The Housing Bubble

Posted on Sun, Feb. 27, 2011 11:38 PM
Best documentary | ‘Inside Job’

Oscar went for timeliness in the documentary feature category, giving the big award to “Inside Job,” a detailed and quietly furious examination of our financial meltdown.

In accepting the award, filmmaker Charles H. Ferguson (he was also nominated three years ago for “No End in Sight,” about the American occupation of Iraq) said, “Forgive me, I must start by pointing out that three years after our horrific financial crisis caused by financial fraud, not a single financial executive has gone to jail, and that’s wrong.”
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Feb-27-2011 20:26

‘Inside Job’ Wins Oscar, But Will Financial Reform Be Gutted?
Salem-News.com

Congressional Attacks on Funding Could Cripple Protections for Consumers, Economy.

(WASHINGTON D.C.) - Tonight’s Best Documentary win for “Inside Job” serves as a reminder of the critical importance of financial reform even as implementation of reform is under attack by congressional Republicans seeking to cut off funding, policy experts at The Greenlining Institute said tonight.

Greenlining co-founder Robert Gnaizda is prominently featured in the documentary as one of the few whistle-blowers who saw the subprime meltdown coming and tried to sound a warning.

“The film shows how deregulation produced a massive housing bubble built on speculation, inflated appraisals, bogus bond ratings and outright fraud, and it ought to be required viewing for members of Congress,” said Chris Vaeth, The Greenlining Institute’s Washington, D.C.-based legislative director.

“It’s ironic that even as ‘Inside Job’ is being honored, some in Congress are working to squelch the very regulations that could stop the next meltdown by blocking the funding needed to implement them.”
…

* U.S. NEWS
* FEBRUARY 23, 2011, 2:29 P.M. ET

Fed’s Hoenig: Easy Money and ‘Too Big to Fail’ Must End
By LUCA DI LEO And BRADLEY DAVIS

WASHINGTON—A top Federal Reserve official said that the central bank was risking a new financial crisis with its easy-money policies and that the U.S. must end its implicit “too-big-to-fail” guarantee for the biggest financial institutions.

Kansas City Fed President Thomas Hoenig, one of the Fed’s most outspoken internal critics, warned that monetary policy should be tailored “so you don’t overshoot and cause the next crisis.”

Mr. Hoenig, taking questions following a Wednesday speech at a Women in Housing and Finance lunch, voted against the Fed’s easy-money policies throughout 2010. He is concerned that very low interest rates will harm the economy by causing prices to rise suddenly or by creating speculative asset bubbles, like the housing one behind the 2008 financial crisis.

Most Fed officials disagree, arguing that low interest rates are needed because unemployment remains so high 18 months after the recession ended, while inflation is still low.

The central bank needs to think about the long-term implications of its actions, Mr. Hoenig said. Monetary policy is a “powerful tool” that can have “unintended consequences.” He pointed out the recent crisis came about following a period of very low rates.

In his remarks, Mr. Hoenig said the U.S. must end its “too-big-to-fail” guarantee or it is doomed once again to face a crisis.
…

Fewer in US deem home-ownership a safe investment
* Attitude shifts likely to cause rents to rise
* Nearly 3/4 believe mortgages harder to obtain in future

WASHINGTON, Feb 28 (Reuters) - Home-ownership as an investment is no longer the rock-solid foundation for the American Dream it once was, according to a survey released on Monday by the firm the government created in the 1930s to promote home-ownership.

Fewer than two in three Americans now think owning their own home is a safe investment, down sharply from more than four out of five who thought it was a good investment less than a decade ago.

That attitude shift is likely to cause rents to rise as more Americans opt for renting over buying, according to the latest quarterly survey of attitudes toward homeownership from Fannie Mae , the largest provider of U.S. home mortgage funds.

The National Housing Quarterly Survey found just 64 percent of Americans think owning their own home is a safe investment, down from 70 percent at the beginning of last year and sharply lower than the 83 percent who thought it was a safe investment in 2003.

Last week, data released by the National Association of Realtors showed that home sales rose for third straight month in January, while the median home price fell to its lowest since April 2002.

An overhang of foreclose properties is weighing down the property market even as the broader economy appears to have entered a sustainable growth path.

“The public is aware that the demand side increase is going to be in the rental market, not the housing (purchase) market,” Doug Duncan, chief economist at Fannie Mae, said in a telephone interview.

Rubber Rebounding 32% as Reserve Drop Drives Michelin Costs
(Reuters)

Rubber’s 15 percent slump in about a week may be the prelude to rallies to a record high, driving up the cost of everything from Michelin tires to surgical gloves.

Harvests in Thailand, Indonesia and Malaysia, the biggest growers, will fail to meet demand for a second year in 2011, leaving stockpiles equal to 69 days of demand, the lowest in more than a decade, Goldman Sachs Group Inc. estimates. Prices may advance as much as 32 percent to 605 yen a kilogram ($7,407 a metric ton) by December, according to the median estimate in a Bloomberg survey of 10 analysts and traders.

Bridgestone Corp. and Michelin & Cie., the world’s biggest tire makers, are boosting prices by as much as 15 percent, and Top Glove Corp., the largest rubber-glove producer, is charging more. The rally in rubber mirrors the 93 percent advance in the S&P GSCI Agriculture Index since its June low caused by floods from Canada to Australia and droughts in China and Russia.

While that’s bad news for consumers, it means “the best price I’ve ever seen,” said Saneh Panpipat, 54, who tends about 2,000 rai (320 hectares) of rubber trees in southern Thailand, the country’s main growing region. “My staff and many farmers who were unable to afford their own cars now have brand-new Toyota or Isuzu pickup trucks.”

(Reuters) - Northern Rock, the bank nationalised during the credit crisis, is preparing to launch a series of mortgages that offer up to 90 percent of a property’s value, the Financial Times reported on Monday.

It said the lender could make the riskier new high loan-to-value mortgages available as early as Monday, citing unnamed people familiar with the plans.

Northern Rock was nationalised three years ago after becoming the first major British bank in more than 150 years to suffer a bank run.

The government has long been keen on returning the bank to the private sector, since selling it would raise cash to help cut the country’s troublesome deficit.

Options for Northern Rock include a sale, stock market flotation or “remutualisation” — turning Northern Rock into a company owned by its customers, such as UK loans and savings group Nationwide.

My sis sent me an article by Tyler Durden, entitled “Analysis of the Global Insurrection Against Neo-Liberal Economic Domination and the Coming American Rebellion”. It’s rather long, but here’s the part of the summation I liked, because it enumerates the remedies for the people:

“When revolution returns to America, the point won’t be to take down a figure head puppet politician like Mubarak or Obama, mere public relations moves will not suffice. We will take down the system behind them. We will take down the global banks, break them up, end the campaign finance racket, end closed-door lobbying, end the system of political bribery, end the two-party oligarchy, remove puppet judges who voted for unlimited spending by private economic elites, end corporate welfare and the various financial rackets which loot national wealth at the expense of the people.

“All countries are basically social arrangements, accommodations to changing circumstances. No matter how permanent and even sacred they may seem at any one time,
in fact they are all artificial and temporary.”
– Strobe Talbott

We must enact common sense polices to deter organized corruption. The devil is always in the details, so rain RICO laws down upon them.

They shall reap what they sow.”

DUBLIN: The new Irish government is headed for a confrontation with the European Union over the country’s austerity program after voters rejected the previous government, which negotiated the EU bailout of Ireland.

The incoming Prime Minister, Enda Kenny, will warn the leaders of France and Germany that the massive backlash by Irish voters at the weekend against the austerity program means the EU’s €85 billion ($115 billion) bailout of Ireland must be renegotiated.

Mr Kenny, the leader of the Fine Gael party, hailed a ”democratic revolution” after voters at the weekend hammered a government blamed for a catastrophic economic collapse and loss of sovereignty to the EU.

The ruling Fianna Fail party was virtually wiped out in the election, losing more than 50 seats in its worst election result in 85 years. Fianna Fail, which has ruled Ireland for 61 of the past 80 years, was reduced to the country’s third party. The Greens, Fianna Fail’s coalition partner, lost all their seats.

But Ireland’s attempt to renegotiate the deal will put it on collision course with the European Central Bank and the European Commission, which are opposed to Irish efforts to get investors to take a ‘’substantial discount” on €20 billion of bank debt.

Ireland votes out the thieves and we vote in more republicans. And I thought the Irish were the drunks….

Really Bad Reporting in Wisconsin: Who ‘Contributes’ to Public Workers’ Pensions?

David Cay Johnston | Feb. 24, 2011 12:16 PM EST

When it comes to improving public understanding of tax policy, nothing has been more troubling than the deeply flawed coverage of the Wisconsin state employees’ fight over collective bargaining.

Economic nonsense is being reported as fact in most of the news reports on the Wisconsin dispute, the product of a breakdown of skepticism among journalists multiplied by their lack of understanding of basic economic principles.

Gov. Scott Walker says he wants state workers covered by collective bargaining agreements to “contribute more” to their pension and health insurance plans.

Accepting Gov. Walker’ s assertions as fact, and failing to check, created the impression that somehow the workers are getting something extra, a gift from taxpayers. They are not.

Out of every dollar that funds Wisconsin’ s pension and health insurance plans for state workers, 100 cents comes from the state workers.

How can that be? Because the “contributions” consist of money that employees chose to take as deferred wages – as pensions when they retire – rather than take immediately in cash. The same is true with the health care plan. If this were not so a serious crime would be taking place, the gift of public funds rather than payment for services.
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Sound Money

Henry Ford once said, “It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

Are you confused by all the talk about monetary policy, fiat money and inflation? You’re not alone. Bankers and politicians have worked hand in hand for many decades to obscure their activities from the public. They hide behind elaborate structures designed to inflate the money supply while creating the false impression that they are looking out for our best interests.

Inflation is a very simple concept to understand: More money = less value. It may seem contradictory but it’s very straightforward.

For illustration purposes, join me on a brief journey of the imagination. One beautiful morning, you wake up and realize that you own twice as much cash as you had just last night. Magic money elves entered your home and bank account and simply doubled your entire cash assets. You’re now twice as wealthy (or half as poor as the case may be).

But you soon realize that the same thing happened to everyone else in the country. The money supply (total amount of money) has doubled! It’s just a one-time event and your regular income remains the same… you just got lucky this one time. It’s okay to dream, so stay with me.

What happens next? If you’re like most people, you probably start spending. You buy things you always wanted to buy but couldn’t afford. You pay back some debts. You buy stocks. In other words, you put the new money into circulation. So do most other people in the country.

Demand for many products increases because a lot more people can afford them now. Consumers are buying so much stuff that some shortages occur. To protect themselves against these shortages, shops and businesses decide to increase their prices. They know that once prices go up, fewer people will be competing to buy the same products, and the situation will be back to normal.

As a side effect of these higher prices, shop owners start earning higher profits than usual. They have more money in their bank accounts, which allows them to increase their spending. They will invest in new stock or expand their business. They might pay out dividends to their investors and bonuses to their employees, allowing these people to buy more products as well. This additional demand puts even more pressure on other shops to increase their prices.

A few months later, prices of almost everything have gone up. Suppliers and manufacturers are faced with the same threat of too much sudden demand from their clients so they too decide to start charging more.

You went on a one-time buying spree and look what happened! Your income stayed the same, but after a few weeks you can suddenly no longer afford the products you used to buy all the time because all prices in the economy have gone up.

Naturally, you demand a higher salary from your employer. If you’re self-employed or in business, you have to charge your customers more money just so that you can maintain your standard of living. Everyone else is in the same situation. Higher prices keep spreading throughout the entire economy, and it’s getting more and more difficult to make a living.

Can you see how this lucky one-time incident which at first seemed so exciting was extremely harmful not just for you but for the entire country? You briefly had a good time but now you’re worse off than before. In our story there are now twice as many dollars in circulation, but your income remains the same and each dollar you earn is worth only about half as much as it used to be. You’re really hoping for those money elves to come back.
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Fannie Mae, Freddie Mac at fault in housing fiasco
By FROMA HARROP
Feb. 22, 2011, 8:49PM

Not Seattle! Home prices in the “Queen City” of the Northwest were not supposed to go south. This isn’t Miami, Phoenix or Las Vegas, where suntanned speculators built big, borrowed big and went bust with a bang.

Yet just as the bubble markets seem to be settling (though on a still sandy bottom), property owners in formerly confident places like Seattle, Minneapolis and Atlanta are seeing their own late-in-the-downturn downturn.

Seattle home prices have fallen 31 percent from their 2007 high, according to economists at Zillow, the real estate website. Zillow thinks Seattle residential property has another 10 percent to go.

If sharp price drops can happen in Seattle, Minneapolis and Atlanta, then real estate is an even riskier investment than previously imagined. But while this development is not good for sellers, it offers a valuable lesson to us all.

Government policies have helped whip up home prices in both bubbly and seemingly froth-free markets.

If Washington, D.C., really wants to help people buy homes — and I don’t see why that should be a public goal - it should let house prices fall as they may.
…

A Union member, a tea party activist, and a CEO are sitting at a table with a plate of a dozen cookies in the middle of it. The CEO takes 11 of the cookies, turns to the tea partier and says, “Watch out for that union guy. He wants a piece of your cookie.”

Reverse Robin Hood robbery of Main Street-America by kleptocratic shock capitalists with Republican henchmen must continue!

Plain Talk: With ‘Koch’ call, it’s clear whose side Walker is on
DAVE ZWEIFEL | Cap Times editor emeritus
Monday, February 28, 2011 7:00 am

Several days ago, I had to laugh to myself when I read an early interview with Gov. Scott Walker in the New York Times.

“I’m not going to be intimidated,” Walker pontificated, “particularly by people from other places.”

He then reiterated that theme when he gave his so-called “fireside chat” a few days later.

The implication, of course, was that many of those pro-union demonstrators who descended on the state Capitol weren’t really from Wisconsin. “People from other places” — outsiders, if you will — are to be dismissed by our esteemed governor.
…
I figured it was the height of hypocrisy for a man who owes his election to big moneyed interests from outside Wisconsin and who is supported by the likes of sleazy Web manipulators like Andrew Breitbart of Los Angeles infamy to complain about “outsiders.” What chutzpah.

And then the bombshell: the prank telephone call to Walker from someone saying he was corporate fat cat David Koch. That phone call — taped and posted on the Web — exposed once and for all how outside interests are actually influencing Walker’s union busting.

There is now mounting evidence that this entire anti-public union gambit isn’t even Walker’s own idea, but the first step in an orchestrated national campaign to destroy the power of the union movement and hence the protections they afford to ordinary American workers.
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Exeter’s post the other day about tracking Fraudie and Phoney listings in his ‘hood prompted me to find their websites and start doing the same thing. Very few listings in our county, but one right here in our ‘hood that seriously (and I mean seriously) undercuts current wishing prices here. It was one of those specuvestor new construction flips I’ve talked about. For its size and amenities it even undercuts the bank-owned properties on the MLS. Welcome to 2011.

Here it comes — lower prices allowing the less well off to move into better off neighborhoods. Anyone else see this where they are? Detroit is an extreme case, but NYC is extreme the other way — it’s still a getrification trend moving out from Manhattan.

http://www.msnbc.msn.com/id/41810267/ns/us_news-life/#

“There’s a way in which they look down on people moving in from Detroit into houses they bought for much lower prices,” says Grace, a 39-year-old telephone company analyst. “I understand you want to keep out the riffraff, but it’s not my fault you paid $250,000 and I paid a buck.”

“Thomas has seen the desperation of the new arrivals. His officers, handling complaints, have found two or more families living in a single house, pooling their money for rent. They have ‘no food in the refrigerator and no furniture,’ Thomas says. ‘They can’t afford the food. They can’t afford the furniture.’ But they were eager to flee the gunfire of their old neighborhoods in Detroit. The foreclosure crisis made it possible.”

“The reason suburbs are the way they are is because a certain element can’t afford to live in your community,” adds Twiggs, a 54-year-old printer. “If you have $300,000, $400,000, $500,000 homes you’re relatively secure in the fact that (the homeowners) are people who can afford it. “But when you have this crash, people who normally couldn’t afford to live in Southfield are moving in. When you have a house for $9,900 on the corner over there — that just destroys my property.”

Local Wisconsin TV News made a vague “mention” that Wisconsin State Senator, Dale Schultz(R) might not support Walkers bill after a brief story about the protestors being allowed to stay in the Capitol overnight.

Almost like somebody is afraid to Break the News to the Sheeple.

Foreclosures Help Change Color Of Suburbs
AP/theindychannel.com | February 28, 2011 | Corey Williams

SOUTHFIELD, Mich. — Three years ago, Lamar Grace left Detroit for the suburb of Southfield. He got a good deal - a 3,000-square-foot colonial that once was worth $220,000. In foreclosure, he paid $109,000.

The neighbors were not pleased.

“They don’t want to live next door to ghetto folks,” he says.

That his neighbors are black, like Grace, is immaterial. Many in the black middle class moved out of Detroit and settled in the northern suburbs years ago; now, due to foreclosures, it is easy to buy or rent houses on the cheap here. The result has been a new, poorer wave of arrivals from the city, and growing tensions between established residents and the newcomers.

“There’s a way in which they look down on people moving in from Detroit into houses they bought for much lower prices,” says Grace, a 39-year-old telephone company analyst. “I understand you want to keep out the riffraff, but it’s not my fault you paid $250,000 and I paid a buck.”

This is a very interesting — and rather courageous — article. In Detroit, there is “black flight” from the inner cities to the close-in suburbs, leading to more black flight from the inner suburbs to the outer suburbs. This is probably the first article I have seen that places more emphasis on behavior than on color.

Foreclosures helping change color of some suburbs
‘It’s not my fault you paid $250,000 and I paid a buck’
By COREY WILLIAMS The Associated Press (M S N B C . com)

SOUTHFIELD, Mich. — Three years ago, Lamar Grace left Detroit for the suburb of Southfield. He got a good deal — a 3,000-square-foot colonial that once was worth $220,000. In foreclosure, he paid $109,000. The neighbors were not pleased.

“They don’t want to live next door to ghetto folks,” he says.

That his neighbors are black, like Grace, is immaterial. due to foreclosures, it is easy to buy or rent houses on the cheap here. The result has been a new, poorer wave of arrivals from the city, and growing tensions between established residents and the newcomers.

…”they’ve allowed for people without documentation and income verification to borrow 95 to 100 percent of home values,” Southfield Treasurer Irv Lowenberg says. “Many purchased homes when they had two jobs in the household and one of the jobs was lost. [ding ding ding! Elizabeth's Warren's two-income-trap coupled with securitization.]

..John Clanton, a retired auto worker, say the new arrivals have brought behavior more common in the inner city — increased trash, adults and children on the streets at all times of the night, a disregard for others’ property.

…”six-figure blacks are very concerned about multiple-family, economically depressed people moving into rental homes and apartments, bringing in their bad behaviors.”

…two or more families living in a single house, pooling their money for rent.
…Many of the foreclosed upon Southfield homes were going for $40,000 to $60,000. With so many empty houses available, rents also dipped by hundreds of dollars. Renters increased from about 13,100 in 2006 to 15,400 in 2009.

…she says middle-class blacks, like middle-class whites, are also put off by behavior of impoverished blacks who “have developed their own culture, one that is very different from mainstream America.”

Sheryll Cashin, who teaches constitutional law and race and American law at Georgetown University, [I looked up Cashin, and I can't tell from the picture if she is black.] says it would be a shame if black flight from the city set off black flight from the near suburbs: “You have a choice of whether you are willing to be around your people or go 180 degrees in the other direction,” she says. “To the higher income black people, if you don’t want to love and help your lower-income black brethren, why would you expect white people to? If you can’t do it, no one in society can do it. You can try to flee or you can be part of the solution.”

[ "Your people?" "Your lower-income black brethren?" Whoh. This is the traditional(?) mindset where the black community binds together. Meanwhile, the rest of the article stresses a new(?) mindset that middle class blacks are not accepting ghetto bahavior, from any color. (maybe because they know that "help" hasn't worked in the past?) Is this another shift toward a color-blind society?]

Southfield officials say one solution to changing neighborhoods is blight enforcement, other ordinances and costly fines. The idea, said the police chief, Thomas, is not to chase people away, but to help them assimilate:

…Williams was cited for parking a small trailer on the property and storing interior doors outside.
…ordinance officials were writing citations outside.
…fined $200 for noxious weeds because the grass was too high and dandelions covered much of the front lawn.

“It wouldn’t happen in Detroit,” he says. “Your property is pretty much your property. I think, here, they are going a little overboard.”
—–

Did you know that…..?

The right to collectively bargain is recognized through international human rights conventions. Article 23 of the Universal Declaration of Human Rights identifies the ability to organize trade unions as a fundamental human right.[3] Item 2(a) of the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work defines the “freedom of association and the effective recognition of the right to collective bargaining” as an essential right of workers.

Just this morning I was thinking about our old friend, the Credit Suisse Graph… and found an update to the huge Option ARM peak. Sorry, it’s a year old, but still useful.

http://dailyreckoning.com/the-second-wave-is-already-ashore/

——
“Instead of resetting as expected after the first five years, many option ARMs are so negatively amortized that they are hitting their automatic reset cap. [ie, the peak has bled left, from Aug 2011 to Jan to Aug 2010.]

That means they are resetting early…like right now [December 2009]— with unemployment reaching quarter-century highs every month, and a massive number of homeowners about to receive mortgage bills for two-three times what they are used to paying.

It takes anywhere between three-12 months for most homes to actually go into foreclosure. It’s tough to say exactly when the storm will come. But my guess is the second half of 2010.”
—–

The author wasn’t far off. These Option ARMS were for 5-years, so they probably weren’t subprime (subprimes had a much shorter time to reset). I’m guessing this second peak is made of formerly-prime FB’s in CA/NV/AZ/FL who did an Escalade-and-boob-job refi, and waited too long to sell because they didn’t want to give it away. Now they are either squatting waiting for somebody to kick them out, or they have already walked.

market pulse

Feb. 28, 2011, 10:00 a.m. EST
Pending home sales fall for second straight month
By Greg Robb

WASHINGTON (MarketWatch) -Pending home sales fell in January, the second straight monthly decline, a real estate trade group reported Monday. The pending home sales index fell 2.8% in January, close to market expectations, the National Association of Realtors said. However, sales in December were much weaker than first thought. Sales in December were revised sharply lower to a fall of 3.2% versus the prior estimate of a 2% increase.
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America’s Debt Crisis
Military health costs up 300%
Military health care costs eating a hole in Pentagon budget

NEW YORK (CNNMoney) — The cost of military health care, up 300% in the past decade, is eating a giant hole in the Pentagon’s budget, according to a report released Monday by a group of defense experts.

The Defense Department expects to spend $52.5 billion on health care in 2012, a 300% increase since 2001, the report says. By 2015, health care will account for 10% of the Pentagon budget.

The eye-popping numbers have set alarm bells ringing inside the Pentagon.

The report, from the left-leaning Center for American Progress, lays out a way to cut $15 billion a year from the Pentagon’s bloated health care budget.

The target: An insurance program called Tricare that accounts for much of the cost increase.

Currently, fees for some of the 9.6 million service members who participate in the program haven’t risen since 1995. And enrollees pay rates far below what they would find in the private sector.
Defense spending: Slaying the sacred cow

Fees for one popular Tricare program — called Tricare Prime — stand at $38 a month, or $460 a year for an entire family. Individual retirees pay $230 a year.

Dollar getting slammed, Silver and Gold surging toward new highs
February 28th, 2011 by maxkeiser

MK: The Dollar is not attracting ‘flight to safety’ support and this is surprising a lot of money professionals. I just heard Hillary’s speech in front of the UN and felt as if she was still reading from the old playbook written by Saudi Arabia and Israel decades ago. She sounded out of key as do all of the knee-jerk analysts ‘surprised’ by the dollar’s weakness. Silver is to the dollar – what the revolutions in N. Africa are to the dictators there. We are witnessing huge shifts in political and economic trends. The old dictators, including the US dollar – as world reserve currency – are being chased out of town by a global insurrection against the banker occupation.

NYT
Where have I seen this movie before?

Detroit is crowing that the auto industry is back, but so far, at least, it is a success story built as much on a revival in lending as on the development of desirable cars.

Sales of new cars rose 11 percent, to around 11.4 million, in 2010 and are off to an even stronger start this year, according to Autodata, an industry research service. Sales of used cars have been similarly robust.

After radically scaling back auto lending during the financial crisis, banks and the lending arms of the automakers have started to issue loans more aggressively. Borrowers of all types are now finding it much easier to obtain a loan compared with a few months ago.

Even car buyers with tarnished credit histories are getting financing, in some cases without making a down payment. More than 859,000 new cars were sold to consumers with a so-called subprime credit rating in 2010, a nearly 60 percent increase from the year before, according to CNW Marketing Research.

finance.yahoo.com/news/Behind-a-Rise-in-Auto-Sales-nytimes-1103931545.html?x=0&sec=topStories&pos=5&asset=&ccode=

Low-flow toilets cause a stink in SF ~ SFGate

San Francisco’s big push for low-flow toilets has turned into a multimillion-dollar plumbing stink.

Skimping on toilet water has resulted in more sludge backing up inside the sewer pipes, said Tyrone Jue, spokesman for the city Public Utilities Commission. That has created a rotten-egg stench near AT&T Park and elsewhere, especially during the dry summer months.

The city has already spent $100 million over the past five years to upgrade its sewer system and sewage plants, in part to combat the odor problem.

Now officials are stocking up on a $14 million, three-year supply of highly concentrated sodium hypochlorite - better known as bleach - to act as an odor eater and to disinfect the city’s treated water before it’s dumped into the bay. It will also be used to sanitize drinking water.

That translates into 8.5 million pounds of bleach either being poured down city drains or into the drinking water supply every year.

Not everybody thinks it’s a good idea.

A Don’t Bleach Our Bay alert has just gone out from eco-blogger Adam Lowry who argues the city would be much better off using a disinfectant like hydrogen peroxide - or better yet, a solution that would naturally break down the bacteria.

As for whether the supposedly environmentally friendly, low-flow toilets are worth the trouble? Well, according to Jue, they have helped trim San Francisco’s annual water consumption by about 20 million gallons.

“the whole gov’t is a ponsi scheme” Madoff said .Tell us something new please, everyone already knows that?

Do all realtors lie

or;

Are all liars realtors?

Farrakhan: Mideast uprisings will come to US ~ Tribune report

Nation of Islam leader Minister Louis Farrakhan predicted on Sunday that America faces imminent uprisings that mirror those in the Middle East.

“What you are looking at in Tunisia, in Egypt … Libya, in Bahrain … what you see happening there … you’d better prepare because it will be coming to your door,” Farrakhan said in a booming voice, thousands of followers cheering in his wake.

Farrakhan also called on President Barack Obama to allow protesters to march, urging the president not to attack innocent people when they do.

The controversial minster spoke to a packed house at the Allstate Arena in Rosemont as part of the 81st annual celebration of Saviours’ Day, which marks the birth of the faith’s founder, W. Fard Muhammad.

The keynote address, titled “God will send saviours,” capped a weekend of workshops focused on health, preparing for natural disasters and unidentified flying objects. The Nation of Islam believes in a UFO called “the wheel” or “the Mother Plane.”

Farrakhan has described a 1985 religious experience in which he ascended into a flying saucer and heard the voice of Elijah Muhammad predicting historical events that came to pass.

For about four hours, Farrakhan spoke and jumped from topic to topic, citing religious texts.
He praised Scientology and its founder L. Ron Hubbard.

Farrakhan extolled the virtues of Scientology and its auditing process, which is considered spiritual counseling by its members.

“L. Ron Hubbard is so exceedingly valuable to every Caucasian person on this earth,” Farrakhan said.

“… L. Ron Hubbard himself was and is trying to civilize white people and make them better human beings and take away from them their reactive minds … Mr. Hubbard recognized that his people have to be civilized,” Farrakhan said to a cheering crowd.

All these guys sound the same………….

3M CEO slams Obama as ‘anti-business’

Buckley said his company, which makes thousands of products ranging from Post-It notes to Scotch Tape, “will do business where it’s good and friendly.”

“There is a sense among companies that [the U.S.] is a difficult place to do business,” he told the FT. “We’ve got a real choice between manufacturing in Canada or Mexico — which tend to be more pro-business — and America.”

http://money.cnn.com/2011/02/28/news/companies/3M_CEO_Obama/index.htm

Pending home sales fall for second straight month

WASHINGTON (MarketWatch) -Pending home sales fell in January, the second straight monthly decline, a real estate trade group reported Monday. The pending home sales index fell 2.8% in January, close to market expectations, the National Association of Realtors said. However, sales in December were much weaker than first thought. Sales in December were revised sharply lower to a fall of 3.2% versus the prior estimate of a 2% increase. The index is 1.5% below January 2010 but 20.6% above the trough hit last June after the homebuyer tax credit expired. Pending homes sales fell in the Northeast, the Midwest, and West but rose in the South. The index is based on sales contracts on existing homes. The NAR also reports on sales of existing homes once the sales close, usually six to eight weeks later.

Back when I bought the Arizona Slim Ranch, I used a real estate agent who specialized in buyers.

And, wouldn’t ya know it, things didn’t go swimmingly after I moved in here. It seemed that the home inspector, which he highly recommended, missed some things. Including the problems with the two toilets, which both broke within the first week of my residence here.

When I called upon Mr. Real Estate for help, it was clear that there would be none coming from him. He’d already cashed the rather slender commission check from this modestly priced house, and he’d gone back to being a buyer’s agent for the better-heeled folks who were seeking golf course properties.

So, I got on with my life.

Well, guess what showed up in my e-mail box this morn: An invitation to connect on LinkedIn. And what do y’all think I did with that invitation?

Latest Libyan oil update: http://www.cnbc.com/id/41829638

Forget McMansions, the $200 micro house is here:

http://www.nytimes.com/2011/02/24/garden/24tiny.html?_r=1&ref=garden

Fresh from Wall Street’s alchemy labs: Credit derivatives tied to General Motors Co. (NYSE: GM - News) debt. The rub is, no such debt exists.

Banks and hedge funds are trading credit-default swaps, which make payments to holders of General Motors bonds in the event of a default. But GM canceled $40 billion of debt in bankruptcy and has pledged to cut its remaining $4.6 billion bank loan to the bone this year.

That is merely a technicality for the banks and hedge funds that have been actively trading the CDS.

Lawmakers and regulators have blamed credit derivatives for exacerbating the financial crisis and helping bring down companies like American International Group Inc. (NYSE: AIG - News) and Lehman Brothers Holdings Inc. Investors who bought “naked CDS” to bet on the likelihood of default, rather than to hedge risk from other investments, are credited with worsening the liquidity crisis that gripped those financial powerhouses, prompting calls for tighter regulation of the industry.

“Sure, having CDS without debt looks odd, and people may balk because credit derivatives were at the center of the AIG collapse, but that doesn’t change the fact that CDS prices are the de facto benchmark used to measure the state of the credit market,” said Kevin McPartland, senior analyst at research firm TABB Group.

Thank God for Frank-Dodd….

Quick pop in equities, followed by a little give back.

I wonder if they can keep this thing up any longer. Pretty soon everybiody is going to hit the exits.

So it looks like the bubble is raising back up again. I thought the whole deal would finish unwinding by 2011, but now I’m think 2015.

Found a couple of housing-related nuggets in our local fishwrap:

1. Some leave, some plan to fight big UA-area student complex

The proposal is for lugg-zhury condos to house 500 college students. People in the surrounding neighborhoods are upset, as University of Arizona students aren’t renowned for their good behavior.

BTW, Yours Truly used to live across the street from what was originally billed as a lugg-zhury condo community. The condos didn’t sell, so the developers turned the place into a student apartment complex. We, the neighbors, were treated to such things as loud parties on any night of the week.

Not to mention trash in our yards, traffic speeding up and down the street, and a home invasion in one of the apartments. It was a case of mistaken identity — those poor kids had nothing to do with whoever the home invaders were seeking. But, be that as it may, they moved away from Partyville shortly after the invasion.

2. Foreclosure comes as bolt from the blue

So much for trying to work with your lender on a loan modification. Soon-to-be-former occupant of the house says, “I think all they wanted to do was string me along and try to get as much money as possible.”

CA renter said:
Wrong again, NYCBoy.

Public employers have some of the most stringent anti-nepotism rules in existence.

Yeah right -

O’Brien has taken care of friends, too, finding jobs for the children of his Boston College football teammate, for a friend who ran a fur shop, for a former plasterer friendly with Cahill, and promoting two probation officers who moonlight as bartenders at a Northampton pizza joint frequented by one of his top deputies. Along the way, O’Brien’s family has also benefited…

O’Brien’s agency hired his daughter Genevieve, despite a warning that he might be violating the court system’s rules against nepotism. That gave O’Brien’s immediate family two jobs at the Probation Department, including his own, and two more under Cahill with a combined annual income of $260,000…

Similarly, some probation employees may feel pressure to support politicians backed by O’Brien. In July 2005, an impressive 45 probation employees — mostly senior managers — donated $5,900 to state treasurer Cahill. O’Brien said he played no role in orchestrating the donations to help out his fellow Quincy resident and the man who hired his wife to work in the state Lottery a few months later. Cahill said in a statement that he had known Laurie O’Brien for years and that she was hired based on qualifications…

For what it’s worth, I enjoyed the read ‘nymag’ titled” Madoff: The jailhouse tapes”

Maybe it’s different here in CA, but my gov’t paycheck includes me paying the following:

$632 month for health insurance
$96 month for union dues
$584 month towards STRS (state teacher’s retirement)

Sweet deal! 87,500 in salary to teach and huge retirement at the end.

CalSTRS’ formula, which is based largely on employee salary, age and longevity, tends to reward retirement at age 61½. For example, a teacher who has worked for 35 years, making $90,000 in her final year, could retire at age 62 and reap a $75,600 annual pension — 84 percent of salary. Teachers can add to their pensions by “buying” additional years.

By law, each teacher contributes 8 percent of salary to CalSTRS, the school district adds 8.25 percent, and the state puts in about 4 percent.

Compare that to the private sector, where employers and workers each contribute 6.2 percent to Social Security, and may contribute and match more through 401(k) savings. Teachers do not participate in the Social Security system.

Ooohhh… you guys are going to LOVE this one:

Linky:
ths gardenweb com/forums/load/realestate/msg021400597480.html

“Here is the story. I put my home in the market just 10 days ago for sale by owner(myself). The very same day a Realtor called me up and wanted me to take him as my agent. However, I nicely denied his offer and told him that I will keep him in mind and will get back to him if I am not successful. He did try to push hard on me but still I did manage to deny him for now.

I put up some “Sale By Owner” boards near the home, curbs, and the streets near by. Boards were bought at HD and Lowes ranging $8.98 to $2.98 (Big to small). Boards displayed my contact no.

Surprisingly, I saw that my boards placed in the street near the road divider were disappearing every day. At first I thought that may be city is removing it. If it is city, they would have contacted me at sometime by now. 4 boards vanished in 3 days.

I had to know who is behind this and put a camera facing the sigh from my home. Today, I did catch the culprit. It is the same Realtor who had contacted me before. I do have video him stopping the car at the sign board and pulling sign board out and getting in the car and driving away. He has covered his head with a hat and has a coat on him. So face is not clear however the physic is him. I had met him in one of the open houses in my area about 3 weeks ago.”

Nice, huh?

Former State Street Corp. (NYSE: STT) Chairman and CEO Ronald Logue recently notified regulators that he plans to sell $25 million worth of stock in the Boston-based company.

A graduate of Boston College, Logue joined State Street in 1990 as a senior vice president. As the company’s CEO, Logue received big-ticket compensation.

During his last three full years as State Street’s leader, for example, Logue’s compensation totaled nearly $60 million, according to SEC filings. That figure includes changes in the value of Logue’s pension.

Those TARP pay restrictions really did the trick…

From May 2009:

State Street said Monday it would sell new stock and notes to repay the government’s investment in the company, as many large financial institutions continue to seek an exit from the Troubled Asset Relief Program, or TARP.

But the company, a mutual fund giant and institutional money manager based in Boston, also announced Monday it would take a $3.7 billion loss as a result of bringing entities known as conduits onto its balance sheet

And in case ya didn’t know, another little factoid not usually reported by the MBM (Make Believe Media):

If you have one dollar in your wallet, that’s more than the combined income tax liability of GE, ExxonMobil, Citibank, and the Bank of America.

Realtors are turd burglars.

Everywhere you turn, the media and politicians are asking “what can we do to help lift this economy?” like it’s some sort of impossible math equation, all the while ignoring the massive commodities speculation which is destroying it, ignoring massive outsourcing of jobs which is destroying it, ignoring massive taxes which are destroying it, ignoring horrific monetary policy which is destroying it, and on, and on, and on. I’m tired of hearing this nonsense.

GENEVA (Reuters) – Ford Motor Co’s (F.N) financial chief wants automakers in the European market to adopt “rational” behavior and put an end to incentive rates he sees as excessive.

“We’d like to see a more rational marketplace,” Chief Financial Officer Lewis Booth told reporters. “People are incentivizing cars so heavily it’s not a long-term rational strategy. We’d like to see the European market stabilize.”

Man that made me laugh.

We’d like an oligopoly that fixes prices.
We’d like the competition to help us out?
We’d like richer customers.
We’d like a candy crappin unicorn. Good luck Mr. Lewis.

This could result in a few NY homes being put up for sale:

New York Gov. Andrew Cuomo aims to cap school superintendents’ pay

“Cuomo told The Associated Press that his (school superintendent salary) cap would be based on student enrollment. His bill would provide for a salary of $125,000 for the smallest rural districts and up to $175,000 for the largest districts, often in wealthier suburbs.

Cuomo’s bill would make superintendents subject to the cap once their current contract expires.

Currently, 31 percent of superintendents make over $179,000 with the highest being the Syosset schools superintendent on Long Island who is paid $386,868. Cuomo’s proposal, should it be passed by the Legislature, could force lower salaries for 319 superintendents, nearly half of the top district administrators in the state.

“We must wake up to the new economic reality that government must be more efficient and cut the cost of the bureaucracy,” said Cuomo. He has proposed a more than 7-percent cut in school aid to help contend with a $10 billion deficit and what he said is years of overspending. He said his cut can be handled by schools without layoffs and without hurting instruction.”

(AP via Syracuse.com)

As an aside, I’d like to say the poorer districts are going to take the hit on this way more than the wealthier ones and also it’s been interesting which districts trust or mistrust their superintendents. Union votes about salary freezes seem go hand in hand w/those districts who trust their superintendant to actually give back the raises when times turn good again. (Yeah, we know how that part’s going to end.)

WASHINGTON – China, the biggest buyer of U.S. Treasury securities, owns a lot more than previously estimated.

In an annual revision of the figures, the Treasury Department said Monday that China’s holdings totaled $1.16 trillion at the end of December. That was an increase of 30 percent from an estimate the government made two weeks ago.

The government made the change to its monthly report based on more accurate information it obtains in an annual survey. That survey more does a better job of determining the actual owners of Treasury securities.

FAT FINGER ACCOUNTING +/- 30%

was told to look for another job today…that’s how it shakes out when the boss says there are too many senior people in the group and one is his best friends wife….the other he has a hard-on for….the third is you.

Oh Carrie Anne…. I’ve got some interesting news regarding NYSAR. Catch up with me here tomorrow. You’re going to love it.

Fun with graphs: Two representations of the Case Shiller graph:

Christian Science Monitor - dramatic.

Wall Street Journal - muted.

Which one most accurately reflects the reality of the situation? The WSJ graph with a gentle bump and a stabilization? Or the CS Monitor one with the dramatic mountain an an unexpected stop to the drop-off?

The wrong message on unions
We may resent union perks, but they have had a valid role, and they should be a goal for more workers rather than something to cut in hard times.
By Sandy Banks
March 1, 2011

I was in Toledo, Ohio, last week, watching the labor union drama in Wisconsin unfold from a La-Z-Boy chair in a suburban home that was purchased, furnished and paid off by the wages of a factory worker.

Watching with me were union acolytes; family members who built comfortable lives in grocery store produce departments and on spark plug assembly lines.

They know the worth of union muscle and support those rallying Midwestern masses. They see the standoff for what it is: a political power grab; union-busting masquerading as budget-balancing.

But they also know the limits of union power, a lesson learned through disappearing jobs and downsized lives.

Their labor unions were no match for our long-brewing economic storm. They couldn’t keep auto plants from closing, grocery stores from rolling back wages or businesses from raising employee costs for everything from healthcare to parking passes.

Now they were watching from the sidelines as government workers waged a battle they had already fought and lost. In the brooding silence that settled in the room as the news droned on, I sensed resentment.

It was a familiar feeling to this visitor from California, where public employee unions — fat-cat bosses, gold-plated benefits and cushy pensions — have become a symbol, and a scapegoat, for our economic woes and political wrongs.
…

If there is a federal government shutdown, will Congress stop taking their paychecks, too?

With government shutdown looming, freshmen are the wild cards
By David A. Fahrentholdand Philip Rucker
Washington Post Staff Writers
Monday, February 28, 2011; 10:46 PM

These 87 new members - who otherwise might have become foot soldiers for party bosses, or jittery pawns of their home-town tea party groups - have instead coalesced into a bloc with its own ideas and a headstrong sense of its muscle.

As Republicans and Democrats try to cut a short-term budget deal this week - and a more permanent one in coming weeks - the freshmen are the wild card. They have the power to derail the whole process. Again.

But even their own leaders don’t know if they will.

The freshmen’s willingness to do things their way stems from their hyper-confident vision of themselves, revealed in interviews in recent days with more than 30 members of the group. Many described their job as a “calling,” a sense that their grandchildren, their country or their God needed them to make hard decisions to right the government’s finances.

“We may be the last opportunity,” said Rep. Michael G. Grimm (N.Y.), a former FBI agent.

But now, the difficult part.

In the escalating budget fight - and other battles to come - the freshmen will face the capital’s hardest kind of decision: how to compromise on the issue they care about the most.

How much ground will the freshmen give before they defy the Senate and risk a government shutdown?
…

“Fighting Special Interest ”

Farmers banded together over a 100 years ago to fight the power of the
monopolies . Knights of labor got the 8 hour work day ,child labor laws
changed . The Political parties wouldn’t do anything and along comes
a President that ends up being a reformer …guess who ?

Go to the Dylan Ratigan Show and the Tape “Fighting Special interest .”

Key Republican plans Fannie, Freddie wind-down
WASHINGTON | Mon Feb 28, 2011 3:37pm EST

WASHINGTON (Reuters) - A key Republican in the U.S. House of Representative plans to reintroduce in “weeks or months” legislation that would wind down mortgage finance giants Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) within five years.

“I will be reintroducing the bill probably within a matter of weeks, maybe months,” Texas Republican Representative Jeb Hensarling said at the Reuters Future Face of Finance Summit.

Treasury Secretary Timothy Geithner is scheduled to appear before the House Financial Services Committee on Tuesday to discuss the Obama administration’s views on the matter.
…

* FEBRUARY 28, 2011, 2:54 P.M. ET

Freddie Mac: Home Prices Fell In 4Q Across US
DOW JONES NEWSWIRES

The purchase price of U.S. homes fell 4.3% in the fourth quarter compared with a year earlier, as values declined across the country, according to Freddie Mac (FMCC).

Frank Nothaft, Freddie Mac chief economist, said Monday low mortgage rates, and the fact that foreclosed-property and short sales remain a big part of the market, contributed to pushing “homebuyer affordability to levels not seen in decades in most places.”

“This high affordability will likely translate into an increase in 2011 home sales relative to last year,” he said.

The real-estate market has been experiencing a choppy recovery since demand plunged last year when a popular tax break for first-time home buyers expired.

The mortgage finance giant Monday also said its Conventional Mortgage Home Price Index Purchase-Only Series showed the price of U.S. homes also fell 2.6% compared with the third quarter, without adjusting for seasonality.

Home prices fell in every region of the U.S. The sharpest drops were in the mountain division, the cluster of states west of Texas but not on the coast, where values fell 4.3% on the quarter and 9.6% in the last year. The Middle Atlantic–comprising New Jersey, New York and Pennsylvania–saw the mildest declines, at 1.1% and 1.7%, respectively.
…

* MARKETS
* MARCH 1, 2011

Fannie, Freddie Stuck In a Dividends Circle
…
Fannie Mae’s fourth-quarter income of $73 million, announced Thursday, was the company’s first profitable quarter in 3½ years. The bottom line doesn’t count $2.2 billion in payments that Fannie Mae had to make to the U.S. government, which was asked to pump an additional $2.6 billion into Fannie Mae.

Freddie Mac, which had a loss of $113 million in the latest quarter, paid $1.1 billion in dividends to taxpayers and asked for $500 million, partly to cover the dividend payment.

Company executives and outside groups such as the National Association of Realtors are prodding Treasury officials to reduce the size of the dividend to 5%, or the same percentage that U.S. banks paid in return for aid under the Troubled Asset Relief Program.

New loans are expected to “pay returns for many years, and they ought to find their way to taxpayers,” Fannie Mae Chief Executive Michael Williams said in an interview. “The question is: How does the government want to recoup their investment?”

In a letter to Treasury Secretary Timothy Geithner, the National Association of Realtors said the current dividend payments are exacerbating losses at Fannie and Freddie, which in turn has prompted the two firms to further restrict their lending standards. Mr. Geithner is expected to testify before a House panel Tuesday morning.

Some mortgage-industry analysts contend that the dividend is so high that it runs at odds with the U.S. government’s stated goal of conservatorship, the legal process that put Fannie Mae and Freddie Mac under control of the Treasury Department and is designed to conserve their assets. The government also got warrants to buy as much as 79.9% of each company’s common shares.

“Even in their best years, they rarely had the type of income to pay these dividends,” said Mahesh Swaminathan, senior mortgage strategist at Credit Suisse.
…

I’m amazed how smoothly the GSE phase out bill is proceeding.

House seen backing housing bill
WASHINGTON | Mon Feb 28, 2011 6:16pm EST

WASHINGTON (Reuters) -The U.S. House of Representatives will likely approve major legislation revamping the way Americans finance their homes by year’s end, a key Republican lawmaker said on Monday.

Rep. Scott Garrett, who chairs the House panel overseeing mortgage finance giants Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB), told the Reuters Future Face of Finance Summit he expected his newly empowered Republican colleagues to approve a measure overhauling the structure of the Government-Sponsored Enterprises (GSEs) by the end of 2011.

“I would say that you would see GSE reform during the course of this year and what happens in the Senate is always a question mark,” Garrett said.

Rep. Jeb Hensarling of Texas, the fourth-highest Republican in the House, told the Summit he plans to reintroduce legislation in weeks or months that would wind down Fannie Mae and Freddie Mac within five years.

Treasury Secretary Timothy Geithner is scheduled to appear before the House Financial Services Committee on Tuesday to discuss the Obama administration’s views on the matter.

The Obama administration earlier this month announced several short-term steps to make government-backed mortgages, including loans backed by the Federal Housing Administration, more expensive going forward in a bid to lure private capital back to the mortgage market.

The administration also announced plans to phase-out Fannie Mae and Freddie Mac over time and presented Congress with three options for replacing them long-term.

NO HOUSING BOTTOM FOR FIVE+ YEARS (AFTER 2011+5=2016).

This is the slated timetable for GSE reform…

* POLITICS
* MARCH 1, 2011

Billions in Bloat Uncovered in Beltway
By DAMIAN PALETTA

The U.S. government has 15 different agencies overseeing food-safety laws, more than 20 separate programs to help the homeless and 80 programs for economic development.

These are a few of the findings in a massive study of overlapping and duplicative programs that cost taxpayers billions of dollars each year, according to the Government Accountability Office.

A report from the nonpartisan GAO, to be released Tuesday, compiles a list of redundant and potentially ineffective federal programs, and it could serve as a template for lawmakers in both parties as they move to cut federal spending and consolidate programs to reduce the deficit. Sen. Tom Coburn (R., Okla.), who pushed for the report, estimated it identifies between $100 billion and $200 billion in duplicative spending. The GAO didn’t put a specific figure on the spending overlap.

The GAO examined numerous federal agencies, including the departments of defense, agriculture and housing and urban development, and pointed to instances where different arms of the government should be coordinating or consolidating efforts to save taxpayers’ money.

The agency found 82 federal programs to improve teacher quality; 80 to help disadvantaged people with transportation; 47 for job training and employment; and 56 to help people understand finances, according to a draft of the report reviewed by The Wall Street Journal.

Instances of ineffective and unfocused federal programs can lead to a mishmash of occasionally arbitrary policies and rules, the report said. It recommends merging or consolidating a number of programs to both save money and make the government more efficient.

“Reducing or eliminating duplication, overlap, or fragmentation could potentially save billions of tax dollars annually and help agencies provide more efficient and effective services,” the report said.
…

Even Yun sees the shadow inventory at this point:

28 February 2011 Last updated at 10:54 ET
US pending home sales in January downturn
Home for sale in Miami, Florida Contracts are signed at the beginning of a home purchase, making them a leading market indicator

Newly-signed sale contracts - a leading indicator of the US housing market - slowed for a second month in January.

The index of “pending” home sales, published by the National Association of Realtors, fell to 88.9 from a downwardly-revised 91.5 in December.

Markets had expected a fall, but only to a level of 89.5.

Contracts are typically signed near the beginning of a home purchase, and the latest data suggests that completed sales may slow in February and March.

The index has shown a patchy recovery since bottoming out at 75.9 in June last year. A reading of 100 represents a healthy level of market activity.

“We should not expect the recovery to be in a straight upward path - it will zig-zag at times,” said Lawrence Yun, the Association’s chief economist in presenting the January report.

“While home buyers over the past two years have been exceptionally successful with historically low default rates, there is still an elevated level of shadow inventory of distressed homes from past lending mistakes that need to go through the system.”
…

Foreclosures helping change color of some suburbs

By Corey Williams
Associated Press
February 28, 2011

SOUTHFIELD, Mich.—Three years ago, Lamar Grace left Detroit for the suburb of Southfield. He got a good deal — a 3,000-square-foot colonial that once was worth $220,000. In foreclosure, he paid $109,000.

The neighbors were not pleased.

“They don’t want to live next door to ghetto folks,” he says.

That his neighbors are black, like Grace, is immaterial. Many in the black middle class moved out of Detroit and settled in the northern suburbs years ago; now, due to foreclosures, it is easy to buy or rent houses on the cheap here. The result has been a new, poorer wave of arrivals from the city, and growing tensions between established residents and the newcomers.

“There’s a way in which they look down on people moving in from Detroit into houses they bought for much lower prices,” says Grace, a 39-year-old telephone company analyst. “I understand you want to keep out the riffraff, but it’s not my fault you paid $250,000 and I paid a buck.”

The neighbors say there’s more to it than that. People like John Clanton, a retired auto worker, say the new arrivals have brought behavior more common in the inner city — increased trash, adults and children on the streets at all times of the night, a disregard for others’ property.

The tensions have not gone unnoticed by local officials.

“I’ve got people of color who don’t want people of color to move into the city,” says Southfield Police Chief Joseph Thomas, who is himself black. “It’s not a black-white thing. This is a black-black thing. My six-figure blacks are very concerned about multiple-family, economically depressed people moving into rental homes and apartments, bringing in their bad behaviors.”

http://www.boston.com/news/nation/articles/2011/02/28/foreclosures_helping_change_color_of_some

Story ignored by CNBC along with gold being at record high prices:
CAIRO (AP) - Saudi Arabia’s main benchmark stock index has plummeted by over 7 percent, in a drop fueled by mounting unrest in neighboring Gulf Arab nations and reports of the arrest of a prominent Shiite cleric in the Sunni Muslim nation.

For good news, Rep. Bauchus is on CNBC stating that housing must find its own bottom without gov. interference. So CNBC at least gets points for that.