Tuesday July 27 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Illinois Construction Workers Make $50-68 Hour, Strike for 15% more - (Mish at globaleconomicanalysis.blogspot.com) Illinois construction workers live in fantasy land of business-as-usual. They are demanding 15% pay hikes when everyone of them ought to be fired with their jobs outsourced to the cheapest non-union shop. Please consider Construction Workers Go On Strike. Here in the Chicago area the highway construction workers went on strike....the reason they want a 5% raise each year over the next three year contract.....to cover the cost of increase healthcare cost! The current salary for construction workers is between $50.00 and $68.00 per hour which include benefits. Illinois is suffering from one of the worst recessions since the depression.... over 700,000 unemployed....Walmart has just announced they plan to build 24 new stores in the Chicagoland area.....most of the new jobs will pay $9.50 per hour....and there are conversations to raise this salary to $10.50 per hour....hundreds of unemployed workers have expressed willingness to take on these new jobs....with pleasure.....many people just want to work and get a paycheck.

Hedge Funds ‘Frozen in Headlights’ Cut Trading as Markets Swing - (www.bloomberg.com) Hedge-fund managers, Wall Street’s best compensated and supposedly smartest investors, are dazed and confused. Reeling from the worst second-quarter performance in a decade, hedge funds have scaled back trading as they struggle to figure out where markets are headed amid sometimes vicious crosscurrents in stock, commodities and other markets, according to brokers and managers. “There’s a degree of being frozen in the headlights, of not knowing what sectors to emphasize, of what securities to emphasize,” said Tim Ghriskey, chief investment officer of Solaris Asset Management LLC, a Bedford Hills, New York-based firm with $2 billion in hedge funds and conventional stock funds. Hedge-fund managers, who oversee $1.67 trillion in assets, are reluctant to put money to work as they are buffeted by a wide range of often conflicting political and economic forces, from fiscal policy in Europe and the U.S., to what regulations will be imposed on the financial-services and energy industries, to the growth prospects in China. In turn, smaller and fewer trades may make it harder for funds to rebound from losses incurred since May, when the industry suffered its worst decline in 18 months.

Allstate CEO Says State Borrowing ‘Out of Control’ - (www.bloomberg.com) Allstate Corp. Chief Executive Officer Thomas Wilson said a surge in borrowing by U.S. state and local governments may trim the value of municipal debt holdings, and called for political leaders to cut costs. “Government borrowing is way out of control.” Wilson, 52, said yesterday in a Bloomberg Television interview from Aspen, Colorado. “We need to get our house in order.” Wilson said concerns about budget deficits and funding shortfalls will probably lead to market-value declines in the municipal bond market rather than widespread defaults. Allstate, the largest publicly traded U.S. home and auto insurer, cut its municipal-bond portfolio in three straight quarters through the end of March, reducing its holdings to $20.1 billion from $23.1 billion as of June 30, 2009. The insurer hasn’t released second- quarter results yet.

Illinois Governor Pat Quinn Gave Raises Averaging 11.4% to 35 Staff Members - (www.myfoxchicago.com) Illinois Gov. Pat Quinn has handed out raises -- some of more than 20 percent -- to his staff while proclaiming a message of "shared sacrifice" and planning spending cuts of $1.4 billion because the state is awash in debt. The Democrat has given 43 salary increases averaging 11.4 percent to 35 staffers in the past 15 months, according to an Associated Press analysis of records obtained under the Freedom of Information Act. They include a $24,000-a-year bump for the man promoted to shepherd the state through the fiscal storm. Budget Director David Vaught got a 20 percent raise to bring his pay to $144,000 in October when he moved to his new position from Quinn's staff, where he was a senior adviser. Lawmakers, whom Quinn has asked to raise income taxes and borrow billions to meet its obligations for employee pensions reacted with skepticism and anger. "It's insulting," said Rep. Jack Franks, a Woodstock Democrat who voted "no" on Quinn's proposal to borrow $3.7 billion for the pension payment that the House OK'd but Senate has not. "It shows how out of touch he is with the real world, where businesses are freezing salaries and in some cases laying people off," Franks said.

US shopping center vacancy rates rose in 2nd quarter - (www.reuters.com) Retailers shuttered more stores in U.S. shopping centers during the second quarter, further delaying a rebound in the struggling retail real estate market, according to research firm Reis Inc. Shopping centers and strip malls have been pounded harder than other types of real estate, hurt by weak consumer spending, anemic job growth and an oversupply built to serve new housing that never materialized. "Until we see stabilization and recovery take root in both consumer spending and business spending and employment, we do not foresee a recovery in the retail sector until late 2012 at the earliest," said Victor Calanog, Reis director of research. For U.S. strip centers, the vacancy rate in the second quarter rose 0.10 percentage point from the first quarter to 10.9 percent, slightly below the 11 percent in 1991 during the prior real estate bust, according to the Reis quarterly report, released on Wednesday. Retailers gave up 1.85 million square feet of occupied space in the second quarter at neighborhood shopping centers, while developers opened less than 400,000 square feet of new strip mall space. That compares with an average of about 7 million to 8 million square feet of shopping centers built each year from about 2001, according to Reis.

OTHER STORIES:

Build America Bond Sales Decline With Yield Premium at Record - (www.bloomberg.com)

Chinese buying of short-term yen notes hits record - (www.reuters.com)

The Swiss franc is the new German mark - (www.ft.com)

Tax on Dividends, Capital Gains Will Remain at 20%: Geithner - (www.cnbc.com)

IMF Says Sovereign, Banking Risks in Europe Threaten Stability - (www.bloomberg.com)

Paulson Said to Lose 6.9% in June With Advantage Plus Fund - (www.bloomberg.com)

BOE Wrestles Inflation ‘Elephant’ as Debate Heats Up - (www.bloomberg.com)

Funding fears trigger rush for loans - (www.ft.com)

China’s ‘Moderately Loose’ Policy Will Stay, Central Bank Says - (www.bloomberg.com)

Cap on Bank Bonuses Clears Hurdle in Europe - (www.nytimes.com)

Europe Stress Tests May Underestimate Probable Losses - (www.bloomberg.com)

Monday July 26 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

San Jose college leader worked at DeAnza College while on sick leave - (www.mercurynews.com) A top executive at the financially troubled San Jose/Evergreen Community College District earned a full salary while on sick leave this spring — yet, during that same period, she earned a separate salary teaching at another nearby district. Bayinaah Jones, whose title at SJECC is executive director of institutional effectiveness, earned $30,672 on sick leave there, but was apparently healthy enough to hold down a $5,775 teaching position in the Foothill-DeAnza Community College District. The revelation comes at a time of economic hardship at community colleges, where students are shut out of classes due to budget cuts — and a mere $800 can provide a student with a valuable certificate in cosmetology or dental hygiene. It follows a searing state audit of the SJECC District's books, which was critical of spending by former Chancellor Rosa Perez — whose live-in partner is Jones. Perez also took paid sick leave — for eight months, earning $25,000 each month — until retiring last Wednesday due to health reasons. Records show that Jones took sick leave from her $123,000 position — "per my physician's order," she wrote in an e-mail message — in April, May and June of 2010. She remains sick, "until further notice." In 2005, Perez hired Jones to be her executive assistant. She was quickly promoted to a newly created job as executive director of institutional effectiveness. The two women live together in a home they own in San Francisco. In the last several years, according to documents obtained by KGO-TV, they took 18 business trips together to places such as El Salvador, Scotland and West Palm Beach — paid with district credit cards.

U.S. Shopping Center Vacancies Approach Record High, Reis Says - (www.bloomberg.com) Vacancies at U.S. neighborhood and community shopping centers moved closer to the highest on record in the second quarter amid signs the economic recovery is losing steam and consumer confidence remains subdued, Reis Inc. said. The vacancy rate at shopping centers rose to 10.9 percent from 10 percent a year earlier and 10.8 percent in the first quarter, the New York-based real estate research firm said in a report today. It was the highest since 1991’s 11 percent. The record for shopping center vacancies since Reis began tracking the data 30 years ago was 11.1 percent in 1990. “There are really very few reasons to believe that performance deterioration won’t continue for another 18 to 24 months for retail properties, although there are some signs that the pace of decline is moderating,” Victor Calanog, director of research, said in the report.

Britain Is Puzzled by Its Inflation Problem in a Downturn - (www.nytimes.com) Committee members at the Bank of England and some economists have been puzzled by persistently high inflation in Britain, causing some concerns that the country’s recovery might stagnate. Unlike in the United States and in countries that share the euro, inflation in Britain never came close to zero in 2009. And while core inflation, which excludes food and energy prices, has declined in countries like France, Germany, Italy and the United States since the beginning of 2008, it has risen in Britain and is now above 3 percent, more than twice the rate in the euro zone. The reason depends on whom you ask.

Industry Cuts Back as Steel Prices Fall - (online.wsj.com) Steel prices in the U.S. are declining after holding firm for months, potentially a bad omen for the nation's economy as manufacturing activity slows and consumers grow more cautious about big-ticket purchases, such as cars and appliances. Steel prices tumbled in June, and U.S. steel mills are responding by cutting production. Earlier this year they were ramping up capacity to meet the growth in demand they hoped would emerge from the economic recovery. Instead, demand has been spotty. Another wild card for the industry is China. While the rest of the world was reducing steel production and consumption during the recession, China's voracious appetite for building bridges, autos and appliances, helped support global steel prices. For the most part, China has stepped back from exporting raw steel, in favor of higher-value finished goods. But a recent easing in demand by China's domestic steel consumers has raised fears the country could step up steel exports to the U.S. and other markets. "There is a very real risk of steel from China being dumped illegally into the U.S. market, despite all the recent trade action," said Michelle Applebaum, of Steel Market Intelligence, a steel consulting firm. Over the past several years, the U.S. has been aggressive in filing trade cases and using trade laws to prevent China from dumping steel—or, exporting it at less than home-market prices. The U.S. has laws or quotas restricting several types of Chinese-made steel products, including hot-rolled steel, plate steel, pipes and tubes, but Ms. Applebaum said those measures aren't as effective as the ones used by Europe and Canada.

Maryland’s Largest County Seeks $325 Million as Downgrade Looms - (www.bloomberg.com) Montgomery County, Maryland’s most- populous and one of about 60 top-rated counties in the U.S., will borrow $325 million as it faces a credit downgrade from Moody’s Investors Service. The suburb of Washington, D.C., home to the National Institutes of Science and other federal offices, was put on review for a possible rating cut after the recession reduced tax revenue, forcing it to tap reserves, Moody’s said April 5. The county’s main account, the general fund, shrank by more than half to $108 million in June 2009 from a year earlier, according to data compiled by Bloomberg. The potential downgrade hasn’t stopped Montgomery County’s general-obligation debt from trading at a lower yield than Maryland’s AAA rated obligations, Bloomberg data shows. The county’s tax-exempt bonds due in 2020 were priced to yield 3.15 percent, 17 basis points below a comparable state bond. The so- called spread fell to 4 basis points yesterday, according to Bloomberg data. A basis point is 0.01 percentage point.

OTHER STORIES:

Europe's "toothless" bank tests making matters worse - (www.telegraph.co.uk)

European Banks' Hidden Losses May Threaten EU Stress Test Plan - (www.businessweek.com)

China Gold Demand Jumps as Stocks Fall, Exchange Says - (www.bloomberg.com)

China Says Treasury Holdings Shouldn’t Be Politicized - (www.bloomberg.com)

Loans Winning Bond Underwriting Spots as Global Sales Drop 39% - (www.bloomberg.com)

Debt May Sink Stocks to Crisis Lows, Says First State - (www.bloomberg.com)

China Seeks to Tighten Liquidity Even as Growth Slows - (www.bloomberg.com)

China ‘Lending Party’ to Roll on as Banks Raise Cash, Shih Says - (www.bloomberg.com)

Pugachyov’s IIB is 1st Russia Bank Default Since 1999 - (www.bloomberg.com)

The ECB may yet turn to QE - (www.ft.com)

More Concerns About Slowing Growth in Asia - (www.nytimes.com)

India Needs ‘Contingency Plan’ to Contain Inflation - (www.bloomberg.com)

Service Industries in U.S. Expand Less Than Forecast - (www.bloomberg.com)

Post Office Wants to Raise Stamp Price - (www.nytimes.com)

Global investment bank earnings set for steep dip - (www.ft.com)

A New Generation, an Elusive American Dream - (www.nytimes.com)

Sunday July 25 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

A Market Forecast That Says 'Take Cover' - (www.nytimes.com) WITH the stock market lurching again, plenty of investors are nervous, and some are downright bearish. Then there’s Robert Prechter, the market forecaster and social theorist, who is in another league entirely. Mr. Prechter is convinced that we have entered a market decline of staggering proportions — perhaps the biggest of the last 300 years. In a series of phone conversations and e-mail exchanges last week, he said that no other forecaster was likely to accept his reasoning, which is based on his version of the Elliott Wave theory — a technical approach to market analysis that he embraces with evangelical fervor. Originating in the writings of Ralph Nelson Elliott, an obscure accountant who found repetitive patterns, or “fractals,” in the stock market of the 1930s and ’40s, the theory suggests that an epic downswing is under way, Mr. Prechter said. But he argued that even skeptical investors should take his advice seriously.

"Probably 2 to 3 times as much inventory as what Realtors are saying on MLS" - (www.miamiherald.com) After slimming down to about half its peak size over the past 20 months, South Florida's inventory of existing homes for sale has slowly begun to expand again, according to a report published Monday by real estate consultancy Condo Vultures. In the month of June, the number of condos, townhomes and single family residences on the market in Miami-Dade, Broward and Palm Beach counties rose by about 2.5 percent, posting increases for each of the last four weeks, the report found. It's the first time South Florida's supply of residences on the market -- which play a crucial role in determining home prices -- has risen four consecutive weeks since Condo Vultures begun tracking in 2008, said Peter Zalewski, a principal at the Bal-Harbour-based consultancy. ``This is the first time since Nov. 4, 2008 that we have three let alone four weeks of increase,'' he said. ``It's only four weeks, but if that turns into 12 weeks, [the South Florida housing market] could be in trouble.'' The number of residences on the market increased to 66,850 on Monday, up from 65,220, the report found. The increase, while relatively small, comes after nearly two years of consecutive month-over-month decreases in inventory, as South Florida's glut of homes for sales has fallen from its peak of more than 100,500 residences.

California Cities Shutting Police Forces to Close Budget Gaps - (www.bloomberg.com) San Carlos, a Silicon Valley suburb that calls itself the City of Good Living, will hire contractors to maintain parks and negotiate with county officials to take over policing, becoming the latest California community eliminating basic services to close budget deficits. Measures passed by the City Council last night may save the community of 28,000 residents about $2.5 million a year, according to Mayor Randy Royce. San Carlos faces a $3.5 million deficit for the fiscal year that begins July 1, on a budget of $25.8 million. About 70 percent of U.S. municipalities are cutting jobs to cope with declining tax revenue, according to a survey published last month by the National League of Cities in Washington. One in five communities cut public-safety spending and revised union contracts, and almost one-quarter reduced health care.

Illinois Stops Paying Its Bills, but Can't Stop Digging Hole - (www.nytimes.com) Even by the standards of this deficit-ridden state, Illinois’s comptroller, Daniel W. Hynes, faces an ugly balance sheet. Precisely how ugly becomes clear when he beckons you into his office to examine his daily briefing memo. Payback Time: He picks the papers off his desk and points to a figure in red: $5.01 billion. “This is what the state owes right now to schools, rehabilitation centers, child care, the state university — and it’s getting worse every single day,” he says in his downtown office. Mr. Hynes shakes his head. “This is not some esoteric budget issue; we are not paying bills for absolutely essential services,” he says. “That is obscene.” For the last few years, California stood more or less unchallenged as a symbol of the fiscal collapse of states during the recession. Now Illinois has shouldered to the fore, as its dysfunctional political class refuses to pay the state’s bills and refuses to take the painful steps — cuts and tax increases — to close a deficit of at least $12 billion, equal to nearly half the state’s budget.

With the US trapped in depression, this really is starting to feel like 1932 - (www.telegraph.co.uk) The US workforce shrank by 652,000 in June, one of the sharpest contractions ever. The rate of hourly earnings fell 0.1pc. Wages are flirting with deflation. "The economy is still in the gravitational pull of the Great Recession," said Robert Reich, former US labour secretary. "All the booster rockets for getting us beyond it are failing." "Home sales are down. Retail sales are down. Factory orders in May suffered their biggest tumble since March of last year. So what are we doing about it? Less than nothing," he said. California is tightening faster than Greece. State workers have seen a 14pc fall in earnings this year due to forced furloughs. Governor Arnold Schwarzenegger is cutting pay for 200,000 state workers to the minimum wage of $7.25 an hour to cover his $19bn (£15bn) deficit. Can Illinois be far behind? The state has a deficit of $12bn and is $5bn in arrears to schools, nursing homes, child care centres, and prisons. "It is getting worse every single day," said state comptroller Daniel Hynes. "We are not paying bills for absolutely essential services. That is obscene."

OTHER STORIES:

World stocks steady amid worries over US recovery - (finance.yahoo.com)

Deflation: Making Sure "It" Doesn't Happen Here - (www.businessinsider.com)

Case Shiller House Prices Cities April 2010 - (calculatedriskimages.blogspot.com)
Top financial adviser since 1980 mostly in cash - (www.marketwatch.com)
Stock market volatility reflects a weak economy - (www.mybudget360.com)
Vancouver becoming tourist destination for house-hunting Chinese - (www.financialpost.com)

How Far Underwater Do Borrowers Sink Before Walking Away? - (www.blogs.wsj.com)

U.S. double-dip recession is officially coming - (www.business.financialpost.com)
Double dip or did the great recession really never end? - (finance.yahoo.com)
Time to shut down the US Federal Reserve? - (blogs.telegraph.co.uk)
US growth estimate revised down to 2.7% - (news.bbc.co.uk)
Consumer Confidence Index Drops Sharply - (www.conference-board.org)
Norway Housing Bubble Risks Grow as Euro Region Crisis Delays Rate Rise - (www.bloomberg.com)
In Ireland, a Picture of the Cost of Austerity - (www.nytimes.com)
Protesters clash with Greek police over proposed reforms - (www.usatoday.com)
How Poland became only EU nation to avoid recession - (www.cnn.com)

Saturday July 24 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Rogoff Says China Property Starting to ‘Collapse’ - (www.bloomberg.com) China’s property market is beginning a “collapse” that will hit the nation’s banking system, said Kenneth Rogoff, the Harvard University professor and former chief economist of the International Monetary Fund. As China’s economy develops, “especially at the speed it’s growing, it’s going to have bumps,” said Rogoff, speaking in an interview with Bloomberg Television in Hong Kong. He also said that while recoveries across the global economy are “very slow,” the danger of a return to recession isn’t “elevated.” Rogoff’s concern echoes that of investors, who sent China’s benchmark stock index to its worst loss in more than a year last week. China’s data have been a focus because the nation has led the global recovery from the worst postwar recession.

Supply Chain for iPhone Highlights Rising Costs in China - (www.nytimes.com) What the latest analysis shows is that the smallest part of Apple’s costs are here in Shenzhen, where assembly-line workers snap together things like microchips from Germany and Korea, American-made chips that pull in Wi-Fi or cellphone signals, a touch-screen module from Taiwan and more than 100 other components. But what it does not reveal is that manufacturing in China is about to get far more expensive. Soaring labor costs caused by worker shortages and unrest, a strengthening Chinese currency that makes exports more expensive, and inflation and rising housing costs are all threatening to sharply increase the cost of making devices like notebook computers, digital cameras and smartphones. Desperate factory owners are already shifting production away from this country’s dominant electronics manufacturing center in Shenzhen toward lower-cost regions far west of here, even deep in China’s mountainous interior.

Microsoft Calling. Anyone There? - (www.nytimes.com) Microsoft’s engineers and executives spent two years creating a new line of smartphones with playful names that sounded like creatures straight out of “The Cat in the Hat” — Kin One and Kin Two. Stylish designs, an emphasis on flashy social-networking features and an all-out marketing blitz were meant to prove that Microsoft could build the right product at the right time for the finickiest customers — gossiping youngsters with gadget skills. But last week, less than two months after the Kins arrived in stores, Microsoft said it would kill the products. “That’s a record-breaking quick end to a product, as far as I am concerned,” said Michael Cronan, a designer who helped drive the branding of products like Kindle for Amazon and TiVo. “It did seem like a big mistake on their part.”

Obama Decried, Used Bush Drilling Policies - (online.wsj.com) Less than four months after President Barack Obama took office, his new administration received a forceful warning about the dangers of offshore oil drilling. The alarm was rung by a federal appeals court in Washington, D.C., which found that the government was unprepared for a major spill at sea, relying on an "irrational" environmental analysis of the risks of offshore drilling. The April 2009 ruling stunned both the administration and the oil industry, and threatened to delay or cancel dozens of offshore projects in Alaska and the Gulf of Mexico. Despite its pro-environment pledges, the Obama administration urged the court to revisit the decision. Politically, it needed to push ahead with conventional oil production while it expanded support for renewable energy. Another reason: money. In its arguments to the court, the government said that the loss of royalties on the oil, estimated at almost $10 billion, "may have significant financial consequences for the federal government." The U.S. Court of Appeals reversed its decision and allowed drilling in the Gulf to proceed—including on BP PLC's now-infamous Macondo well, 50 miles off the Louisiana coast.

Detroit: The Do-It-Yourself City - (online.wsj.com) In tapped-out Detroit, residents pay out-of-pocket to spruce up vacant lots, parks. Although he retired long ago, Eddie Edwards has found work that keeps him busy for much of the year: staving off blight on his block. This summer, the 63-year-old Mr. Edwards is chopping down tall weeds in empty lots and cleaning the alleyways behind his home and across the street. He also routinely takes care of the street sweeping, using just a broom and dust pan. "It is time-consuming," says Mr. Edwards, who spent his professional life molding glass into windshields and tail lights for Chrysler. "But I don't have anything else to do." Across Detroit, do-it-yourselfers such as Mr. Edwards are rolling up their sleeves and opening up their wallets to provide basic services that the financially strapped city can no longer manage on its own, from boarding up vacant homes to mowing lawns to maintaining parks. In some areas, residents also partner with city agencies or look to philanthropies for help. "My cellphone is full of people" who do upkeep on their own, says Brad Dick, deputy director of Detroit's General Services Department. Many think they are going it alone, he says. "They're always shocked they're not the only one."

OTHER STORIES:

Property Bonds Slump Most Since ’09 on Slowdown: Credit Markets - (www.bloomberg.com)

China takes aim at off-balance sheet lending - sources - (www.reuters.com)

China Growth Weakens in Car Sales, Services Industry - (www.bloomberg.com)

China eyes shake-up of bank holdings - (www.ft.com)

Japan revises its role in the China market - (www.ft.com)

Germany focuses on cutting spending - (www.ft.com)

China Fears Warming Effects of Consumer Wants - (www.nytimes.com)

Less to Bank on at Bank of China - (online.wsj.com)

RBI Has ‘Eye on the Ball’ as India Inflation Quickens - (www.bloomberg.com)

Friday July 23 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Governor puts 200,000 state workers on minimum wage - (www.sacbee.com) Roughly 200,000 state workers will receive minimum wage paychecks next month under terms of an order issued Thursday by the Schwarzenegger administration. According to a letter delivered to Controller John Chiang in late afternoon, July pay for most hourly state employees will be withheld to the minimum allowed by federal law – $7.25 an hour – and then restored once there's a budget. Chiang, whose office cuts state paychecks, said Thursday that he won't follow the order unless a court tells him to. The letter from the governor's Department of Personnel Administration instructs Chiang to withhold employees' pay because the state started the 2010-11 fiscal year Thursday without a budget appropriating money for payroll. Hours earlier, Gov. Arnold Schwarzenegger officially ended 17 months of furloughs for state workers.

Energy Hedge Funds Close After Investor Withdrawals - (www.bloomberg.com) Energy hedge funds in Europe are collapsing after investor withdrawals forced managers to scale back bets amid sliding prices for oil, coal and electricity. At least six funds managing more than $158 million shut in the first half, including four in May and June, according to data compiled by Bloomberg. London-based Rampart Capital LLP succumbed after failing to reach “critical mass” within nine months of opening, according to Chief Investment Officer Marcello Romano. The funds were battered after Brent crude fell in May by the most since November 2008 and German power had its fourth monthly drop this year. The average loss from January through May for global energy funds was 19 percent, according to a June 10 report from JPMorgan Chase & Co., compared with a 0.9 percent gain for Hedge Fund Research Inc.’s main index of more than 2,000 members. “The industry is limping,” said Fredrik Adolfson, a 43- year-old manager for Stockholm-based Adapto Energy Fund, which started on Jan. 18 and returned about 3 percent through June 30. “Risk capital has dropped off radically.” Liquidations around the world rose to about 240 in the first quarter, compared with 165 in the previous three months, Chicago-based Hedge Fund Research reported June 8.

1.3 million unemployed won't get benefits restored - (news.yahoo.com/s/ap) More than 1.3 million laid-off workers won't get theirunemployment benefits reinstated before Congress goes on a weeklong break for Independence Day. And hundreds of thousands more will lose their benefits in the coming weeks. The House voted 270-153 Thursday to extend jobless benefits for people who have been laid off for long stretches, but the gesture was made futile by the Senate's inability to pass the bill. For the third time in as many weeks, Republicans in the Senate successfully filibustered a similar measure Wednesday night before senators adjourned for vacation. A little more than 1.3 million people have already lost benefits since the last extension ran out at the end of May, according to the Labor Department. By the end of the week, the number will jump to 1.7 million. By the end of July, it would top 3 million.

Goldman Defends Valuations That Helped Put AIG In Bind - (online.wsj.com) Goldman Sachs Group Inc., already under scrutiny from regulators, faced new questions from a congressional commission about whether it aggressively marked down the value of its mortgage-securities positions to benefit a bet Goldman made against the mortgage market. A bipartisan panel reviewing causes of the financial crisis grilled Goldman executives about valuations of mortgage assets the Wall Street firm provided American International Group Inc. and other trading partners in the mortgage crisis of 2007 and 2008. Documents released by the panel showed Goldman repeatedly valued these securities lower than rivals did, demanding additional money from AIG, which was insuring against losses in the securities. These and other banks' collateral demands strained AIG, which was bailed out by the U.S. government in September 2008. At the time, Goldman had placed a trading bet with the firm's money against the mortgage market. Lower valuations, or "marks," would have made that bet more profitable. Goldman executives defended their practices. "Our marks were based on actionable prices, informed by market information from comparable transactions," David Lehman, a Goldman managing director, told members of the Financial Crisis Inquiry Commission. In any case, the questions underscored an unnerving reality in the financial world: Investors have no way of knowing with any certainty the value of many securities. Fewer than half of all securities these days trade on exchanges with readily available price information, making large parts of the U.S. financial markets essentially a hall of mirrors. Phil Angelides, the commission's chairman, said this week that Goldman "built the bomb" by developing complex mortgage securities and "built a bomb shelter" by betting against the mortgage market in 2007. "The question is, did they light the fuse" by lowering the value of mortgage securities, he said.

VIDEO: Calling out CNBC - (market-ticker.denninger.net) For those who have short memories, this was what started my feud with Dennis Kneale on CNBC....

We as a society and government are doing everything in our power to avoid the banks and others having to take their medicine - that is, to allow the excessive debt to be defaulted. We have in fact shifted more than $2 trillion dollars of actual bad debt onto the Treasury and Federal Reserve rather than allow the market to declare it defaulted and force those who hold too much of it into bankruptcy, and we continue this asinine and exactly backward program to this very day.

Elliot Wave predicts triple-digit Dow in 2016 - (finance.yahoo.com) An investment letter that called the Crash of 2008 said that this would be a bad year — and it now says it will get worse. A whole generation of investors think that Robert Prechter and his Elliott Wave Theory letters, Elliott Wave Financial Forecasts and Elliott Wave Theorist, are permabears. And they've certainly seemed that way for the last decade -- although it should be noted that the stock market is now roughly back where it started. But Prechter was very bullish after the 1974 low and, briefly, after being one of the very few services to make money in 2008. Then he announced that "2010 is the year when the bear market in stocks returns in full force." Elliott Wave Financial Forecasts (EWFF) makes recommendations specific enough to be tracked by the Hulbert Financial Digest. (The Elliott Wave Theorist is too, well, theoretical.)

OTHER STORIES:

Spectre of an economic relapse stalks markets as China wobbles - (www.telegraph.co.uk)

Job recovery hits a wall - (money.cnn.com)

Majority of U.S. Workers Lost Jobs, Wages or Hours - (www.businessweek.com)

Stocks: If you thought the 1st half was bad... - (money.cnn.com)

N.Y. MTA Reduces Week’s Largest Taxable Sale as Spreads Widen - (www.bloomberg.com)

Portugal Leads Euro Area Bond Gains as Debt Concern Subsides - (www.bloomberg.com)

Mortgage Bonds Booming - (online.wsj.com)

SEC Said to Investigate Marketing of Principal-Protected Notes - (www.bloomberg.com)

Emerging-Market Bonds Attract Record Inflows as Stocks Struggle - (www.bloomberg.com)

Australia’s PM waters down mining tax - (www.ft.com)

China Growth Forecast Cut by Goldman Sachs Amid Property Curbs - (www.bloomberg.com)

Euro-zone unemployment unchanged at 10% - (www.marketwatch.com)

Payrolls in U.S. Fall 125,000; Jobless Rate at 9.5% - (www.bloomberg.com)

IMF considers 'new tool kit' to head off market meltdowns and hoarding - (www.washingtonpost.com)

U.S. housing market remains fragile despite low mortgage rates - (www.washingtonpost.com)

Fannie and Freddie are top Wall St customers - (www.ft.com)

Goldman Sachs’s Role in Crisis at Stake in Question Over Marks - (www.bloomberg.com)

Krugman or Paulson: Who You Gonna Bet On? - (www.bloomberg.com)