The Housing Bubble

Biggest Defaulters on Mortgages Are the Rich ~ NY Times

LOS ALTOS, Calif. — No need for tears, but the well-off are losing their master suites and saying goodbye to their wine cellars.

The housing bust that began among the working class in remote subdivisions and quickly progressed to the suburban middle class is striking the upper class in privileged enclaves like this one in Silicon Valley.

Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.

More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.

Obama loses drilling moratorium appeal
Jul 8 08:48 PM US/Eastern

The Obama administration lost its court bid to maintain a six-month moratorium on offshore deepwater drilling which a federal judge ordered lifted last month.

The Fifth Circuit Court of Appeals denied the government’s emergency request to stay that judge’s order pending appeal.

The motion was denied because the government failed to show “a likelihood of irreparable injury if the stay is not granted,” the appeals panel judges wrote in a 2-1 ruling.

The government also “made no showing that there is any likelihood that drilling activities will be resumed pending appeal.”

For all of you protectionists:

finance dot yahoo dot com slash news slash companies-brace-for-end-of-apf-2437567795 dot html?x=0

This is why we do not need protectionist measures for cheap Chinese goods. Eventually the goods aren’t so cheap anymore. Amazing how capitalism works huh?

OK, put a 10% tax on gold chains, drumbeats and p___y; problem solved!

‘Tan tax’ discussions include allegations of reverse racism

Mention the new “tan tax” in a major news outlet and cries of discrimination and reverse racism often follow.

The complaint surfaced on reader comment boards to blogs and news Web sites back in December, when it became clear that the levy — a 10 percent surcharge on the use of ultraviolet tanning beds — was likely to be included in the new health-care overhaul bill. Since then, it’s been repeated by conservative commentators such as Rush Limbaugh and Doc Thompson, a fill-in host for Glenn Beck who intoned in March, “I now know the pain of racism.”

The case can seem deceptively simple: Since patrons of tanning salons are almost exclusively white, the tax will be almost entirely paid by white people and, therefore, violates their constitutional right to equal protection under the law.

“To say that this health rationale was a mere pretext for wanting to stick it to white people is completely implausible,” Kennedy said.

Rioting in Oakland can’t be good for property values or employment….a Footlocker destroyed and shoe boxes all over the street

Consumer Credit in U.S. Declined More Than Forecast

July 8 (Bloomberg) — Consumer borrowing in the U.S. dropped in May more than forecast, a sign Americans are less willing to take on debt without an improvement in the labor market.

Borrowing that’s increased twice since the end of 2008 shows consumer spending, which accounts for about 70 percent of the economy, will be restrained as Americans pay down debt. Banks also continue to restrict lending following the collapse of the housing market, Fed officials said after their policy meeting last month.

“The trend in consumer deleveraging is clear as credit has declined 11 of the last 13 months,” Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York, said in a note to clients. “Credit card debt continues to be paid down at a heady pace.”

And the maelstrom rages on:

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Great new price!!! Unique property and location!!! This raised ranch offers an in-law apartment, and spacious open floor plan! Master bedroom and private bath! Basement has a family room , laundry-mud room with plenty of storage!! Outside find a large 240 sq. Ft deck with a hot tub! The big bonus—a 720 sq. Ft. Garage —all set on a .67 Acre lot!!! Enjoy your privacy!!! Please note** the 2 wood stoves do not stay with the property. This home is eligible for a u.S.D.A. (sic) Loan which means there is no down payment required!!! Don’t miss out on the great opportunity!!! Owners are relocating.

40,000 Illinois State Workers To Get 14% Payraises
FOX Chicago News

Springfield, Ill. - More than 40,000 unionized state workers got a pay raise last Thursday, bringing to 7 percent the amount they’re gotten since last year. These same state employees are in line for another 7 percent by next July 1, all at a cost of a half-billion tax dollars a year.

It’s more than the virtually bankrupt state can afford, and some Republican lawmakers say the raises need to be rolled back.

“I’m outraged,” said State Senate Minority Leader Christine Radogno. “It’s very difficult to buy this rhetoric that, ‘We need to borrow, we need increased revenue,’ when these kind of poor management decisions are going on.”

From NYT/MSNBC: http://www. DOT msnbc.msn.com/id/38158763/

“NYT: Biggest defaulters on mortgages are the rich
Wealthy simply see loss of home as one bad investment and walk away

Peter DaSilva for The New York Times By DAVID STREITFELD

Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.

More than one in seven homeowners with loans in excess of a million dollars is seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent…

In the middle of a workday, one troubled homeowner here leaned over his laptop at the kitchen table, trying to maneuver his way out from under his debt and figure out the next big thing. His five-bedroom house, drained of hundreds of thousands of dollars of equity over the last 13 years, is scheduled for auction July 20. Nine months ago, after his latest business (he has had several) failed in what he called “the global meltdown,” the man, a technology entrepreneur, said he quit making his $9,000 monthly payments.

“I’m going to be downsizing,” he said. The man spoke on the condition of anonymity because, he said, he did not want his current problems to interfere with his coming reinvention. “I’m a businessman,” he explained. “I have to be upbeat.” ”

Upbeat? Oh pass the puke bucket. Best comment on the story:

Some folks seem to think that if they have a million dollars in debt, that means that they’re a millionaire.

Is it just me, or does anyone else find the NSA’s cybersecurity program name “Perfect Citzen” just the teensiest bit creepy?

http://www.informationweek.com/news/government/security/showArticle.jhtml?articleID=225702741&cid=RSSfeed_IWK_News

http://www.bloomberg.com/news/2010-07-08/public-universities-in-u-s-facing-dramatic-funding-cuts-moody-s-says.html

“Many U.S. public universities face dramatic declines in state funding on a scale that surpasses past experience,” the analysts wrote. States spent a combined $90 billion on public universities in fiscal 2009, which amounted to about 30 percent of the revenue at the institutions, down from 50 percent two decades ago, according to Moody’s.

Public colleges and universities also face a potential “funding cliff” beginning in fiscal 2012 when stimulus funds are no longer available, the analysts wrote. In 20 states, money from the American Recovery and Reinvestment Act made up more than 4 percent of budgeted support for public universities in fiscal 2010.

**************************
There’s the beginning of the air hissing out of that bubble. I’ve heard of many benefactors stepping up w/some pretty large gifts for the private schools although I have no data on how individual schools are faring. I’d say we’re going to see an accelerated bifurcation between private and public level schools where the privates will stay relatively healthy compared to a nasty shake out in the publics. In the end the talent and supplier shake-out will lead to lower costs for private schools which will probably be necessary as their numbers begin to get hit too.

In some circles, employer paid education is still intact for now w/even spouses sometimes eligible for free classes. (an investment to reduce turnover as it attempts to keep the spouse happy during highly transient, glob trotting career paths). I’m betting HRs have seen a step up in people taking advantage of those opportunities.

Everything you’ve ever wanted to know about the HAMP program:

http://www.makinghomeaffordable.gov/about.html

Canada created 93,250 jobs in June . That would translate into over 900,000 jobs in the U.S. based on population. Maybe it is different up here, but I’m not counting on it.

Biggest Defaulters on Mortgages Are the Rich

LOS ALTOS, Calif. — No need for tears, but the well-off are losing their master suites and saying goodbye to their wine cellars.

The housing bust that began among the working class in remote subdivisions and quickly progressed to the suburban middle class is striking the upper class in privileged enclaves like this one in Silicon Valley.

Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.

More than one in seven homeowners with loans in excess of a million dollars is seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.

Though it is hard to prove, the CoreLogic data suggest that many of the well-to-do are purposely dumping their financially draining properties, just as they would any sour investment.

“The rich are different: they are more ruthless,” said Sam Khater, CoreLogic’s senior economist.

In a recent column on Freddie Mac’s Web site, the company’s executive vice president, Don Bisenius, acknowledged that walking away “might well be a good decision for certain borrowers” but argues that those who do it are trashing their communities.

The CoreLogic data suggest that the rich do not seem to have concerns about the civic good uppermost in their mind, especially when it comes to investment and second homes. Nor do they appear to be particularly worried about being sued by their lender or frozen out of future loans by Fannie Mae, possible consequences of default.

U.S. Says No Country Manipulates Currency, Yuan `Undervalued’
Bloomberg

“What matters is how far and how fast the renminbi appreciates,” Treasury Secretary Timothy F. Geithner said, using another name for China’s currency. “We will closely and regularly monitor the appreciation of the renminbi and will continue to work towards expanded U.S. export opportunities in China that support employment in the United States, in close consultation with Congress.”

The report reflected Geithner’s effort to avoid a confrontation with China over currency issues. The Treasury chief has repeated that it will be “China’s choice” when to let the yuan rise, deflecting pressure from lawmakers including Senator Charles Schumer who call for more appreciation and threaten to legislate trade sanctions.

U.S. lawmakers weren’t convinced that Geithner made the right call. Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, said he planned to hold a hearing on the report, and Schumer said the Treasury missed its opportunity to hold China accountable.

“This report is as disappointing as it is unsurprising,” said Schumer, a New York Democrat. “It’s clear it will take an act of Congress to do the obvious and call China out for its currency manipulation.”

Other lawmakers reiterated calls for the Obama administration to bring the currency issue to the World Trade Organization. House Ways and Means Committee Chairman Sander Levin and Senator Charles Grassley, the Senate Finance Committee’s top Republican, both called for the U.S. to file a trade complaint.

The genious keeps enlightening us with his knowledge

—————

Greenspan Says Economy May Be Undergoing a `Pause’

Former Federal Reserve Chairman Alan Greenspan said the U.S. economy may be undergoing what he called a “pause,” and that he can’t rule out the possibility of a so- called double-dip recession.

“Stock market behavior over the last several days” has been “encouraging,” Greenspan said after S&P 500 index rose 0.9 percent to 1,070.25 at 4 p.m. in New York, its highest close since June 28. “Banks are scared, but, then again, so are businesses.’

He added that there are “still huge imbalances in the flow of funds,” and that China’s currency remains “undervalued.” After he spoke, the U.S. Treasury Department released a report to Congress saying the yuan “remains undervalued,” while stopping short of branding the country a currency manipulator.

Americans Oppose Federal Suit Against Ariz. Immigration Law

PRINCETON, NJ — Americans’ initial reactions to the U.S. Justice Department lawsuit against Arizona’s new illegal immigration law are more negative than positive, by a 50% to 33% margin.

The Justice Department lawsuit asks for a preliminary injunction to prevent the Arizona law from taking effect, arguing that Arizona’s law “pre-empts” the federal government’s responsibility to deal with immigration issues. President Obama publicly opposes the Arizona legislation, and the lawsuit thus becomes the latest part of a debate that may have ramifications for this fall’s midterm elections.

People keep moving to states with lower taxes… why stay in NY, CA or IL with those crazy tax rates and crazy government employees that suck the life of the government?

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Texas popular among relocating Americans

An increasing amount of Americans want to move to Texas, according to a recent survey by a homeowner relocation website.

Attracted by stable real estate prices and a relatively low unemployment rate of 8.5 percent, 6.9 percent in Austin, Relocation.com found that in June, 50 percent more people said they wanted to move to the Lone Star State than in its previous survey in February.

Texas knocked California out of the top spot, with the Golden State moving to third. Florida came in second and North Carolina and Georgia rounded out fourth and fifth

This may or may not be filed under “watch out for what you ask for” It may bode well for jobs returning to US shores but not before prices on tech, clothing and baubles get a little nasty:

Companies brace for end of cheap made-in-China era

Where once low-tech factories and scant wages were welcomed in a China eager to escape isolation and poverty, workers are now demanding a bigger share of the profits. The government, meanwhile, is pushing foreign companies to make investments in areas it believes will create greater wealth for China, like high technology.

Many companies are striving to stay profitable by shifting factories to cheaper areas farther inland or to other developing countries, and a few are even resuming production in the West.

“China is going to go through a very dramatic period. The big companies are starting to exit. We all see the writing on the wall,” said Rick Goodwin, a China trade veteran of 22 years, whose company links foreign buyers with Chinese suppliers.

“I have 15 major clients. My job is to give the best advice I can give. I tell it like it is. I tell them, put your helmet on, it’s going to get ugly,” said Goodwin, who says dissatisfied workers and hard-to-predict exchange rates are his top worries.

Beijing’s decision to stop tethering the Chinese currency to the U.S. dollar, allowing it to appreciate and thus boosting costs in yuan, has multiplied the uncertainty for companies already struggling with meager profit margins.

In an about-face mocked on “The Daily Show with Jon Stewart,” Wham-O, the company that created the Hula-Hoop and Slip ‘n Slide, decided to bring half of its Frisbee production and some production of its other products back to the U.S.

At the other end of the scale, some in research-intensive sectors such as pharmaceutical, biotech and other life sciences companies are also reconsidering China for a range of reasons, including costs and incentives being offered in other countries.

“Life sciences companies have shifted some production back to the U.S. from China. In some cases, the U.S. was becoming cheaper,” said Sean Correll, director of consulting services for Burlington, Mass.-based Emptoris.

That may soon become true for publishers, too. Printing a 9-by-9-inch, 334-page hardcover book in China costs about 44 to 45 cents now, with another 3 cents for shipping, says Goodwin. The same book costs 65 to 68 cents to make in the U.S.

“If costs go up by half, it’s about the same price as in the U.S. And you don’t have 30 days on the water in shipping,” he says.

http://news.yahoo.com/s/ap/20100708/ap_on_bi_ge/as_china_cheap_no_more

Liar loans making a comeback, and ABC News says that’s a good thing!

“Forbes has learned that banks are quietly reestablishing the no-doc and low-doc mortgage market. In fact, low-doc loans accounted for 8% of newly originated loan pools as of this February, FirstAmerican Corelogic reports.”

abcnews dot go dot com/Business/mortgage-surprise-liar-loans-make-comeback/story?id=11110951

According to Tracy Byrnes on FOX Business Network, 1 in 7 people who own houses that are worth more than $1million are walking away.

Wholesale Passenger-Car Demand in China Grows at Slowest Pace in 15 Months. ~ By Bloomberg News - Jul 9, 2010

China’s passenger-car sales to dealerships rose at the slowest pace in 15 months in June as inflation reduced consumers’ purchasing power and economic growth showed signs of cooling.

Sales of cars, sport-utility vehicles and multipurpose vehicles in the world’s largest auto market rose 19 percent from a year earlier to 1.04 million last month, the China Association of Automobile Manufacturers said in an e-mailed statement today. It was the smallest increase since March 2009.

Auto dealers’ inventories rose after inflation quickened in May to an annual 3.1 percent rate, the fastest in 19 months, reducing buyers’ spending power. Data next week may show consumer prices rose 3.3 percent in June from a year earlier, and the government may report that gross domestic product increased at a reduced pace in the second quarter, according to the median forecast in a Bloomberg News survey.

WASHINGTON (AP) — The International Monetary Fund is calling for the United States to make a stronger effort to curb its budget deficits.

The IMF said Thursday that in addition to cutting government spending, the Obama administration will have to consider raising taxes to get the U.S. deficit down to a manageable level.

The IMF proposed a range of possible tax increases that would be certain to generate huge political opposition, from reducing the popular tax deduction for home mortgages to instituting a national sales tax.

I totally expect them to do away with the home mortgage deduction or atleast reduce it at some point. Right around the time everyone is trapped. Interest rates will rise and people won’t be able to afford to move.

Gotta love “peaceful” protesters…

California (Reuters) - A white former transit police officer was found guilty of involuntary manslaughter in a videotaped shooting death of an unarmed black man last year in Oakland, California, sparking a wave of looting and destruction in the city on Thursday.

The verdict prompted a peaceful protest by up to 1,000 people in downtown Oakland, which gave way after nightfall to some people looting stores, smashing car windows, throwing powerful fireworks at police and lighting fires in trash cans.

The police, numbering in the hundreds, made more than 50 arrests, but Oakland police expected that figure could double.

“This city is not the wild, wild West,” Oakland Police Chief Anthony Batts told a televised news conference. “This city will not tolerate this activity.”

ATHENS, Greece – Greece said Friday it will auction euro1.25 billion ($1.58 billion) in 6-month treasury bills next week, in its first effort to borrow from international markets since receiving a vital international bailout in May.

I’ll open the bidding with an interest rate of 10% for 6 mo, any takers, (Crickets). 20% for 6 mo, get them while their hot, buy them for your mom. OK let’s go who’s going to step up and bid. (Crickets) OK 25%, get rich now, guaranteed return. Who’s that in the corner. Mr. Bernanke bids, going once going twice, wait Mr. Trichet from the EU will purchase for 20%, Bernanke will purchase for 15%, Trichet 10%, Bernanke 5%.Going once going twice sold to the man making helicopter drops in the corner.

This guy is a damn genius…

Greenspan Says Economy May Be Undergoing a `Pause’

Former Federal Reserve Chairman Alan Greenspan said the U.S. economy may be undergoing what he called a “pause,” and that he can’t rule out the possibility of a so- called double-dip recession.

“Of course, there’s a possibility,” Greenspan said in an interview on CNBC today. “The trouble is there’s always a possibility in both directions.”

Debt collectors get nasty

NEW YORK (CNNMoney.com) — Debt collectors are getting desperate and dirty.

Harassing phone calls, abusive language and physical violence are becoming a bigger part of business as debt collectors struggle to round up money from people who don’t have it.

“The American consumer is really hurting and collectors are having to fight harder to get money,” said Robert Andrews, a senior analyst specializing in the debt industry at research firm IBISWorld.

Complaints of harassment by debt collectors surged 50% to 67,550 in 2009, according to the Federal Trade Commission. And they are on track to jump 13% this year, based on the number of FTC complaints filed in the first six months.

The No. 1 complaint is repeated calls, and it is not uncommon for collectors to bombard consumers with back-to-back calls for days, weeks, months and even years.

When debt collectors finally get someone on the other end of the phone, they are more likely to use nastier language. Complaints of debt collectors using obscene or abusive language spiked 35% last year.

A 55-year old New York woman, who asked to remain anonymous, said a collection agent called her home repeatedly, personally attacking her and her husband. When she refused to answer the phone, the collector called her estranged sister, an ex-boyfriend and her husband’s ex-wife’s mother.

Another well oiled gubmint machine…

Labor Dept. Estimates $7.1 Billion in Overpayments to Unemployed
Overpayment Figure Increases From $4.2 Billion the Previous Year
ABC NEWS Business Unit

While many Americans are feeling the pain of expired unemployment benefits, some have gotten a good chunk more than they were legally eligible for.
Congress will not extend jobless benefits for the long-term unemployed.

Preliminary estimates released by the U.S. Department of Labor find that, in 2009, states made more than $7.1 billion in overpayments in unemployment insurance, up from $4.2 billion the year before. The total amount of unemployment benefits paid in 2009 was $76.8 billion, compared to $41.6 billion in 2008.

Fraud accounted for $1.55 billion in estimated overpayments last year, while errors by state agencies were blamed for $2.27 billion, according to the Labor Department. The department’s final report will be released next month.

YEAH YEAH YEAH … IT’S ALL BUSH’S FAULT
ByNeal Boortz July 9, 2010

So there’s The Community Organizer out there in Las Vegas yesterday blaming the Republicans for our economic mess. Obama will give another speech on the economy today in Nevada. Blame Bush? Probably so. Look .. there’s enough blame to go around here for the mess we’re in, but in the end it all comes back to bad mortgage loans.

The nucleus of this whole economic mess was the government’s push to make mortgage lenders loan money to people who simply did not qualify for mortgage loans. After those bad mortgage loans were made the quasi-government agencies, Fannie Mae and Freddie Mac, stepped forwarded and virtually guaranteed those loans. The bad loans were then packaged and shipped off to be sold to investors. You know the rest.

So .. without the government browbeating lenders into making loans to people who had no realistic chance of paying them back .. and we’re talking about millions of loans here .. and without the government then giving the appearance that these loans were backed by the full faith and credit of the United States … perhaps this whole mess doesn’t happen. Bush certainly has a share of the blame. He pushed this “ownership society” perhaps a bit too hard.

But look to Fannie Mae and Freddie Mac protectors Barney Frank and Chris Dodd as well. Remember … there are quite a few people out there who should be renters, not owners.

APNewsBreak: $500K donated to Ariz. to defend law

PHOENIX – Retirees and other residents from all over the country were among those who donated nearly $500,000 to help Arizona defend its immigration enforcement law, with most chipping in $100 or less, according to an analysis of documents obtained Thursday by The Associated Press.

The donations, 88 percent of which came from through the Arizona defense fund’s website, surged this week after the federal government sued Tuesday to challenge the law. A document from Gov. Jan Brewer’s office showed that 7,008 of the 9,057 online contributions submitted by Thursday morning were made in the days following the government’s filing.

Dollar Tree stops playing music in its stores in order to save money.

Publicity stunt or penny-pinching? That’s the question being asked about Dollar Tree’s decision to discontinue playing music in its 3,899 stores.

In response to customer complaints on its Facebook page, Dollar Tree explained the decision to remove music from its store:

“… keeping our expenses as low as possible is ALWAYS a focus at Dollar Tree. By doing so, we can continue to offer amazing values to our customers. The decision to remove store music was not an easy one, but the savings from that allow us to expand the variety of fantastic items we currently offer our customers.”

Ironically, when I called the corporation to ask for further details, I was put on hold, and the hold music was Aretha Franklin’s wonderful “A Natural Woman.”

Stores pay a fee to music licensing companies such as Muzak, Trusonic or Sirius to play music. Easily recognizable Top 40 songs cost more than a rendition of say “Blowing In The Wind” played on a pan flute.

Alex Jones sums up Labron who?? Lindsey What?

http://www.youtube.com/watch?v=3B_xBWsDpz0

Westchester Medical Center Plans to Lay Off 130 People

VALHALLA, N.Y. (AP/ 1010 WINS) — Westchester Medical Center says it will lay off 130 people. About half of them work in a medical unit at the county jail.

Hospital management notified the staff on Thursday.

Michael Cappiello, vice president of the Civil Service Employees Association, says some staff members are traumatized by the news. The hospital cut 400 jobs in 2009.

Economy prompts closure of 100 dental offices
Phoenix Business Journal

Arizona’s dentists are being drilled by the recession, with reports of more than 100 dental offices closing throughout the Valley last year.

Kevin Earle, executive director of the Arizona Dental Association, said many dentists followed population growth to outer areas of the Valley during the real estate boom of 2005-06. Unfortunately, he said, they were locating almost on top of one another and couldn’t compete, particularly as the housing crisis set in and business dried up.

Faced with $200,000 in dental school debt, high rental rates and expensive equipment investments, many dentists just couldn’t generate enough revenue to cover their costs, Earle said.

Dr. Robert Griego, a Phoenix dentist, said many young dentists were overextended after setting up extravagant offices.

Company’s Abrupt Closing Leaves Employees Stranded
WESTFORD (WBZ)

“I’m still numb by it all that was my whole life.”

Cheryl Gaulin is terrified. A few weeks ago, the place she’s worked for the last 42 years unexpectedly let her and all 75 employees go — no final check, no vacation pay… nothing. “Word of mouth went around that, that was it. We were all done, we are closing the doors… don’t bother to come back.”

Now she is caring for her husband who’s battling cancer without health insurance and is looking for a new job, but still wondering what happened to her last one. “It’s very scary that you’re not going to get up every morning and go to your job that I was so used to doing everyday for so long. It’s a scary thought for anyone.”

Cheryl worked at Fletcher Granite in Westford. She along with the others lost their jobs with no warning.

This is a company that used to have hundreds of employees and worked on huge projects such as Quincy Market, the Greenway, even the Treasury Department in Washington, DC.

Rocketplane Kistler Files for Chapter 7 [Oklahoma Gazette]

Rocketplane Kistler, the Oklahoma-based company that aspired to carry cargo to the international space station and paying passengers to the edge of space, filed for Chapter 7 bankruptcy liquidation in mid-June, the Oklahoma Gazette reported July 7.

“The bankruptcy papers were filed June 15, one each for three separate companies — Rocketplane Inc., the parent company, and its subsidiaries Rocketplane Global and Rocketplane Kistler — and a personal bankruptcy filing by [owner George] French himself. According to the documents, the companies and French ranged in assets of $108,000 to $287,000 to liabilities of more than $8 million. The debtors included vendors Rocketplane had contracted with for services and parts, pending lawsuits and back taxes. Some of the lawsuits are from former employees for breach of contract.”

Private equity fundraising falls as focus turns to smaller funds
Silicon Valley / San Jose Business Journal

U.S. private equity fund-raising fell to $45.1 billion during the first half of 2010, down 26 percent from $61.2 billion raised during the same period last year, according to a report Thursday from Dow Jones LP Source.

The number of funds raising capital was static, with 198 funds attracting commitments during the first half of 2010, the same number as in the first half of 2009.

“The absence of mega buyouts, which drove private equity fund-raising to new peaks a few years ago, is now keeping the total capital raised at lower levels,” Jennifer Rossa, managing editor of Dow Jones Private Equity Analyst said. “However, the number of funds that attracted commitments was stable over last year, signaling a recovery of sorts.”

Earlier this week, we were discussing the forthcoming postal rate increase and the declining effectiveness of junque mail. Well, it seems that door hangers and similar promos aren’t resonating with the citizens of Our Fair City. If you have a moment, read the online comments that go with this story.

Zillow.com, a Seattle-based real estate data provider, is preparing to release figures for May and expects them to show a 1.7% decline in home values nationally through the first five months. The pain is spread unevenly across the landscape, with home values in cities like San Diego, Los Angeles and Boston rising 2% to 4% while prices in Las Vegas, Miami and elsewhere tumbled 6% to 7%.

New York-based data firm Radar Logic, which tracks values by sifting through housing transactions in the 25 largest U.S. cities, reports that through April 30 values were up 1.9%. It warns, however, that values may have merely received a boost from the spring season (home values typically have their best stretch as the weather warms) and the extension of the first-time-buyer tax credit that expired last month. Its index will likely hit new lows in the second half of the year, Radar Logic says.

In a report released last month, analysts at investment bank Goldman Sachs said their own review of housing data available at the time showed 2009’s recovery in values had stalled. U.S. housing values will fall 3% in the coming year, with the heaviest blows dealt to Las Vegas, Portland, Ore., and Seattle, Goldman predicts. With an eye toward high home vacancy rates or rising mortgage delinquencies in these cities, the bankers projected values there would drop 4% to 12% in the coming 12 months.

SBA loans plummet after stimulus breaks expire
Triangle Business Journal

Lending through Small Business Administration programs has plummeted since the end of May, when the SBA ran out of money for breaks that made these loans less risky for lenders and more affordable for borrowers.

This drop in SBA lending has occurred even as Congress explores new ways to expand small businesses’ access to credit.

The economic stimulus bill increased the government guarantee on the SBA’s flagship 7(a) loans to 90 percent from the typical 75 percent. The legislation also reduced or waived fees on these loans as well as 504 loans, which are used primarily for real estate. As a result of these breaks, SBA lending rebounded after cratering during the credit crisis of late 2008.

Note: Funds for 90 percent 7(a) loan guarantee and fee waivers ran out May 26.

Through June 25, the SBA had approved $10.5 billion in 7(a) loans this fiscal year, which began Oct. 1. That’s up 80 percent compared with the same period a year ago.

Empire Center: NY spending $15.6M an hour
The Business Review (Albany)

By the time you read this, New York will have spent about $259,703.

That’s according to the Empire Center for New York State Policy’s “Spend-O-Meter.” The Empire Center said the meter is calibrated to the state Division of Budget’s estimated $136.5 billion spending plan for fiscal year 2010-11

According to the meter, New York spends:

• $4,328 a second

• $259,703 a minute

• $15,582,192 an hour

• $373,972,603 a day

•$2,625,000,000 a week.

• $10,983,333,333 a month

At the time of this writing, $37.209 billion and change had been spent so far this fiscal year.

“Under this year’s budget, our state government will spend more every hour than 200 typical New York families earn in a year,” said E.J. McMahon, the center’s director. “The Spend-O-Meter continues to spin at a faster rate every year, even though our economy is crashing.”

Report: Chevron laid off Huntington Beach tanker truck drivers
THE ORANGE COUNTY REGISTER

HUNTINGTON BEACH – More than 150 Chevron tanker drivers in California, including some from a Huntington Beach terminal, have been laid off after the company decided to outsource and downsize to save money, according to published reports.

Chevron officials said that the demand for fuel is decreasing because of the ongoing recession which contributed to the recent layoffs, the report said.

Chevron reported that profits were up 148 percent at $4.55 billion for the first quarter, the report said.

Other Chevron terminals in California that had layoffs were Montebello, Van Nuys and San Diego, the report said.

Shipbuilders of WI to lay off 70

MANITOWOC - Shipbuilders of Wisconsin, Inc., has notified state officials it plans to lay off at least 70 employees in the next six months.

Company leaders cite “business conditions” as the reason for the move. Employees affected will be carpenters, finishers, metal workers, mechanics, fluid power technicians, pipefitters, electricians and office administration. The company expects incremental layoffs continuing in addition to those that have already taken place, with “more significant” layoffs in September.

Perhaps the past week’s stock market rally was only a mirage: Fund-flow data showed retail investors ran for the exits even as the major averages were gaining nearly 4 percent and staging their biggest surge in months.

Equity investors pulled nearly $12 billion out of mutual funds for the week ending July 7, nearly matching the entire month of May, when the Standard & Poor’s 500 (INDEX: .SPX) fell 8.5 percent and dropped into correction territory off the April 23 high.

Though some mutual funds reflect institutional investor holdings, they are considered a strong barometer of retail investor behavior.

So with $11.6 billion leaving the market in one week, investment pros are suspect about the quality of the rally.

“This looks like a short-covering rally,” says David Twibell, president of wealth management for Colorado Capital Bank in Denver. “You have a big up day, decent follow-through, but not much volume, not much conviction, and it’s hard to find a catalyst for any of it.”

Fund data indeed paints a fairly gloomy picture for US stocks as earnings season kicks into gear next week and investors look more towards outlook than quarterly performance

Biggest Defaulters on Mortgages Are the Rich By DAVID STREITFELD
Published: July 8, 2010

http://tinyurl.com/2e4rbw2

Oakland Chaos:
Video of riots after BART shooting Mehserle verdict

(The following comment is below the YouTube video of the Oakland riots; not my words, though I couldn’t have said it any better, although methinks the writer is rather unfair to animals and savages:)

‘So let me see if I understand. One man is killed by the police (wrongfully) and so these people to honor his name they do this. Whats the different between these people and animals. Looks like a bunch of dogs on a dead animal. People use the death of a man to thieve and do damage to other people’s property. I’m left with just one word, “Savages”‘