The Housing Bubble

U.S. Subpoenas 15 FHA Lenders With High Mortgage Defaults.

Jan. 12 (Bloomberg) — The U.S. Housing and Urban Development Department said it subpoenaed 15 mortgage companies today to seek out possible fraud in an effort to stem losses on loans insured by the Federal Housing Administration.

HUD officials, who oversee the FHA mortgage insurance program, said they haven’t found any evidence of wrongdoing at the lenders, and were singling out those with the highest default rates.

The investigation is “focusing on many of the worst performers in the FHA portfolio,” FHA Commissioner David Stevens said on a conference call with reporters in Washington.

“We aren’t making any accusations at this time, we have no evidence of wrongdoing, but we will aggressively pursue any indicators of fraud,” HUD Inspector General Kenneth Donohue said. “The fact that there are 15 institutions on this list today does not in any way suggest that there aren’t other institutions that we will not look at later.”

California Creditors See IOUs With Schwarzenegger Missing Obama

Jan. 13 (Bloomberg) — California’s hopes are fading for federal help in closing a projected $19.9 billion deficit that has caused the lowest-rated state’s borrowing costs to rise 26 percent in three months.

“We recognize they have enormous problems,” David Axelrod, senior adviser to President Barack Obama, said in an interview. “But we can’t solve all of those problems from Washington.”

Investors are growing more concerned that California, the world’s eighth-largest economy, will repeat last year’s fiscal crisis that forced it to use IOUs to pay bills. With Governor Arnold Schwarzenegger seeking $6.9 billion in federal assistance to narrow the deficit, the extra interest paid on the state’s 10-year bonds over AAA-rated municipal securities has risen to 1.34 percentage points from 1.06 points in three months.

Economic stimulus has created or saved nearly 2 million jobs, White House says ~ Washington Post ~ January 13, 2010

The $787 billion economic stimulus package has created or saved between 1.7 million and 2 million jobs, but its impact on the economy ebbed slightly in the final quarter of 2009 compared with prior months, the White House said Tuesday night.

Releasing the administration’s second quarterly report to Congress on the stimulus’s impact, Christina Romer, chairman of the Council of Economic Advisers, said a third of the tax cuts and spending in the package is out the door. Her office estimates that the stimulus added between 1.5 and 3 percentage points to the growth in gross domestic product in the final quarter of 2009. That estimate, which is in line with other analyses, is lower than her office’s estimate of stimulus-related impact in the third quarter, between 3 and 4 percentage points.

Many Reluctant to Hire Because of New Taxes, Rules. ~ CNBC

A potential wave of new regulation and higher taxes may be scaring many businesses from hiring, prolonging any rebound in employment, say business groups and economists.

The prospect of increased federal and state regulation and taxes has been particularly disruptive to the hiring plans of small- and medium-sized businesses, which have historically generated about two-thirds of the nation’s jobs.

“I don’t really see the private sector hiring much in the next few months,” says Brian Bethune, an economist at Global Insight. “For the small-business sector there is just too much uncertainty about what happens beyond 2010.”

Not only is the Obama administration seeking to push through major overhauls of energy and health care policy, it is also expected to impose dozens of new workplace rules and raise income taxes.

Recession hits U.S. power generation.

NEW YORK (CNNMoney.com) — The nation’s economic decline led to the biggest drop in electric output since 1938, according to an industry trade group.

A new report released Tuesday from the Edison Electric Institute says output fell by 3.7% for its second year of declines in a row.

The group said the fall was triggered by the recession and cooler summer temperatures, which were more than 20% lower than normal in many parts of the country.

The report showed that the industry provided just 3.9 million gigawatthours of electricity to the continental United States, the lowest amount since 2004. The highest weekly output during the year was just 88,713 GWh, which is 10% less than the all-time record high of 98,583 GWh set in August 2006.

While electric output levels fell across the nation, they decreased the most in the Central Industrial and West Central regions, by 6.0% and 5.4% respectively. The South Central Region showed the smallest drop, by 1.1%. To top of page

Party on…

Botox to vacations: Where bankers spend their bonuses.
For just $17,500 a night you can rent Dunton Hot Springs, a private town in the Colorado mountains.

NEW YORK (CNNMoney.com) — Wall Street bankers are putting together their wish lists for 2010 — and they’re not holding back. After last year’s dry spell, bonuses for top-level executives are expected to be sky high. Maybe even records.

Bankers at Goldman Sachs and Chase are anticipating bonuses of more than $500,000 a piece, on average, so they’ll have plenty to spend.

Here’s where they’ll be putting the money.

Real Estate: $3 million to $5 million

Buying apartments, second homes and vacation houses tops the list of ways bankers will most likely spend their money.

“Because these are big Wall Street bonuses, people are buying million-dollar-plus properties in the Hamptons, South Florida, skiing communities like Vail and Aspen, and Europe,” said Milton Pedraza, CEO of the New York-based research firm the Luxury Institute.
Wall Street’s big bonus culture

Of course, the first status residence is in Manhattan, and bankers are already starting to check out the goods in advance of their windfall. They’re putting up huge down payments, which has helped the $3 million to $5 million sector of the city’s housing market to rebound, said Pamela Liebman, CEO of New York-based brokerage firm Corcoran.

U.S. Chamber warns of ‘double-dip’ recession because of Dem policies.

U.S. Chamber of Commerce President Tom Donohue warned the U.S. faces a double-dip recession because of the taxes and regulations under consideration by the Democratic Congress and President Barack Obama.

“Congress, the administration and states must recognize that our weak economy simply could not sustain all the new taxes, regulations and mandates now under consideration. It’s a sure-fire recipe for a double-dip recession, or worse,” Donohue said in a speech providing the Chamber’s outlook for 2010.

So I’ve started asking myself, “what’s wrong with this house?” Basically anything that is appropriately priced in the Pinellas area has a major defect. The good news is that these homes are encouraging my wife to rent longer. I don’t know how long we can string along our landlords, but I don’t want to drive them nuts either.

At this point I’m a broken horse. You can put me down, let me run, whatever…

Bad Andy, I saw your post the other day when you said you let the house go back to the back. I’m not asking for personal information, but can you provide me more insight to the whole process? How much of a falling knife did you catch? At what point did you jingle mail? Why did you jingle mail?

I am again at home today — all day — with a sick little dude, so let’s yap it up.

Fed Seeks to Block Release of Bank Bailout Secrets.

(Bloomberg) — The Federal Reserve asked a U.S. appeals court to block a ruling that for the first time would force the central bank to reveal the identities of financial firms that might have collapsed without the largest government bailout in U.S. history.

The U.S. Court of Appeals in Manhattan will decide whether the Fed must release records of lending programs that were instituted or expanded to help banks survive the longest recession since the Great Depression. In August, a federal judge ordered that the information be released, responding to a request by Bloomberg LP, the parent of Bloomberg News.

“This case is about the identity of the borrower,” said Matthew Collette, a lawyer for the government, in oral arguments yesterday. “This is the equivalent of saying ‘I want all the loan applications that were submitted.’”

Bloomberg argued that the public has the right to know basic information about the “unprecedented and highly controversial use” of public money.

Weird, so my friends back in Rochester are in a bidding war over one of their parent’s homes. That is ridiculous.

John Lanchester’s new book, I.O.U., is reviewed in the NYTimes. He makes an interesting point about the end of the cold war and the and its relation to the financial crisis:

“Mr. Lanchester suggests that there are larger cultural forces at play. He traces the roots of the crisis to the fall of the Berlin Wall in 1989. Before this transformative moment, he writes, Western democracies kept their banks on a relatively short leash. Otherwise, he says, they might have forfeited whatever moral authority they enjoyed over their Communist foes.

“The jet engine of capitalism,” Mr. Lanchester writes, “was harnessed to the oxcart of social justice, to much bleating from the advocates of pure capitalism, but with the effect that the Western liberal democracies became the most admirable societies that the world has ever seen.”

But when the Soviet Union fell, Mr. Lanchester laments, so did the checks and balances on capitalism. After that, he says, the forces of capitalism, particularly the harsher variety practiced in the United States and Britain, held a two-decade-long victory party.

Emboldened by their triumph, he writes, bankers made shameless demands of their governments and got nearly everything they wanted, including the right to trade dangerously complex securities with virtually no regulation. ”

—

Lanchester is a novelist who also wrote “The Debt to Pleasure”, one of the best books I’ve read in recent years- especially interesting if you’re a ‘foodie’. (Mr. Pussycat, if you’re monitoring us, you would, I think, paricularly enjoy it.)

CHICAGO (MarketWatch) — Mortgage applications rose a seasonally adjusted 14.3% last week as interest rates on fixed-rate mortgages fell, the Mortgage Bankers Association said Wednesday.

Refinancing applications jumped 21.8% in the week ended Jan. 8 compared with the week before, which was shortened for the New Year’s holiday. Applications for mortgages to purchase homes rose a seasonally adjusted 0.8% on a week-to-week basis.

Two of Mr. Eddy’s main points lately:
1. Rents are rising
2. It’s a garden variety, typical recession

Reality Check:
So much is out there to disprove these erroneous conclusions but here are a couple examples.

U.S. apartment vacancy rate hits 30-year high
NEW YORK, Jan 7 (Reuters) - The U.S. apartment vacancy rate rose to an almost 30-year high of 8 percent in the fourth quarter, and rents dropped in the biggest one-year slump in 2009,
http://www.reuters.com/article/idUSN0614064020100107

Here’s a site by the MN Fed showing that this recession is BY FAR THE WORST RECESSION SINCE THE GREAT DEPRESSION. By length, depth, unemployment etc.
http://www.minneapolisfed.org/publications_papers/studies/recession_perspective/index.cfm

There are dozens of similar stories out there that can be easily brought up on a web search.

No Shock: Stimulus Is A Money Loser. ~ Investors Business Daily

Economic Recovery: The results are in, and last year’s $787 billion stimulus not only failed to do what it was supposed to do, but it has also turned out to be one of the worst investments in economic history.

Remember the debate in 2008 over the bailouts then being put together by the Treasury, the Fed and the Democratic Congress? Proponents often raised the possibility that any bailout would make money for taxpayers.

Didn’t work that way. As we’ve discovered, the American people aren’t just saddled with the ongoing costs of the various and sundry stimulus programs. They’re also taking huge losses in doing so.

On Tuesday, the Treasury estimated that taxpayers had lost $68.5 billion in the fiscal year ended Sept. 30, 2009, on the Troubled Asset Relief Program and that the losses could go as high as $120 billion.

That isn’t imaginary cash stuffed under some government cushion. It’s a tax on you that comes straight out of your pocket. It’s money that won’t be used to fund private-sector jobs or pay for a child’s education or a new house. It’s gone.

Meanwhile, the Federal Reserve says it earned $45 billion last year — the largest one-year profit in its 96-year history.

As the Washington Post points out, that will easily eclipse “the expected profits of Bank of America, Goldman Sachs and JPMorgan Chase combined.”

Why the big Fed profit? Basically, it printed money, bought Treasuries and private bonds with what it printed (we called it a bailout), then watched as interest on the investments flowed in. At year-end, the Fed held $1.8 trillion in U.S. government debt and mortgage securities, up from $497 billion a year earlier.

Don’t worry, though. The Fed doesn’t keep the money. It goes to the Treasury — which will just spend the money on something else.

All of this only underscores how badly the so-called stimulus has turned out. After trillions of dollars in outlays by the Fed, Treasury and Congress, the U.S. has zero net new jobs to show for it. Zip.

In fact, jobs at private businesses shrank by 4 million in 2009.

Nor have banks started lending to small and midsize businesses. Commercial and industrial loans, the lifeblood of U.S. industry, fell $252 billion, or nearly 16%, from January through November.

Why aren’t profitable banks lending to businesses? Good question. For one thing, like the Fed, banks have found a sure thing in round-tripping bailout funds provided at virtually zero interest into Treasuries yielding 3%. No risk, all gain.

My son’s girlfriend sent me this link yesterday.

http://beckandlee.wordpress.com/2008/12/31/federal-court-endorses-financial-crisis-as-basis-for-relief-from-pre-existing-contractual-duties-could-real-estate-contracts-be-affected/

US sees non-OPEC oil output growth ending in 2011
* OPEC share of global oil supply may reach 42 pct in 2011

WASHINGTON(Reuters) - The world will become more dependent on OPEC oil beginning next year as the combined oil output from countries outside of the producer group begins to decline, the U.S. government said on Tuesday.

The Energy Information Administration said in its new monthly forecast that non-OPEC oil supplies will not sustain the 630,000 barrel-per day-increase experienced in 2009.

Unless the Fed does a heckuva job going forward with financially engineering “higher than expected” inflation, I have a hard time imagining how Generation Recession will be able to afford all those McMansions out there still priced to sell for north of $500,000. Nobody on high is admitting it, but isn’t it pretty much imperative that the Fed do its durndest to inflate?

The Recession Generation

Those entering the workforce now will likely make less and save more—not just in the short term but for the rest of their lives.

By Rana Foroohar | NEWSWEEK
Published Jan 9, 2010
From the magazine issue dated Jan 18, 2010

We all know the type of person who came of age in the Great Depression. They are the grandmothers and grandfathers who can’t use a tea bag too many times, yet are enjoying comfortable retirements in warm climates. And we know what the children of the 1950s are all about. They are the optimistic boomers who embodied an age of continual upward mobility and possibility. They have often spent more than they earned, because for them it has been a truism that times can only get better. It’s no accident that the psychology of entire generations is shaped by the milieu in which they grew up; economic research tells us that our lifelong behaviors are determined in large part by the seismic events—good or bad—of our youth. So, given that we have just experienced the worst economic period in 70 years, it’s no surprise that people have begun to wonder what sort of consumers, investors, and citizens will be bred by the Great Recession. Will there be, in effect, a “Generation Recession” of young people whose behaviors will be permanently shaped by the downturn?
…

I was trying to remember the sequence of housing bubble and bust events, and I find I’m forgetting some of them. Did the subprime orginators go bust in early 2007? When were Countrywide and Golden West bought? When did the builders start posting losses.

It would be a big job for one person, but I wonder if it would be possible to collabarate on a housing bubble and bust timeline, to be posted here?

It could start with the antecedents (ie. the lifting of permitted leverage at the investment banks and similar decisions), early price rises stretching cost relative to income, the “creative finance” and appraisal fraud phase, the construction boom, price peak, and unfolding disaster.

Since asset prices do not enter official inflation statistics, stock prices are a perfect place for the Fed and its private Wall Street Megabank, Inc partners to hide inflation in plain view. And for anyone bother to pay attention, the usual price of higher stock prices is a lower dollar.

Pre-Market Indications
Index Futures: S&P 500 1,136 +1.60 +0.14%
DOW 10,596 +8.00 +0.08%
NASDAQ 1,867 1.00 0.05%

Stocks finding their footing

Stock index futures point toward gains, with traders eager for further P&L figures after a weak start to fourth-quarter earnings season. China controversy thrusts Google shares in the spotlight.

Tuesday January 12, 2010
Clusterf#@k to the Poor House - Wall Street Bonuses

Companies that American taxpayers had to bail out with billions of dollars use that money to reward their employees with bonuses. (04:47)

Dumb question of the day:

Has the Fed recently morphed from a central bank into the world’s largest hedge fund with a monopoly right to print its own money?

I can’t remember yet seeing any articles or posts on banks taking “Recourse” after a foreclosure. Recourse states, recourse on HELOCs, recourse on fraudulent mortgages, nothing. I would expect some of the strategic defaulters are low hanging fruit for the F’d banks. Why don’t they go after any of them, or why don’t we hear any sob stories about former homeborrowers being hounded to the grave to pay up?

Fewer people selling their homes cut their listing price in December, according to the latest numbers from San Francisco-based Trulia.com.

Nationwide, prices on 21 percent of homes on the market as of Jan. 1 were cut at least once, down from 22 percent in the previous month and down from 25.6 percent two months ago.

In South Florida, West Palm Beach had the highest percentage of homes with price reductions – 23 percent – followed by Miami, with 21 percent, and Fort Lauderdale, with 17 percent.

The average price reduction in West Palm Beach was 14 percent off the listing price, representing $26.1 million in price cuts.

The average price reduction in Miami was 15 percent, representing about $179 million in price cuts.

In Fort Lauderdale the average price reduction was 13 percent, representing $61 million in total reductions.

The number of major U.S. cities with price reduction levels at 30 percent was cut in half in January, with just seven cities experiencing a reduction of 30 percent or more.

“Consumers have a golden window of opportunity to find a great home and take advantage of the tax credit before mortgage rates return to the 6 percent level and above,” Trulia co-founder and CEO Pete Flint said in a news release.

Those looking to take advantage of the homebuyer credit have until April 30 to sign contracts and until the end of June to close on the sale.

Several cities have experienced a significant decrease in price reductions, including:

* Los Angeles, down 46 percent
* New York, down 36 percent
* Memphis, Tenn., down 34 percent
* Minneapolis, down 33 percent
* Honolulu, down 33 percent

Jacksonville saw the highest percentage of listings with a price reduction, at 36 percent, followed by Portland, Ore., and Milwaukee (33 percent); and Omaha, Neb., and Seattle (32 percent); and Tucson, Ariz., and Charlotte, N.C. (30 percent).

Those homes priced at $2 million and above continue to be hit the hardest by price reductions and are responsible for 24 percent of the $21.2 billion in cuts.

The average discount for homes priced less than $2 million held steady, at 10 percent.

Trulia gathers its data from live listings on its Web site, and does not include foreclosures or short sales.

“The Federal Reserve System is not about making money at the expense of the government. It is about using a government-granted monopoly over money to regulate the economy to the benefit of a handful of large banks. This has always been its primary function.”

~Gary North

CNBC’s Diana Olick does a number on housing “green shoots”:

Published: Tuesday, 12 Jan 2010 | 1:53 PM ET
By: Diana Olick

A lot of reports out today collectively gave me a very bad feeling about the state of our current housing recovery.

First, Amherst Securities Group took a look at Pay Option ARMs. These are the adjustable rate loans so popular in 2006 that allowed you to choose your monthly mortgage payment, while tacking what you don’t spend on to the principal of your loan. Only 9 percent of these loans had full documentation from the borrower and 76 percent were originated in California, Florida, Arizona and Nevada, our four disaster states for housing. It should therefore come as no shock that they are suddenly approaching subprime in their delinquency status. So while we all sit around saying that the subprime loans have already worked their way through the system, they’re fast being replaced by POA’s. “For 2006 securitized issuance, 61% of subprime loans have defaulted, as have 49% of the option ARMs,” according to the Amherst report.

Not soon after I saw that report, another flew into my “In” box from Fitch ratings: “Overall, prime RMBS 60+ days delinquencies rose to 9.2% for December 2009, up almost three times compared to the same period last year (3.2% in December 2008). The 2006/2007 vintages combined rose to 12.7% from 4.3%.” They’re talking about residential mortgage backed securities, which of course are pools of residential loans.

Then there was the report I received last night from Lender Processing Services:

“Total delinquencies, excluding foreclosures, increased to a record high 9.97 percent, representing a month-over-month increase of 5.46 percent and a year-over-year increase of 21.29 percent. Loans rolling to a more delinquent status totaled 5.01 percent compared to 1.52 percent of loans that improved. Of loans that were current in December 2008, 4.37 percent were either 60 or more days delinquent or in foreclosure by the end of November 2009, a rate higher than any other year for the same period.”

So instead of diving into a bottle of Ketel One, I jumped on a conference call with the Mortgage Bankers Association that included their chief economist Jay Brinkmann’s economic forecast. Brinkmann spoke quite a bit about unemployment, noting that while the rate of job losses is definitely slowing, the already-unemployed are not getting back into the job market at a healthy rate. He noted specifically that this would mean many more prime loan defaults by borrowers in financial trouble as opposed to borrowers who took out loans they never should have been offered.

“Over one-third of prime jumbo borrowers that are current on their mortgages also are ‘underwater’ on their mortgages,” said Vincent Barberio of Fitch. Makes you wonder how long they’ll stay current.

All of this then piled on top of a number I noted yesterday, not newly reported, but new to me, that Experian was forecasting close to a million borrowers who could afford to pay their loans had voluntarily walked away from their commitments because they were so far underwater that they would not see any home equity any time soon. Judging by the fact that a quarter of all borrowers, or about 15 million, are currently underwater, that number will likely rise in 2010.

Needless to say, the big banks, while perhaps trying their darndest to modify as many loans as they can, are looking at potentially millions of borrowers who either can’t be modified due to insufficient income or don’t want to be modified due to insufficient interest in throwing their money into a bottomless pit.

Saw the article yesterday on the Fed buying $500B in MBS, plus another $100B in non-securitized mortgages. I guess presumably this is in addition to the other $1.25B program? If so - why hasn’t this been WAY bigger news than it has been? Did I miss something?

The article says it was announced on Nov. 25th. I don’t remember it.

That brings us to a total of $2.15 Trillion in QE now, right?
- $1250B original MBS purchase
- $300B treasury purchase
- $600B new MBS + mortgage direct purchase

Correct?

That’s a friggin’ lot of new money flying around.

Not to mention the other $500-600B in “who knows” purchases, plus $90B or so bought by the banks with money borrowed from the Fed.

That’s a friggin’ lot of new money flying around.

Is it enough to keep house prices from falling more in the next 5 years?

Jan. 13 (Bloomberg) — Stuyvesant Town and Peter Cooper Village debt holders demanded payment from Tishman Speyer Properties LP and BlackRock Inc. within 10 days, a step toward foreclosing for New York’s largest apartment complex, said two people familiar with the matter.

A group led by Winthrop Realty Trust which holds about $300 million in senior mezzanine debt said in a letter it intends to pursue “rights and remedies” including a foreclosure sale, according to the correspondence. The parties could act within 90 to 180 days, said the people.

“The sharks are circling in the waters,” said New York City Councilman Daniel Garodnick, a Peter Cooper Village resident as well as its council representative. “This is a point of great concern.”

Tishman Speyer and Blackrock missed a $16.1 million payment on the apartments last week. Their plans to cover the debt by raising rents were thwarted Oct. 22 when the state’s highest court ruled in favor of tenants who claimed some increases were illegal. Tishman Speyer and BlackRock paid $5.4 billion for Stuyvesant Town and Peter Cooper’s 11,200 apartments in 2006. In October, Fitch Ratings valued the property at $1.8 billion
***

Tishman Speyer and BlackRock, also based in New York, each invested $112.5 million in Stuyvesant Town out of total equity financing of $1.9 billion. They took out a $3 billion mortgage from Wachovia Bank and $1.4 billion of mezzanine debt.

The mortgage was packaged with other commercial properties loans and sold as securities. The biggest holders are Fannie Mae and Freddie Mac, the U.S. government-owned home-loan finance companies.

So in 2006 BlackRock and Tishman Speyer borrowed 5 billion or so in loans for a property worth 1.8 billion.

A brief update from the land of squatters:

The bank finally issued an NOD for the house we had paid rent on until Oct. of ‘08 and lived in for free until moving out over the Christmas holiday. It went 14 months from last payment on the mortgage to NOD.

All upside for us, but a bit of a downer for the young family to whom we bequeathed our squat. I’ve told them they are looking at probably another 6 months before the trustee sale and then Cali law gives another 60 days from there for a renter to leave.

FWIW.

Wear GOLD! Wear GOLD! Wear GOLD!

This is the second story this week of this modus operandi:

“…The man then brandished a knife and held it to the boy’s head while he demanded the mother’s gold necklace”

By DENISSE SALAZAR THE ORANGE COUNTY REGISTER January 13, 2010

Home trends that should go away

Now that the first decade of the century is in the rear-view mirror, it’s time to wave buh-bye to some ubiquitous design trends that have worn out their welcome. Here are my picks:

Two-story family rooms. It’s a McMansion thing. Remember when towering great rooms first arrived on the scene and we thought they were grand and impressive? Now they just seem stiff and pretentious. Not to mention dysfunctional. When what should be the coziest, most convivial space in the house has an echo, you’re got a design problem. Soaring ceilings are perfectly fine if you’re planning an audience with royalty. But for hanging with family and friends? Not so much. (My house, built in 1990, has a vaulted ceiling in the master bedroom, which is even worse!)

Cookie-cutter kitchens. Stainless steel and granite have been inseparable during our long love affair with the trophy kitchen. But the honeymoon is over. Stainless steel appliances are too cold and commercial for most home kitchens. And granite? Well, I finally got some a couple years ago. Visually, it was a big improvement over my old laminate. But it hasn’t been as indestructible as I thought it would be. I have to seal it every year and worry about oil stains. The edge is already chipped in several places. Plus I spent way too much on it. There are a lot of other materials out there, and it’s time to play the field.

Mismatched upholstery. This fad always irritated me, even when it was new and “fresh.” I’m not talking about mixing and matching complementary pieces of furniture. I’m talking about those sofas and chairs that aspire to be quaintly “cottage” by combining two or more fabrics — like a cabbage-rose print on the seat cushions and another pattern on the back or arms. Such contrived bohemia is worse than too much matchy-matchy.

White stair risers. Want to showcase every scuff mark and spend your weekends scrubbing? Here’s how to do it.

Tuscan overload. Murals, Venetian plaster and wrought iron can be rustic and charming. But when you pile them all together, everywhere, and slap the T-word on them — year after year after year — it’s lke gorging on too much fettucine. Who wants to live in an Italian theme park?

That’s my list. What are YOU ready to be done with?

www dot startribune.com/blogs/81319552.html?elr=KArks:DCiUHc3E7_V_nDaycUiacyKUHDYaGEP7eyckcUr

I’m ready to be done with any room that’s meant to impress visitors but is almost never used. For me that’s formal dining rooms separate from the kitchen and “great” rooms separate from where the family actually hangs out and watches TV or plays video games or whatever.

I have to say I like tall(er) ceilings, though. Not the super-high stuff, but I guess maybe I’m a little claustrophobic…I like to hang out in a space where the ceiling is at least 10-12 feet up there. Makes me feel relaxed for some reason.

Didn’t everyone here try to convince me that tourism is dead? About that….
________________________________________________________

NEW YORK (CNNMoney.com) — Hospitality provider Starwood Hotels announced Tuesday that it plans to create 12,000 new jobs worldwide in 2010, increasing its staff by more than 8%, with about half of the new positions located in the United States.

Starwood (HOT, Fortune 500), which employs 145,000 workers at hotels in more than 100 countries, said a majority of the additions will be made at the 80 to 100 new hotels the company and its development partners are slated to open this year in both large markets and small markets worldwide.

Today my littleman couldn’t sleep, so we “snugga” on the couch until he feel asleep. He got up before me, moved his step stool from his bedroom to the bathroom, reached for a high shelf, circumvented the child safety cap, and poured pepto bismol on my face to wake me up. Good morning, again!

Renter advantage: none.

Nice little bit with Marc Faber

finance.yahoo.com/tech-ticker/marc-faber-the-next-thing-you-need-to-worry-about-is-the-piigs-403497.html

After every financial crisis there’s a sovereign debt crisis, Marc Faber says. Countries that borrowed too much during the boom times start struggling to pay their competitors back, and eventually some of them default.

The countries most likely to blow up this time around are the “PIIGS”: Portugal, Ireland, Italy, Greece, and Spain. One ore more of them, Faber says, will likely default in the next couple of years. And, that could result in the death of the Euro currency.

Longer-term, Faber says, Japan and the US are in line for the same fate.

The US crisis won’t hit us this year or next year. But within 5-10 years, the United States will be forced to quietly default on its debt, most likely by printing money and destroying the value of the currency.

My take
When PIIGS start collapsing the US currency will rise then things get ugly. Put $$ into hard assets and energy generation/efficiency that can’t be taxed.

Looks like this security guard graduated from Countrywide NINJA High School.

——————

The Edison Tech student accused of stealing a gun and taking it to school told police he walked right through security with the weapon strapped to his belt next to a cell phone.

In the statement, Harvey said a large metal detector at Edison went off when he walked through it. A sentry then scanned Harvey with a handheld wand, which also went off. Harvey claims the sentry then waved him through into the building without checking what caused the metal detectors to go off

Ben and Bad Andy, if both of you are willing, I’d like to see a guest post from Bad Andy about buying too soon and walking away. It would be helpful for some of us who are at risk of falling off the fence (me).

I’m currently on a one day time shift for the blog, unfortunately in delay mode. I wanted to make a brief comment on the primelazy ones interjection on the Roman census of antiquity. It is a subject of interest to me and I happen to have a close friend who is something of an expert. He replied to my query as follows:

“BS–actually the Palestine-Syria census is well documented–the only question is which one (there are actually multiple census counts under Augustus, who was reordering the empire after decades of civil war)—I would just say this to your ignorant blogger– “A censor was a Roman magistrate elected every 10 years or so to conduct a Census–the term… See More, the office, the practice is all of Roman origin… See More. There were hundreds of censuses (censi in Latin) conducted during the millenia of Roman history…

My point above, is that we don’t have complete evidence for most Roman censuses, but we know they were conducted frequently and sometimes universally, we can never say “there wasn’t one” with any accuracy just because no record survives–actually, Luke’s account is in itself evidence that one was conducted in Syria under Cyrenius–and Luke’s gospel… ”

(my reply) ‘His point was the part about, “return to place of birth” as a method for a census or taxation.’

“Again- no existing record is not equal to “did not happen”; and again, the gospel of Luke is of great enough antiquity to be a source in and of itself for the practice (and is in fact cited as such by many ancient historians)”

Again, FWIW

California downgraded by Standard & Poor’s

NEW YORK (MarketWatch) — Standard & Poor’s said Wednesday it downgraded California’s credit rating to A-minus. The state’s previous rating was A, already the lowest in the nation. The rating agency also maintained its negative outlook, according to a spokeswoman at S&P, indicating more downgrades are possible. The downgrade comes as the state faces another multi-billion-dollar budget gap for the current fiscal year and has appealed to federal lawmakers for assistance. S&P last downgraded California last February.

GM to halt Hummer production Tuesday
JACKSON, Miss.

General Motors will stop producing Hummers next week at its Louisiana plant until sale of the brand to a Chinese company is completed.

Hummer spokesman Nick Richards said Wednesday it was unclear whether jobs would be . The Shreveport plant builds Chevrolet pickup trucks in addition to Hummer models.

He says production will halt Jan. 19 because there’s “sufficient inventory” of Hummers to sustain dealers while the sale gets final regulatory approval.

Sales of the off-road vehicles have plunged due to the recession and high gas prices.

The plant once employed about 3,000, but layoffs and buyouts have reduced that to about 700.

Moody’s Says Greece, Portugal May Face ‘Slow Death’ (Update2)

Jan. 13 (Bloomberg) — The Portuguese and Greek economies may face a “slow death” as they dedicate a higher proportion of wealth to paying off debt and investors demand a premium to hold their bonds, Moody’s Investors Service said.

While the two countries can still avoid such a scenario, their window of opportunity ”will not be open indefinitely,” Moody’s said in a report today from London. Portugal, with a negative outlook on its Aa2 rating, has more time “to reverse this trend” while Greece “has significantly less time.” Moody’s cut Greece’s rating to A2 from A1 on Dec. 22.

The premium that investors demand to hold Greek debt instead of German equivalents is six times more than it was two years ago, and the spread has doubled since 2008 in the case of Portugal. Greece had the largest budget deficit in the euro region last year, more than four times the European Union limit of 3 percent of gross domestic product. Portugal’s debt load will account for 85 percent of GDP this year, according to the European Commission.

The stupidity train just keeps chugging along with wastes of time like this.

“Children who were considered “poor” by the government used to be classified as “disadvantaged.” But that made the children feel bad about themselves because of the stigma of the word associated with poverty. Then they became “at risk” children. Well apparently that term is too negative for lawmakers these days. So Democrat State Senator Rosa Franklin in Washington has an idea: let’s label these children as “at hope.”

“No, I am not kidding. “At hope.”

“State Sen. Rosa Franklin wants to spend thousands of dollars rewriting the 54 places in state law that use the words “at risk” or “disadvantaged.”

“Yup … as soon as you label them “at hope” everything will be hunky dory”.

~ Boortz~

Applied Micro to cut 11% of staff.
Silicon Valley / San Jose Business Journal

Applied Micro Circuits Corp. said in a filing with the Securities and Exchange Commission that its board has approved a plan to cut about 11 percent of its employees.

Sunnyvale-based Applied Micro (NASDAQ:AMCC) said employees were told Tuesday about the job cuts, which will save the company about $1.5 million a year.

The company expects to take a charge of $1.3 million to $1.7 million for severances.

In its filing, the company said it implemented the restructuring “to become a more cost competitive company and improve efficiencies by integrating its global operations.”

At the end of 2009 the company had about 551 employees.

EXCLUSIVE: Inside China’s secret toxic unobtainium mine.
DailyMail (UK)

Last week it was reported that China - which has a global monopoly on the production of rare-earth metals - is now threatening to cut off vital supplies to the West. A shortage would jeopardise the manufacturing and development of green technologies such as wind turbines and low-energy lightbulbs. RICHARD JONES is the first Western journalist to visit the rare-earth mines in Inner Mongolia to discover why China is unwilling to give up its precious elements…

Read more: http://www.dailymail.co.uk/news/article-1241872/EXCLUSIVE-Inside-Chinas-secret-toxic-unobtainium-mine.html#ixzz0cXEd7WdP

improve efficiencies by integrating its global operations ??

Code for; Cut here & Hire there…

Are these apologies a tacit admission of guilt? If so, when will the U.S. taxpayer see a return of the ill-gotten bankster bonus booty?

Bankers apologize for actions that led to crisis
By JIM KUHNHENN and DANIEL WAGNER Associated Press Writers
Jan. 13, 2010, 4:44PM

WASHINGTON — Challenged by a skeptical special commission, top Wall Street bankers apologized Wednesday for risky behavior that led to the worst financial crisis since the Great Depression. But they still declared it seemed appropriate at the time.

The bankers — whose companies collectively received more than $100 billion in taxpayer assistance to weather the crisis — offered no regrets for executive pay that is now likely to increase as a result of their survival. They did say they are correcting some compensation practices that could lead to excessive risk-taking.

The tension at the first hearing of the Financial Crisis Inquiry Commission was evident from the outset.

“People are angry,” commission Chairman Phil Angelides said. Reports of “record profits and bonuses in the wake of receiving trillions of dollars in government assistance while so many families are struggling to stay afloat has only heightened the sense of confusion,” he said.
…

More on the tourism front:

- Las Vegas totel hotel visits up 3% ‘09 vs ‘08

- Gaming revenue up 8% YOY. For Bear that means it was 8% higher last year than 2 years ago.

- MGM Mirage (I have a soft spot for them as I did some work for Steve Wynn back in the day when he owned Mirage Properties) had a 6.5% increase in New Years revenue over last year. MGM is up 300% over the past year.

Another sign of the deepening depression.

Monsanto’s GMO Corn Linked To Organ Failure, Study Reveals
Huffington Post

In a study released by the International Journal of Biological Sciences, analyzing the effects of genetically modified foods on mammalian health, researchers found that agricultural giant Monsanto’s GM corn is linked to organ damage in rats.

According to the study, which was summarized by Adam Shake at Twilight Earth, “Three varieties of Monsanto’s GM corn - Mon 863, insecticide-producing Mon 810, and Roundup® herbicide-absorbing NK 603 - were approved for consumption by US, European and several other national food safety authorities.”

Monsanto gathered its own crude statistical data after conducting a 90-day study, even though chronic problems can rarely be found after 90 days, and concluded that the corn was safe for consumption. The stamp of approval may have been premature, however.

In the conclusion of the IJBS study, researchers wrote:

“Effects were mostly concentrated in kidney and liver function, the two major diet detoxification organs, but in detail differed with each GM type. In addition, some effects on heart, adrenal, spleen and blood cells were also frequently noted. As there normally exists sex differences in liver and kidney metabolism, the highly statistically significant disturbances in the function of these organs, seen between male and female rats, cannot be dismissed as biologically insignificant as has been proposed by others. We therefore conclude that our data strongly suggests that these GM maize varieties induce a state of hepatorenal toxicity….These substances have never before been an integral part of the human or animal diet and therefore their health consequences for those who consume them, especially over long time periods are currently unknown.”

Hey, Wilbur, bite me!
Just another greedy prick, that sincerely could not care less about the good of the country that made him fat.

Ross Calls for New U.S. ‘Cash-for-Clunkers’ Program (Update2)

Jan. 13 (Bloomberg) — Wilbur Ross Jr., the billionaire investor whose holdings include auto suppliers, said the U.S. government should introduce “tomorrow” another car-buying incentive program to stimulate the economy and create jobs.

A new “cash-for-clunkers” initiative must be simpler, larger and last longer than the $3 billion version run by the Transportation Department in July and August, said Ross, who formed International Automotive Components Group by buying distressed partsmakers.

“They should do it tomorrow morning,” Ross told reporters today after a speech at the Automotive News World Congress conference in Detroit. “I think a fair amount of the growth in the third quarter of last year was due to the cash-for-clunkers and the first-time home buyer subsidies.”

Kentucky Selling State Property to Generate Money.
Government-owned planes, vehicles will be put up for sale to help balance Ky. state budget ~ FRANKFORT, Ky. January 13, 2010 (AP)

As Kentucky’s state government faces a mammoth revenue shortfall, Gov. Steve Beshear is doing what lots of families do when income falls short of obligations: Find the stuff they aren’t using and put it up for sale.

State-owned planes, vehicles and other property will be sold to generate money for Kentucky’s shrinking budget, Beshear said Wednesday.

The move is the result of an economic recession that has hit the state’s general fund hard, leading to a projected $1.5 billion shortfall over the next two-year budget cycle. That’s on top of $1 billion that has been cut from the current budget.

Beshear said he doesn’t know how much money the property sales will raise, but he said it should “soften the blow of budget cuts” that could include employee layoffs.

“The scope of what we’re tackling suggests that the benefits could be substantial,” he said told reporters in a Capitol press conference.

Beshear said he is proposing the sale of all land, buildings and equipment that isn’t essential. Under the initiative, the administration will re-evaluate rental property agreements and renegotiate state contracts for goods and services.

… AANNNDD for those persistent few who made it down this far this late in HBB, here is a little Sade for your enjoyment.

Roidy

http://www.youtube.com/watch?v=LI7GWbVV7ps

Blue Skye: Is China built out on the suburbia model like the US? If not, where are all those Chinese driving their cars to? The empty cities and empty malls?

I think most countries are. It’s not a model - most countries don’t have American-style zoning - if you own land, you do pretty much whatever you want, no government bureaucrat gets in the way. The payoff is in lower property taxes. For instance, the owner of a $200,000 property in China might pay $200 in annual property taxes.

China’s biggest city, Chongqing, has a population density of 1000 people per square mile. Nassau County, Long Island, by comparison, has a population density of 4,562 people per square mile. The average Chinese lives in a 2000 square foot house, not a Hong Kong-style tenement (necessary when pop density is 16,500 per sq mile). China’s population density is slightly lower than Europe’s.

Bernanke’s Shaky Branch in Housing Argument
1/13/2010

Fed Chairman Ben Bernanke has insisted that low interest rates in recent years have had nothing to do with the housing bubble. WSJ’s David Wessel looks at the problems with his argument.

News Hub: Challenging Bernanke on Housing Bust
1/13/2010

Fed Chairman Ben Bernanke says low interest rates aren’t to blame for the housing boom and bust. WSJ’s Jon Hilsenrath tells Kelly Evans why fellow economists aren’t buying his argument.

News Hub: Bonuses Fuel Apartment Sales
1/12/2010

Brokers say Web and open-house traffic is up for luxury apartments. WSJ reporter Dawn Wotapka tells the News Hub’s Simon Constable it’s tied to Wall Street bonuses.

Circular logic: The housing stimulus is working, as home prices are rising. Therefore, more stimulus is needed, to make sure home prices keep rising.

AM Report: Seeking a Housing Recovery
1/7/2010

Gains in home sales have been driven by government stimulus, leading some to wonder if the nascent housing recovery needs federal assistance to sustain, Nick Timiraos reports.

Time for the bankster chiefs to enjoy a public flogging. Got popcorn?

The Financial Times
Wall Street titans face the flak

By Tom Braithwaite and Francesco Guerrera in Washington

Published: January 13 2010 14:25 | Last updated: January 13 2010 19:25

Four of Wall Street’s top executives offered some contrition and a defence of their actions on Wednesday, as the head of the Financial Crisis Inquiry Commission promised to use wide-ranging powers to establish the causes of the financial crisis and pursue any wrongdoing.

Lloyd Blankfeinof Goldman Sachs, Jamie Dimon, chief executive of JPMorgan Chase, John Mack of Morgan Stanley and Brian Moynihan of Bank of America maintained a united front as the Financial Crisis Inquiry Commission, headed by Phil Angelides, probed the bail-out of AIG, risk management and executive compensation.

Mr Blankfein, whose bank has become a lightning rod for public anger at Wall Street, bore the brunt of the panel’s questions. He mounted a robust defence after being asked whether part of his business was akin to selling a car with faulty brakes and then buying an insurance policy. But he added: “Anyone who says I wouldn’t change a thing, I think, is crazy.”

The Goldman boss said that he and his rivals had been insufficiently sceptical of loose credit standards.

“We rationalised [it] because a firm’s interest in preserving and growing its market share, as a competitor, is sometime blinding – especially when exuberance is at its peak.”

Mr Angelides, a former California treasurer appointed head of the panel by Congress last year, told the witnesses on the first day of public hearings: “We’re after the truth . . . the hard facts . . . we’ll use our subpoena power as needed. And if we find wrongdoing, we’ll refer it to the proper authorities.”

Bonuses are drawing increasing political fire on Capitol Hill as the banks prepare to announce billions of dollars in pay-outs over the next few days.

“Clearly Wall Street has to be a lot more attuned to what’s going on in the economy,” said Mr Mack. But he said that compensation had to allow the banks to compete for staff. “I have to run a company.”
…
EDITOR’S CHOICE
Bankers grilled in tense exchanges - Jan-13
Crisis inquiry: Live blog - Jan-13
In depth: Crisis inquiry - Jan-12
In depth: US banks - Jan-07
Opinion: Why Obama must take on Wall Street - Jan-12
Global Insight: Still bristling over AIG haircut - Jan-13

How did this 2009 prediction pan out?

Wall Street Bonuses May Go Way of Dodo Amid Bailouts (Update2)
By Dawn Kopecki and Christine Harper

Jan. 30, 2009 (Bloomberg) — The Wall Street bonus, considered a sacred ritual, may become the industry’s biggest casualty as governments worldwide bail out financial institutions.

UBS AG was told to reduce bonuses after the Swiss government gave the country’s biggest bank a $59.2 billion lifeline. Bank of America Corp. is under pressure to scale back payouts after New York Attorney General Andrew Cuomo subpoenaed executives earlier this week for information on compensation and President Barack Obama said just yesterday that bonuses handed out by banks represent “the height of irresponsibility.”

The current system of “asymmetric compensation,” in which people are rewarded when they do well and aren’t required to return the rewards when they lose money, is detrimental to society and needs to change, said Nassim Taleb, a professor at New York University and author of “The Black Swan: The Impact of the Highly Improbable,” in an interview.

The worst economic crisis since the Great Depression, a $700 billion taxpayer bailout in the U.S. and the demise of three of the biggest securities firms — Bear Stearns Cos., Lehman Brothers Holdings Inc. and Merrill Lynch & Co. — didn’t deter investment banks from offering year-end rewards to employees on top of their salaries.

Financial companies in New York City paid cash bonuses of $18.4 billion last year (2008), the sixth-most in history, even as they posted record losses, according to data compiled by the office of state Comptroller Thomas DiNapoli. The payouts are split among everyone from managing directors to secretaries.
…

Last Updated: January 14, 2010
Weather: Melbourne 13°C - 24°C . Becoming sunny.

Barack Obama wants Street to pay

* Daily Mail
* From: Herald Sun
* January 14, 2010 12:00AM

Tax raid: US President Barack Obama is planning a levy for the banking industry. Source: AFP

BARACK Obama is planning a tax raid on American banks to claw back some of the mammoth support taxpayers have thrown at America’s stricken financial system.

As Wall Street firms prepare to hand out record bonuses, the President could raise as much as $US120 billion ($A129 billion) through the mooted windfall levy on the banking industry.

Mr Obama is said to be angered by the prospect of Wall Street handing hefty cheques to traders - while Main Street USA picks up the tab for the financial meltdown of late 2008.

With the unemployment rate above 10 per cent, a tax raid on the reviled banking industry would be a popular move ahead of Congressional elections later in the year.

The move is the most dramatic sign yet that the net is closing in on fat-cat investment bankers.
…