The Housing Bubble

Realtors Are Liars

Another Monday in the life of a …ugh….. Renter…….pipe under sink is rotting out….aluminum foil and duct tape is not working anymore…..time for a plumber on the landlords dime.

Just watched ABC Good Morning

A short clip on how many people are either walking away or giving away their time share deeds.

There are 7,000,000 people who own time share properties.

Couple makes $150k/year and defaults on $240,000 mortgage.

Expect to see alot more of this…

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Sinking values prompting homeowners to consider strategic default as best business decision

Slight drop in strategic defaults unlikely to last as more people do the math, see they can’t recover and make a business decision to walk away from their mortgage, even if it ruins their credit

“I did a lot of soul-searching about whether it was morally the right thing to do,” he said. “I felt there was no moral obligation to make a payment. The contract says it’s a financial obligation, not a moral obligation.

“I was in a boat with a slow leak. It was manageable, but I know I was slowly sinking.”

The decision to walk, tied to a housing crisis that continues to grip the market, is far-reaching, raising serious questions about whether financial commitments can ever be considered optional.

Earlier this month, CoreLogic reported that as of the end of March, home prices had declined for eight consecutive months, and more than 11 million borrowers nationally were underwater, which means they owe more on their mortgages than the home is worth. It’s difficult to predict just how many of those borrowers may opt for default, but FICO, the widely used credit scoring system, recently developed a formula to help lenders pinpoint borrowers who might default.

http://www.chicagotribune.com/business/ct-biz-0522-strategic-defaults–20110522,0,3910292.story

Illinois plan to cut mortgage debt is making waves
Marketwatch.com

WASHINGTON (MarketWatch) — A pilot program close to getting off the ground in Illinois seeks to use $100 million in taxpayer dollars to help potentially thousands of troubled mortgage holders in the state who owe more than their homes are worth.

Backers of the program, which needs the approval of the U.S. Treasury Department to move forward, argue that it will stabilize neighborhoods, reduce foreclosures, help the economic recovery and ultimately cost taxpayers nothing. Opponents insist it will leave taxpayers on the hook and drive better-off homeowners to engage in so-called strategic default, leading to more foreclosures and less stability.

‘Stem the flow’

The program’s supporters also argue that struggling borrowers who are no longer underwater will have an incentive to continue paying their mortgages, rather than to abandon the home as many have been doing.

“We have got to stem the flow of more [housing] supply coming into the marketplace by keeping families in their home,” said Bill Goldsmith, president of Mercy Portfolio Services, on of the architects of the approach. “Lots of these families have a lot of back end debt that could drive them out of the home.”

Lenders are creating glut of foreclosed homes: NYT

TEL AVIV (MarketWatch) - Banks and lenders are piling up foreclosed homes, creating a glut that could deepen the housing-market slump and slow the economic recovery, The New York Times reported on Monday. Citing data from RealtyTrac, the Irvine, Calif., consultants, the paper reported that banks and lenders own more than 872,000 homes, almost twice the number they had when the financial crisis started in 2007. Another 1 million homes are in the foreclosure process and the lenders may take several million more in coming years, the Times reported. Economists told the paper that the glut could create a vicious circle by depressing home prices and leading to more distressed home sales.

Is the Wild, Wild, West Era in Wall Street mortgage banking finally coming to a close?

California creating mortgage fraud task force
By Alejandro Lazo, Los Angeles Times
May 23, 2011, 12:02 a.m.

California Atty. Gen. Kamala Harris, saying that years of unscrupulous lending still haunts the state, is creating a 25-person task force to target mortgage fraud of any size — from small operations that preyed on troubled borrowers to corporations that sold risky loans as safe investments.

The team of 17 lawyers and eight special agents from the state Department of Justice will pursue three major areas, Harris said in an interview:

•Corporate fraud, including instances in which bundled mortgages were sold as securities to the state or its pension funds under false pretenses. Harris said her office plans to prosecute some cases under California’s False Claims Act, which she described as “one of those very powerful tools that California uniquely has … to pursue, in essence, what are false claims that are submitted to the state.”

•Scams, including instances in which consultants, lawyers and others took fees from people in foreclosure, saying they would help the homeowners get loan modifications or other remedies, but delivered nothing.

•Fraudulent lending practices, including deceptive marketing, failure to fully disclose loan terms and qualifying people for loans who couldn’t afford the terms.

Harris said the mortgage fraud that ultimately led to the housing crash continues to be a drag on the state, causing huge losses in jobs, property values and state revenues.

“We are looking at a situation of up to $640 billion in wealth having been lost because of this wave of foreclosures that has hit the state,” Harris said, referring to the decline in homeowner equity. “There is a direct connection” between mortgage fraud “and the issue that we are challenged with in terms of our state budget crisis.”
…

Money talks, bullsh!t walks.

Prosecutors Faulted on Failure to Charge ‘Bandits’ in U.S. Market Collapse
By Justin Blum - May 22, 2011 9:00 PM PT

In November 2009, Attorney General Eric Holder vowed before television cameras to prosecute those responsible for the market collapse a year earlier, saying the U.S. would be “relentless” in pursuing corporate criminals.

In the 18 months since, no senior Wall Street executive has been criminally charged, and some lawmakers are questioning whether the U.S. Justice Department has been aggressive enough after declining to bring cases against officials at American International Group Inc. (AIG) and Countrywide Financial Corp.

Prosecutions of three categories of crime that could be linked to the causes of the crisis — corporate, securities and bank fraud — declined last fiscal year by 39 percent from 2003, the period after the accounting scandals at Enron Corp. and WorldCom Inc., Justice Department records show.

“You need a massive prosecutorial effort,” said Solomon Wisenberg, a white-collar defense attorney at Barnes & Thornburg LLP in Washington and a former federal prosecutor. “I don’t see evidence that it’s happening. If we were talking baseball, it would be at the AAA level.”
…

More heat than light?

MARKETS
MAY 23, 2011

Officials Heighten Mortgage Scrutiny
By RUTH SIMON

State attorneys general are stepping up their investigations of mortgage-industry practices by probing for potential misdeeds when banks originated home loans and packaged them into securities, according to people familiar with the examinations.

New York State Attorney General Eric Schneiderman has issued subpoenas to four bond-insurance companies as part of his expanding probe of mortgage-securitization practices, people familiar with the matter said.

At the same time, California Attorney General Kamala D. Harris is expected to announce Monday a new law-enforcement effort aimed at mortgage-industry practices, people familiar with the initiative said. The effort will cover a range of activities, from loan origination to the packaging of mortgages into securities, and will include both civil and criminal prosecutions, these people said.

Mr. Schneiderman has issued subpoenas to units of Ambac Financial Group Inc., Assured Guaranty Ltd., MBIA Inc. and Syncora Holdings Ltd., people familiar with the investigation said.

The bond insurers aren’t the subject of the investigation, these people added, but have been asked to provide information about their dealings with banks that packaged mortgage loans into securities. Bond insurers provided guarantees on a variety of mortgage-related products and have suffered heavy losses as a result of the mortgage meltdown.

Mr. Schneiderman’s office has asked the bond insurers for information regarding claims paid to bond investors and about litigation and settlements the insurers have entered into with banks that packaged loans into securities, these people said.

An MBIA spokesman said the company plans to comply with the subpoena, which focuses on lawsuits filed by MBIA against banks that packaged loans into securities guaranteed by the company.

“Syncora did receive a subpoena from the New York Attorney General to provide certain information relating to mortgage loans, payments and potential settlements,” said a company spokesman, who declined to comment further.

A spokeswoman for Assured Guaranty declined to comment on whether the company had received a subpoena. “We support the Attorney General with their investigation, which will hopefully accelerate the resolution of mortgage-origination, -securitization and -servicing problems,” she said.

A spokesman for Ambac declined to comment.

The subpoenas are the latest sign of how state and federal officials are stepping up their scrutiny of the mortgage machine. Federal prosecutors, for instance, are using tools such as the Civil War-era False Claims Act in an effort to recoup government losses on soured mortgage loans. The tools available to Mr. Schneiderman include the state’s Martin Act, which doesn’t require prosecutors to prove intent to defraud. The Martin Act has been used by Mr. Schneiderman’s predecessors to address a variety of alleged misconduct by Wall Street.
…

May 23, 2011, 8:52 a.m. EDT
China’s manufacturing growth may have cooled
By Chris Oliver, MarketWatch

HONG KONG (MarketWatch) — China’s factory activity is set to cool further in May, according to a preliminary PMI survey released Monday, as companies cut back orders amid tighter monetary policy and high commodity prices.

Leaders of Japan, China and South Korea meet to speed up preparations for a three-way free-trade pact, while the private-equity world is abuzz over yuan-denominated funds.

The news helped send markets across Asia sharply lower as investors scrambled to gauge the impact of weakening Chinese factory orders and what that could be signaling about the health of the global recovery.

An early reading of China’s manufacturing activity indicates that it slowed to a 10-month low in May, according to the results of the survey conducted by HSBC.

Monday’s “flash” release, compiled from a smaller base than the regular PMI, is designed to give a glimpse of what the broader survey will reveal next week. The preliminary survey showed that momentum slowed to 51.1 from the April reading of 51.8.
…

NYT: “Glut of foreclosed homes threatens housing market”

“All told, they own more than 872,000 homes as a result of the groundswell in foreclosures, almost twice as many as when the financial crisis began in 2007, according to RealtyTrac, a real estate data provider. In addition, they are in the process of foreclosing on an additional one million homes and are poised to take possession of several million more in the years ahead.”

http://tinyurl.com/426hljh

What is this BS about recovery of this economy . How can you have recovery when you haven’t changed or solved the reasons for the crash and
crisis to begin with .Jobless recovery in a consumer base economy ,I think not . Real estate recovery when the prices were fake to begin with ,I think not . Job creation,I think not ,only more lay offs ,more out-sourcing ,more
money going to the top . Wall Street/Banks put in their place and their faulty bubble creating casinos shut down ,not happening . Health care costs
addressed ,not happening . Health care monopoly addressed ,not happening. Who are the losers ….guess who .

Its like watching a exercise in futility when the Powers that be continue to hold on to their kill the host ,transfer the pain ,hold on to insanity
plans . Who are all these jerks trying to kid .

Steve Sailer’s critique of an article from The American Spectator that neglects one of the major reasons for the housing meltdown. Not sure if Wallison (the author) is that ignorant, or most likely, he’s afraid to discuss the role government (specifically Clinton and Bush) had in urging lending institutions to hand out money to minorities, in order to increase minority home-ownership. Another reminder that PC makes you stupid.

War on Crime Revs Up on Wall Street
The Street

NEW YORK (TheStreet) — These days the Justice Department and the Securities and Exchange Commission are investigating Wall Street using tactics, such as wire taps, usually reserved for professional criminals and terrorists.

Apparently, those agencies recognize what the Treasury and the Federal Reserve simply won’t admit: Insider trading, robo foreclosures and peddling dodgy securities to unsuspecting investors are old-fashioned fraud. These practices handicap American capitalism in global competition and undermine prosperity.

In February 1998, the S&P 500 first closed higher than 1000. Since then, corporate profits are up about 210% percent, but equities have risen less than 35%. Corporate profits rose 6% annually, but investing in stocks paid a disappointing 2.3% a year.

Buying stocks doesn’t seem to pay, because too much of the profits created by innovators with ordinary investors’ capital is captured by hedge funds, Wall Street trading desks, private equity houses, aggressive M&A shops, and then paid to Wall Street executives and traders.

In the drive for ever bigger compensation packages, Wall Street’s best and brightest violate boundaries of ethical behavior and the law. Not all of our problems can be laid on Wall Street’s steps, but its culture of entitlement and sharp practices impose enormous burdens.

Huge Wall Street incomes, juiced by duping investors, deprive pension funds and ordinary investors of the returns they are due on their stocks.

The absence of significant appreciation in equities for more than a decade means that many retirees dependent on IRAs and other defined contributions vehicles can no longer live comfortably, and many baby boomers who have been pushed into such pension vehicles can’t retire. Their money may be working hard, but only for Wall Street titans and not for them.

It is sound public policy to encourage workers to save for retirement, instead of relying on the promise of a defined benefit pension from an employer that may ultimately disappear, but contributions-defined pensions simply can’t work without a stock market that generates returns that follow the growth of corporate profits.

Home Sellers Provide Last-Resort Loans
Bloomberg Businessweek

Sue and Douglas Reed knew no bank would give them a mortgage — not with a bankruptcy and two foreclosures fresh in their credit history. They turned to Hilarie Walters, whose childhood home on 15 acres in Marshall, Mich., had been on the market since 2009, a year after she inherited it. Walters agreed in December to sell the property to the Reeds for $105,000. She also consented to a risky payment plan that in effect makes her the couple’s mortgage lender. “They’re paying me interest every month, but I’d rather have the money and be done with it,” says Walters, an unemployed single mother who is using their payments to cover the mortgage on her Battle Creek (Mich.) residence. “It does make me nervous.”

Financing provided by sellers, popular in the 1980s when mortgage rates reached 18 percent, is making a comeback in markets such as Michigan that have been hit hard by foreclosures and where tightening lending standards and years of economic distress have drained the pool of creditworthy buyers. For a small but growing number of people, it’s the only way to get a deal done. “Anytime the market is in this much trouble, people have to find ways to get it to function,” says Dennis Capozza, a professor of finance at the University of Michigan in Ann Arbor.

I post rarely, but wanted to give some information on an “estate sale” I attended this weekend. It was a typical McMansion, a big 12 room house on a small plot of land with an unusable front yard due to the high sloop. I would think a lawn mower would almost have to be tied to a rope to mow the front yard. The driveway had a steep slope which would make going up it in winter hard due to snow and ice. The inside had 2 staircases, and a 2 story entrance way.

There were really nice items inside the house, mostly decorated in the colonial style. There were many pieces of Wedgewood, Waterford Crystal light fixtures, mahogany furniture, oil paintings, etc. There was a hot tub for sale for ‘only’ $3,000 as the ‘new owners had children and didn’t want it for safety reasons.’ The sub-zero refrigerator was for sale for $4,500, along with the washer and dryer. All the expensive window draperies were for sale. Even though the ad said credit cards were accepted, the woman wanted cash unless the purchase was at least $500. Then she could put it through her store. Supposedly the house belong to her son.

Something didn’t ring quite right (selling appliances, light fixtures, chandelier, window dressings -things a purchaser might want) and thanks to this board I knew how to do research. The numbers following are rounded.

The house was purchased in 2006 for $792K. There are 2 mortgages totally 100% of the purchase price. The first one was $633K with an adjustable rate rider.

Liens quickly started going on the house:

2006 - $5,000
2009 - $8.000
2009 - $13,000
2010 - $8,000 (for furniture)

During that time, it was listed on and off for sale for @$900K. The new tax rate doesn’t support this price, rather something around $635K as this is a town where assessed value is close to actual selling value.

The ‘family’ purchasing this house is the mortgage company with a foreclosure date of 30 May 2011. Someone’s ‘getting out of Dodge’ as quickly with as much cash as possible.

I’m glad I rent even though I am amazed at people who life this lifestyle. It is what the board has said. There were many people who lived this way with credit.

How you guys doing? It’s been a while since I posted. Hope everyone is doing well.

Is it about to start ARMageddoning again?

“If we are out there undercutting prices, we are contributing to the downward spiral in market values,” said Eric Will, who oversees distressed home sales for Freddie Mac. “We want to make sure we are helping stabilize communities.”

Wage inflation in India is 10% according to this article:

As Indian companies grow in the U.S., outsourcing comes home
By Paul Glader
http://www.washingtonpost.com/business/as-indian-companies-grow-in-the-us-outsourcing-comes-home/2011/05/17/AFZbrp7G_story.html?wpisrc=emailtoafriend
New York —

Ray Capuana paces the rows of cubicles in a haggard high-rise a stone’s throw from Wall Street as his people hustle the phones and hope for a bonus check.
…
India’s outsourcing giants — faced with rising wages at home — have looked for growth opportunities in the United States. But with Washington crimping visas for visiting Indian workers, some companies such as Aegis are slowly hiring workers in North America, where their largest corporate customers are based. In this evolution, outsourcing has come home.

States shorten duration for unemployment benefits

WASHINGTON (AP) — Some of the states that have drained their unemployment insurance funds are cutting the number of weeks that a laid-off worker can count on those benefits. Legislators are trying to limit tax increases for businesses to replenish the pool and are hoping the federal government keeps stepping in when the economy slumps.

Michigan, Missouri and Arkansas recently reduced the maximum number of weeks that the jobless can get state unemployment benefits. Florida is on the verge of doing so. Unemployment in those states ranges from 7.8 percent in Arkansas to 11.1 percent in Florida.

The benefit cuts come as legislatures deal with the damage that the recession inflicted on state unemployment insurance programs. The sharp increase in the number of people who lost their jobs drained the reservoir of money dedicated to paying out benefits.

About 30 states borrowed more than $44 billion from the federal government to continue payments to laid-off workers. Many states hastened the insolvency of their funds by keeping balances at historically low levels going into the downturn.

The burden of replenishing the funds and paying off the loans will fall primarily on businesses through higher taxes, but the benefit cuts are an effort to limit the tax increases.

States usually provide up to 26 weeks of benefits to laid-off workers. Michigan and Missouri have cut that to a maximum 20 weeks. Arkansas went to 25.

Florida is considering a more complex change that would link the duration of benefits to the strength of the economy. The cap would range from 23 weeks during periods of double-digit unemployment to as low as 12 weeks during periods of extremely low unemployment. The Florida Legislature approved the changes, but the governor hasn’t signed the bill.

Rueters
WASHINGTON – Republican presidential candidate Newt Gingrich says he and his wife are “very frugal,” live within their budget and have no debts.

But the former House speaker is keeping to himself about how they spent hundreds of thousands of dollars at Tiffany’s jewelry store.

A financial disclosure form filed by Callista Gingrich in 2006 and 2007 showed the couple owed from $250,000 to $500,000 to Tiffany & Co.

Uhh how is owning 250-500k having no debt? Maybe this is the problem our politicians don’t understand debt.

How is 250-500k on high end jewelry being frugal?? May be this is our problem our politicians don’t understand being frugal.

In today’s Denver Post:

Colorado divorce rate plummets during recession

“witnessed a sesmic change in the way clients ended their marriages. A number of women were divorcing, and we felt they made out pretty well when they got the house … It’s completely the opposite now. Often, the house is worth less than when it was bought, so there is no equity for either partner to start a new life”

With the 10th anniversary of the 9/11 attacks looming, a federal lawsuit in Manhattan offers the possibility of resolving a central mystery about the attacks: Was Iran involved?

Former investigators on the 9/11 Commission, which uncovered tantalizing but inconclusive evidence of Tehran’s ties to the plot, tell The Daily Beast they welcome the lawsuit, because they believe the U.S. government has done little to follow up on the commission’s evidence of Iranian complicity.

The lawsuit, they say, may offer the best hope of getting to the truth about whether Iranian government officials had advance knowledge of the plot and worked with al Qaeda to make it easier for several of the hijackers to travel undetected in the year before the attacks.

The suit, brought in the United States District Court in Manhattan on behalf of the families of dozens of 9/11 victims, is promising testimony from three Iranian defectors, all of them identified as former members of Iran’s central spy agency, who will implicate Iran and its terrorist proxies in Lebanon in the Sept. 11 attacks.

This sounds familiar

news.yahoo.com/s/dailybeast/20110523/ts_dailybeast/14272_the911commissionsunfinishedbusinesswhatdidiranknow;_ylt=AgUivejj8holFV01EJjQK4us0NUE;_ylu=X3oDMTR2MzNxcWNtBGFzc2V0A2RhaWx5YmVhc3QvMjAxMTA1MjMvMTQyNzJfdGhlOTExY29tbWlzc2lvbnN1bmZpbmlzaGVkYnVzaW5lc3N3aGF0ZGlkaXJhbmtub3cEY2NvZGUDcmFuZG9tBGNwb3MDNwRwb3MDNARwdANob21lX2Nva2UEc2VjA3luX2hlYWRsaW5lX2xpc3QEc2xrA3RoZWlyYW4tOTExYw–

WASHINGTON – The Supreme Court on Monday narrowly endorsed reducing California’s cramped prison population by more than 30,000 inmates to fix sometimes deadly problems in medical care, ruling that federal judges retain enormous power to oversee troubled state prisons.

Hmm what happens when a bunch of criminals are released early into a society that can’t produce enough jobs and is cutting supportive services??

~Sounds like this fellow does not want to get elected.

Pawlenty: Real change is about telling hard truths

WASHINGTON (MarketWatch) — Republican presidential candidate Tim Pawlenty hits the campaign trail this week with tough talk for both Wall Street and seniors, pledging an end to bailouts for big banks and changes for what he calls unsustainable entitlement programs.

“I’m going to New York City to tell Wall Street that if I’m elected, the era of bailouts and handouts for big banks is over,” wrote Pawlenty, a former governor of Minnesota. “I’m going to Florida to tell both young people and seniors that our entitlement programs are on an unsustainable path and have to be changed,” Pawlenty wrote. He also promised he’d speak “truthfully” about farm subsidies while in Iowa on Monday.

“We will grow our economy if we shrink our government.”

~ These clowns never stop…

Illinois plan to cut mortgage debt is making waves
Would helping hand for ‘underwater’ borrowers make a difference?

WASHINGTON (MarketWatch) — A pilot program close to getting off the ground in Illinois seeks to use $100 million in taxpayer dollars to help potentially thousands of troubled mortgage holders in the state who owe more than their homes are worth.

Backers of the program, which needs the approval of the U.S. Treasury Department to move forward, argue that it will stabilize neighborhoods, reduce foreclosures, help the economic recovery and ultimately cost taxpayers nothing. Opponents insist it will leave taxpayers on the hook and drive better-off homeowners to engage in so-called strategic default, leading to more foreclosures and less stability. Read more on the higher costs associated with strategic default.

At issue is a proposal by Mercy Housing, a non-profit group that’s seeking to set up a mortgage stabilization fund using $100 million in capital from roughly $7.5 billion in taxpayer funds from the Troubled Asset Relief Program.

The funds have been allocated to 18 states designated as having been hit the hardest in the tidal wave of foreclosures, including Illinois, to create programs for delinquent homeowners. A portion of the funds is to go to state programs for borrowers with so-called underwater loans, which means they owe more than what the mortgage is worth usually because of a decline in home values.

Mercy Housing is seeking to use the fund to initially buy as many as 3,000 mortgages from underwater borrowers. Proponents say the loans — which are on the verge of foreclosure — can be bought at such a major discount from banks that balances could be reduced to levels below what the homes in question are worth.

News from the home rental market in my neighborhood (mid-Peninsula, Bay Area).

My landlord/neighbor just bought another house to rent (the math, doesn’t make sense, but he just wanted to control the property on the other side of his house–he now can control who both of his immediate neighbors are).

Anyway, it’s a 3/1, and needs a lot of help–he’s going to rehab the home later, but for now, he cleaned it up quickly, put it on Craigslist for rent, and he had it leased in a day.

Leasing in a day isn’t all that uncommon. When I rented the house on the other side of him in 2003, the listing came up on Craigslist on a Sunday morning, and by the time we saw it at about 10:00am that same day, we were second in line…we got lucky that the person in front of us declined to take the house.

Anyway, according to my landlord, the current rental market is significantly stronger than in 2003 (he owns a number of other properties as well, so he has a good context for judgement). The landlord said that he had people swarming his new acquisition almost immediately.

I’m moving out within the next month…he has told me not to tell people what he was charging me…I expect him to raise the rents for the next tenant by 10-25% over what I am paying. And I think he’ll get someone to pay it.

Go Utarrrrrrrrrr!

Utah Goes for Gold: State Puts Metal Coins on Par with the Dollar:
By Stacy Curtin | Daily Ticker / Yahoo

Utah has gone for gold — quite literally.

As the law stands, Utah retailers are not required to accept this new form of currency. Probably a good thing since placing a real-time value on gold coins would be particularly tricky…

That’s happens when you tell voters their “free” stuff is going away…

Zapatero’s Socialists Routed in Spanish Backlash Over Austerity Measures
By Emma Ross-Thomas - May 23, 2011

May 23 (Bloomberg) — Bloomberg’s Owen Thomas and Elliott Gotkine report on the prospects for Spain’s austerity program after Prime Minister Jose Luis Rodriguez Zapatero’s Socialist party suffered its worst defeat in more than 30 years in local elections.

Spanish Prime Minister Jose Luis Rodriguez Zapatero’s Socialist party had its worst electoral setback in more than 30 years, prompting a shift in regional power that risks swelling the public deficit.

Spanish bonds fell after results showed the opposition People’s Party won 38 percent of the vote in municipal elections yesterday, compared with 28 percent for the ruling Socialists. The Socialists lost control of Barcelona for the first time since 1979 and ceded Seville, leaving the party in opposition in the nation’s four biggest cities. The central region of Castilla-La Mancha, held by the Socialists for three decades, fell to the PP, as did the Balearic Islands.

The transfer of power in the regions may spark doubts over Spain’s ability to contain its budget deficit. Spanish bonds declined amid concern newly elected officials may reveal weaker finances than their predecessors reported. The defeat, capping a week of street protests, may further weaken Zapatero as he cuts the euro-region’s third-largest shortfall to avoid following Greece, Portugal and Ireland in needing a bailout.

I want to go out on a limb and suggest something is afoot in Ireland. In the space of just one week the Queen and now the POTUS.

I wonder if they are considering pulling out of the EU and ditching their debt like Iceland?

Not that it matters…Print, baby print!

(Reuters) - President Ronald Reagan once famously said that a stack of $1,000 bills equivalent to the U.S. government’s debt would be about 67 miles high.

That was 1981. Since then, the national debt has climbed to $14.3 trillion. In $1,000 bills, it would now be more than 900 miles tall.

In $1 bills, the pile would reach to the moon and back twice.

The United States hit its legal borrowing limit on Monday, and the Treasury Department has said the U.S. Congress must raise the debt ceiling by August 2 to avoid a default.

The White House is trying to hammer out a deal with lawmakers to cut federal spending in exchange for a debt-limit increase.

Most people have trouble conceptualizing $14.3 trillion.

Stan Collender, a budget expert at Qorvis Communications, said the biggest sum most Americans have ever handled — in real or play money — is the $15,140 in the original, standard Monopoly board game.

The United States borrows about 185 times that amount each minute.

Here are some other metrics for understanding the size of the national debt and United States borrowing:

* U.S. Treasury Secretary Timothy Geithner has said the United States borrows about $125 billion per month.

With that amount, the United States could buy each of its more than 300 million residents an Apple Inc iPad.

* In a 31-day month, that means the United States borrows about $4 billion per day.

A stack of dimes equivalent to that amount would wrap all the way around the Earth with change to spare.

* In one hour, the United States borrows about $168 million, more than it paid to buy Alaska in 1867, converted to today’s dollars.

In two hours, the United States borrows more than it paid France for present-day Arkansas, Missouri, Iowa and the rest of the land obtained by the 1803 Louisiana Purchase.

* The U.S. government borrows more than $40,000 per second. That’s more than the cost of a year’s tuition, room and board at many universities.

“That usually gets their attention,” Doug Holtz-Eakin, who was chief White House economist under President George W. Bush, said in an email. “I have two kids, so every 10 seconds, the feds borrow more than I paid lifetime.”

* The Congressional Budget Office projects the total budget deficit in fiscal 2011 at about $1.4 trillion.

“The net worth of Bill Gates, roughly around $56 billion, could only cover the deficit for 15 days,” said Jason Peuquet, a policy analyst with the Committee for a Responsible Federal Budget. “The net worth of Warren Buffet, roughly around $50 billion, could only cover the deficit for 13 days.”

Thief Steals Woman’s Hair At Bus Stop

SAO PAULO (AP) - Brazilian police say a thief cut off and stole a woman’s long hair while she waited at a bus stop.

Police say the hair was virgin, meaning it had not been chemically treated, and will probably be sold for the production of wigs.

Inspector Jose Carlos Bezerra da Silva said Friday to Globo TV’s G1 website that the woman was waiting for a bus in the central city of Goiania when the man used a knife-like weapon to cut the hair, which reached past her waist. She said she thought the man was going to steal her purse so she turned her back to him.

Silva said he’d never seen a theft like it in 20 years.

He said the 24-year-old woman reported the case to police because she is evangelical and had to explain to her pastor why her hair wasn’t long anymore.

ElBaradei: Egypt is ‘disintegrating’ as tourism drops
By BLOOMBERG

“People don’t feel secure, they’re buying guns,” former IAEA chief says; Egypt suffering from lack of tourism, no investment, inflation.
Talkbacks (15)

Egypt is disintegrating socially and its economy “is bust,” said Mohamed ElBaradei, the former director of the International Atomic Energy Agency and possible candidate for the Egyptian presidency.

“Right now, socially, we are disintegrating,” ElBaradei said on CNN’s “Fareed Zakaria GPS,” scheduled to air Sunday. “Economically we are not in the best state. Politically it’s — it’s like a black hole. We do not know where we are heading.”

California’s low crime rates were nice while they lasted.

Supreme Court upholds order for California to release 46,000 inmates

Inmates at dinner

Inmates sit for dinner at the California State Prison in Lancaster. A federal overseer of the state’s prison system has suggested freeing the sickest inmates as a way to cut costs. (Gary Friedman / Los Angeles Times / June 10, 2010)
By James Oliphant Washington Bureau

May 23, 2011, 7:31 a.m.
Reporting from Washington—

The Supreme Court, in a narrow 5-4 decision, has an upheld an injunction by a three-judge panel ordering California to release about 46,000 inmates — more than one-fourth the state prison population — over the next two years to relieve overcrowding.

The decision was written by Justice Anthony Kennedy and backed by the court’s liberal bloc. At issue was whether federal judges had the power to order the release of state prisoners as a necessary means of curing a constitutional violation.
…

http://www.economy.com/dismal/article_free.asp?cid=199776

“The number of consumer loans including first mortgages that are between 30 and 90 days delinquent has plunged from 22 million in early 2009 to less than 14 million, the lowest level since the late 1990s. ”

Interesting. Most must be other consumer loans. While early home mortgage delinquencies have fallen (30-90 days(, they are not “late 90’s” low.

And now, a story from the commercial side:

Citigroup might take $186 million haircut on Destiny USA loans

Citigroup wants to get out of the Destiny USA project so badly it is giving mall developer Robert Congel a $186 million incentive to find another lender.

Included deep inside an agreement that settled a two-year lawsuit between the bank and Congel in March is an offer by Citigroup Global Markets Realty Corp. to forgive two loans totaling $186 million if the developer pays off a separate $310 million mortgage held by the bank on Congel’s Carousel Center shopping mall in Syracuse.

The debts Citigroup would forgive include money it loaned Congel to build the unfinished Carousel Center expansion.

Congel likely would have to refinance his $310 million mortgage with another lender to pay it off by the deadline in the agreement — 2013. The agreement allows him to extend the date until 2015, but only if he makes extra principal payments totaling $100 million.

If Congel cannot pay off or refinance the mortgage, the $186 million owed on the other two loans — an $86 million construction loan and a $100 million mortgage on the mall — must be paid off in full.

In the meantime, the developer must make interest payments on the $186 million, but he will not have to make principal payments.

http://www.syracuse.com/news/index.ssf/2011/05/citigroup_willing_to_forgive_1.html

Just caught a promo for tonight’s HBO movie premier “Too Big To Fail,” and I’m not encouraged. It’s being marketed here as an apologea for the investment banks, Bernanke, Paulson, et al; I.E.; “If we hadn’t bailed them out, life as we know it would have come to a halt.” And “We saved America.”

Anyone in the yeast watching the film? Should I bother?

Did you guys hear? Poof! is back!

1. On your marks, get set, Poof!

2. The only thing we have to fear, is Poof! itself.

3. That’s one small Poof! for man; one giant Poof! for mankind.

4. Accept the challenges so that you can feel the exhilaration of Poof!

5. All religions, arts and sciences are branches of the same Poof!

Quote: When ah think of all those poor white people- forced to buy new bass boats and pick-up trucks and take vacations to Hawaii every year with their home equity credit-lines- I weep for our nation, and how the minorities forced their corruption on all of us.

*snicker*

What’s your point? Oh, I get it. You think I don’t hold “poor white people” responsible for their role in the meltdown. Well, you’re wrong. There were a lot of idiots involved. Including everyone who borrowed money that had no hope in repaying their loans. And those that threw the money around recklessly. And those that urged the throwing around of money. Government idiots, Banking idiots, real estate idiots included. Got that, snicker-boy?