The Housing Bubble

So reading ole HBB yesterday it became apparent that it was another day of O care debate. Sigh. Again, I estimated it is a small percentage of the population effected. It would be a lot smaller if the job situation was better. Also, if we possibly looked at what things are driving the costs.

Anyhow, keep hearing the recession is over. Not hearing a lot of good things from the ground.

I can’t imagine that the financial sector is close to recovery, the government revenue streams are getting any closer to healthy or the bond sector has taken it’s lumps.

Then again, this might be the new normal. With creeping poverty and unemployment along with crippling debt.

Still seems we are in bubble chasing mode. Stocks, gold, commodities.

U.S. Home Vacancies Rise to 18.8 Million on Defaults.

Oct. 29 (Bloomberg) — About 18.8 million homes stood empty in the U.S. during the third quarter as banks seized properties from delinquent borrowers and new home sales fell in September.

The number of vacant properties, including foreclosures, residences for sale and vacation homes, rose from 18.4 million a year earlier and 18.7 million in the second quarter, the U.S. Census Bureau said in a report today. The record high was in the first quarter, when 18.95 million homes were vacant. The homeownership rate, meaning households that own their own residence, stood at 67.6 percent.

The worst U.S. housing crash since the Great Depression has led to a record number of foreclosures and shaved almost a third off property values. The S&P/Case-Shiller Index of 20 cities in August was 29 percent below its 2006 high, after rising for four consecutive months.

“We are bumping along the bottom of the housing market,” said James Lockhart, vice chairman of WL Ross & Co. and the former director of the Federal Housing Finance Agency. “There is the potential for another swing down.”

Sales of new U.S. homes fell 3.6 percent in September to an annual pace of 402,000, the Commerce Department said yesterday. That was lower than the 440,000 median forecast of 75 economists surveyed by Bloomberg News.

Do banks have something to hide?
Even experts have a hard time getting a handle on how bad losses might get as the commercial real estate market implodes.

NEW YORK (Fortune) — The banks have taken some lumps since the economy went bad. But some believe their biggest headaches are yet to come.

The pace at which U.S. commercial banks are adding to their loan loss reserves has slowed this year, while loans continue to go bad at a brisk pace.

Despite the optimism of lenders like Wells Fargo (WFC, Fortune 500), some observers warn that banks aren’t socking away enough for a rainier day.

The disconnect is particularly acute in commercial real estate, where lenders are facing a surge of defaults on commercial mortgages and construction loans made when prices were much higher and demand for space much stronger.

Banks have been recognizing commercial real estate losses slowly, even though the high season for defaults isn’t expected to arrive until next year.

That’s not the only problem. Ill-defined or inconsistently applied rules for valuing securities and handling loan modifications can make it hard to say how healthy banks really are, from Citigroup (C, Fortune 500) and Bank of America (BAC, Fortune 500) on down.

The risk is that this year’s recovery could turn out to be a false dawn, delivering another blow to investor trust — not to mention people’s 401(k)s.

The economy isn’t fixed yet, say Wall Streeters
Weak financial regulation and a flood of money in the system pose hidden dangers, experts contend.

NEW YORK (Fortune) — The economy may be showing signs of life, but that doesn’t mean the financial system is fixed or healthy growth has returned, according to a panel of high-profile Wall Street figures who gathered the night before the latest GDP numbers were announced.

For one thing, the government is unlikely to pass regulation that effectively regulates the financial-services industry, short seller Jim Chanos said Wednesday.

While the new administration came in “guns blazing,” legislation has been too slow to emerge in the wake of the financial crisis, said Chanos, founder of the Kynikos Associates hedge fund, during a discussion on the future of markets hosted by the New York Historical Society. Chanos added that as more days ticked by, the urgency to regulate large financial institutions would pass.

“Ink will be spilled… but at the end of the day there will not be teeth in most of it,” Chanos said, adding that any laws passed will likely be watered down to a point of meaninglessness.

He also referred to the Senate as the place “where interesting things go to die.”

They’re worried about Washington’s stewardship of the economy, ranging from the Federal Reserve’s reluctance to draw down the flood of money it injected into the economy, coupled with legislative inaction on key issues including financial regulation.

Bankers Expect Rising Bonus Pay to Break Records in Global Poll.

Oct. 30 (Bloomberg) — In Washington and on Main Street, politicians and voters are railing against Wall Street’s multi- million-dollar pay packages. In the financial world, most executives expect their bonuses to match or exceed last year’s, with 1 in 10 predicting their best-ever payout.

Having shaken off the biggest economic decline since the 1930s, almost three in five traders, analysts and fund managers believe their 2009 bonuses will either increase or won’t change, according to a quarterly poll of Bloomberg customers. Only one in four see a decline. Asians are the most optimistic about pay and Americans and Europeans somewhat less so.

“The large banks are knocking the cover off the ball,” said Daniel Alpert, managing director of New York-based investment bank Westwood Capital LLC. The industry is “making money, though with government help.”

Worldwide, a majority of market professionals in the survey also turn thumbs down on government attempts to limit compensation, with 51 percent saying restrictions will stifle useful innovation. Only about 38 percent think pay limits will control excessive risk-taking.

In the U.S., where President Barack Obama has chided Wall Street for being “motivated only by the appetite for quick kills and bloated bonuses,” 65 percent say the restrictions will damp innovation.

NEW YORK (Reuters) - Two of the largest U.S. apartment landlords said on Thursday they see something in their sector that’s been missing for the past few years — a little optimism about the future.

While not declaring an end to falling rents and declining net cash generated by their properties, the heads of industry leaders Equity Residential (EQR.N) and AvalonBay Communities Inc (AVB.N) said they are seeing increased demand for some of their apartments.

“While we expect operating performance to remain weak near term, there are signs that the weaknesses in both the economy and in some of our operating metrics are beginning to moderate,” Bryce Blair, AvalonBay chairman and chief executive, said during a conference call with analysts.

Both real estate investment trusts have buildings in key U.S. cities and held conference calls following the release of their third-quarter results.

The U.S. apartment sector has been in a nosedive for more than a year, as job growth, the key driver of apartment demand, has been replaced by hemorrhaging unemployment. Because of their short leases, the apartment sector is quick to feel market softness, yet also rebounds quickly.

To keep or attract tenants, landlords have been offering months of free rent and other concessions.

AvalonBay said its properties in Washington, D.C. seem to be improving, while those in the New York metropolitan area are about the same. The West Coast is still seeing deep declines.

Vote on Extending Homebuyer Tax Credit Delayed Over TARP Issue.

Oct. 30 (Bloomberg) — The U.S. Senate won’t vote until next week at the earliest on proposals to extend both an $8,000 tax credit for first-time homebuyers and unemployment benefits for the nation’s jobless.

Senate action was delayed by a Republican demand that a vote be allowed on an amendment to end the Treasury Department’s Troubled Asset Relief Program at the end of this year.

Senate Majority Leader Harry Reid, a Nevada Democrat, balked yesterday at the demand by Senate Minority Leader Mitch McConnell, a Kentucky Republican. Reid also took procedural steps to end debate and schedule Senate action on extending the homebuyer tax credit and the unemployment benefits.

Lawmakers announced plans earlier this week to attach the tax-credit proposal to a pending bill on the unemployment benefits. The $8,000 tax credit, enacted earlier this year as part of the $787 billion economic stimulus package, is set to expire at the end of November.

The lawmakers want to extend it until April 30. Their proposal would also expand it to allow higher-income Americans and some who already own homes to qualify for the break.

Homebuyers who have lived in their prior residences for at least five years may receive a $6,500 credit under the plan, said Senate Finance Committee Chairman Max Baucus. Also, couples earning as much as $225,000 and individuals as much as $125,000 would qualify for the extended break, Baucus said. That’s up from a $75,000 limit for individuals and $150,000 for couples.

I received an e-mail that two of my relatives in the commercial construction business have been layed off. No real surprise, the thing is they primarily build new and refurbish old Wal-Marts. In North,South Carolina,Virgina &Georgia.

Wal-Mart pulled the plug on 2 of 5 planned new stores and they lost their bid on the other 3,under cut. Love or hate Wal-Mart, the point is they are a fairly good economic indicator. Commercial construction is in for a world of hurt, round two is right around the corner.

For everyone looking forward to gubmint sickness care. I don’t know what’s in it, but one thing I am 100% certain of… It will be one giant mess, that will take years if not a decade to get off the ground. Count on it!

House health bill clocks in at 1,990 pages.

It runs more pages than War and Peace, has nearly five times as many words as the Torah, and its tables of contents alone run far longer than this story.

The House health care bill unveiled Thursday clocks in at 1,990 pages and about 400,000 words. With an estimated 10-year cost of $894 billion, that comes out to about $2.24 million per word. .

And for some members, that may not be enough.

A “robust” public option can’t be found in the bill. Neither can the word “doctor” – save for a few references to degrees. No “cost curve” is bent. No “blue pill” is dispensed.

“Death” and “taxes” are both in there, but “death panel” is not.

The text defines dozens of words and phrases, including “family” (“an individual and . . . the individual’s dependents”), “health insurance coverage,” “exchange-eligible individual” and “Indian.”

And for those who cry “read the bill,” beware. There are plenty of paragraphs like this one:

“(a) Outpatient Hospitals – (1) In General – Section 1833(t)(3)(C)(iv) of the Social Security Act (42 U.S.C. 1395(t)(3)(C)(iv)) is amended – (A) in the first sentence – (i) by inserting “(which is subject to the productivity adjustment described in subclause (II) of such section)” after “1886(b)(3)(B)(iii); and (ii) by inserting “(but not below 0)” after “reduced”; and (B) in the second sentence, by inserting “and which is subject, beginning with 2010 to the productivity adjustment described in section 1886(b)(3)(B)(iii)(II)”.

The section deals with “incorporating productivity improvements into market basket updates that do not already incorporate such improvements,” if that helps.

Optimistic lawmakers say it could take a week just to get through the bill’s text.

“I’ll have to call an emergency meeting of my staff and drop the customary procedure of me reading and my staff not reading,” joked House Judiciary Committee Chairman John Conyers (D-Mich.), who famously told filmmaker Michael Moore that lawmakers “don’t read most of the bills.”

“It’s one thing to read it,” said Rep. Lee Terry (R-Neb.), a lawyer who voted against the first version of the bill on its way through the Energy and Commerce Committee. “It’s another thing to understand it when it’s written in legalese.

“There has been no indication that Mr. Bernanke will raise interest rates anytime soon, much less raise them to the level needed to convince the market that he intends to preserve the purchasing power of the dollar. ” ~James Turk

For those that didn’t see San Diego RE Bear’s post towards the end of the day yesterday - it’s worth going back to check it out (maybe SDREB repost?). It’s an excellent summary of the HBB, our general views on the economy, and our wide variety views on political issues.

“The largest stimulus program in the nation’s history has created or saved at least 650,000 state and local jobs, according to a report released by the Obama administration on Friday.

Based on approximately $150 billion in spending from the $787 billion recovery package, the tally is the first broad, concrete look at the stimulus program’s impact on the economy. The numbers are drawn from tens of thousands of reports from state and local recipients as well as private companies.”

That’s great news. They SAVED 650,000 jobs and so far it only cost $150 billion. I think that is still about $220,000 per job saved. What kind of jobs are these that they saved? Oh, that’s right, it’s mostly the boys on Wall Street and in hedge funds.

Mission accomplished for hope and change.

Comment by San Diego RE Bear
2009-10-29 13:54:26

By looking at the charts, it looks like a new downward correction in the S&P is imminent. We should see a real slide of about 25% downward going into March. The Case-Schiller should resume its decline shortly as well. Then the Obama machine will pump in masses of stimulus from March until November for another giddy ride up to keep the pig-men followers all in their blankets for the election. This is entertaining!

Detroit’s answer to unemployment….Leave

http://money.cnn.com/2009/10/28/news/economy/metro_unemployment/index.htm?postversion=2009102813

The metro areas with the lowest unemployment rates in September were all in North Dakota, with Bismarck at 2.9%, followed by Fargo at 3.7% and Grand Forks at 3.8%.

WOW….but the question is, in ND, what are the major industries? I guess for you country people, this would work…..

I hope we hear something soon from Eddie. I need a commentator to keep up with the fake recovery. Otherwise I get lost. When reality wins, we all lose.

Personal Income Remained Unchanged in September as Consumer Spending Fell 0.5 Percent.

WASHINGTON — Consumer spending plunged in September by the largest amount in nine months, reflecting the end of the government’s Cash for Clunkers auto sales program. Incomes, the fuel for future spending, were flat.

While the government reported that the overall economy grew in the July-September period, signaling the end of the worst recession in seven decades, the weakness in spending and incomes as the quarter ended underscores the fragility of the recovery.

The Commerce Department says spending dropped 0.5 percent in September, matching economists’ expectations. Personal incomes were unchanged as workers contend with rising unemployment and a squeeze on wages.

Apropos of nothing in particular and everything in general, I’d just like to say that with the exception of a (very) few members, CONgress is one of the most, if not THE most, viciously insane group of people on the face of the planet.

So building a 45′ party boat, in hopes of a rebound. Sounds like a solid plan! There are 10’s of thousands of used boats on the market.

Production cuts, layoffs continue at boat builders’ parent company.

Production cuts and layoffs will continue through the rest of this year at Brunswick Corp. plants, as the company tries to sell off existing inventory and lay the groundwork for a better 2010.

Brunswick, based in Lake Forest, Ill., announced Thursday its sales were down 36 percent overall in the third quarter of this year, falling to $665.8 million from $1.04 billion. Net losses for the quarter ended Oct. 3 were $114.3 million.

Sales for the boat division, which operates three plants in Volusia and Flagler counties, fell 62 percent in the quarter to $118.2 million from $314.2 million in 2008.

The boat segment includes Brunswick Commercial and Government and Boston Whaler plants in Edgewater and a Sea Ray plant in Flagler County.

During the past two years, the boat segment has cut production and laid off workers.

On Thursday, Boston Whaler employed 260 locally; Sea Ray, 270; and Brunswick, 95, according to company spokesman Dan Kubera. That was down from 400, 500 and 100 two years ago.

The company has been trying to reduce dealer and company inventories to reduce interest costs and other associated expenses. The strategy increased cash flow but hurt revenue and earnings.

CEO Dustan E. McCoy said the company will continue that strategy through the remainder of 2009. The result, he hopes, will be a rebound next year.

Part of that recovery, company officials hope, is the introduction Thursday of the Sea Ray 450 Sundancer, a cruiser designed for entertaining.

The 45-foot yacht — which features a retractable sunroof, entertainment center with a grill and TV, and a media room — will be built at the company’s Flagler County plant.

The low estimate for earnings this quarter for house builder MDC was a loss of 58 cents. They lost 69 cents on the quarter.

The headline on Yahoo! Finance for MDC was, “MDC Holdings 4Q loss narrows on smaller charges”. The dishonesty of the financial media is just staggering. Multiply this by 1,000 or more and that is what people are being spoon fed. CNBC isn’t the only despicable organization mis-reporting the news.

To those who say “End the fed!” I ask, what then?

Audit request on Fed must be answered
Writer’s Bloc

By Jeremy Davis

Wednesday, October 28, 2009

People are getting fed up with the Federal Reserve.

“End the fed!” some say as the economy remains on shaky grounds, with a potential depression looming not far ahead. People are looking for answers.

Some of those answers may be found in the Federal Reserve Transparency Act of 2009 (HR 1207), which, if passed, would shed light on what the Fed is doing with our tax dollars through a full scale audit.

The Fed, the unelected central bank of the United States, has not been truly accountable to Congress since it was created in 1913. Protection of the value of our dollar was the principle rationale for its inception, which has lost more that 95 percent of its purchasing power since the Fed came into existence.

The actions of the Fed, when combined with the Department of Treasury and Congress, has thrust the national debt to more than $11 trillion and added on nearly $13 trillion thanks to recent bailouts and loans. One would think that a private bank such as the Fed – having the power to manipulate our money and potentially endanger the free market – would be subject to higher scrutiny by Congress and have more transparency.

Despite all this, the Fed still refuses to tell members of Congress and the American people which financial institutions have been given large amounts of funds.

Rep. Alan Grayson of Florida recently asked Ben Bernanke, chairman of the Federal Reserve Board, about which foreign banks were the recipients of Federal Reserve credit swaps of more than half a trillion dollars, which Bernanke answered with a telling, “I don’t know.”

“Half a trillion dollars and you don’t know who got the money?” Grayson responded.

It’s no wonder a majority of Americans are supporting the need for more transparency.

A recent poll conducted in July by Rasmussen Reports found 75 percent of Americans actually favor auditing the Federal Reserve and making the results available to the public.

Only 9 percent of adults think it’s a bad idea to audit the Fed and oppose it, while 15 percent said they weren’t sure. HR 1207, introduced by Rep. Ron Paul of Texas, has gained support from both republicans and democrats, with 307 co-sponsors since it was first introduced earlier this year, making this issue a bipartisan one. And how could it not be? Government waste of money agitates everyone.
…

Is Geithner planning to sell his NY home some time soon?

Oct. 29, 2009, 12:32 p.m. EDT

White House backs housing tax-credit deal

By Greg Robb, MarketWatch

WASHINGTON (MarketWatch) — The Obama administration threw its support Thursday behind congressional efforts to extend and expand a popular tax-credit for people interested in buying homes.

“This credit has brought new families into the housing market and contributed to three consecutive months of rising home prices nationwide,” Treasury Secretary Timothy Geithner said in a statement.
…

There are only 51 days left till Christmas. The retail numbers are going to look like crap.
I for one hope that charity’s wont suffer.

“It runs more pages than War and Peace, has nearly five times as many words as the Torah, and its tables of contents alone run far longer than this story.
The House health care bill unveiled Thursday clocks in at 1,990 pages and about 400,000 words. With an estimated 10-year cost of $894 billion, that comes out to about $2.24 million per word. . ”

LOL…bush spent $ 1 Trillion with one paragraph…i fracking hate irrelevant facts like this meant to insight outrage.

Fed’s Massive Secret Wall Street Bailout Still Going Strong
Oct 30, 2009 Henry Blodget in Investing, Banking

Remember last fall, when our government explained that the reason we needed to give $800 billion to Wall Street was so the banks could lend it back to us and shock the economy back to life again?

That was a happy story!

And we fell for it.

What happened, of course, was that the banks took the money, stopped lending, and used it to pay themselves and their shareholders through the nose.

Twelve months later, the banks still aren’t lending, and we’re still bailing them out hand over fist.

By lending the banks money at zero interest rates, the FT’s Martin Wolf says, the Fed is helping the banks recapitalize themselves. The banks aren’t lending because they’re still trying to recover from all the lousy loans they made three years ago (and because there aren’t all that many folks to lend to). So there’s nothing else to do with the money other than hoard it, buy safe Treasuries, and pay huge bonuses.

It’s annoying to watch banks that would have collapsed a year ago now minting money at taxpayer expense. But that’s the way monetary stimulus always works.

Wolf, however, believes the public’s outrage over the bailout and bonuses will drive Congress to pass some kind of financial reform. And, in an ideal world, he’d also like to see a windfall tax levied against bank bonus pools, which he says serves “no economic purpose.”

The important questions for the economy and market now, says Wolf, are whether the Fed will remove the stimulus in time to stave off inflation, and it does, whether the removal will hobble the economy.

Who will be the lucky ones getting the Bair hug today?

Went to withdraw money from a Big Bank yesterday . It took them a hour and 1/2 to give me the check . In addition, they subjected me to a salesman who tried to sell me bonds that had a 5 year term . In spite of me coughing all over the guy and repeatedly I said I didn’t like the term they offered on the bonds they wouldn’t let up . Because I was weak I just sat there and
listened and than I repeated my request for my money .Eventually I said to the three person team that didn’t want to let go that they were killing me .

I than went to a smaller bank who treated me like gold and even gave me water for my cough . The smaller bank offered me a bunch of free services
including a free safe deposit bank ,free checks and free money orders and
all kinds of stuff . The smaller Bank not only had a higher rate than the Bank I just left, but they treated me the way I wanted to be treated .

Repost from yest

The FCC voted unanimously yesterday to move forward with the debate in an effort to formalize net neutrality guidelines. Senator John McCain followed up by introducing a bill that would prohibit the FCC from governing communications.

In the wake of FCC chairman Julius Genachowski’s initial announcement of his intent to pursue formal net neutrality rules, a group of GOP lawmakers already initiated a similar attempt. However, that amendment was retracted almost as quickly as it was filed.

McCain’s bill, the Internet Freedom Act, seeks to do the opposite of what its name implies by ensuring that broadband and wireless providers can discriminate and throttle certain traffic while giving preferential treatment to other traffic. Basically, those in power or those who pay more will have better access. Apparently we have different definitions of ‘freedom’.

Oddly, the bill also contains text stating that any regulations in effect on the day before the Internet Freedom Act is officially enacted are grandfathered in and exempt from the provisions of the Internet Freedom Act. The implication seems to be that if the FCC can formalize net neutrality rules before McCain can get the Internet Freedom Act signed into law, the net neutrality rules would still apply.

Net neutrality opponents claim that the free market can police itself and that any net neutrality restrictions will stifle innovation and competition. However, Comcast tried to throttle peer-to-peer networking traffic and only changed policy after the threat of FCC net neutrality rules. AT&T sought to block customers from using VoIP services from its wireless network, but changed policy out of fear of the net neutrality rules. The trend seems to be that these providers only do the ‘right thing’ when the net neutrality gun is pointing at their head.

I hope they don’t decide to slow Ben’s web site.
I guess we should just let AT and T and Comcast decide what we can look for on the internet.

Packman said
From someone who has worked in that business - I agree with McCain.

Take Verizon FiOS for example. Super-high speed access - 100-200 Mbps Fiber-to-the-Home. I worked on that equipment.

If this law had existed back when they did the business plan for FiOS, it would have altered their business plan dramatically, by reducing their potential profits.

It’s not like they have a monopoly on internet access - they don’t

Response

Many markets only have two internet providers, that’s hardly competition. I have no problem with internet providers charging more for people who use it more to download movies TV etc, but I have a big problem with allowing AT and T the ability to slow down content or worse block it. The problem is that if they selectively slow a product customers might not realize that it is due to AT and T . The customer might blame the web site and choose another. If AT and T has a search engine, or takes a bribe from say Microsoft to slow Google people might say Google sucks and start using the AT and T site. If Ben’s site get’s interrupted repeatedly and appears to crash we might loose a valuable source of non MSM info.

Local property tax bills came in yesterday’s mail. The news around Chicagoland had been full of dire warnings about tax increases, so I made sure to pour a BIG glass of wine before opening the envelope.

The tax increase on our modest less-than-quarter acre with 1800 sq ft 3br2ba ranch home is *only* 10 %. It was a relief, but knowing that our taxes have doubled in the 19 years we’ve been in our home made me kinda sick. After a couple glasses of wine, though, I felt better.

In other news, it appears we have entered a new period of market volatility. There may be some money to be made day trading. Too bad I’m still feeling too burned by SRS to participate.

TGIF, HBBers!

Ohio residents say cops advised them to move away. Oct 29

COLUMBUS, Ohio – Residents of one Ohio city are complaining that police officers are telling them if they’re fed up with crime in their neighborhoods they should move out. At least two Columbus city council members have heard the complaint.

An aide to Councilwoman Charleta Tavares said she has received more than 20 calls. Councilman Andrew Ginther said if police are making the comments, they’re neither acceptable nor appropriate, though he said he believes most officers want to be helpful.

A police spokesman said the department addresses the complaints when it’s given the name of an officer.

A police union official said he understands if officers are frustrated with crime. Fraternal Order of Police President Jim Gilbert said: “It’s like the OK Corral out there.”

Here’s a great cartoon I just saw. It’s a keeper.

Time Inc. to lay off about 540:

NEW YORK (MarketWatch) — Magazine publisher Time Inc., part of Time Warner Inc. may cut more jobs as soon as next week, according to published reports Friday. Citing unnamed company insiders, the New York Post said that Time will lay off about 540 workers over a two-week period, with the news and finance group expected to be the hardest hit. Meanwhile, the New York Times reported that Time will cut $100 million in costs, which are expected to come largely from layoffs.

Oh, the humanity!

Dow Jones down 236 to 9726.

DJIA 10100, 10000, 9900, 9800; we barely knew ye.

Jacques Chirac to become first former French President in history to stand trial for corruption ~ 30th October 2009

Jacques Chirac is to become the first former president in French history to stand trial for corruption, it emerged today.

The 76-year-old faces a range of embezzlement charges dating back to his time as the Mayor of Paris.

They mainly relate to ‘ghost’ jobs awarded to political cronies who were allegedly allowed huge salaries and expenses for doing absolutely nothing.

‘Mr Chirac will stand trial for misuse of public funds and breach of trust,’ said a judicial source at the Paris Prosecutor’s Office.

The announcement comes less than a year since Jean-Claude Marin, Paris’s chief public prosecutor, said there was no case against Chirac.

But Xaviere Simeoni, another judge who has since reviewed the evidence, said it clearly pointed towards corruption.

Mr Chirac, who was mayor from 1977 until 1995 when he was elected president, was principally investigated over 35 work contracts awarded by Paris City Hall to friends or associates, allegedly as political favours.

The allegations against Mr Chirac also originally included backhander payments made in return for contracts to refurbish secondary schools in the Paris region.

A source close to Mr Chirac, who now divides his time between Paris and a country estate in Morocco, said he was ‘relaxed’ about the charges and convinced he could avoid trial.

The source said there would be an appeal against the decision to prosecute.

During his 12 years in power Mr Chirac was able to claim presidential immunity against all the charges – an option which is no longer open to him.

Sleaze allegations have mounted up against Mr Chirac for years, with nobody until today taking firm legal action.

My mother’s non-profit merged with another non-profit. The “other” non-profit’s executive director is now in charge, and has treated the merger more like a takeover, showing preference to her own employees and treating the rest like they’re diseased. My poor mother has worked for more than 20 years there, and now feels like she’s on thin ice- a very sad thing for somebody in their late 60’s who has little chance of getting a new job in this economy.

The latest in a long list of insults is that they told her they are running a credit check on her. She asked why, though she has nothing to fear, and they said “because we want to know the character of the people working for us”. I cannot believe what has become of this country. This is a complete violation of privacy.

Local builder here in Chicago promoting “well if the banks would just give us 3.5% interest rates on our home loads, the economy would recover.”

I spent three days debating with this guy on email privately last week. I’d like to see what the HBB crew has to say about his proposal.

John Hall Homes proposal

I never cease to be amazed that anyone thinks that markets could, would, or ever have been fair and honest. Ain’t gonna happen, add a thousand new laws, won’t ‘fix’ a thing, never has. I know, create a new law that makes greed, graft and deception illegal, punishable by death.

Galleon case portrays a world of corporate leaks.

NEW YORK (Reuters) - The Galleon insider trading case reveals a world where corporate secrets are thrown around with cavalier disregard for regulations on how public company information should be disclosed.

For much of the past decade, U.S. regulators have sought to fight selective disclosure of sensitive company information, believing that such data should be disclosed to all investors in a fair and equal manner.

But the Galleon scandal suggests there may be many in American business prepared to make a mockery of these efforts.

Prosecutors have charged six people, including billionaire Galleon Group founder Raj Rajaratnam, in the biggest hedge fund-related insider trading case in history. Rajaratnam was at the center of crisscrossing illegal information networks that brought more than $20 million in profit, according to the complaints.

Among those entangled in the case are executives at several major companies, including IBM (IBM.N) and Intel Corp (INTC.O); an executive at management consulting firm McKinsey & Co; an investor relations specialist; and a former Moody’s analyst.

Some of these executives are alleged to have passed on information relating to their companies’ earnings or deals, potentially violating the disclosure rule known as “Reg FD.”

Regulation Fair Disclosure was put in place in 2000 to prevent corporate executives from selectively disclosing information to analysts and investors.

The rules have led to an increase in regulatory filings when executives speak at conferences, ensuring that information disclosed by the executives is available publicly. But the Galleon case is raising questions about whether rules to control such behavior have any teeth.

Hey- Does anyone on here live in Temecula, CA? I see big McMansions on small lots for $250k (they were $600k). 30% less than it would cost to build. Temecula has highly ranked public schools, is it an awful place to raise kids? I hate being an in-lander, but sooooo cheap and a 3 car garage to set up a shop in. 2 hrs to Big Bear, 1 hr to Swami’s.

Why Homeowners Are Raising the Roof
Thursday, October 29, 2009 ~ WSJ

People who refrained from splurging on big home-improvement projects during the housing boom are reaping the rewards now.

Depending on the region and the job, some homeowners are paying as much as 20% less for home-remodeling projects than they would have a few years ago. Many contractors are willing to accept smaller jobs and “handyman” projects that they used to snub. And more projects are being delivered on time and on budget—a stark contrast from the boom years.

Kim and Chandra Sobieski of Cat Spring, Texas, considered expanding their home two years ago, but thought the contractor’s $380,000 estimate was too high. Earlier this year, Mr. Sobieski, a 54-year-old retired title-company executive, called the same contractor and got a quote for a slightly revised expansion for 20% less. The couple wound up paying $300,000 to add 1,500 square feet to their old 3,400-square-foot home, including installing a new roof, converting a garage to an entertainment room and adding a new garage.

“We caught them at a time there was more downtime, and it seemed to work to our advantage,” says Mr. Sobieski, who adds that the project was finished ahead of schedule.

The Sobieskis’ contractor agrees that timing made the difference. “Three years ago, if you asked someone for a discount, they’d laugh at you,” says Jeff Hunt, vice president of Brothers Strong, the Houston firm that did the project.

LOL!!!

I love it, if ever there was a money sucking completely Worthless organization, that thinks they are smart and lofty thinkers. Far above the masses. Go Colonel!

Colonel Sanders infiltrates the UN
29 October 2009

A man dressed as KFC’s Colonel Sanders successfully snuck into restricted areas at the UN Headquarters in New York.

A spokesperson for Ban Ki-moon, the current UN Secretary General, said that an investigation into the security breach has begun.

The break-in is understood to be a publicity stunt organized by KFC as part of a wider campaign to promote a new menu range. This campaign has included several previous attempts to ‘lobby’ the UN – including a letter written to Mr Ki-moon asking for grilled chicken lovers to be represented at the assembly – for inclusion of the fictional ‘Grilled Nation’ as a UN member state.

News that the actor who dressed as Colonel Sanders for the stunt has been named by KFC as Robert Thompson will surely disappoint those die-hard fans who maintain that the iconic Colonel did not die in 1980.

Ayn Rand’s Revenge - NYT Book Review

By ADAM KIRSCH
Published: October 29, 2009

A specter is haunting the Republican Party — the specter of John Galt. In Ayn Rand’s libertarian epic “Atlas Shrugged,” Galt, an inventor disgusted by creeping American collectivism, leads the country’s capitalists on a retributive strike. “We have granted you everything you demanded of us, we who had always been the givers, but have only now understood it,” Galt lectures the “looters” and “moochers” who make up the populace. “We have no demands to present you, no terms to bargain about, no compromise to reach. You have nothing to offer us. We do not need you.”

“Atlas Shrugged” was published 52 years ago, but in the Obama era, Rand’s angry message is more resonant than ever before. Sales of the book have reportedly spiked. At “tea parties” and other conservative protests, alongside the Obama-as-Joker signs, you will find placards reading “Atlas Shrugs” and “Ayn Rand Was Right.” Not long after the inauguration, as right-wing pundits like Glenn Beck were invoking Rand and issuing warnings of incipient socialism, Representative John Campbell, Republican of California, told a reporter that the prospect of rising taxes and government regulation meant “people are starting to feel like we’re living through the scenario that happened in ‘Atlas Shrugged.’ ”

Rand’s style of vehement individualism has never been universally popular among conservatives — back in 1957, Whittaker Chambers denounced the “wickedness” of “Atlas Shrugged” in National Review — and Rand still has her critics on the right today. But it can often seem, as Jonathan Chait, a senior editor at The New Republic recently observed, that “Rand is everywhere in this right-wing mood.” And while it’s not hard to understand Rand’s revenge-fantasy appeal to those on the right, would-be Galts ought to hear the story Anne C. Heller has to tell in her dramatic and very timely biography, “Ayn Rand and the World She Made.”

So, a hypothesis: The current downturn in the markets is the resultof the plans to cap/remove Wall St bonuses, and the market will magically start turning back up again once they stop talking about it.

Good lord, just stick a fork in this one already…

CIT Gets $1 Billion Line From Icahn, Still Faces Bankruptcy
Friday, 30 Oct 2009 | 2:25 PM ET CNBC

Troubled lender CIT Group agreed to a deal with Carl Icahn Friday that will give the company a $1 billion line of credit, but the company is still likely to file a prepackaged bankruptcy Sunday night, CNBC has learned.

CIT shares [CIT 0.752 -0.198 (-20.84%) ] were halted on the Icahn news, but then resumed trading about 10 percent lower.

The agreement with Icahn was reached a day after CIT’s debt restructuring offer expired.

Icahn has been an outspoken critic in recent weeks of New York-based CIT Group’s plan to restructure its debt in an effort to avoid collapse.

CIT, one of the largest lenders to small and midsized business, has been trying to reduce its near-term costs in recent months as it struggles to survive.

CIT may draw on the Icahn line of credit on or before Dec. 31, and in the case of bankruptcy, it can be drawn as debtor-in-posession financing.

Interesting about commerical loans vs. home loan crash is that banks for most part don’t chop the loans up and sell them. They have commerical loans front and center on their books and they own them.

From bloomberg dot com page 1

Wilbur Ross Sees ‘Huge’ Commercial Real Estate Crash (Update3) Share Business ExchangeTwitterFacebook| Email | Print | A A A
By John Gittelsohn and Thomas R. Keene

Oct. 30 (Bloomberg) — Billionaire investor Wilbur L. Ross Jr., said today the U.S. is in the beginning of a “huge crash in commercial real estate.”

“All of the components of real estate value are going in the wrong direction simultaneously,” said Ross, one of nine money managers participating in a government program to remove toxic assets from bank balance sheets. “Occupancy rates are going down. Rent rates are going down and the capitalization rate — the return that investors are demanding to buy a property — are going up.”

U.S. commercial property sales are forecast to fall to the lowest in almost two decades as the industry endures its worst slump since the savings and loan crisis of the early 1990s, according to property research firm Real Capital Analytics Inc. The Moody’s/REAL Commercial Property Price Indices already have fallen almost 41 percent since October 2007, Moody’s Investors Service said Oct. 19.

Billionaire George Soros, speaking today at a lecture organized by the Central European University in Budapest, said a “bloodletting” may be coming for leveraged buyouts and commercial real estate.

“The American consumer will no longer be able to serve as the motor for the world economy,” said Soros, 79.

His comments came in the same week that Capmark Financial Group Inc. filed for Chapter 11 bankruptcy protection after originating $60 billion in commercial property loans in 2006 and 2007.

Damn… This guy sounds like a nutt….

Sacked: Drug tsar who claimed Ecstasy, cannabis and LSD are less harmful than alcohol.
30th October 2009 (UK)

Controversy: Professor David Nutt criticised the decision to reclassify cannabis as a Class B drug

The Government’s chief drugs advisor has been sacked for claiming cannabis, ecstasy and LSD were less dangerous than alcohol and cigarettes.

Home Secretary Alan Johnson decided he had ‘no confidence’ in Professor David Nutt after he made a string of controversial remarks about drug use - including ecstasy being no more dangerous than ‘riding a horse’.

It is the first time a chairman of the Advisory Council on the Misuse of Drugs has been fired in its 38-year history.

Home Office officials said Mr Johnson had been ’surprised and disappointed’ by Prof Nutt’s public comments on the harm caused by illegal drugs, most of which he ranked below drinking.

Mr Johnson said the remarks ‘damaged efforts to give the public clear messages about the dangers of drugs’.

Prof Nutt has long courted controversy. Under his stewardship, the ACMD resisted the reclassification of cannabis and also called for ecstasy to be downgraded to a Class B subst

Wilbur Ross Sees ‘Huge’ Commercial Real Estate Crash (Update3)

Oct. 30 (Bloomberg) — Billionaire investor Wilbur L. Ross Jr., said today the U.S. is in the beginning of a “huge crash in commercial real estate.”

“All of the components of real estate value are going in the wrong direction simultaneously,” said Ross, one of nine money managers participating in a government program to remove toxic assets from bank balance sheets. “Occupancy rates are going down. Rent rates are going down and the capitalization rate — the return that investors are demanding to buy a property — are going up.”

U.S. commercial property sales are forecast to fall to the lowest in almost two decades as the industry endures its worst slump since the savings and loan crisis of the early 1990s, according to property research firm Real Capital Analytics Inc. The Moody’s/REAL Commercial Property Price Indices already have fallen almost 41 percent since October 2007, Moody’s Investors Service said Oct. 19.

Billionaire George Soros, speaking today at a lecture organized by the Central European University in Budapest, said a “bloodletting” may be coming for leveraged buyouts and commercial real estate.

“The American consumer will no longer be able to serve as the motor for the world economy,” said Soros, 79.

His comments came in the same week that Capmark Financial Group Inc. filed for Chapter 11 bankruptcy protection after originating $60 billion in commercial property loans in 2006 and 2007.

‘Extreme Caution’

Ross, the 71-year-old chairman and chief executive officer of WL Ross & Co. LLC, said in an interview on Bloomberg Radio that he would use “extreme caution” before putting money into commercial real estate, especially office space, because properties are losing tenants.

The new series I bond rate will start Monday November 2. The current fixed rate (May 1 to October 31) is 0.10%. The current variable rate is -2.87%. So the bonds currently yield 0% (guaranteed to not return negative rate).

The new variable rate is going to be 3.07% for the period November 1 to April 30. So you add that to whatever fixed rate your bond is and the total will be your yield.

The government will announce the fix rate on Monday for the series I bonds purchased the next six months. If you have a bunch of 1% or higher fixed rate Series I bonds, you are in a very good situation!

Brooklyn board-game maker meets it match
New York Game Factory files for bankruptcy, despite having a number of one-time hits like So Sue Me!

The board is bare for the New York Game Factory. The Brooklyn-based business, which primarily sells board games to retailers such as Amazon.com and Toys R Us, filed for Chapter 7 bankruptcy protection this week.

The company cited assets of $5,000 and liabilities of more than $229,300, along with fewer than 50 creditors. Debts include $38,000 to small business advisor Accion New York Inc. and more than $6,000 to Mr. Chips, a game-part supplier based in Illinois.

Founded six years ago, New York Game Factory became well known through the sales of such hits as So Sue Me!, a Monopoly-style board game where players can “sue your friends, take their stuff;” as well as games Controversy and Powered By Fun. Just four years ago, New York Factory appeared on ABC’s Eyewitness News and in The Wall Street Journal for its innovative games, and So Sue Me! was stocked by trendy retailers such as Urban Outfitters. However, many of the company’s games are now marked down by more than 50% on Amazon’s Web site.

Neither owner Jeffrey Gross nor his attorney returned calls requesting comment.

The Constitution already has a provision for this… It’s called Bankruptcy! There is NO such thing as “too big to fail”! Get your head out of your ass.

U.S., EU urged to find common ground on “too big to fail”

LONDON/WASHINGTON (Reuters) - The United States and Europe are moving at different speeds down possibly divergent paths toward dealing with troubled multinational financial giants, despite promises of transatlantic coordination.

The prospect has some prominent experts in the field of financial regulation worried, with a key U.S. congressional committee scheduled to vote as soon as next week on a new Obama administration plan for dealing with “too big to fail” firms.

“Negotiations to create a unified cross-country resolution process should begin immediately,” said a report released this week by the Squam Lake Working Group of 15 academics.

The group urged rapid adoption of at least one measure that could be shared and equally effective in any country.

“Every major bank holding company should be required to regularly file a ‘living will’ detailing how the bank should be legally resolved in the event of distress.

“Other systemically important institutions … should also file these plans,” said the report, whose authors include Yale University economist Robert Shiller, author of the 2000 book Irrational Exuberance, and Martin Baily, former chairman of the Council of Economic Advisers in the Clinton administration.

“Flat Incomes, Weak Consumer Spending Raise Concern”

Why is this concern? Did Wall Street really think the so-called “consumer” would be back that quickly? Like no one saw this coming, just like no one could have forseen the housing implosion…

BTW, from the article, “This recovery is going to be very weak. Consumers are in no position or mood to spend. Their wages are down and they can’t get credit,” said Sung Won Sohn, an economics professor at California State University’s Smith School of Business.

Is a consumer still a consumer if he doesn’t spend? Can we stop thinking of people as consumers as if we are all robots and are only programmed to spend? They act like there is something wrong with our programming.

Perhaps we if stop spending, they will stop referring to us as “consumers”. Anyone venture to guess what they would call us then?

http://finance.yahoo.com/news/Flat-incomes-weak-consumer-apf-2836210974.html?x=0&sec=topStories&pos=6&asset=&ccode=

Wow. 9 banks on the FDIC failed bank list today!