February 23, the bank will foreclose on her home. Warden lost her job in February 2011 and not long after approached Morgan about paying off her mortgage. He initially agreed but then backed out when he accused her of giving an interview with the media. Warden denies this allegation.

OTHER STORIES:

Euro zone jobless hits highest level since birth of euro - (www.reuters.com)

China’s Premier Wen Says Property Curbs to Stay, Reiterates Fine-Tuning - (www.bloomberg.com)

Italy’s Jobless Rate Climbed to Eight-Year Highest in December Amid Cuts - (www.bloomberg.com)

Czechs to scrutinise EU treaty, cracks widen in govt - (www.reuters.com)

German Unemployment Fell More in January - (www.bloomberg.com)

Euro-Zone Data Point to Recession - (www.online.wsj.com)

Consumer Confidence in U.S. Unexpectedly Drops on Fuel Costs, Job Concerns - (www.bloomberg.com)

Case Shiller Home-Price Index Falls 3.7% - (www.bloomberg.com)

Chicago Purchasing Managers Index Unexpectedly Declined to 60.2 in January - (www.bloomberg.com)

Tuesday February 14 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Federal Mortgage Insurer Headed Toward Collapse - (www.theepochtimes.com) The Federal Housing Administration (FHA) is deeply insolvent and headed toward a financial crash like that of Freddie Mac and Fannie Mae in 2008, according to analysis from the American Enterprise Institute (AEI) released last week. “We are watching—in not-so-slow motion—the same gradual descent into insolvency that occurred with Fannie and Freddie a little more than three years ago,” reads the outlook for FHA authored by Edward Pinto, an executive vice president and chief credit officer for Fannie Mae until the late 1980s, and Peter J. Wallison, a general counsel of the U.S. Treasury Department during the Reagan administration. If you have tried to buy a home in recent years, you know that 20 percent is typically the required amount for a down payment on a mortgage. The only way to get around that is an FHA-backed loan, which requires as little as 3.5 percent down. The jump from 20 percent to 3.5 percent may seem like a boon to homebuyers, but it is also telling of a system warped by government intrusion.

A Mortgage Investigation. Really? - (www.nytimes.com) In the State of the Union address, President Obama promised a fresh investigation into mortgage abuses that led to the financial meltdown. The goal, he said, is to “hold accountable those who broke the law, speed assistance to homeowners and help turn the page on an era of recklessness that hurt so many Americans.” Could this be it, finally? An investigation that results in clarity, big fines and maybe even jail time? There is good reason to be skeptical. To date, federal civil suits over mortgage wrongdoing have been narrowly focused and, at best, ended with settlements and fines that are a fraction of the profits made during the bubble. There have been no criminal prosecutions against major players. Justice Department officials say that it reflects the difficulty of proving fraud — and not a lack of prosecutorial zeal. That is hard to swallow, given the scale of the crisis and the evidence of wrongdoing from private litigation, academic research and other sources.

JPMorgan CEO says foreclosure deal threatened - (www.yahoo.com) JPMorgan Chase & Co (NYSE:JPM - News) Chief Executive Jamie Dimon said President Barack Obama's decision to expand investigations into home lending and sales of mortgage securities could stop settlement talks with the states over foreclosure practices. "It has a pretty good chance of derailing it," Dimon said in a televised interview with CNBC from Davos, Switzerland on Thursday. Obama, in his State of the Union address Tuesday, said he has asked his attorney general to create a special unit of prosecutors to expand investigations into home lending and packaging of mortgage-backed securities. It is not clear how the new unit will be different from earlier investigations.

New Yorkers Face Downward Mobility - (www.bloomberg.com) About one third of New York City residents nearing retirement age won’t be able to quit or will have to rely entirely on Social Security because they have less than $10,000 in savings, according to a study released today. About 40 percent of New York workers had access to an employer-sponsored retirement plan in 2009, compared with the national average of 53 percent, according to the report by the New School’s Bernard Schwartz Center for Economic Policy Analysis. It was released by the Office of New York City Comptroller John Liu. “It’s going to mean a generation of retirees will do worse than their parents and grandparents,” Teresa Ghilarducci, the center’s director, said in a telephone interview. “This means a lot more downward mobility.”

The Ron Paul Media Blackout Is Back On - (www.theatlanticwire.com) After a brief spike in interest, the mainstream media coverage of GOP candidate Ron Paul is back to nearly nothing, according to the Pew Research Center's Project for Excellence in Journalism. This week, less than 5 percent of all campaign stories focused on Paul, the lowest point since Dec. 11. when strong performances in Iowa and New Hampshire helped stoke some interest. Over the same period, Paul's performance in the polls has only improved, going from the single digits to 12.7 percent, putting him nearly even with Rick Santorum, in the current RealClearPolitics average. But in Pew's weekly study, Paul has been heading in the opposite direction. Pew tracks a list of 52 mainstream news outlets across broadcast television, cable news, newspapers, radio and the 12 most popular news sites to measure exposure. As you can see from the graph below, the downward trajectory of coverage volume has been steep for Paul, as the star of New Gingrich rose following his decisivevictory in South Carolina and strong polling in Florida.

OTHER STORIES:

Economists vs. Americans - (www.wsj.com)

Do progressives have to be loser liberals? - (www.aljazeera.com)

Why House Prices Have Much Further to Fall - (www.financialsense.com)

Can Lender Get Deficiency Judgment Under Trustee Sale Foreclosure? - (www.patrick.net)

You Can Thank Supreme Court For Newt Gingrich's Extended Campaign - (www.talkingpointsmemo.com)

Progressive taxes are dead for the superrich - (www.cnn.com)

How to curb chronic homelessness? First, a home! - (www.csmonitor.com)

A new vision for America: Restoring a country that makes things - (www.washingtonpost.com)

Warren Buffett: 'My Side Has Nuclear Bomb' In Tax Code Struggle - (www.huffingtonpost.com)

Monday February 13 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

U.S. Banks Tally Their Exposure to Europe’s Debt Maelstrom - (www.bloomberg.com) After a hurricane, homeowners check nervously to see if their insurance will cover all of the damage. With the European financial crisis still threatening a trail of defaults, United States banks are betting that their insurance is going to pay out. Five large American banks, including JPMorgan Chase and Goldman Sachs, have more than $80 billion of exposure to Italy, Spain, Portugal, Ireland and Greece, the most economically stressed nations in the euro currency zone, according to a New York Times analysis of the banks’ financial disclosures. But these banks have made extensive use of a type of financial insurance, the credit-default swap, to help them offset any losses that might occur if defaults swamped the five troubled nations. Using these swaps, along with other measures, the five banks have cut their theoretical exposure to the troubled countries by $30 billion, to $50 billion. The analysis also shows thatCitigroup has the greatest percentage of its exposure potentially protected, at 47 percent, while Bank of America has bought the least protection, at 12 percent.

Money From MF Global Feared Gone - (online.wsj.com) Nearly three months after MF Global Holdings collapsed, officials hunting for an estimated $1.2 billion in missing customer money increasingly believe that much of it might never be recovered, according to people familiar with the investigation. As the sprawling probe that includes regulators, criminal and congressional investigators, and court-appointed trustees grinds on, the findings so far suggest that a "significant amount" of the money could have "vaporized" as a result of chaotic trading at MF Global during the week before the company's Oct. 31 bankruptcy filing, a person close to the investigation was cited as saying Monday. Many officials now believe certain employees at MF Global dipped into the "customer segregated account" that the New York company was supposed to keep separate from its own assets -- and then used the money to meet demands for more collateral or to unfreeze assets at banks and other counterparties as they grew more concerned about their financial exposure to MF Global.

This Woman's Awful Bank Of America Foreclosure Story Could Turn Into Another Viral PR Disaster - (www.bloomberg.com) About two and a half years ago, she and her son's father, Tim, realized their fixed-rate mortgage payments were going up like an adjustable rate. After calling the bank, she claims that Bank of America had tacked on charges for insurance and other products the couple had not requested. In the end, though, they decided to keep the insurance so that the house would still be paid for if something happened to Tim or Ramos. Sadly, Tim recently committed suicide. On top of that, she claims the insurance Ramos had paid on their home wasn't going through. When she called to find out what happened, the bank told her that since she wasn't the executor of Tim's estate, she had no right to see what was going on — and they had no record of her insurance payments either. In Ramos' own words. "But Bank of America, they don't care. They said it's our house now. They're going to foreclose on it. Forget that I paid for insurance to 2 1/2 years, forget that my name is on the mortgage..."

No relief in rising gasoline prices as refineries shut down - (www.latimes.com) American motorists may well be wondering when, if ever, they will again see a sustained and significant drop in retail gasoline prices. Not in the forseeable future, it seems. In California, the average price for a gallon of regular gasoline has risen another 3.3 cents in the last week, to $3.747, according to the AAA Fuel Gauge Report. That's 39.1 cents a gallon higher than the old record for Jan. 30, set just last year. Nationally, the average is $3.429, up another 4.3 cents over the past week. That's also 33 cents a gallon higher than last year's record for the date. Meanwhile, fuel supply sources continue to shrink, particularly in the eastern U.S., negating at least some of the effect of continuing low demand for gasoline in the U.S. In its most recent weekly petroleum report, for example, the Energy Department noted another refinery that was set to close.

P&G To Lay Off 1,600 After Discovering It's Free To Advertise On Facebook - (www.bloomberg.com) Reality appears to have finally arrived at Procter & Gamble, the world's largest marketer, whose $10 billion annual ad budget has hurt the company's margins. P&G said it would lay off 1,600 staffers, including marketers, as part of a cost-cutting exercise. More interestingly, CEO Robert McDonald finally seems to have woken up to the fact that he cannot keep increasing P&G's ad budget forever, regardless of what happens to its sales. He told Wall Street analysts that he would have to "moderate" his ad budget because Facebook and Google can be "more efficient" than the traditional media that usually eats the lion's share of P&G's ad budget.

OTHER STORIES:

China Signals Caution on Loosening - (www.bloomberg.com)

EU leaders struggle to reconcile austerity, growth- (www.reuters.com)

Analysis: Fed-watching gives Asian central banks cause to pause - (www.reuters.com)

Spanish economy shrinks in Q4, nearing recession - (www.finance.yahoo.com)

Consumer Spending in U.S. Stalls - (www.bloomberg.com)

Fed Says Business-Loan Demand Climbed Last Quarter as Economy Accelerated

Small business hiring slows, wages dip in January - (www.reuters.com)

Euro-Region Economic Confidence Increased Less Than Estimated in January

Morgan Stanley, Credit Suisse Lead Wall Street Pay Cuts: Table - (www.bloomberg.com)

Friday February 10 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Banks Reduce French, Italian, Spanish Lending, Pile Into Bunds, BIS Says - (www.bloomberg.com) International banks cut their loans to fellow lenders and governments inItaly, France and Spain in the third quarter, hoarding German, Japanese and U.S. bonds instead, data from the Bank for International Settlements show. Cross-border claims on the Italian state, mainly bonds and loans, declined by 23 percent, or $67.7 billion, in the quarter ended Sept. 30 at banks in the 24 countries for which the Basel, Switzerland-based BIS reports those data. The same measure dropped 21 percent for France and 10 percent for Spain. It also fell for emerging economies including Brazil, Mexico and Poland, while $65.3 billion went into German government debt and $77.2 billion into U.S. Treasuries, the BIS said in a statement.

For Greece, the Outlook Is Still Grim - (www.nytimes.com) Even as Greece tries to convince creditors that its debt-reduction efforts are on track, gloomy new International Monetary Fund forecasts about its long-term economy are threatening to derail talks meant to secure the nation’s next big installment of bailout funds. The concerns, stemming from an analysis that the I.M.F. has been quietly sharing with European officials and Greece’s creditors in recent weeks, come at a crucial time for Athens. The new Greek government is in dual-track talks with private and public sector creditors, trying to make the case that its program for reducing long-term debt is working. The government seeks to persuade private creditors to provide relief by taking some losses on their bond holdings, and to persuade its public sector lenders to release a scheduled allotment of bailout money, possibly as much as 30 billion euros ($39 billion).

Citigroup sued for fraud over $1 billion of CDOs - (finance.yahoo.com) Citigroup Inc (NYSE:C - News) was sued for fraud by Loreley Financing over nearly $1 billion worth of collateralized debt obligations purchased in 2006 and 2007. Citigroup is accused of defrauding Loreley into purchasing "fraudulent investments that are now worthless," Loreley said in a complaint filed Tuesday in New York State Supreme Court in Manhattan. Citi used the CDOs to offload the risks of toxic mortgage-backed securities on its books and to help preferred clients "short" the housing market, the lawsuit claims.

Invisible Bond Vigilantes Attack the White House - (www.cepr.net) In short, the economy was clearly in much worse shape than was implied by the projections that the Obama Administration used in crafting its stimulus. In fairness to the Obama Administration, these projections were in keeping with the consensus among economists at the time. The other striking part of this memo is the concern with “bond market vigilantes.” The memo discusses the need to focus on the medium-term deficit with the idea of reaching deficit targets by 2014. The highest deficit target listed in the memo for this year was 3.5 percent of GDP. The memo also includes calculations with a deficit target of 2.5 percent of GDP, and a balanced budget. The deficit for the fiscal year that ended last October was 8.5 percent of GDP. Depending on how the payroll tax debate, the extension of unemployment benefits and a few other issues get resolved, the deficit is not likely to be very much lower in 2012.

Who is Sheldon Adelson and What Has Newt Promised Him? - (www.robertreich.org) Sheldon Adelson, the billionaire casino owner, is now the poster boy for what’s terribly wrong with our campaign-finance system. Adelson, you may recall, had, before the South Carolina Republican primary, donated $5 million to the pro-Gingrich Super Pac “Winning Our Future” – giving Newt a pile of money for negative advertising against Mitt Romney in South Carolina. Adelson has done it again. He and his wife Marian have cut another $5 million check for Gingrich to go negative on Romney in Florida. The money won’t go as far as it did in South Carolina – TV ads cost a lot more in Florida – but it’s enough to give the Grinch a solid footing. And, who knows? The Adelsons are billionaires. They might decide to put in another $5 million or perhaps $20 million into Gingrich’s Super Pac. The point is, there’s no limit. Do you know who Sheldon and Marian Adelson are? Do you know what Gingrich has promised them, or what they think they’ll get out of a Grinch presidency? I don’t. But if Newt becomes President of the United States, they’ll be singularly responsible. And we better find out, because Newt will owe them big time.

OTHER STORIES:

Europe Risks 'Balkanization' From Crisis: UK Chancellor - (www.cnbc.com)

Europe Avoided 'Major Credit Crunch': ECB Official - (www.cnbc.com)

U.S. Economy Grows 2.8%, Less Than Forecast - (www.bloomberg.com)

Fed Easing May Harm Long-Term Economic Growth, Warsh Says - (www.bloomberg.com)

Lacker Says Fed May Need to Raise Rates Before Late 2014 to Stop Inflation - (www.bloomberg.com)

Ford Falls Short of Estimates While Reporting Biggest Profit in 14 Years - (www.bloomberg.com)

Meet the Bundlers Behind the Money - (www.opensecrets.org)

US has more people in prison than were in Stalin's gulags - (www.newyorker.com)

Florida's Housing Mess Puts GOP Hopefuls on Uncomfortable Turf - (www.nationaljournal.com)

In Florida, Facing the Political Implications of Housing Crisis - (www.nytimes.com)