The Housing Bubble

Falling Rates Aid Debtors, but Hamper SaversBy GRAHAM BOWLEY
Published: September 8, 2010

It is a side effect of a government policy meant to push down interest rates to a point that businesses and consumers are compelled to borrow and spend again, and yet it is hurting anyone with a savings account.

With the regulated rate that financial institutions can borrow from one another at almost zero, banks are paying savers next to nothing. The average returns on interest-bearing deposit accounts slipped to 0.99 percent in July, according to Market Rates Insight, which tracks bank rates. It is the first time its measure has dipped below 1 percent since the 1950s, when its data begins.

http://www.nytimes.com/2010/09/09/business/economy/09rates.html

‘Pain comes roaring back’ on foreclosure front

By SARAH SHEMKUS
September 01, 2010 12:00 AM

Foreclosure numbers continued their steady climb last month, according to numbers released Tuesday by real estate data firm The Warren Group.

In Bristol County, completed foreclosures more than doubled in July, jumping from 58 in July 2009 to 121. The region has been experiencing growth in foreclosures since December.

Foreclosure numbers “got better last year because there were an awful lot of programs and laws … that encouraged them to slow down,” said Vincent Valvo, editor-in-chief of Banker and Tradesman, a publication of The Warren Group. “But it’s an awful lot like taking aspirin when you’ve got a toothache: It makes it feel better for a little while, but then the pain comes roaring back.”

Plymouth County saw 114 foreclosures in July, up 70 percent from the July 2009 total of 67. The number of completed foreclosures in the area began rising in March.

On Cape Cod, the number of foreclosure deeds filed in July was 144 percent higher than during the same month last year, jumping from 27 in July 2009 to 66 last month. This increase marks the eighth straight month in which foreclosure numbers in Barnstable County have exceeded the previous year’s total after several months of declining foreclosure levels.

As the number of completed foreclosures has been climbing, however, the number of petitions to foreclose filed — the first step in the process — has been increasing far more slowly. This discrepancy, said Valvo, indicates that homeowners who enter the foreclosure process have a far greater chance of losing their houses than in the past.

“The probability that you will lose your home has increased exponentially,” he said.

At Housing Assistance Corp. in Hyannis, approximately 25 homeowners at risk of losing their homes call seeking help every week, said vice president of operations Nancy Davison. The agency’s three foreclosure prevention counselors have an active caseload of between 1,600 and 1,900 clients at any given time, she said.

Early on in the economic downturn, many of the organization’s clients had taken out subprime loans or other mortgages with questionable terms, she said. Now, however, “most of the people we’re working with have 30-year fixed mortgages,” Davison said. “Most of the people are here because of lost revenue and lost jobs.”

Even financial institutions that never made any subprime mortgages or loosened their lending standards during the housing boom are starting to see the impact of the economy on their borrowers.

“We have seen our borrowers struggling,” said Peter Muise, president and CEO of Fairhaven-based First Citizens’ Federal Credit Union.

Though his credit union has not seen as significant an uptick in foreclosures as the state as a whole, Muise is concerned about what might happen if the economy continues along its current path.

“Unless there is some systemic change, we will start to fall into line with the (statewide) numbers,” he said.

The high foreclosure numbers already have started to affect the real estate market by adding to the number of homes available for sale, said David Callahan, president of the Cape Cod and Islands Association of Realtors.

“Whenever you have a large inventory, it brings the prices down,” he said.

In remembrance of 9/11, a day that will live in infamy. I pray the US can heal itself and recover from all the havoc that has been wreaked on it from both outside and from within.

And, dear God, just a teensy little prayer, if You could see fit to rapture up Washington and Wall Street, I’d consider it a huge favor. Otherwise I’ll keep having to wish them into the cornfield.

Phoenix housing market lacks supply of homebuyers

by Catherine Reagor - Sept. 9, 2010 12:00 AM
The Arizona Republic

Few homes are selling. Prices keep dropping.

In the metro Phoenix housing market, it’s all a simple matter of supply and demand: too many homes for sale and not enough buyers.

Of the people who are buying homes, more than a third are investors, snapping up mostly foreclosure homes at bargain prices and turning them into rentals. The number of houses on the market remains high, partly because many traditional homebuyers just aren’t buying.

Some of them want to buy - but can’t.

Mortgage requirements are tighter now than they have been in a generation, and many people who would like to get into the market can’t qualify.

Some of them can buy - but won’t.

Many renters today see friends and relatives burned by the housing collapse who now owe more than their homes are worth.

They’re reluctant to get in because they think home values will keep falling. Many young professionals say that they find such great bargains in rental homes, buying doesn’t make financial sense.

Can’t buy

Despite nearly record-low interest rates, lending guidelines for many borrowers are tougher than they’ve been in 20 years. Gone are the mortgages from the boom years that allowed people to purchase homes with little to no down payment or documentation of their incomes.

This is affecting all types of homebuyers. Except for first-time buyers who qualify for Federal Housing Administration loans that require as little as 3.5 percent down, many borrowers must now come up with at least 10 percent down payments and prove their income over multiple years.

http://www.azcentral.com/rsslinks/1827085 - 97k

Since we have to choose one, it’s the lesser of two evils. We have to get the Democrats out.

“A foreclosure forced Donald Pennington Jr. to move out. But until Tuesday night, nothing and no one could force him to move on.

That’s when the man former neighbors described as “a nut” and “pure evil” was killed in the front yard of the southeast Dallas home that he never could seem to leave after he lost it in 1996. ”

http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/091110dnmetobsession.2708de8.html#slcgm_comments_anchor

There are so many houses in my ‘hood in Redington Beach that aren’t on the MLS, no action against the owner in public records, and nobody living in them or taking care of them.

I also learned that Tino Martinez is my neighbor — my wife was very disappointed that she had to explain to me who he is.

Who the heck is Tino Martinez? Lola Falana’s son?

One little teeny comment and people get upset. Chill out.

I don’t understand this “share losses” business. Is the FDIC covering losses or isn’t it?

WASHINGTON – Regulators on Friday shut down a small Florida bank, bringing to 119 the number of U.S. bank failures this year amid mounting loan defaults.

In addition, the FDIC and Bank of the Ozarks agreed to share losses on $150.4 million of Horizon Bank’s loans and other assets.

Thanks Wipeout! I’ve been reading HBB for years and rarely comment. This bad economy has affected me, my family and friends and we need to get rid of the fat cats in Washington. They are the ruling class and we are the peasants. I’d like to throw all of them out! I’m ready for the economy to go down and correct itself. I’ll just grow my own food and survive by my own wits. Maybe then buying a home will be a good idea. I’m happy to be renting.

I doubt that Americans will start blowing money just because another crook got elected. Give me a break

Deleveraging Looks Like: Consumer Spending Declines Again In August What

This year, consumers — particularly upper-income Americans — started to spend again in May. However, the spending spurt was short-lived, with August spending returning to 2009 levels among both upper-income and middle-/lower-income consumers. In a sense, the current direction of consumer spending seems to be just the reverse of spending during this time a year ago.

This year’s somewhat disappointing back-to-school spending has been followed by few added expenditures for Labor Day. Consumer spending for the week before Labor Day averaged $61 per day — the same as during the prior week, and down from a $70 average during the same week in 2009.

Spending prospects for the next couple of months do not look much better, with Americans peppered by economic pessimism as the midterm elections approach. Many Republicans are talking about a lack of economic improvement. And the president is promoting new efforts to get the weak economy going. Neither party seems to hold out much hope for a significantly better jobs outlook or a surge in economic growth anytime soon.

On the other hand, no matter what happens in the elections, Americans could go on a post-election holiday spending spree. It just may be that a newly elected Congress could create some sorely missing economic optimism about the outlook for 2011.

* OPINION
* SEPTEMBER 10, 2010

From Zombie Banks to Zombie Mortgages?

Japan misallocated capital during its lost decade. How the U.S. can avoid its mistakes.
…
The U.S. shouldn’t be smug. Prolonged economic distress could undermine the attitudes responsible for U.S. economic dynamism. For example, the political winds are shifting against immigration even as labor-force growth slows because of an aging population and the leveling out of women’s participation in the work force. The crisis has demonstrated that too much U.S. wealth is tied up in houses. The mortgages that financed them now clog financial institutions’ balance sheets, starving new businesses of credit, much as Japanese banks kept lending to “zombie” companies at the expense of more promising firms. The U.S. risks perpetuating this misallocation of capital by maintaining extensive federal support for mortgages.
…

Video: ‘Bernanke bad for US, Fed head’s plan kills recovery’
YouTube RT

(You’re gonna have to lift your lazy arse and use Google to find it, cause I can’t figure out how to link it…)

Amazing how much brighter the picture became since just one week ago!

Policy Options Dwindle as Economic Fears Grow
Ed Nacional
By PETER S. GOODMAN
Published: August 28, 2010

THE American economy is once again tilting toward danger. Despite an aggressive regimen of treatments from the conventional to the exotic — more than $800 billion in federal spending, and trillions of dollars worth of credit from the Federal Reserve — fears of a second recession are growing, along with worries that the country may face several more years of lean prospects.

On Friday, Ben Bernanke, chairman of the Fed, speaking in the measured tones of a man whose word choices can cause billions of dollars to move, acknowledged that the economy was weaker than hoped, while promising to consider new policies to invigorate it, should conditions worsen.

Yet even as vital signs weaken — plunging home sales, a bleak job market and, on Friday, confirmation that the quarterly rate of economic growth had slowed, to 1.6 percent — a sense has taken hold that government policy makers cannot deliver meaningful intervention. That is because nearly any proposed curative could risk adding to the national debt — a political nonstarter. The situation has left American fortunes pinned to an uncertain remedy: hoping that things somehow get better.
…

Get Ready, We’re Going To Cut Taxes, Increase Spending, And Blow Out The Deficit

The Bush tax cut debate isn’t Obama winning and Republicans losing, but rather a compromise where everyone gets to keep their tax cuts.

In the event of that compromise, the Democrats are likely to get a lot of their new fiscal stimulus measures passed, including new infrastructure spending, in an effort to balance out what might otherwise be perceived as a Republican victory.

This way, Democrats can say they cut middle class taxes and put American laborers back to work on infrastructure projects. Republicans can say they got everyone tax breaks, including the more wealthy elements of the party, and blame the President for the increased spending.

In this scenario, the only loser is the deficit, which will increase as a result of all the new fiscal stimulus.

Here’s Who To Invest In If The GOP Wins Big In November

Let’s say the Republicans take everything in November, what will it mean for your portfolio? This is an easy call to make. Expect a dramatic roll back of the leftward policies the country has adopted over the last two years, and a sudden revival of the industries that have suffered as a result. In fact, if you look at the charts below, many of the stocks I am suggesting have already started to discount a conservative win.

Big oil companies will be huge winners. American oil imports from the Middle East will accelerate, where the industry earns 80% of its profits. That will bring peak oil sooner, easily taking crude over $100/barrel quickly, and eventually to $150 or $200. Restrictions on both onshore and offshore drilling will get rolled back to their Bush era laissez faire levels, cutting costs and boosting profitability. You want to own Chevron (CVX), ExxonMobile (XOM), Conoco Phillips (COP), and of course, BP (BP). The drilling and service companies, like Transocean (RIG) and Diamond Offshore (DO), should do spectacularly well.

http://www.neurosoftware.ro/finance/insurance/economy/heres-who-to-invest-in-if-the-gop-wins-big-in-november/

Food for thought:

WAYNE ALLYN ROOT: Overwhelm the system

Barack Obama is no fool. He is not incompetent. To the contrary, he is brilliant. He knows exactly what he’s doing. He is purposely overwhelming the U.S. economy to create systemic failure, economic crisis and social chaos — thereby destroying capitalism and our country from within.

Barack Obama is my college classmate ( Columbia University , class of ‘83). As Glenn Beck correctly predicted from day one, Obama is following the plan of Cloward & Piven, two professors at Columbia University . They outlined a plan to socialize America by overwhelming the system with government spending and entitlement demands. Add up the clues below. Taken individually they’re alarming. Taken as a whole, it is a brilliant, Machiavellian game plan to turn the United States into a socialist/Marxist state with a permanent majority that desperately needs government for survival … and can be counted on to always vote for bigger government. Why not? They have no responsibility to pay for it.

– Universal health care. The health care bill had very little to do with health care. It had everything to do with unionizing millions of hospital and health care workers, as well as adding 15,000 to 20,000 new IRS agents (who will join government employee unions). Obama doesn’t care that giving free health care to 30 million Americans will add trillions to the national debt. What he does care about is that it cements the dependence of those 30 million voters to Democrats and big government. Who but a socialist revolutionary would pass this reckless spending bill in the middle of a depression?

– Cap and trade. Like health care legislation having nothing to do with health care, cap and trade has nothing to do with global warming. It has everything to do with redistribution of income, government control of the economy and a criminal payoff to Obama’s biggest contributors. Those powerful and wealthy unions and contributors (like GE, which owns NBC, MSNBC and CNBC) can then be counted on to support everything Obama wants. They will kick-back hundreds of millions of dollars in contributions to Obama and the Democratic Party to keep them in power. The bonus is that all the new taxes on Americans with bigger cars, bigger homes and businesses helps Obama “spread the wealth around.”

– Make Puerto Rico a state. Why? Who’s asking for a 51st state? Who’s asking for millions of new welfare recipients and government entitlement addicts in the middle of a depression? Certainly not American taxpayers. But this has been Obama’s plan all along. His goal is to add two new Democrat senators, five Democrat congressman and a million loyal Democratic voters who are dependent on big government.

– Legalize 12 million illegal immigrants. Just giving these 12 million potential new citizens free health care alone could overwhelm the system and bankrupt America . But it adds 12 million reliable new Democrat voters who can be counted on to support big government. Add another few trillion dollars in welfare, aid to dependent children, food stamps, free medical, education, tax credits for the poor, and eventually Social Security.

– Stimulus and bailouts. Where did all that money go? It went to Democrat contributors, organizations (ACORN), and unions — including billions of dollars to save or create jobs of government employees across the country. It went to save GM and Chrysler so that their employees could keep paying union dues. It went to AIG so that Goldman Sachs could be bailed out (after giving Obama almost $1 million in contributions). A staggering $125 billion went to teachers (thereby protecting their union dues). All those public employees will vote loyally Democrat to protect their bloated salaries and pensions that are bankrupting America . The country goes broke, future generations face a bleak future, but Obama, the Democrat Party, government, and the unions grow more powerful. The ends justify the means.

– Raise taxes on small business owners, high-income earners, and job creators. Put the entire burden on only the top 20 percent of taxpayers, redistribute the income, punish success, and reward those who did nothing to deserve it (except vote for Obama). Reagan wanted to dramatically cut taxes in order to starve the government. Obama wants to dramatically raise taxes to starve his political opposition.

With the acts outlined above, Obama and his regime have created a vast and rapidly expanding constituency of voters dependent on big government; a vast privileged class of public employees who work for big government; and a government dedicated to destroying capitalism and installing themselves as socialist rulers by overwhelming the system.

Add it up and you’ve got the perfect Marxist scheme — all devised by my Columbia University college classmate Barack Obama using the Cloward and Piven Plan.

Thanks, Joey. Who knew?

http://news.yahoo.com/s/ap/20100911/ap_on_bi_ge/eu_iceland_financial_crisis

The people of Iceland are demanding accountability for their “leaders” who allowed the plutocrats to collapse their banking system. What a concept - compare their anger and activism to their zombified American counterparts, who are too busy watching American Idol and stuffing themselves on Doritos to get seriously riled up about Wall Street’s screw job on the rest of the country.

Those names ring a bell!

Kabul Bank Too Big to Fail?
By Jed Babbin on 9.8.10 @ 6:09AM

Messrs. Sherkhan Farnood and Khalilullah Frozi — the top executives at Afghanistan’s largest banking institution, Kabul Bank — were fired from their jobs last week by the leaders of the nation’s central bank when a run on their bank threatened its continued existence.

Kabul Bank apparently has accumulated losses in excess of $300 billion. Which, of course, leaves it as solvent as Fannie Mae and Freddie Mac. Though we have no report that the Afghanistan central bank leader is named either Abuben Behrnanki or Hafizullah Pahlson, Kabul Bank is now in the “too big to fail” category.
…

Basel rules to hit ‘too big to fail’ banks harder

‘Too Big To Fail’ banks will be subject to harsher capital requirements than their less systemically important peers under the new rules on capital ratios set to be agreed this weekend.

By Harry Wilson, Financial Services Correspondent
Published: 9:01AM BST 09 Sep 2010
…

Executives with criminal records slip through FHA crackdown, documents show
By Brian Grow
Center for Public Integrity
Sunday, September 12, 2010

A crackdown on reckless mortgage lenders by the Federal Housing Administration has failed to root out several executives with criminal records whose firms continue to do business with the agency in violation of federal law, according to government documents, court records and interviews.

The get-tough campaign has also been hamstrung because, even when the FHA can ban mortgage companies for wrongdoing or an excessive default rate, the agency does not have the legal power to stop their executives from landing jobs at other lenders, or open new firms.

After the collapse of the home loan market, the FHA launched an effort aimed at reducing losses on mortgages it insures by weeding reckless lenders out of the program.

But documents and interviews reveal that more than 34,000 home loans have been issued over the past two years by a dozen FHA-approved lenders that have employed people who were convicted of felonies, banned from the securities industry or previously worked for firms barred by the agency.

More than 3,000 of those loans, about 9 percent, were seriously delinquent or already a claim on the FHA insurance fund as of June 30. That’s nearly triple the rate for all loans made by FHA lenders over the past two years, about 3.4 million.

Compared with other regulators, critics of the FHA say it rarely cracks down on company executives. “In the securities industry, you bar people for life. You don’t see that a lot with the FHA,” says Mark Calabria, director for financial regulation studies at the Cato Institute.
…

Ben Bernanke was Wrong

Will the old purpose of central banking come back soon, that of “leaning against the wind,” or taking away the punch bowl before the party gets out of control, rather than constantly respiking the punch bowl the morning after a night of bubblelicious debauchery, to provide stimulus for a “hair of the dog” hangover cure?

Swiss summit will shape future of banking industry
By Howard Schneider
Washington Post Staff Writer
Saturday, September 11, 2010

The coterie of central bankers and government regulators gathering in the small Swiss city of Basel this weekend doesn’t know whether you’ll need to buy a car next year or borrow money to run a business.

But the new rules they have written over the last few months may well determine whether those loans can be made, how much they will cost - and perhaps how quickly the economy overall will expand.
…
“If you are in a period of rising house prices and people feel wealth and want a loan and to participate in a boom and suddenly the regulator says, oops, this is above-average growth and we need to put a stamp on it - that is not the way to win first prize in a popularity contest,” said Bernhard Speyer, head of banking and financial regulation for Deutsche Bank.
…

The good news:

- No double dip means interest rates will soon start climbing back towards normal levels, potentially popping the bond bubble, knocking up mortgage rates, and leading to the next substantial leg down in U.S. housing prices.

World markets rise as double-dip fears ease
By CARLO PIOVANO (AP) – 5 days ago

LONDON — World stock markets advanced modestly Monday as investors rode momentum from Friday, when an upbeat U.S. jobs report eased fears that the global economy could slip back into recession.

With Wall Street closed for a holiday, however, trading was expected to remain light.

Markets took heart after official data last week showed private employers in the U.S. added 67,000 jobs in August, more than analysts expected.

The figure bolstered optimism that the U.S. will maintain a slow but steady recovery from last year’s recession and avoid another economic contraction later this year.

By mid-afternoon in Europe, Britain’s FTSE 100 index was up 0.3 percent at 5,446.17, Germany’s DAX was 0.3 percent higher at 6,153.31 and France’s CAC-40 was up 0.3 percent at 3,684.20. Asian indexes closed higher and trading on Wall Street was to remain shut for Labor Day weekend after closing higher on Friday.

With most major governments reining in economic stimulus measures and many pushing through austerity spending cuts to reduce deficits, investors worry the global economy would be pushed into a double dip recession, particularly as the U.S. slows down quickly.

Because the U.S. economy is the world’s largest and consumer spending there accounts for a fifth of global economic activity, the stronger-than-expected jobs data on Friday helped calm investors’ frayed nerves after weeks of worrying indicators.

“The renewed flight to safety we have witnessed over the past month is overdone and risks an equally large reversal when the worries over a double dip subside,” analysts from Rabobank said in a report.
…

Afghanistan’s troubled bank
House of Karzai
A bank run exposes more murky financial and political dealings
Sep 9th 2010 | Kabul

PALM JUMEIRAH, the giant palm-shaped peninsula in the Persian Gulf, is famous for its luxury homes. In Kabul one frond is known as Little Afghanistan because so many of the country’s political and business elite have set up there. Mahmoud Karzai, a brother of the Afghan president, Hamid Karzai, is a prominent figure there. Luckily for him, he had help paying for it. As with other luminaries, the bill was picked up by ordinary Afghans who put money into Kabul Bank, a scandal-wracked institution of which the brother is the third-biggest shareholder.
…

Models tell us more than hindsight
By Tim Harford
Published: September 10 2010 22:41 | Last updated: September 10 2010 22:41

According to my esteemed colleague Gideon Rachman, economists should be swept off their thrones by historians. Economists have had far too strong a stranglehold on the levers of power, he claims. They think they are scientists. They think they can foretell the future. They are wrong: “pseudo-scientists”, “peddling brash certainties”. Historians such as Gideon and Professor Niall Ferguson, hitherto relegated to backwaters such as the FT’s op-ed page, should at last be paid a bit of attention.

In pondering how to respond, I suffered an acute shortage of brash certainty. Gideon is quite right about the importance of history. When it comes to economics, however, the chief source of brash certainties appears to be Gideon, who wouldn’t know an economic model if it paraded down a catwalk at him.

I know as little about history as Gideon knows about economics, but no doubt he is right to suggest that an important role of the historian is to emphasise the knotty particularity of time and place, and the difficulty of producing sweeping scientific laws that accurately describe a complex social world. Economists, sociologists, psychologists and anthropologists should appreciate this just as keenly. The best do. Many do not and, sadly, they are over-represented in the media. Perhaps this is the reason Gideon misunderstands the task and the methods of economics.

Gideon Rachman responds:

In his spirited and learned defence of his beloved economists, Tim Harford makes a mistake that is a characteristic of the profession that we both really belong to – journalism. That mistake is to rest too much of his argument on a couple of anecdotes. The story about the collapse of the Kemper Arena is indeed delightful. The implication Tim seems to draw is that the laws of physics and engineering are no more reliable than the “laws” of economics. They are all just hypotheses, which are gradually improved by trial-and-error in the real world. But it is my perhaps lazy impression, that the hard sciences have established a body of settled, scientifically-testable knowledge that economics simply cannot lay claim to. Is Tim really saying that ain’t so?

Tim also admits that macroeconomic models have proved “useless” at forecasting but suggests that this is a minor matter, since few academic economists “even bother to try”. But the starting point for my piece was Joseph Stiglitz’s suggestion that “the failure of much of the economics profession to see the crisis coming should be a cause of great concern.” And Professor Stiglitz is a winner of the Bank of Sweden prize for economics – sometimes referred to as the Nobel prize.

He argues that while economic edifices are always collapsing, “buildings constructed according to the laws of physics seem to stand”. This is an odd statement. Buildings constructed according to the laws of physics have a habit of falling down. Henry Petroski, engineer and author of Success through Failure, observes that structural engineers tend to learn by constructing ever more ambitious structures. When one of them falls down or wobbles, engineers figure out what was wrong with their models. Sometimes the results are tragic: when the innovative Malpasset dam cracked thanks to inadequate geological modelling, nearly 400 people died. Sometimes they are delicious: the award-winning Kemper Arena collapsed, with no loss of life, just 24 hours after hosting the American Institute of Architects Convention. From his riverside eyrie, I think Gideon can just see the famous wobbly bridge across the Thames. Is this really a damning indictment of the laws of physics?
…

More haircuts, less bailouts…

Basel should stand firm on capital
Published: September 9 2010 22:00 | Last updated: September 9 2010 22:00

All eyes are on Basel as bank regulators enter the final stretch in the quest to create new global capital standards. This Sunday the world’s central bankers and heads of bank supervision meet to finalise a key element of the package: the level of the minimum capital ratios. It is an opportunity to redeem the Basel Committee for its unwise earlier concessions to the banking industry and to present leaders at the forthcoming G20 summit in Seoul with a stringent proposal.

The new ratios have yet to be definitively pinned down, but reports suggest regulators are beginning to converge around a minimum core tier one capital ratio – the ratio of equity and retained earnings to risk-weighted assets – of five per cent. An additional buffer of 2 per cent to 3 per cent, which if breached by banks could restrict dividend pay-outs or bonuses, also seems likely. A further countercyclical buffer may be introduced, as well as a surcharge of 1 or 2 per cent of risk-weighted assets for banks deemed “systemically important”.

These would be a big improvement over the current minimum ratio of 2 per cent – and that on a more permissive definition of core tier one. Some will still see the new ratios as too low. But any level of capital can conceivably be too low if losses are big enough. This is why tier one ratios are only a piece of the puzzle and must be supplemented by schemes forcing haircuts on creditors when shareholders have been wiped out.
…

Shake-up set to raise costs of borrowing
By Brooke Masters in London
Published: September 9 2010 19:16 | Last updated: September 9 2010 19:16

Companies could face sharply higher costs for short-term borrowing, including revolving credit and commercial paper, under the banking reform package being finalised by global regulators meeting this weekend in Basel.

The comprehensive capital and liquidity package – known as Basel III – is designed to make banks safer and more resilient and avoid more taxpayer-funded rescues.

Among the provisions are the widely supported “liquidity coverage ratio” which requires banks to hold enough cash and easy-to-sell assets to get through a 30 day crisis.

But bankers and companies are warning that a specific part of that rule could make corporate overdraft facilities and the $200bn commercial paper market prohibitively expensive. That would make companies even more reliant on bank lending at a time when many banks are cutting their balance sheets.

“It is a highly unrealistic approach that would make corporate credit more expensive and complex,” said the Association for Financial Markets in Europe.
…

Bond Report

Sept. 10, 2010, 4:38 p.m. EDT
Treasurys decline, adding to weekly losses
By Deborah Levine, MarketWatch

NEW YORK (MarketWatch) — Treasury prices declined on Friday, pushing yields up for a third day, with stocks and technical resistance levels guiding action.

Treasurys, which had been higher in European trading hours, posted a weekly loss.

A week ago, the benchmark securities yielded 2.71%. Ten-year yield have increased for three straight weeks.

Yields on 2-year notes (UST2YR 0.57, 0.00, 0.00%) were little changed at 0.57%. That’s up from last Friday, when they ended at 0.51%.

Thirty-year bond yields (UST30Y 3.87, 0.00, 0.00%) rose to 3.87%, up 3 basis points. They’ve risen for three weeks, up from 3.67% a week ago.

“A very, very light day today for the New York Friday trading session should help the shortened holiday summer week come to a graceful close after a very bearish U.S. Treasury week,” said George Goncalves, a bond strategist at Nomura.
…

Wow! Am I on the wrong blog? Is this Stormfront light now or something? So just to clarify, it is just because of the “blacks” that this is happening, right? I have a feeling if a minority moved in next to you, you would want to move too…

That is about the most racist thing I have heard here. Pretty much every industrial city in the northeast and midwest went to hell in the last 20 years, and the people with the money moved out. In some of those cities, most of the people without money happen to be minorities - who ended up stuck - and of course with less and less of a tax base, the issues just perpetuate themselves. But in New England there are plenty of old mill towns with the exact same problems occurring with mostly poor white populations. What is their excuse?

“Comment by Diogenes (Tampa, Florida)
2010-09-11 08:41:57
Milwaukee, once formerly inhabited by German and Polish immigrants, is now 40% black (”african-american”). I would vacate, too. Whenever there is a proportion greater than about 15%, the city falls into decay. You just can’t support that much “entitlement”.

Wow! Am I on the wrong blog? Is this Stormfront light now or something? So just to clarify, it is just because of the “blacks” that this is happening, right? I have a feeling if a minority moved in next to you, you would want to move too…

That is about the most racist thing I have heard here. Pretty much every industrial city in the northeast and midwest went to hell in the last 20 years, and the people with the money moved out. In some of those cities, most of the people without money happen to be minorities - who ended up stuck - and of course with less and less of a tax base, the issues just perpetuate themselves. But in New England there are plenty of old mill towns with the exact same problems occurring with mostly poor white populations. What is their excuse?

http://www.nytimes.com/2010/09/12/us/politics/12boehner.html?_r=2&hp=&pagewanted=all

For anyone operating under the sad delusion that voting for the corrupt Establishment GOP in November is going to curb Wall Street’s rapacious looting of Main Street, there’s a thing or two you need to know about Republicrat leader John Boehner, whore of the corporate lobbyists.

Greek PM to go ahead with austerity plans amid protests
11 September 2010 Last updated at 23:00 ET

Greek unions have staged mass protests in the city of Thessaloniki against the government’s austerity programme.

Prime Minister George Papandreou, who is attending a trade fair in the city, has said he is not going to give up on his government’s plans.

The protests were largely peaceful but police used tear gas on a small group which broke away from the rally.

Stephanie Holmes reports.

This problem is very easy to solve: LOWER THE TICKET PRICES, AND YOU WILL SELL MORE TICKETS AND BUILD YOUR FAN BASE.

National League West-leading Padres still lacking fan support

San Diego is trailing 10 of the league’s 15 other teams in attendance, averaging fewer than 26,000 fans at home despite playing in one of baseball’s best parks.

September 11, 2010|5:34 p.m.

If they win it,will they come?

The San Diego Padres may be leading the National League West in wins, but they’re trailing 10 of the league’s 15 other teams in attendance, averaging fewer than 26,000 fans at home despite playing in one of baseball’s best ballparks.

And they didn’t even do that well in the 12 games that preceded this weekend’s crucial four-game showdown with the second-place San Francisco Giants, drawing an average of 25,086 against Philadelphia, Colorado and the Dodgers.
…

I might actually like this new fellow….

Indeed, for many Americans, literally every line they fill out on their tax return is information the I.R.S. already has. (If you don’t believe it, try not filling out the “wages” line on your tax return next year and see what happens. You’ll receive a notice that states your wages — and assesses a penalty for not reporting them.)

With a small adjustment in processing procedures, the revenue service could send you a tax form already filled out with the information it has for you — a Simple Return — rather than a blank tax form. You would simply check the numbers against your W-2 and 1099 and then sign it. That would be it. If you didn’t want to participate, you could just throw the Simple Return away and do your own taxes the old-fashioned way.

- Austan Goolsbee in a 2007 NY Times editorial

18