The Housing Bubble

Mama mia…Its lookin like dow 10,000

Housing Bulls(hitters), it’s not stabilizing. Take a looky.

For the rest of us, advance to 4:40 for a great laugh. It’s a clip of what is happening to prices….

http://tinyurl.com/ygfrnsq

$15K tax credit for all!
Where’s my $100K stimulus check?

The problem with waiting out this market is fighting boredom. I seem to be on a scooter kick lately. I need a 500cc Piaggio that I can goof around on.

While I’m waiting, of course

Green shoots everywhere…

http://abcnews.go.com/Business/wireStory?id=8824971

Sept. Retail Sales Fall 1.5 Percent Post Clunkers

Retail sales declined in September by the largest amount this year as car sales plummeted following the end of the government’s popular Cash for Clunkers program. But outside of autos, sales were better than expected.

The Commerce Department said Wednesday that retail sales dropped 1.5 percent last month. That’s smaller than the 2.1 percent fall economists had expected, but still the biggest setback since sales dropped 3.2 percent in December.

Hong Kong apartment sells for whopping $57 million
By JEREMIAH MARQUEZ, AP Business Writer Jeremiah Marquez, Ap Business Writer

HONG KONG – It’s a price tag that would make even New Yorkers and Londoners gasp — an outsized luxury apartment sold for nearly $57 million in Hong Kong Wednesday amid growing fears of a real estate bubble.

The five-bedroom duplex suite with as much as 6,158 square feet was sold to an unidentified buyer from mainland China, said the developer, Henderson Land Development, a major Hong Kong property company. It is believed to be Asia’s most expensive property by square foot at nearly $9,200.

http://news.yahoo.com/s/ap/20091014/ap_on_re_as/as_hong_kong_expensive_apartment/print

fasten your seatbelts….inflation here we come.

http://finance.yahoo.com/news/Business-inventories-decline-apf-85049395.html?x=0&sec=topStories&pos=1&asset=&ccode=

Oil up better than $1 to go over $75 per barrel. No break in gas prices thus far, and we’re getting close to November. The pig men have succeeded in their price fixing. A rally to more than $100 seems baked into the cake, it’s just a matter of when. I need to unload this V8 before that happens.

For many U.S. wealthy, housing crisis still a squeeze.

ST. CHARLES, Illinois (Reuters) - Despite some signs that the worst of the U.S. residential housing crisis may be over, many wealthy homeowners are still being squeezed by the combination of weak home prices and the stock market crash.

“I think for wealthy homeowners it will get worse before it gets better,” said Dennis Hedlund, founder of iEmergent, a forecaster for mortgage and real estate companies.

“I don’t think home prices have bottomed yet. Many people are stuck at the high end, as there aren’t many buyers out there,” Hedlund said of owners of luxury properties.

From California to Massachusetts, the U.S. housing crisis came after years of easy credit and soaring property values. Towns like the western Chicago suburb of St. Charles saw an unprecedented growth of wealth, especially in high-end homes.

An hour by train from Chicago and known for good schools, St. Charles was a magnet for senior managers and professionals. But as the housing crisis that began in the subprime residential market spread up the property chain, the once-thriving high-end local market ground to a near halt.

“We’ve never seen anything like it,” said Maurine Trafals, office manager at local realty agency Source One. “The market just stopped in the summer.”

St. Charles, population 40,000, now has 74 homes for sale with buyers asking more than $1 million.

“That’s a huge number to have on the market in a community of this size,” Trafals said.

“Let us call to all the people for thrift and economy, for denial and sacrifice if need be, for a nationwide drive against extravagance and luxury, to a recommittal to simplicity of living, to that prudent and normal plan of life which is the health of the republic. There hasn’t been a recovery from the waste and abnormalities of war since the story of mankind was first written, except through work and saving, through industry and denial, while needless spending and heedless extravagance have marked every decay in the history of nations.”

~Pres. Harding, 1920

NY Post - 10-13-09

Ben Bernanke’s dollar crisis went into a wider mode yesterday as the greenback was shockingly upstaged by the euro and yen, both of which can lay claim to the world title as the currency favored by central banks as their reserve currency.

Over the last three months, banks put 63 percent of their new cash into euros and yen — not the greenbacks — a nearly complete reversal of the dollar’s onetime dominance for reserves, according to Barclays Capital. The dollar’s share of new cash in the central banks was down to 37 percent — compared with two-thirds a decade ago.

Currently, dollars account for about 62 percent of the currency reserve at central banks — the lowest on record, said the International Monetary Fund.

Bernanke could go down in economic history as the man who killed the greenback on the operating table.

After printing up trillions of new dollars and new bonds to stimulate the US economy, the Federal Reserve chief is now boxed into a corner battling two separate monsters that could devour the economy — ravenous inflation on one hand, and a perilous recession on the other.

“He’s in a crisis worse than the meltdown ever was,” said Peter Schiff, president of Euro Pacific Capital. “I fear that he could be the Fed chairman who brought down the whole thing.”

Going Green…

Wood making comeback as power source.
One of the world’s oldest energy sources is making a comeback.

Across the USA, power plants are turning to wood to make electricity. The move is spurred by state mandates to encourage renewable power and by bills moving through Congress that require more renewable electricity nationwide.

Wood power’s rise is “meteoric,” says William Perritt, editor of Wood Biomass Market Report. One wood-burning plant started up in 2007, seven in 2008 and a dozen in 2009, he says.

Dozens more are on the drawing board. That includes three 100-megawatt plants, scheduled to start in 2012 that together would crank out enough juice to power up to 270,000 homes.

In 2008, wood-burning power plants were capable of generating roughly 6,700 megawatts or enough to provide power to about 6 million homes, according to the Energy Department. That includes, however, plants that supply power to wood-products factories that use waste wood to generate electricity.

Many plants now burn bark, twigs and other waste wood. If wood power grows as expected, whole trees will have to be cut down to fuel the plants, says Pete Stewart of Forest2Market, a forest-industry analysis firm.

Plants have promised to use waste wood, but “as soon as they get their permit and see how much it’s going to cost to do that, they change their tune,” he says. Stewart says it is generally more expensive to build a wood-burning plant than one powered by coal or natural gas.

Some environmentalists fear that the rise of wood power could devastate forests.

Mr. Cole has a cold, (Hwy’s been on pins and needles about H1N1,) so I run across this excellent article in the Atlantic, …now really, how many people knew about this Cheney-Shrub connection?

“…The U.S. first began stockpiling Tamiflu and Relenza back in 2005, in the wake of concern that an outbreak in Southeast Asia of bird flu, a far more deadly form of the disease, might go global. On November 1, 2005, President George W.Bush pronounced pandemic flu a “danger to our homeland,” and he asked Congress to approve legislation that included $1billion for the production and stockpiling of antivirals. This was after Congress had already approved $1.8billion to stockpile Tamiflu for the military, a decision that was made during the tenure of Defense Secretary Donald Rumsfeld. (Before joining the Bush Cabinet, Rumsfeld was chairman for four years of Gilead Sciences, the company that holds the patent on Tamiflu, and he held millions of dollars’ worth of stock in the company. According to Roll Call, an online newspaper covering events on Capitol Hill, Rumsfeld says he recused himself from all government decisions involving Tamiflu. Gilead’s stock price rose more than 50 percent in 2005, when the government’s plan was announced.)”

“As with vaccines, the scientific evidence for Tamiflu and Relenza is thin at best. In its general-information section, the CDC’s Web site tells readers that antiviral drugs can “make you feel better faster.” True, but not by much. On average, Tamiflu (which accounts for 85 to 90 percent of the flu antiviral-drug market) cuts the duration of flu symptoms by 24hours in otherwise healthy people. In exchange for a slightly shorter bout of illness, as many as one in five people taking Tamiflu will experience nausea and vomiting. About one in five children will have neuropsychiatric side effects, possibly including anxiety and suicidal behavior”

http://www.theatlantic.com/doc/200911/brownlee-h1n1/3

I noticed something new today. One of my checking accounts is with a brokerage firm, and they require that I link a trading account with the banking account. So today when I’m moving money from the checking to the trading account, at the screen where they ask for confirmation, they’ve added a warning: “Please be advised that you are about to transfer funds into an account that is not FDIC insured.” And they display the warning again after the request is confirmed. I maintain minimal deposits in this account anyway but, sheesh, you gotta bust your but to keep up with these crooks.

Would this be considered deflation??

Colorado minimum wage to drop as living costs fall

DENVER — Colorado will become the first state to reduce its minimum wage because of a falling cost of living.

The state Department of Labor and Employment ordered the wage down to $7.24 from $7.28. That’s lower than the federal minimum wage of $7.25, so most minimum wage workers would lose only 3 cents an hour.

Colorado’s provision allows wage declines, the minimum wage will drop because of a falling consumer price index. It will be the first decrease in any state since the federal minimum wage law was passed in 1938.

Other states with minimum wages that rise with inflation are Arizona, Missouri, Montana, Nevada, Oregon, Vermont and Washington.

http://www.washingtonpost.com/wp-dyn/content/article/2009/10/13/AR2009101301422.html

Told you so.

NEW YORK (CNNMoney.com) — Congress is considering proposals to greatly expand a soon-to-expire $8,000 tax credit for first-time homebuyers — potentially applying it to all but the wealthiest homebuyers. Beyond extending that deadline, some lawmakers want to make the credit available to all homebuyers who meet income eligibility requirements. And some want to increase the amount of the credit from $8,000 to $15,000.

US Housing Market Could Take Double-Dip Down In 2010
Nasdaq ^ | 10/13/09 | Steve Kerch

http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=200910131934dowjonesdjonline000536&title=us-housing-market-could-take-double-dip-down-in-2010

“Obama thinks of number between one and ten, wins Nobel Prize for Mathematics”

Another headline from Tomorrowland

Walking away a fair thing to do, says MSNBC.

http://www.msnbc.msn.com/id/33295860/ns/business-the_big_money/

“The aim of these critics is to shame debtors into sticking with their mortgages. That’s something debtors should take with a grain of salt. There are many good reasons to keep paying your mortgage and avoid the black mark of foreclosure, but the immorality of sticking the bank with a loss isn’t one of them.”

After all, the banks stick you with the fine print of their credit card bills, don’t they? The democratization of “business ethics.”

I heard today from my accountant that the IRS has a 22 weeks backlog on the $8K credit. Anyone else heard this?

Jim Rogers: The Next 10 Years
Written by Heather Bell - 10- 09-2009 (excerpt)

I just wanted to offer some highlights from his speech at ETF Securities’ mini-conference.

1. The 21st century belongs to China

According to Rogers, the 19th century was the era of the British Empire and the 20th century was the U.S.’ heyday. But the 21st century is China’s (though the rest of Asia is definitely going to get a boost too).

The reasons for this are many, but some points brought up by Rogers include the following:

1. The Chinese want to live like we do;
2. They are more eager to work;
3. They are better at saving;
4. There are 1.5 billion Chinese citizens (and 3 billion people in all of Asia), and we owe them money. They are, according to Rogers, “among the best capitalists in the world.”

There will be some setbacks, of course, Rogers says, but these are opportunities. “If you see setbacks in China, you should pick up the phone and get more involved,” he advised, before adding his favorite refrain, “The best advice of any kind that I can give you is to teach your children and grandchildren Chinese.”

China’s path to world domination started with Deng Xiaoping’s capitalist programs in 1978, and there hasn’t been any looking back since. Rogers views China’s dominance as nigh-on unstoppable except for one little thing: its water problem. There are parts of the country that are running out of water, and when the water disappears, Rogers points out, so does civilization. However, the country is acting aggressively to combat the problem, and he doesn’t view it as that much of a threat.

2a. Jim Rogers is not a Ben Bernanke fan

Yep, it’s a fact. No “Team Bernanke” shirts for Jim Rogers (who said to scattered applause during the Q&A session that if he was in charge of the U.S. economy he would “abolish the Fed and resign.”).

Rogers is appalled by the government’s actions—Bernanke’s in particular. The U.S. government’s strategy calls for the debasement of the dollar, he says, calling it a “horrible policy.” While he concedes it can work in the short term, it NEVER works in the mid- or long term.

“He’s going to run those printing presses until we run out of trees, because that’s the only thing he knows,” Rogers said of Bernanke.

Add that on top of the country’s rapidly growing astronomical debt, and Rogers believes you’ve got a recipe for disaster.

2b. The U.S. dollar is screwed

Consider this a corollary to point 2a. Its status as a reserve currency is teetering on a precipice, in Rogers’ opinion, and he’s not alone. In fact, so many people are selling dollars right now that he’s sitting tight, waiting for a possible—and ultimately unsustainable—rally in order to exit the market.

“Don’t be silly, everyone knows you can’t have price inflation without wage inflation!”
…from Dude

Not sure if you’re serious or not. I’ll answer anyway. Of course you can have price inflation without wage inflation.
Suppose on average everybody earns the same AND the amount of available goods and sevices is cut in half. What do you think that would do to prices? Exactly, price inflation. The same amount of $$ chasing fewer goods. It’s also called a reduction in the standard of living, coming to soon to an economy near you.

For all you deficit hawks, no more worries: WH is “NOT COOL” with high deficits (choice of adjectives signifies the degree of worry):

White House “Not Cool” with Trillion-Dollar Deficits as Far as Eye Can See
Posted Oct 14, 2009 11:23am

Critics of the Obama administration argue that the President is bankrupting the country by spending more than $1 trillion a year more than the government generates.

These trillion-dollar deficits, moreover, aren’t expected to be a one-time thing. Many forecasters, including the White House, expect them to continue for the better part of the next ten years.

But here’s a relief: The White House is not cool with that!

We asked our guest Christina Romer, the chair of the Council of Economic Advisers, about the President’s attitude toward these deficits, and she confirmed that he’s not comfortable with them.

Mrs. Romer did not offer details about how the President plans to deal with these deficits, at least over the next few years. Rather, she stressed that the President’s strong priority is to get the economy back on firm footing.

To this end, the White House is very encouraged about the recent recovery and thinks GDP grew 2-3% in the third quarter.

Mrs. Romer was quick to manage future expectations, however.

The White House does not think we’re headed for a v-shaped recovery. And until we start to see robust job growth again, the President will not be saying “Mission Accomplished.”

Oh the irony… We turn toward it and Cuba may be turning away from it…

Cuba gives ’socialism lite’ a try as recession deepens
The Miami Herald

Cuba’s workplace cafeterias are closing, President Raúl Castro keeps saying the well-off shouldn’t get the same subsidies as the poor, and now there are rumblings that one of the stalwart vestiges of the revolution — the ration booklet — has outlived its usefulness.

As the Cuban government struggles through a deep recession, its leaders have begun picking away at socialism in order to save it. But experts say the latest buzz by the Cuban government is simply another desperate fix to stem the slide of a failed economy that buckled long ago.

Even one of Havana’s leading economists recently said Cuba’s economy needed to be turned upside down — “feet up.” So taxi drivers got private licenses, farmers now have their own plots of land and government workers have to pack their own lunches.

“I think what they are trying to do is prepare the people for a hard landing,” said Cuba expert Jonathan Benjamin-Alvarado of the University of Nebraska. “The government is really saying in so many words: We’ve got limited resources and can only do so much. I think they are stuck.”

Since he took office early last year, Raúl Castro has been saying that the country’s severely battered economy needs fixing. In a widely quoted August speech, Castro said Cuba was spending more than it made.

“Nobody, no individual nor country, can indefinitely spend more than she or he earns. Two plus two always adds up to four, never five,” he said. “Within the conditions of our imperfect socialism, due to our own shortcomings, two plus two often adds up to three.”

“Gold is being re-monetized,” says MoneyWeek editor Simone Wapler. “All the world’s paper monies are losing value - and credibility. There’s a race to the bottom as they try to devalue their currencies.”

All countries are fighting for market share. In a price-sensitive world, they increase exports by cutting prices. And the fastest - sometimes, the only - way to do that is by devaluing the currency. But when one nation devalues - say, by printing extra money - other nations must devalue too in order to stay competitive.

What can they all devalue against?

“Gold is rediscovering its old role,” says Simone. “Once again, it is the way we preserve wealth and keep track of what things are worth.”

Excerpt- Daily Reckoning

White-collar workers make up about 60 percent of the labor force and their higher earnings give them spending power that is invaluable to the economy’s health,” says CEO John Challenger in a new report.

An analysis of Bureau of Labor Statistics data found that of the 5.5 million Americans out of work for 27 weeks or more in September, 46 percent previously held management, professional and related occupations. By comparison, white-collar workers accounted for only 30 percent of the long-term jobless during the 2001 recession.

Put another way, when poor people are out of work it doesn’t matter so much to the overall economy because they don’t have much money to spend anyway. But when a manager used to making six figures is unemployed, that’s money not being spent on a new car, a new furniture or season tickets to UW football games.

Even high-wage earners who’ve kept their jobs are holding tight to their wallets. A recent survey by IBM found that 59 percent of respondents earning $100,000 or more have made significant spending cuts because of the economy.

But a bigger question no one is asking is whether an economy based 70 percent on consumer spending is flawed to begin with.

Americans since the 1980s have been played for fools with easy credit and cheap money to buy a lot of crap they likely don’t need.

What’s the “new economic model” if consumers finally wake up and decide to save like Grandma always said?

Please don’t take my big screen away…

California appears set to ban high-energy, big-screen TVs

California regulators appear to be on track to pass the nation’s first ban on energy-hungry, big-screen TVs, the Los Angeles Times reports.

The newspaper says the influential lobby group Consumer Electronics Association appears to be losing the battle and is asking the California Energy Commission instead to let consumers decide on their own whether to buy the most energy-saving new models of LCD and plasma high-def TVs.

“Voluntary efforts are succeeding without regulations,” says the association’s Doug Johnson, the newspaper reports. He also warns that too much government interference could boost the cost of TVs for consumers.

But regulators could vote as early as Nov. 4 to set maximum energy-consumption standards for TVs to be phased in over two years beginning in January 2011.

That would bring TVs into line with lower energy consumption for refrigerators, air conditioners and dozens of other products that has been standard since the 1970s.

California’s 35 million TVs and related gear account for about 10% of all household electricity consumption, the commission staff reports, according to the newspaper.

The Times quotes one staff engineer as saying consumers could save $30 per set each year from reduced electricity use and avoid the $600-million cost of building a new power plant.

Manufacturers dispute the figures and argue that manufacturers are already developing new ways to make even 50-inch-screen models much more economical to operate, the Times says.

WILMINGTON, Delaware (Reuters) – Two victims of Bernard Madoff’s Ponzi scheme filed a federal lawsuit against the U.S. Securities and Exchange Commission on Wednesday, seeking at least the $2.4 million they lost in the fraud.

The victims, believed to be the first to sue the SEC over the $65 billion fraud, said in court papers the agency was negligent and breached its duties by failing to investigate Madoff, despite numerous warnings and tips.

The suit, in New York federal court, is likely to be watched closely by other Madoff victims who blame the SEC for failing to detect the scam.

It is being brought by Phyllis Molchatsky of New City, New York, who lost $1.7 million, according to court documents filed by the Herrick Feinstein law firm. The other plaintiff is Steven Schneider, a New York doctor, who lost about $750,000.

ROME (AFP) – The food crisis in poor countries coupled with the global economic crisis have caused a spike in world hunger, with more than one billion people undernourished this year, the UN food agencies said Wednesday.

“No nation is immune and, as usual, it is the poorest countries — and the poorest people — that are suffering the most,” said FAO head Jacques Diouf and WFP chief Josette Sheeran in this year’s annual report on global food security being released in advance of World Food Day on October 16.

“Even before the food crisis and the economic crisis, the number of hungry people had been increasing slowly but steadily,” says the report compiled jointly by the Food and Agriculture Organisation and the World Food Programme.

“With the onset of these crises, however, the number of hungry people in the world increased sharply,” said the Rome-based agencies.

The financial crisis has led to declines in foreign aid and investment in poor countries as well as remittances from relatives working in wealthy countries.

“This loss of income is compounded by food prices that are still relatively high in the local markets of many poor countries,” the FAO said.
the top 0.5%

According to mortgage bankers, it’s the gubmint’s job to get FBs “back on their feet”?

Oct. 14, 2009, 10:49 a.m. EDT
Letter of the day? W
Housing could take double dip down in 2010

By Steve Kerch, MarketWatch

SAN DIEGO (MarketWatch) — Despite signs of stabilization at the end of 2009, next year could prove treacherous for the housing and mortgage markets as a variety of woes could rekindle the falloff of the last two years, according to mortgage-industry veterans speaking at the Mortgage Bankers Association annual convention here.

“I’m a firm prophet of the ‘W’ shaped recovery. Housing is going to go down again in the first quarter of 2010,” said Steve Horne, CEO of Wingspan Portfolio Advisors, a firm that facilitates loan modifications. “The real healing won’t begin until all these nonperforming loans start trading in earnest, until we get these borrowers back on their feet.”
…

Fed Says Some Officials Were Open to Buying More MBS (Update2)

Oct. 14 (Bloomberg) — Some Federal Reserve policy makers said last month expanding the central bank’s $1.25 trillion mortgage-backed securities purchase program may help boost the economy amid concerns the recovery may fade.

“Some members thought that an increase in the maximum amount of the committee’s purchases of agency MBS could help to reduce economic slack more quickly,” according to minutes of the Federal Open Market Committee’s Sept. 22-23 meeting released today in Washington. One member said the improvement in the outlook could warrant a reduction in purchases, the minutes said, without identifying the policy maker.

Chairman Ben S. Bernanke said last week the Fed will be prepared to tighten credit when the economic outlook “has improved sufficiently.” Fed officials in last month’s meeting considered the risks of an anemic recovery with unused capacity leading to “subdued and potentially declining wage and price inflation.”

“The Fed will be there to make sure that the flow of credit into housing continues and to make sure interest rates are nice and low for as far as the eye can see,” Allen Sinai, president of Decision Economics Inc. in New York, said in a Bloomberg Television interview. “They’re a long way away from any exit plan.”

Premier Resorts closes doors
thesunnews
Wed, Oct. 14, 2009

Premier Resorts, a Utah company that manages some properties at Barefoot Resort, closed its office and laid off employees Tuesday at the complex as its financial woes grow.

Premier Resorts International decided to stop all operations at the property at the close of business Monday, said Jamie Khan, a lawyer with Pratt-Thomas Walker, P.A., who represents Carolina First Bank.

In September, Carolina First Bank started foreclosure proceedings and filed a lawsuit against Premier Resorts International, based in Park City, Utah, and the local subsidiary, Premier Holdings of South Carolina LLC, for failing to make payments on two loans worth a total of $6.75 million.

Premier Resorts International, which manages properties and owns land at Barefoot Resort, has defaulted on loans and has failed to pay property owners. It is trying to sell some of its property at Barefoot Resort. A representative for Premier Resorts could not be reached Tuesday.

A letter that Premier Resorts at Barefoot Resort sent to property owners Tuesday said: “During the last couple of weeks, we have worked to transition the rental program to another operator. Unfortunately those efforts have not been successful and the rental program of Premier Resorts has ceased operations effective today. We are working to relocate guests to other accommodations.”

The company’s employees were told when they arrived at work Tuesday morning that they no longer had a job, said Lynn Brock, the owner of Barefoot Resort Spa, who rents space from Premier Resorts. Brock wasn’t one of those workers, but talked to ones who were laid off. It is unclear how many people were laid off.

She said the spa will stay open, but she expects her business will be affected because she got a lot of referrals through Premier.

“Most of my business came through Premier, so if they don’t have the people coming through, I don’t know,” she said. “I’m concerned. I’m hanging in there the best I can.”

A sign posted on the door to the registration center says, “Premier Resorts offices closed, Contact Beach Vacations.”

“Politics, as a practice, whatever its professions, has always been the systematic organization of hatreds.”
~Henry Adams

Hey, what happened to Barry’s pay czar? Oh that’s right he’s on the bonus list…

Shareholders Challenge Goldman Sachs as It Prepares To Pay Record Bonuses
October 14, 2009 3:00 PM EDT

BOSTON and NEW YORK, Oct. 14 /PRNewswire/ — Goldman Sachs is issuing its much anticipated earnings announcement on Thursday (October 15, 2009), and is expected to set aside up to $20 billion for executive bonuses. In view of this action coming so quickly on the heels of the federal bailout money issued to the company during the height of the financial crisis last year, investors are responding by mounting major proxy initiatives.

The Nathan Cummings Foundation and the Benedictine Sisters of Mt. Angel, Oregon announced today that they have filed a shareholder resolution urging the Board to review pay disparity at the company and analyze the appropriateness of its spiraling pay packages - packages that have an unprecedented impact on Wall Street compensation in general

The resolution, which is expected to gather more co-sponsors, has been filed early to challenge Goldman Sachs as the Board makes final decisions on bonuses. It was filed to appear in the 2010 proxy and be voted on at the stockholder’s meeting. Goldman Sachs had received resolutions calling for shareholders to have an Advisory Vote on executive compensation that received a 46% vote in favor, but the Board has resisted implementing even that modest reform. Other investors may also file resolutions calling for a “say on pay” or for separation of board chair and CEO positions at Goldman Sachs.

Laura Shaffer, who is director of shareholder activities of the Nathan Cummings Foundation and one of the resolution’s sponsors, stated: “This request is especially timely as Goldman Sachs rushes to pay huge bonuses, setting an example that many Wall Street firms will no doubt strive to emulate.

8 indicted on mortgage fraud charges in Wellington’s Versailles deals
By PAT BEALL
Palm Beach Post Staff Writer
Tuesday, October 13, 2009

WEST PALM BEACH — The house at 3509 Mabillon Way in Wellington’s Versailles was popular in 2007 - too popular, according to federal indictments announced Tuesday.

In less than 31 days, the home was bought, sold, and finally sold again to Ericson Perez, generating a dizzying $882,000 hike in sales price in a month.

That wasn’t the only big number in play. Perez had qualified to buy the house based on his assertion that he was pulling down $49,000 a month working for Celltown Inc.

Now, the Cumming, Ga., man is one of eight buyers, mortgage brokers and title agents facing federal fraud charges, the upshot of a string of home sales in the upscale Wellington community of Versailles.

The Palm Beach County Mortgage Fraud Task Force said Tuesday that the group schemed to defraud Washington Mutual Bank of $8.5 million in mortgage money for five homes. Each of the properties was flipped, often in 24 hours, then fell into default within a year.

But before they went into foreclosure, the scheme netted anywhere from $10,000 to $155,000 for the “buyers” who lent their name to the deals and, in some cases, lied about their true income and assets.

Versailles is among a few upscale communities in Wellington, along with the Black Diamond and Olympia developments, that have been especially hard hit by foreclosures.

Last month, The Palm Beach Post wrote about another group of unusual home purchases in Versailles involving buyers from the Opa-locka area. That group, made up of people of modest means, picked up $41 million in mortgages in 2006 and 2007, then quickly defaulted without ever moving to Versailles. Their average time to default was only nine months.

The charges announced Tuesday don’t necessarily signal an end to investigations into home deals along State Road 7. Subpoenas reportedly have been issued within the past several weeks seeking information about other sales there.

In addition to Perez, also charged are Juan Carlos Lopez, 42, of Miami; Rony Alberto Aguilar-Hecker, 33, of Miami; Reinaldo Perez-Sanchez, 44, of Miami and Colombia; Pablo Atouro Aponte-Torres, 44, of San Juan, Puerto Rico; Fabio Salazar, 54, of Miami and Colombia; Roger Omar Nunez-Murillo, 60, of Miami Beach; and Idalmis C. Arias, 27, of Miami Beach.

Separately, two Palm Beach County residents were charged with recruiting college students and military members to lie on loan documents to obtain more than $1.7 million in mortgage money.

Stephen Mark Lecorgne, 29, of Palm Beach Gardens, and Brian Ernest Oelbermann, 28, of West Palm Beach, allegedly worked with Atlanta businessmen Allen J. Gingrich, 29, and Donte Deshaun White, also known as Donte Cox, 30.

Gingrich and Cox solicited students and military personnel to take out the loans, according to the charges, while Oelbermann and Lecorgne, two loan originators at Warshaw Capital LLC in West Palm Beach, helped get the loans financed.

I wanted to maybe get some thoughts from some of you old timers. I used to lurk on here a lot. Anyhow, I’ve been wanting to move out of California for years. I recently lost my job and have saved up quite a bit. Almost enough to just buy a house outright in another state. But the thing is that as much as I hate to say it, I’m not getting any bites on jobs out of state and now have 3 potential good paying jobs in the Bay Area.

Buying a home in the Bay Area has been off my radar because I was intent on moving away. But with the prospect of another few years of jobs here, I’m looking around tentatively. The frustrating thing is that despite all the news about lower house prices, the prices are still at what I consider outrageous levels. I can’t find hardly anything for under 500k. At that price these houses are still shitty little starter homes. I can’t bring myself to pay that much for a house. There’s also been news that home prices have actually maybe leveled off. So that frustrates the hell out of me. I am in in no way going to pay that kind of money for a house. No way.

lastly, the other cities I’m looking at are at the same time filling up with people from other states and getting expensive as well. Like WTF? How in the hell is this still going on? Sorry, I’m just venting.

Dang she must not of got it in time…maybe not enough postage…darn! ;-(

Sources: Limpbaughs dropped from group seeking to purchase Rams:

“League sources told that Limbaugh’s candidacy in any Rams bid had “zero chance” of being approved by the league’s owners. In his statement, Checketts said Limbaugh’s participation had become “a complication and a distraction” to the group’s efforts.”

Previously:
(Hwy licks .28 cent stamp… sends postcard to God: “…Please close this deal ASAP!”)

BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)

Rush Limbaugh says he’s trying to purchase Rams:
LA Times October 6, 2009
(…The Rams went 2-14 in 2008 and have lost their last 14 games.)

Late post but this is very interesting read. I won’t have access to Internet tomorrow so someone can repost in tomorrow’s bits bucket if he/she feels like it. Go to CR to click on CNBC story from Diana Olick on LV bidding frenzy.

From CR:

The real estate market has gone crazy. At the low end we’ve been seeing many offers per house for some time, and recently agents have been telling me there is almost no inventory. Jim the Realtor has been reporting on this in San Diego, see: Hot All Over and The “Euphoria Express”

And from Diana Olick at CNBC today: Lunacy in Las Vegas Housing (ht Larry)

Olick include an email from a real estate agent to a client “Katie”:

- This market is crazy and many things are just not going to make any sense.
…
- Properties are selling in the blink of an eye.

- Properties are getting multiple offers within a few days of being on the market, the most offers I’ve heard a house had recently was 44 offers (I know, crazy).
…
- 40% of all transactions are cash purchases, which makes it harder for the buyers who are financing to get their offers accepted.

- We have 1/2 the inventory we had a year ago and 4 times as many buyers as we did a year ago.

So the low end houses are selling like hotcakes? These must be some of those $40,000 ones with bars in the windows. I suppose they are being snapped up by Don Trump wannabe landlords who hope to rent them out to low end card dealers.

But what about clean upscale LV places? Trump’s lofts are still several hundred bucks per sq foot.

No Shadow Inventory of Bank Owned Homes
Foreclosure Investors Still Finding Discounts at Trustee Sale
Discovery Bay, CA, October 13, 2009 - ForeclosureRadar (www.foreclosureradar.com),

Click my name for the full report.

Late in the day, but wanted to share some good news….

In only 3 months of working, I’ve gotten my savings back to pre-unemployment levels. It’s amazing how easy it is to save when one doesn’t feel compelled to buy all kinds of useless crap, and I’ve still been living a pretty good life - going out to eat every now and again, etc.

So, after 9 months of unemployment and the expenses of moving 2000 miles, I’m back to where I started. It feels good. *And* I still have a job, so hopefully I can get ahead some too.

Now, if only the purchasing power of the $$$ was still the same…

J

drumminj
Great news on your job and savings account. Where did you move from and to?
What advice would you have for someone facing the same decisions?

BBC NEWS

Page last updated at 17:11 GMT, Friday, 30 January 2009
Banker + gangster = bankster

(Protesters dressed as a City fat cat and Gordon Brown in bed together)

A POINT OF VIEW

It seems timely to resurrect this Americanism from the 1930s - one of many evocative words the United States has contributed to the English language, says Harold Evans.

Americans are pretty good at adding words to the English language. We owe them pin-up girls, highbrows, killjoys, stooges, hobos, drop-outs, shills, bobby-soxers, hijackers, do-gooders and hitchhikers who thumb a ride.

The Americanisms are so much more concise and vivid. Instead of saying “sorry we’re late but drivers ahead of us slowed us down when they craned their necks to look at a crash” you can say “we were held up by rubberneckers”.

Words pop in and out of our language as social conditions change. The American gangster, which is still with us, has been around as a noun and a reality since 1896 according to my Shorter Oxford, but it seems to have dropped another Americanism from the 1930s and I think now is the time to revive it.

The word is bankster, derived by a marriage of banker and gangster.

It was coined, as far as I can deduce, by an American immigrant, a fiery Sicilian-born lawyer by the name of Ferdinand Pecora. He was the chief counsel to the US Senate Committee on Banking set up in the early 30s to probe the origins of the Crash of 1929.

He exposed quite a lot of the Wall Street practices that Harvard’s Professor William Z Ripley had condemned in 1928. The believable Ripley called them - get ready for these Americanisms - “prestidigitation, double-shuffling, honey-fugling, hornswoggling and skullduggery”.

The professor had vainly tried to warn President Calvin Coolidge that Wall Street was full of gas and was bound to blow up. To great discomfort all round, Pecora identified Coolidge himself, by then out of office, as one of those who’d been in on the honey-fugling.

The great banking house of JP Morgan had the president on a “preferred list” by which the bank’s influential friends were given a chance to buy stock at half price. Shall we say, they made out like bandits?

Today the term bankster perfectly fits Bernard Madoff, whose crooked Ponzi scheme lost $50 billion of what the trade calls OPM - other people’s money - invested with him.

Costly rug

But the revelations come thick and fast. People are now struggling for words to describe the latest example of Wall St’s money madness. The fabled investment bank Merrill Lynch, run by one John Thain, had so many big zeroes on its balance sheet it would have been liquidated in December but for a merger with the Bank of America.

A shotgun wedding

That was actually a shotgun marriage - in the US vernacular - since the Bank of America was forced to take billions of government money when it learned later that Merrill Lynch was down another $15bn.

Then what? In the few days in December while he was still in charge, Mr Thain reportedly spent nearly $4bn on staff bonuses. That’s peanuts on Wall St. In 2007 Mr Thain himself received $83m.

But a week ago, CNBC’s Charles Gasparino, in a detailed scoop on the Daily Beast website revealed that during the time Mr Thain was busy cost-cutting, he spent $1.1m doing up his office - $86,000 for a rug, $35,000 for something called a commode on legs.

Readers bayed for blood, posting comments such as: “Oh how I wish this was Revolutionary France and we peasants could storm the offices…”

The anger about the greed that got us into our mess is, in my view, wholly justified. And now we hear that 10 of the big banks that got $148bn from Uncle Sam so they could make loans to get things humming again have actually reduced their loan totals by $46bn.

Mr Thain now is history, having resigned, but the great Bank of America, the biggest in the US and maybe the world is now on the list of banks that may have to be nationalised - a word no red-blooded American ever thought would be uttered in the land of enterprise.
…

Who will California screw over to bear Capers’ losses, and how will they screw them?

One suggestion to fellow Californians: Mind your driving habits. My wife and I have received more moving violations between us over the past year than we received collectively over the preceding four year period. And my driving habits are the same as before (until just lately, when I have slowed down considerably…)

* The Wall Street Journal
* OCTOBER 15, 2009

More Pain for State’s Taxpayers, Cities

By STU WOO and JIM CARLTON

The cost of shoring up Calpers, the troubled $200 billion pension fund for California public employees, will ultimately fall on the state’s 38 million residents, who are already dealing with tax increases and reduced public services.

The state and local governments are contractually bound to increase their payments to Calpers to help it make up for its investment losses of more than $50 billion in the fiscal year ended June 30. Officials around the state are calling for more oversight of Calpers, which announced Wednesday it was investigating fees paid by its investment managers.

California Gov. Arnold Schwarzenegger, shown in Los Angeles Sept. 30, asked this summer for stricter oversight of public funds such as Calpers.

Gov. Arnold Schwarzenegger’s office in July asked the Governmental Accounting Standards Board, which oversees public funds such as Calpers, for stricter oversight of the funds.

David Crane, an economics adviser to Mr. Schwarzenegger, said the fund’s losses mean “there is less money for parks and recreation, less money for the University of California, less money for health and human services.”
…

* The Wall Street Journal
* NEWS & TRENDS
* OCTOBER 13, 2009

Real-Estate Pros Go Moonlighting

By DANA MATTIOLI

The housing market’s long decline has left once-thriving real-estate professionals scrambling for supplemental income or changing professions.

Realtors, agents, brokers and builders rely on sales and commissions for most of their income. And their incomes plunged as sales of existing homes fell 13.3% to 4.9 million last year from 7.1 million in 2005, the most recent peak. The National Association of Realtors says median income for Realtors and brokers fell to $36,700 last year from a high of $49,300 in 2004. The group’s membership fell to 1.14 million in September from 1.35 million in September 2006.
…

I wouldn’t doubt bidding wars. They are giving away FHA loans and 203K Streamline also. These loans are going to uneducated, ignorant, and gullable buyers who can easily default when one small problem occurs in their life. The loan puts them in a stretch and they have no savings. I see an ocean of HUD homes in the future.