The Housing Bubble

Fed carries losses from Bear portfolio.
FT ~ New York ~ February 15 2010 23:45

The US Federal Reserve is sitting on significant paper losses on the real estate assets it acquired in the Bear Stearns rescue, with much of the red ink coming from debt used to back some of the most high-profile buy-out deals of the bubble years.

Among the debts weighing on the central bank’s portfolio are those used in financing the acquisitions of Hilton Hotels, which is being restructured, and hotel operator Extended Stay, which is in bankruptcy, people familiar with the matter say.

The Fed holds these and other real estate assets in a vehicle known as Maiden Lane I, which was set up to pave the way for JPMorgan Chase’s purchase of Bear. At the time the deal was struck in March 2008, JPMorgan feared that if it bought all of Bear’s assets it would be left with too much exposure to the real estate market. Bear, for example, originally had $5.4bn of Hilton debt, a huge concentration

The assets in Maiden Lane I – all of which came from Bear’s mortgage desk – were originally valued at $30bn when a final agreement on the portfolio was reached in June 2008 by the New York Fed, its advisers at asset managers BlackRock and JPMorgan. At the end of 2009 the Fed said the assets were worth $27.1bn (€20bn, £17.4bn).

http://www.ft.com/cms/s/0/b3898a44-1a62-11df-a2e3-00144feab49a.html?ftcamp=rss

The British feel they are entitled to a 5-bedroom house!

http://stossel.blogs.foxbusiness.com/2010/02/15/entitled-to-a-five-bedroom-house/comment-page-4/?action=late-new

Downtown Boynton condo hopes discounts bring Promenade of buyers

By ALEXANDRA CLOUGH
Updated: 11:42 a.m. Monday, Feb. 15, 2010

The Promenade condominium in downtown Boynton Beach is pushing buyers toward a March 3 closing date, meaning the long-awaited project could finally start seeing residents.

To persuade buyers holding pre-construction contracts to close, Promenade’s developers have drastically cut prices, in some cases shaving $200,000 off the price of existing contracts.

New buyers are being offered deals, too. One bedroom units with a city view start at $150,000 . One bedroom ocean views start as low as $240,000. All told, the discounts amount to about 40 percent from the original price, according to a statement by the project’s development company, Boynton Waterways Investment Associates.

But Boynton Waterways won’t disclose how many of its 318 units are under contract. Nor is there any way of knowing how many contract holders will actually come to the closing table.

The Promenade, located at the corner of Boynton Beach Boulevard and Federal Highway, could be an indicator of the strength of the beleaguered real estate market. The luxurious new condo, with its Intracoastal Waterway and ocean views, features a 5,000-square foot clubhouse, an Olympic-length lap pool and even a putting green.

First launched in 2005, the project once had buyers camping out overnight for a chance to snap up a unit. But then the developer had to cancel contracts and return deposits because rising construction costs meant the project could not be built under the original budget. Condos then were reoffered at higher prices, to cover the higher building costs. Construction finally began in 2007 and the project was completed last August.

Just overseeing the Zombie bubble in DC. At this pace, I will be on Social Security before things get rational.

Another funny anecdote…

Saw an example of what appeared to be short sale fraud (where the agent sells the home for below market price without putting it on the MLS…this was a particularly large transaction), and shared it with the Federal Reserve, my congressman, and the FBI by linking the information (video “proof”) with a more detailed note about the transaction, and mentioned the fact that the taxpayers need to be better protected.

Didn’t get any response from the FBI, or from my congressman, but got this message from the Federal Reserve [bold is mine]:

Thank you for your recent correspondence in which you expressed your concerns about real estate fraud. Your comments will be forwarded to the appropriate Board staff.

Sincerely,
———————————-

I find it interesting that they claim they have a “limited influence” on the real estate market, and that their policies are not aimed at any particular market. Nothing could be further from the truth.

Who in the world is watching out for the taxpayers’ interests? The Tea Party movement (as originally intended, and which grew from Rick Santelli’s rant against the bailouts) had a good start, but then was co-opted by the right-wing Republicans and turned into an anti-healthcare reform movement. IMHO, the PTB are infiltrating the Tea Party movement so they can run one of their puppets as an “Independent” candidate. Just watch…the next candidate who cozies up to the Tea Party types will really be someone “from the inside” who’s pretending to be an outsider.

/tinfoil hat

Florida family gives up on small-town North Dakota
By JAMES MacPHERSON
Associated Press

HAZELTON, N.D. – A tiny North Dakota town’s promise of cash and free land lured only one family from out of state. Now, Michael and Jeanette Tristani and their 12-year-old twins are trying to move from the town without a traffic light back to Miami.

Tired of crime, traffic, hurricanes and the high cost of living in Florida, the Tristanis moved four years ago to Hazelton, a dwindling town of about 240 that has attempted to attract young families to stay on the map. Michael Tristani, 42, said at the time the 1,800-mile move was “an answer to our prayers.” “We don’t have to look over our shoulder to see who’s going to rob us, or jump out of the bushes to attack us,” Tristani said. “Taxes are low, the cost of living is low and the kids enjoy school.”

But the family also found a cliquey community that treated them like outsiders. “For my wife, it’s been a culture shock,” he said. Rural communities across the Great Plains, fighting a decades-long population decline, are trying a variety of ways to attract outsiders. But the Tristanis show how the efforts can fail even at a time when many people are desperate. “It’s been quite an experience, 50-50 at best,” Tristani said. “It hasn’t been easy. No one really wants new people here.”

The Hazelton Development Corp., formed by a determined group of citizens, began running ads in 2005 offering families up to two free lots and up to $20,000 toward home purchases. Businesses were offered free lots and up to $50,000 for setting up shop in the town. Besides cash and free land, Hazelton had little else to offer except elbow room. Surrounded by flat farm land and livestock, the century-old town boasts three churches, a bank, a grain elevator and a bar.
Like many small towns across rural America, the once thriving farming community began shrinking as residents moved on or passed away. Tom Weiser, one of the city leaders behind the project to lure new residents, said Hazelton had hundreds of inquiries from around the world when the community’s proposal made headlines across the country. Several families from other states visited the town but only the Tristanis made the commitment to move. “Not everybody fits in in a small town,” said Weiser, who works as a baker at Wal-Mart in Bismarck, about 45 miles away. Hay bales, a gas station and a graveyard greet visitors as they roll into Hazelton off the state highway.

Michael Tristani came from his native Florida wearing gold necklaces and a Rolex and driving a Lexus. He proved as foreign as a flamingo in a place where pickups, farm caps and flannel shirts are de rigueur. “People thought I was a drug dealer,” he said. Tristani said he was prepared for Hazelton’s bitter winters — when wind chills can reach 50-degrees below zero and snow drifts are measured in feet — but not the small-town drama. “People prejudge you without getting to know you,” Jeanette Tristani said.

The couple bought a house built by students at an American Indian college in Bismarck. The home was moved to town and put on two lots donated by the city. The Tristanis bought a third lot and were later given $15,000. Tristani, a former grocery worker, and his wife, a former real estate agent, opened a bistro and coffee shop. But within weeks of moving to the city, the couple petitioned for a restraining order against the owners of another coffee shop. The Tristanis allege one of the owners drove by their house yelling obscenities and threatened to damage the family’s new home.

“He appears to be out of control,” The Tristanis wrote in court papers. “At times, it’s difficult to understand the rest of the words he’s using on my family due to his uproar.” Both businesses are now shuttered. After his bistro failed, Michael Tristani said he began buying old houses in Bismarck, fixing them up and reselling them to earn money. Jeanette, 44, lost her job last year at a call center in nearby Linton when the business failed. The Tristanis say the family enjoys spending time together and has little to do with the locals. They relish trips to a Wal-Mart in Bismarck.

The couple’s home in Hazelton has been on the market since August, though the for-sale sign has been covered with snow for weeks. School Superintendent Brandt Dick said losing the Tristani twins, a boy and a girl in the seventh grade, would be a blow to the shrinking enrollment. Dick said there are 72 students enrolled at the local high school, and that the number is expected to fall to 31 in four years. “We are declining in numbers and will continue to decline unless something changes,” he said.

Bev Voller, a member of the nonprofit development group, said the incentives were funded largely through private money, much of it from “an anonymous donor.” But, she says, “the cash thing is over now.” Kim Preston, a spokeswoman for the rural advocacy group Center for Rural Affairs, based in Lyons, Neb., said the offer of free land to lure new residents to wilting towns is a phenomenon that started in the past decade. But the small communities that have had success are near larger communities, she said. “For it to work, it needs to be no more than a 30-minute commute,” she said. It’s a 45-minute drive from Hazelton to Bismarck — in good weather. And the weather is often bad.

Jeanette said the main reason she wants to move back to the Miami area is to care for her elderly parents. Michael said he couldn’t convince his wife’s parents to join them in Hazelton. “The cold weather has them freaked,” he said.

Looks like Zillow has droped the “gain/loss last 30 days” line from their snapshot page. Pressure?

From Canada’s Globe & Mail: We do not have a housing bubble, just a debt bubble:
http://www.theglobeandmail.com/report-on-business/bubble-trouble-no-its-our-thirst-for-debt/article1469360/

Snips from the article:
Do we have a real estate bubble in Canada? The answer’s not certain, but by most measures, it’s no. Yet the subject dominates headlines and discourse about the economy right now.

There’s not much concrete research behind the viewpoint that there is a bubble. The argument comes down to the fact that house prices are at record highs, and have risen pretty fast by some measures, most notably the average resale home price calculated by the Canadian Real Estate Association.

Key quote:
Canada is now where the United States was in about 2004 on this key measure, and while the U.S. consumer is now paying down debt, Canadians continue to pile it on, mostly via mortgages. Even with interest rates remaining low, debt payments are eating up more Canadians’ income as a result of the sheer volume of money they owe.

Either way Canada’s housing will pop. I found this blog back in March 2005, and I think we are at that time/level here. I still think it will be 2011 before anything huge hits here (like 2006 it really started in the US), but 2012 or even this year wouldn’t be really surprising!

HBBers,
Some correspondence between myself and Bloomberg concerning a recent article on a trader leaving his bonus to make high-end skis. Yeah, right.
Anyway, here it is.

Roidy

Here is the URL:http://www.bloomberg.com/apps/news?pid=newsarchive&sid=alrOTKfBPvIs

I just don’t believe this. He was fired or asked to leave. Why I’m not sure. The article doesn’t say. Note he didn’t leave when times were good. Forced out?

From: Roidy
to: jheaven1@bloomberg.net
date: Sun, Jan 31, 2010 at 7:53 AM
subject: UBS Currency Man Drops Bonus to Run Luxury Ski-Maker (Update2) Math Mistake or Grammatical Error?

Email to the reporter:

You reported:
“He also gave up his $7,000-a- month, 250-square meter house with gardener, located 15 minutes from UBS’s Stamford, Connecticut trading floor, which is the size of two football fields.”

Is the house the size of two football fields, or is the trading floor the size of two football fields?
A 250 square meter house is about 2690 square feet. Two football fields are about 115,200 square feet. The cost of this is $84,000 per year which is a lot of rent for normal folks in a 2700 square foot rental house, gardener or no. For a criminal trader who has bilked the US taxpayer and ran away with the money, it isn’t so much. Now, a 115,200 square foot house is a completely different matter.

Please clarify.
Roidy

jheaven’s response:

The trading floor.

(The house was 250 square meters.)

JH

Stagflation alert.

According to the WSJ, the price of lumber is up 32 percent, not because we have a construction boom, but because capacity was so shrunk in the recession, and no one is in the mood to increase it. They probably couldn’t get the financing if they were in the mood.

Folks say there can be no price inflation without wage inflation. I disagree. We developed substantial capacity to produce McMansions, SUVs, fast food and toxic financial instruments, and have lost the capacity to produce anything else.

Unless demand shows up in the same place as past supply, we could see 10 percent unemployment and 10 percent inflation, particularly for traded commodities we can no longer afford to import or other countries can use their financial advantage to buy up from here.

The seniors and public employees will be automatic inflation adjustments, and the rich would see their tax brackets adjusted, while everyone else would be crushed.

“[Greece's financial problems] should provide a warning to Americans about how quickly things can unravel for a country when it refuses to confront the realities of its mounting debt. Though significantly smaller than the U.S., some of the same problems that Greece faces are issues here: over-dependence on a consumer-based economy, a money-sucking old age pension system, reliance on other nations to finance its deficits, and a swelling debt toll that has surpassed its annual gross domestic product.”

Phillip Klein believes that if the U.S. puts off dealing with shortfalls we’ll have to confront the problem with ad hoc tax hikes and benefit cuts that are likely to cripple our economy and cause social upheaval.

I found a 700 sq ft condo on central Austin that is for sale in a good neighborhood in Austin. I lived in the same complex when I went to college. Mostly graduate students and some retired people loce there. It was built in the 80s. The price is about 125k, But if I put 20% down, the monthly payments are just 580 dollars. Taxed are about 200 a month and HOAs about 100. I used to pay 900 to rent the unit. I could break even if I were to buy this property, and lease it to someone.
What do u guys think?
It’s an older unit and the bathroom an kitchen are not updyed. However, putting any money isn’t a great idea because I doubt the value will go up much with time.
Is this a crazy idea?

During the Great Depression, Franklin Roosevelt made these demands:

“This nation asks for action, and action now. Our greatest primary task is to put people to work… I shall ask the Congress for the one remaining instrument to meet the crisis — broad executive power to wage a war against the emergency…”

That was in 1933. Roosevelt got the big government programs he wanted — but activist government chilled the private sector. Seven years later unemployment was still at nearly 15 percent.

On February 13th, 1933, journalist Garet Garrett wrote:

“This is what is new in this depression, and wherein it departs from history. In previous depressions, a bank that was book solvent and unable to pay its depositors had no alternative. It was obliged to go into bankruptcy and liquidate. A railroad that could not pay its creditors simply went into receivership and was liquidated. And so on. Such a thing as Government going into debt itself in order to assume and underwrite the debts of private enterprise was hitherto unimaginable.”

“Today the average American can’t imagine the government NOT assuming responsibility for bankrupt institutions. Even citizens who have done a poor job of managing their own financial affairs are begging for rescue from the federal government. (Read - taxpayer.)

Hardy Har Har: “Oh me, oh my, oh dear”

http://www.palmbeachpost.com/news/state/2-700-florida-homeowners-to-get-6-000-242364.html

Unreal, where is my check for being screwed by the housing bubble?

US APNewsAlert

(AP) – 38 minutes ago

WASHINGTON — Foreign demand for U.S. Treasury securities falls by record amount as China reduces holdings.

was cleaning out freezer last night after i came back from the grocery store.

i buy the individually wrapped purdue chicken breasts. i had one from like six months ago and i had bought a new one.

the one from six months ago came with 6 chicken breasts.

the new one came with 5…and no noticeable price change.

Foreign demand for Teasury securities falls
Foreign demand for US Treasury securities falls by record amount as China reduces holdings.

WASHINGTON (AP) — The government says that foreign demand for U.S. Treasury securities fell by the largest amount on record in December with China reducing its holdings by $34.2 billion.

The reductions in holdings, if they continue, could force the government to make higher interest payments at a time that it is running record federal deficits.

The Treasury Department reported that foreign holdings of U.S. Treasury securities fell by $53 billion in December, surpassing the previous record of a $44.5 billion drop in April 2009.

The big drop in China’s holdings meant that it lost the top spot in terms of foreign ownership of U.S. Treasuries, dropping to second place behind Japan.

Here is what we get to look forward to if the TBTF problem remains unfixed:

David Weidner’s Writing on the Wall

Feb. 16, 2010, 2:55 a.m. EST
What Citigroup knows that you don’t

Commentary: Citi’s latest ‘financial innovation’ needs more scrutiny

Wall Street’s latest contagion goes global

Robin Hood and Goldman Sachs, the movie

By David Weidner, MarketWatch

NEW YORK (MarketWatch) — Questions of the day: Would you buy a round-trip ticket on an airplane prone to crashes? How about a car with a history of serious brake problems? Interested in a TV that works great, except for the picture?

If you answered yes to any of those, do I have an investment opportunity for you.
…

anybody seeing article like this where they live?
CT regional school district (Region 7- small poor towns) are looking at a 30% increase in their health insurance premiums and 4.75% increase in teacher salaries.
schools are funded through property taxes in this state (except for big cities that get lots of state aid).

February and march are when budgets get drafted around here, approving referenda are in may.
Rubber meet Road.

Didn’t somebody suggest the other day that emergency rooms/hospitals should not treat non-citizens?

Who walks around with proof of citizenship in their pocket? Anyone can get adriver’s license. Will your artery bleed out before somebody shows up with a birth certificate? Does it have to be an official copy?

Feb. 16 (Bloomberg) — Walt Serafin, a manager for a biotechnology company in Kansas City, Kansas, is getting an iPhone as a reward from American Express Co.

That’s not what U.S. card issuers and their lobbyists predicted could happen when they opposed legislation limiting abrupt contract changes such as interest rate increases. The American Bankers Association, a Washington-based trade group, said the law would penalize cardholders with high credit scores, making them subsidize losses from lower-scoring consumers.

The bill was passed by Congress anyway and signed by President Barack Obama in May. Most of its provisions go into effect Feb. 22. Instead of being punished, Serafin and others with credit scores above 750 continue to receive rewards and promotional offers as banks battle to retain premium customers, said Ben Woolsey, director of marketing and consumer research at CreditCards.com, an online resource for cardholders based in Austin, Texas.

“These are the customers the banks are vying for,” said Woolsey. “They’ve come through unscathed.”

Credit-card write-offs, or loans deemed uncollectible, jumped 59 percent to $89 billion last year from $56 billion a year earlier, according to R.K. Hammer Investment Bankers, a Thousand Oaks, California-based adviser to card issuers. Banks may lose $5.5 billion in interest income because of the legislation this year and $11 billion in 2011, based on estimates by R.K. Hammer.

Imagine that banks yelling fire in order to get their way.

Nurseries struggle with lagging economy.
Nurseries, landscaping businesses suffer in stalled economy, experts expect a slow recovery.

PORTLAND, Ore. (AP) — Like his father, grandfather and great-grandfather, David Niklas feels the quickening of spring as the season ramps up at his wholesale nursery in a farming community south of Portland. Niklas and his workers busily package plants for shipment.

These days, his flowers and vegetable seedlings have fewer places to go, as the housing bubble burst and the state and national economies flatlined.

Just three years after reaching a record high of almost $1 billion in sales, Oregon’s nursery industry has plummeted into an historic slump. Nurseries are laying off employees, cutting costs and foregoing new buildings and equipment.

A few, like Niklas’ Clackamas Greenhouses, have gone bankrupt.

“The family has poured money into it as we tried to restructure it and make new markets,” said Niklas, who had to file bankruptcy after losing almost half his sales when his primary retailer was bought out. “Commercial lenders aren’t talking to me because I’m coming out of bankruptcy.

Feb. 16 (Bloomberg) — Walt Serafin, a manager for a biotechnology company in Kansas City, Kansas, is getting an iPhone as a reward from American Express Co.

That’s not what U.S. card issuers and their lobbyists predicted could happen when they opposed legislation limiting abrupt contract changes such as interest rate increases. The American Bankers Association, a Washington-based trade group, said the law would penalize cardholders with high credit scores, making them subsidize losses from lower-scoring consumers.

The bill was passed by Congress anyway and signed by President Barack Obama in May. Most of its provisions go into effect Feb. 22. Instead of being punished, Serafin and others with credit scores above 750 continue to receive rewards and promotional offers as banks battle to retain premium customers, said Ben Woolsey, director of marketing and consumer research at CreditCards.com, an online resource for cardholders based in Austin, Texas.

“These are the customers the banks are vying for,” said Woolsey. “They’ve come through unscathed.”

Credit-card write-offs, or loans deemed uncollectible, jumped 59 percent to $89 billion last year from $56 billion a year earlier, according to R.K. Hammer Investment Bankers, a Thousand Oaks, California-based adviser to card issuers. Banks may lose $5.5 billion in interest income because of the legislation this year and $11 billion in 2011, based on estimates by R.K. Hammer.

Michael Tristani came from his native Florida wearing gold necklaces and a Rolex and driving a Lexus. He proved as foreign as a flamingo in a place where pickups, farm caps and flannel shirts are de rigueur.

“People thought I was a drug dealer,” he said.

That’s funny

Audit finds US census preparations wasted millions.
Census preparations wasted millions as temps collected checks for excessive travel, training.

WASHINGTON (AP) — The Census Bureau wasted millions of dollars in preparation for its 2010 population count, including thousands of temporary employees who picked up $300 checks without performing work and others who overbilled for travel costs.

Federal investigators caution the excessive charges could multiply once the $15 billion headcount begins in earnest next month unless the agency imposes tighter spending controls, according to excerpts of a forthcoming audit obtained by The Associated Press.

On a positive note, investigators backed the Census Bureau’s decision to spend $133 million on its advertising campaign, saying it was appropriate to boost public awareness. The spending included a $2.5 million Super Bowl spot that some Republicans had criticized as wasteful.

The findings by Todd Zinser, the Commerce Department’s inspector general, highlight the difficult balancing act for the Census Bureau as it takes on the Herculean task of manually counting the nation’s 300 million residents amid a backdrop of record levels of government debt.

From the Bradenton Herald (Florida)
PALMETTO — A high-rise condominium in Palmetto that fell into foreclosure now has a new owner, who has slashed prices by hundreds of thousands of dollars. The new owners of Bel Mare at Riviera Dunes, near the southeast corner of U.S. 41 at Haben Boulevard, is offering condo units originally priced between $435,000 to $1.4 million for as little as $140,000.

Our states may be facing more budget pressures as government employee pension plans become a bigger liability. A new 50 state study found that as of 2006, states had accumulated $360 billion in unfunded pension obligations. That was 2006. Since then we have had a collapse of our financial market and a record number of people deciding to get out and retire early. Other estimates with recent data put our states’ current unfunded pension liabilities at $1 trillion.

Case in point: Illinois. It seems as though Illinois is running a Bernie Madoff ponzi scheme in order to keep government pension plans afloat in his state. In January of this year, the state of Illinois sold $3.5 billion in “pension obligation notes.” That’s a fancy way of saying that the state borrowed money in order to finance its state’s contribution to five retirement systems - the teachers unions ($2.08 billion), Illinois state universities ($702.5 million), the Illinois State Board of Investments ($813 million), and the Illinois General Assembly Retirement System.

So what happens when these bonds (plus interest) have to be repaid in five years? They will have to borrow more money, and the cycle continues until it collapses.

~ Clipped from Neal Boortz

Tough times at Office Depot
February 16, 2010

(Fortune Magazine) — In the midst of a recession that has hit business and consumer spending especially hard, it may not be so surprising that retailer Office Depot is having a rough go of things: The No. 2 office-supplies chain lost money in each of the past five quarters and is expected to lose $96 million this year.

But the company, based in Boca Raton, Fla., is facing troubles that go deeper than reduced demand for paper and pens: namely, an investigation by the SEC that’s in the final stages of settlement and a fresh round of probes into whether the company overcharged government customers.

The MarketWatch people are calling this guy’s Australian housing bubble warning a “one-man tea party.” Guess the MSM hasn’t run out of straw men yet?

Feb. 16, 2010, 1:11 a.m. EST

Australian economist warns of bubble in nation’s housing

By Chris Oliver, MarketWatch

HONG KONG (MarketWatch) — Australia’s seemingly bulletproof economy could soon face fallout from high debt levels and purportedly misguided policies designed to pump up asset prices, according to an outspoken skeptic of the nation’s housing boom.

Economist Steve Keen of the University of Western Sydney, who claims to have accurately foreseen the global financial crisis, said he’s been dismayed by what he sees as a growing nationwide housing bubble stoked by government efforts to forestall economic pain.

Keen points to a first-time homebuyer subsidy program, various other stimulus programs, and a 4-percentage-point reduction in interest rates — policies introduced in the wake of the 2008 crash and which he termed “The Boost” — as having helped fueled a new housing boom and a 6% rise in mortgage debt last year.

“The Boost has … given Australia a dubious distinction when compared to the rest of the OECD. Yes, we are the only country that avoided a technical recession; but we are also the only country where debt levels are rising once more compared to GDP, rather than falling,” Keen wrote in comments posted on his Web site, keenwalk dot com dot au.
…

The MSM has a persistently myopic focus on the DJIA, ignoring countervailing drops in the exchange rate value of the dollar. Even the Euro is up by over one percent today relative to the dollar.

CURRENCY VALUE CHANGE % CHANGE TIME
EUR-USD 1.3762 0.0164 1.2029% 12:24
GBP-USD 1.5764 0.0104 0.6621% 12:24
USD-CHF 1.0671 -0.0106 -0.9799% 12:24
USD-SEK 7.1808 -0.0625 -0.8627% 12:24
USD-DKK 5.4084 -0.0652 -1.1918% 12:24
USD-NOK 5.8514 -0.0685 -1.1574% 12:23
USD-CZK 18.8900 -0.3142 -1.6362% 12:24
USD-SKK 21.8900 -0.2674 -1.2069% 12:23
USD-PLN 2.8913 -0.0733 -2.4729% 12:24
USD-HUF 197.5520 -2.7925 -1.3938% 12:23
USD-RUB 30.0240 -0.2009 -0.6648% 12:23
USD-TRY 1.5066 -0.0100 -0.6626% 12:23
USD-ILS 3.7375 -0.0160 -0.4263% 12:23

Family budgets squeezed as VAT rise sends inflation soaring to 14-month high of 3.5% ~ Daily Mail Reporter UK ~16th February 2010

Families and savers are facing a massive squeeze on their finances after inflation soared beyond its official target last month.

The official Consumer Price Index(CPI) inflation measure has seen a record two month increase from 1.9 per cent in November to 3.5 per cent in January - the highest figure in 14 months.

At the same time the Retail Prices Index (RPI) inflation, which includes the cost of mortgages and housing, has also rocketed from 2.1per cent to 3.7per cent.

The figures mean that families already struggling to pay the bills as wages fall are being hit with huge increases on food essentials compared to January last year.

Climategate: A Defiance of Arrogant Political Power

“Various cap-and-trade systems have been shown to be an extra tax, which may end up being distributed by the sticky fingers of the UN.”

“The allotted 10-minute speaking time for President Hugo Chavez became a one-hour rant against capitalism. He received a standing ovation. This is what Copenhagen was about.”

http://pajamasmedia.com/blog/climategate-a-defiance-of-arrogant-political-power/

IMO higher taxes distributed by a bunch of wasteful, limp wristed bureaucrats is exactly what we don’t want. Follow the money, you’ll find the trail leads to a bunch of arrogant elites (Al Bore, Michael Moore, etal) who have been able to convince an ever decreasing % of the population that this spoof if real.

Peace to all,
Lip

Homebuilder Confidence Increase in February ~ 16 Feb 2010

The National Association of Home Builders says its housing market index rose two points in February, a sign that low interest rates and federal tax credits for buyers boosted confidence in consumer demand for new homes.

The builders group says the index reached 17 in February, after falling for two consecutive months.

The increase shows builders are feeling better about their prospects as evidence emerges that the job market may be improving. But challenges still exist, such as a high number of foreclosures and a lack of financing for new projects.

The index reflects a survey of 528 residential developers across the U.S. Index readings below 50 indicate negative sentiment about the market. The last time it was above 50 was in April 2006.

UPDATE 1-East West Resort Development files for Ch 11 bankruptcy
Feb 16, 2010
* Says unable to secure more capital from lenders
* Seeks court approval for $10 mln DIP loan

Feb 16 (Reuters) - East West Resort Development V LP LLLP, a U.S. luxury residential community developer, filed for bankruptcy protection early on Tuesday, saying it was unable to secure additional capital from its current lenders to fund development and other expenses.

In court filings, the company said it was formed to develop residential and commercial real estate projects on and around the North-at-Tahoe Resort, a residential development and year-round resort community located in North Lake Tahoe, California.

East West Resort Development, whose affiliate owns the five-star Ritz-Carlton Highlands at Lake Tahoe, said its properties had lost significant value over the past year and in some cases, assets were being valued below their loan balances.

The company said that as on Dec. 31, 2009, it had $256 million in assets. Excluding $189.4 million in contingent guarantee liabilities and bond obligations, it had $61 million in debt.

Explosion at JP Morgan office in Athens, Greece. No one hurt.

Will an abstract theorist be able to help the Fed improve on their ability to notice bubbles before they inflate to ginormous size then burst?

Bloomberg
Minneapolis Fed Gets ‘Best Abstract Theorist’ in Kocherlakota
February 16, 2010, 12:43 PM EST
More From Businessweek

By Vivien Lou Chen

Feb. 16 (Bloomberg) — Minnesotans like “fresh faces,” says Tom Welle, chairman of the Minnesota Bankers Association.

That’s what they are getting in Narayana Kocherlakota, the 46-year-old economics professor who delivers his first speech today as president of the Federal Reserve Bank of Minneapolis.

When asked whether he’d heard of the new Fed official, Welle said: “To be honest with you, no. I haven’t figured out how to pronounce his name yet.” (Nair-ah-yah-nah Koach-er-lah- ko-tah, according to the bank’s Web site.)
…

Did anyone at the Fed see the housing bubble as “likely to occur”? Just sayin’…

Tuesday, February 16, 2010 - 13:09
Minn Fed Pres: Warns of Infl Threat in High Excess Reserves

By Steven K. Beckner

WASHINGTON (MNI) - Minneapolis Federal Reserve Bank President Narayana Kocherlakota warned Tuesday that even though inflation is “relatively tame” now, the large volume of excess bank reserves creates “the potential for high inflation” if the Fed does not make “good policy choices.”

At the same time, Kocherlakota was pessimistic about the economic outlook, particularly as regards unemployment, saying he would be surprised if it drops below 9% by the end of this year or below 8% by the end of next year.

In his first major public speech since becoming president of the Minneapolis Fed on Oct. 9, 2009, the successor to Gary Stern said he sees real GDP growth of little more than 3% over the next two years and warned that the “nascent” recovery could be “curtailed” if problems in commercial real estate lead to a further contraction of bank lending.

Kocherlakota, in remarks prepared for delivery to the Minnesota Bankers Association in St. Paul, said “uncertainty” about government health care and other policies are also hindering recovery and job creation.

He stressed the need for the Fed to retain its role in banking supervision at a time when proposed legislation on Capitol Hill is threatening to end or limit that role.

“The positive news in this economy is that inflation has been relatively tame,” said the former University of Minnesota professor of economics.

But Kocherlakota added, “Here’s the caveat: Deposit institutions are holding over a trillion dollars of excess reserves (that is, over 15 times what they are required to hold given their deposits). These excess reserves create the potential for high inflation.”

“Suppose that households believe that prices will rise,” he continued. “They would then demand more deposits to use for transactions. Banks can readily accommodate this extra demand, because they are holding so many excess reserves.

“These extra deposits become extra money chasing the same amount of goods and so generate upward pressure on prices,” said. “The households’ inflationary expectations would, in fact, become self-fulfilling.”

“Why might households expect an increase in inflation?” Kocherlakota asked.

“The amount of federal government debt held by the private sector has gone up by over 30% since the beginning of 2008,” he said in answering his own question. “This debt can only be paid by tax collections or by the Federal Reserve’s debt monetization (that is, by printing dollars to pay off the obligations incurred by Congress).”

“If households begin to expect that the latter will be true — even if it is not — their inflationary expectations will rise as well,” he added.

Kocherlakota stressed that he views this scenario as “unlikely.”

“For it to transpire, we would need a combination of bad monetary policy and poor fiscal management,” he said. “I do not foresee this combination as likely to occur.”
…

Come and listen to my story… Ahh forget it

2,700 Florida homeowners to get $6,000 checks as part of settlement with Countrywide

The Associated Press
TALLAHASSEE, Fla. — More than 2,700 Florida homeowners can look for a nice-sized check in their mailboxes this week.

The checks, which will be for just over $6,000 each, are part of a $16.9 million settlement with Countrywide Financial Corporation, Attorney General Bill McCollum said Monday.

In a 2008 lawsuit, McCollum claimed Countrywide put borrowers into mortgages they couldn’t afford or loans with rates and penalties that were misleading.

The attorney general has also called on Bank of America, which acquired Countrywide after the lawsuit was filed, to be more responsive to consumers who are trying to modify their loans to save their homes from foreclosure.

More than 2,700 Florida homeowners can look for a nice-sized check in their mailboxes this week.

The checks, which will be for just over $6,000 each, are part of a $16.9 million settlement with Countrywide Financial Corporation, Attorney General Bill McCollum said Monday.

In a 2008 lawsuit, McCollum claimed Countrywide put borrowers into mortgages they couldn’t afford or loans with rates and penalties that were misleading.

The attorney general has also called on Bank of America, which acquired Countrywide after the lawsuit was filed, to be more responsive to consumers who are trying to modify their loans to save their homes from foreclosure.

Copyright 2010, The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Feb. 16 (Bloomberg) — U.S. lenders, criticized for being too reckless in the past and too stingy in the present, have been sitting on as much as $1.29 trillion in cash, equal to a record 98 cents for every dollar of existing business loans.

The ratio of cash to corporate loans has more than quadrupled from 21 cents in June 2008, according to Jan. 13 Federal Reserve data compiled by Bloomberg. Corporate loans shrank 14 percent to $1.32 trillion during that period as bankers tightened standards to curb record defaults and meet demands by regulators for more liquidity.

Banks are leaving more cash idle amid slack demand from borrowers throughout the economy and concern that regulators will require more liquidity to forestall another financial crisis. That’s crimping profit, and the result may be a drop in returns on equity by about 33 percent from pre-crisis levels, according to analysts at KBW Inc.

It appears the banks still want to hold onto cash.

Depite todays little pop in equities Gamestop (GME) continues to underperform (down over 1% ) today….on its way to zero.

Calling our Social Security system a “money-sucking old age pension system” sounds harsh, but it’s a problem to be faced. And an ad hoc tax hike has already been put upon Social Security recipients.

Consider - there was no cost of living increase for them this year. With price inflation officially running at 2.7 percent that means a cut in purchasing power of nearly 3 percent. There will be no COLA next year, either.. Moreover, there was an increase in Medicare premiums. Result…..oldsters are less well off. This may well be in the back of their minds on election day in November.

Well, I’m bummed. Shocked is more like it, maybe even suffering from PTSD.

I went to a family (or)deal the other day and my nephew showed. He lives in Oregon, so I don’t see him often.

I found out he’s a banker.

This is kind of like finding out you have a felon in the family.

He even plays golf.

Where did we go wrong?

Ford lays off 900 workers at Mustang plant
Associated Press ~ Feb. 16, 2010

DETROIT — Ford Motor Co. said Tuesday that it plans to cut 900 workers at the Michigan plant that makes the Mustang, after slow sales last year due to the tough economy and competition from the new Chevrolet Camaro.

Ford will reduce shifts from two to one in July at the AutoAlliance International plant in Flat Rock, Mich. The plant, which is jointly owned with Mazda Motor Corp., also makes the Mazda6 midsize sedan.

The plant employs nearly 2,300 people. Most of the layoffs will be hourly manufacturing workers, but some salaried staff also will be cut, Ford spokeswoman Marcey Evans said.

Barry heads off on his “Sink the Senate” tour…

Sens. seek Obama boost on campaign trail. ~ Washington Times ~

President Obama kicks off what might be called his “Save the Senate” tour this week, heading west to campaign for two embattled Democrats trailing badly against Republican challengers - including Senate Majority Leader Harry Reid of Nevada.

Even Democratic strategists say a visit by the president - whose poll numbers have plummeted since taking office - carries risks for his fellow Democrats.

“It’s definitely a gamble,” said Democratic strategist Liz Chadderdon. “A handshake that raises $1 million now could cost them the election later.”

I still have a problem with Social security being the end all. Planned properly, all that should be returned to the retired person is the amount they paid in and a modest interest percentage. Cost of living increases are not necessary. These increases were never intended to make sure the retired were taken care of. The retiree was to provide the additional cost of living, by planning and saving. All I want back, is what I paid in, plus some interest. When it reaches that point, in versus out, stop my payments. Social security was designed to force people to save for retirement. It was never to be an entitlement. I would suggest, to fix the problem, only pay out what I have stated. When the money runs out, if you have not planned, well, too bad, you starve. i remember awhlie back, a native american friend of mine was getting social security for being disabled becuse of a booze additction.He never paid a dime of taxes. Thats where the program went astray. If you eliminate all those who collect based upon some kind of disability who have not paid in, the system would not be broke. Keep it simple, you pay in, you take out. No cola’s. Simple fix.

Motorists are still getting a break at the pump, as gasoline pump prices continued their monthlong slide on Tuesday, dropping to a new low for 2010.

Natural gas prices fell, even as another winter storm dumped as much as a foot of snow on the Midwest and the forecast called for cold temperatures for much of the nation for the rest of the month.

Oil still up despite what Saudi Arabia has called a likely 2007 peak in demand.
.

Oil up more than $5 per barrel since mid day Friday. What’s the justification this time?

Mexico sees 15 percent drop in tourism income’s.
February 15, 2010

MEXICO CITY (AP) — Mexico’s revenue from foreign tourism dropped 15 percent in 2009 amid the global economic downturn and the swine flu epidemic.

The Tourism Department says Mexico received almost $11.3 billion from foreign tourism in 2009, compared to $13.3 billion in 2008.

In the wake of the swine flu outbreak, revenue plummeted 49 percent in May compared to the same month in 2008. The epidemic virtually paralyzed Mexico, forcing the closure of schools, restaurants and archaeological sites. Some countries restricted air travel to Mexico.

Drug violence has also discouraged foreigners from visiting parts of Mexico.

Dumped! Brand names fight to stay in stores.
February 16, 2010

NEW YORK (CNNMoney.com) — Don’t be shocked if you can’t find your favorite salad dressing or mouthwash on your next trip to Wal-Mart.

Large retailers — including Wal-Mart (WMT, Fortune 500), the world’s biggest — are wrestling with having too many types of brand-name products. At the same time, shoppers are buying less and looking for bargains.

So unless a particular brand is a top seller in its category, it’s getting knocked off the shelf — and sometimes getting replaced by a cheaper store brand.

For example, Wal-Mart recently removed Glad and Hefty-branded storage bags from shelves, replacing them with its own lower-priced Great Value brand, according to the parent companies of both products.

All Roads Lead to Goldman Sachs.
Tuesday, 16 February 2010 Source: GoldSeek.com
By: Rob Kirby

Once upon a time, Goldman Sachs shunned publicity. During the period from 1930 to 1969, Sydney Weinberg ran Goldman Sachs where he developed a staunch corporate cultural aversion to publicity. During the 1970s, a tandem of John Weinberg and John Whitehead assumed the reigns of leadership at Goldman Sachs. Whitehead left the company in 1984 to enter public life. John Weinberg carried on in the same vein as his father Sydney – shunning publicity – to the point where he hired a man to keep his name and his firm’s out of the press. He kept him off the full-time payroll (though he sat full-time at a desk in head office) so that if, improbably, a comment did slip out, it could be honestly dismissed as not coming from a Goldman Sachs employee.

John Weinberg served as sole senior partner and chairman until 1990. His mantra was to put the client’s interests first and he wouldn’t allow Goldman to be involved hostile takeovers.

The culture at Goldman Sachs dramatically changed in 1990 when operational control of the firm was ceded to Robert Rubin and Stephen Friedman. This tandem became the Co-Senior Partners in 1990 and re focused the firm on globalization and strengthening the Merger & Acquisition and Trading business lines.

I kind of like this:

http://tinyurl.com/ybp6shp

Maybe it’s the Scotts-Irish in me, but it applies to Wall Street, too.

It’s too late to apologize…

Chinese seen as potential Alaska gas customer.
Associated Press 2010-02-15

Alaska officials are looking to China and what some believe will be that country’s strong demand for natural gas to help the state advance its long-held pipeline dreams.

Gov. Sean Parnell has invited an official with China’s National Energy Administration and others to visit Alaska, following up on a trade mission Lt. Gov. Craig Campbell helped lead to China in December.

Campbell returned from that trip believing the rapidly developing communist nation, already a leading export market for such Alaska products as seafood, zinc and lead ore, could also become a major investor in or export market for Alaska natural gas or its byproducts.

The potential for Alaska is huge, said Harold Heinze, chief executive of the Alaska Natural Gas Development Authority, who was with Campbell on the trip. He sees several possibilities for the Chinese, from building a plant to convert ethane to pellets that would be used in manufacturing to signing on with a major natural gas pipeline project. Ethane is a component for plastics that he says is found in the Prudhoe Bay region.

Brace Yourself for a Decade of Higher Taxes, FT Columnist Says
Feb 16, 2010 by Heesun Wee in Investing, Recession, Banking, Politics.

European finance ministers Tuesday gave Greece a month to show it’s making budget cuts to stop its debt crisis from spreading to other nations. A potentially larger debt crisis, however, is brewing at home.

States and local governments including California face massive budget shortfalls. President Obama has told California not to expect a bailout. But our guest, Dan McCrum, Lex columnist at the Financial Times, says it’s only a matter of time. “This year we’re starting to see some big budget shortfalls. And ultimately they’re going to go cap in hand to Washington,” McCrum says.

Bailout hazards. Expect fireworks, when states ask Washington for financial rescues. If Washington says no to municipalities after saying yes to Wall Street and big banks, “that’s going to play very difficult politically,” McCrum says.

Higher taxes. In fact, local governments have been raising debt in the municipal bond market — roughly 10X Greece’s debt market — for decades. But with the recession battering tax receipts and the federal stimulus waning, higher local taxes now are inevitable.

“The taxpayer is going to have to dip his hand in his pocket quite deep for the next 10 years

Greetings from Indiana! (Carmel, Indiana, to be exact.) I’ll try to get a Bubble Report for you after I have a look around.

(Spent last week in Vienna, Austria. They didn’t seem to be too bubbly there….)

GM UAW open probe into Toyota recalls
February 16, 2010 7:33 PM ET

All Thomson Reuters news WASHINGTON/DETROIT (Reuters) - U.S. regulators on Tuesday opened an investigation into whether Toyota Motor Corp acted in a timely way to recall cars for acceleration problems, and the automaker moved to slow its U.S. production to avoid a costly ballooning of inventories.

The National Highway Traffic Safety Administration said it had requested production data, consumer complaints and other documents expected to shed light on how and when Toyota learned of problems affecting about 6 million vehicles it has recalled in the United States.

CitiMortgage’s pitch to delinquent borrowers: Give us the keys and you can stay free for six months

Palm Beach Post Staff Writer
Posted: 5:46 p.m. Tuesday, Feb. 16, 2010

With rising numbers of Floridians defaulting on their home loans, CitiMortgage is now allowing some owners to stay in their homes six months for free in exchange for handing over the keys.

The program, which began Friday and is being tested in five other states, cancels the borrower’s debt while awarding them at least $1,000 to cover relocation costs.

For the bank, the benefit is avoiding foreclosure expenses and lengthy court cases.

But the advantage for the borrower is less clear.

With backlogged courts and overwhelmed lenders, people facing a foreclosure in Florida are already staying in their homes for free for a year or longer. Plus, the black mark on a borrower’s credit will be basically the same under the new program as if the home was foreclosed on.

CitiMortgage’s report to credit agencies will show that a deed was received in lieu of foreclosure on a defaulted mortgage. But it will also note that the payment on the home loan was less than the amount owed — a ding that can significantly lower a credit score.

“The fact that the loan became seriously delinquent is highly predictive of future risk, statistically, regardless of how that delinquency is ultimately resolved,” said Craig Watts, a spokesman for FICO, the leading credit scoring company.

CitiMortgage, a unit of Citigroup Inc., created the new program, in part, because loan default rates are still high despite the $75 billion Making Home Affordable loan modification program. A Treasury Department progress report on the federal program is expected today. Through December, 66,465 permanent modifications had been awarded nationally. Of those 8,405 of the loans were in Florida.

“We’re committed to finding every solution possible to help families facing foreclosure,” said Sanjiv Das, CEO of CitiMortgage. “Not every homeowner has the financial stability to remain in their home.”

In Florida, 12 percent of CitiMortgage loans were 90 or more days delinquent in the third quarter of last year, compared to 6 percent nationwide.

As measured in the fall, about 42 percent of modified CitiMortgage loans in Florida were 60 or more days late on payments after a year of being modified. Nationally, 39 percent of modified loans were in the same situation.

Fort Lauderdale real estate attorney Shari Olefson said the idea of letting people stay in their homes for six months for free is a good one, but won’t solve the nation’s foreclosure crisis. “The reality in Florida is you can sit still in your house and not pay your mortgage and be there for much longer than six months,” she said.

Ramona Barbagallo, president elect of the Florida Association of Mortgage Brokers Palm Beach chapter, said the CitiMortgage program may foster an “alliance” with the borrower so the person is less likely to strip their house before the foreclosure.

The program requires the homeowner to maintain the property.

“It’s weird times,” Barbagallo said about the state of the housing market and mortgage dilemma in general. “I’ve never seen anything like this in my life.”

How much will these healthcare rate increases speed up the defaults on mortgages and credit cards?
Anyone see the 39% increase Anthem of California is asking for? Is 30% increasse (with less coverage and higher deductibles) the new normal?

Wow!!! I mean, how many people can keep paying that without noticing, or without making a radical shift in their spending priorities? Anybody that is self-employed is screwed.

As if employers needed another reason NOT to hire. what are the ramifications of all this? Those posters who would require US citizenship before getting ER services might see J6pack getting that treatment after he lets his insurance lapse.

The Greeks might be unemployed and taxed at 85%, but they won’t be consulting WebMD trying to figure out how to take out an appendix at home.

The North County Times
HOUSING: Defaults down, foreclosures up statewide

By ERIC WOLFF - ewolff@nctimes.com | Posted: February 16, 2010 6:47

Notices of mortgage default in California fell to 25,737 in January, a 36.6 percent drop compared to the previous year, though 17,610 homes were sold at auction, up 14 percent from last January, real estate data specialists ForeclosureRadar said Tuesday.

In North San Diego County, banks notified 655 borrowers that they were 90 or more days late in paying their mortgages, down 44 percent from last January, and 91 properties were sold at auction, a 76 percent drop.

Southwest Riverside County saw similar declines, with notices of default down 36 percent from the previous year to 756, while 136 homes were sold in foreclosure auctions, a 77 percent drop from the previous January.
…

Why does fiscal balance even matter when there is a printing press technology ever available?

The Fed
Feb. 16, 2010, 3:32 p.m. EST

U.S. risks crisis without fiscal action: Hoenig
Kansas City Fed chief calls for pre-emptive strike on tax, spending policy

By Robert Schroeder, MarketWatch

WASHINGTON (MarketWatch) — U.S. fiscal policy is on an “unsustainable course” and the government must adjust its tax and spending programs or risk a crisis, Kansas City Federal Reserve Bank President Thomas Hoenig said Tuesday.

“The U.S. government must make adjustments in its spending and tax programs,” Hoenig said in remarks prepared for delivery at a conference about the budget.

“It is that simple. If pre-emptive corrective action is not taken regarding the fiscal outlook, then the United States risks precipitating its own next crisis,” said Hoenig. Read Hoenig’s speech.
News Hub: Bayh’s Exit Leaves Senate in Play

Democratic Indiana senator Evan Bayh announced that he would not be seeking re-election, which shocked his party as it wrestles with health care reform. The News Hub panel discusses the implications for Washington.

Hoenig also said the current outlook for fiscal policy poses a threat to the Fed’s ability to achieve price stability and long-term growth.

It’s therefore a threat to the Fed’s independence, Hoenig said.

“In time, significant and permanent fiscal reforms must occur in the United States,” said Hoenig. “I much prefer this be done well before anyone feels an irresistible impulse to knock on this central bank’s door.”

A government faced with rising debt levels must come up with a credible long-term plan to reestablish fiscal balance, Hoenig said.

That plan must be seen as fair, said Hoenig, and those who put it in place must be wiling to disappoint special interests.

“It means, for example, controlling budget earmarks, trimming subsidies to numerous economic sectors, and resolving our banking problems and the perception that Wall Street is favored over Main Street, all of which would otherwise foster mistrust and cynicism among the public,” said Hoenig.
…

Feb. 16 (Bloomberg) — Higher yields on Treasury securities are “the most likely catalyst” for U.S. stocks to end more than a decade of price swings and move higher, according to Bank of America Merrill Lynch.

The CHART OF THE DAY compares the performance of the Standard & Poor’s composite stock-price index with the 10-year Treasury note’s yield since 1900, according to data compiled by Yale University Professor Robert Shiller.

Merrill’s research investment committee included a similar chart, using the Dow Jones Industrial Average as a benchmark for share prices, in a Feb. 9 report. Michael Hartnett, chief global equity strategist, and Joseph Zidle, global wealth management investment strategist, lead the panel.

The 10-year yield climbed last week to 3.70 percent, its first weekly advance this year, according to data compiled by Bloomberg. Last year, the yield fell below 3 percent.

Treasury yields reached “an inflection point,” where they either hit bottom or topped out, before every so-called secular bull market in U.S. stocks since 1900, Merrill wrote. The chart displays those points, as defined by the committee. Secular rallies usually last more than five years and may be punctuated by shorter bear markets.

“U.S. equity markets have been in a big, fat trading range for the past 13 years,” the report said. Rising government-bond yields may help break out of that range, the committee wrote, especially if investors anticipate faster economic growth, renewed inflation and a recovery in bank lending

You have to be kidding me?
Previously rising bond rates were due to the gov attempting to slow the economy. Rising bond rates now are due to less demand for treasuries at a time when the gov is trying to borrow more. This is supposed to be a good sign for stocks?

Former Fannie Mae CEO on CNBC is singing the hbb song:

(Paraphrased)

-We shouldn’t celebrate upward housing starts. We first need to absorb the current inventory, get employment numbers back up and then resume building.

-We should return to 20% downpayments.

-The modifications are only kicking the can down the road.

-Foreclosed homes are not being maintained accelerating the downward value.

Ah, now we’re into the public reaction to buckling down reform, the Achilles heel of gov types that know the truth.