Tuesday December 11 Housing and Economic stories

TOP STORIES:

Greece has an 'unsustainable' debt burden. - (www.cnbc.com) As the troika of international creditors to Greece met on Monday to finalize the next tranche of aid for Athens, one economist has warned that the euro zone is likely to resolve Greece's immediate funding crisis with a "sticking plaster" but fail to resolve the main issue: the unsustainable debt burden. Debt restructuring is "is likely to be a step too far for core politicians," Ben May from Capital Economics said in a report on Monday, adding that the proposals so far to lower interest rates or tweak growth targets for Greece were unlikely to help the country in the long run. "The key point is that the deal [on further financial aid] will only result in debt falling in the medium term if the economic assumptions on which it is underpinned prove accurate," May stated.

European bankruptcies may jump soon - (www.cnbc.com) New banking regulations may lead to an increased rate of insolvencies, as banks are forced to focus on their capital requirements at the potential cost of keeping “zombie” companies alive. The relatively low rate of insolvencies in Europe since the credit crisis began has been credited to central bank monetary easing, which has helped banks put off foreclosing on some loans — a process known as forbearance. In recent months, concerns have been raised about the number of so-called “zombie companies” this has created, particularly in the U.K. These companies are thought to be kept going because low interest rates mean that they can continue to pay off the interest on their debts, but are not growing. They have been credited with helping to keep employment rates higher than they should be in the current stage of the economic cycle.

Greece's lenders fail again to clinch debt deal - (www.reuters.com) International lenders failed for the second week to reach a deal to release emergency aid forGreece and will try again next Monday, but Germany signaled that significant divisions remain. Euro zone finance ministers, the International Monetary Fund and the European Central Bank were unable to agree in 12 hours of overnight talks in Brussels on how to make the country's debt sustainable. They want a solution before paying the next loan tranche which is urgently needed to keep Greece afloat. Several European officials played down the delay, saying the disagreements were technical and a deal would be reached when they meet again on November 26.

House prices nowhere near a bottom - (finance.yahoo.com) In recent months, most economists have come to believe that U.S. house prices have finally bottomed after a horrible five years of declines. Most of the major house-price indices, including the monthly Case-Shiller report, have turned higher. And yesterday's Existing Home Sales report showed an increase in the median house price of a startling and encouraging 11% year over year. In the past couple of years, there have been periods in which house prices have risen temporarily, only to soon begin falling again. These "head fakes" caused many analysts and real-estate agents to prematurely call the bottom. And they have likely left some home buyers and investors sitting on losses that they didn't expect.

Merkel's day of reckoning as taxpayer haircut on Greece looms - (www.telegraph.co.uk) Germany, Holland, and the creditor states of northern Europe have not lost a single cent on eurozone rescue packages, so far. They have lent money, at a theoretical profit. They have issued a fistful of guarantees to Europe’s twin bail-out funds, covering Greece, Ireland, Portugal, Spain, and soon Cyprus. They have taken on opaque and potentially huge liabilities through the European Central Bank. Yet little has disturbed the illusion that the euro is a free lunch for the surplus powers. An assumption persists that the creditors will - and should - be spared the consequences of flooding Southern Europe with excess capital. All the losses in Greece until now have been concentrated on those pension funds, insurers, and banks that stayed to the bitter end, rewarded with 75pc haircuts for their loyalty.

OTHER STORIES:

Moody's strips France of its prized 'AAA' credit rating - (www.telegraph.co.uk) Eurogroup leader Jean-Claude Juncker and Finland raise doubts about reaching a deal on Greek aid as eurozone finance minister prepare to meet in Brussels later today.

The world's third largest economy - Japan - has a miserable future - (www.cnbc.com)

S&P Sees 33% Chance of French Debt Rating Cut Next Year - (www.bloomberg.com)

Spanish bonds downgraded - (www.bloomberg.com)

Service sector adds to eurozone gloom - (money.cnn.com)

Euro zone faces deepest downturn since early 2009 - (www.reuters.com)

China banks turn blind eye as corporate debt piles up - (www.reuters.com)

Consumer sentiment stalls in November - (www.reuters.com)

Chinese Stocks Fall to Seven-Week Low - (www.bloomberg.com)

Bernanke expected to defend ultra-easy policy - (www.marketwatch.com)

Monday December 10 Housing and Economic stories

TOP STORIES:

Goldman Sachs Turns Down Southern Europe Banks as Crisis Lingers - (www.bloomberg.com) Goldman Sachs Group Inc. (GS), the No. 1 stock underwriter in Europe, turned down roles in offerings by banks in Spain and Italy this year, the only top U.S. securities firm not to take part in the fundraisings by southern European lenders as the region’s debt crisis stretches to a fourth year. The firm declined a role in Banco Popular Espanol SA (POP)’s 2.5 billion-euro ($3.2 billion) rights offering this month because it wanted greater protection to avoid potential losses on the sale, two people familiar with the talks said. JPMorgan Chase & Co. (JPM) and Morgan Stanley are helping to guarantee the deal. Goldman also didn’t underwrite this year’s share sales by Italy’s UniCredit SpA and Portugal’s Banco Espirito Santo SA (BES), which drew Bank of America Corp. and Citigroup Inc. Goldman Sachs, which got 55 percent of its revenue this year from sales and trading, is passing on underwriting fees that could be at risk should the stock drop, as happened with insurer Fondiaria-SAI SpA (FSA) this year. 

Why IPOs Look to Be Entering a Slow Deep Freeze for Now - (www.cnbc.com) Making a killing on initial public offerings used to be easy. At the peak of the technology boom, little more than a decade ago, a plentiful supply of companies vied to sell stock on the exchanges, and investors were assured mouthwatering returns. These days, the deals are fewer and the returns more modest. Companies are set to raise more than $45 billion through IPOs this year — the most since 2007, according to data provider Dealogic. But if you scratch the surface, there are signs that the market is less healthy than it appears. Almost a third of the money raised in IPOs this year came from one deal, Facebook's $16 billion offering in May, and the number of companies taking themselves public may end at a three-year low.

Smart Money? Hedge Funds Now Worse Than Mutual Funds - (www.cnbc.com) Hedge fund managers don’t have much to be thankful for these holidays, as failure to beat low-fee index funds will likely infuriate investors shelling out hefty fees for their services. Just 13 percent of the so-called smartest money on the Street are outperforming the S&P 500, and a fifth of all hedge funds are actually in the red during 2012, according to Goldman Sachs data. To make matters worse, hedge fund managers have crowded into the same trades, with turnover at a record low, according to Goldman. Translation: Hedge fund investors are paying 2 percent fees up front and 20 percent of profits thereafter to managers delivering poor performance and apparently doing little about it.

Downturn erodes central bank independence - (www.ft.com) The global financial and economic crisis has weakened central bank independence, a report suggests, as bankers’ increased responsibilities have earned them higher profiles and politicised their work. Most of the world’s central banks have in recent decades been granted power to set monetary policy as they see fit, rather than bend to the demands of politicians to lower interest rates before elections. But the downturn has weakened their operational independence as it has left them filling in for governments unable, or unwilling, to prevent an economic slowdown, a report, due to be published on Tuesday, has said.

Supreme Court Says It's OK To Record Cops In Illinois – (www.businessinsider.com) The U.S. Supreme Court issued an order Monday that essentially allows people in Illinois to record police officers, the Chicago Tribune reports. The justices declined to review a lower court ruling that found the state's “anti-eavesdropping law” to be in violation of a person’s free speech rights when used against anyone who records police officers. By refusing to review the case, the high court leaves the ban on the law in place. The law set out a maximum prison term of 15 years.

OTHER STORIES:

Euro-Area Bailout Fund Survival Faces Final Hurdle at EU Court - (www.bloomberg.com)

Euro zone, IMF to seek Greece deal, debt write-off main problem - (www.reuters.com)

Treasury Bears Capitulate as Fed Buying Meets Cliff Worry - (www.bloomberg.com)

Euro Chiefs Claim Greek Progress, Seek to Persuade ECB - (www.bloomberg.com)

France Lags Euro-Area Economy Overhaul Effort, Study Says - (www.bloomberg.com)

Italian Consumer Confidence Falls to Record Low on Recession - (www.bloomberg.com)

Analysis: India's deficit-cutting plan faltering as clock ticks - (www.reuters.com)

Analysis: "Caveat emptor" as foreigners rush to ride China rebound - (www.reuters.com)

'Twelve Days of Christmas' gift list soars to record $107,300 - (www.latimes.com)

Friday December 7 Housing and Economic stories

TOP STORIES:

Deadline Looms for Long-Term Unemployed - (online.wsj.com) More than 40% of the nearly five million Americans who receive unemployment insurance are set to lose those benefits if federal programs expire as scheduled at year-end. Some economists worry that cutting off those benefits could harm the economy by leaving millions of Americans with less money to spend on everything from food to fuel. Others argue that overly generous benefits are helping to prolong joblessness. About 2.1 million Americans receive payments through federally backed emergency unemployment programs, which Congress adopted starting in 2008 as a temporary supplement to state-level programs funded primarily with taxes on employers, which generally offer six months of benefits. 

450,000 Businesses Shut Down in Italy in Three Years - (translate.google.com) In just three years, from 2010 to 2012, about 450,000 companies closed with a loss of over 300,000 jobs, while the Italians caught up in terms of wear [usurious loans] increased to 600,000.
These are the data provided by Sos enterprise-Confesercenti usury-day. In particular, wear Italian capital Rome and Naples are confirmed. It is "wear submerged, chameleon, now violent now` hit and run 'which marks a difference between the demands of incredible help and legal reality." [Bankruptcy looms]

States Want to Have Say During Talks Over Budget - (www.nytimes.com) Their states are still recovering from the recession, and now the nation’s governors are bracing, again, for cuts in federal aid. They have been down this road before — Congress has already missed several self-imposed deadlines to cut the deficit — but many say they fear that this time, the talks in Washington to avert the so-called fiscal cliff will actually lead to deep cuts. So they want a say in the negotiations. “The main message is that it’s important to remember that, on a lot of areas of governance, we’re partners — and that these issues can’t be solved simply by cost-shifting to the states, because the states aren’t really in a position to do all that,” said Gov. Jack Markell of Delaware, chairman of the National Governors Association. “We just want to make sure that we have a voice as these decisions are being made.”

Downturn erodes central bank independence - (www.ft.com)  The global financial and economic crisis has weakened central bank independence, a report suggests, as bankers’ increased responsibilities have earned them higher profiles and politicised their work. Most of the world’s central banks have in recent decades been granted power to set monetary policy as they see fit, rather than bend to the demands of politicians to lower interest rates before elections. But the downturn has weakened their operational independence as it has left them filling in for governments unable, or unwilling, to prevent an economic slowdown, a report, due to be published on Tuesday, has said.

U.K. Newspapers Sweat Inquiry's Findings - (online.wsj.com) The British newspaper industry is on tenterhooks ahead of a British judge's report on whether and how the country's print press should be reined in to prevent invasions of privacy. From saucy News Corp. tabloids to the venerable British Broadcasting Corp., Britain's media has spent many months with an unflattering spotlight on the way it gathers and reports the news. Now, the industry is on tenterhooks ahead of a British judge's report on whether and how the country's print press should be reined in. Lord Justice of Appeal Brian Leveson on Thursday is set to detail his recommendations for new British press regulations. Prime Minister David Cameron assigned the task to the well-known judge in July 2011, at the height of the phone-hacking scandal at News Corp.'s now-closed News of the World.

OTHER STORIES:

Catalan Pro-Independence Parties Win, Exit Poll Shows - (www.bloomberg.com)

Euro Ministers Take Third Swing at Clearing Greek Payment - (www.bloomberg.com)

Catalans Vote as Secession Push Piles Strain on Rajoy - (www.bloomberg.com)

Egypt's Mursi faces judicial revolt over decree - (www.reuters.com)

Thousands of Italians rally against Monti's austerity - (www.reuters.com)

Italy’s Bersani Faces Off Against Renzi in Bid to Replace Monti - (www.bloomberg.com)

China’s manufacturing sector must reinvent itself if it’s to survive - (www.washingtonpost.com)

China's Wenzhou unveils reform plans as bad loans climb - (www.reuters.com)

India Pledges to Cut Deficit, Cap Debt to Avert Downgrade - (www.bloomberg.com)

Thursday December 6 Housing and Economic stories

TOP STORIES:

Germany Can’t Stomach Forgiving Greece on Debt - (www.cnbc.com) German objections to suffering losses on official loans to Greece have forced the euro zone to explore more complex means of helping Athens cope with its debt mountain. After almost 10 hours of intense talks on Tuesday night, euro zone finance ministers failed to agree on how fast to cut Greece’s debt pile. They called a further meeting next week to settle differences and release 44 billion euros of long-overdue aid. The main stumbling block was Berlin’s refusal to back “illegal” cuts to the interest rates on bilateral loans to Greece or return the profits from the European Central Bank’s purchases of Greek bonds, said people involved in the talks.

Argentina Is Accusing the US of 'Judicial Colonialism' - (www.cnbc.com) Argentina will appeal a U.S federal court ruling ordering it to pay $1.33 billion to holdout bond investors, the government said on Thursday, vowing to fight "judicial colonialism" all the way to the U.S. Supreme Court if necessary. The stakes in the years-long legal battle were raised when New York federal judge Thomas Griesa on Wednesday ordered Argentina to immediately pay bondholders who shunned two exchanges of defaulted debt in 2005 and 2010. As financial markets fretted about a possible new default ahead for the South American county, Economy Minister Hernan Lorenzino said the government will take the judge's ruling to the U.S. Second Circuit Appeals Court on Monday.

Realtors press for bogus appraisals - (www.ocregister.com) When Cris Robinson put her Rancho Santa Margarita townhouse on the market earlier this year, she noticed that the only nearby homes selling were foreclosures and short sales. "There wasn't a single standard sale to (compare) me with," said Robinson, an equity seller. Robinson said a buyer offered to pay $317,000, but the appraisal came in at $310,000 – the price at which another home in the neighborhood recently sold. That townhouse was the same model, Robinson said, but it was distressed and needed work. By contrast, her own place had thousands of dollars in custom upgrades, including travertine floors. A homeowner looking askance at an appraisal is nothing new. But many Realtors also complain that lowball appraisals are hurting home sales. The National Association of Realtors says a recent survey indicated that in some cases appraisals are lagging behind the recovering housing market. Appraisers aren't always familiar with neighborhoods, and some use foreclosures and short sales as comparable sales without adjusting for them.

100 million in compensation: no performance metrics required - (www.nytimes.com)  SHAREHOLDERS get little say on executive pay. Yes, they can get angry. But they can rarely get even. One big investor, the Louisiana Municipal Police Employees’ Retirement System, wants to change that. Its target is the Simon Property Group of Indianapolis. Last year, that company granted its chief executive, David Simon, a stock award worth $120 million. The folks down in Baton Rouge aren’t very happy about that. The Louisiana pension fund argues that Mr. Simon’s award should have been put to a shareholder vote, and it has sued Simon Property’s board. The suit raises questions not only about Simon Property but also about the New York Stock Exchange, where Simon’s shares are traded. The Big Board has rules that are supposed to protect shareholders from questionable pay practices.

Time share resale scam uncovered - (www.lasvegassun.com)  Seven Las Vegas residents were arrested by federal authorities this week on charges of wire fraud and money laundering stemming from a fraudulent timeshare resale scheme. The seven, plus one Los Angeles-based co-conspirator, are accused of soliciting advanced payments from victims in exchange for promising to provide willing buyers for timeshare properties or points, according to a statement from the United States Attorney’s Office. Instead of following through, the conspirators, acting as the Jariv Companies, simply kept the payments, pocketing more than $6 million between Feb. 1, 2011, and Jan. 31, 2012.

OTHER STORIES:

Spain to offer residency to people who buy homes. - (www.ap.org)

The Real Mental Challenges For Housing Bulls - (www.ritholtz.com)

A New Problem Brews for Hamas: Its Finances - (www.cnbc.com)

These 8 States Will Tax Your Amazon Purchases - (www.cnbc.com)

Real Estate Sales Collapse in Paris; New Home Starts Lowest Since 1998 - (globaleconomicanalysis.blogspot.com)

A Prison of Debt on Both Sides of the Atlantic - (www.spiegel.de)

Even Muni Bonds May Be Targeted in ‘Fiscal Cliff’ Talks - (www.cnbc.com)

American Banks Actually Are Lending Again—to Europe - (www.cnbc.com)

Wednesday December 5 Housing and Economic stories

TOP STORIES:

HP’s Accounting Claims Are Seen as Cover for Bad Deals - (www.bloomberg.com) Hewlett-Packard Co.’s (HPQ) claims of financial improprieties at Autonomy Corp. have accounting experts questioning whether the allegations are an attempt to divert attention from yet another bad acquisition. Hewlett-Packard said yesterday it recorded an $8.8 billion writedown related to its purchase last year of Autonomy, the U.K. software maker. More than $5 billion of that impairment charge was the result of accounting practices at Autonomy, Hewlett-Packard said in a statement. About $200 million of Autonomy’s revenue had been recorded prematurely or improperly, according to Hewlett-Packard’s general counsel.  “How does that translate into a $5 billion write-off?” said Lynn E. Turner, former chief accountant of the U.S. Securities and Exchange Commission and a managing director at LitiNomics Inc., an economic and forensic consulting firm. “The big issue isn’t the fraud they’re talking about. The big issue is that HP has made acquisitions that have turned out to be a disaster.”

Drought No Obstacle to Record Income for U.S. Farms - (www.bloomberg.com) Even after the worst drought in a half century shriveled crops from Ohio to Nebraska, U.S. farmers are having their most-profitable year ever because of record- high prices and insurance claims. Farmer income probably will jump 6.9 percent to $144 billion, exceeding the government’s August estimate of $139.3 billion, said Neil Harl, an economist at Iowa State University. Parched fields that drove corn, soybean and wheat futures as much as 68 percent higher since mid-June mean insurance payouts may more than double to $28 billion, according to Doane Advisory Services Co., a farm and food-company researcher in St. Louis.

Meat Firms Face Hit to Plump Profits - (online.wsj.com)  Most big U.S. meat companies have posted solid profits this year, though some have experienced an earnings slowdown as consumers balk at higher prices for steak and other meat products. Now the companies are just starting to face a new challenge: a severe U.S. drought that has driven up the cost of grains they use to fatten cattle, hogs and chickens. Investors looking for clues into how the higher costs will affect the meat giants will get a taste this week, when Tyson Foods Inc. and Hormel Foods Corp. report quarterly results.

Los Angeles Set to Rival Chicago With Highest Sales Levy - (www.bloomberg.com) Los Angeles shoppers looking for just the right satin blindfold or Whip Me stockings at Agent Provocateur’s lingerie boutique on Melrose Avenue may soon pay as much tax as customers at the company’s Gold Coast store in Chicago, and more than at the one on Madison Avenue. The City Council, which faced $1.6 billion in deficits over the past four years, voted 11-4 today to ask residents to boost the local sales tax 0.5 percentage point, bringing the total levy -- local and state -- to 9.5 percent. That would tie Los Angeles with Chicago for the highest rate of the 10 largest U.S. cities. New York City is 8.875 percent.  “Our approach to dealing with our budget shortfalls has been to cut,” said Edward Johnson, a spokesman for City Council President Herb Wesson, who backed the sales tax proposal. “If we continue to cut, we will drastically affect the services that we deliver to our citizens.”

Catalan Banks Owing ECB $77 Billion May Stall Independence Drive - (www.bloomberg.com) Catalan bank borrowings of about 60 billion euros ($77 billion) from the European Central Bank may prove an obstacle on the region’s path to possible independence.

CaixaBank SA, Spain’s third-biggest bank, took about 20 billion euros in central bank funding, according to the Barcelona-based company’s accounts. Banco Sabadell SA, a Catalan lender that became Spain’s fifth-biggest after a string of acquisitions, has borrowed about 27 billion euros. The region’s President Artur Mas called early elections for Nov. 25 in a gambit that may trigger a drive for independence and risks stranding a new Catalan state outside the European Union as well as severing ties to Spain. The region’s banks, like other Spanish lenders, tapped the ECB’s low-cost funding when Spain’s economic crisis shut them out of debt markets.

OTHER STORIES:

Bernanke Says Fiscal Cliff Fix May Bring ‘Very Good’ Year - (www.bloomberg.com)

Pitfalls lurk as Fed marches toward transparency - (www.reuters.com)

Twinkies maker Hostess wins court OK to close - (www.reuters.com)

German doubts force rethink on Greece - (www.ft.com)

Merkel says lower rates, EFSF boost can fill Greek gap: source  - (www.reuters.com)

Japan’s Exports Reach Three-Year Low as Recession Looms: Economy  - (www.bloomberg.com)

Tuesday December 4 Housing and Economic stories

TOP STORIES:

Fannie and Freddie - pay us back! - (www.nytimes.com)  WHO says Democrats and Republicans can’t agree on anything? When it comes to fixing the government’s troubled and costly relationship with the private mortgage market, bipartisanship is very much alive. Politicians in both parties have reached consensus over the past four years to simply do nothing. Consider the elephant in the room: Fannie Mae and Freddie Mac owe American taxpayers nearly $140 billion — and there seems to be no plan on any front to pay it back. Though many Americans aren’t aware of it, the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) are publicly traded companies — like I.B.M. or General Electric. Except these two giant housing lenders were created by Congress and, as a result, have a relationship, albeit an awkward one, with Uncle Sam. 

Sony, Panasonic Credit Rating Cut to Speculative Grade - (www.bloomberg.com) Sony Corp. (6758) and Panasonic Corp. (6752), the Japanese electronics makers reeling from record losses, had their credit ratings cut to junk for the first time by Fitch Ratings amid slumping demand for their televisions. Sony’s rating was cut by three levels to BB-, three steps below investment grade, and Panasonic by two levels to BB, with the outlook on both companies being negative, Fitch said in separate statements today. Both companies had their short-term ratings reduced to B from F3.

To Stem Losses, FHA Mortgages Get More Expensive - (www.cnbc.com) The federal agency that some credit with saving the housing market during the worst of the recent crash, may now be in need of taxpayer help itself. The Federal Housing Administration (FHA), which insures more than $1 trillion worth of home mortgages, is looking at $16.3 billion in losses, according to an annual audit released today. “This does not mean FHA has insufficient cash to pay insurance claims, a current operating deficit, or will need to immediately draw funds from the Treasury,” according to a release from the Department of Housing and Urban Development (HUD). “The need to draw on Treasury funds is determined not by the economic assumptions of this actuarial review but those used in the President’s FY 2014 budget proposal to be released in February, with a final determination on a potential draw made in September.”

Rising down payments and loan costs will hinder a housing recovery - (www.ochousingnews.com) Besides credit qualification barriers due to low FICO scores, there are two barriers to originating more loans and selling more houses to owner occupants: (1) insufficient down payment, and (2) increasing loan costs. The FHA still originates loans at 3.5% down, and the credit barriers are limited, despite realtor pleas and rhetoric to the contrary. However, since the FHA is losing a great deal of money and facing a bailout, they are continually raising their insurance fees as they become the replacement for subprime lending. These increasing costs are making houses less affordable and thereby reducing access to credit. As a result, many borrowers are opting for conventional mortgages with their higher down payment requirements. And since fewer potential buyers have the available cash saved for a down payment, the increasing costs of FHA loans which drives people to conventional mortgages is further reducing the buyer pool. This will inevitably lead to less demand.

Tiny houses in San Francisco at MacMansion prices - (www.sfgate.com) This week, San Francisco’s Planning Commission will vote on whether to cap the new micro-apartments allowed in the city at 375 units. Proponents of the tiny apartments — which cram living room, bathroom and kitchen into as little as 220 square feet of living space —  say the city desperately needs more apartments with lower monthly rents. They also point out that 40 percent of San Franciscans live alone, making this type of unit ideal. But opponents worry that the units would not benefit neighborhoods where they would be built, and point out that, at a higher price per square foot than larger apartments, they are not truly affordable housing.

OTHER STORIES:

Euro zone faces deepest downturn since early 2009  - (www.reuters.com)

Euro-Area Services, Manufacturing Contract for 10th Month - (www.bloomberg.com)

EU Spars Over Budget as Chiefs See Possible Deadlock - (www.bloomberg.com)

EU Budget Showdown Pits Bee Subsidies Against Veto Threat - (www.bloomberg.com)

Exclusive: India's fiscal deficit could reach 5.5-5.6 percent of GDP in 2012/13 - source - (www.reuters.com)

China's manufacturing growth quickens; HSBC flash PMI at 13-month high - (www.reuters.com)

Holiday shopping marathon starts as consumer sentiment shaky - (www.reuters.com)

Monday December 3 Housing and Economic stories

TOP STORIES:

House Report Says Corzine’s Risky Bets Aided MF Global’s Fall  - (www.nytimes.com) Congressional investigators on Wednesday took aim at a former colleague, Jon S. Corzine, blaming the onetime senator’s risk-taking at MF Global for accelerating the brokerage firm’s demise. In excerpts from a broader MF Global report that is to be released on Thursday, Republican members of a Congressional panel outlined a withering critique of Mr. Corzine’s 19-month reign at the firm. Mr. Corzine, a former Democratic senator and governor from New Jersey, resigned as MF Global’s chief executive last fall after the firm raided customer accounts during a futile fight for survival.

U.S. Postal Service on a ‘Tightrope’ Lost $15.9 Billion - (www.bloomberg.com) The U.S. Postal Service said its net loss last year widened to $15.9 billion, more than the $15 billion it had projected, as mail volume continued to drop, falling 5 percent. Without action by Congress, the service will run out of cash on Oct. 15, 2013, after it makes a required workers compensation payment to the U.S. Labor Department and before revenue typically jumps with holiday-season mailing, Chief Financial Officer Joe Corbett said today. The service, whose fiscal year ends Sept. 30, lost $5.1 billion a year earlier. It announced the 2012 net loss at a meeting at its Washington headquarters. “We are walking a financial tightrope,” Postmaster General Patrick Donahoe said at the meeting. “Will we ever stop delivering the mail? It will never happen. We are simply too important to the economy and the flow of commerce.”

17% of FHA loans delinquent in September, bailout coming - (www.ochousingnews.com) Everyone knew this was coming. The FHA needs a bailout. When the final tally of losses at the FHA come in, everyone will act surprised. Nobody paying careful attention to what the FHA is doing will be shocked. They are absorbing the losses the banks could not by insuring loans with low down payments in a declining market. No private lender or mortgage insurer would do this because the losses would put them out of business. Instead these losses will be absorbed by the US taxpayer — by you. FHA has been the lender of last resort since its inception.

FHA Nears Need for Taxpayer Funds - (online.wsj.com)  The Federal Housing Administration is expected to report this week it could exhaust its reserves because of rising mortgage delinquencies, according to people familiar with the agency's finances, a development that could result in the agency needing to draw on taxpayer funding for the first time in its 78-year history. Such a report would likely set off a political fight over the government's role in housing, as it raises the prospect of billions of dollars being added to the U.S. government's effort to stabilize the hard-hit sector in the aftermath of the 2008 financial crisis, which already includes $137 billion spent to bail out Fannie Mae and Freddie Mac. Together with Fannie and Freddie, federal agencies are backing nearly nine in 10 new mortgages.

The FHA is giving loans to Ponzis to reenter the housing market - (www.ochousingnews.com) Do we really want to let Ponzis back into the housing market? There is a large group of people who’ve proven to be completely irresponsible with mortgage debt as evidenced by my daily debtor debacles. I wrote yesterday that Pent-up demand from boomerang buyers may not materialize, but isn’t stopping the FHA from trying. I have no problem with peak buyers whose only mistake was poor timing from reentering the housing market, but do we really want to let the irresponsible Ponzis back in? And do we as taxpayers want to be on the hook when they resume their old habits? That’s where the FHA is headed. It shouldn’t be surprising that Ponzis want to own another cash cow. They were handsomely rewarded for owning last time.

OTHER STORIES:

Analysis: U.S. credit rating could again take hit in 2013 - (www.reuters.com)

Fed minutes show lots of talk, no action, on new strategy - (www.washingtonpost.com)

Williams Says Fed May Buy $85 Billion in Bonds Per Month - (www.bloomberg.com)

U.S. Fiscal Cliff Showdown Turns Into Early Blame Game - (www.bloomberg.com)

US Fed looks at further easing - (www.ft.com)

The new boom: Shale gas fueling an American industrial revival - (www.washingtonpost.com)