The Housing Bubble

The US is in a permanent stagflationary depression

I don’t know if anyone has been watching HGTV lately but it has gotten much more disgusting than I remember. They have moved beyond housing flipping, and bathroom and kitchen remodels to pure obscenity. Flipping through the channels this weekend, there was this one show about Disneyfying your yard. Essentially during this recession when many people are struggling to survive, attractive white upper middle class surburban families are chosen to get 100k plus back yard makeovers, including pirate ships, moats, water park with cannons, etc. House Hunters Vacation was similar, attractive white upper middle class surburban families are picked to get their choice of a free vacation rental of a multimillion dollar home. The programming was so much worse than your hardest-core porn site, it made me feel sick. FUHGTV.

Can free houses be far behind?

For the roughly four million homeowners who have fallen behind on their mortgage payments, the federal government is offering yet another remedy: free money to catch up on their loans.

More Money for Struggling Homeowners
by AnnaMaria Andriotis
Wednesday, June 29, 2011

A new federal program is offering aid with a sweet kicker: It doesn’t need to be repaid.

The effort, called the Emergency Homeowners Loan Program, is the latest in the federal government’s efforts to slow down the flood of foreclosures a necessary step to a meaningful recovery in the housing market, says a Department of Housing and Urban Development official. For people who have lost their jobs, the $1 billion program offers loans of up to $50,000 that don’t actually need to be repaid, if applicants meet certain requirements.

The goal, says HUD, is to offer short-term aid to people who look like they’ll be back on their feet soon. But critics say the loans may leave homeowners worse off in the long run. “This is a short run band-aid, a modest attempt to grapple with the severity of the situation,” says Stuart Gabriel, director of the Ziman Center for Real Estate at the University of California, Los Angeles.

Rolled out by HUD and the nonprofit housing advocacy group NeighborWorks America, the program is making loans with far better terms than anything on offer at a local bank. The loans are interest-free. Payments go directly to the lender for a portion of the borrower’s monthly mortgage, including missed payments or past due charges. And when the assistance period — which runs for up to two years — ends, 20% of the loan is forgiven with each passing year. In other words, for qualified borrowers who stay in their home for at least five years after the assistance period and who don’t fall behind on their mortgage again, this money doesn’t have to be paid back.

But some critics say that’s where help for consumers ends. By taking this loan, borrowers risk falling further into debt. If they sell their home before the entire loan is forgiven, they’ll be on the hook for the remaining amount. The same holds true if they fall behind on their mortgage payments again: they’ll need to repay the remaining balance of the loan when they sell or refinance their home. Separately, borrowers aren’t required to have equity in their home to receive this money, so someone who has to repay this loan risks owing more on the home later than they do now. For homeowners who are significantly underwater now, the loan may only delay foreclosure, says Gabriel. While the limit each person will get is up to $50,000, loans will average about $35,000 per person, according to NeighborWorks America.

http://finance.yahoo.com/loans/article/113040/more-money-for-struggling-homeowners-smartmoney?mod=series-m-article-b - 89k -

REPORT AIR DATE: July 1, 2011
Protecting Its Fannie: How Mortgage Giant Primed the Bubble, Covered Its Assets

JEFFREY BROWN: Next, how a mortgage giant with a public purpose helped inflate the housing bubble in the lead-up to the financial crisis.

http://www.pbs.org/newshour/bb/business/july-dec11/makingsense_07-01.html - 65k -

From

REPORT AIR DATE: July 1, 2011
Protecting Its Fannie: How Mortgage Giant Primed the Bubble, Covered Its Assets

PAUL SOLMAN: Fannie Mae had no comment on any of the charges in the book. But its supporters say it was trying to do something almost all politicians believed in: making housing more affordable for more people, especially the less well-off. So, isn’t homeownership good social policy?

GRETCHEN MORGENSON: Not if you’re giving loans to people who can’t afford to pay them back, OK? And, so, if you are perverting the homeownership process because you are trying to enrich yourself, increase your profits, which Fannie Mae was absolutely determined to do, then that becomes a perversion of homeownership.

I hope everyone had a wonderful 4th of July. Went to a concert at the National Cathedral in the morning, a community center party in the afternoon (most of the politicians kept their speeches under 2 minutes and the longest bit in the presentation part of the afternoon was celebrating a local resident who just turned 100) and saw the fireworks from the roof of my building. Other residents told me the really good view was Sunday night as the same company that does the display on the mall does a set at a near by country club and that is also visible from the roof (better viewing).

Not a bad holiday.

Just a note. I find people playing instrumental versions of “My Country, ‘Tis of Thee” a little disturbing on the 4th of July. It is the same tune as “God Save the King/Queen.” Seems a little off to be playing the British national anthem on Independence Day.

Big Banks Easing Terms on Loans Deemed as Risks
By DAVID STREITFELD
Published: July 2, 2011

As millions of Americans struggle in foreclosure with little hope of relief, big banks are going to borrowers who are not even in default and cutting their debt or easing the mortgage terms, sometimes with no questions asked.

Two of the nation’s biggest lenders, JPMorgan Chase and Bank of America, are quietly modifying loans for tens of thousands of borrowers who have not asked for help but whom the banks deem to be at special risk.

Rula Giosmas is one of the beneficiaries. Last year she received a letter from Chase saying it was cutting in half the amount she owed on her condominium.

Ms. Giosmas, who lives in Miami, was not in default on her $300,000 loan. She did not understand why she would receive this gift — although she wasted no time in taking it.

Before Chase shaved $150,000 off her mortgage, Ms. Giosmas owed much more on her place than it was worth. It was a fate she shared with a quarter of all homeowners with mortgages across the nation. Being underwater, as it is called, can prevent these owners from moving and taking new jobs, and places the households at greater risk of foreclosure.

Chase, which declined to comment on its program, got $50 billion in option ARM loans when it bought Washington Mutual in 2008. The lender, which said last fall that it had dealt with 22,000 option ARM loans with an unpaid principal balance of $8 billion, still has $33 billion of them in its portfolio.

Bank of America acquired a portfolio of 550,000 option ARMs from its purchase of Countrywide Financial in 2008. The lender said more than 200,000 had been converted to more stable mortgages.

http://www.nytimes.com/2011/07/03/business/03loans.html - -

From

Big Banks Easing Terms on Loans Deemed as Risks
By DAVID STREITFELD
Published: July 2, 2011

“I used to say every day, ‘Why doesn’t anyone get rewarded for doing the right thing and paying their bills on time?’ ” said Ms. Giosmas, who is an acupuncturist and real estate investor. “And I got rewarded.”

The fireworks shows were nice , but seem to get smaller every year. Still recall the monster bashes in 1976, the 200th , every little hamlet went all out then….

“We the people” have lost control. Congress won’t live within the means of the taxpayers.

It’s not only those maturing securities! The federal government is committed to spending $306.7 billion in the month of August. It expects an inflow of only $172.4 billion.

If we operated our household budgets like this we’d all be looked at as fools, yet this is standard practice for the denizens of Washington….our representatives. Are they at fault, or should American voters accept blame for sending such spendthrifts to the nation’s capital?

Writing on the 4th of July, Robert Samuelson (Washington Post) observers:

“Democrats won’t admit the need for major benefits cuts. . . .Republicans won’t concede the necessity for higher taxes. The result is the leaders are playing a game of brinksmanship over raising the federal debt ceiling or defaulting.

“…this from ‘the world’s greatest nation.’ It lowers our competence and elevates our national embarrassment. Altogether, an unhappy birthday.

We discuss topics of Neo-Science here quite a bit. I find it amusing, the realization that new “Truths” are always being trotted out, to help herd the masses into this behavior or that with panic and anxiety, always to be discarded at maturity for some new Chicken Little theme.

Chinese pollution is causing Global Cooling! Damn those Chinese. I guess Upstate NY isn’t going to be our tropical haven anymore. It’s the sulphur now, demon brimstone. What’s that old joke about the three blind men and the elephant?

reuters dot com/article/2011/07/04/us-climate-sulphur-idUSTRE7634IQ20110704

HISTORY LESSON: What became of the 56 men who signed the Declaration of Independence?

Jefferson was fortunate. Many lost their lives as a consequence.

Have you ever wondered what happened to the 56 signators of the Declaration of Independence?

Five signers were captured by the British as traitors, and tortured before they died. Twelve had their homes ransacked and burned. Two Lost their sons in the revolutionary army, another had two sons captured. Nine of the 56 fought and died from wounds or hardships of the revolutionary war.

They signed and they pledged their lives, their fortunes, and their sacred honor.

What kind of men were they? Twenty-four were lawyers and jurists.Eleven were merchants, nine were farmers and large plantation owners, men of means, well educated. But they signed the Declaration of Independence knowing full well that the penalty wouldbe death if they were captured.

Carter Braxton of Virginia, a wealthy planter and trader, saw his ships swept from the seas by the British Navy. He sold his home and properties to pay his debts, and died in rags.

Thomas McKeam was so hounded by the British that he was forced to move his family almost constantly. He served in the Congress Without pay, and his family was kept in hiding. His possessions were taken from him, and poverty was his reward.

Vandals or soldiers or both, looted the properties of Ellery, Clymer, Hall, Walton, Gwinnett, Heyward, Ruttledge, and Middleton.

At the battle of Yorktown, Thomas Nelson Jr., noted that the British General Cornwallis had taken over the Nelson home for his headquarters. The owner quietly urged General George Washington to open fire. The home was destroyed, and Nelson died bankrupt.

Francis Lewis had his home and properties destroyed. The enemy jailed his wife, and she died within a few months.

John Hart was driven from his wife’s bedside as she was dying.Their 13 children fled for their lives. His fields and his grist mill were laid to waste. For more than a year he lived in forests and caves, returning home to find his wife dead and his children vanished. A few weeks later he died from exhaustion and a broken heart. Norris and Livingston suffered similar fates.

Such were the stories and sacrifices of the American Revolution.These were not wild eyed, rabble-rousing ruffians. They were soft-spoken men of means and education. They had security, but they valued liberty more. Standing tall, straight, and unwavering, they pledged: “For the support of this declaration, with firm reliance on the protection of the divine providence, we mutually pledge to each other, our lives, our fortunes, and our sacred honor.”

Source: American Library

Realtors Are Liars

Here’s a great idea…

Banks should offer ‘mates mortgages’ so friends can buy together, says housing minister.
Mortgage experts question practicality of MP’s proposal
http://www.dailymail.co.uk 5th July 2011

Banks should offer ‘mates mortgages’ to help groups of friends buy a home together, a Government minister will say today.

Grant Shapps will urge lending giants to send a lifeline to the record numbers of first-time buyers struggling to get on the property ladder.

The housing minister said that without urgent help from banks a generation of young people would be locked out of the market.

The answer, he suggested, was a radical and new type of lending that he called ‘mates mortgages’.

In most parts of the country it is almost impossible for a young person with a full-time job to buy a home on their own.

The average salary of workers in their 20s is £21,000 whereas the cost of the average home is around £160,000.

As a result, only those on much higher salaries or with family money can put down a deposit on a house.

Mr Shapps said: ‘If there are mates who are perfectly capable of paying monthly mortgage payments but are struggling to fund a deposit of their own, there should be straightforward options to unite with their friends and take the first step on to the housing ladder together.’
Mortgages down: This graph shows mortgage growth rates slowing, while personal deposits rise as consumers rein in spending

Mortgages down: This graph shows mortgage growth rates slowing, while personal deposits rise as consumers rein in spending

His plea for ‘mates mortgages’ will be made today when he holds his second summit to tackle the problems facing first-time house buyers.

But yesterday mortgage experts raised doubts as to whether the Tory minister’s scheme would be practical.

David Hollingworth, of the independent adviser London & Country, said the proposal was ‘absolutely full of risks’.
‘Full of risks’: Critics of the scheme suggest that friends have enough problems sharing flats and it will only get worse if they have a mortgage to worry about

‘Full of risks’: Critics of the scheme suggest friends have enough problems sharing flats and it will only get worse if they have a mortgage to worry about

He added: ‘People get into enough strife when they rent a flat together over basic things like: “Who finished off the milk?” and “Who is going to do the washing up?” It will be even worse if they have a mortgage to fight over.’

More bank branches closing
Weak economy, tighter rules prompt decision
Boston Globe Staff / July 5, 2011

For the first time in 15 years, banks across the United States are closing branches faster than they are opening them, eliminating locations in Massachusetts, other parts of New England, and the rest of the country.

Bank of America, the nation’s largest bank, plans to close 1 in 10 branches nationwide by 2014, including some in Massachusetts. Webster Bank of Waterbury, Conn., plans to close a half-dozen branches, including one in Mansfield, in October. Rockland Trust and Community Bank of Brockton are each closing three branches.

Overall, banks have eliminated more than 1,400 US locations in the past two years. And almost every week, more branches go dark.

“The industry is overbranched,’’ said Bob Meara, senior analyst with Celent, a financial research firm in Boston. “Banks are doing triage with their branch networks and closing the least profitable ones.’’

The branch closings will probably affect people who have business that is difficult to conduct electronically, such as retailers trying to obtain small bills and coins, or customers who prefer giving or getting their money in person. Advocates for the poor also worry that lower-income neighborhoods will feel the brunt of branch closings, forc ing more residents to turn to payday lenders, check cashing services, and other institutions that typically charge higher fees.

“Residents of those neighborhoods will be paying much more to cash their checks, to get loans, and to do their business,’’ said Jesse Van Tol, a spokesman for the National Community Reinvestment Coalition, a Washington advocacy group. “It’s a trend that threatens to create a dual banking system in America: one for the wealthy and one for everybody else.’’

Widening GM Truck Supply Looks Like 2008 Again
Jul 5, 2011 (Bloomberg)
Widening GM Truck Supply Reminiscent of 2008 ‘Bad Habits’

General Motors Co. (GM) stocked Jim Ellis Chevrolet in Atlanta with plenty of Silverado full-size pickups in early 2011, part of a wager on a strong economic recovery. The strategy is backfiring.

“We thought that this year would bring back the kind of economic activity that would translate into us selling more trucks,” Mark Frost, the dealership’s general manager, said in a phone interview. “It’s not happening.”

Supply of Silverado has ballooned to 6 1/2 months worth at the dealership, a figure Frost, 52, calls “a little scary.” The Detroit-based automaker, 33 percent owned by the U.S. after its 2009 bankruptcy, has 280,000 Silverado and GMC Sierra pickups on dealers’ lots around the country. If sales continue at June’s rate, that would be enough to last until November.

After GM’s truck inventory swelled to 122 days worth of average sales, the company said 100 to 110 will be normal going forward for such a large and complex line of vehicles, compared with 60 to 70 days for most models. Peter Nesvold, a Jefferies & Co. analyst, isn’t convinced. Ford Motor Co. (F), which makes similar trucks, is running at 79 days, and Nesvold says GM averaged 78 days on hand at year end from 2002 to 2010.

“It’s unbelievable that after this huge taxpayer bailout and the bankruptcy that we’re right back to where we were,” Nesvold, who has a “hold” rating on the stock, said in a telephone interview. “There’s no credibility.” In a research note he asked: “Is GM falling into old, bad habits?”

Is 10%+ loans in delinquency the new normal for banks?

July 5, 2011, 7:07 a.m. EDT
China’s problem loans looking bleaker: Moody’s
By Chris Oliver, MarketWatch

HONG KONG (MarketWatch) — Moody’s Investors Service on Tuesday said the scale of problem loans at Chinese banks could be closer to the bleaker range of estimates it has given previously.

There’s pressure on Beijing to free up China’s raw materials, while at the bottom of the ocean, Japanese explorers discover a new stash of rare-earth minerals.

The ratings agency said it believes 8% to 12% of loans extended by Chinese banks could eventually be classed as non-performing, revising its outlook from an earlier view that such problems would be seen in a range of 5% to 8% of loans.

Moody’s said the range for its worst-case scenario would involve 10% to 18% of loans in jeopardy of sliding into delinquency, although this isn’t the scenario it believes likely to unfold.
…

How is the recovery treating your family so far?

JULY 5, 2011

Inside the Disappointing U.S. Recovery
By JON HILSENRATH And CONOR DOUGHERTY

Two years after the official end of the worst recession since the Great Depression, the recovery is proving to be among the most disappointing since the Great Depression.

Across a wide range of measures—employment growth, unemployment levels, bank lending, economic output, income growth, home prices and household expectations for financial well-being—the economy’s improvement since the recession’s end in June 2009 has been the worst, or one of the worst, since the government started tracking these trends after World War II.
…
The biggest problem may be household indebtedness. At the peak of the economic boom in the third quarter of 2007, U.S. households collectively had borrowed the equivalent of 127% of their annual incomes to fund purchases of homes, cars and other goods, up from an average of 84% in the 1990s. The money used to pay off that debt means less available for new spending. Households had worked their debt-to-income levels down to 112% by the first quarter, in part because banks have written off some debt as uncollectible.

Jurgen Schulz, owner of K-5, a San Diego area retailer that sells surfboards, skateboards and lifestyle apparel, sees more people living month-to-month. “Our sales trail way off the further it gets from pay period,” he said. Mr. Schulz, in turn, didn’t hire this year the six to eight seasonal workers his company usually brings on each summer.

Getting rid of debt could be a long and slow process. To get back to a 1990s debt-to-income ratio of 84%, households would either need to pay down another $3.3 trillion of debt, or see their incomes rise $3.9 trillion. That’s equivalent to about nine years’ worth of income growth in normal times, estimates Credit Suisse economist Dana Saporta.

Debt constraints are especially hard on consumers who before the crisis relied on credit cards or home equity lines to keep spending when they faced income shortfalls. Now many of those lines have been limited or cut.

With less access to credit, many families are finding the only way to make ends meet is to cut spending.

“Every single month you’re struggling, struggling, struggling,” says Javier Toro, 49, a father of three. He makes $13 an hour as a customer service representative at a non-profit that administers a program offering free energy efficiency upgrades to homeowners. The program, funded by the 2009 stimulus law, ends in a few months as government funds dry up. He’s paying about $100 a month to keep current on $3,000 in credit card debt, but making no headway paying down principal. To make ends meet, he’s cut his cable and Internet service, and the fixed telephone line to his rented home.

He said, “You don’t see when this is going to stop.”

Debt and a dismal job market have hurt consumers’ confidence, which further damps their willingness to spend. The University of Michigan finds that 24% of households expect to be better off financially within a year’s time.

That’s the lowest this measure has been at this point in a recovery since World War II.

President Barack Obama’s financial overhaul law is nearly a year old. For congressional Republicans, the fight to weaken it is just starting.

Wary of trying to repeal the entire statute and being portrayed as Wall Street’s protectors — banks rank among the country’s least popular institutions — GOP lawmakers are trying to nibble away at the behemoth measure. It’s a crusade they’re waging despite lacking the White House and Senate control they need to prevail.

Days ago, one Republican-run House committee approved bills diluting parts of the law requiring reports on corporate salaries and exempting some investment advisers from registering with the Securities and Exchange Commission. Another House panel voted to slice $200 million from Obama’s $1.4 billion budget request for the SEC, which has a major enforcement role.

Meanwhile, Senate Republicans are continuing a procedural blockade that has helped prevent Obama from putting Elizabeth Warren or anyone else in charge of the Consumer Financial Protection Bureau, which opens its doors in two weeks.

The law hurts “the formation of capital, the cost of capital and access to capital, and you can’t have capitalism without capital,” said Rep. Jeb Hensarling,

Then the money shot

The financial industry leans Republican in its campaign contributions but not overwhelmingly. Sixty-one percent of the $9 million that commercial banks gave federal candidates for the 2010 elections went to Republicans, while 54 percent of the securities and investment industry’s $9 million went to Democrats, according to the nonpartisan Center for Responsive Politics.

yahoo.com/gop-uses-budget-other-tools-sap-financial-law-070222193.html

“You can avoid reality, but you cannot avoid the consequence of avoiding reality.” ~Ayn Rand

Looks like Australia still has a long long way to drop:

The median price of houses and units in Melbourne has fallen by $21,000 from its peak in November 2010, to about $500,000. ”Melbourne has hit the brakes,” Mr Lawless said.

http://m.smh.com.au/business/house-prices-falling-at-worse-rate-than-2008-20110630-1gsyc.html

I see our old friend Mark Zandi today predicts that the worst is over and things will “get better” from here on out.

Oh yes, and he also says that Jamie Dimon is the ideal candidate to succeed Timmy…..really, there is absolutely no penalty for getting it wrong again and again if you are a pro-FIRE pundit.

Snowbird caps longest season with holiday skiing
Monday, July 4, 2011 Deseret News

LITTLE COTTONWOOD CANYON — A few thousand mostly red-and-blue-clad skiers celebrated the Fourth of July on the white slopes at Snowbird Ski and Summer Resort.

“This is unbelievable,” said Salt Lake City resident Melissa Witman, who wore a red, white and blue bikini top Monday on the resort’s final day of the ski season. “It’s summer skiing!”

Temperatures in the 50s and 60s made swimsuits and shorts popular choices for skiers who decided to take advantage of the longest ski season in Snowbird’s 39-year history.

“It’s beautiful up here on the Fourth of July,” said Clayton Butler of Salt Lake City, who wore only skis, boots, a helmet and a Speedo. “It’s a little chilly if you hang out up top too long. But once you start going, it warms right up.”

By being open for skiing Monday, Snowbird set a record for the number of days it was able to stay open in a single season with 202, said Emily Moench, the resort’s communications manager. The previous record of 201 was set in 2005.

Snowbird also had a record for snowfall this season, with 783 inches — topping the previous high by nearly 100 inches, Moench said.

“It’s a spectacular way to wrap of the season,” she said of the holiday skiing.

Skiing and snowboarding were limited to the upper mountain, where snow reportedly was about 12 feet deep. The lower portions of the resort were open for summertime activities such as the alpine slide, a zip line, bungee trampolines and a climbing wall.

The big squeeze: Families need to earn 20% more than last year to maintain living standards - dailymail.co.uk

Households with children need to earn 20 per cent more this year than last to maintain the lifestyle their family has become used to, research shows.

Even though official figures show living costs rising by about five per cent a year, families requiring childcare would typically have to increase gross earnings by four times that in order to maintain living standards.

This is because child benefit has been frozen and tax credits have been reduced for many families.

Most significantly, tax credits helping low-income families meet childcare costs have been cut, the Joseph Rowntree Foundation data showed.

This makes it harder for low-paid women to earn enough even to cover the cost of childcare, according to the foundation.

The research found that a couple with two children now need to earn at least £18,400 each or a total of £36,800 if they work full-time, to meet the charity’s measure of a good quality of life.

Families with a single earner need gross earnings of £31,600 and a lone parent would need to be earning £18,200 to meet the minimum acceptable standard of living.
Family Watching TV

Family struggle: The average family which requires childcare will see a 20 per cent increase in the cost of living compared to last year

A minimum income standard for the UK in 2011 shows how much various households need to reach a minimum standard of living, using measures determined by members of the public.

Researchers found that over the past decade, the cost of a ‘minimum’ basket of goods and services has risen by 43 per cent, compared to a 27 per cent increase in the Consumer Price Index (CPI).

These differences matter greatly because many people on low incomes rely on benefits and tax credits which are now uprated by the CPI.

State layoffs of 1,300 employees hitting home
~ TALLAHASSEE

Millions of Floridians head back to work today after a three-day Fourth of July weekend.

But Toni Gugliotta won’t be among them.

She’ll be applying for $275 a week in unemployment benefits instead.

The Pinellas County woman is among 1,300 state employees put out of work by the new budget approved by the Legislature and signed into law by Gov. Rick Scott on May 26.

Scott kept his promise to reduce the size of the state government bureaucracy. But he did so at the expense of real people with mortgages, health care bills, college tuition payments and credit card payments.

Many of them earned less than $30,000 a year after years of state employment.

To them, the Scott mantra “Let’s get to work” rings hollow. They now join the hordes of Floridians looking for work in a state with an unemployment rate that, while declining, remains in double digits at 10.6 percent.

The state agencies that took the biggest hits are the Department of Juvenile Justice and the Department of Children and Families, which together account for most of the layoffs.

“It’s like 12 years going down the drain,” Gugliotta said.

Gugliotta, 50, of Dunedin, earned nearly $29,000 a year as one of 18 full-time community service officers under the Florida Highway Patrol. CSOs, as they were known, directed traffic and handled fender-bender accidents, freeing up Florida Highway Patrol troopers for more serious calls.

Most CSOs were in Pinellas and Hillsborough counties, where the program was created.

The program was a perennial target of budget cuts but always managed to survive — until this year. After 14 years, it’s gone.

“I was proud to wear the uniform,” Gugliotta said. “I did not walk out of my house with a stain or a crease.”

For the first time in 15 years, she’ll be without a paycheck this week. She’s single and has no other income and plans to file for unemployment benefits, but worries knowing the $275 a week won’t cover her $560 monthly health insurance premiums and other bills.

“I have a mortgage. I have bills. I have to pay for my knee surgery,” Gugliotta said.

She also worries about motorists who she says will now have to wait longer for help.

“Wait until hurricane season. Wait until schools open,” she said. “The snowbirds are going to come down soon. Here, when they need us the most, they’re eliminating the program.”

Firing the CSOs saves $900,000. That’s a pittance, Gugliotta says, compared with the waste that went into the $48 million courthouse in Tallahassee known as the Taj Mahal.

New Yorkers: Beware of ‘Monster’ Plant Causing Blisters, Blindness
July 05, 2011 | Associated Press

A monster plant with flowers the size of umbrellas and sap that causes blisters and blindness is spreading across New York.

It’s the giant hogweed, an invasive species, and the Department of Environmental Conservation is asking for help locating outbreaks so they can send crews to nip it in the bud.

The agency has a Giant Hogweed Hotline at 845-256-3111 for people to call and report sightings. Callers are asked to provide photos and site information, but avoid touching the plant.

This is DEC’s fourth year of controlling giant hogweed. Six crews totaling 14 people will visit most of the 944 known giant hogweed sites.

Sites with less than 400 plants will be controlled by hand cutting their roots; sites with more than 400 plants will be controlled with herbicide.

Revealed: Tim Geithner’s Cover Letter to Goldman Sachs
By Constantine von Hoffman | bnet.com

Timothy F. Geithner
Department of The Treasury
1500 Pennsylvania Avenue, NW
Washington DC 20220
(202) 622-2000
Moneyguy01@treas.gov

HR Department
Goldman Sachs & Co.
200 West Street
New York, NY 10282

Dear Mr./Ms. Last Name:

I am writing to apply for the position of Master Of The Universe at Goldman Sachs as advertised in The Bilderberg Group Daily News. I believe my experience in experimenting on the economy playing with other people’s money makes me an excellent candidate for this position. As requested, I am enclosing a completed job application, my certification, my resume and three references. (Please call Dr. Kissinger first. He’s not getting any younger.)

I have extensive experience working with the rich and powerful. My most recent job was as secretary of the U.S. Treasury (a situation which put a premium on diversity awareness). Even before I took the job I was the center of attention in Washington. And despite not paying any income taxes for four years, my nomination was opposed by only a third of the Senate. As Treasury Secretary, I ended all those fluctuations in the unemployment rate and kept it at a nice steady level. Despite the job’s title, I did NOT answer phones or any filing. Although I can do both while typing 120 wpm. With one hand.

Among my many other accomplishments: Helping a large number of financial institutions avoid the consequences of their actions. As many of the very large number of our mutual friends (hint, hint) will tell you, the quid pro quo on this — cutting executive salaries and perks while limiting dividends and corporate acquisitions — was strictly window dressing. Remember the bonuses AIG paid to executives in its Financial Services division after receiving $170 billion in bailout?

Prior to my current position I served as president of the Federal Reserve Bank of New York. It was in that job, when I got Bear Stearns a $30 billion bailout, that I discovered my true vocation: Giving large amounts of other people’s money to down-on-their-luck wealthy institutions. This was very important to help the economy, no matter what Paul Krugman says. I mean really, what’s he ever done?

In closing I would just like to say how much I respect and admire your CEO, Lloyd Blankfein, whom everyone agrees is very spry for a man of his age.

Very Sincerely Yours,

Tim

P.S.: Don’t believe what you read in the press about me: I still want the job. Actually, just don’t believe anything about me you read in the press. Call me!

Maryland Councilwoman Resigns Under Pressure After Guilty Plea
July 05, 2011| Associated Press

The wife of former Prince George’s County Executive Jack Johnson resigned from her seat on the County Council on Tuesday, five days after she pleaded guilty to destroying evidence in a federal corruption probe.

Leslie Johnson handed her resignation letter to Council Chair Ingrid Turner on Tuesday morning, said her attorney, Shawn Wright. The resignation is effective July 31, the last day before the Council recess.

Johnson admitted in federal court that she destroyed a $100,000 check from a developer to her husband and stuffed nearly $80,000 in illicit cash into her underwear as federal agents knocked on the door of the couple’s Mitchellville home. Her sentencing is scheduled for Oct. 13; sentencing guidelines call for her to receive between a year and a year and a half in prison.

Jack Johnson pleaded guilty to shaking down developers for more than $400,000 in cash and other favors in exchange for doing business with the county during his eight years in office. He faces more than a decade in prison.

“After careful thought and consideration, I tendered my resignation this morning as a member of the Prince George’s County Council for District 6,” Leslie Johnson said in a statement read by Wright. “My resignation is important for the constituents of District 6 so that the district can be in the best possible position to continue to move forward. I again apologize for my mistake.”

Johnson was not legally obligated to resign. She would have been forced to give up her seat, which carries a $96,000 annual salary, only after her sentencing, and Wright said Thursday that Johnson planned to remain in office until that date.

Won’t be long now the savvy will be out snapping up RE in droves.

Best Consumer Credit Since ‘06 Reveals Loan Rebound Across U.S.
(Bloomberg)

Michael Busick says his credit union “was shocked” to discover his credit score was 812 of a possible 850 when he applied for a $19,500 new-car loan.

The loan officer told Busick he rarely sees scores so close to perfect, said the Charlotte, North Carolina, math teacher, who added that he always pays his bills on time and doesn’t “overextend.” He got the funds in May.

The average U.S. credit score — a predictor of the likelihood lenders will be paid back — rose to 696 in May, the highest in at least four years, according to Equifax Inc., a provider of consumer-credit data. The ratio of consumer-debt payments to incomes is the lowest since 1994, and delinquencies have dropped 30 percent in two years, Federal Reserve data show.

Improving credit quality gives households the ability to lift borrowing as concerns ease about rising gasoline prices, hard-to-find jobs and falling home prices. A reacceleration in spending would belie Morgan Stanley economist Stephen Roach’s assertion that consumers will be “zombies” for years because of too much debt.

“The financial situation of the household sector has improved far faster and far more than everyone thought it would two years ago,” said James Paulsen, chief investment strategist for Wells Capital Management in Minneapolis. “People are still locked into the view that consumers are facing record burdens, and they are not. There has been a change that is sustainable and durable.”
Willing to Lend

Bank senior loan officers reported a pickup in demand for auto loans in the second quarter, following first-quarter growth for all consumer lending — the first increase since 2005, according to a quarterly Fed survey released in May. About 29 percent were more willing to make consumer installment loans, the highest percentage since 1994, the survey found.

“The household deleveraging process is much further along than is appreciated,” said Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “This is evident in the rapid improvement in credit quality. ‘Zombie consumers’ is a mischaracterization of the state of the American consumer.”

More borrowing could help spur growth slowed by higher gasoline prices, Paulsen said. That will make stocks more attractive than bonds, pushing the Standard & Poor’s 500 Index up about 8 percent to 1,450 by year end, while raising the yield on 10-year Treasury notes more than half a point to 3.75 percent, he said.

If you have time read some of the comments… Sounds familiar.

Train-Maker Bombardier Cuts Over 1,400 Jobs
UK, Tuesday July 05, 2011

Darren Little, Midlands correspondent, in Derby
The engineering firm Bombardier has said almost 1,500 jobs are to go at its Derby factory, the last train manufacturing plant in Britain.

http://news.sky.com/skynews/Home/Business/Bombardier-Set-To-Announce-2000-Job-Losses-In-Derby-After-Losing-Key-Government-Train-Contract/Article/201107116023872?lpos=Business_First_Buisness_Article_Teaser_Region_0&lid=ARTICLE_16023872_Bombardier_Set_To_Announce_2%2C000_Job_Losses_In_Derby_After_Losing_Key_Government_Train_Contract

Obama tries to stop execution in Texas of Mexican killer
US president warns Texan authorities that execution would put America in breach of international legal obligations

guardian.co.uk, Tuesday 5 July 2011

President Barack Obama has asked the Texan authorities not to execute the convicted rapist and murderer Humberto Leal Garcia

President Barack Obama is attempting to block the execution in Texas on Thursday of a Mexican man because it would breach an international convention and do “irreparable harm” to US interests.

The White House has asked the US supreme court to put the execution of Humberto Leal Garcia on hold while Congress passes a law that would prevent the convicted rapist and murderer from being put to death along with dozens of other foreign nationals who were denied proper access to diplomatic representation before trials for capital crimes.

The administration moved after the governor of Texas, Rick Perry, brushed aside appeals from diplomats, top judges, senior military officers, the United Nations and former president George W Bush to stay Leal’s execution because it could jeopardise American citizens arrested abroad as well as US diplomatic interests.

Leal, 38, was convicted in 1994 of the rape and murder of a 16-year-old girl in San Antonio. Few question that he was responsible for the killing but the Texas authorities failed to tell Leal, who was born in Mexico and has lived in the US since the age of two, that under the Vienna convention he was entitled to contact the Mexican consulate when he was arrested.

Leal’s lawyers argue that the lack of consular access played a role in the death penalty being applied because the Mexican national incriminated himself in statements made during “non-custodial interviews” with the police on the day of the murder. Had Leal had access to the Mexican consulate it would have been likely to have arranged a lawyer who would have advised the accused man to limit his statements to the police. As it was, the Mexican authorities were never informed of his arrest.

In a 30-page brief to the supreme court, the administration said that the carrying out of the execution “would place the United States in irreparable breach of its international law obligation” under the convention.

The White House said it was in the US’s interests to meet its treaty obligations.

Bankrupt Real Housewives star Sonja Morgan faces losing $6m mansion in divorce battle By Daily Mail Reporter

Real Housewives of New York star Sonja Morgan could lose her $6m mansion in her bitter divorce battle.

Bankrupt reality TV star Morgan, 47, is currently battling in court over a $3m settlement with millionaire 80-year-old John Adams Morgan, the New York Post reports.

‘I’m sure the world thinks, “Sonja doesn’t have to worry, she’s got that husband there for her.” But I’m on my own,’ Morgan, 47, told the Post.

In court papers Morgan claims that while her ex-husband lives on a $19m private island off Connecticut, she is banned from visiting homes they co-own.

And Morgan, a mother of one, says she now may be forced to sell off her own New York home.

Layers for Adams Morgan say his client is appealing previous court rulings because he believes the divorce judge forced him to pay more than was agreed in pre and postnuptial agreements.

Morgan’s financial woes have been documented in recent episodes of her hit reality TV show.

Last month, footage aired showing her co-stars learning she had filed for bankruptcy for $19 million in the papers.

She said she was ‘heart broken’ despite putting on a brave face.

After the episode, she took to her blog on Bravotv.com.

‘It has been a steep learning curve in a business I knew nothing about,’ she wrote, referring to an movie investment that sparked her finance trouble.

‘I am back to doing what I know and will recover some of my loss with continued hard work. Facing this reality is not pretty for me.’

Moody’s downgrades Portugal

Moody’s cuts Portugal credit ratings to junk

(Reuters)

Moody’s Investors Service on Tuesday slashed Portugal’s credit rating into junk territory, saying there is great risk the country will need a second round of official financing before it can return to capital markets.

Heightened concerns that Portugal will not be able to fully achieve the deficit reduction and debt stabilization targets set out in its loan agreement with the European Union and International Monetary Fund weighed on Moody’s decision.

There also is an increasing probability that Portugal will not be able to borrow at sustainable rates in the capital markets in the second half of 2013 and for some time thereafter, Moody’s said.

Portugal is facing formidable challenges in reducing spending, increasing tax compliance, achieving economic growth and supporting the banking system, the agency said.

Moody’s cut Portugal’s credit rating by four levels to Ba2. It is the first of the Big Three ratings agencies to put Portugal’s credit in junk status. Standard & Poor’s and Fitch Ratings both have Portugal at BBB-minus, the bottom of the investment grade range.

Just a little more junk…

Global Credit Research - 05 Jul 2011

London, 05 July 2011 — Moody’s Investors Service has today downgraded Portugal’s long-term government bond ratings to Ba2 from Baa1 and assigned a negative outlook. Concurrently, Moody’s has also downgraded the government’s short-term debt rating to (P) Not-Prime from (P) Prime-2. Today’s rating action concludes the review of Portugal’s ratings initiated on 5 April 2011.

Casey Anthony not guilty. Any lawyers here want to comment on whether or not they believe the prosecution presented the case well or not? Not that I have any law background at all beyond Business Law moot court. Ha ha! but I thought most of what they presented was circumstantial.

To Kirisdad in reply to a post from yesterday
‘ A chorus line’ is a great show for summer stock, because the cast are young energenic kids striving for broadway. What parts did they play?

The performers playing Maggie and Mark both from grew up in the vicinity of Annapolis, MD (as did my offspring). I spent a lot of time building sets and working backstage and watchng them all perform at The Talent Machine Company, Children’s Theatre of Annapolis, and several other local theatre groups in the area. And then, when my youngest graduated from high school I sold my over-valued house (in 2006) and have been renting ever since. Partial credit to this blog, for reassuring me that I was not crazy to think that my house was not really worth what people were paying at that time. The current “zestimate” is about 20 per cent less than my sale price, but I expect that the prices will eventually have to drop a lot more.

I started the new job today. Will be very busy so I’ll mostly be around on weekends. Don’t worry, I won’t buy a house!

Ugh….I could use words of encouragement. How much longer do I need to wait to get a house?

I live in the suburbs of Philadelphia. All the listing prices are still 2x the 1998 assessment. However, the only houses that are selling are those that lower their price. I wanted to get in a house before my oldest started kindergarten, now I am hoping for before my youngest starts school.

Is it legitimate to approach a seller directly when they have a listing agent? We won’t be using a realtor, and wouldn’t mind saving the other 3% as well.