The Housing Bubble

DON’T BUY YET! Bear in mind that housing demand in 2009 was underpinned by the Fed’s MBS purchase program and the $8K first-time buyer credit.

WSJ Blogs
Developments
Real estate news and analysis from The Wall Street Journal

* August 16, 2010, 12:10 AM ET

Redfin: Less Than Half of All Home-Sale Attempts Successful in ‘09
By Nick Timiraos

A survey of seven major housing markets found that less than half of all attempts to sell a home in 2009 had, as of last Wednesday, resulted in a sale.

The analysis, conducted by Redfin Corp., a Seattle-based brokerage that operates in nine states, shows just how tough the housing market has become–and just how many sellers are unwilling to lower their prices.

The survey looked at how the 500,000 homes that were listed for sale last year in seven of the nation’s biggest counties had fared. Around 47% of those listings had sold by last week, while just 4% of those listings were still active. The success rate looks at the number of listings that sold through the original listing agent; if someone hired an agent, and then changed agents, the home is added again to the count of new listings.

“There’s just such a standoff in the market between sellers and buyers, both with unrealistic expectations, and a lot of heartbreak and wasted effort,” said Glenn Kelman, Redfin’s chief executive. He said that buyers’ complaints of overpriced or stale listings had prompted the number crunching, which looked at properties in the counties that include Chicago, Atlanta, Seattle, Los Angeles, San Francisco, Phoenix and Boston.

Of those counties, Phoenix’s Maricopa County and San Francisco County had the highest share of listings that sold, at 59% and 57%, respectively. Chicago’s Cook County had just one-third of all homes listed during 2009 sell by mid-August.

Seller Stand-Off: A Look at Redfin’s Data
…

David Weidner’s Writing on the Wall

Aug. 17, 2010, 3:30 a.m. EDT
Why Wall Street doesn’t buy the American Dream
Commentary: Government intervention has made private investment a bad bet

By David Weidner, MarketWatch

NEW YORK (MarketWatch) — What happens when you have 20 years of price appreciation in the housing market in just five years?

Your house goes from personal piggy bank to the pigs at the bank.

That’s the unsavory reality lawmakers and a panel of experts will grapple with Tuesday in a Washington summit to discuss the future of Fannie Mae and Freddie Mac, the government-sponsored mortgage lending giants.
…
A bursting bubble

Adjusted for inflation, the price of the median U.S. home was about $125,000 in 1970 and rose to about $150,000 in 1999. In other words, over 29 years, the price of the median U.S. home rose about 2%, according to date from the National Association of Realtors.

Then, with U.S. interest rates artificially low, the boom in mortgage-backed securities and additional aid from the U.S. government including a generous tax exemption passed under the Clinton administration, housing prices began to sky rocket.
News Hub: Housing ills cloud Fannie-Freddie Summit

Nick Timiraos discusses what to expect at Tuesday’s summit that is planned to address some of the problems at Fannie Mae and Freddie Mac.

By 2002, the median U.S. home cost $175,000. By 2004, it was $225,000. The price peaked in 2006 at more than $250,000.

The fall happened faster. The median U.S. home now sells for just under $175,000.

Though the fall has put today’s housing prices close to the historical norm, prices are roughly 1.5% higher than they should be using trend line of the last 40 years. Moreover, that five-year period of extraordinary price inflation didn’t happen in a vacuum, it coincided with one of the biggest home-buying binges in U.S. history — home ownership jumped 6% in 10 years to 69% at the end of 2005, according to the Census Department.

In other words, millions of Americans are sitting on homes they overpaid for in the bubble. The government is backing most of those mortgages. And even if they’re not underwater — in that owners still have some equity stake — many homeowners are struggling to make their housing payments in a down economy, or at least feeling a lot poorer knowing that their biggest investment was a bust.
…

Treasury Fixing Home-Finance Juggles Bailout, Economy.

(Bloomberg) — Charles Gabriel, managing director of Capital Alpha Partners, talks about tomorrow’s U.S. Treasury Department summit on the mortgage-finance system and the outlook for Fannie Mae and Freddie Mac.

The U.S. Treasury Department, hosting a summit tomorrow on how to repair the mortgage-finance system, may get a blunt message from stakeholders in an industry tied to 15 percent of the country’s economy: Don’t screw it up.

The system’s size and complexity mean that a wrong move by the Obama administration could restrict credit, drive down home prices, increase foreclosures and slow the economy, housing advocates and industry participants say. At the same time, some lawmakers say it’s time to close government-controlled loan guarantors and halt limitless bailouts.

“It’s like building an airplane while you’re still flying it,” said David Ledford, senior vice president of mortgage finance at the National Association of Home Builders in Washington. Housing investments and related services account for 15 percent of gross domestic product, according to the group, ranking the industry second to health care.

Late mortgage payments spike in 2Q vs year ago
Rate of missed mortgage payments jumps in 2Q from a year ago, but down from start of this year.

NEW YORK (AP) — The rate at which U.S. homeowners fell behind on their mortgage payments remained stubbornly elevated in the second quarter.

In the three months ended June 30, the number of mortgage holders 60 days or more behind on their payments was 6.67 percent, credit reporting agency TransUnion said Tuesday. That’s a big jump from 5.81 percent in the second quarter of last year, and well above the historical norm of 1.5 percent to 2 percent.

One positive sign is that the statistic reveals a slower rate of increase from the pace seen a year ago.

What’s more, it marks a marginal improvement from the rate of 6.77 percent recorded during the first three months of the year. It’s also below the 6.89 percent record reached in the fourth quarter of 2009.

“We’re seeing signs of recovering in terms of delinquency,” said FJ Guarrera, vice president in TransUnion’s financial services unit.

I understand that many school districts are having trouble balancing their spending, and I also understand that some are better funded than others, but…

I have not heard or read about any school district proposing a reduction in force of administrators. People have stated in this blog that school districts are now either charging fees, or not providing toiletries, or laying off teachers, while administrative jobs remain sacred.

It appears that school districts have the jurisdiction to do anything they want to maintain a no-lay off policy for administrators. They can increase these new fees. A $1.00 daily fee for a bus ride, that becomes the $2.00 fee, then the $3.00 fee… If that’s not enough, they can impose a per-head yearly surcharge. (You know, utilities are expensive.) $100 per student, which becomes $200, which becomes $300…

I can see a future where the per-head surcharge can be increased into the thousands of dollars. Exemptions can be made for those who can prove hardship (provide tax/personal records to the school board), which of course will require even more administrators to implement. A pay-as-you-go system, very similar to the county ambulance services that charge according to the customer’s willingness to forego their privacy to some review board. (Or how well connected the customer happens to be.)

But school boards steadfastly refuse to lay off administrators. The odds of school board administrators reducing their own ranks are about as good as a CEO outsourcing his own job to Chindia. I don’t think these two events will ever happen in America, but I am willing to listen to anybody who knows otherwise.

Treasuries Decline as Reports May Show Housing, Industrial Output Improve.

Treasuries snapped a two-day advance, pushing 10-year yields up from a 17-month low, before government and central bank reports that economists said will show the housing market and industrial production improved.

Longer-maturity bonds, which are more sensitive to inflation expectations, led the drop on speculation separate data will show producer prices rose last month, easing concern the U.S. is heading for deflation. The Federal Reserve is scheduled to buy Treasuries due from August 2014 to July 2016 today, reviving its purchases to spur the economy by keeping borrowing costs down. Asian and European stocks gained, damping demand for fixed income.

London’s Rich Enlist New Breed of Broker in Search for Homes.

Beverley Kirby gave up trying to buy a house on her own in London’s Chelsea neighborhood after twice getting burned by owners reneging on agreements to sell to her.

The night before Kirby was due to sign for one 4.5 million- pound ($7 million) house a year ago, she was trumped by an offer that was 500,000 pounds higher. The aborted deal cost her 4,000 pounds in fees and left her with a few months to vacate the apartment she had sold.

“I was getting desperate,” said Kirby, who bought and sold seven other homes previously with her former husband. “There was madness in the market. People had no ethics at all.”

That experience, along with the surge in prices for a dwindling number of top-end properties for sale, led Kirby to hire Robert Bailey, a type of broker known as a buying agent. Bailey is one of several hundred operators in a field that barely existed in the U.K. 15 years ago. He found her a home that wasn’t advertised. Kirby moved into it in early April after Bailey helped her carry out refurbishments and get planning consent to use the top of the garage as a roof terrace.

So, dude was in Zurich last week on business, and observed a full go economy. I even talked to a couple of legal Spanish immigrants from Ecuador who went to CH when the construction work in Spain dried up.

The prices are astonishing there. 8 dollars for a Whopper, $7 for a simple Brarwurst, $4.50 for a Coke. The dollar and Swiss Franc are essentially at parity now. Has Switzerland been more successful at inflating its way out of the crisis? From my conversation with engineers over lunch the median home price to income ratio is about 10 now, and seems to be buoyed up by similar tax advantages to Holland.

Where goes the CHF from here?

A little local news from Tampa Tribune, yesterday:

45% upside down on Tampa homes, down from 54%

By SHANNON BEHNKEN | The Tampa Tribune
Published: August 16, 2010

“TAMPA - Home values continued their free fall in the second quarter, leaving 45 percent of Tampa Bay homeowners upside down on mortgages.

The good news: That’s better than last quarter, and the Bay area saw values rise month-over-month for the first time since May 2006, according to Zillow.com.

If you’re a Clearwater homeowner, it gets even better: Home values are up from last quarter, too.

Home values dropped 8.2 percent in the second quarter in the Tampa-St. Petersburg-Clearwater metro area, compared to the same period last year. The median value hit $118,700, Zillow says. Values fell in the short-term, too, dropping 0.1 percent from the previous quarter.

In the first quarter, 53 percent of Tampa area owners owed more on their mortgages than their homes were worth. So 45 percent for the second quarter is an improvement.

One reason may be that distressed homeowners are getting rid of their upside down properties. Zillow said 40 percent of all homes changing hands in June sold for loss.

Values in the Tampa metro area have fallen 45 percent since their peak in May 2006 and are now back to the level they were at in December 2002.”

I deleted all the details, but you get the picture. I have maintained that 2001 to 2002 was where the bubble really got it’s lift here. Prices started to boost a year or two earlier from a more traditional trajectory, so we are getting near the bottom of the crash, but an “overshoot” is usually typical.
As usual, the story uses the more dramatic case of all mortgages, rather than all homeowners. If 1/3 of houses are mortgage-free, then only 2/3 of 50% are underwater, so more like 1/3 of all the houses here.
That’s still a lot.

Ahead of the Bell: Housing starts
Housing starts expected to post small gain in July but remain at depressed levels. ~ August 17, 2010

WASHINGTON (AP) — Housing construction likely will show a small gain in July following a big decline the previous month.

Economists surveyed by Thomson Reuters expect construction of new homes and apartments to have climbed to a seasonally adjusted annual rate of 560,000 in July. The report will be released by the Commerce Department at 8:30 a.m. EDT Tuesday.

The expected 2 percent gain in July housing construction would follow a big drop in construction in June that pushed total activity down to an annual rate of 549,000 units, the slowest pace since last October.

The sluggish nature of the housing recovery has acted to depress the rebound of the overall economy, which has lost momentum since the start of the year.

The big drop in June housing construction was driven by a 20 percent plunge in condominium and apartment construction, a small but volatile portion of the housing market.

China Cuts Long-Term Treasuries By Most Ever as Yields Drop

Aug. 17 (Bloomberg) — Kenneth Lieberthal, a senior fellow at the Brookings Institute, a Washington policy group, talks about the outlook for China’s economy and the mainland’s holdings of U.S. Treasuries. China cut its holdings of Treasury notes and bonds by the most ever, raising speculation the plunge in U.S. yields that sent two-year rates to a record low has made government securities too expensive for some investors.

China cut its holdings of Treasury notes and bonds by the most ever, raising speculation a plunge in U.S. yields that sent two-year rates to a record low has made government securities unattractive.

The Asian nation’s holdings of long-term Treasuries fell by $21.2 billion in June to $839.7 billion, a U.S. government report showed yesterday. Total Chinese investment in U.S. debt declined 2.8 percent to $843.7 billion, the least in a year, following a 3.6 percent slide in May.

Our jobs, our way or life, any financial security we used to have and now our health…

Our health-care system fails us, bankrupts us, makes us sick, and makes us cower in fear. Which is the American patriot? The one who defends our existing health-care system or the one who tries to reform it for the good of the American people?

Economy Led to Cuts in Use of Health Care 8/16/10

The economic crisis in the United States has reduced the use of routine medical care, and the cutbacks here are much deeper than in countries with universal health care systems,

“Americans, who face higher out-of-pocket health care costs, have reduced their routine medical care” much more than people in Britain, Canada, France and Germany.

“We find strong evidence that the economic crisis — manifested in job and wealth losses — has led to reductions in the use of routine medical care,” the researchers said.

“Reductions in care were far greater in the United States than elsewhere,” they said, in part because about 15 percent of Americans are uninsured, whereas the other countries have near-universal coverage.

Among Americans responding to the survey, they said, 26.5 percent reported reducing their use of routine medical care since the start of the global economic crisis in 2007.

This proportion dwarfs the comparable numbers for other countries: 5.3 percent in Canada, 7.6 percent in Britain, 10.3 percent in Germany and 12 percent in France.

Several provisions of the new health care law, signed by President Obama in March, could counter the trend described in the report.

“About 70 percent of hospitals (In the USA) report fewer patient visits and elective procedures as family budgets remain tight and patients continue to delay or forgo care,”

http://www.nytimes.com/2010/08/17/health/policy/17health.html?_r=1&hp

Yea buddy…we’re numero uno.

No quick fix for Fannie and Freddie seen from meeting

(Reuters) - The Obama administration will pick the brains of housing finance leaders on how to fix Fannie Mae and Freddie Mac, but made one thing clear on Tuesday: there is no going back to their pre-crisis structure.

Treasury Secretary Timothy Geithner, in excerpts of remarks to be delivered at a Treasury conference on restructuring the two government-controlled mortgage finance giants, called that task one of the most “consequential and complicated” problems facing the United States.

“We will not support returning Fannie and Freddie to the role they played before conservatorship, where they took market share from private competitors while enjoying the perception of government support,” Geithner said. “We will not support a return to the system where private gains are subsidized by taxpayer losses.”

all this reminds of Lucent stock when it dropped from 75 to 50 it was good buy! when it dropped from 50 to 25 it was a terrific buy! from 25 to 10 an excellent buy! under 10 you better grab some they’re making a comeback! Only difference here the government was not giving you $8,000.00 to buy some.

Irate law school grads say they were misled about job prospects

Seton Hall law school graduates Scott Bullock and Justine Zappone say they were dismayed at the meager opportunities and heavy debt they faced. He blogs about his frustration.

The angry rants first surfaced last summer on an anonymous New Jersey blog.

Law school is a “scam,” the blogger wrote. Administrators are greedy “charlatans” who could not care less about education, and students are but “hapless lemmings” who have been tricked into paying a fortune to enter “America’s most overrated, miserable and saturated industry.”

Within months, the blog was drawing up to 5,000 unique readers a day, many of whom praised the anonymous writer — known only as Law is 4 Losers — as a hero for exposing the lies they say they, too, were fed about secure jobs and generous incomes.

The blogger is Scott Bullock, a 2005 Seton Hall University School of Law graduate who agreed to reveal his identity to The Star-Ledger for this article. Yet Bullock, whose outrage stems from graduating with more than $100,000 of debt but meager job prospects, says he is merely tapping into a groundswell of resentment against the nation’s law schools.

Another gem from Paul Craig Roberts. Without a revolution, Americans are history. The “revolution” means a drastic cut to the military/security complex budget and bringing back the offshored jobs. This guy knows whereof he speaks, having been assistant Treasury Secretary during Reagan’s first term.

http://www.counterpunch.org/roberts08162010.html

Just one more ‘report’ to add to the listing from today, from the Dept. of Housing and Urban Development (better known as HUD). I prefer Housing Undermining Dept:

HOUSING STARTS
Privately-owned housing starts in July were at a seasonally adjusted annual rate of 546,000. This is 1.7 percent (±9.7%)* above the
9.7%) revised June estimate of 537,000, but is 7.0 percent (±7.5%)* below the July 2009 rate of 587,000.
Single-family housing starts in July were at a rate of 432,000; this is 4.2 percent (±8.7%)* below the revised June figure of 451,000.
The July rate for units in buildings with five units or more was 95,000.

Now, look real close at those numbers and see that the possible error in sampling exceeds the actual percent noted. There is a footnote to explain this at the bottom of the page:

* 90% confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero.

So, even though they are reporting improvements, they don’t really know if any improvement has occurred. I would expect the NYT to report the final numbers with a puff -piece story about the economy improving, excluding the raw data which says they don’t really know what the heck’s going on.

Does anyone here on the HBB use over the air TV, as opposed to cable or satellite? Being a bit of a curmudgeon, I just refuse to pay for TV, that’s just me. I’m not judging anyone who does. I’m griping about the the so-called “digital revolution”. Here in the Tampa area, it really bites the big one. One of my local stations just disappeared during the changeover. Can’t get it anymore. When the weather deteriorates, so does the reception of those stations that are available.

Oh yah, that’s progress, right? I’ve never had the problems with analog that I do now. Just another modern “improvement”, boo-yah.

Question of the day:

What would mortgage rate - currently at historic lows - look like if 9 out every 10 loans was not backstopped by the U.S. government?

Am I just tired, or is the first paragraph of this article as bass-ackwards as it seems to me?

Aug. 17, 2010, 10:02 a.m. EDT
Geithner: Housing system needs government support
HUD chief Donovan urges reduced Washington involvement in mortgages

By Ronald D. Orol, MarketWatch

WASHINGTON (MarketWatch) — If there were government support for the housing finance system, future economic downturns could be harsher, Treasury Secretary Timothy Geithner said Tuesday at a conference on the future of housing finance.
…

recontrust has 565 foreclosures set up to sell in Descutes county, population 175k(approx)

Recontrust has 503 set up to sell in Clackamas county, pop. 350k

All real estate is local! Bend has been the fastest growing, then the fastest shrinking, place to live in the last few years

Unless WE do something to stop this out of control spending and taxation, we are going the way of Greece.

I say cut the pay of ALL CONgresscritters in HALF. They can get the OTHER half as a BONUS ONLY if they balance the budget every year. They get FIRED if they don’t

Simple.

Scientists Say as Much as 79% of Oil Remains in Gulf of Mexico

A group of scientists says as much as 79 percent of BP Plc’s leaked oil remains in the Gulf of Mexico, challenging an Obama administration assessment that the crude is largely gone or rapidly disappearing.

Most of the oil that leaked from BP’s Macondo well from April 20 to July 15 is still beneath the water’s surface, scientists including Samantha Joye, a professor of marine sciences at the University of Georgia in Athens, concluded in a memo made public yesterday. The researchers say they drew upon the U.S. government’s study while reaching different conclusions.

The Obama administration’s Aug. 4 report indicated that almost three-fourths of the crude that leaked has disappeared or soon will be eaten by bacteria. Jane Lubchenco, administrator of the National Oceanic and Atmospheric Administration, has said at least half of the oil released is now “completely gone.”

Chemist Dana Wetzel said that conclusion felt like the “closing credits of a movie.”

“It’s like they were saying ‘the end,’” Wetzel, program manager at Mote Marine Laboratory in Sarasota, Florida, said in an interview last week. “I’d say we have just gotten through setting up the plot.”

Seems the State & the Fed’s aren’t seeing eye to eye…(hardy har har)

What blinded 8 veterans? State still clueless, one year later:
August 17th, 2010, by BRIAN JOSEPH, Sacramento Correspondent OC Register

“…And then there’s the case of David E. Woodward, Sr.vs. the United States of America, a medical negligence case filed in U.S. District Court in the Northern District of California. Woodward claims in his suit that he received treatment from optometrists at the Palo Alto VA and was informed by the VA in July 2009 that the optometrists had misdiagnosed his glaucoma, which has caused him to lose vision.

The suit states that VA officials “disclosed to the plaintiff and plaintiff’s wife that an internal breakdown occurred within VAPAHCS (Veterans Affairs Palo Alto Health Care System) which began with an improper evaluation of plaintiff’s glaucoma condition in 2005 and also a failure to refer plaintiff to Ophthalmology in 2005.”

The suit also names an additional three optometrists — all of whom appear in the board’s database of California licensed optometrists.

For those of you counting at home, that’s 10 California licensed optometrists the state could be investigating.

Now, in the state’s defense, Consumer Affairs and Board of Optometry spokesman Russ Heimerich says the state needs more than just the names of doctors to conduct an investigation. It needs the names of victimized patients, too, and that’s what he says the state hasn’t been able to get from the feds.

Fair enough, but Dr. Craig Kliger, executive vice president of the California Academy of Eye Physicians & Surgeons, says it’s disturbing that these two government agencies can’t seem to cooperate on a probe of such public importance. Furthermore, he said the Woodward court case would seem to unearth enough public documentation to launch some sort of investigation at the state level.

“I believe it’s a breakdown in the system,” Kliger said. “It shouldn’t take a year.”

If we can ever get that correspondence from the state, may be we’ll see what’s taking so long.

I hate reading an article which supports my thesis so well. Do I like it because it makes logical sense, or simply because it reinforces my own beliefs?

Here’s an article that says that low interest rates are DE-stimulating the economy by taking away the boomer’s discretionary income.

Low yields present retirees with a difficult choice: Accept the lower income offered by safer bonds, or take the risk of staying in the stock market. Either way, their predicament could put a long-term damper on the consumer spending that typically drives U.S. growth.

“If these rates stay as low as they are, then a lot more people are going to be hurting,” says Jack Van Derhei, research director at the Employee Benefit Research Institute. The non-partisan outfit estimates that if current conditions persist, nearly three in five baby boomers will be at risk of running short of money in retirement. “There are going to be many luxury items that will simply have to be eliminated,” for retirees to make ends meet.

I thought for a moment there was a “conundrum”, nope…just have to see beyond the first impression…(hardy har har again)

Its creator, a blind mathematician named Jim Miekka…

+

The 50-year-old former physics teacher, who is an avid target shooter…

Technical Gauge and Its Creator Sense Stock Gloom; ‘Good Conspiracy Theories’?
Hindenburg Omen’ Flashes:
by Steven Russolillo and Tomi Kilgore / Monday, August 16, 2010

Technical Gauge and Its Creator Sense Stock Gloom; ‘Good Conspiracy Theories’?

The back story on the blind mathematician named Jim Miekka:
by WABI-TV5 News Desk - August 17th 2009 10:19pm - Read more Local News

“James Miekka of Surry is a target shooter with an accuracy most people would admire. He’s also completely blind.

His accuracy comes from his ingenuity.”

“My favorite thing is when I see somebody who’s never seen him shoot before. And if they watch him shoot, their jaw just drops open. And they go, ‘How does he do that?’” says Miekka’s neighbor, Robert Duhaime.

Miekka can’t see his target…he hears it, using an artificial vision system he designed himself.

“It requires an extreme amount of concentration,” Miekka says.

He shoots using instruments to do the same job as the eyes of sighted people, changing light into electric signals.

“So, I’ve taken the light I’ve converted to electricity, and then it travels down the cord which is the equivalent of your optic nerve. Finally, I have to take that signal and put it in a way my brain can decode it,” Miekka says.

For that, he uses sound. The sound frequency is proportional to the light intensity on the target.

“I hear tick, tick, tick and I scan around for black next to white, and very quiet next to very loud. That white on that target should be the loudest thing out there,” he says.

Neighbor Rick Zeamer helped Miekka, a former physics teacher, research the special photocells at the heart of the system, and calibrate the scope for his backyard shooting range.

Filed under: “Commonwealthy…vs…commonunwealthy” on with the “Games”!

(Hwy wonders if Talibanpakistan militant terrorist’s would consider this Trillion $$$$$$$$$$$$$ dollars as a type of “long-term” mal-investment for India?)

Leaky Delhi Stadium Seen as Boon for GMR, Reliance:
By Subramaniam Sharma / Aug. 17 (Bloomberg)

“…The nation’s Planning Commission said India will need to spend $1 trillion on highways, ports, airports and utilities between April 2012 and March 2017, twice the amount it recommended in the previous five years.”

For the Commonwealth Games, a contest that includes Britain and its former colonies and dependencies, the Indian capital added the airport terminal and is expanding the metro network, constructing an express rail link to the city center, restoring 46 monuments, and augmenting water and electricity supplies.

The airport building was ready in 37 months, faster than the 45 months Beijing took to complete its terminal ahead of the Olympics. Delhi airport is run by a venture consisting of Bangalore-based GMR, state-run Airports Authority of India Ltd., Frankfurt-based Fraport AG and Malaysia Airports Holdings Bhd.

A venture between billionaire Anil Ambani’s Reliance Infrastructure and Spain’s Construcciones y Auxiliar de Ferrocarriles SA will operate the 23 kilometer rail link, cutting travel time by at least a third to 19 minutes. State-run Delhi Metro Rail Corp. built the viaduct and tunnel for the link.

“But I can assure the government engineers and contractors are very careful about the stability of the structures.”

On vacation in Co, wouldn’t want to own resort real estate wow.
A friend who built his dream home way out on a remote mountain is trying to sell it. I didn’t have the heart to ask him bout it.

Read an article by Kevin Hassett in the free local paper. This pig from the Am Enterprise Inst says this country should not be concerned with the steady declinine in manufacturing. He suggests taht we our economy is one of ideas. He says that the decline of manufacturing in 2009 to 11% of GDP is not a concern and that “any economist” would tell us that. He ignores the huge percentage of our economy that was nothing more than a bubble. He suggests that those who become unemployed due to the loss of manufacturing get training for the “new economy” What new economy you MF?? He doesn’t mention one specific. These pigs really want a country with no middle class only parasitic corporate titans deciding how much they can bleed from the masses.

I wonder what money pays for the free daily paper and Mr. Hassetts free article to dumb down the masses?

Oh Mr Bear, Mr. Gross is polishing his crystal clear ball again…

Gross Urges ‘Full Nationalization’ of Housing Finance:

Aug. 17 (Bloomberg) By Lorraine Woellert– Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said the U.S. should consider “full nationalization” of the mortgage- finance system as the Obama administration plots the revival of a market that was at the center of the 2008 credit crisis.

“To suggest that there’s a large place for private financing in the future of housing finance is unrealistic,” Gross said today at a U.S. Treasury Department conference in Washington. “Government is part of our future. We need a government balance sheet. To suggest that the private market come back in is simply impractical. It won’t work.”

From M. Stanton Evans’: “Evans’s Law of Political Perfidy.”

10 facts of American national politics that you must understand
IF you wish to get meaningful change.

1. You can’t beat something with nothing.
2. 80% of politicians respond only to two things: (1) fear; (2) pain.
3. Bureaucrats (tenured) respond only to one thing: budget cuts.
4. Political reform never comes as long as the tax money flows in.
5. The #1 goal is to reduce the government’s funds, not re-direct
them.
6. Congress’s club system sucks in 80% of new members by term #2.
7. Politicians listen to their peers, not to their constituents.
8. Money from the government buys off most voters.
9. Most citizens care little about politics and know less.
10. This gives influence to organized swing-vote blocs.

American Apparel’s future in jeopardy.

NEW YORK (CNNMoney.com) — Casual clothing chain American Apparel, suffering a steep sales slump and manufacturing problems, warned Tuesday that it might default on loans and not be able to stay in business.

The Los Angeles-based maker and seller of “Made in U.S.A” T-shirts and other basic fashion clothing, said it may default on loan agreements with its lenders, cited ongoing weakness in its business.

If that happens, the company said it may not have sufficient liquidity to stay in business for the next 12 months.

The company, which operates 279 stores in 20 countries, said it expects same-store sales, or sales at its stores open at least a year, to tumble 16% in its second quarter. The company expects to post a loss from operations of between $5 million to $7 million in the quarter.

Abercrombie & Fitch Posts Profit; to Close 60 Stores.

NEW YORK—Abercrombie & Fitch Co. swung to a profit for its fiscal second quarter on rebounding sales, but its shares fell Tuesday on worries about higher inventories.

Abercrombie reported inventory jumped 47% on a per-square-foot basis, and margins continued to fall amid discounts.

Budget shortfall could mean 7,300 layoffs for Texas prisons
Corrections officials say deep spending cuts would endanger public safety.

More than 7,300 criminal justice employees would have to be laid off if Texas’ corrections agency is required to cut its spending by 15 percent, officials said Monday, warning that such a move could force the closure of several prisons and endanger public safety.

The prediction came as state corrections officials made public their budget request for 2012-13. The proposal asks for $6 billion and holds the line on much new spending, but it includes more than $720 million to fund already-promised pay raises for correctional and parole officers, and escalating costs of medical care for prisoners, among other items.

“We are clearly moving into a very tight fiscal time for the state \u2026 and we are trying to maintain a criminal justice system that at this point is stable and sound,” said Brad Livingston, executive director of the Texas Department of Criminal Justice, which operates 112 state prisons that house more than 154,000 felons.

“Refinance wave could use your tax dollars to lift the value of MBS owned by PIMCO” is more like it…

WSJ Blogs
Developments
Real estate news and analysis from The Wall Street Journal

* Real Estate News: Geithner Sees U.S. Role in Mortgage Market
* August 17, 2010, 12:03 PM ET

Bill Gross: Refinance Wave Could Lift Home Prices

By Nick Timiraos

At Tuesday’s summit on housing finance, Pacific Investment Management’s Bill Gross plugged a plan floated a few weeks ago that would allow millions of homeowners to refinance their mortgages at today’s rates, which are the lowest in generations.

With Treasury Secretary Timothy Geithner moderating a panel, Mr. Gross said the U.S. could easily refinance every current mortgage borrower, who is paying a rate above 5%, with a loan backed by Fannie Mae, Freddie Mac, and the Federal Housing Administration, returning tens of billions in savings.

He warned that the American economy was slowing and that the lack of additional stimulus “will slow it to a snail’s pace, incapable of providing capable job growth going forward.”

Massive refinancing of the nearly 60% of mortgages backed by the government that are one full percentage point above today’s 4.5% mortgage rates would provide quick stimulus “as well as a potential lift of 5-10% in terms of housing prices,” he said.
…

Home > Origination/Lending > Bankrate: Loan Closing Costs Jump 36.6% Year-Over-Year ~ August 17th, 2010

The average origination and third-party fees on a $200,000 mortgage increased 36.6% to $3,741 from last year’s average of $2,739, according to Bankrate’s annual mortgage fee survey. Lender origination fees increased to $1,463, or 22.8%, in 2010 from $1,192 in 2009, while the average total third-party fees rose 47.2%, to $2,277 from the year-ago average of $1,547.

Bankrate suggests one reason for this jump in cost is the government requirement for lenders to provide accurate good faith estimates (GFEs) of closing costs. GFEs give a borrower an idea of how much the loan will cost to close and, until this year, were non-binding. This means that the lender could provide an inaccurate or lower statement to the borrower without being penalized. Since May, however, lenders are penalized for undershooting a GFE.

I’m sure glad the panelists at the Obama housing pow-wow were carefully selected to make sure they did not stand to personally gain from any of their recommendations.

August 17, 2010, 11:03 am
Pimco’s Gross says feds must back mortgages
Colin Barr

Bill Gross said the government should fully take over the business of guaranteeing mortgage loans.

Gross, who runs the giant Pimco Total Return fund, said letting the private market take over the role long played by the government-sponsored mortgage investors Fannie Mae (FNMA) and Freddie Mac (FMCC) is “impractical.”

Gross made the comments at the Treasury’s future of housing finance conference. The administration called together bankers, investors and others to discuss how an ideal housing-finance system might work, and how the government might implement changes.

Republicans have been calling for a privatization of housing finance, pointing to the huge losses incurred by Fannie and Freddie when they relaxed their standards during the housing boom. Taxpayers are now on the hook for $150 billion or so of those losses and counting.

But Gross said a properly managed government financing plan offers advantages the private sector can’t match. Gross called for government guarantees protected by adequate down payments and properly priced mortgage insurance.
…

Saks Incorporated to Close Its Saks Fifth Avenue Stores in Plano, Texas and Mission Viejo, California
Total of five Saks Fifth Avenue store closings in 2010

NEW YORK, Aug 17, 2010 (BUSINESS WIRE) — Retailer Saks Incorporated today announced it plans to close its Saks Fifth Avenue store in The Shops at Willow Bend in Plano, Texas on August 21, 2010 and its Saks Fifth Avenue store in the Mission Viejo Mall in Mission Viejo, California on October 23, 2010.

Steve Sadove, Chairman and Chief Executive Officer of Saks, commented, “In the ordinary course of business, we assess the productivity, profitability, and potential for each of our stores and may determine it is appropriate to close a store from time to time. Store closing decisions are never easy, but the planned closing of these two stores is consistent with our strategy of employing our resources in our most productive locations.” The Company closed its Saks Fifth Avenue stores in Portland, Oregon; San Diego, California; and Charleston, South Carolina last month.

It’s always the evil USA’s fault…

Russian Scholar Warns Of ‘Secret’ U.S. Climate Change Weapon
The heatwave has caused forest and peat fires across Russia

As Muscovites suffer record high temperatures this summer, a Russian political scientist has claimed the United States may be using climate-change weapons to alter the temperatures and crop yields of Russia and other Central Asian countries.

In a recent article, Andrei Areshev, deputy director of the Strategic Culture Foundation, wrote, “At the moment, climate weapons may be reaching their target capacity and may be used to provoke droughts, erase crops, and induce various anomalous phenomena in certain countries.”

The article has been carried by publications throughout Russia, including “International Affairs,” a journal published by the Foreign Ministry and by the state-owned news agency RIA Novosti.

In an telephone interview with RFE/RL, Areshev appeared to back off from claims he made in the article, saying that he was merely positing a theory.

“First of all, I would like to say that what I wrote in that article, even the citations, does not in any way claim to a be final truth. It is, if you will, speculation, in other words, the definition of an hypothesis,” Areshev said.

Moscow is currently sweltering under record temperatures. On July 29 Moscow suffered its hottest day ever, with temperatures hitting 39 degrees.

Here’s an encouraging sign. I was watching “Property Virgins” last night… well, I had it on while I was cooking dinner in my 70’s-tastic non-granite kitchen… where a couple was trying to buy their first house. They had 15% down, but were using FHA financing since they didn’t have 20% down. Anyway, they tried bidding on a few condos, including a short sale, and wound up ‘winning’ a bid on a place, but they couldn’t do the FHA financing because the place already had too many of them. They scrambled around, secured a traditional loan by figuring they could ’scrounge up’ 4500 extra in cash they’d need in a month (short sale, so they’d have to wait for the bank to get back to them.)

Anyway, everything fell through and they decided to go back to… drum roll please… GO BACK TO RENTING! They planned on saving more money and trying again in a year or two.

Finally, a happy ending on an HGTV show!

Trane: Local Layoffs On Schedule
The Times Record, Fort Smith, AR.

About 131 employees at the Trane plant on Zero Street can expect to lose their jobs in October in connection with the relocation of a product line to Florida, a company spokesman confirmed Monday.

The layoff, which will begin Oct. 11, follows the Aug. 2 termination of 68 plant workers. As previously announced, another six employees will punch out in December.

Trane announced early this year that it would transfer one of its product lines to a plant in Lynn Haven, Fla., a move that would result in layoffs of some 212 employees in Fort Smith by the end of 2010. Representing nearly half of the 400-plus workforce, the layoffs were expected to affect 197 hourly and 15 salaried employees.

The Zero Street plant makes air-conditioning units for residential and light commercial use.

We are still trying to recover from the greatest housing mania in the history of the planet, and all this guy can come up with is a proposal for a mammoth housing stimulus to make housing less affordable, to the benefit of Pimco investors?

This is utterly despicable.

Here’s Why Bill Gross Might Get His Wish For A Mammoth Housing Stimulus
Joe Weisenthal | Aug. 17, 2010, 2:14 PM

The big news today is that Bill Gross is forcefully coming out for an expanded role for government in the housing industry, which is in stark contrast to what many folks, calling for a wind down of Fannie and Freddie, have been saying of late.

On CNBC, the PIMCO chief basically put it out this way: If we want higher home values and more housing starts, then the government needs to play a big role.

He’s probably right about that, and that’s why he may get his wish.
…

Wichita home sales down 34 percent in July
Wichita Business Journal

Wichita-area home sales fell 34 percent in July, according to data released by the Wichita Area Association of Realtors.

New and existing home sales totaled 559 during the month, down from 847 in July 2009.

There were 517 sales of existing homes and 42 sales of new homes in July.

The numbers continue to paint the picture of a relatively mixed year in 2010 as the market absorbs new buyers prompted by the federal home buyer tax credits. That program effectively ended in June, which was the initial deadline for closings.

Home sales in March, April and May exceeded sales in comparable months in 2009. Sales have been down otherwise.

Still, in 2010, about 100 more homes were sold from January through July than the same period last year — 4,768 compared to 4,641.

Tessa Hultz, CEO of the Wichita Area Association of Realtors, says tax credits — as expected — have caused buyers who would have purchased later in the year to buy earlier. That’s caused the lull that was experienced in July.

She says home prices haven’t fallen.

“We’re just not seeing the volume,” she says.

Did he mention that without government guarantees, housing prices would be far more affordable for the average American family, while the value of the MBS which Pimco invests in would drop like a rock? Because after all, affordable housing is the GSE mission.

Rates go up, summit goes on
By Holden Lewis · Bankrate dot com
Tuesday, August 17
Posted: 2 pm ET

Mortgage bond yields have been rising today, maybe enough to spur some lenders to hike mortgage rates by one-eighth of a percentage point. Pin it on rising stock prices, which compel investors to take money out of bonds so they can buy stocks. The result is rising bond yields and rising mortgage rates.

Today there was a housing summit at the U.S. Treasury Department, in which bigwigs opined about the future of housing finance in general, and the fates of Fannie Mae and Freddie Mac in particular. One the panelists was Bill Gross, co-chief investment officer of PIMCO, the bond trading giant. He said that, without government guarantees, mortgage rates would be several percentage points higher.
…

Prices Of US Agency Mortgages Drop Dramatically
First Published Thursday, 12 August 2010 08:29 pm

(Adds analyst comments, context, fresh details.)

By Prabha Natarajan

Of DOW JONES NEWSWIRES

NEW YORK -(Dow Jones)- Agency mortgage securities unexpectedly dropped in price from record highs Thursday as investors reacted to lower yields on Treasury bonds and worries about the future of government-backed mortgage buyers Fannie Mae (FNMA) and Freddie Mac (FMCC).

Fannie Mae’s 30-year bond with a 4% coupon dropped as low as 102-11 from 102-25 before rebounding somewhat, while the Fannie Mae bond with a 6.5% coupon slipped as far as 108-29 from 109-07. This translates to a $5,625 loss per $1 million invested in the Fannie 4% bond, and a $6,875 loss per $1 million on the 6.5% bond. Prices improved slightly off those low.

“Mortgages went…too high, too fast,” said Gary Greenberg, portfolio manager at Payden & Rygel in Los Angeles. “Prices have to come down, though it may be not by much.”
…

Millions to Lose Jobless Benefits by Year’s End ~ Reuters

While hundreds of House members and dozens of senators hit the campaign trail in a fight to save their jobs with help from President Obama, more than 2 million out-of-work Americans are faced with dropping into unemployment obscurity by the end of the year.

Though Congress last month passed a jobless benefits extension, the boost only lasts until Nov. 30 — that means a backlog of recipients will drop off those benefits all at once come December. Between the end of August and the end of the calendar year, approximately 2.37 million Americans will stop getting unemployment checks, according to Labor Department statistics.

The looming dropoff is sure to contribute to economic anxiety in a climate where the economy already ranks as the top issue for voters in poll after poll.

If this azzclown gets elected, I’m moving to Mexico. Enough of these scum professional politicians.

“Crist finally finds a Republican donor worthy of a refund.

When Charlie Crist bailed out of the Republican primary, he initially promised to refund the money donated to him by Republicans if and when they requested refunds. Later, he reneged on that promise, saying that they had donated money to make Crist Senator, and that their money would still be put to good use. But Crist has finally found a donor worthy of getting a refund — his old buddy and defendant in a corruption case, Jim Greer:

Republicans in Florida are pouncing on Gov. Charlie Crist’s decision to refund campaign contributions from indicted former state GOP Chairman Jim Greer, a longtime Crist ally charged with stealing money from party coffers.

In a letter to the governor dated August 5, Greer asked that $9,600 worth of contributions to Crist’s Senate campaign be returned so he could help pay for his legal fees. The Crist campaign on Monday agreed to do so after the letter was reported by the St. Petersburg Times.

But Crist’s decision comes after an earlier refusal to return money to Republican donors who sought refunds when the governor bolted the GOP and embarked on an independent run.

Crist’s Republican critics are crying foul over the move, but they’re also pleased to once again have Crist sharing the spotlight with the scandal-tainted Greer.”

Real Estate tax in Health Care bill
August 17, 2010 by English Beat
Filed under In the News
Leave a Comment
REAL ESTATE SALES TAX
Need to sell your house by December 31, 2012.
——————————————————————————–
Read the newpaper article at the end….
Under the new health care bill – did you know that all real estate transactions are now subject to a 3.8% Sales Tax? The bulk of these new taxes don’t kick in until 2013 (presumably after Obamas re-election). You can thank Nancy, Harry and Barack and your local Democrat Congressman for this one. If you sell your $400,000 home, there will be a $15,200 tax. This bill is set to screw the retiring generation who often downsize their homes. Is this Hope & Change great or what? We can vote the bums out in November and demand that they eliminate the bill or at the very least defund it. Then in 2012 repeal it.
Oh, you weren’t aware this was in the Obamacare bill? Guess what, you aren’t alone. There are more than a few congressman that aren’t aware of it either. AND, there are a few other surprises lurking.
March 28, 2010
Health law’s heavy impact
Paul Guppy
Special to The Spokesman-Review
In the days leading up to the dramatic late-night vote on President Barack Obama’s health plan, Speaker Nancy Pelosi said, “We have to pass the bill so that you can find out what is in it .” Now that ObamaCare has passed, it is slowly dawning on people what the new law means for the country and for Washington state.
ObamaCare sweeps away a host of state regulations and permanently alters our state’s insurance market. From now on, the federal government will manage the health care of all Washingtonians. The 2,700-page law contains a complex web of mandates, directives, price controls, tax increases and subsidies.
Federal officials will now decide what kind of insurance people in Washington must have, what medicines will be covered, what treatments are allowed and which are not. Early reports indicate, however, that President Obama, Vice President Biden, the Cabinet, senior members of Congress and leadership staff are exempt.
The new law falls well short of universal coverage. ObamaCare will leave about 6 percent of Washington residents without coverage. The measure is conservatively expected to cost $2.4 trillion in its first full decade. Thousands of older Washingtonians will lose their Medicare Advantage coverage, and the state’s 120,000 Health Savings Account holders may need to buy new policies or face stiff penalties.
Washington residents will begin paying ObamaCare taxes this year, while most benefits don’t start until 2014. The law includes some 19 new taxes. Here’s a rundown of what Washingtonians can expect in the coming years.
Penalties on individuals. Individuals will pay a yearly penalty of $695, or up to 2.5 percent of their annual income, if they cannot show they have purchased a government-approved health policy.
Penalties on families. Families will pay a yearly penalty of $347 per child, up to $2,250 per family, if parents cannot show they have purchased a government- approved policy.
Penalties on employers. Business owners with more than 50 employees must buy government- acceptable health coverage or pay a yearly penalty of $2,000 per employee if at least one employee receives a tax credit.
Tax on investment income. ObamaCare imposes a 3.8 percent annual tax on investment income of individuals making $200,000 or more and on families making $250,000 or more. The new tax is not indexed to inflation, so more people will fall under it each year. Seniors on fixed incomes and people with IRAs and 401(k) plans will be hit particularly hard.
Tax on “Cadillac” health plans. Starting in 2018, imposes a 40 percent annual tax on health care plans valued at $10,200 for individuals and $27,500 for families.
Medicare tax increase. Requires single people earning $200,000 or more and couples earning $250,000 or more to pay an additional 0.9 percent in Medicare taxes.
Tax on Home Sales. Imposes a 3.8 percent tax on home sales and other real estate transactions. Middle-income people must pay the full tax even if they are “rich” for only one day – the day they sell their house and buy a new one.
Tax on medical aid devices. Creates a new 2.9 percent tax on medical aid devices. Certain items intended for personal use are exempt.
Tax on tanning. Imposes a 10 percent tax on services at tanning salons. Business owners will collect the tax from customers and send it to the federal government. This appears to be the first federal sales tax in the United States.
ObamaCare will be enforced by the Internal Revenue Service. The tax agency plans to hire 16,500 new auditors, agents and investigators, and to increase enforcement audits. The IRS can confiscate tax refunds, place liens on property and seek jail time if health-related penalties and taxes are not paid.
President Obama had said people could keep their coverage if they want, yet the Congressional Budget Office estimates that under ObamaCare 8 million to 9 million people will lose their employer-provided coverage.
The ObamaCare law passed over bipartisan opposition in Congress. Republicans say they will run on a “repeal and replace” platform this fall, and Washington has joined 12 other states in a lawsuit challenging the federal government’s power to force state residents to buy a product – insurance – from private companies. The long-term prospects of ObamaCare are unclear. In the meantime, Washingtonians should prepare for major changes in their tax burden.
Paul Guppy is vice president for research at the Washington Policy Center, a research organization with offices in Spokane, Seattle, Olympia and the Tri-Cities ( http://www.washingtonpolicy.org).

This “policy advice” would be great for Pimco’s bottom line, not so much for the Nation.

PIMCO’s Gross calls for massive mortgage refinance
Published: Tuesday, 17 Aug 2010 | 4:28 PM ET

WASHINGTON - Influential bond investor Bill Gross dispensed more policy advice than the U.S. Treasury bargained for on Tuesday, calling for a massive program to refinance mortgages at low rates to boost the flagging economy.

Gross, speaking at a Treasury forum on the future of housing finance giants Fannie Mae and Freddie Mac, said a massive refinancing program to slash monthly mortgage payments could boost consumer spending by $50 billion to $60 billion and boost home prices by 5 to 10 percent.

“Policymakers should quickly re-engineer a refinancing opportunity for all mortgagees that are current on payments and are included in GSE-securitized mortgages,” said Gross, PIMCO’s co-founder and co-chief investment officer.
…

This along with those fart catcher bags for cows the Swedes have invented ought to do the trick. Problem solved, next.

Curry spices for cows and sheep could cut methane emissions

Curry spices could hold the key to reducing the enormous greenhouse gas emissions given off by grazing animals such as sheep, cows and goats, scientists have claimed.

Research carried out at Newcastle University has found that coriander and turmeric – spices traditionally used to flavor curries – can reduce by up to 40 per cent the amount of methane that is produced by bacteria in a sheep’s stomach and then emitted into the atmosphere when the animal burps.

Working rather like an anti-biotic, the spices were found to kill the methane-producing “bad” bacteria in the animal’s gut while allowing the “good” bacteria to flourish. The findings are part of an ongoing study led by Dr Abdul Shakoor Chaudhry at Newcastle University.

There are around 30m sheep in the UK, each producing around 20 litres of methane a day, emitted by burping. Methane (CH4) is more than 20 times as powerful in terms of causing global warming as the main greenhouse gas, carbon dioxide (CO2). As well as the environmental implications, the sheep itself also loses an estimated 12 per cent of its food energy to methane production, resulting in a lower milk and meat yield.

“Methane is a major contributor to global warming, and the slow digestive system of ruminant animals such as cows and sheep makes them a key producer of the gas,” Mr Hasan explained. “What my research found was that certain spices contain properties which make this digestive process more efficient so producing less waste – in this case, methane.

Fed Buys $2.551 Billion Treasuries in Resumption of Purchases

Aug. 17 (Bloomberg) — Alice Rivlin, senior fellow at the Brookings Institution and a former vice chairman of the Federal Reserve, talks about the U.S. deficit and her concern that investors may “panic” and bid up bond yields.

The Federal Reserve bought $2.551 billion of Treasuries in the first outright purchase of U.S. government debt since October to prevent money from being drained from the financial system.

The Fed bought 14 of the 25 securities listed for possible purchase. The notes mature from August 2014 to February 2016, the Federal Reserve Bank of New York said in a statement today on its website. The New York Fed conducts open-market operations to implement the policies of the Federal Reserve System.

* AUGUST 13, 2010, 3:17 P.M. ET

Pimco Cuts US Government-Related Holdings In Flagship Bond Fund

By Min Zeng Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)–Bond fund giant Pacific Investment Management Co. cut the holdings of U.S. goverment-related holdings in its flagship bond fund in July after lifting the holdings over the previous three months.

The U.S. government-related holdings for Pimco’s flagship Total Return Fund, the world’s biggest bond fund with more than $200 billion in assets, fell to 54% in July from 63% in June–which was the highest share level since October 2009.

The share level is still higher than 51% in May and 36% in April, according to data available on the company’s web site as of Friday afternoon. The fund is managed by Bill Gross, founder and co-chief investment officer of Newport Beach, Calif.-based Pimco.

The U.S. government related holdings include nominal Treasurys, Treasury Inflation-Protected Securities, agencies bonds and Treasury futures and options.

In contrast, Gross lifted holdings of mortgage-backed securities to 18% in July from 16% in June. He also boosted non-dollar developed market debt holdings, which includes both government debt and corporate debt, to 5% from 3% in June. The holdings are still lower compared to 6% in May and the recent peak of 19% in February.
…

From Tucson’s daily fishwrap:

Methods to prevent foreclosure gain steam

Here’s the part that bopped me over the head. Story of a homeowner who works for the state:

“[The homeowner] said she is on her fourth attempt to get a loan modification from Bank of America. She began to fall behind on mortgage payments - though she is paying part of what she owes each month - last year when the state began cutting employee wages.

“She said she was approved for the next step in a loan modification process in April, and filed the needed paperwork, but waited months for a response.

“Selling her home near West Ina and North Thornydale roads isn’t an option because she paid more than $190,000 for it five years ago and wouldn’t be able to get anywhere near that now. She’s also fixed up her kitchen and added tile floors.

“‘I’m not about to give up,” she said. “I’m not going to give them my house.’”

Slim’s take:

I can’t help thinking that, a few months from now, she’ll be walking away.

Indy UAW Workers Wont Take A Pay Cut To Keep Plant Doors Open

by Scott Sarvay
GM To Decide Fate Of Indy Stamping Facility
August 16, 2010

INDIANAPOLIS (Indiana’s NewsCenter) - UAW workers in Indianapolis will not vote on a proposal to cut their wages to keep the doors of their plant open.

http://www.indianasnewscenter.com/news/regional/Indy-UAW-Workers-Wont-Take-A-Pay-Cut-To-Keep-Plant-Doors-Open-100791759.html - 70k

I’ve been giving a lot of charity hours to the client company lately so this is very late to post.

Seems that Congress is about to retract its $600 1099 reporting requirement for gold bullion dealers.

This is certainly a score!

http://www.kitco.com/reports/KitcoNews20100817AS-1.html

I posted a link to a Kitco article that predicts the 1099 reporting requirement for $600 and up purchase/sales of coins from dealers is probably going to be raised to $5,000 minimum or repealed altogether. The link will arrive later …

Quote from Kitco.com article on the September vote on “liberalizing” the $600 precious metals dealers sales/purchases:

‘both parties seem to favor a repeal or scaling back of the Form 1099 requirements, said Bill Rys, tax counsel for the National Federation of Independent Business.

“On the House side, we have almost every member on record as in favor of supporting the repeal in one form or the other,” Rys said.’

Okay, I just saw this quote and decided that everybody deserved a good belly laugh:

“Compared to just about every other type of business, the business of real estate is kept almost puritanically ethical. I know there’s good reason for that.”

He’s actually serious…

WSJ Blogs
Developments
Real estate news and analysis from The Wall Street Journal

* August 17, 2010, 10:02 AM ET

Wells Fargo ‘Party House’ Sold at 30% Off

By Juliet Chung

Accessories creators Bruce Makowsky and his wife, Kathy, have paid nearly $15 million for the bank-owned Malibu beach house that made waves last year for allegedly being used as a party house by a Wells Fargo executive.

The purchase price is nearly 30% less than its original $21.5 million asking price last September. The most recent asking price was $18 million.

“The house is spectacular and it’s on a gorgeous, beautiful beach,” said Mr. Makowsky, who is co-president of Van Zeeland, Inc., which includes the B. Makowsky handbag and shoe brands available at retailers including Macy’s and QVC.

Mr. Makowsky said he and his wife closed within seven days of seeing the home. “There aren’t a lot of homes that become available in that area,” he said. The couple’s primary residence is in Long Island, N.Y.; they plan to use the Malibu property as a vacation home. The publicity surrounding the house didn’t impact their interest or decision to buy, Mr. Makowsky added.

Wells Fargo later fired the employee, Cheronda Guyton, who dealt with foreclosed properties; the home had belonged to Madoff victims.

The four-bedroom, contemporary home is located in the guard-gated Malibu Colony area and has walls of glass that look onto the Pacific. The roughly 3,800-square-foot home has a double-height living area, decks and terraces and an open floor plan on the first level. Chad Rogers of Hilton and Hyland, a Christie’s Great Estates affiliate, was on both sides of the deal.
…

Is this proposal as simple as screwing current MBS owners out of a portion of the contractually agreed interest on the bonds they own in order to benefit those making monthly payments (homeowners with securitized mortgages)?

Is Gross proposing to personally finance the cost of this proposal?

WSJ Blogs
Developments
Real estate news and analysis from The Wall Street Journal

* Real Estate News: Geithner Sees U.S. Role in Mortgage Market
* August 17, 2010, 12:03 PM ET

Bill Gross: Refinance Wave Could Lift Home Prices

By Nick Timiraos

At Tuesday’s summit on housing finance, Pacific Investment Management’s Bill Gross plugged a plan floated a few weeks ago that would allow millions of homeowners to refinance their mortgages at today’s rates, which are the lowest in generations.

With Treasury Secretary Timothy Geithner moderating a panel, Mr. Gross said the U.S. could easily refinance every current mortgage borrower, who is paying a rate above 5%, with a loan backed by Fannie Mae, Freddie Mac, and the Federal Housing Administration, returning tens of billions in savings.

He warned that the American economy was slowing and that the lack of additional stimulus “will slow it to a snail’s pace, incapable of providing capable job growth going forward.”

Massive refinancing of the nearly 60% of mortgages backed by the government that are one full percentage point above today’s 4.5% mortgage rates would provide quick stimulus “as well as a potential lift of 5-10% in terms of housing prices,” he said.

Mr. Geithner and other panelists didn’t address the refi proposal, which has caused lots of heartburn for mortgage-bond investors in recent weeks.

To be sure, government officials have dismissed any idea that such a plan was in the works. Others have pointed out that Fannie, Freddie, and the FHA have already come up with other methods to “streamline” refinance homeowners who owe more than their homes are worth.
…

Have these perfessors ever heard of quantitative easing? ‘Cuz I thought the point of QE was to keep them interest rates low forever?

* The Wall Street Journal
* OPINION
* AUGUST 18, 2010

The Great American Bond Bubble

If 10-year interest rates, which are now 2.8%, rise to 4% as they did last spring, bondholders will suffer a capital loss more than three times the current yield.

By JEREMY SIEGEL AND JEREMY SCHWARTZ

Ten years ago we experienced the biggest bubble in U.S. stock market history—the Internet and technology mania that saw high-flying tech stocks selling at an excess of 100 times earnings. The aftermath was predictable: Most of these highfliers declined 80% or more, and the Nasdaq today sells at less than half the peak it reached a decade ago.

A similar bubble is expanding today that may have far more serious consequences for investors. It is in bonds, particularly U.S. Treasury bonds. Investors, disenchanted with the stock market, have been pouring money into bond funds, and Treasury bonds have been among their favorites. The Investment Company Institute reports that from January 2008 through June 2010, outflows from equity funds totaled $232 billion while bond funds have seen a massive $559 billion of inflows.

We believe what is happening today is the flip side of what happened in 2000. Just as investors were too enthusiastic then about the growth prospects in the economy, many investors today are far too pessimistic.

The rush into bonds has been so strong that last week the yield on 10-year Treasury Inflation-Protected Securities (TIPS) fell below 1%, where it remains today. This means that this bond, like its tech counterparts a decade ago, is currently selling at more than 100 times its projected payout.
…

Opinion Journal: I Was a Fannie Mae Executive 8/16/2010 12:49:41 PM

Former Chief Credit Officer Edward Pinto explains how it all went wrong.

HUD = mortgage lending debaucher in chief. Shut down HUD; restore the mortgage lending system.

Stripper Says Degree Profitable for Goldman Not Worth It

Aug. 6 (Bloomberg) — Carrianne Howard dreamed of designing video games, so she enrolled in a program at the Art Institute of Fort Lauderdale, a for-profit college part-owned by Goldman Sachs Group Inc. These days, the 26-year-old makes her living in a way that doesn’t require a college diploma — by stripping at a topless club. Like many investors, Goldman, owner of 38 percent of the Art Institute’s parent, Education Management Corp., was drawn to for-profit colleges by their rapid growth and soaring stock prices. Bloomberg’s Cali Carlin reports. (Source: Bloomberg)

Thanks for the post. I agree that if you are tyring to time the absolute bottom then it could possibly be a little early as this could still be a lot of unlisted inventory. However if you are long the market at all then you can’t lose as the rates and prices are so incredibly low so jump in.