Wednesday July 27 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

A Small City’s Depleted Pension Fund Rattles Rhode Island - (www.nytimes.com) The small city of Central Falls, R.I., appears to be headed for a rare municipal bankruptcy filing, and state officials are rushing to keep its woes from overwhelming the struggling state. The impoverished city, operating under a receiver for a year, has promised $80 million worth of retirement benefits to 214 police officers and firefighters, far more than it can afford. Those workers’ pension fund will probably run out of money in October, giving Central Falls the distinction of becoming the second municipality in the United States to exhaust its pension fund, after Prichard, Ala. “Time is running out,” warns Robert G. Flanders, the state-appointed receiver, who recently closed the public library and a community center to save money. He has no power to cancel the city’s contracts with workers, so instead he has begun approaching retired police officers and firefighters with what he describes as “the Big Ask”: will they voluntarily accept smaller benefits in the name of saving Central Falls?

Light bulb ban riles up lawmakers - (money.cnn.com) The so-called light bulb ban, set to begin in 2012, has become a rallying point for conservatives, libertarians, and various free-market activists who deride what they see as unnecessary government interference in the marketplace. A bill calling for light bulbs to become gradually more efficient beginning in 2012 and ending in 2020 -- what critics are calling a ban -- passed in 2007 with bipartisan support and was signed into law by then-President George W. Bush. Because of those higher standards, traditional bulbs will probably be phased out, to be replaced with more efficient incandescent bulbs, compact fluorescents and LEDs. Republicans have been under considerable pressure to roll back those higher efficiency standards, though the House on Tuesday failed to pass a measure that would have done just that. "The government has taken upon itself to decide what people should buy," said Myron Ebell, head of Freedom Action, an activist group he described as "hardcore free market." Ebell's group has been circulating a petition online that he said has garnered tens of thousands of signatures. Many of those who've signed have written their legislators urging an end to the ban.

Plunge Brings Debt Crisis to Italy - (www.bloomberg.com) The plunge in Italian markets overshadowed policy makers’ efforts to fix Greek finances as the euro-region’s debt crisis infected Europe’s largest borrower. Italian bonds fell for a seventh day and the nation’s borrowing costs jumped by more than half at an auction of 6.75 billion euros ($9.4 billion) of bills today. Stocks pared declines after falling to a two-year low. Warnings by Moody’s Investors Service and Standard & Poor’sover Italy’s ability to trim debt, coupled with infighting in Silvio Berlusconi’s government over a budget-cutting plan, fueled the sell-off. “Italy coming under severe market pressure, being the third-largest economy and a founding member of the EU, signals that the sovereign and banking crisis has reached a deeply systemic phase,” Vladimir Pillonca, an economist at Societe Generale SA in London, wrote in a note to investors today. The rout in Italy underscored Europe’s inability to contain the crisis that began in Greece in October 2009 and led to bailouts in Ireland andPortugal. Finance ministers last night failed to agree on how to share with creditors the cost of a second bailout for Greece to be financed primarily by its European Union allies, including Italy.

Cisco Said to Be Cutting as Many as 10,000 Jobs - (www.bloomberg.com) Cisco Systems Inc. (CSCO), the largest networking-equipment company, may cut as many as 10,000 jobs, or about 14 percent of its workforce, to revive profit growth, according to two people familiar with the plans. The cuts include as many as 7,000 jobs that would be eliminated by the end of August, said the people, who asked not to be identified because the plans aren’t final. Cisco is also providing early-retirement packages to about 3,000 workers who accepted buyouts, the people said. Cisco Chief Executive Officer John Chambers is slashing jobs and exiting less-profitable businesses as competitors such as Juniper Networks Inc. (JNPR) and Hewlett-Packard Co. (HPQ) take market share in Cisco’s main businesses with lower-priced, simpler products. Sales of Cisco’s switches and routers, which made up more than half of revenue last year, will continue to slip, said Brian Marshall, an analyst at Gleacher & Co.

The Worst Stadium Financing Deal Ever Is Still Crippling Cincinnati's Taxpayers - (www.businessinsider.com) The Wall Street Journal has a fascinating look at Hamilton County, Ohio, which is being crushed under the weight of the worst stadium financing deal ever. Back in the mid-'90s, the Cincinnati Bengals threatened to leave town unless they got a new football-only stadium. So Hamilton (where Cincy is the county seat) caved. They agreed to build Paul Brown Stadium and to finance almost entire thing. The Journal claims it was the most lopsided of any NFL public stadium financing deal – a problem compounded by the fact that Hamilton paid for it without the help of the state or any of the surround counties. Now, more than 10 years after it opened, stadium costs make up 16.4% of the county budget, with almost no benefit to the surrounding area's economy. (Attendance is actually lower than it was in the old stadium.) Hamilton County faces a $30 million budget shortfall and has had to cancel a planned property tax rollback in order to service their debt.

OTHER STORIES:

Ireland Cut to Junk Rating by Moody’s - (www.bloomberg.com)

EU Sees Risks to Financial Stability, Girds for Banks Failing Stress Tests - (www.bloomberg.com)

Euro zone shifts to accepting possible Greek default - (www.reuters.com)

EU Revives Buyback Idea as Crisis Hits Italy - (www.bloomberg.com)

Italy’s Borrowing Costs Soar at 6.75 Billion-Euro Bill Sale on Contagion - (www.bloomberg.com)

Europe banks hit as Italy stokes contagion fears - (www.reuters.com)

Six Spain banks failed stress tests - report - (www.reuters.com)

Euro zone pledges new steps on Greece, but no action - (www.reuters.com)

China Money Supply Growth, New Lending Rebound Even After Cooling Measures - (www.bloomberg.com)

Spanish Lawmakers Mull 2012 Spending Plan as Election Risk Looms - (www.bloomberg.com)

Fed Officials Divided on Further Stimulus - (www.bloomberg.com)

U.S. Trade Deficit Unexpectedly Surges on Oil - (www.bloomberg.com)

Coffee Protects Against Drug-Resistant Germs in Latest Baffling Benefit - (www.bloomberg.com)

Tuesday July 26 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

You are forced to pay your neighbor's mortgage - (finance.yahoo.com) A new federal program is offering aid with a sweet kicker: It doesn't need to be repaid. For the roughly four million homeowners who have fallen behind on their mortgage payments, the federal government is offering yet another remedy: free money to catch up on their loans. The effort, called the Emergency Homeowners Loan Program, is the latest in the federal government's efforts to slow down the flood of foreclosures a necessary step to a meaningful recovery in the housing market, says a Department of Housing and Urban Development official. For people who have lost their jobs, the $1 billion program offers loans of up to $50,000 that don't actually need to be repaid, if applicants meet certain requirements. The goal, says HUD, is to offer short-term aid to people who look like they'll be back on their feet soon. But critics say the loans may leave homeowners worse off in the long run. "This is a short run band-aid, a modest attempt to grapple with the severity of the situation," says Stuart Gabriel, director of the Ziman Center for Real Estate at the University of California, Los Angeles. Rolled out by HUD and the nonprofit housing advocacy group NeighborWorks America, the program is making loans with far better terms than anything on offer at a local bank. The loans are interest-free. Payments go directly to the lender for a portion of the borrower's monthly mortgage, including missed payments or past due charges. And when the assistance period -- which runs for up to two years -- ends, 20% of the loan is forgiven with each passing year. In other words, for qualified borrowers who stay in their home for at least five years after the assistance period and who don't fall behind on their mortgage again, this money doesn't have to be paid back.

‘Madness Abounds’ as Fake Candidates Confuse Wisconsin Recalls - (www.bloomberg.com) Wisconsin voters will choose among real and fake Democrats this week to challenge six Republican senators in recall elections that may derail the agenda of Governor Scott Walker. The primaries are the opening skirmish in a state at political war. The six districts in tomorrow’s races have Republicans running as Democrats, hoping to win the nomination and effectively render the Aug. 9 recall votes meaningless. On July 19, there will be two primaries and a full-fledged recall aimed at Democratic senators who fled the state in February in hopes of blocking the measure, which touched off weeks of protests across the nation. State election law allows open primaries, which means that voters can participate regardless of partisan affiliation. It also allows members of one party to enter another’s primary. The state’s nine legislative recall elections compare with a total of 20 across the nation since 1913, according to Joshua Spivak, a senior fellow at the Hugh L. Carey Institute for Government Reform at Wagner College in New York. If any recalls succeed, that will encourage more, McCabe [Mike McCabe, executive director of the Wisconsin Democracy Campaign, a nonprofit that advocates openness in government] predicted, including one that has been started against Walker, who cannot be ousted until he has been in office a year.

Union curbs rescue a Wisconsin school district - (www.washingtonexaminer.com) "This is a disaster," said Mark Miller, the Wisconsin Senate Democratic leader, in February after Republican Gov. Scott Walker proposed a budget bill that would curtail the collective bargaining powers of some public employees. Miller predicted catastrophe if the bill were to become law -- a charge repeated thousands of times by his fellow Democrats, union officials, and protesters in the streets. Now the bill is law, and we have some very early evidence of how it is working. And for one beleaguered Wisconsin school district, it's a godsend, not a disaster. The Kaukauna School District, in the Fox River Valley of Wisconsin near Appleton, has about 4,200 students and about 400 employees. It has struggled in recent times and this year faced a deficit of $400,000. But after the law went into effect, at 12:01 a.m. Wednesday, school officials put in place new policies they estimate will turn that $400,000 deficit into a $1.5 million surplus. And it's all because of the very provisions that union leaders predicted would be disastrous. In the past, teachers and other staff at Kaukauna were required to pay 10 percent of the cost of their health insurance coverage and none of their pension costs. Now, they'll pay 12.6 percent of the cost of their coverage (still well below rates in much of the private sector) and also contribute 5.8 percent of salary to their pensions. The changes will save the school board an estimated $1.2 million this year, according to board President Todd Arnoldussen.

EU Revives Buyback Idea as Crisis Hits Italy - (www.bloomberg.com) As exploding bond yields in Italy and Spain brought the crisis closer to the heart of the euro area, Europe’s search for answers took it back to proposals that were scuttled by Germany earlier this year. After a nine-hour meeting, the 17 euro ministers issued a six-paragraph statement pledging to flesh out details of a new strategy to end the 21-month-old crisis “shortly,” without setting a timeline. The decision to have another look at reinforcing the European Financial Stability Facility, the 440 billion-euro ($618 billion) bailout fund that was beefed up only last month, came after talks with bondholders over a “voluntary” rollover of Greek debt ran into a threat by credit-rating companies to put Greece in default. Finance ministers offered varying interpretations of the commitment to explore a wider range of options. For Dutch Finance Minister Jan Kees de Jager, who insists on getting bondholders to roll over Greek debt, the pledge includes the possibility of the “selective default” opposed by the ECB. Europe’s lunge back to basics came after Greek Prime Minister George Papandreou complained that a “cacophony” had sowed “panic” that overwhelmed the budget cuts that he pushed through his parliament amid street riots last month. The uphill struggle for solvency in Athens was dramatized by data yesterday showing the central government’s deficit widened 28 percent in the first half of 2011, with spending surpassing targets and revenue falling short. Rejected by Germany earlier this year, the buybacks would pare Greece’s debt burden of 142.8 percent of gross domestic product by enabling it to retire bonds at a discount.

Protecting Its Fannie: How Mortgage Giant Primed the Bubble, Covered Its Assets - (www.pbs.org) The Washington home of Fannie Mae. This so-called government-sponsored enterprise and its cousin, Freddie Mac, increases money for homeownership, buying home loans from banks and packaging them into securities to sell to investors everywhere. A new book, though, "Reckless Endangerment," argues that, for the past two decades, Fannie pursued profit for its own sake and bought riskier and riskier loans that pumped a housing bubble bound to burst. When it did, Fannie and Freddie failed. A federal bailout that has cost some $130 billion followed. We talked to co-authors Gretchen Morgenson, a Pulitzer Prize-winning reporter, and finance analyst Joshua Rosner, outside Fannie's headquarters. So, the main culprit of your story is Fannie Mae, right behind you there. Why Fannie Mae?

GRETCHEN MORGENSON, "Reckless Endangerment": It was a primary mover, a first mover in the process to relax lending standards, to go downhill into the sort of subprime morass that really got us into trouble.

OTHER STORIES:

Greek Default May Be 'Inevitable': Soros - (www.cnbc.com)

Japanese Land Prices Dropped for Second Year in 2010 - (www.bloomberg.com)

Why the American dream is only a dream for most - (www.doctorhousingbubble.com)

America: One Dollar, One Vote - (www.motherjones.com)

Eurozone Pledges New Steps to Help Greece - (www.cnbc.com)

Banks Easing Terms or Debt on Some Option ARM Loans - (www.nytimes.com)
The Swindler and the Mortgages - (www.nytimes.com)

China Reserves Hit $3.2 Trillion; Lending Quickens - (www.cnbc.com)

Moody's Raises Red Flags at 49 Chinese Companies - (www.cnbc.com)

Australia Housing Drop Pits Local Bulls vs Foreign Bears - (www.bloomberg.com)

Australian house prices falling at better rate than 2008 - (www.smh.com.au)

Business of America: Lobbying, Not Production - (www.gjfreepress.com)

What history teaches us about the welfare state - (www.washingtonpost.com)

Monday July 25 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Economy Faces a Jolt as Benefit Checks Run Out - (www.nytimes.com) An extraordinary amount of personal income is coming directly from the government. Close to $2 of every $10 that went into Americans’ wallets last year were payments like jobless benefits, food stamps, Social Security and disability, according to an analysis by Moody’s Analytics. In states hit hard by the downturn, like Arizona, Florida, Michigan and Ohio, residents derived even more of their income from the government. By the end of this year, however, many of those dollars are going to disappear, with the expiration of extended benefits intended to help people cope with the lingering effects of the recession. Moody’s Analytics estimates $37 billion will be drained from the nation’s pocketbooks this year. In terms of economic impact, that is slightly less than the spending cuts Congress enacted to keep the government financed through September, averting a shutdown.

Spain’s Castilla Has ‘Extremely Serious’ Deficit, Leader Says - (www.bloomberg.com) Spain’s Castilla-La Mancha region requested an urgent meeting with the Finance Ministry about its “extremely serious” fiscal situation as the nation’s borrowing costs reached a record on concern about debt-crisis contagion. “The deficit is much higher than what we were told, the situation is extremely serious,” the region’s president, Maria Dolores de Cospedal, told Onda Cero radio in an interview today. “In the first quarter alone, the deficit reached 1.7 percent of gross domestic product compared with an annual target of 1.3 percent,” said Cospedal, elected on May 22 when the opposition People’s Party ended three decades of local Socialist rule. Cospedal said she sent a letter to Finance Minister Elena Salgado seeking talks to find out “if the government knew about the reality of Castilla La Mancha’s fiscal situation.” Deepening deficits in the regions are sparking investor concern that the Socialist-led central government will struggle to rein in the euro area’s third budget deficit and prevent the nation from following Greece, Ireland and Portugal in seeking a bailout.

New Fears on Italy Jolt Europe - (online.wsj.com) Italy, long a bystander to the euro-zone's debt woes, was thrust into the maelstrom Monday as investors fled the country's bonds and Europe's leaders struggled to keep the crisis from infecting the Continent's third-largest economy. Fears over Italy's solvency and political stability were compounded by market frustration that Europe's leaders haven't yet come up with a solution to Greece's deepening debt problems: The gap between the yields on Italy's 10-year sovereign bonds and safer German Bunds jumped by more than 100 basis points, or a whole percentage point, to a record high of 285.6, compared to a week ago. Stocks across Europe tumbled. In the U.S., investors paid more attention to the worsening situation in Europe after having largely shrugged it off in recent weeks. The Dow Jones Industrial Average lost 151.44 points, or 1.20%, to 12505.76. Trying to stem the panic, embattled Italian Prime Minister Silvio Berlusconi has promised to avoid the political dithering that so often thwarts Italian policy-making, and speedily get through parliament a package of austerity measures unveiled two weeks ago, aimed at balancing Italy's budget by 2014.

Italian, Spanish Bonds Tumble as Contagion Worsens; German Bunds Advance - (www.bloomberg.com) Italian and Spanish bonds tumbled and German bund yields sank to a more than seven-month low as contagion from Greece’s debt crisis threatened to spread to bigger economies, stoking demand for the safest assets. Ten-year Italian yields soared to the highest in 10 years. The spreads investors demand to hold Italian, Portuguese and Spanish debt over bunds widened to euro-era records. German Finance Minister Wolfgang Schaeuble said “there’s no discussion whatsoever” of doubling the European Union’s rescue facility after Die Welt reported yesterday that the European Central Bank is seeking to increase the pool to 1.5 trillion euros ($2.11 trillion) to cover an Italian crisis.

It Looks Like Greece Is Angry At All The Attention Italy Is Getting - (www.businessinsider.com) Everyone has moved on to Italy -- it even got the NYT treatment today -- but Greece seems miffed at no longer being the center of attention. We only say that because Greek yields are surging to totally brand new records: over 31% for 2-year debt, after having briefly dipped to near 25% right after the Hellenic Parliament passed the bailout. Of course, now that "selective default" is on the table as a Greek option, it makes sense that bondholders are eager to dump whatever they're still hanging onto. And yes, this blowout is the story across Europe today. Italian short-term yields are at fresh highs vs. German Bunds. Portuguese yields up. You get the drill...

OTHER STORIES:

Euro Finance Ministers Study Financing Buybacks of Greek Debt in Markets - (www.bloomberg.com)

Euro Chiefs Clash as Italy Concern Mounts - (www.bloomberg.com)

Eurozone mulls Greek options, concerns spread to Italy - (www.reuters.com)

EU chiefs meet on Greece, minds focused by Italy - (www.reuters.com)

Euro Chiefs Clash as Italy Concern Mounts - (www.bloomberg.com)

China to punish local officials for excessive debts: report - (www.reuters.com)

Berlin confident Italy will take austerity measures - (www.reuters.com)

Italy Evolves Into E.U.’s Next Weak Link - (www.nytimes.com)

Debt reduction talks in limbo as clock ticks toward Aug. 2 deadline - (www.washingtonpost.com)

Fed on Hold Longest Since 1940s - (www.bloomberg.com)

Wall St. Banks Expected to Post Weak 2nd-Quarter Results - (www.nytimes.com)

Drought Spreads Its Pain Across 14 States - (www.nytimes.com)

Sunday July 24 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Broke Rhode Island Town Asks Unions For Pension Cuts To Avoid Bankruptcy - (www.businessinsider.com) Teetering on the brink of insolvency, Central Falls, R.I. is asking its unions for major concessions to help the city close its $5.5 million budget shortfall and stave off municipal bankruptcy. In a letter sent to the city's police and fire unions today, Central Falls' state-appointed receiver Robert Flanders asked retirees to accept benefit cuts and healthcare contributions that would trim the city's pension payment by at least $1.75 million in benefit cuts and increased healthcare contributions. If an agreement can't be reached, the city may have to file for bankruptcy, Flanders told the Providence Journal. Central Falls, a tiny city with a population of just 19,000, faces a $4.9 million budget shortfall, and deficits are projected to grow to $25 million over the next five years. To make matters worse, the city owes $80 million in unfunded pension and benefit obligations.

Hey, Washington, I've Been Paying Into Social Security And Medicare For 48 Years--So How Much Are You Cutting From YOUR Benefits? - (www.businessinsider.com) Given the extent of our current financial problems, some government leaders at some point are going to have to break promises made to Americans by their government predecessors--predecessors who made promises they knew they couldn't keep. The politicians could make this news go down a bit easier if they imposed the consequences of some of these broken promises on themselves. Here's the text of the supposed letter to Mr. Simpson. We've edited out some adjectives and expletives. Hey Alan, let's get a few things straight...

1. As a career politician, you have been on the public tit for FIFTY YEARS.

2. I have been paying Social Security taxes for 48 YEARS (since I was 15 years old. I am now 63).

3. My Social Security payments, and those of millions of other Americans, were safely tucked away in an interest bearing account for decades until you decided to raid the account and give OUR money to a bunch of zero ambition losers in return for votes, thus bankrupting the system and turning Social Security into a Ponzi scheme that would have made Bernie Madoff proud.

4. Recently, just like Lucy & Charlie Brown, you pulled the proverbial football away from millions of American seniors nearing retirement and moved the goalposts for full retirement from age 65 to age 67. NOW, you are proposing to move the goalposts YET AGAIN.

Heavy selling hits eurozone bonds - (www.ft.com) Eurozone bond markets suffered heavy selling on Wednesday after Portugal’s downgrade to “junk” knocked investor confidence in the region and raised fears the debt crisis would intensify. The action by Moody’s, the US rating agency, sent Portuguese and Irish government bond yields to euro-era highs and led to one big European company pulling a debt deal. Shares in a number of European banks tumbled. Suki Mann, credit strategist at Société Générale, said: “The action on Portugal has put the brakes on any recovery hopes we may have had for eurozone government bonds for the moment.” The biggest move was a leap in two-year Portuguese bond yields, which have an inverse relationship with prices. Two-year yields jumped 3.8 percentage points to 16.74 per cent, one of the biggest daily moves of the year. At the same time, a debt sale by Spain’s sovereign bank restructuring fund only managed to raise just over half its target amount. Several Spanish savings banks are rushing to secure private funds to avoid a state rescue.

Italian Yields Reach Nine-Year High as Debt Crisis Spreads; Bunds Surge - (www.bloomberg.com) Italian bonds slid for the fifth straight day, driving yields to a nine-year high, as contagion from Greece’s fiscal crisis intensified in the region’s biggest government-debt market. German 10-year yields fell the most since April after U.S. employers added less than a fifth of the workers economists estimated in June. The yield on 10-year Italian securities jumped to a euro-era record over German bunds as data showed industrial production in the Mediterranean nation dropped while Italian bank stocks fell, paced by UniCredit SpA. (UCG) A European Union document said governments should be ready to help banks that fail stress tests as a last resort. Spanish, Irish and Greek bonds also fell. “If you are talking about a default in Greece where contagion spreads through Ireland, Portugal and Spain, then Italy is the next stop,” said Charles Diebel, head of market strategy at Lloyds Bank Corporate Markets in London. “Italy has an awful lot of debt.”

35% Of California Teens Can't Find Work This Summer - (www.businessinsider.com) It used to be you could get a job as a high school drop-out. Or you could hold a job while staying in school. And you could definitely find work over the summer. Not anymore. 34.6 percent of California teens who are looking for work can't find it, according to the Employment Policy Institute. Teen unemployment is equally high in Georgia; followed by Nevada at 34.3 percent; Washington at 33.2 percent; North Carolina at 32.1 percent; Idaho at 31.8 percent; and West Virginia at 30.2%. The District of Columbia is even higher at 49% teen unemployment. The national average rose from 24.2 to 24.5 percent in June.

OTHER STORIES:

Spain and Italy risk being sucked in - (www.ft.com)

Moody’s Cut Three Muni-Bond Ratings for Each Upgrade During Second Quarter - (www.bloomberg.com)

Hedge funds feel pain over volatility - (www.ft.com)

Dim sum market stirs U.S. borrowers - (www.reuters.com)

Corporate Earnings Poised for Smallest Gain in 2 Years in U.S. - (www.bloomberg.com)

Push to regulate derivatives is under strain - (www.ft.com)

Landlords Limit Freebies as U.S. Apartment Vacancies Reach Three-Year Low - (www.bloomberg.com)

JPMorgan Will Pay $228 Million to End Municipal Bid-Rig Case - (www.bloomberg.com)

U.S. Lawmakers Mulling Fate of Fannie Mae Split on Government Housing Role - (www.bloomberg.com)

Hedge Funds Move Past Greece With Bets That Sovereign Debt Crisis Expands - (www.bloomberg.com)

Trichet Fights a War on Two Fronts - (www.bloomberg.com)

Saturday July 23 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

State and local governments bleeding jobs - (www.reuters.com) U.S. state and local governments cut thousands of jobs in June, pushing their payrolls down to the lowest in five years, according to Labor Department data released on Friday, and analysts do not expect the losses to end any time soon. Local governments shed 18,000 jobs and state governments cut 7,000 in June. The level of local government employment -- 14.143 million employees -- is the lowest since June 2006. State government employment is the lowest since August 2006. "Today's employment report reflects continued belt-tightening at the state and local level and the trend we have previously noted, a trickle-down in budget cuts from the state to the local level," wrote Natalie Cohen, senior analyst at Wells Fargo Securities, in a research note.

Housing Recovery Stymied by Government - (www.bloomberg.com) Sue Stamper, a business owner in Sacramento, California, wants to buy a home. After mortgage- financiers Fannie Mae and Freddie Mac imposed the strictest loan standards in more than a decade, she doesn’t qualify. Pam Crawford of Lyon Real Estate is trying to sell a three- bedroom bungalow on Sacramento’s east side for $179,000, a third less than what it went for in 2004. She hasn’t found a buyer even after cutting the asking price by $10,000 two weeks ago. The two women, who haven’t met, illustrate the deadlock crippling the U.S. housing market five years into the crash: While a record share of Americans want to buy homes, U.S. policies, often working at cross-purposes, are making it more difficult. Government-controlled Fannie Mae and Freddie Mac have boosted standards so high that some people previously considered prime borrowers no longer qualify. That’s limiting a real estate rebound that also has been damped by a state attorneys general probe into foreclosure practices and an Obama administration loan-modification program that has fallen short of expectations.

Ireland May Be Next to Face Junk After Portugal - (www.bloomberg.com) Ireland’s credit rating may be cut to junk by Moody’s Investors Service after Portugal yesterday lost its investment grade rating, according to analysts. Moody, which slashed Portugal to Ba2 from Baa1, in April lowered Ireland’s credit rating to the lowest investment grade Baa3 and left country’s outlook on negative. The ratings company cut Portugal’s rating in part because the nation may not be able to return to debt markets in the second half of 2013. Ireland has been locked out of markets since September, and the yield on 10-year Irish bonds climbed to 12.44 percent today, a euro-area record for the country that agreed to a rescue package with the European Union and International Monetary Fund last November.

U.S. Lawmakers Mulling Fate of Fannie Mae Split on Government Housing Role - (www.bloomberg.com) The U.S. housing industry is finding political traction in Congress as it objects to plans that would wind down Fannie Mae and Freddie Macand eliminate any government role in mortgage finance. Two members of the House Financial Services Committee, Gary Miller, a California Republican, and Carolyn McCarthy, a New York Democrat, today introduced legislation to create a government-run replacement for the two mortgage finance companies, which originally were chartered by Congress. The measure directly challenges House Republican leaders, who have backed bills that would do away with the two companies and aim to minimize the risk that taxpayers will have to bail out future mortgage failures. “This ideological approach has resulted in a stalemate for years,” Miller said at a press conference. “It’s not getting us any closer to fixing the housing problem.” He and McCarthy were joined at the event by leaders from two of the industry’s most active lobbying groups, the National Association of Realtors and the National Association of Homebuilders.

OTHER STORIES:

Dismal jobs picture complicates debt talks - (www.reuters.com)

Economists Blame Updates, Seasons for Jobs Miss - (www.bloomberg.com)

Jobs Report Fuels Calls on Obama to Include Economic Stimulus in Debt Deal - (www.bloomberg.com)

Rising Unemployment Pressures Fed to Purchase More Bonds, Economists Say - (www.bloomberg.com)

U.S. Payrolls Rise 18,000; Jobless Rate Climbs to 9.2% - (www.bloomberg.com)

Obama calls debt talks ‘constructive,’ invites parties to reconvene Sunday - (www.washingtonpost.com)

Companies Added a More-Than-Estimated 157,000 Employees in June, ADP Says - (www.bloomberg.com)

Consumer delinquencies tick up in first quarter - (www.reuters.com)

White House Seeks ‘Positive’ Tax Revenue as U.S. Debt-Limit Talks Resume - (www.bloomberg.com)

Service Industries in U.S. Expanded Slower - (www.bloomberg.com)