The Housing Bubble

Fishkind is still at it. Who is paying this clown?

http://www.sun-herald.com/Newsstory.cfm?pubdate=072707&story=bz3.htm&folder=NewsArchive2

“Florida’s economy is not on the verge of recession”

“On Friday Bloomberg news service created quite a stir with a story flamboyantly entitled “Miami Condo Glut Pushes Florida’s Economy to Brink of Recession.”
In the story, the highly respected economist Mark Zandi from Moody’s/Economy.com predicted that the oversupply of condominiums in South Florida will force prices down as much as 30 percent, the worst decline since the 1970s, and help push Florida’s economy into recession as early as October.”

“It is also important to note that Florida’s housing markets, outside of Miami’s condo market, have hit bottom months ago. The closing volume for new and for existing homes has stabilized. Although closing volumes are not going higher anytime soon, they are no longer declining.”

“Therefore, we have already seen the worst for this cycle. There is no evidence of sharp price drops anywhere in the state, and there is no reason to expect any such drops outside of Miami condos. Population growth is holding up well as the state continues to attract large volumes of retirees and working families looking for jobs. I estimate that population growth has declined from its peaks, but it is still running at about 900 new net residents each day. So, there are no data to suggest that a recession is imminent.”

Dr. Henry D. Fishkind heads Fishkind & Associates, a 26-member economic and financial consulting firm with offices in Orlando, Naples and Port St. Lucie.

Ah oh………….

http://money.cnn.com/data/premarket/

The only question for today is whether the GDP number will be some fantasy number or not. They are predicting 3.6%. WTF? Building is off 40 percent or so and we are getting an increase of GDP at a 3.6% clip? Pull this other leg……

Brunswick… If folks are cutting back on toys, then look out!

http://www.chicagotribune.com/business/chi-fri_localerns_0727jul27,0,2572216.story

If we have a global economy that is fueled by global credit then the Fed is probably powerless since the source of funds is outside their control. Seems like the credit crunch can only be cured (temporarily?) by reduction in rates in the funding countries of Japan and China.

Another issue is the discrediting of the rating agencies. When Triple A paper drops 5% in less than a week (how many sigmas is that?) the whole credit rating system is called into question upon which the fate and value of $trillions of debt securities worldwide depend. Now we know that AAA CDOS/RMBS etc. are not AAA. What about the bonds issued by all those dodgy companies/soveriegns in the emerging markets?

Also even if we get a snap back in the equities market today the underlying rot in the credit market is not going away and therefore the equities market remains susceptible.

Be careful out there.

IRS Loses Tax Challenge

The Internal Revenue Service has lost a lawyer’s challenge in front of a jury to prove a constitutional foundation for the nation’s income tax, and the victorious attorney now is setting his sights higher.
“I think now people are beginning to realize that this has got to be the largest fraud, backed up by intimidation and extortion and by the sheer force of taking peoples property and hard-earned money without any lawful authorization whatsoever,” lawyer Tom Cryer told WND just days after a jury in Louisiana acquitted him of two criminal tax counts.
Although the legal citations in the case tend to run the length of paragraphs, Cryer told WND the underlying issue is not that complicated. Essentially, he argued that income is not necessarily any money that comes to a person, but rather categories such as profit and interest.
He said the free exchange of labor for compensation has been upheld as a right by the Supreme Court, but that doesn’t necessarily make the compensation income.
If ever such an argument were to be presented widely, Cryer said, the income to the federal government would plummet. But not to worry, he said, the expenses could be reduced equally by eliminating programs, departments and agencies that also have no foundation in the Constitution.
“The Founding Fathers intentionally restricted the taxing powers of the new federal government as a measure of restraint on its size. By exceeding that limited taxing authority the federal government has been able to obtain resources beyond its intended reach, and that money has enabled the federal government to exceed its authority,” he said.
The jury in U.S. District Court in Louisiana voted 12-0 to find Cryer, of Shreveport, not guilty of failure to file income taxes for two years. He had been indicted in 2006 on charges of failing to pay $73,000 to the IRS in 2000 and 2001. The next step in his personal case will be up to the IRS and prosecutors, if they choose to continue the issue, he said.

I have another question about second mortgages. When a person gets a second mortgage, do they make two payments (one to the primary lender and the other to the secondary lender) or do they send one check to a trustee whom divides the payment respectively. Can someone default on a second mortgage but be current on a first?

Oh, the irony of FREE “Self Defense Classes” for Realtors on August 2nd!! after reading the title of this article: “Relax. Chicago Market almost normal dated July 15th, Chicago Tribune.”

http://www.chicagotribune.com/news/local/nearwest/chi-mary_re_07-15jul15,0,1204058.story

“It’s timely then, that the Martial Arts Club of Woodstock is offering a free safety and self-defense program for real estate agents from 1 to 3 p.m. Aug. 2 at the club’s facility at 686 S. Eastwood Dr. in the far northwest suburb.”

http://www.chicagotribune.com/news/local/nearwest/chi-mary_re_07-15jul15,0,1204058.story

It’s timely then, that the Martial Arts Club of Woodstock is offering a free safety and self-defense program for real estate agents from 1 to 3 p.m. Aug. 2 at the club’s facility at 686 S. Eastwood Dr. in the far northwest suburb.

Was talking to my retired father the other day about his investments. He’s got an some sort of professional financial planner managing his accounts which are probably in the ballpark of $1 million or so. Most of it sounded reasonable, a mix of low-cost index funds, bonds, and that sort of thing. But it turns out this guy has my dad in REITs also. It’s a small percentage of his portfolio, but still….

That just shocked me and I pressed him on it. My Dad didn’t know that much really, except that they are commercial-property investments not residential property and that his planner was still bullish on REITs as a diversification strategy.

Is this crazy? I really don’t understand the REIT investment market but it just struck me as rather risky to be putting retirement funds into REITs at this point in time.

Last night’s Brian William’s evening NBC news telecast sounded like it was scripted from this blog.

The term “housing bubble” was specifically mentioned three times.

Items related to the housing crash are now appearing in the Beantown Globe main and business sections everyday now.

Duh…what’s it taken now…2 years for the MSM to ramp up?

Anecdote from the SW Florida/Sarasota area….

One of the part time guys here at work does the “Pin the legal paperwork on the door thingy” to keep him outta the bars in the afternoon :). He mentioned to me normally he does 5 or so of these per week…Yesterday he did 10 !!!!! This is mainly foreclosure realed stuff.

I asked him “How bad ya think its gonna get”? I didn’t like the look he gave me a whole lot. I think the two of us might be the only ones who think like this though in the whole building…

Chris

I’m not sure if any of you have this same problem. When I’m to the good on my spec positions in the market I generally have a harder time sleeping than when I’ve gotten myself upside down. I guess it’s because it gets the brain working on the possibilities.

So anyway, I was awake late last night in my beautiful rental home for which I pay less than $2K/mo. and my landlord pays $3K/mo. Last I checked our delusional friends at Zillow showed this particular house had lost $35K of phantom equity in the last 30 days.

Well, that got me to thinking about FBs, GFs, and the REIC.

A prediction:

Before this whole thing runs it’s course a significant number of FBs will take their revenge on the lender(s) who they blame for the total ruination of any financial security they may have had.

They will do this by burning down at least one REO home on the books of the lender whom they blame. Since it’s not their own former home there is nothing to tie them back to the crime if it’s done right.

I fear for the firefighters and next door neighbors of REO properties but I have to admit that this course of action may be the best thing that could happen to this correction.

I see 3 benefits from this. First, the FB gets some rather justifiable revenge and therefore it is less likely they will lash out in some other way and hurt an innocent. Second, this would force lenders to mark REO stocks to market and accelerate the down side of the cycle. Third, it would simply reduce the stock of REO.

Before you call me nuts, I’ll caveat this by saying that some of my most outstanding thoughts come between 1 and 3 am (if I’m not being chased through Bavarian forests by wolves while being tripped up by squirrel/monkeys in my dreams).

if most of these flippers, investstors, speculators and real estate people were involved in “fraud” while the times were good, can you imagine what they will resort to as the times get bad???

You guys gotta check this out…

http://www.bernankepanky.com/comic/bp4-1.php

Is Kasriel just trying to say “subprime is contained” in so many words?

Around the globe, rout in credit markets accelerates
By Leslie Wines & Nick Godt, MarketWatch
Last Update: 1:48 AM ET Jul 27, 2007

NEW YORK ( MarketWatch) — America’s era of easy money is going out with a bang - and on a global scale.

Investors around the world on Thursday got a painful reminder of the fallout.

Behind the latest sell-off in the Dow Jones Industrial Average was an erosion in credit-market confidence that has plunged international corporate bonds along with emerging-market debt into an accelerated retrenchment, analysts said.

“The fact is we live in a general equilibrium world,” said Paul Kasriel, chief economist at Northern Trust. “Everything affects everything else and [the U.S. housing slowdown] is spreading to other parts of the economy and the credit markets.”

http://www.marketwatch.com/news/story/debt-crunch-taking-global-scale/story.aspx?guid=%7B91361604%2D253B%2D4AD5%2D8ADE%2D12117E6D3CAD%7D

Seriously though, what would happen to a FB who gutted his home of all the items of value before defaulting?

What are they going to prosecute him for? A bad remodeling job? “Your honor, the furnishings were getting out of date and I was just in the middle of remodeling. I assumed that my bank was going to finance my remodel because every week they send me more credit card officers and letters saying that I’m prequalified for home equity loans. They lied to me”

Housing vacancy numbers are out from census. Looks like the homeowner vacancy rate fell from 2.8% in the first quarter to 2.6% in the second, though it is still up from 2.2% year-over-year.

The number of owner-occupied units rose by about 280K, while the number of renter-occupied units rose by 360K, from first quarter. The year-over-year gains are much smaller for owner-occupied, and much greater for renter occupied.

Seasonal and “other” vacancy units are up by about 190K from the prior quarter.

Pearlstein, from today’s Washington Post:

Will the Leak Ruin the Engine?

By Steven Pearlstein
Friday, July 27, 2007; Page D07

It’s not just about subprime mortgages anymore.

The turmoil we’re witnessing in global financial markets is nothing less than the popping of an enormous credit bubble that built up over the past five years, artificially inflating the market prices of stocks, bonds and real estate. It created a bonanza for Wall Street investment houses and private-equity funds and fueled the longest and strongest period of global economic growth in modern history.

The only question now is whether the bubble will deflate slowly enough to allow an orderly repricing of those assets, or whether a broad loss of confidence by investors will create a vicious cycle in which selling begets more selling, markets freeze up for lack of buyers, and a credit crunch ensues.

While looking for property in Mirasol in Palm Beach Gardens Fl I came across what could be a classic case of the wannabe/flipper real estate mogul.

I was looking at this house http://www.mirasolproperty.com/listing_sheet/R2791236 and searched the land records. This person purchased three houses in Mirasol.

Property 1
Purchased 7/04 for 541,714 1st Mortgage 333,000 5.25% 2nd Mort 199,000 (line of credit) Bank filed foreclosure notice July 19, 2007. Can’t find the listing but from similar houses probably trying to be sold for around $700,00 - $800,000.

Property 2
Purchased 7/06 for 928,132 1st Mortgage $742,505 fixed rate. Bank filed foreclosure notice July 19, 2007. Property was sold for $825,000 this week. Estimated loss after selling expenses at least $150,000 plus carrying costs for the last year.

Property 3 (see link link above)
Purchased 8/06 for $773,165 1st Mortgage $695,848 10 3/8% 2 year arm (can you say subprime). Mortgage payment is $7,000 per month, add in taxes, insurance, and HOA and is probably over $9,000 per month. Bank filed foreclosure notice July 19, 2007. Currently listed for $699,000.

He may get lucky and come out of this almost whole or at least a loss of less than $100,000 not including carrying costs if the first house sells for around $800,000 but I would not want to be in his shoes. I would not be able to sleep at night with that kind of debt.

I can’t believe the mortgage company made the third loan, that was a loan made that they knew had to default.

I wonder how many similar moguls are out there praying to get out before the bank takes them out.

Jim Rogers investment thoughts from yesterday.
Dump dollars and bonds

“China’s stock market will remain bullish for 80 years, fund manager and investment author Jim Rogers said at an exposition yesterday in Shanghai, the Shanghai Securities News reported.

Rogers, in a presentation at a conference, also reiterated his suggestion to dump dollars and bonds and stay invested in commodities.

China’s stock market is dangerously high but environmental protection, water, railways and renewable energy stocks are still worth holding, Rogers said.

To ride such a prominent China bull, Rogers said, investors nonetheless should be cautious after the country’s benchmark Shanghai composite index quadrupled over the past two years.

Rogers sees opportunities in Chinese companies involved in sectors such as environmental protection, water, green energy, railways and education, where the government and public are expected to spend a lot of money.

“I’m not selling my Chinese shares. As I said, I bought more of them last week. If the market triples again next year I would probably have to sell my Chinese shares,” said Rogers, who bought his first Chinese stocks in 1999.

Rogers, 64, urged investors to increase exposure to the Chinese currency, the yuan, and dump the US dollar, which he calls “a terribly flawed currency”.

“The yuan is going to be one of the strongest currencies for many years to come,” he said.”

China Daily
http://tinyurl.com/ytl865

Raytheon Company
Waltham, MA
Largo, FL
Raytheon Co. laid off 35 production workers at its Largo plant, effective today. A spokesman for the defense contractor said the cuts were triggered by production changes at the facility, which makes military communications equipment. Following the layoffs, Raytheon will have 710 employees in Largo and another 925 in St. Petersburg.
Approximate Affected Workforce: 1-50
Source: St. Petersburg Times - July 20, 2007

Ford Motor Company
Dearborn, MI
Windsor, ON
Ford Motor Company’s Essex Engine Plant is scheduled for closure Dec. 1 throwing 500 employees out of work and reducing the once-mighty automakers’ local workforce to less than 2,000. The closure, which the company said last year would come in the final quarter of this year, is part of a massive Ford restructuring effort which will see it reduce its workforce by between 25,000 and 30,000 employees through plant closures and layoffs. The plant was opened more than 25 years ago.
Approximate Affected Workforce: 101-500
Source: Windsor Star - July 25, 2007

General Motors Corporation
Detroit, MI
Pontiac, MI
General Motors Corp. will cut the number of pickup trucks it produces at its Pontiac, Mich., assembly plant and lay off an unspecified number of workers because of a slowing market. The move will take place starting in early September at the plant, which employs about 2,800 hourly workers. The number of workers who will be laid off has not been determined, but the plant’s assembly line speed will be reduced from 54.5 vehicles per hour to 45.
Approximate Affected Workforce: N/A
Source: The Atlanta Journal-Constitution - July 25, 2007

Arnold Worldwide Llc
Boston, MA
Boston advertising agency Arnold Worldwide is shutting down its corporate communications group and cutting about eight jobs. Yesterday the agency began informing current clients its public relations practice - which handles PR for Foley Hoag, USA Today and TA Associates - is being phased out and could be shut down in the next two months. The chief executive of Arnold confirmed the PR group was being closed. The PR group represents less than one half of 1 percent of Arnold’s business. The group primarily handles PR for companies that aren’t Arnold advertising clients. Earlier this year, the PR group had a major win when it became USA Today’s agency of record. But sources said USA Today recently informed Arnold it was going to scale back the account. That came on top of the loss of athletic apparel client Under Armour last month. With those losses, Arnold’s management decided it was time to dismantle the group and its small staff.
Approximate Affected Workforce: 1-50
Source: The Boston Herald - July 21, 2007

Cleveland Athletic Club
Cleveland, OH
The Cleveland Athletic Club announced Monday that it will discontinue its food service until October as a result of money troubles, laying off several employees. The decision came about two weeks after an annual member meeting July 9 at which the Board of Directors recommended the club file for bankruptcy. The food service will be discontinued Aug. 1 in an attempt to reduce payroll and utility cost. The club’s food service is losing money. Revenue from catering this year has been significantly lower than in past years.
Approximate Affected Workforce: N/A
Source: Plain Dealer - July 24, 2007

First Data Corporation
Englewood, CO
Tulsa, OK
First Data Corp. plans to close its Tulsa call center, which employs 400 people, by the end of December. First Data said it would be making cuts because a major client — financial services provider USAA — wouldn’t be renewing its contract for services at the Tulsa center. Also, the company’s lease of the facility expires at the end of December. First Data’s Tulsa center handles credit card customer calls for banks and financial institutions.
Approximate Affected Workforce: 101-500
Source: Tulsa World - July 26, 2007

Raymow Enterprises
Oldsmar, FL
The drop has pulled the rug out from under rug sellers … and landscapers, appliance dealers, plumbers and others. As one of the Tampa Bay area’s largest landscaping companies, Raymow thrived servicing new home buyers of companies such as Standard-Pacific and Transeastern homes. Now Standard Pacific’s Florida sales are in retreat. Transeastern has tanked and its corporate name will vanish under new ownership. Housing’s economic ripple has rolled over Raymow. The Oldsmar company projects $5-million less in sales than originally forecast and has laid off about 100 of 320 employees.
Approximate Affected Workforce: 51-100
Source: St. Petersburg Times - July 22, 2007

Standard Register Company
Dayton, OH
Standard Register Co. announced Friday it eliminated 250 positions in management and overhead. Standard Register said it cut the jobs as part of its overall plan to reduce its annual operating costs by $40 million. The Dayton-based company provides document-management services to the health care, financial services, manufacturing and other industries. It employs about 3,700 people overall and 550 locally.
Approximate Affected Workforce: 101-500
Source: Dayton Business Journal - July 20, 2007

IndyMac Bancorp Inc.
Pasadena, CA
In the face of an increasingly tough mortgage market, IndyMac Bancorp. announced Thursday it is laying off about 400 employees, roughly 4 percent of its total work force. Most of the layoffs will become effective immediately, a company official said. Pasadena-based IndyMac will still employ 9,200 workers. Industry loan volumes and profit margins continue to be under pressure, the president said, and IndyMac’s dollar loan volume was down 12 percent in the second quarter compared with the same period a year earlier. The impacted employees include both management and staff.
Approximate Affected Workforce: 101-500
Source: Pasadena Star-News - July 20, 2007

Wells Fargo & Company
San Francisco, CA
Baton Rouge, LA
Des Moines, IA
Wells Fargo & Co. is shutting down its subprime mortgage loan unit, the bank’s mortgage division said Thursday. San Francisco-based Wells Fargo said the collapsing subprime market is not worth the risk. Wells Fargo will close its offices in Baton Rouge, La. and Des Moines, Iowa. It will try to find jobs for the 237 workers who will be laid off.
Approximate Affected Workforce: 101-500
Source: Sacramento Business Journal - July 26, 2007

Cargill Inc.
Wayzata, MN
Guelph, ON
More than one-quarter of Better Beef’s employees will be out of work by the end of this week. Cargill Ltd., which bought the Guelph plant about two years ago, announced yesterday it is cutting about 300 positions, trimming its workforce from about 1,100 staff to 800. The cuts, which take effect Saturday, will be achieved by eliminating an afternoon shift in the cutting room, and reducing the number of cattle killed daily from 1,700 to 1,400. The layoffs are “the culmination of a couple of variables.” These include the “lingering impact” of the mad cow crisis — after bovine spongiform encephalopathy (BSE), known as mad cow disease, was found in an Alberta heifer more than four years ago — and prices being driven down by a strong Canadian dollar. Better Beef was purchased in the summer of 2005 by Cargill Ltd., the Canadian subsidiary of international meat processing giant Cargill Inc.
Approximate Affected Workforce: 101-500
Source: Guelph Mercury - July 24, 2007

Kellogg Company
Battle Creek, MI
Kellogg Co. will lay off about 300 employees as part of a reorganization of its direct store-door delivery operations in the Southeast. Kellogg said it has notified the affected employees. Under the reorganization plan, Kellogg said it has extended offers to exit 517 distribution route franchise agreements with independent contractors. The company said it will incur total charges between $75 million and $85 million for exiting the agreements and severance costs.
Approximate Affected Workforce: 101-500
Source: FinancialWire - July 20, 2007

pg 1 of 3

Boston Scientific Corporation
Natick, MA
Troubling revenue trends at Boston Scientific will force a reduction in expenses and head count, a company official said Friday. Boston Scientific is based in Natick, Mass. The company’s chief financial officer, said Friday morning during a conference call with investors that Boston Scientific’s plans will let the company enter 2008 with a lighter expense load. Sales of implantable defibrillators and drug-coated stents - the company’s top two products, were down during the quarter that ended in June. Sales have been hurt by a series of product recalls dating back to 2005.
Approximate Affected Workforce: N/A
Source: St. Paul Pioneer Press - July 20, 2007

CCS Medical Inc.
Clearwater, FL
New Albany, OH
A Florida company that sells home health-care supplies for diabetes and other medical conditions has told Ohio it is closing its New Albany office, cutting 67 jobs. CCS Medical is in the final stages of consolidating operations in Clearwater, Fla., following a merger two years ago with MP TotalCare Supply Inc.
Approximate Affected Workforce: 51-100
Source: Columbus Business First - July 26, 2007

Swedish Medical Center
Seattle, WA
Swedish Medical Center recently announced that it is closing its Sleep Medicine Institute, although the practice itself will be continued by a private physicians group. That will result in a reduction of 75 positions; meanwhile, the hospital has said it expects to reduce employment (7,331 at the end of 2006) by about 200 full-time-equivalent positions this year through layoffs, reassignments and early retirements, because patient volumes are below projections.
Approximate Affected Workforce: 101-500
Source: THE SEATTLE POST-INTELLIGENCER - July 25, 2007

Automatic Data Processing Inc.
Roseland, NJ
San Bernardino, CA
The maker of TurboTax, Quicken and other finance software is phasing out its San Bernardino office over the next eight months, eliminating 84 jobs in the process. The closure stems from a deal announced in February between Mountain View accounting and finance software developer Intuit Inc. and payroll processing firm ADP Employer Services, a division of Automatic Data Processing Inc. in Roseland, N.J. ADP is acquiring 25,000 Intuit business customers who outsource payroll tasks to third-party providers. The acqusition includes customers of Intuit Payroll Services in San Bernardino, an operation that dates to 1966.
Approximate Affected Workforce: 51-100
Source: Business Press - July 23, 2007

Foldera Inc.
Huntington Beach, CA
FolderaTM, Inc., the next-generation Information Organizer and Collaboration service, today announced it has reduced its workforce from 47 to 23 employees as part of an overall strategy to substantially reduce costs until the company obtains meaningful revenue. FolderaTM is the secure and easy-to-use service that instantly organizes workflow. Foldera combines web-based email, a file manager, a task manager, a calendar, a contact manager, and sharable folders into a unified productivity suite, available with a single login from any web browser. Foldera also has the unique ability to instantly sort and file your sent and incoming email, files, tasks, and events into folders, on a project-by-project basis, chronologically and in real time.
Approximate Affected Workforce: 1-50
Source: Business Wire - July 23, 2007

Intel Corporation
Santa Clara, CA
Rio Rancho, NM
Intel Corp. will notify more than 1,000 employees that their jobs will be terminated beginning Monday. The previously announced work force reduction comes as Intel ramps down production next month, which makes older, simpler computer components using 200-millimeter silicon wafers. The job cuts will bring the total staff at Intel’s Rio Rancho plant to below 4,000 employees. Intel currently employs 4,700 at the site.
Approximate Affected Workforce: over 1000
Source: Albuquerque Journal - July 26, 2007

LSI Corporation
Milpitas, CA
Wichita, KS
LSI Corp. on Wednesday projected a third-quarter loss and said it will eliminate about 2,100 production jobs, as the chipmaker works to improve operational efficiencies. LSI has agreed to sell an assembly and test operations facility in Thailand for $100 million to STATS ChipPAC Ltd. and will transfer similar functions performed at its facilities in Singapore and Wichita, Kansas to current contract manufacturing partners. The moves will result in the loss of 2,100 jobs and reduce annual capital costs by $20 million to $25 million starting in 2008, LSI said.
Approximate Affected Workforce: over 1000
Source: Associated Press Financial Wire - July 25, 2007

Mediware Information Systems Inc.
Shawnee Mission, KS
Scotts Valley, CA
Mediware Information Systems Inc. laid off about 20 employees Friday, including a small number in its Lenexa headquarters office. Most of the cuts occurred in California, where Mediware closed an office. The cuts largely affected the company’s surgery division and completed the consolidation of three business units into a single entity. Mediware had nearly 200 employees, including about 50 in Lenexa, before the latest cuts.
Approximate Affected Workforce: 1-50
Source: The Kansas City Star - July 24, 2007

U-Tech Media USA LLC
San Jose, CA
Ontario, CA
An Ontario CD and DVD replicating and packaging company laid off 80 people this month as it moves in with its sister operation in San Jose. U-Tech Media USA is consolidating the two plants. The Ontario firm will lay off 80 professional staff, warehouse and clerical workers by July 11.
Approximate Affected Workforce: 51-100
Source: Business Press - July 23, 2007

Brunswick Corporation
Lake Forest, IL
Fond du Lac, WI
Brunswick Corp., the parent company of the Mercury Marine engine group in Fond du Lac, on Friday said it will trim production of marine engines and recreational boats and lay off staff due to a weak demand for its products. The recreational boating industry in the United States has been caught in a prolonged cyclical downturn. Steep gasoline prices and the consumer fallout from a weakening housing market recently have added to the difficulties.
Approximate Affected Workforce: N/A
Source: The Milwaukee Journal Sentinel - July 21, 2007

Ice Industries Inc.
Sylvania, OH
Toledo, OH
Word spread quickly among Acklin Stamping Co. workers Friday. The company was preparing to cart away much of the Toledo factory’s heavy machinery — and a majority of its jobs. Company officials said the longtime Toledo operation will remain open, but they conceded yesterday that the workforce will be cut significantly. The factory, owned by Ice Industries Inc., of Sylvania, produces housings for air conditioners, compressors, and small motors. The work is being transferred to a company plant in Grenada, Miss., to bring it closer to the firm’s customers, most of whom are in Alabama and Mississippi. Plant officials have said that 53 or 54 workers will be laid off, leaving just 24 hourly workers. Company officials said they didn’t provide a longer warning because of fears of sabotage.
Approximate Affected Workforce: 51-100
Source: The Blade - July 24, 2007

pg 2

ohn Maneely Company
Sharon, PA
Little Rock, AR
A maker of sprinkler tube and electric conduit has announced it will shut down production at its Little Rock plant, laying off most of its 145 workers. Wheatland Tube Co. said Wednesday it would close its manufacturing facility by the end of September. The company says competition from imports from China and a pair of recent mergers are behind the move. Wheatland, which is a division of Cleveland-based John Maneely Co., merged last year with Atlas Tube Co. And John Maneely acquired another manufacturer, Sharon Tube Co., earlier this year. The company is consolidating its steel-tube manufacturing operations and cutting costs by reducing unnecessary capacity. More steel tubing is being imported, and that is putting more price pressure on domestic manufacturers.
Approximate Affected Workforce: 101-500
Source: The Associated Press State & Local Wire - July 25, 2007

Koolatron Corporation
Brantford, ON
Koolatron is laying off up to 20 workers starting today, about four months after getting a $2.34-million provincial loan meant to safeguard jobs at the cooler manufacturer. Workers have been told that the company lost a contract to supply coolers to Canadian Tire, which is instead turning to China for its products.
Approximate Affected Workforce: 1-50
Source: Brantford Expositor - July 20, 2007

Mowhawk Industries Inc.
Calhoun, GA
Eden, NC
Karastan announced 47 layoffs from its rug manufacturing division this week. The director of manufacturing said that about 550 employees will remain at the plant. Rug manufacturing is being reduced because of a sluggish housing market leading to reduced sales of home furnishings. The layoffs were announced Monday and will occur over three to four weeks. Some rugs will still be made there, but on a reduced basis. Commercial and residential carpet manufacturing will continue at the Eden plant. Karastan is owned by Mowhawk Industries, based in Calhoun, Ga.
Approximate Affected Workforce: 1-50
Source: News & Record - July 25, 2007

Pitney Bowes Inc.
Stamford, CT
Danbury, CT
Pitney Bowes plans to lay off 96 employees in Danbury. The layoffs are part of a larger initiative through which the company is out-sourcing its internal information technology work, a spokesman said. These jobs support the company’s internal voice and data networks, servers and other technology needs. The company is not closing its Danbury site, which is the factory and design center where it makes high-end production mail equipment. This equipment is mainly used by financial, insurance and health care companies to cut, fold, insert and meter mailings such as bank and insurance statements. The layoffs are effective Sept. 20, 2007. The company has about 4,000 workers in Connecticut, about 650 work in Danbury.
Approximate Affected Workforce: 51-100
Source: Connecticut Post Online - July 20, 2007

Proliance International Inc.
New Haven, CT
Proliance International’s president and CEO said that preliminary results in the second quarter show lower sales due to the late arrival of seasonal business activity. The company anticipates a 2007 net loss of between $12M-$17M and restructuring expenses of $5M-$7M. The company will cut its U.S. workforce by approximately 15%.
Approximate Affected Workforce: N/A
Source: Theflyonthewall.com - July 25, 2007

Raydon Corporation
Daytona Beach, FL
Raydon Corp., a top U.S. military supplier for virtual reality training gear, has laid off 95 workers. The cuts amounted to about a third of the company’s work force. Raydon chief executive said it was necessary because the company grew quickly, and inefficiently, from 2004 to 2006. It went from total revenue of $19 million to $45 million. The cuts were planned for some time, and supposed to happen in September. Delays in government funds forced Raydon to make them now.
Approximate Affected Workforce: 51-100
Source: The Associated Press State & Local Wire - July 26, 2007

TI Automotive
Oxford, UK
Hebron, OH
TI Automotive Systems will close its Hebron plant, cutting nearly 200 jobs. The layoffs will begin in the final three months of 2007, with the plant slated to close around the end of next July. No reasons were given for the closing. TI Automotive is based in the United Kingdom and has more than 16,000 employees in 27 countries. Its U.S. operations make fuel-storage and delivery systems, including plastic fuel tanks and electric fuel pumps; the U.S. headquarters is in Warren, Mich. Of the 195 affected workers in Hebron, 182 work in production.
Approximate Affected Workforce: 101-500
Source: The Columbus Dispatch - July 21, 2007

Royal Ontario Museum
Toronto, ON
Depending on how you look at it, the newly reopened Royal Ontario Museum is either half empty or half full. The Toronto museum said attendance is 50 per cent higher than average for this time last year. But at least 24 summer workers were recently laid off. Some of these workers said they were told to expect 10,000 visitors a day.
Approximate Affected Workforce: 1-50
Source: The Globe and Mail - July 25, 2007

The American Red Cross of Greater Idaho
Boise, ID
Between July 1, 2005, and June 30, 2006, almost 200 Idaho families lost their homes to disasters — almost 200 families that may have children, jobs, pets and homes full of memories. The American Red Cross of Greater Idaho was there to help. The heads of the state chapter say the Red Cross will still be there to help — only now it’ll be with half the paid staff members, the latest cut in an effort to eliminate yearly shortfalls of up to about $700,000. There are overhead costs, such as renting office space and paid administrative workers. The costs eventually became too much for the Idaho Red Cross. To better meet the donations, the organization has trimmed more than $1 million annually in program expenses since 2001, mostly by cutting paid positions. The chief executive officer for the Idaho Red Cross recently announced cutting 10 paid positions from the state chapter.
Approximate Affected Workforce: 1-50
Source: Times-News - July 23, 2007

Aspreva Pharmaceutical Corporation
Victoria, BC
British Columbia-based Aspreva Pharmaceutical Corporation said Wednesday it will cut 33 jobs, and replace its chief scientific officer, as part of a restructuring plan. The move comes after a June announcement that an experimental lupus drug in a late-stage trial failed to meet objectives. The job cuts account for 25 percent of the Aspreva’s total workforce.
Approximate Affected Workforce: 1-50
Source: The Associated Press - July 25, 2007

Bristol-Myers Squibb Company
New York, NY
Bristol-Myers Squibb Co. on Thursday reported 5.8% higher second-quarter earnings, but revenue was flat due to competitive pressure from generics on two key products, Pravachol and Plavix. Despite the competitive pressure, the New York drugmaker raised its 2007 financial forecast, citing anticipated strong sales for some newer products as well as continued emphasis on cost controls and a gain expected from the sale of certain assets. The proposed cost controls “will include workforce reductions in some areas and the rationalization of some facilities,” the Chief Executive said in a statement.
Approximate Affected Workforce: N/A
Source: MarketWatch - July 26, 2007

Hollis-Eden Pharmaceuticals, Inc.
San Diego, CA
Hollis-Eden Pharmaceuticals, Inc. announced a restructuring designed to tightly focus the Company’s future strategic direction on development of its proprietary class of adrenal steroid hormones in the therapeutic areas of metabolic disorders, autoimmune and other inflammatory conditions, and hormone sensitive cancers. Consistent with this focus, the Company’s primary development efforts will be on clinical drug candidates HE3286 and HE3235, as well as follow-on compounds that may offer benefits in these therapeutic areas. With the Company’s recent decision to discontinue investment in products for biodefense, Hollis-Eden is also reducing its headcount by 25% to effectively reduce its overall cash usage to an estimated $10-$12 million for the second half of 2007.
Approximate Affected Workforce: N/A
Source: Pharma Investments, Ventures & Law Weekly - July 22, 2007

Nabi Biopharmaceuticals
Boca Raton, FL
Rockville, MD
Nabi Biopharmaceuticals today announced that it has created the second of its two planned strategic business units (SBU), Nabi Pharmaceuticals. Nabi Pharmaceuticals is responsible for the NicVAX(R) (Nicotine Conjugate Vaccine) and StaphVAX(R) (Staphylococcus aureus Polysaccharide Conjugate Vaccine) development programs, as well as for the continuing milestone-related development obligations following the sale of PhosLo(R) (calcium acetate). In connection with the reorganization required to support the business strategy of the new SBU, the company eliminated 33 positions in its Rockville, Maryland research and development facility. This reduction - approximately 5 percent of the company’s total current workforce - is expected to yield approximately $3.3 million in savings on an annualized basis. Nabi Biopharmaceuticals leverages its experience and knowledge in powering the immune system to develop and market products that fight serious medical conditions.
Approximate Affected Workforce: 1-50
Source: PR Newswire - July 20, 2007

AT&T Inc.
San Antonio, TX
Independence, MO
Milwaukee, WI
In the 1980s, hundreds of people worked in the area as AT&T long-distance operators. Fewer than 40 remain, and those jobs will be eliminated next month. AT&T Inc. has said that it will be closing its Independence office by Sept. 5. The office has 36 hourly employees, including 32 operators. AT&T has been reducing its operator work force for years as technology has reduced call volumes. AT&T also plans to close a service center in Milwaukee this fall, eliminating 103 jobs. The company will shut its service center for industry markets because it handles calls from a shrinking segment of its business - line sharing with other telephone service providers, said an AT&T spokesman.
Approximate Affected Workforce: 101-500
Source: The Kansas City Star - July 24, 2007

Citizens Communications Company
Stamford, CT
Rochester, NY
Telecommunication services provider Citizens Communications Co. said Tuesday in a regulatory filing it will close its Rochester, N.Y., residential call center and credit and collections center, potentially cutting the jobs of more than 100 employees. The Stamford, Conn.-based company said it is unable to estimate the third-quarter charges it will incur because of these actions.
Approximate Affected Workforce: 101-500
Source: The Associated Press - July 24, 2007

Platinum is getting hammered, -$40.00

Japanese are heavily into Pt, maybe a bit of quick cashing out money is fueling it down?

Gold is off just a few bux.

I think if we end down triple figures today then its “Game Over” next Monday or Tuesday. If we end down in double digits I give it a 50/50.

I am experiencing deja vu with the Russian financial crisis and the events leading up to the meltdown on August 17th 1998.

Krakatoa, east of Jersey

Salon.com has an interiew with a woman who spent a year as a flipper and real-estate broker. She recently wrote a book about it.

Has something gone haywire with Fannie Mae’s plunge protection mechanism? I thunk they were riding to the rescue of subprime, but now it appears they are falling victim to the scourge.

Fannie, Freddie seen facing subprime losses
But they’re positioned well to weather mortgage storm, Citigroup says
By Alistair Barr, MarketWatch
Last Update: 12:26 PM ET Jul 27, 2007

SAN FRANCISCO (MarketWatch) — Fannie Mae and Freddie Mac could have $4.7 billion in unrealized losses from the deterioration in subprime mortgages, Citigroup’s fixed-income strategy team estimated on Friday.
The bank’s strategists said that probably won’t be a big problem and argued that recent moves in the credit-derivatives market suggesting Fannie (FNM :Last: 58.04-3.06-5.01% 12:13pm 07/27/2007) and Freddie (FRE :Last: 57.96-1.43-2.41% 12:13pm 07/27/2007) are more risky have been overdone.

The estimated $4.7 billion in losses represent about 6% of the equity capital of the government-sponsored mortgage-finance giants, the strategists noted, adding that Fannie and Freddie’s retained portfolios contain roughly $182 billion of subprime bonds, most of which are rated AAA.

http://www.marketwatch.com/news/story/fannie-freddie-face-47-billion/story.aspx?guid=%7B039A6514%2D2144%2D4BC7%2DB9F6%2D8573CC3699ED%7D

I like how Gold closes 2 1/2 hours ahead of Wall Street…

Gigantic aftermarket swings are made of days like this~

http://www.boston.com/business/markets/articles/2007/07/27/all_business_mortgage_woes_no_surprise/

NEW YORK –Century 21 Real Estate’s CEO Thomas Kunz may have unintentionally hit the nail on the head when he declared that a “pity party” is gripping the housing industry right now.

Many recent home buyers are expressing shock that their properties may be worth a lot less than when they bought them. CEOs like Countrywide Financial Corp.’s Angelo Mozilo are claiming that “nobody saw” the deterioration of real estate values coming, and are pointing fingers at others for causing this mess. And Wall Street seems to only now be waking up to the implications of mortgage securities imploding.

They all need an education in how markets work. In a perfect world, everyone keeps making money on their investments because values never drop. This is the real world. Things just don’t work that way.

Yikes! El bottomo fell out-o! Grab your crash helmet!

What a week! The dow had it’s worst week in 5 years.

This thing seems to be unwinding much more swiftly than I ever thought. I wasn’t expecting commercial credit to lock up over night like this. It’s even nastier than I thought it would be.

Anyone else losing interest in this topic now that what we’ve all been predicting has come to pass?

Fear and loathing in the stock market — what was with the 3:45 selloff?

Realtors camping out over 24 hours for Condos in Toronto:

http://www.thestar.com/Business/article/240381

I would like to see a follow up story on these clowns when this project opens in 2010.

test

Thank you Wall Street. May I have another?