The Housing Bubble

Would renters also lose the help they have been getting if this bill passes?

market pulse
March 29, 2011, 7:47 p.m. EDT
House approves bill to axe borrower help
By Ronald D. Orol

WASHINGTON (MarketWatch) — The House of Representatives late Tuesday approved legislation that would axe an Obama administration program that seeks to modify mortgages for troubled borrowers. It is unlikely that the bill would be approved by the Democratic-controlled Senate. GOP officials argue that the programs aren’t working and must be eliminated as part of a plan to cut spending and reduce the deficit while Democrats insist that Republicans haven’t come up with a better alternative. A Congressional Oversight Panel recently reported that Treasury will likely only spend $4 billion of $30 billion in taxpayer funds allocated for loan modifications.
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I certainly would vote for Shelby if I lived in Alabama.

March 17, 2011, 1:50 p.m. EDT
Senators, Treasury spar over ‘too-big-to-fail’
TARP watchdogs criticize Treasury over mortgage assistance effort
By Ronald D. Orol, MarketWatch

WASHINGTON (MarketWatch) — Senators and the chiefs of two watchdog groups for the government’s bailout programs on Thursday criticized a top Treasury official, charging that he and the Obama administration didn’t do enough to help troubled homeowners or limit ”too-big-to-fail” banks.

“After TARP, creditors and investors in big banks have every reason to expect that the U.S. government will never allow these banks to fail,” said Sen. Richard Shelby at a banking committee hearing called to assess the successes and failures of the $700 billion Troubled Asset Relief Program. Shelby, the top Republican on the committee, is from Alabama.
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This Western nation banking crisis just goes on and on and on and on!

March 29, 2011, 12:42 p.m. EDT
S&P cut leaves Portugal one notch above junk
Greece also downgraded as debt rater cites restructuring worries
By William L. Watts, MarketWatch

LONDON (MarketWatch) — Portugal was dealt another blow in its effort to avoid a bailout Tuesday, as a further downgrade by Standard & Poor’s left the country’s credit rating one notch above junk status.
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Nightmare for residents trapped in Spanish ghost towns

Half-finished developments languishing amid dust and weeds reveal the scale of a burst property bubble Spain will take years to recover from

Aditya Chakrabortty
guardian dot co dot uk, Monday 28 March 2011 21.50 BST

A house under construction in Andratx on the south-west coast of the Spanish island of Mallorca before the financial crisis hit the industry hard. Photograph: Dani Cardona/Reuters

Sightseers come to Spain for the Alhambra, the Gaudis, the beaches. But Spaniards talk about a new set of landmarks, a kind of tourist anti-attraction. You can find them clustered on the outskirts of big cities and around holiday resorts, in Madrid and Valencia. They are half-completed housing estates, often vast areas of empty flats and foundations and property-developers’ hubris. Now they are nearly deserted. The Spanish call them ciudades fantasma: ghost towns.
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This story is among the first I recall that reports U.S. home prices back to pre-2000 levels. Only sixteen years’ worth of additional housing price reductions are needed for Atlanta to achieve FPSS’s prediction for 1983 prices!

Atlanta Business News 5:43 p.m. Tuesday, March 29, 2011
Housing price index sags to ‘99 levels
By Michelle E. Shaw
The Atlanta Journal-Constitution

An index measuring metro Atlanta home prices slid to its lowest point in 11 years in January.

According to the latest Standard & Poor’s Case-Shiller Index, released Tuesday, existing single-family home sale prices declined by nearly 7 percent in January compared with the same month in 2010. Atlanta’s index sagged to 99.59, just below the 100 benchmark score representing prices at the start of 2000. It was the first time metro Atlanta’s score was below 100 since December 1999.
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Ruh-roh — now economists are throwing in the towel on the idea of housing price reflation. Time to hit the decks!

Robert Shiller: Nobody is Predicting Back to the Races
By editor Mar 29, 2011, 12:25 PM

Case-Shiller Index co-author Robert Shiller spoke with FBN’s Connell McShane about his predictions for the future of the housing market and about his guess that the next bubble will be in farmland. Shiller said that in surveying professional forecasters, “median expectation is for flat to slightly declining until 2012,” and that “nobody is predicting back to the races.” He also spoke about how his view on housing has changed recently, saying that, “We’ve seen a major financial shock and it’s the kind of thing that could change public attitudes for a long time.”
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How is that red hot spring sales season shaping up so far this year?

Home prices nearing new lows

The Standard & Poor’s/Case-Shiller index shows January home prices in 20 major U.S. cities continued to weaken and approach the recession lows of 2009.

By Alejandro Lazo, Los Angeles Times
March 30, 2011

Home prices in January remained barely above lows hit during the worst of the recession, according to an index that tracks prices in America’s biggest cities, and many analysts said they expected values to fall further as the housing downturn plumbs new depths.

The Standard & Poor’s/Case-Shiller index for 20 major U.S. cities, released Tuesday, showed prices dropped 3.1% from January 2010 and 1% from December as demand for homes remained weak and distressed properties — foreclosures and short sales — remained a large part of the market.

“Keeping with the trends set in late 2010, January brings us weakening home prices with no real hope in sight for the near future,” said David M. Blitzer, chairman of the index committee at Standard & Poor’s. “The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery.”
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How low will home prices go?

Home prices in the top 20 housing markets were down 3 percent in January from a year ago. The slide in home prices is accelerating.

WSJ Blogs
Real Time Economics
Economic insight and analysis from The Wall Street Journal.

March 29, 2011, 3:27 PM ET

Where Are Americans Most Miserable?
By Kathleen Madigan

The lot of the U.S. consumer hasn’t been a happy one. Weak labor markets, falling home values and, recently, soaring gas prices have gnawed away at confidence.

The economic angst was apparent Tuesday when the Conference Board reported its index fell to 63.4 this month, from 72.0 in February.

Even so, misery isn’t blanketing the U.S. in equal measure. And gauging local gloom is possible using data collected at the city level. It turns out Boston is coping best. Clouds are darkest in sunny Phoenix.

The twin worries depressing consumers — slow progress on the job front and soaring gas prices — are reminiscent of the fears of the late 1980s. Back then, a misery index — the sum of the inflation and unemployment rates — illustrated the strains on households. In 1980, the index averaged 21%.

How miserable are consumers now? A 1980s index would total 11.0%, but recent inflation reports haven’t totally captured the pain drivers are suffering at the pump. Plus, any measure today would have to include the weakness in real estate. The January S&P/Case-Shiller report showed the fall in home prices is accelerating again. Declining home values make homeowners feel especially miserable.
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Moral hazard has run amok.

Special report: The revolution in central banking
Thu Mar 24, 2011 5:25pm EDT
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Since the early days of the financial crisis in 2008, the European Central Bank, the U.S. Federal Reserve and the Bank of England have all been forced to adopt policies that just a few years ago they would have dismissed as preposterous. And the Bank of Japan responded to the Sendai earthquake and tsunami by doubling its own asset-purchase programme, to keep the banking system of the world’s third-largest economy on an even keel.

For a generation, the accepted orthodoxy has been to focus on taming inflation. Financial stability has taken something of a back seat. Now, whether mandated to do so or not, western central banks have bought up sovereign debt to sustain the financial system, printed money by the truckload to stimulate their economies, sacrificed some of their independence to coordinate monetary policy more closely with fiscal decisions, and contemplated new ways of preventing asset bubbles. Some — such as Bank of England Governor Mervyn King — have joined wider political protests at commercial banks that are still behaving as if they are “too big to fail”, and as if being bailed out is just a hazard of business.

In the measured world of central banking, it amounts to nothing short of a revolution. Otmar Issing, one of the euro’s founding fathers and a career-long monetarist hawk, told Reuters that in buying government bonds the ECB had “crossed the Rubicon”. The question now for the ECB — and for its counterparts in Britain, the United States and elsewhere — is what they’ll find on the other side.
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Cash-Paying Vultures Pick Bones of U.S. Housing Market as Mortgages Dry Up. - Mar 29, 2011 (Bloomberg)

Delavaco Properties LP plans to spend as much as $30 million this year and $40 million in 2012 to buy bank-owned houses and condominiums in foreclosure-ridden South Florida. The private-equity fund will pay cash.

As lenders tighten mortgage standards and consumers stay on the sidelines amid a five-year slide in home prices, all-cash purchases are surging. The deals are done mostly by investors who can get properties for less than buyers needing loans, fix them up and resell or rent them.

“If there weren’t vultures out there, you’d have a city of dead carcasses,” Robert Theocles, an independent consultant for Fort Lauderdale, Florida-based Delavaco, said in a telephone interview. “It’s like the circle of life.”

A record 33 percent of existing-home sales were made to cash buyers in February, when an annualized 4.88 million properties changed hands, the National Association of Realtors reported March 21. That compares with 15 percent of the 4.82 million annualized sales when the Chicago-based trade group started monthly tracking of such purchases in October 2008.

In Florida’s Broward County, where Theocles is based, deals with no mortgages made up 69 percent of sales in February, according to Southeast Florida Multiple Listing Service data.

Amber Waves to Ivory Bolls ~ The New York Times

SPEARMAN, Tex. — Tight supplies of corn, soybeans and wheat have sent prices skyrocketing in the last year, prompting worries of a looming global food crisis.

In other years, American farmers have responded to high prices by devoting more land to staple food crops.

But this spring, many farmers in southern states will be planting cotton in ground where they used to grow corn, soybeans or wheat — spurred on by cotton prices that have soared as clothing makers clamor for more and poor harvests crimp supply.

The result is an acreage war between rival commodities used to feed and clothe the world’s population.

“There’s a lot more money to be made in cotton right now,” said Ramon Vela, a farmer here in the Texas Panhandle, as he stood in a field where he grew wheat last year, its stubble now plowed under to make way for cotton. Around the first week of May, Mr. Vela, 37, will plant 1,100 acres of cotton, up from 210 acres a year ago. “The prices are the big thing,” he said. “That’s the driving force.”

Economists, agricultural experts and government officials are predicting that many farmers, both in the United States and abroad, will join Mr. Vela this year in chasing the higher profits to be made in cotton — with consequences that could ripple across the globe.

“It’s good for the farmer, but from a humanitarian perspective it’s kind of scary,” said Webb Wallace, executive director of the Cotton and Grain Producers of the Lower Rio Grande Valley. “Those people in poor countries that have a hard time affording food, they’re going to be even less able to afford it now.”

So for the folk’s having a hard time making ends meet because of the cost of food and energy don’t worry just charge it, history is on the Bernakes side.

~U.S. Federal Reserve Chairman Ben S. Bernanke
History Backs Bernanke Betting Volatility Variable Won’t Hurt
(Bloomberg)

Federal Reserve Chairman Ben S. Bernanke is betting that surging prices for food and fuel won’t wind up breaking the cost of living for Americans. The historical record shows the odds are in his favor.

Opec set for $1,000bn in export revenues

Opec, the oil producers’ cartel, will reap $1,000bn in export revenues this year for the first time if crude prices remain above $100 a barrel, according to the International Energy Agency.

The cartel has been one of the main beneficiaries of high oil prices, which have soared in recent weeks amid the civil uprisings in the Middle East and north Africa.

Brent crude was trading at $115 a barrel on Tuesday.

Fatih Birol, chief economist at the IEA, said a new assessment by the rich nations’ oil watchdog showed that the total number of barrels exported by Opec in 2011 would be slightly lower than in 2008, when cartel oil revenues reached $990bn. But if average prices remain around $100 a barrel, Opec’s oil revenues will still reach a record of $1,000bn this year.

“It would be the first time in the history of Opec that oil revenues have reached a trillion dollars. It’s mainly because of higher prices and higher production,” Mr Birol said in a Financial Times interview. “However, Saudi Arabia has made substantial efforts to calm down the oil markets by increasing production and hinder prices from going higher.”

The estimate, based on total Opec production including natural gas liquids, does not take inflation into account. “Depending on your choice of specific inflation adjustment, the 2008 number may be slightly higher [in real terms],” Mr Birol said.

Many of Opec’s biggest producers are using the price gains to increase public spending, partly to guard against popular unrest. Saudi Arabia announced a multiyear spending package of $129bn and is expected to spend about $35bn in 2011.

This largesse means the country now needs an oil price of $83 per barrel in order to balance its national budget this year. “The more they earn, the more they tend to spend. So the oil price they need is ratcheted up,” said Leonidas Drollas, chief economist at the Centre for Global Energy Studies in London.

http://www.ft.com/cms/s/0/7fa28b96-5a2f-11e0-86d3-00144feab49a.html#ixzz1I4V4yQSP

Foreclosure fiasco‎

A new industry report yesterday warned that an “enormous backlog of foreclosures” among adjustable rate mortgages, known as option ARMs, is ready to swamp the fragile housing market, where home values have continued to slide for the sixth straight month with no clear bottom in sight.

Foreclosures involving ARMs have soared by 23 percent in the past six months alone — accounting now for 18.8 percent of all foreclosure actions — a rate higher than subprime mortgages ever reached, said Lender Processing Services, which services about half of US mortgages.

“The housing market recession is not yet over,” said economist David Blitzer of the S&P index. “At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing.”

“The average US loan in foreclosure [has] been delinquent for a record 537 days [while] a full 30 percent of loans in foreclosure have not made a payment in over two years,” the report said.

Meanwhile, the Dow Jones industrial average is up over 6 percent this year and the national unemployment rate is down over the last several months.

Read more: http://www.nypost.com/p/news/business/foreclosure_fiasco_Q6t4HPN0yGlA8A3cuj8y4J#ixzz1I4mkAhj9

Come on people multiply…

In an interview with a New Hampshire radio station Tuesday, Rick Santorum suggested the nation’s “abortion culture” is to blame for the Social Security program’s financial problems.

“The Social Security system, in my opinion, is a flawed design, period. But having said that, the design would work a lot better if we had stable demographic trends,” Santorum said. “We don’t have enough workers to support the retirees . . . . A third of the young people in America are not in America today because of abortion.”

“We have seven children, so we’re doing our part to fund the Social Security system,”

http://news.yahoo.com/s/yblog_theticket/20110329/ts_yblog_theticket/santorum-blames-abortion-culture-for-social-security-woes

I would love to see a shutdown, but it won’t happen. There will be a last minuet compromise, and the jokes that are called budget cuts will fall by the way side.

Item: Government Shutdown Grows Likelier ~ Associated Press

Senate Majority Leader Harry Reid at a ‘Back Off Social Security’ rally on Capitol Hill Monday. A deal to fund the government is slipping away.

Talks between congressional leaders and the White House on a deal to fund the government for the rest of the year appear to have slowed, with Democrats and Republicans loudly bickering over the fate of their negotiations.

Failure to reach a deal by April 8, a milestone that appears increasingly difficult to achieve, would result in a government shutdown. In the absence of any visible signs of progress on negotiations, Democrats and Republicans on Monday ratcheted up criticism of each other.

WSJ’s Carol Lee reports talks to avert an April 8 U.S. government shutdown have all but broken down.

Senate Majority Leader Harry Reid (D., Nev.) said negotiations had stalled because GOP leaders refused to compromise on their party’s plan to cut $61 billion in the remaining six months, in part because they were under pressure from tea-party activists.

“The biggest gap in this negotiation isn’t between Republicans and Democrats—it’s between Republicans and Republicans,” said Mr. Reid on the Senate floor. “The infighting between the tea party and the rest of the Republican Party, including the Republican leadership in Congress, is keeping our negotiating partner from the negotiating table.”

Michael Steel, a spokesman for House Speaker John Boehner (R., Ohio), said, “Discussions continue even today.”

The Congress is at this point because it didn’t pass a 2011 budget and has instead been funding the government with temporary measures, including the one that expires April 8. House Republicans passed a resolution to fund the rest of the fiscal year with $61 billion in cuts. Democrats balked and agreed to two short-term spending bills that cut $10 billion from the budget. In trying to bridge that $51 billion gap, Democrats proposed an additional $11 billion in cuts, but Republicans dismissed that as inadequate.

Greek schoolteachers, doctors walk off the job
March 30, 2011 | Associated Press

ATHENS, Greece – State school teachers and hospital doctors in debt-ridden Greece have walked off the job to protest planned education and health spending cuts.

Doctors in the social security fund system were also on strike for the second day Wednesday, demanding that their fixed-term contracts be made permanent.

Health and education unions are planning demonstrations in central Athens later in the day, to protest planned school and hospital mergers.

Severe cutbacks by the government have sparked a series of strikes and protests over the past year.

Greece was saved from bankruptcy last May by a euro110 billion ($155 billion) package of bailout loans from other EU countries that use the euro, and the International Monetary Fund.

Nuclear power plants dangerous to president’s health.
“Tokyo Electric Power Co. President Masataka Shimizu was hospitalized Tuesday. He was expected to remain in treatment for several days, company Chairman Tsunehisa Katsumata told reporters.
”
http://us.cnn.com/2011/WORLD/asiapcf/03/30/japan.nuclear.reactors/index.html?hpt=T1#

You would think that maybe the workers that try to fix the mess would need to be hospitalized, but no it the president of TEPCO. I guess fabricating new lies and cover ups is more stressful than being exposed to high levels of radiation and working around the clock.
They should force this piece of scum to help in the cleanup effort.
So much for my morning rant. Have a niece day.

As Libyan rebels run for their lives gold is heading up. So how long will it be before Obama breaks his word on the United States turning the offensive part of the operation to NATO? They do not even have the capacity to maintain strike levels never mind stepping them up.

How Low Will Home Prices Go?

By: Diana Olick
CNBC Real Estate Reporter
Published: Tuesday, 29 Mar 2011 | 1:48 PM ET

“Keeping with the trends set in late 2010, January brings us weakening home prices with no real hope in sight for the near future” says Standard and Poors’ David M. Blitzer. “The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery. At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing.”

“Bottom line, prices are retesting the lows again with no reason to think they won’t break below,” notes Miller Tabak’s Peter Bookvar. “The question of course is to what degree and whether bank balance sheets are prepared. Most unfortunately do not assume a double dip in pricing.”

http://www.cnbc.com/id/42324054 - 133k -

Before Libya, White House Must Negotiate With ABC

After some friendly negotiations, all parties agreed to a mutually acceptable time: 7:30 Eastern, which meant the speech on the military situation in Libya could be delivered — and analyzed — in time for the fans of “Dancing,” as well as other scheduled network shows, to see the shows they expected to see at their regularly scheduled times.

From Monday’s NYTimes if anyone missed this important nugget

“A substantial number of these are foreclosure homes that the banks haven’t yet put back on the market to sell or they’ve listed them at unrealistic prices,”

Vacant homes in South Florida nearly double over past 10 years

Paul Owers and John Maines, Sun Sentinel
6:58 p.m. EDT, March 28, 2011

The number of vacant homes in Broward and Palm Beach counties nearly doubled during the past decade, as the devastating housing collapse led to record foreclosures.

“A substantial number of these are foreclosure homes that the banks haven’t yet put back on the market to sell or they’ve listed them at unrealistic prices,” said Brad Hunter, chief economist with the Metrostudy research firm in Palm Beach Gardens.

Some real estate agents say they’re surprised there aren’t even more empty homes in South Florida. In 2000, bank-owned properties were nowhere near as prevalent.

“Now they’re a way of life,” said Bill Richardson, a real estate broker for 25 years and president of the Realtors Association of the Palm Beaches. “Virtually every community has a vacant home or two or five or 10.”

http://www.sun-sentinel.com/business/fl-census-vacant-houses-20110328,0,1681028.story - 34k

market pulse
March 29, 2011, 11:23 p.m. EDT
Fed’s Fisher vows to vote against extending QE
By V. Phani Kumar

HONG KONG (MarketWatch) — The U.S. Federal Reserve Bank of Dallas Pres. Richard Fisher said Tuesday that he would vote against any further monetary easing by the central bank at the end of the current program in June. “I will vote against … any further extension of that program,” Fisher told Fox Business News, referring to the U.S. Federal Reserve’s $600 billion asset-purchase program, often referred to as “Quantitative Easing 2.” “I cannot foresee a circumstance where I can support any further liquidity in the economy,” he said.

so i was watching 60 minutes last night and they were talking about a company called bloom energy…some sort of “green” energy company.

a few big companies have bought box the bloom boxes. ebay…google…fed ex. they cost 700K a piece .CA grants a 20% credit and the federal government grants a 30% tax credit. the company gets the benefit of energy savings. half the cost is born by the taxpayers.

meanwhile jon stewart belly aches about big corporations not paying taxes.

explain to me again why my toil should go to subsidize these corporations?

is it seriously beause this type of technology is going to save the planet…and the rich getting richer is just a byproduct?

What this guy sez may be true for Cleveland or Detroit, but it definitely does not apply to coastal California at this point in the cycle.

And with seven-or-so years of shadow inventory coming down the pipeline (a detail that appears to be missing from his article), what’s the rush?

March 28, 2011, 11:51 p.m. EDT
Home prices slide, but the end may be in sight
Commentary: Any day now, buyers will see the light
By Irwin Kellner, MarketWatch

PORT WASHINGTON, N.Y. (MarketWatch) — Home prices are sliding but the end may be in sight.

The latest housing data paint a picture of unremitting gloom. Once again, sales of both new and existing homes fell in the latest month, compared with the previous month. And to no one’s great surprise, prices are down as well.

The price data are especially disturbing. For one thing, median prices are the lowest they have been in almost a decade. For another, as long as they continue to fall, the outlook for housing will be grim.
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But there is another — even more powerful — reason why buyers are not stepping up to the plate, and that is psychology.

For years, if not decades, prospective home buyers bought as quickly as their finances permitted. Prices were generally rising, offering them a means of boosting their wealth. And, it stands to reason that if they had hesitated, buyers would have had to pay a higher price later on.

But since the housing bubble burst a few years ago, buyer psychology has done a 180. Now, the home buyer’s mantra is buy later, when prices are lower.

But trees don’t grow to the sky and people don’t live forever. So as the late economist Herb Stein once said, “If something cannot go on forever, it will stop.”

Indeed, in my view, we may not be far from a bottoming out of housing prices — if not an actual rise.
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Chase demands Ben-Ezra & Katz turn over foreclosure files

By Christine Stapleton Palm Beach Post Staff Writer
Updated: 11:41 a.m. Tuesday, March 29, 2011
Posted: 4:20 p.m. Monday, March 28, 2011

Chase Home Finance has filed a federal lawsuit against its former legal counsel, Ben-Ezra & Katz, accusing the firm of refusing to hand over foreclosure case files that contain over $400 million worth of original notes and mortgages “without which Chase will be unable to proceed with any of the pending cases.”

In the 11-page lawsuit filed Friday in federal court in Fort Lauderdale, Chase asked for a temporary restraining order and permanent injunction ordering the firm to return the files and pay Chase an unspecified amount of damages.

During its two-year contract with Chase, the law firm handled thousands of foreclosures throughout the state. According to the lawsuit, the contract requires the firm to immediately transfer case filees when the contract ends. Chase has made “repeated demands” for its files but “Ben-Ezra has not returned or released any of the Chase files.”

“Ben-Ezra refuses to release the Chase Files because it claims that it is owed over $5 million in fees and costs,” according to the lawsuit. Although Chase disputes the amount it owes the firm, it has offered to post a $2.8 million bond as security.

http://www.palmbeachpost.com/money/chase-demands-ben-ezra-katz-turn-over-foreclosure-1355804.html - 84k -

SC DEHEC , our store and Meat inspector crowd , discovered Raccoon meat being sold in a central SC grocery store , in a news item I noted today . Hey , anyone on here have a taste for that ?

Four UCSD libraries to close in consolidation move
Vaunted Scripps library will be among those targeted
By Pat Flynn

Originally published March 29, 2011 at 7:35 p.m., updated March 29, 2011 at 7:38 p.m.

Four University of California San Diego libraries, including that of the renowned Scripps Institution of Oceanography, are slated to be closed and their collections consolidated into other campus libraries in a cost-cutting move.

The consolidations are being decried by students and faculty members.
“Scripps has a library that is 100-years old and recognized as the leading collection of oceanographic history and information in the world,” said Walter Munk, 93, former director of the Institute for Geophysics and Planetary Physics at Scripps and one of UCSD’s founding fathers.

“The university is facing horrible financial problems and libraries have changed. I will accept all that,” said Munk, who is still active on campus. “Still, it would be extremely painful to me to see it close.”
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California is in budget limbo, with no bailouts forthcoming.

Brown halts budget talks with GOP lawmakers after failing to get support for special election
By Associated Press, Tuesday, March 29, 10:48 PM

SACRAMENTO, Calif. — Gov. Jerry Brown cut off budget negotiations Tuesday with Republican lawmakers, effectively ending his plan to ask Californians to vote on tax extensions in a June special election and creating uncertainty about what steps he and the Legislature will take to close the rest of California’s deficit.

Brown issued a statement saying he had halted talks days after GOP leaders released a list of 53 demands they were seeking in exchange for their support for a special election.

The Democratic governor and majority Democrats wanted to ask California voters in June to extend temporary tax increases enacted two years ago as part of their solution to close the deficit but were unable to get the Republican support needed for a ballot measure.

Those tax renewals were part of a plan that included a roughly equal amount in spending cuts to higher education, welfare, in-home support services, Medi-Cal and other programs.

Brown said in a statement and a video posted on YouTube Tuesday evening that he supports some of the reforms sought by Republican lawmakers, including a state spending cap, changes to the pension system for public employees and streamlining business regulations.

But he said after progress was made on those issues, the Republicans issued a much longer wish list that included items not related to the state budget debate and corporate tax breaks that would cost the state billions of dollars a year. The governor concluded that further talks would be fruitless.
…

How about reviewing a classic SoCal housing bust call, to help take our minds off the grim present?

Risks of a Serious Home Price Decline
Submitted by Rich Toscano on November 27, 2005 - 3:10pm

The probability of a serious housing downturn is much higher—and that of the oft-heralded “soft landing” much lower—than most people acknowledge.

An Atypical Housing Market

Home prices are notoriously “sticky” on the way down. As demand decreases and sellers find they can’t get the prices they want, many take their homes off the market and stay put. This reduction in supply helps to offset the reduced demand, and prices pretty much stay flat until wages rise or economic conditions improve enough that demand starts to rise again. Thus, a sustained rise in home prices is typically followed by a period of flat or mildly declining prices until the cycle can begin again.

The Southern California real estate market, however, is anything but typical, and there is no good reason to think that the ride down will be any more typical than the ride up. As a matter of fact, there are several factors that pose great risks to the standard-issue “soft landing” scenario:

1. Southern California prices are so far out of line with incomes, and income growth so slow, that it would take a very long time for incomes to catch up in the usual manner.

2. Southern California’s poor affordability renders it unusally susceptible to rising interest rates and tightening lending standards.

3. A significant portion of Southern California homebuyers are dependent on continued home price growth to maintain their fiscal solvency.

4. The local Southern California economies are vulnerable to a slowdown in either housing activity or home price appreciation.

5. Southern California homes are priced based on unrealistically high expectations of future gains.
…

Methinks the writer makes way too big a deal over a 0.1 percent YOY increase.

UPDATED, 10:16 a.m. Tuesday
S&P: Home prices in San Diego, D.C. ‘recovering’
By Lily Leung
Tuesday, March 29, 2011 at 9:31 a.m.

The S&P/Case-Shiller Home Price Index tracks changes in the value of homes nationally and in 20 major metropolitan regions. The index is calculated every month and has a two-month lag.

Home prices in San Diego have held steady and are faring better than most major metro areas that continue to see drops, show Tuesday’s S&P/Case Shiller Home Price Index.

The local region and Washington, D.C., were the only places to post annual gains in January, the last full month of data in the 20-area index since it operates on a two-month lag.

San Diego’s annual increase in January was slight, at 0.1 percent, while Washington D.C.’s was higher at 3.6 percent.

Those two areas were the only ones that ended 2010 in “positive territory” and remained there, said S&P/Case Shiller spokesman David R. Guarino on Tuesday.

Meanwhile, the remaining major metro areas in the index have either returned to negative territory or stayed there throughout last year. Areas that continue to suffer include Cleveland, Detroit and Las Vegas.

Washington D.C. “appears to be the only market that has weathered the recent storm,” said David Blitzer, the chairman of S&P’s index committee. It was the only area in the index to post a gain in January from December, at 0.1 percent. San Diego prices fell 1.2 percent during that same time frame.

“The housing market recession is not yet over,” Blitzer said. “And none of the statistics are indicating any form of sustained recovery.”

He added: “At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing.”
…
Year-over-year change

Washington, D.C.: 3.6 percent
San Diego: 0.1 percent
Boston: -0.6 percent
San Francisco: -1.7 percent
Los Angeles: -1.8 percent
…
Previous Case-Shiller coverage
Feb. 22: Index: San Diego prices up 1.7% year-over-year
Jan. 25: San Diego home prices hold steady in S&P index
Dec. 28: Key index shows San Diego housing prices slipped in October
Nov. 30: San Diego joins in U.S. home price dip

Buy low, sell high.

NY REAL ESTATE COMMERCIAL
MARCH 30, 2011

The Cost of Paying Top Dollar
Trump Son-in-Law Strives to Hold On to Building Bought at Highest-Ever Price
By ELIOT BROWN

Jared Kushner, the real-estate scion and Donald Trump’s son-in-law, plunged into the New York market at the top of the boom, paying $1.8 billion for a Fifth Avenue office and retail tower, the highest price ever for a single building at the time.

Now he is dealing with the consequences. With cash running low, the 30-year-old developer is scrambling to hold on to 666 Fifth Ave. ahead of a looming default deadline.

As of March, the aluminum-panel-clad skyscraper, where retailer Uniqlo is planning its flagship store, was about $3.5 million-a-month short on debt service, say people familiar with the matter. Only $10 million remained in a reserve fund used to service the property’s $1.22 billion mortgage, which is tied to the office portion of the building. Its revenues are only one-fourth the amount forecast in 2007.

Mr. Kushner is now facing off against a set of lenders that include private-equity heavyweights Starwood Capital Group and Colony Capital LLC. Talks have accelerated recently, with Mr. Kushner offering to put in tens of millions of dollars to recapitalize the property in exchange for some form of relief, people familiar with discussions said.

The Kushner family appears to have significant financial resources, and lenders don’t expect other backers, including Mr. Trump, to come to Mr. Kushner’s aid.

“The Kushners are ready and willing to invest more money into the property as soon as they can come to mutually satisfactory terms with the servicing agent,” a spokesman for Mr. Kushner said.

Talks are fluid, but several people familiar with the talks say that outlines of a deal could be agreed upon within weeks.

“He is a very smart young man,” Mr. Trump said of Mr. Kushner in an interview Tuesday. “I think it will come out well for him and everybody.”
…

I thought the policy goal was affordable housing, not affordable mortgages?

REAL ESTATE
MARCH 30, 2011

Regulators Unveil Mortgage-Lending Rules
By NICK TIMIRAOS And VICTORIA MCGRANE

Federal regulators proposed far-reaching changes to lending rules that eventually could raise the cost of borrowing for most homeowners, kicking off what is likely to be a furious effort by the housing and banking industries to soften the proposal.

The Dodd-Frank financial-overhaul law requires banks to hold 5% of the credit risk for mortgages and other loans that are bundled together and sold off as securities. The idea is that banks and other issuers of securitized loans will do a better job ensuring the quality of those loans if they are required to have more “skin in the game.”

Lawmakers directed six different regulators to write the proposed rule, and the law also allowed regulators to exempt certain gold-standard residential mortgages from the risk-retention requirement. Since the rules are likely to raise costs for lenders, any mortgages satisfying the “qualified residential mortgage” definition are likely to have lower borrowing costs.

If approved, the proposal would eventually reset what constitutes a prime mortgage as only those to borrowers who make down payments of at least 20%, with higher equity levels required for refinances.

The real-estate industry and consumer-advocate groups already have forged an unlikely alliance to push for less-restrictive rules. They say the rules could substantially raise borrowing costs, particularly for first-time home buyers. “You’re clearly creating a nation of have and have-nots when it comes to housing,” said Jerry Howard, president of the National Association of Home Builders.

Critics of the rule say relatively few borrowers will be able to obtain the less costly, gold-standard mortgages. Around 46% of all homeowners with a mortgage had less than 20% equity in their homes at the end of 2010, according to CoreLogic Inc., a real-estate data firm.

“A rigid 20% down payment requirement is going to unnecessarily prevent the middle-class, first-time home buyers from getting affordable mortgages,” Sen. Kay Hagan (D., N.C.) said in an interview.
…

Here’s some levity…
Palmer’s Chocolate Co (Dollar Tree Stores) has a new product out that’s cute. It’s a mint chocolate mini’s package called “Stimulus Package/Chocolaty Million Dollar Bills” 1,000,000USA Someone bought a package for me. Someone in the firm has a sense of humor.

Most Taboo subjects in Politics #1 the Holocaust from Ryantineocon

Aggressively intelligent monologue by this young man:

http://tinyurl.com/4dhsctl

Big article in the Commercial Record about foreclosing on reverse mortgages. I guess that’s where grandma isn’t paying the homeowners/taxes so the bank forecloses.

I haven’t seen it on this blog, nor anywhere else. If it is happening in Connecticut, it must be happening more in the really bad states.

Local real estate company put a help wanted add on the radio.

I suspect that many former mercedes driving bleached blond realtors have not been making much cash as of late and have quit or found other employment.

Remember when laddy was very focused on the Sierra snowpack, and how life would change forever in California because the diminishing levels were a sign of global climate change?

http://www.usatoday.com/weather/storms/winter/2011-03-30-sierra-snow-california-drought_N.htm

Posted yesterday by a former realtor. And she confirms that:

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Realtors Are Liars

Comment by robin
2011-03-29 23:32:00
Says him (her); I was once a realtor (legally for 12 years), and can confirm from experience that the majority of other realtors I dealt with were, indeed, liars. I only sold one house to a close friend and rebated him half of my $390 pre-tax commission. Yes, I was a greedy bastard on that $29,900 transaction.

While in the boiler room I paid to occupy, many discussions revolved around how to best avoid discussing known defects with prospective buyers. Small things like leaky roofs. Cracked foundations.

Disgusting. Kept the license active for 12 years but was so repulsed by the industry norm that I only hung my license with that agency for 6 months. Never hung it elsewhere. Familiarity bred contempt.

Thereafter I kept up the education requirements but never wanted to swim again among the sharks.

So yes, most of the realtors I have known are liars, but I current know and will deal with a select few who are golden. Be careful out there! -

Professionals lured into mortgage fraud by hope of legit work

http://www.pittsburghlive.com/x/pittsburghtrib/news/pittsburgh/s_728352.html#ixzz1I6DpQOXB

Ripping off banks for about $20 million before fleeing to Brazil made Bernardo Katz a familiar name in Western Pennsylvania and mortgage industry circles.

Less well known is the Murrysville attorney who helped the Mt. Lebanon fugitive carry out the mortgage fraud schemes.

A federal jury convicted John L. Chaffo Jr., 50, in July on 11 counts of wire fraud and conspiracy. Chaffo transferred thousands of dollars between Katz and other participants in the scheme but earned his standard fees on the deals that ended his career — and earned him four years and nine months in prison while Katz plays cello in YouTube videos as a fugitive.

…Federal officials say it’s typical for a few people at the center of a mortgage fraud to make most of the money. Other participants seemingly risk their careers and freedom for the same fees they earn in legitimate mortgage deals. Why? Because, in the mid-2000s, going along with the frauds attracted more legitimate business.

….Such abuses in the mortgage industry led a Democrat-controlled Congress last year to pass the Dodd-Frank Act.

Now under Republican control, Congress is questioning whether the new Consumer Financial Protection Bureau set up by the act has too much power over banks and other financial institutions.

Here are my top three reads about the housing meltdown:

1. The Big Short by Michael Lewis. How betting against credit default swaps paid off bigtime.

2. The Monster by Michael Hudson. About subprime lending and its effects on homebuyers, government policy, and the economy.

3. Financial Crisis Inquiry Commission Report. It’s long. It has small print. But, as official government reports go, it’s a real page-turner.

This is total b.s. This is a flip. I drive past it every day on my way to work and I watched them buy it and renovate it. No one lived in it during that time.

“The owners loss is going to be the buyers gain. The list of upgrades and work done is too long to list. The sellers hate to leave this wonderfully updated and meticuously taken care of home.

http://www.everyhome.net/pa/mg/ul/t5859469.htm

Too many Gringo’s with too much of the Fed’s “hot money”?

Brazil clamps down on foreign land buyers to curb speculation

http://www.upi.com/Top_News/Special/2011/03/18/Brazil-clamps-down-on-foreign-land-buyers-to-curb-speculation/UPI-68711300471632/#ixzz1I6eWS83R

Brazil has unveiled plans to toughen rules that govern foreign ownership of land in an attempt to control speculative buying of large tracts of farmland and real estate by foreign investors, including sovereign fund managers.

Officials said the law relating to land purchases by overseas investors would be revised to effect the change.

Massive infusions of capital into the Brazilian economy have pushed up the value of the real, creating a headache for financial regulators and exporters alike. Business leaders said an overvalued real would discourage foreign buyers of Brazilian commodities and goods and make a dent into the country’s projected growth.

“Facts do not cease to exist just because they are ignored.” ~T.H. Huxley

I think everyone here will get a chuckle out of this weeks New Yorker magazine cartoon caption contest winner (#227)…

http://contest.newyorker.com/?tab=winner&affiliate=ny-caption

On the Palm Beach Post there was a fellow who said that the state should take possession of properties -etc.

“Not paying and cannot prove then ownership to the state who sells it after paying up any fees and holds the funds in escrow in case this can be overcome by either party.”

Homeowners were beguiled and should have some relief though, but not thru a forced reduction. I think credit reporting agencies should be barred from reporting mortgage payment status now and in the future.

I also think that the IRS should be instructed to not audit any recapture for the next five years related to owner occupied housing.

All deficiency lawsuits for owner occupied housing (once the owner has left and it has been sold at a great deal less) should have a national moratorium of five years as well.

This way homeowner loses, the government doesn’t gain on the forced disposition, and the banks lose any prospect of recovering their losses. There should be a time frame set for the homeowner to qualify by saying within the next six months anyone intending this path has to elect to do so. It would also not hurt the homeowner’s credit rating (provided he had paid his condo fees, etc).

Special courts should also be funded (from the interest on the escrow funds) so as to allow real estate prosecutions to deal with these monsters who created this mess.

From the Editors of American Banker

All Through the Crisis, Average Bank Pay Grew at Pre-Downturn Clip

The past few years have been very rewarding for bank employees.
OK, maybe not the government rescues, stagnant loan books, layoffs and litigation. But none of these disasters hurt pay at banks.

A review of call reports filed with the Federal Deposit Insurance Corp., compiled by BankRegData.com, shows that average compensation in the last few years rose — and at the same rate as it did before the crisis.

Another year of free living.

South Florida law firm’s demise puts 9,000 foreclosures in limbo

By Kimberly Miller and Christine Stapleton
Palm Beach Post Staff Writers
Updated: 11:45 a.m. Wednesday, March 30, 2011
Posted: 10:07 p.m. Tuesday, March 29, 2011

WEST PALM BEACH — Palm Beach County courts will sort through nearly 9,000 wayward foreclosures in a cattle call of cases from the collapsed Law Offices of David J. Stern.

Chief Judge Peter Blanc ordered hearings for pending Stern foreclosures that the firm has said it no longer has the manpower to withdraw from as counsel of record.

For homeowners, a Friday letter from Blanc to Stern outlining the procedures for case management conferences could mean a dismissal if no one from the bank’s side attends the hearing. The bank could re-file the foreclosure, but it would likely cause a delay of months or even a year considering the recent slowdown in new filings.

Stern told judges in a March 4 letter that he was shutting down his foreclosure business at the end of the month, leaving as many as 100,000 cases statewide in limbo.

Why Marco Rubio won’t vote to raise debt limit.
He says everybody in Washington knows how to cut spending.
“The time to start is now.”

Floridians sent to Washington a senator who understands the U.S. is killing itself with its reckless borrowing habits. Senator Rubio laid out his objections to raising the debt ceiling yet again in the editorial pages of today’s Wall Street Journal.

Article: Don’t Raise Debt Limit

- The clock is ticking. The Treasury can move accounts around to avoid hitting the debt ceiling a while longer, but Congress must eventually stop spending money it doesn’t have. Even more pressing is the deadline a week from tomorrow on approving the funding for federal operations. Congress was supposed to have a budget in place October 1st, 2010 but never got around to it. It has been running the government on continuing resolutions ever since. Come April 9 the money runs out…unless Congress acts.

Good news for California!

Near-record Sierra snow good news to parched Calif.
TheNewsTribune.com

Chris Rivest’s father sent him from San Francisco to the family vacation cabin near the Sierra Nevada crest with a seemingly simple chore - clear it and the driveway of snow.

Easy for him to say. When Rivest arrived earlier this week at the cabin near Soda Springs, about 90 miles northeast of Sacramento, the snow was so deep it nearly touched the power lines crossing in front of the cabin. Snow was piled at least 10 feet high on top of the deck of the A-frame home.

“My dad wants me to clear the deck,” the ponytailed 21-year-old said Monday, as he labored to clear the driveway with a snow blower. “How do I even begin to do that? Where would I put the snow? This is absurd.”

Absurdly deep is how Sierra residents and travelers might describe this season’s snowfall, which is setting records at some ski resorts and nearing records at official gauging stations.

The last round of storms that blew across much of the 400-mile-long range during the weekend added several feet to what has become a snowpack of historic proportions, and one that promises an end to California’s lingering drought.

After state water officials release the results of their latest snow survey Wednesday afternoon, Gov. Jerry Brown is expected to officially declare the drought over, said Evan Westrup, a spokesman for the governor’s office. Former Gov. Arnold Schwarzenegger declared a statewide drought in June 2008 and a state of emergency because of low water levels in February 2009.

Read more: http://www.thenewstribune.com/2011/03/30/v-lite/1605041/near-record-sierra-snow-good-news.html#ixzz1I6xzk4AM

Real Estate Crash Catches Up to Cities as Property Taxes Slide
Bloomberg

The real-estate crash is catching up to U.S. municipalities.

Cities, counties and school districts had been sheltered from the full impact of the slump because of the lag between when realty prices fluctuate and values are reset by local tax assessors. That’s changing as property rolls are adjusted to the current market and residents push to have their taxes cut.

Local officials are now facing the consequences. Property- tax revenue dropped in the last three months of 2010 at the fastest pace since home prices slipped from their peak more than four years ago, the Census Bureau said yesterday. The decline may continue as values fall further, adding strains to cash- strapped localities that already fired workers, halted projects and cut spending because of the recession that began in 2007.

“The story had been a question about why property taxes weren’t declining,” said Christopher Hoene, research director for the Washington-based National League of Cities. “What the census is picking up is that’s been happening and it’s likely to keep happening for the next few quarters.”

The decline for local governments contrasts with a recovery for U.S. states led by income and sales taxes. Their collections in the fourth quarter climbed by $13 billion to $177.8 billion, the biggest jump since 2006, according to the census data released yesterday.

“Cities are by no means out of the woods,” Hoene said. “They have got another year or two of dealing with either declining revenues or pretty slow growth.”

Western Values

In Maricopa County, Arizona, the county assessor reported last month that values of all property dropped by 12 percent for the next tax year, the second straight double-digit decline. In Los Angeles, the second most-populous U.S. city, property taxes for the year ending June 30 are projected to fall 1.7 percent to $1.42 billion, according to a March 1 report by the controller.

The strain may mean credit-rating cuts this year for local- government debt, which trades in the $2.93 trillion municipal bond market, Moody’s Investors Service said in a report this month.

Foreclosure Fiasco
House votes to kill Obama mortgage plan
By Jennifer Liberto, senior writer
March 29, 2011: 8:21 PM ET

WASHINGTON (CNNMoney) — The House passed a bill Tuesday to kill a signature Obama administration program that helps homeowners stay in their homes but has faced criticism as ineffective.

The House voted 252 to 170 to stop any new funding for the Home Affordable Modification Program (HAMP). Eleven Democrats joined Republicans to defund the program.

The program taps the federal bailout that saved the big banks, providing incentives to mortgage servicers to modify mortgages for borrowers behind on their payments.

“To many struggling Americans seeking permanent mortgage relief, HAMP offered little more than false hope. More homeowners have been kicked out of the program than have received permanent relief,” Rep. Darrell Issa, the California Republican who chairs the House Oversight Committee, said in a statement.
…

The -fixr will laugh at all your little girlie man AR-15s and .45 ACPs, when these babys show up on the front door……

Go to Http://www.govliquidation.com/auction/search

Search “Event 8069″

Citadel Said to Shut $200 Million Fund After Manager Leaves
- Mar 30, 2011 (Bloomberg)

Citadel LLC, the $11 billion hedge fund run by Ken Griffin, is shutting one of its residential mortgage funds after Bill King, the portfolio manager, left the Chicago-based firm, according to three people familiar with the situation.

King, who joined Citadel in 2008 from JPMorgan Chase & Co., left on March 7 following the appointment of Glenn Perillo as co-manager of the firm’s mortgage funds, according to the people, who asked not to be identified because the firm is private.

Some clients in the $200 million mortgage fund for U.S. investors wanted to take out their money following King’s departure, prompting Citadel to liquidate the fund, the people said. It had returned about 9 percent since it opened in June 2010.

Devon Spurgeon, a spokeswoman at Citadel, declined to comment.

Citadel has been expanding its business beyond its main multistrategy Wellington and Kensington funds. Those funds tumbled 55 percent in 2008 and have yet to recoup the losses, meaning they generate no performance fee income for the firm. Citadel, whose assets peaked at $21 billion in 2007, runs three other single-strategy funds.

“Single-strategy funds are more dependent on the portfolio manager than a multistrategy fund, so if a manager leaves, the firm is left with a black eye,” said Geoff Bobroff, an East Greenwich, Rhode Island-based consultant who advises money- management firms.

Citadel also runs a $100 million mortgage fund for offshore investors that it may also close, the people said.

Jamie Dimon threatens Americans (again) with Armageddon if the taxpayer doesn’t pay up:

http://www.marketwatch.com/story/dimon-us-debt-default-would-becatastrophic-2011-03-30

Very carefully put the money in the bag. And no funny business. No, no… the BIG bills…

Medicare to pay $93k for prostate cancer drug that gives patient extra four months to live:

What kind of arrangement does the guy who makes this decision for the government have with the drug rep for this bigpharma corp? This is the kind of bullcrap that is ruining this once-great country.

http://finance.yahoo.com/news/Medicare-to-pay-for-93000-apf-2472968382.html?x=0&sec=topStories&pos=3&asset=&ccode=

* March 30, 2011, 5:13 PM ET

Shadow Housing Inventory — Going Nowhere Fast
By Dawn Wotapka

Another day, another troubling housing statistic: A shadow supply of millions of bank-owned and potentially foreclosed homes looms over the residential market, threatening to depress values even further and delay recovery.

The number, currently at 1.8 million units, represents a nine-month supply that, when added to the current 8.6-month supply of existing homes on the market, makes for sobering total that could depress values even further and delay recovery. A six-month supply is typically considered balanced.

Mortgage modifications likely helped whittle the shadow supply from 2 million a year ago. But, despite widespread efforts to help troubled home owners stay in their homes, CoreLogic doesn’t expect the shadow market to lighten up anytime soon.
…

Seems like LPS Mortgage Monitor reported a current number around 6.9m of homes in nonpayment or foreclosure; not sure how that relates to what these guys call “shadow supply”?

Unlisted ’shadow’ supply of 1.8 million homes looms over housing market
March 30, 2011 | 10:25 am

A supply of 1.8 million homes either owned by banks or poised for foreclosure potentially hangs over the nation’s real estate market, according to data released Wednesday.

This “shadow inventory” of residential real estate — property that is in foreclosure, has a loan 90 days past due or has been taken back by a lender and is not yet listed for sale — stood at a nine-month supply at the end of January, according to Santa Ana research firm CoreLogic.

That was a decline from an estimated 2 million units in January 2010. However, because the sales pace remains so weak and prices are on the decline again, a large shadow supply could affect the market for the foreseeable future, holding back any recovery.

Additionally, CoreLogic estimates that there are nearly 2 million homes with loans that are more than 50% “underwater,” with the home worth less than half what the property is worth. These homes are likely to fall into foreclosure in the near future, according to the firm.

“While the trend of the shadow inventory is improving somewhat, the current level and distressed months’ supply remain very high,” Mark Fleming, chief economist for CoreLogic, said in a statement. “The short-term weakness in prices and longer-term weakness in the drivers that affect the housing market imply that excess supply will remain high for an extended period of time.”
…

Published: March 30, 2011
Updated: 2:27 p.m.
Estimate: 1.8 million homes hidden in ’shadow’ inventory
By JON LANSNER
THE ORANGE COUNTY REGISTER

January’s 1.8 million home shadow inventory supply breaks down to: 870,000 seriously delinquent but not in foreclosure yet; 445,000 in some stage of foreclosure; and 470,000 owned by lenders. Shadow supply is believed to be a major drag on housing ability to recovery from its recent, deep slump as it adds pricing pressure – and uncertainty – to the market.

On top of the 1.8-million-home shadow inventory, CoreLogic found another nearly 2 million residences where the homes value is less than half of what is owed on the residence. CoreLogic believes that these severely “upside down” homes will likely become part of shadow supply in the near future.

Mark Fleming, CoreLogic chief economist, said” “While the trend of the shadow inventory is improving somewhat, the current level and distressed months’ supply remain very high. The short-term weakness in prices and longer-term weakness in the drivers that affect the housing market imply that excess supply will remain high for an extended period of time.”
…

March 29 (Bloomberg) — Bill Treacy retired as executive director of the TexasPublic Accountancy Board in 2003. Rehired to the same job a month later, he’s been pulling down both a government paycheck and a pension ever since.

“The job has to go to somebody and if you get someone with experience, you don’t have to train a newcomer,” Treacy, 68, a 40-year state employee who makes an annual salary of $120,000, said in a telephone interview. “It’s an injustice to say that this is taking advantage of the system.”

With U.S. unemployment averaging 8.9 percent, so-called double-dipping by tens of thousands of government workers nationwide is drawing increasing scrutiny. Lawmakers from coast to coast are taking steps to curb the practice as states face combined deficits projected at $112 billion and unfunded pension liabilities of as much as $3 trillion.

Arkansas banned double-dipping by state workers last month, while bills to curb it are pending before lawmakers in Olympia, Washington, and Trenton, New Jersey.

“It just drives people absolutely crazy that some public employees can draw a six-figure salary and still collect a very generous pension,” said Adam Braun, a spokesman for New Jersey Senator Jennifer Beck, a Red Bank Republican. Beck has backed a bill to limit double dipping in the state, which has almost $54 billion in projected unfunded pension liabilities.

As I’ve said, there was so much fraud going on it’s going to take a long time to prosecute everyone.

http://www.reuters.com/article/2011/03/30/us-crime-minkow-idUSTRE72T7YC20110330?feedType=RSS&feedName=domesticNews

Minkow admits guilt in U.S. scam aimed at Lennar

In a plea agreement filed in a Miami federal court, Minkow admitted to spreading lies about Lennar that caused its stock price to plummet in January 2009.

The losses to Miami-based Lennar were estimated in the plea agreement to total $583.6 million.

$100 Million seems to be a rough upper bound on what people will pay for a house in America.

* The Wall Street Journal
* HOMES
* MARCH 31, 2011

Home Brings $100 Million
By JULIET CHUNG And S. MITRA KALITA

The $100 million sale of a Los Altos Hills, Calif., home shows how some luxury properties are insulated from the U.S. housing slump.

A Russian billionaire investor paid $100 million for a French chateau-style mansion in Silicon Valley, marking the highest known price paid for a single-family home in the U.S.

The purchase of the 25,500-square-foot home in Los Altos Hills, Calif., underscores the strength of some luxury properties in an otherwise depressed housing market.

The buyer, Yuri Milner, 49, who heads Digital Sky Technologies and whose investments include Facebook Inc., Groupon Inc. and Zynga Inc., had no immediate plans to move into the home, said a spokesman.

Mr. Milner is the stocky founder of DST, a Moscow-based fund that’s made a splash in Silicon Valley via its investments. Its first in the U.S. was a $200 million check for Facebook in 2009. His primary residence is in Moscow, where he lives with his wife and two children.

The sky seemed to be the limit for Mr. Milner’s new house, a symmetrical limestone mansion with San Francisco Bay views that was inspired by 18th-century French chateaux.
…
Some past sales of high-end residential properties in the U.S.

In 2008, an investment company linked to Russian fertilizer billionaire Dmitry Rybolovlev paid $95 million for an estate owned by Donald Trump in Palm Beach, Fla.

Former Global Crossing chairman Gary Winnick in around 2000 acquired a Los Angeles estate in the Bel Air neighborhood in a deal worth more than $90 million.

Housing tycoon Dwight Schar bought an 11-acre oceanfront compound in Palm Beach, Fla., in 2004 and 2005 for $85.6 million, from financier Ron Perelman.

Builder Mohamed Hadid sold a Bel Air estate in 2010 for $50 million. The 48,000-square-foot house, known as Le Belvedere, has 11 bedrooms, 19 fireplaces and a swan pond.

In 2006, private-equity figure J. Christopher Flowers paid $53 million for a Manhattan townhouse on East 75th Street.

In 2007, developer Harry Macklowe paid $51.6 million to piece together a roughly 13,000-square-foot-condominium on the seventh floor of Manhattan’s Plaza Hotel.

In 2007, Edgar Bronfman, Jr. sold a Manhattan townhouse on East 64th Street to Russian oil magnate Len Blavatnik for $50 million.

In 2006, music executive Tommy Mottola paid $47 million cash for Crystal Island Ranch, a 900-plus-acre ranch near Aspen, Colo.

Hollywood mogul Peter Guber in 2004 sold his 650-acre Mandalay Ranch for $46 million to mortgage-company executive Roland Arnall and his wife, Dawn.

Juliet Chung and Josh Barbanel

Perth house prices fall again
SHANE WRIGHT ECONOMICS EDITOR, The West Australian
March 31, 2011, 9:11 am

Perth median house prices fell another 0.2 per cent in February, as further signs emerge that the housing construction sector is stalling.

RP Data-Rismark’s monthly measure of the housing market, released today, showed the median house price in Perth was now $480,000, down four per cent over the past 12 months.

It is the second worst performed market in the country, with only flood-soaked Brisbane going backward at a faster rate.

The news is just as bad for those with a unit, with median prices dropping 1.4 per cent through February to be 4.5 per cent over the past year.

Only a collapse in the Darwin market, where median unit prices dropped 12.6 per cent over the past quarter, stopped Perth being the worst performed unit market in the country.

Nationally, capital city house and unit prices were flat through the month to be up just 0.8 per cent over the year.

Prices were up in Sydney, Melbourne and Canberra, offsetting the falls in Perth, Brisbane and Darwin.
…

If this article is not a clear sign of a bubble top, I don’t know what is…

The homebuyer strikes back
By online business reporter Michael Janda
Updated 16 minutes ago
Homebuyers to feel impact of rate rise

Prosper Australia says first home buyers are at the bottom rung of a nationwide ponzi scheme (AAP: Alan Porritt, file photo)

A tiny land tax lobby group has sparked a storm by suggesting first home buyers go on strike to force property prices lower.

Prosper Australia is an organisation devoted to promoting the ideas of 19th-century political economist Henry George, who suggested that income and company tax should be replaced by land tax.

It launched its call for an Australian first home buyer strike on March 15 - since then the idea has gone on to become the number one suggestion on GetUp’s campaign ideas forum with 5,644 votes, followed by another housing-related campaign idea to abolish negative gearing.

The online interest has translated into coverage in major daily newspapers and breakfast television, but Prosper Australia spokesman David Collyer says thousands of Australians were already boycotting home purchases before the campaign launched.

“The aim of the campaign is to make first home buyers who are locked out of the market aware that they’re not alone, and that their private economic decisions are actually being made by all of their peers at the same time,” he told ABC News Online.

Mr Collyer says two average incomes, even with significant savings for a deposit, are no longer enough to secure many prospective home buyers a property, even on the urban fringe.

“The housing market has spiralled off into ridiculous pricing that nobody can possibly afford, and it gets to the point where if nobody can afford it the prices must change,” he added.
…

Beware of collapsing housing bubbles in the land down under…

Beware a ‘buyers’ strike’ in property
DAVID LLEWELLYN-SMITH
31 Mar, 2011 10:24 AM

Word had circulated for a couple of weeks about a so-called “buyers’ strike” on the real estate market before BusinessDay gave it a prominent airing yesterday.

I haven’t moved to support it, nor had I moved against it, because I’m seriously ambivalent.

I can imagine how the powers that be view it. If they bother taking note at all, they probably conclude it’s some renegade act of economic vandalism.

But it isn’t. Australian housing doesn’t have anything to do with economics. It long since ceased being a “market” at all.

Rather, it is a political complex - a quango - that represents the single largest page in the socio-economic contract between the government, the Australian financial system and an ageing baby-boomer population.

When the baby-boomer generation first took power and reshaped Australia in the 1980s, the promise was for a new kind of meritocracy.

The old “Australian Settlement” described brilliantly by Paul Kelly in the End of Certainty - a protectionist social contract between unions, industry, government and the people – was swept aside in favour of a neo-liberal vision.

The new world demanded an open, more dynamic Australia. An Australia that rewarded entrepreneurial effort and flexibility. A productive Australia.

For a while it worked. Australia dropped its tariffs, deregulated government enterprise, most especially the banks, and after a false start at the end of the eighties, embarked on an historic productivity boom.

Dark seed

But at some point a distortion began to grow at the heart of the new vision. It’s dark seed was sown by the original architects of the new world when they back-tracked on the removal of negative-gearing tax policy for housing in the ’80s.

By the late 1990s it had become a cancer eating away at the achievements of the baby-boomer generation and a second wave of bipartisan supporters of the new vision took power only to further deregulate finance and install fabulous capital gains tax privileges on property investment.
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Homebuyer confidence falls due to natural disasters, rising cost of living
March 30, 2011 9:47 PM EDT

Homebuyers are feeling less confident about the housing and mortgage markets following a summer of natural disasters, according to results of the latest Genworth Homebuyer Confidence Index, which fell 1.5 per cent since September 2010.
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The State of the Housing Market

The housing market is still suffering. Prices are falling in major cities, and there’s talk of another double dip.

On Wednesday, CoreLogic, a real estate analysis firm, reported that there are nearly $1.8 million homes in the so-called “shadow inventory.” These are homes that could soon be foreclosed on, and then put up for sale. That would flood the real estate market and keep prices down. CoreLogic said nearly two million homeowners have homes worth less than half of their mortgages.

Greg Cecala, the CEO and publisher of Inside Mortgage Finance, has the details about a recent House vote to end a program that helps homeowners modify their loans. He also talks about the probability of a settlement between several attorneys general and mortgage servicers.

Western States Could See Double Dip in Home Prices says Report
March 30th, 2011 | by Elizabeth Ecker Published in News, Reverse Mortgage

The housing picture is not pretty, according to the most recent Case-Shiller home prices data, and another study says the western states are by far the worst overall. National home prices may have appreciated 4.2% since early 2009, but the West has seen quarter-over-quarter declines (-4.5%) that could lead the region into double dip territory as soon as April according to a report from Clear Capital.

“Despite distressed inventory pressure and traditional winter inactivity, current trends are continuing to show a softening of price declines,” said Dr. Alex Villacorta, director of research and analytics at Clear Capital. “The 3.9 percent quarterly decline we observed in December has given way to moderating declines with the national price index now down only 1.4 percent, suggesting a leveling of prices is on track for spring.”

“From a larger perspective, prices are still up 4.2 percent off of the absolute lows of the housing crash, a sign that long term gains can be realized amidst the volatile behavior of the last two years,” added Villacorta. “Yet, when comparing this growth to other economic indicators over the same time period, it is clear that the housing market still has a long way to go toward a sustained recovery.”
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Let’s ship the Wall Street Megabankers to Libya, where they can set up shop without any pesky U.S. bank regulators in their faces.

The Financial Times
Dimon warns of bank ‘nail in coffin’
By Tom Braithwaite in Washington
Published: March 30 2011 20:53 | Last updated: March 31 2011 01:10

Jamie Dimon, chief executive of JPMorgan Chase, launched a broadside against financial regulation on Wednesday, warning that new capital rules could be “the nail in our coffin for big American banks”.

Regulators are negotiating international capital standards for the biggest banks but Mr Dimon said setting the new requirements too high, or allowing overseas banks to calculate their asset base differently, could disadvantage US banks and was already stifling economic growth.

“If you want to set it so high that no big bank ever goes bankrupt … I think that would greatly diminish growth,” he told a US Chamber of Commerce conference. Too large a disparity in capital requirements between Europe and the US would mean “you’re pretty much putting the nail in our coffin for big American banks,” he said.
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Can anyone offer comment on the connection of Farmer Mac (if any) to the ag land bubble?

Farmer Mac is America’s secondary market for first mortgage agricultural real estate loans. Farmer Mac was created by Congress to improve the ability of agricultural lenders to provide credit to America’s farmers, ranchers and rural homeowners, businesses and communities. We do this primarily by purchasing qualified loans from lenders, thereby replenishing their source of funds to make new loans. Farmer Mac funds its loan purchases by issuing debt or securities backed by pools of loans and selling them into the capital markets. In so doing, Farmer Mac facilitates the flow of lendable money from Wall Street to rural America, thus providing a stable supply of mortgage credit to lenders and borrowers.

Total Irish bank debt unveiled
Thursday, 31 March 2011

The full extent of the multi-billion euro black hole in the Republic of Ireland’s bust banks will be listed today.

The breathtaking losses in Allied Irish Bank (AIB), Bank of Ireland, Irish Life and Permanent (IL&P) and the EBS building society will be set out as the Republic’s new coalition government attempts to finally measure the debt mountain. It is expected to say Irish banks need about another €30bn (£26bn) to stay open.

The skeleton in the closet is a ticking time bomb of thousands unable to repay mortgages.

More than 44,000 of homeowners are behind with their mortgages — valued at £7.5bn.

Eurozone crisis: The pain in Spain

The Spanish crisis is no such thing: it is in fact three big problems rolled into one huge and enduring mess

Editorial
The Guardian, Wednesday 30 March 2011
Article history

What economists and policymakers sometimes call the Spanish crisis is no such thing: it is in fact three big problems rolled into one huge and enduring mess. There is the financial collapse within the eurozone, in which over the past year the governments of first Greece then Ireland have been blocked from borrowing from financial markets at any but exorbitant interest rates. There is the meltdown of the Spanish property market, which has in turn triggered a crisis for both the cajas (regional savings banks) and the government treasury. And finally there is the long-run problem of Spain’s labour market, where one in five workers are officially out of a job.
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Brown leaves noted on green shoots:

IMF cuts Japan, U.S. 2011 GDP forecast: report
ROME | Wed Mar 30, 2011 10:32am EDT

(Reuters) - The International Monetary Fund has cut its forecast for Japan’s 2011 GDP growth after this month’s devastating earthquake and has also lowered its near term outlook for the United States, Italian news agency ANSA reported on Wednesday.
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