The Housing Bubble

Short sale fraud plagues the housing market

NEW YORK (CNNMoney) — Just as the housing market began to collapse near the end of 2007, a real estate agent in Bridgeport, Conn. asked Regions Bank if it would accept a $102,375 bid on a home that was underwater on its mortgage. Under the impression that this was the best offer on the home, Regions agreed to the short sale and released the mortgage it owned on the home.

Later that same day, the new owner — an investment group owned by another real estate agent — resold the home to a buyer who had been lined up before the short sale transaction went through. The final sale price: $132,500, netting the seller a cool $30,000 — a profit that should have gone to Regions.

In this latest twist on short sale fraud, scammers have found a way to rip off mortgage lenders by tens of thousands of dollars — sometimes in a matter of hours.

The scam artists, usually real estate agents, will secure a legitimate bid on a home, one where the borrower owes far more on the mortgage than the home is worth. Then they arrange for an accomplice investor to make a lower offer on the home.
Foreclosures for sale: Big supply, low prices

The agent then presents the lower bid to the lender and asks them to forgive any remaining balance owed — without disclosing that there was a higher bid made on the home. Once the short sale is approved, the scammer then sells the home to the higher bidder, often on the same day.

“These same-day resales are on average nearly $50,000 greater than the lender agreed upon short-sale price,” said Tim Grace, senior vice president of product management and analytics at CoreLogic (CLGX), a financial analytics company based in Santa Ana, Calif.

Such transactions are expected to cost lenders more than $375 million this year, up more than 20% from last year, according to CoreLogic
The anatomy of a scam

Most of the time, pulling off one of these scams involves a real estate agent and an investor acting as a “straw buyer.” Sometimes, the owner of the home is involved as well, but not often, said Robert Hagberg, an investigator for the mortgage giant Freddie Mac (FMCC, Fortune 500).

“In most instances, the sellers are apathetic; they’ve, basically, already lost their homes,” he said. With nothing to gain or lose, they allow agents to handle the entire deal.

To get the banks to approve low bids, appraisals or broker price opinions are manipulated. Home prices have plummeted in many housing markets and the house may be worth far less than what the seller paid.

Sometimes, said Hagberg, fraudsters bribe appraisers or brokers to get the prices they want but they can employ sneakier methods as well. One method: Misstating the home’s location so it’s compared with much cheaper places.

One case in California last year involved an expensive Malibu property that the agent said was in Riverside, Calif.

“It didn’t cause any alarm bells to go off at the bank,” said Grace. “The short sale went through at $200,000, which was a fifth of its value. It was turned around for $1 million.”

Sometimes an agent will point out every defect in the home to get appraisers to reduce their values, according to Hagberg. In Wisconsin, an agent left the windows open during spring rains and flooded the basement. He told the appraiser the plumbing burst and would need expensive repairs. All it really needed was a pump.

“When the flippers say there’s something wrong with the electricity, the plumbing or the roof, the appraiser can’t tell whether they’re being deceived or not,” said Hagberg.

http://money.cnn.com/2011/06/28/real_estate/short_sale_fraud_rising/index.htm?iid=HP_LN

Hi. Quick ? for Polly or other legal gurus. New landlord bought the building. They wanted to amend the lease for increase in rent. I waited the few months until my year long lease end. But the lady in the office did not change the date on the amendment form. So it states new rent shall be $X starting in May. But I signed the amended (yes I should have notice the date error.) the end of May and started the paying new rate for June. But got letter from LL saying I own extra rent for May. The amout is not much. But so far they have not been good LL. Can the amendment be valid since I signed it after the date in which the rent increase was to start?

The housing slump is far worse than you think
Key housing market statistics point to years of stagnation

By Roben Farzad
Business Week
updated 7/14/2011
8:02:50 AM ET

Ramsey says every housing statistic he tracks, including new and existing home prices and the performance of homebuilding stocks, has so far matched the pattern of prices after the bursting of other bubbles, including the Dow Jones industrial average following the crash of 1929 and Japan’s Nikkei after its 1989 peak. It starts with a steep decline lasting three or four years, followed by a brief rally that ends in years of stagnation. The Dow took 35 years to return to pre-crash levels. The Nikkei trades at less than a third of where it peaked 22 years ago. “The housing decline,” he says, “will be a long, multiyear process, and the multiplier effect across the economy will be enormous.”

Others are equally gloomy. “It’s still a vicious cycle of foreclosures, prices falling and buyers remaining on the sidelines,” says Jonathan Smoke, head of research for Hanley Wood, a housing data company. With the homeownership rate possibly headed to its pre-bubble level of 64 percent from 69 percent at the peak, Smoke calculates that the nation needs 1.6 million fewer homes that it now has. “We’ve gone through a period when we should have been tearing down houses,” he says. “The supply of total housing stock is beyond what is necessary.”

Big ripple effect

If these predictions are right, the economy will be missing a key driving force for years — and the nation will keep paying the price for what Ramsey calls the “illusory prosperity” of the housing boom. “Think about local tax revenues — what the housing bubble contributed to coffers across the country,” he says. “The ripple effect for the economy was enormous: washers, dryers, carpeting, construction jobs.” The housing wealth that has now evaporated gave Americans false expectations about economic growth and rising standards of living. Asks Ramsey: “What was real and what was never meant to be?”

The bottom line: Despite intermittent signs of recovery, the housing market may be in the midst of a slump that could last a generation.

http://www.msnbc.msn.com/id/43687588/ns/business-us_business/t/housing-slump-far-worse-you-think/ - 81k -

I am sure this was posted but anything that has “ominous shadow” in it deserves a second look. Knute, she’s headed for the rhubarb!

Bank Delays May Push 1 Million U.S. Foreclosure Filings to 2012
By Dan Levy -
Jul 14, 2011 12:00 AM ET

Lender delays in processing home- loan defaults will push as many as 1 million U.S. foreclosure filings from this year to 2012 or beyond, casting an “ominous shadow” on the housing market, according to RealtyTrac Inc.

“If you accept the premise that foreclosures are the black cloud hanging over the market, we’re not going to get price stability and people won’t leave the sidelines until that cloud is cleared away,” Nicolas Retsinas, professor of real estate at Harvard Business School in Cambridge, Massachusetts, said in a telephone interview.

3.2 Million Forecast

RealtyTrac in January forecast as many as 3.2 million foreclosure filings for 2011. Delays have persisted as state attorneys general investigate “robo-signing,” the practice of pushing through documents without verifying their accuracy. Total filings for the year are likely to be about 2 million at the current pace, compared with 2.9 million in all of 2010, Rick Sharga, senior vice president, said in a phone interview

http://www.bloomberg.com/news/2011-07-14/bank-delays-push-1-million-u-s-foreclosures-into-2012-in-ominous-shadow-.html - 90k -

Dimon Says Mortgage Clash Swells as ‘Everybody Is Going to Sue’

By Rick Green -
Jul 14, 2011 3:14 PM ET

“There have been so many flaws in mortgages that it’s been an unmitigated disaster,” Dimon said during a conference call today. “We just really need to clean it up for the sake of everybody. And everybody is going to sue everybody else, and it’s going to go on for a long time.”

http://www.bloomberg.com/news/2011-07-14/dimon-everybody-is-going-to-sue-over-mortgages.html - 85k -

Whirlpool is laying off 350 employees at the plant in Amana,Iowa.

Employees were told today of the the “employee reduction” which will be effective August 1st. The layoffs will impact 50 employees hired for temporary summer work and 300 full time employees.

Seven years of prosperity, and there shall arise after them thirty seven years of make believe?

Real estate investing during a housing depression can get real expensive, especially if compounded by a nasty divorce.

UPDATED: Frank McCourt asks judge to cut his support to Jamie McCourt
July 15, 2011 | 1:06 pm

Dodgers owner Frank McCourt asked Friday that a judge reduce the financial support he must pay his ex-wife Jamie, saying the amount of money he paid her last year is more than he will make this year.

“I simply cannot afford to support [her] lifestyle any longer,” McCourt wrote in a filing with the Los Angeles Superior Court.

He asked that Jamie McCourt be ordered to pay all costs associated with the couple’s seven homes — perhaps by renting some or all — or that the properties be sold immediately. The court set an Aug. 10 hearing date.

Frank McCourt said his income this year would be $5 million. In accordance with court orders, Frank McCourt said he paid Jamie McCourt $7.76 million over the past year, to cover temporary spousal support and to maintain the couple’s seven homes. In comparison, Frank McCourt said he spent $600,642 on “my own personal expenses and lodging.”

[UPDATED 3:39 p.m.: The statement from Ryan Kirkpatrick, an attorney for Frank McCourt:

“Jamie McCourt continues to live a lifestyle that simply is not sustainable. She has seven homes which Frank pays for, and despite many requests, she has refused to sell or rent any of them. No one needs seven houses. Beyond covering her home expenses, Frank has been paying her $225,000 a month to support her unrestrained style of living. Today’s request by Frank simply reflects economic reality.”
…

What happens if the game of debt ceiling chicken ends in a head-on collision?

1) Karmageddon
2) Two-term Obama presidency

Posted at 02:40 PM ET, 07/15/2011
How default would harm homeowners, cities, businesses and everyone else
By Ezra Klein

(FRANK FRANKLIN II) It’s easy to understand why the government will have more trouble borrowing if it fails to pay its debts, or even has a difficult time paying its debts. It’s a bit harder to see why ordinary Americans, the city of Pittsburgh, hospitals in Iowa, and medium-sized corporations will have more trouble borrowing. But they will. And their trouble borrowing is the main channels through which a default, or even something too close to it for the market’s comfort, could deal a body blow to the economy.
…
The 2008 economic crisis wasn’t started by a nuclear bomb detonating in New York, or a campaign to sabotage the country’s factories, or a plague that struck our able-bodied young males. Rather, investors bought a lot of debt based on subprime mortgages. They performed some tricky financial wizardry that they thought made the debt low-risk. They found out they were wrong. And then, because the players in the financial system no longer knew how much money anyone had, the credit markets froze and the economy crashed.

Now imagine that happening, not with the housing market, but with the government of the United States of America. The cornerstone of the global financial economy is the idea that Treasuries are risk-free. If they’re not, then like in the financial crisis, no one knows how much money anyone who holds treasuries has. But they also don’t know how much money anyone who depends on the federal government — be they businesses or individuals — holds.

This is how a default gets into the rest of the economy: It takes everything the financial markets thought they could know and rely on and upends it. It then shuts off credit, or makes it prohibitively expensive, for nearly every participant in the economy, from states and cities to hospitals and universities to homebuyers and credit-card applicants. That, in turn, freezes all of their activity, which destabilizes everyone who relies on them, which then destabilizes financial markets further, and so on.

It was one thing to have forgotten that this sort of thing could happen in 2006, when America hadn’t seen it for 70 years. But we just went through it. And if we go through it again, the Federal Reserve, which has pushed interest rates as low as they can go, and Congress, which has vastly expanded the deficit, have a lot less ammunition left for a response.

Are we likely to get to that point? No, of course not. But between here and there are worlds where the economy doesn’t crash, but because the federal government panics the market, interest rates rise and the economy slows. In a recovery this weak, that would be a disaster. And it would be entirely of our own making.

By Ezra Klein | 02:40 PM ET, 07/15/2011

A US default isn’t a matter of “if” but “when,” David Murrin, chief investment officer at Emergent Asset Management, told CNBC.

“It’s inevitable that the US will default – it’s essentially an empire which is overextended and in decline – and that its financial system will go with it,” he said.

In his book “Breaking the Code of History,” Murrin argues that the balance of power has shifted away from the West, with America as the superpower, towards the East, led by China.

He believes the US cannot afford to compete with the rise of Eastern powers.

“It’s very simple, its (America’s) empire system, its financial system is in decline, we’ve seen very little growth for over a decade apart from financial engineering and leveraging, which ultimately caused the debt crisis of 2008,” Murrin said.

“The only similar example is Britain. It was once an empire and when it lost its power over (the Suez Canal crisis of 1956) it had a large amount of loans outstanding to the Empire, and America owned most of that,” Murrin said. “That was the power America had over Britain and it ended the pound, but their values were very similar in terms of global geo-politics and the world didn’t really change that much.”

For investors wondering where to look in this environment, Murrin said one thing is clear: “You probably shouldn’t own dollar- denominated assets.”

Ted Nugent: You have the right to remain stupid.

http://www.washingtontimes.com/news/2011/jul/13/you-have-the-right-to-remain-stupid/

Man-crush confirmed….

Here’s an interesting article about Eric Cantor and the debt negotiations.

http://www.washingtonmonthly.com/political-animal/2011_07/cantor_rejects_plan_to_spend_l030889.php

from the article:

For years, the government was able to purchase prescription drug prices through Medicaid at a big discount. Republicans changed the law in 2006 as part of creating Medicare Part D, which privatized the negotiating process.

The problem, of course, is the House Majority Leader, who wants to maintain the status quo, even if it costs billions more, and who just happens to be the beneficiary of enormous campaign contributions from drug makers.

http://larouchepub.com/pr_lar/2011/lar_pac/110713qe3_bernanke.html

With Europe engulfed in debt-panic and the European Central Bank (ECB) becoming a huge “bad bank” for unpayable debt assets, Federal Reserve Chairman Ben Bernanke stepped into the breach July 13 by announcing to the House Financial Services Committee that the Federal Reserve is preparing a QEIII, with more expansion of its asset book. Stocks and the Euro momentarily soared, the dollar plunged.

Bernanke seemed to be defying what just-released minutes of June 22 Federal Open Market Committee (FOMC) meeting showed, namely, that only “a few members” were in favor of even considering another round of “monetary stimulus,” or money-printing. A few hours after Bernanke’s announcement in Congress, Dallas Fed president Richard Fisher said in a speech there, “We’ve exhausted our ammunition, in my view, and expanding the Fed’s balance sheet from about $2.7 trillion to more than $3 trillion might spook the marketplace. I do not personally see the benefit of more monetary accommodation even if the economy weakens further.” One day earlier, retiring Kansas City Fed chief Thomas Hoenig, no doubt aware of what Bernanke would do, had blasted Fed money-printing in a speech: “Part of our basic problem worldwide and here in the U.S., is that the emperor has no clothes and no one’s willing to say it. You print money, print money, and print money, but you don’t create real wealth.”

All commentary focussed on the fact that Bernanke was trying to save the Euro single currency—a hopeless task, and one that leads the Fed further into violating even the Federal Reserve Act of 1913. Note that on June 29, the Fed extended unlimited currency swap lines of credit to the ECB and the Swiss, British, Canadian, and Japanese central banks. The ECB is being widely described as a “European bad bank” in the growing debt crisis, as it has lowered the standards for the collateral assets it is buying from banks, to below junk grade, and is buying from private equity funds, hedge funds, and investment banks. Will the Fed now be directly buying European sovereign debt, or European bank bonds, in support of the floundering ECB? Without waiting to find out, QEIII should be stopped.

An interesting report appearing July 6 on the financial analysis website “Zero Hedge”, used Federal Reserve flow-of-funds and bank reserves charts to show that all $600 billion of the so-called QEII money-printing appeared to go offshore to big Inter-Alpha and other European banks. The Fed’s purchases of Treasuries with its newly printed reserves from November 2010 to June 30, 2011 evidently were overwhelmingly from BNP Paribas, RBS, Barclays, Credit Suisse, Deutsche Bank, HSBC, and UBS. The “Zero Hedge” analyst concluded: “The only beneficiary of the reserves generated were US-based branches of foreign banks (which in turn turned around and funnelled the cash back to their domestic branches), a shocking finding which explains … why US banks have been unwilling and unable to lend out these reserves.”

Arguably, this violates the 1913 Federal Reserve Act, even with its 1932 “exigent and unusual circumstances” amendment, which still requires AAA-rated collateral in the form of U.S. Treasuries or equivalent, for the Fed lending to any “non-bank.”

But on more fundamental Constitutional grounds, an attempt to repeat this in a QEIII would be barred—and the QEII effects could be reversed—by immediate passage of legislation restoring the Glass-Steagall Act through both Houses of Congress. Under Glass-Steagall, not only were commercial banks separated from various kinds of securities-speculation and insurance firms. The Glass-Steagall principle is that only those commercial banks, thus separated, in the Federal Reserve System—U.S. banks—are eligible for Federal support in the form of discount window and special lending, deposit insurance, and other protective regulation. All the big European banks are famously “banking supermarkets” stuffed with investment banking arms, speculative hedge funds, insurance divisions, money-market funds, etc.

The current trans-Atlantic bad-debt bubble, imploding in Europe now, does not qualify for such lending or support; that gambling debt should be left on the shoulders of those who bet on it. Glass-Steagall passage would stop this latest panic bailout.

“We are now paying for the funeral of Keynesian theory.” -Eric Sprott

Someone should tell this clown to give it up, he does not stand a snowballs chance in hell of being elected.

Nearly 1/2 of Newt Gingrich’s campaign debt is from private airplanes
~ Daily Caller

FEC reports released Friday show that former Speaker Newt Gingrich’s campaign has $1,030,627.82 in debt.

He blames his consultants who resigned en masse last month. But the Gingrich campaign’s FEC report shows that nearly half of the debt comes from charting private airplanes. More specifically, the campaign owes $451,946.00 to Moby Dick Airways LTD.

Gingrich spokesman R.C. Hammond tells me Gingrich was unaware of the financial situation until the consultants left. Once problems became apparent, Gingrich made several changes — “part of which included replacing private travel with commercial.”

Speaking of consultants, Gingrich’s campaign also paid them a lot of money this quarter, but still owes $20,616.80 to Norway Hill Associates Inc. — the consulting company headed by ex-Gingrich senior advisor Dave Carney.

Hammond tells me that Gingrich is not replacing most of his consultants, an additional step he is taking to turn around the campaign’s financial situation.

Like F&F give a crap, they have the biggest chumps in the world backing them up…The U.S. taxpayers.

ITEM: S&P warns it may downgrade Fannie, Freddie credit

WASHINGTON (AP) — Standard & Poor’s warned mortgage giants Fannie Me and Freddie Mac on Friday that they may lose their top credit ratings if lawmakers don’t raise the U.S. government’s borrowing limit in time to avoid a default.

S&P said government-controlled Fannie and Freddie, along with certain Federal Home Loan Banks and Farm Credit System Banks, could also default on their debts, given each institution’s “direct reliance on the U.S. government.”

The rating agency this week threatened to lower the U.S. government’s credit rating if the White House and Congress can’t agree to raise the $14.3 trillion borrowing limit and avoid a default in the coming weeks. It said there was at least a one-in-two likelihood that it will lower the rating within the next 90 days.

On Wednesday, Moody’s Investors Services said it is also reviewing the government’s triple-A bond rating.

The government reached its borrowing limit in May. The Treasury Department has said that the government will default on its debt if the limit isn’t raised by Aug. 2.

Congressional and Obama administration officials met for a sixth day Friday in an effort to avert a default. But Obama conceded that “we’re running out of time.”

Attention has turned to a fallback plan being discussed by Senate Republicans and Democrats. The plan would give the president greater authority to raise the borrowing limit while setting procedures in motion that could lead to federal spending cuts.

Administration officials and economists say a default on the debt would have a devastating effect on the U.S. economy.

Our state paper has fought tooth and nail for a long,long time trying only to put a positive spin on RE. At least for once they have printed an article that fairly well tells what’s going on here.

- Home sales in Columbia and across South Carolina have been set back more than a decade as the economy struggles to recover.
The State - News - Local / Metro Jul. 16, 2011

And experts say sales won’t improve in the foreseeable future.

Sales were down 24 percent to 3,088 through the first six months of the year in the Columbia area. Statewide, sales were down 11 percent to 22,881, according to a report released Friday by the S.C. Realtors trade group.

Columbia area home sales fared worst among the state’s major areas, according to the report. The state’s coastal regions are the only ones that showed slight increases for the first half of the year.

The last time the Columbia area averaged 500 sales a month – as it did in the first half of 2011 – was in the 1990s, said Jay Graham, a real estate agent with more than three decades of experience in the Midlands market. “That’s our new normal. That’s where we’re at, like it or not.”

Statewide, sales are back to where they were around 2001, said Nick Kremydas, executive director of the S.C. Realtors trade group. But inventory levels and the number of days that homes are staying on the market before they sell are higher, he said.

Home sellers in South Carolina waited almost five months to sell their homes in the first six months of the year, about two weeks longer than the same period last year. In Columbia, they waited four months, a nearly three-week increase from the previous year.

And there is a 15-month supply of homes on the market now, compared with 14.7 months a year ago statewide and 12 months a year ago in Columbia. A healthy housing market has about a six-month supply.

The median price of homes sold during the first half of the year was down 2 percent to $146,000. The Columbia market fared better as home prices held steady at close to $140,000.

“I don’t think we’re ready to say what the new normal is,” Kremydas said. “The sales are still erratic. I’m not ready to say we are even out of this recession until we see some job creation. The unemployment numbers are staggering.”

Unemployment in South Carolina stands at 10 percent.

“When unemployment gets back to the 5 percent range, things might change, but not until then,” Graham said.

Earlier this week, Federal Reserve chairman Ben Bernanke hinted at the possibility of more government stimulus money if the fledgling recovery falters.

But Graham says that is a bad idea.

“Bringing back the government punch bowl” – as the government did last year, when it offered incentives to first-time home buyers – artificially inflates sales and drags out the pain, he said. “Let it do what it’s going to do. If it needs to fall, let it fall.”

Kremydas said two measures in Congress further could stall a recovery.

The Dodd-Frank Act opened the door for Congress to require home buyers to make 20 percent down payments when buying a home. “It’s a little bit of a knee-jerk reaction to some of the financial meltdown that we have experienced recently.”

Home buyers who used a government program that required a smaller down payment would have to pay a higher interest rate, he said. “We’re concerned as an industry that this rule is going to have a real negative effect on a market that’s in the early stages of a very fragile recovery.”

Congress also has yet to act to reauthorize the federal flood insurance program. The program is necessary in many coastal and flood-prone areas near lakes and rivers because there is no viable private insurance option, Kremydas said.

“Last year, it lapsed twice and it held up almost 4,000 transactions in South Carolina,” Kremydas said. “It created a huge mess.”

It is different in Charleston, they will sell them all.

Ritzy condo complex coming to downtown
postandcourier.com July 16, 2011

Few sectors of today’s real estate market have been hit harder than condominiums, but the developers of Charleston’s Concord Park site think there is unmet demand for high-end condos in the heart of the city, and they are pressing ahead with plans to build them.

“It will be One Vendue Range, on steroids,” said Wally Seinsheimer Jr., a partner in the Concord Park project and developer a decade ago of the One Vendue Range condos along the city’s Waterfront Park.

The hotel and condominium building planned at the corner of Calhoun and Concord streets would comprise a high-quality hotel with 70 rooms, 49 condominium units, a restaurant, a spa and shops.

As with One Vendue Range, the plan at Concord Park is to build 49 pricey condos — expected to sell for just under $800 a square foot — on property near the water, adjacent to a city park.

The main difference is that the condos at Concord Park would share a building with a 70-room hotel, restaurant, spa and other businesses.

That means someone living in one of the condos could pay for housekeeping, order room service, or have someone collect their dry cleaning. That’s the “on steroids” part.

“We really believe that the market is there,” said Seinsheimer, of Johns Island-based Dolphin Architects & Builders. He said the hotel is expected to be of four-star quality.

The courtyard-style, six-story building that will house the hotel, condos and businesses at Calhoun and Concord streets is moving through the city’s architectural design process, and would be the second building constructed on the Concord Park property.

The 10-acre site is bounded by Calhoun, Concord, Laurens and Washington streets, and is also known as the location of the former Ansonborough Homes low-income housing project, which was flood-damaged in 1989’s Hurricane Hugo, then demolished in 1992 because of pollution discovered in the soil.

The city sought to redevelop the site and in 2007 agreed to sell 3.5 acres of the property to East West Cumberland Park Associates, Seinsheimer’s group, for $16 million.

I am eating my hat now. Two ladies outside my local (Phoenix) library today registered me to vote. They were obvious Obama supporters. But I reluctantly registered. At least I chose the Libertarian Party. They asked me if I will sign a pledge of support for my favorite Pres, Obama. I kindly said no. I will vote again for Ron Paul in 2012. I will again write him in for Pres if the Repukeniks again run a steamroller over Ron Paul like they did in 2008.

The change…. CIA is still killing people……

Bodyguard who killed Karzai’s brother was trusted CIA contact

Police in Ga. shut down girls’ lemonade stand

MIDWAY, Ga. (AP) — Police in Georgia have shut down a lemonade stand run by three girls trying to save up for a trip to a water park, saying they didn’t have a business license or the required permits.

Midway Police Chief Kelly Morningstar says police also didn’t know how the lemonade was made, who made it or what was in it.

The girls had been operating for one day when Morningstar and another officer cruised by.

The girls needed a business license, peddler’s permit and food permit to operate, even on residential property. The permits cost $50 a day or $180 per year.

One girl, 14-year-old Casity Dixon, says the three had to listen to police and shut down.

The girls are now doing chores and yard work to make money.

A Short History of US Credit Defaults
Mises Daily:July 15, 2011 by John S. Chamberlain

On July 13th, the president of the United States angrily walked out of ongoing negotiations over the raising of the debt ceiling from its legislated maximum of $14.294 trillion dollars. This prompted a new round of speculation over whether the United States might default on its financial obligations. In these circumstances, it is useful to recall the previous instances in which this has occurred and the effects of those defaults. By studying the defaults of the past, we can gain insights into what future defaults might portend.

The Continental Currency Default of 1779

The first default of the United States was on its first issuance of debt: the currency emitted by the Continental Congress of 1775. In June of 1775 the Continental Congress of the United States of America, located in Philadelphia, representing the 13 states of the union, issued bills of credit amounting to 2 million Spanish milled dollars to be paid four years hence in four annual installments. The next month an additional 1 million was issued. A third issue of 3 million followed. The next year they issued an additional 13 million dollars of notes. These were the first of the “Continental dollars,” which were used to fund the war of revolution against Great Britain. The issues continued until an estimated 241 million dollars were outstanding, not including British forgeries.

http://mises.org/daily/5463/A-Short-History-of-US-Credit-Defaults

Realtors Are Liars

Capistrano Mobile Terrace Files Chapter 11
Park owners say they cannot afford to make necessary repairs at the mobile-home site near the San Juan Hills Country Club.

The owners of Capistrano Terrace Mobile Home Park are filing for Chapter 11 bankruptcy protection in the midst of efforts to shutter the park entirely.

“The mobile home park, purchased in 2003, has seen mounting liabilities caused by geological issues, deteriorating infrastructure, lawsuits by tenants over park issues, and failure of insurers to handle resolution of those claims,” said Capistrano Terrace Ltd. spokesman Ray Poulter.

It is not immediately clear how the filing will affect the closure report currently being reviewed by San Juan Capistrano’s Housing Advisory Committee.

“It does affect the implementation of the city ordinance on park closures, but we don’t know yet just how much. We are trying to get some response on that matter,” said Poulter. “The costs and obligations required by the city’s park closure ordinance also contributed to the unfortunate need to file for bankruptcy protection.”

The city’s strict rent control laws have kept the owners from collecting the money they need to make major repairs, Poulter said.

The park pool, for example, has been closed for the past three years due to “geological issues.” The owners say that because of last winter’s heavy rain, they spent more than $150,000 trying to repair electrical and plumbing malfunctions, as well as to clean up mud and debris.

The mobile homes are considered to be some of the most affordable places to live in San Juan, where the average home sales for about $2 million.

Poulter said the Capistrano Terrace Mobile Home Park was built as a temporary travel-trailer park in the 1950s. It was never intended to be a full-time mobile-home park, he said, but over the years, it has become just that.

Additionally, residents were recently awarded a court victory in a recent failure-to-maintain lawsuit. The residents are vehemently opposed to the park’s closure.

U.S. looks to airline fees as tax revenue slumps
Airlines are likely to push back, says one analyst

WASHINGTON (MarketWatch) — The U.S. proposed Friday that airlines provide more detail on the ancillary fees they collect from passengers for such items as luggage check and in-flight entertainment as part of a broader effort to find new sources of government revenue.

Airlines are expected to push back, according to Michael Miller at the American Aviation Institute, a Washington-based independent think tank for commercial aviation.

“It’s rampant regulation and it is something no other industry has to deal with,” Miller told MarketWatch.

Implementing the new rules could be costly for the industry at a time when it is still struggling for steady profits and would also expose an airline’s pricing strategy to competitors.

But tax revenue to support air traffic control operations, safety inspections and to build new runways has been declining for years as domestic ticket prices declined and airlines reduced their fuel consumption.

At the same time, revenue from ancillary services such as baggage check and food were up sharply. Airlines broke out those services from their base fares starting in 2007 so only customers who use them have to pay for them, helping to keep ticket prices low.

Last year airlines raked in $5.7 billion from baggage and cancellation fees alone, up from $1.38 billion in 2007.

By identifying more closely the amounts airlines collect for such services, it could help give the government a clearer picture of what could be taxed to replenish the Airport and Airways Trust Fund, which supports the U.S. aviation system through the Federal Aviation Administration.

High-tech job openings decline for third straight month in NC
By WRAL Tech Wire

Raleigh, N.C. — High-tech jobs are getting harder to find in North Carolina with the number of advertised openings falling back to December 2010 levels.

“The back and forth in demand over the last year indicates that there is no optimism, neither with employers nor consumers,” say the authors of the latest North Carolina IT Job Trends report from the North Carolina Technology Association, TEK Systems and SkillPROOF.

In June, the average daily openings declined to 4,090 – a 7 percent drop from May. Job opportunities have fallen for three consecutive months.

“The job market in North Carolina continues to erode after a good start earlier this year,” NCTA said. But after the recent declines, the report notes: “Looking back over the last 12 months it appears the IT job market in the state is stagnant.”

North Carolina’s overall jobless rate in May was 9.7 percent; the national unemployment rate in June was 9.2 percent. NC figures for June will be announced July 22.

Saudi Arabia Beheads Man for Attack on Woman
July 16, 2011 | Associated Press

RIYADH, Saudi Arabia – Saudi authorities have beheaded a man convicted of attacking a woman and snapping nude photos of her in order to blackmail her for sex.

A Saudi Interior Ministry statement carried in national papers Saturday says the man broke into the woman’s apartment and attacked her husband before turning on the woman. It was not clear when the attack took place.

The statement says the assailant, who was not identified, was beheaded with a single sword stroke Friday.

Saudi Arabia follows a strict interpretation of Islam under which people convicted of murder, drug trafficking, rape and armed robbery can be executed — usually with a sword.

According to an Associated Press count, Saudi Arabia has executed 31 people so far this year. The kingdom executed 27 people last year.

Yes, it is a Depression. In fact, it’s worse.

Skip the rhetoric and check out the charts that follow the wordy parts.

http://www.businessinsider.com/end-of-the-middle-class-2011-7?op=1

Michael Snyder, The Economic Collapse | Jul. 14, 2011, 10:30 AM

the fact that we are facing rampant unemployment that never seems to go away should not be a surprise to anyone. Today, the “official” unemployment rate went up to 9.2 percent even though a whopping 272,000 Americans “dropped out of the labor force” in June. The government unemployment figure that includes “discouraged workers” went up from 15.8% to 16.2%. The mainstream media is proclaiming that this was “a horrific report” because most economists were expecting much better news.

Well, guess what?

Things are going to get a whole lot worse.

More job cuts are coming. One recently released report found that the number of job cuts being planned by U.S. employers increased by 11.6% in June.

It is also being projected that state and local governments across the U.S. will slash nearly half a million more jobs by the end of next year.

LOL! Love the final paragraph, sounds like the D.C. teachers union has a stone cold genius in command!

ITEM: DC School District Fires More than 400 Employees
(WASHINGTON,D.C.)News Wire

The final bell rang for 413 D.C. public school employees Friday, after officials announced they were being laid off for poor performance and failure to meet licensing requirements.

Of the terminated staff, 206 are teachers- which adds up to 5 percent of all the public school teachers in the entire District of Columbia.

The biggest chunk of workers let go- 288 of them- were rated subpar by the city school district’s evaluation system, called “IMPACT.”

The program is Michelle Rhee’s brainchild from her days as chancellor of the D.C. public school system, and it uses five 30-minute classroom visits to determine who the good teachers are, and who the bad teachers are. Educators are measured by how high their students score on assessment tests and how well lessons are laid out.

“‘IMPACT’ is allowing us to do exactly what we set out to do, which is recognize and reward our highest performers, which is to support and develop our people who are struggling, and to move out our lowest performers,” DC Public Schools Chancellor Kaya Henderson told Fox News affiliate WTTG.

Rewards for the “highly effective,” can potentially- and literally- pay off big time. The same set of reviews that terminated 206 teachers identified 663 top performers, all of whom are now eligible for up to $25,000 in bonuses.

Still, the Washington Teachers Union has issues with “IMPACT”, and they don’t think this particular evaluation system gives their members a fair shake.

“‘IMPACT’ as an evaluation system is biased,” contends Washington Teachers’ Union President Nathan A. Saunders. “And most, if not all, evaluation systems run by other human beings have been proven to be biased.”

http://www.youtube.com/watch?v=4sYSyuuLk5g

As a fan of post-Apocalyptic movies and novels, this upcoming flick looks promising.

I confidently predict the first TV ad of any post-Apocalyptic era will be from the NAR who, like cockroaches, will manage to survive and tell us “There’s never been a better time to buy!”

I bought Mrs. RAL a new set of 36D’s and now she has a herd new and worn once VS super bras. They’re going to ebay unless any of you sisters are interested…. realtors_are_liars@live.com

700 Bofa auctions scheduled to be repo-ed and added to the central OR inventory this fall? About 200 homes are sold per month in the same area lately. I wonder if the market can handle that, or if Bofa will resume massively rescheduling the auctions like before? It’s a given that our dire local unemployment rate of 15% does not help.

Will Bofa postpone some of these as they did before; knowing that robo-signing is behind them (hopefully), and there is a crop of homes waiting to make the list anew, as they have not had a trustee sale in a year.

RE Robosigning resolution: BofA did change servicers on my wife last month; BAC to Bank of America, N.A. Then they sent another letter stating(in the fine print) that if my wife did not dispute her debt then it would be assumed to be good debt.

She has already asked for the original note; it is on the way from the bank; and she will be disputing the debt from the “new” servicer(i.e. in name only apparently to clarify who owes them money legitimately). This is an attempt on her part to get more time in our free-for-now home. And to try to take the bank to task regarding following proper procedure. 8.5 billion settlement from Bofa to Countrywide investors must be admitting that many of these crap loans were suspect in quality; I assume for many reasons.

After all it was originated it was re-sold several times without proper procedures being followed, ripping off the state by ignoring laws regarding recording of new mortgage arrangements. And it was shoddily originated; with no income info required, it sure seemed to be dodgy; then that company was sold to Countrywide and that was then sold to BofA. Given BofA’s 8.5 billion dollar settlement with investors regarding crappily made mortgages maybe there is something wrong with wife’s mortgage and its subsequent allonges-reassignments that at the least circumvented state law.

After all; why else should they change the servicer from BAC to Bank of America, N.A.; then say that bit about not disputing the debt makes it a valid debt? Must mean that they fear those disputing it may point to some INvalidities? I mean, changing servicers from BAC to Bank of America, N.A. must have cost something so why did they do it?

Why not dispute it? If it was recorded incorrectly in any of its designations, some judges take issue with that. Maybe it just buys her some more time in the home?

Oh yeah, lots of homes in our hood are either being sold short or foreclosing as values have halved from 400k to 200K(or 150!). They are largely for sale; vacant. A few are being enjoyed by their owners as we are on a golf resort. New owners next door just bought theirs for 200k and are loving life thus far. Too bad wife paid double. Not something a few more shifts at the grocery store will solve; or even a raise at her lunch lady job!

My link fell through the cracks.

Did you all read about the Zerohedge article saying the PPT was being defunded?

If true, that will shake things Up!

July 10, 2011
Faculty Immobility in the New Economy
Imagine the star system if no one could go anywhere
By Leonard Cassuto

When Henry Louis (Skip) Gates Jr. left Duke University for Harvard University’s African-American-studies department in 1991, it was his fourth work address in seven years. I remember a waggish response at the time featured a Top 10 list of reasons for his departure. One: “Why do you think they call him Skip?”

Gates’s peregrinations were more frequent than we usually saw (even for him: He’s stayed at Harvard for 20 years since), but they were broadly typical. Publication historically stamped the passports enabling faculty movement. Departments that sought to “improve” did so by hiring high-profile researchers. Notice that I’m using the past tense here. The academic “star system,” as it’s been named, is confronting economic weakness in one of its foundation pillars: The recession is now keeping many ambitious senior faculty members—especially those in the hard-hit humanities—in place.

That’s because senior-faculty movement has dropped along with every other figure in today’s employment market. The American Historical Association, for example, reports a decline of more than 40 percent in tenured openings (including endowed chairs) during the past two years; last fall there were just 52 openings altogether (though not including senior searches aimed at specific celebrity prey that are sometimes not advertised). The situation in English, another discipline that collects and breaks down its employment figures, is the same. Data from the Modern Language Association show an almost-40-percent drop in positions in English advertised at the rank of associate professor or above in the last two years, and only 61 positions at those ranks in 2009-10.
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Some reporters sure are clueless about the seasonality concept; year-on-year is a much better indicator of trend than month-on-month, especially when entering the red-hot summer sales season!

June housing numbers are in for San Diego
By Lily Leung, Reporter - Real estate
Tuesday, July 12, 2011 at 9:26 a.m.
…
SOUTHERN CALIFORNIA: More than 20,532 home were sold in San Diego, Los Angeles, Riverside, Ventura, San Bernardino and Orange counties in June, up 11.6 percent from May but down 14 percent June 2010. The month-over-month increase is more than usual for May-to-June. DataQuick officials said on average, sales between those months is have gone up 6.2 percent since 1988, when the company began to track housing data.

June’s median price for all six counties was $285,000, up 1.8 percent from May but down 5 percent from one year ago. “Today’s median is also suppressed somewhat by abnormally low sales of newly built homes, which typically sell for more than resale homes,” this month’s DataQuick report said.

Banks gearing up to fill looming gap in jumbo loans
Fannie Mae, Freddie Mac and the FHA are facing an upcoming cutback in mortgage limits, but banks say they’re planning to expand their jumbo loan business in high-cost housing markets.
July 10, 2011|By Kenneth R. Harney

How big a deal is the upcoming cutback in mortgage limits for Fannie Mae, Freddie Mac and the Federal Housing Administration? Will buyers and sellers who depend on jumbo-sized loans find themselves in a financing squeeze after Oct. 1, when the limits plunge in key markets around the country?

Housing and realty lobbies are pushing hard on Capitol Hill for a continuation of the $729,750 high-cost area maximum, but one industry is delighted by the prospect and is gearing up to fill the gap.

From small community banks to megabanks, the message is the same: Bring on the switch to lower limits. We plan to expand our jumbo loan business wherever market demand requires. There will be no financing squeeze for anyone who needs a mortgage too big for Fannie, Freddie or the FHA, provided the applicant is creditworthy and has enough of a down payment.

Congress raised the conventional and FHA limits during the economic crisis to ensure access to capital for buyers and refinancers. Those limits are scheduled to adjust downward Oct. 1, unless lawmakers agree to an extension — a move that would run counter to calls from Republicans and the Obama administration to reduce the federal footprint in the mortgage arena.

Federal guarantees support loans purchased, securitized or insured by Fannie, Freddie and the FHA, putting taxpayers’ dollars at risk in the event of foreclosures. Fannie and Freddie together have sopped up more than $150 billion in direct taxpayer assistance since being placed in federal conservatorship three years ago because of mounting losses from loan defaults.

On Oct. 1, the maximum loan at each of the three federal mortgage giants will fall to $625,500. Though the upper-limit decline is only $104,250 below where it is today, some realty and business analysts worry that buyers who need big mortgages — especially in California, New York, New England, Florida and Washington, D.C. — will be forced to make much heftier down payments, pay higher interest rates or be prevented from purchasing the house they want.

Bankers say those worries are way overblown. Cam Fine, president and chief executive of the Independent Community Bankers Assn., says his 5,000-plus members plan to take up the slack in the jumbo arena and have the financial capacity to do so. Community banks, which generally range in size up to $20 billion in assets, “are very adept at creating products that fit the needs of customers,” Fine said.
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Awesome: Another class action against Megabank, Inc. Keep ‘em coming, Americans!!! If we all work hard enough at this, we can get these greed pigs to give something back to our Nation’s people.

Banks’ inequity in home-equity loans
By Kenneth R. Harney, Published: July 15

Picture this nightmare financial scenario: You’ve taken out a $150,000 home-equity credit line to remodel your house. You’ve already pulled out thousands to pay contractors and owe thousands more, when suddenly you get a curt letter from the bank.

“Effective yesterday,” it says, “we’ve shut down access to your credit line. Although we haven’t physically appraised your property, an automated valuation indicates that it is now worth significantly less than it was when we approved your application. If you wish to hire an appraiser, chosen by us but at your own expense, you can appeal our decision.”

You’re in shock. You can’t pay bills for work you’ve contracted, and you can’t touch the money you confidently thought you had. Plus, you know that housing prices in your area have been relatively stable since you took out the credit line. How could a bank effectively devalue your real estate using nothing more than a computer program?

Welcome to the world of what class-action lawyers estimate to be massive numbers of homeowners — 1 million customers at one national bank alone — who had their credit lines reduced, frozen or canceled without appraisals during 2009 in the tense months following the near-collapse of the capital marketplace.

Now a federal district court in Chicago has given the green light to clients of JPMorgan Chase to proceed with a consolidated lawsuit alleging that their equity lines were yanked or reduced illegally, costing them billions of dollars in lost borrowing power. Judge Rebecca Pallmeyer rejected the bank’s motion to dismiss the case, clearing the way for a possible giant class action.
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