The Housing Bubble

On mortgage rates, Obama wants proposal for how government can keep big role. - The Washington Post

President Obama has directed a small team of advisers to develop a proposal that would keep the government playing a major role in the nation’s mortgage market, extending a federal loan subsidy for most home buyers, according to people familiar with the matter.

The decision follows the advice of his senior economic and housing advisers, who favor maintaining the government’s role as an insurer of mortgages for most borrowers. The approach could even preserve Fannie Mae and Freddie Mac, the mortgage finance giants owned by the government, although under different names and with significant new constraints, said people knowledgeable about the discussions.

A decision to preserve a major government role would mark a big milestone in the effort to craft a new housing policy from the wreckage of the mortgage meltdown and could mean a larger part for Fannie and Freddie than administration officials had signaled.

In a statement, the White House said it is premature to say that senior officials have agreed on any of the three main options outlined earlier this year in an administration white paper on reforming the housing finance system.

“It is simply false that there has been a decision to move forward with any particular option,” said Matt Vogel, a White House spokesman. “All three options remain under active consideration and we are deepening our analysis around how each would potentially be implemented. No recommendation has been made to the president by his economic advisers.”

Fed Says Banks Eased Lending Standards in Second Quarter Amid Competition (Bloomberg)

Banks loosened credit standards on most types of loans in the second quarter, with commercial and industrial lenders citing “aggressive competition” as a reason for the easier terms, according to a Federal Reserve survey.

“Banks continued to ease lending standards and most terms on all major types of loans other than loans secured by real estate over the past three months,” the central bank said today in its quarterly survey of senior loan officers.

Fed Chairman Ben S. Bernanke and his policy-making colleagues pledged on Aug. 9 to hold the main interest rate at a record low near zero at least until mid-2013, saying economic growth is “considerably slower” than anticipated.

“We’re going to see credit standards stay about the same in the next few months given the increased volatility in financial markets and increased uncertainty about where the economy is heading,” said Mark Vitner, senior economist at Wells Fargo Securities in Charlotte, North Carolina.

Most banks expect the pace of mortgage lending to stay about the same through the rest of this year, according to the Fed survey. Lackluster demand from creditworthy borrowers and uncertainties about the outlook for house prices and the overall economy were the main reasons, according to the central bank.

Ahead of the Bell: Housing starts
Builders likely broke ground on fewer homes in July but pace is half healthy level
The Associated Press, August 16, 2011

Builders likely broke ground on fewer homes in July, as early summer gains in apartment and single-family home construction levels off.

Economists forecast that builders began work last month on a seasonally adjusted 600,000 homes per year, according to a FactSet survey. That would be a 4.6 percent decrease from the previous month’s 629,000-home-per-year pace.

The Commerce Department releases the report at 8:30 a.m. Eastern Tuesday.

The building pace is roughly half the 1.2 million homes a year that economists say must be built to sustain a healthy housing market.

If the forecast holds true, builders would be roughly 26 percent ahead of the 477,000-per-year pace from April 2009 — the lowest point on records dating back to 1959. But they would be down roughly 74 percent from their peak of nearly 2.3 million in January 2006.

Building permits, a gauge of future construction, rose last month to the highest level since December. But apartment and condominium construction accounted for a large portion of that increase.

Cash-strapped builders are struggling to compete with deeply discounted foreclosures and short sales, when lenders allow borrowers to sell homes for less than what is owed on their mortgages.

New-home sales fell in June to a seasonally adjusted pace of 312,000 homes per year, less than half the 700,000 per year that economists would consider healthy.

Buying is cheaper than renting in most U.S. cities
cnnmoney

Home prices have taken such a beating and demand for rental units has increased so much that it’s now cheaper to buy a two-bedroom home than to rent one in most major U.S. cities.

According to real estate web site Trulia, buying was cheaper than renting in 74% of the country’s 50 largest cities in July. In just 12% of the cities, including New York, Seattle and San Francisco, renting was cheaper. In the remaining 14% of cities, renting was less expensive but close to the cost of buying.

In addition to a continuing decline in home prices, rock-bottom interest rates have added a lot of weight to the buy side of the scale. The overnight average rate for a 30-year fixed was just 4.19% on Monday, according to Bankrate.com. A 15-year fixed averaged just 3.43%.

Add in the tax perks of home ownership and for those who can afford it (and who can actually qualify for a loan), it certainly is a buyer’s market.

“It’s a personal decision, of course. But if you have a steady job and you are planning to stay for seven years or more and have enough cash to put 20% down and enough left over for seven or eight months of expenses, you’re better off buying in most places,” said Daisy Kong, a spokeswoman for Trulia.

Prices there have plunged more than 59% from their August 2006 peak, according to the S&P/Case-Shiller home price index.

The median price of a two-bedroom, two-bath condo or townhouse is about $60,000, according to Trulia, a ratio of only six times the median annual rent of a similar rental apartment, which is $9,700.

Monthly mortgage payments on a median-priced Vegas condo would come to only $256 on a 30-year, 5% interest loan. Even factoring in property taxes and common charges of roughly $300 a month, the monthly amount is still much lower than the $810 in monthly rent they would pay on a similar place.

Detroit, according to Trulia, is another metro area where buying is better. The median price for a condo or townhouse is about seven times annual rent. Home prices in Mesa, Ariz. and Fresno, Calif. also clock in at seven times rent.

“A system of capitalism presumes sound money, not fiat money manipulated by a central bank. Capitalism cherishes voluntary contracts and interest rates that are determined by savings, not credit creation by a central bank.” - Ron Paul

Obama: I reversed recession until ‘bad luck’ hit
by Byron York

At a town hall meeting on his campaign-style tour of the Midwest, President Obama claimed that his economic program “reversed the recession” until recovery was frustrated by events overseas. And then, Obama said, with the economy in an increasingly precarious position, the recovery suffered another blow when Republicans pressed the White House for federal spending cuts in exchange for an increase in the national debt limit, resulting in a deal Obama called a “debacle.”

“We had reversed the recession, avoided a depression, gotten the economy moving again,” Obama told a crowd in Decorah, Iowa. “But over the last six months we’ve had a run of bad luck.” Obama listed three events overseas — the Arab Spring uprisings, the tsunami in Japan, and the European debt crises — which set the economy back.

“All those things have been headwinds for our economy,” Obama said. “Now, those are things that we can’t completely control. The question is, how do we manage these challenging times and do the right things when it comes to those things that we can control?”

“The problem,” Obama continued, “is that we’ve got the kind of partisan brinksmanship that is willing to put party ahead of country, that is more interested in seeing their political opponents lose than seeing the country win. Nowhere was that more evident than in this recent debt ceiling debacle.”

Except for its updated details, much of the president’s speech resembled the stump speeches he gave when campaigning for Democrats before the 2010 midterm elections. But the White House claims this trip is non-political, part of the president’s officials duties to discuss economic issues with the public. For the three-day tour through Minnesota, Iowa, and Missouri, the Secret Service has rolled out two new buses, costing more than $1 million apiece, to take the president and his aides around the countryside.

“we’ve got the kind of partisan brinksmanship that is willing to put party ahead of country, that is more interested in seeing the political opponents lose than seeing the country win.”

Doubly true this time around, because he’s Black. Just keeping it 100, y’all.

Gotta read this…your entitlement society at work……

http://www.telegraph.co.uk/news/uknews/crime/8702412/Mother-of-13-year-old-who-smashed-up-shop-blames-government.html

Here’s a link to an interesting (and really long) article entitled “Can the Middle Class Be Saved” written by Don Peck in The Atlantic.

http://tinyurl.com/CanMiddleClassBeSaved

From the article:

“It’s hard to miss just how unevenly the Great Recession has affected different classes of people in different places. From 2009 to 2010, wages were essentially flat nationwide—but they grew by 11.9 percent in Manhattan and 8.7 percent in Silicon Valley. In the Washington, D.C., and San Jose (Silicon Valley) metro areas—both primary habitats for America’s meritocratic winners—job postings in February of this year were almost as numerous as job candidates. In Miami and Detroit, by contrast, for every job posting, six people were unemployed. In March, the national unemployment rate was 12 percent for people with only a high-school diploma, 4.5 percent for college grads, and 2 percent for those with a professional degree.”

“Housing crashed hardest in the exurbs and in more-affordable, once fast-growing areas like Phoenix, Las Vegas, and much of Florida—all meccas for aspiring middle-class families with limited savings and education. The professional class, clustered most densely in the closer suburbs of expensive but resilient cities like San Francisco, Seattle, Boston, and Chicago, has lost little in comparison. And indeed, because the stock market has rebounded while housing values have not, the middle class as a whole has seen more of its wealth erased than the rich, who hold more-diverse portfolios. A 2010 Pew study showed that the typical middle-class family had lost 23 percent of its wealth since the recession began, versus just 12 percent in the upper class.”

Yes Virginia…….. Realtors Are Liars®

How can people that run global economics be so clueless?

PIIGS are implimenting austarity. Germany shocked that their exports to the PIIGS countries are falling and their economy slowing.

Hello idiots. Every trade has to have a buyer and a seller. If one party is selling more than buying, then someone else has to be buying more than selling.

Money and debt are offsetting factors that result from trade imbalances. Trade imbalances can not exist long-term because debt builds up to excessive levels. If the trade imbalances do not reverse, the debt can not be repaid.

Germany, YOU WANTED PAID BACK? Simple, start buying more from your trade partners than you sell them, reversing the trade imbalance.

Oh, but that makes you poorer and you do not want to be poorer? Then watch the debt collapse and the money just vanish.

Have the serial bottom callers finally thrown in the towel on the foolish notion that the U.S. housing market is coming back next year?

Because it is looking more and more like we are at a 50-year trough in the long-term real estate cycle, and extend-and-pretend efforts to prop up home prices suggests it will last for a while.

The Financial Times
August 16, 2011 2:34 pm
US housing starts dip in July
By Shannon Bond in New York

Construction of new homes in the US dipped in July as bloated inventory levels and persistent weakness weighed on demand for single-family properties.

Housing starts pulled back 1.5 per cent to a seasonally adjusted annual rate of 604,000 last month from June’s downwardly revised 613,000, the census bureau said on Tuesday, compared with expectations of a fall to 600,000. Year on year, starts rose 9.8 per cent.

“This range [since the beginning of the recovery] leaves us at the lowest levels since the series began in 1959. While monthly volatility is likely to continue, no real recovery looks to be on the horizon,” said Jill Brown, vice-president of economics at Credit Suisse.
…
More On this story

Confidence in US house sales remains low
US commercial property loan terms stay tight
Economic Outlook US growth signals awaited
US industrials prepare for risk of double dip
Consumer sentiment at 30-year low in US

Forget the cushy firefighter job I am heading for 7-11!!!

Arroyo cleared in fraud verdict
Ex-city firefighter was bodybuilder while on disability

Carris had reminded jurors that Arroyo had complained that his back problems were so bad he had trouble lifting a piece of paper. At the same time, she said, he was working out twice a day, at times using dumbbells to squat more than 200 pounds.

“It’s like telling people at work that you can’t type because your fingers are bothering you, but you’re a concert pianist in your spare time,’’ Carris said.

In addition to asserting that the government had not proved its case, Watkins said, “Bodybuilding or not, Albert Arroyo had a good-faith basis for filing the application.’’ He pointed out that the former firefighter had first sought treatment for on-the-job back injuries in 2000. He added that Arroyo did not have “the intent to deceive anyone, because he didn’t want to retire.’’

Watkins also argued that Arroyo’s disability claims would not have led to “a pot of gold.’’ Arroyo, 49, sought to collect an annual $65,000 tax-free pension.

“Accidental disability for someone Albert’s age is a prison,’’ Watkins said. “The cost of living goes up, and that’s it. He might make a little more money working at a 7-Eleven. . . . Why is that worth concocting a scheme?’’

http://www.boston.com/news/local/massachusetts/articles/2011/08/16/former_firefighter_found_not_guilty_of_disability_fraud/?page=2

Perry Warns of Fed Treason, Challenges Obama
by Dan Balz
The Washington Post

CEDAR RAPIDS, Iowa — Texas Gov. Rick Perry turned his rhetorical fire on Federal Reserve Chairman Ben S. Bernanke here Monday night, saying that the chairman would be committing a “treasonous” act if he tried to boost the economy with a decision to “print more money.”

Perry was responding to a question about “quantitative easing,” a monetary policy by which the government purchases Treasury bonds to inject more money into the economy, which he said would amount to a political attempt to help President Obama win reelection in 2012.

“If this guy prints more money between now and the election, I don’t know what you all would do to him in Iowa, but we would treat him pretty ugly down in Texas,” Perry said of the possibility of another round of so-called quantitative easing in the money supply.

http://www.washingtonpost.com/politics/perry-warns-of-fed-treason-challenges-obama/2011/08/16/gIQABVScIJ_story.html?hpid=z1

Florida pastor found dead in a Times Square hotel room may have died of a drug overdose, according to a police source.

A small glassine envelope containing a white powder was found in Zachery Tims’s pocket, the source said.

Tims and his wife, Riva, founded the church in Orlando in 1996. It now has 8,000 members.

Two years ago, the couple divorced after he admitted having an affair with a stripper.

This sounds downright unpleasant. Try not to catch yourself a falling knife in the ‘death cross’ stock market.

Aug. 16, 2011, 12:01 a.m. EDT
‘Death cross’ springing up everywhere
Commentary: Indicator a harbinger of bear markets
By John Nyaradi

BEND, Ore. — The “death cross,” a high-profile bear-market indicator, springs up everywhere.

The death cross forms when the 50 Day Moving Average crosses the 200 Day Moving Average in a downward trajectory and is a widely followed indicator that’s commonly viewed as a harbinger of bear markets.

Last week, it flashed its warning, not only in the major indexes, but in many key sectors, as well.
…

http://www.theatlanticwire.com/entertainment/2011/08/jon-stewart-ron-paul/41311/

I was walking around town yesterday and noticed that a new RE business had sprung up called Investment Realty. When I saw it I was reminded that the development near my house, which the developer spent $40 million to buy the land and build the amenities, was going on the auction block next month with a $2.6 million minimum bid (the local fishwrap said that they would be lucky to even get that amount). Yes siree Bob, RE is the best “investment” you can make!

Paul B. Farrell Archives | Email alerts
Aug. 16, 2011, 12:01 a.m. EDT

Tax the super-rich or riots will rage in 2012

MarketWatch — What a year. Rage in London, Egypt, Athens, Damascus. All real. Just a metaphor in the new “Planet of the Apes” film? No, much more. Warning: More rage is dead ahead. Across our planet a new generation is filled with rage. High unemployment. Raging inflation. Dreams lost. Hope gone. While the super -rich get richer and richer.

Listen to that hissing: The fuse is rapidly burning, warning us. Wake up before the rage explodes in your face. This firestorm is endangering America’s future. From forces outside, yes. But far more deadly, from deep within our collective psyche. We have lost our moral compass. We are self-destructing.

Crackpot warning? No. This warning comes from the elite International Monetary Fund. A recent IMF report looked at “the causes of the two major U.S. economic crises over the past 100 years, the Great Depression of 1929 and the Great Recession of 2007,” writes Rana Foroohar, an economics editor at Time magazine.

“There are two remarkable similarities in the eras that preceded these crises. Both saw a sharp increase in income inequality and household-debt-to-income ratios.” And in each case, “as the poor and middle-class were squeezed, they tried to cope by borrowing to maintain their standard of living.”

But the rich “got richer, by lending, and looked for more places to invest, bidding up securities that eventually exploded in everyone’s face. In both eras, financial deregulation and loose monetary policies played roles in creating the bubble. But inequality itself — and the political pressure not to reverse it, but to hide it — was a crucial factor in the meltdown. The shrinking middle isn’t a symptom of the downturn. It’s the source of it.” Today the consequences of the meltdown still haunt us — there’s more to come.

So here are all of those invent yourself a job, follow your dream types who are finding out it isn’t as easy as working for the man.

I know a few crafters who sell at the local farmers markets. Most of them have spouses who work with benefits. Some are retired with pensions, Social Security, or 401K savings to contribute income. None of them are making a full time living.

http://seattletimes.nwsource.com/html/businesstechnology/2015920158_planbcareer16.html

“Plan B, it turns out, is a lot harder than it seems. But that hasn’t stopped cubicle captives from fantasizing.

“But the reality is that, even during boom times, most new businesses fail.”

Merkel, Sarkozy Propose Eurozone Government- AP

The leaders of France and Germany are pushing all 17 nations that use the euro to enshrine balanced budgets in their constitutions and want greater collective governance of the eurozone.

Pay Pal founder and early Facebook investor Peter Thiel has given $1.25 million to an initiative to create floating libertarian countries in international waters. To be built on oil rig platforms.

1. Question how much gold can you load on an oil platform??

2. I’m guessing this will be a new corporate tax haven, I’m surprised they haven’t done this already.

3. Why off the coast of the US? Why not Somalia ?

4. Is this where corporate titans will go to escape the starving angry mobs?

Employers turn to tests to weed out job seekers
Some screens may violate law, but applicants rarely have choice
(AP)

Personality tests are being used by companies inundated with resumes in this tough job market to prune the endless job applications they get. But they could be discriminatory.

Here’s a sampling of questions from an online personality test that CVS Caremark, the pharmacy chain, was giving to potential candidates. The questions send up legal red flags. The applicants had to answer whether they agreed or disagreed with the statements.

People do a lot of things that make you angry.
There’s no use having close friends; they always let you down.
Many people cannot be trusted.
You are unsure of what to say when you meet someone.

After hearing from several applicants, the Rhode Island ACLU filed a complaint with the state Commission for Human Rights, which found “probable cause” that the CVS test was in fact discriminatory, said Steven Brown, the organization’s executive director. Last month, the company settled the case and agreed to remove the problematic questions. (CVS did not respond to a request for comment.)

The CVS case could be the tip of an iceberg. The growing use of such tests so early in the hiring process is relatively uncharted ground, and could hurt people with mental disorders, depending on the questions asked, legal and human resource experts note.

“There’s an increase in the use of these tests to weed people out because of the Internet,” said Gavin Appleby, an attorney with Littler Mendelson, one of the nation’s largest employment and labor law firms representing management.

Home Depot Raises Forecast on Higher Profit (Bloomberg)

Home Depot Inc. the largest U.S. home improvement retailer, raised its full-year profit forecast after second-quarter profit exceeded analysts’ estimates, spurred by increased traffic and spending by customers.

Net income advanced 14 percent to $1.36 billion, or 86 cents a share, in the quarter ended July 31, from $1.19 billion, or 72 cents, a year earlier, the Atlanta-based company said today in a statement. Analysts projected 82 cents, the average of 21 estimates in a Bloomberg survey.

Home Depot, led by Chief Executive Officer Frank Blake, boosted the number of transactions by 1.1 percent to 373 million, the sixth increase in the past seven quarters. Lawn and garden sales rebounded from rainy, colder-than-average temperatures in the first quarter, boosting sales from older stores more than analysts had projected.

Customer visits “tend to build like a snowball rolling down a hill as an improved customer service experience on one visit emboldens that consumer to come back in the future,” Christopher Horvers, an analyst at JPMorgan Chase & Co. in New York, wrote today in a note to clients. He rates Home Depot as “overweight.”

Jon Stewart: Why is Everyone Still Ignoring Ron Paul?

In Iowa’s Ames Straw Poll this weekend, Michele Bachmann bested 2nd place Ron Paul by less than 200 votes. And yet, in the immediate spin cycle at least, pundits talked about Rick Perry, Mitt Romney and Bachmann. Paul seemed to be, as his supporters always point out, invisible. Last night on The Daily Show, Jon Stewart became the latest to weigh in on the habit of ignoring Paul. After playing a few highlight reels showing anchors going out of their way not to mention the libertarian firebrand, he incredulously asks: “How did libertarian Ron Paul become the 13th floor in a hotel?”

http://www.theatlanticwire.com/entertainment/2011/08/jon-stewart-ron-paul/41311/

Import Prices in U.S. Rise 0.3%, Led by Gains in Costs of Fuel, Clothing
(Bloomberg)

Prices of goods imported into the U.S. rose in July, led by gains in costs of fuel, industrial supplies and clothing.

The 0.3 percent gain in the import-price index followed a revised 0.6 percent drop in June, Labor Department figures showed today in Washington. Economists projected a 0.1 percent decrease for July, according to the median estimate in a Bloomberg News survey. Prices excluding petroleum rose 0.2 percent.

Slowing growth in emerging economies such as China and Brazil, coupled with weakening demand in the U.S. amid political gridlock and stock declines, means import prices are likely to taper off this month. Federal Reserve policy makers last week said they expected inflation to “settle” lower as commodity price gains “dissipate further.”

“While we’re still importing a good amount of price pressures from the faster-growing emerging economies, that trend has tempered in recent months,” said Lindsey Piegza, an economist at FTN Financial in New York. “Core prices remain well contained, giving the Fed additional room to maintain their current level of accommodation.”

What a clueless administration.

—————–

Obama Ag Secretary Vilsack: Food Stamps Are A Stimulus

Obama’s Secretary of Agriculture Tom Vilsack: “Well, obviously, it’s putting people to work. Which is why we’re going to have some interesting things in the course of the forum this morning. Later this morning, we’re going have a press conference with Secretary Mavis and Secretary Chu to announce something that’s never happened in this country — something that we think is exciting in terms of job growth. I should point out, when you talk about the SNAP program or the foot stamp program, you have to recognize that it’s also an economic stimulus. Every dollar of SNAP benefits generates $1.84 in the economy in terms of economic activity. If people are able to buy a little more in the grocery store, someone has to stock it, package it, shelve it, process it, ship it. All of those are jobs. It’s the most direct stimulus you can get in the economy during these tough times.”

It’s a Technical Mess All Over the World: Yamada
By Matt Nesto | Breakout

As markets around the world put the brakes on a nascent comeback rally after only 3 sessions, legendary chart analyst Louise Yamada says it’s a technical mess all over the world. “We are at a critical juncture right now,” warns Yamada. Be it the BRICs, other Emerging Markets, or Europe, Yamada says “all of them have come into long-term sell signals” with the exception of Japan, Thailand, Jakarta, and a few U.S. markets.

As if the debt concerns out of Greece, Italy, and France weren’t enough, word comes today that the global slowdown is hitting Europe’s largest and most stable economy: Germany. The country reported a weaker than expected second-quarter GDP rate of 0.1%, compared to 1.3% in Q1.

“Germany was the strongest market and it had a very severe setback…and went right to the bottom of the 2010 support,” says Yamada. “So any further decline there and you bring into question whether the market goes to the 2009 lows.”

In the case of the Germany’s benchmark DAX (^GDAXI), that would be a fall to about 3600, nearly 40% below current levels. The index has suffered a 16% drop in August alone.

Another global powerhouse is also in question. Yamada points out that Hong Kong’s Hang Seng Index (^HSI) is at the same ”critical juncture.” Right now it sits at 2010 support levels and is now looking at the possibility of a further 40% support gap back to its 2009 trough.

But before you race off in search of a safe haven, Yamada says it’s best to wait for some clear confirmation that the global downtrend has reversed. Until that happens, “rallies would be best used to lighten some positions.”

Hey!

Did you guys miss me?

What do you think the F-word GSEs will do with their shadow inventory now that their credit has been downgraded?

One of the many reasons why higher education is so expensive:

Coaches’ Pay

At the top of the Rutgers scale, football coach Greg Schiano made $2.03 million including bonuses for the fiscal year ended in June, according to the school. The 45-year-old Schiano won 59 games and lost 63 in 10 seasons, including a 4-1 record in postseason bowl games.

While Schiano’s compensation isn’t out of line among football coaches, it compares with an average of $142,000 for full professors, $96,000 for associate professors and $49,000 for nontenure-track instructors, according to the professors union.

Donald Siegel, 48, teaches introductory chemistry at Rutgers for about $70,000 a year, he says. Under the professors union’s 2007 contract, he was eligible for raises of as much as 17 percent over four years, but because of the salary freeze he got 3.75 percent, he says. He and his wife just bought their first house after 20 years of renting, he says.

Schiano’s Home Loan

“Athletics programs are always a net loss, and every economic study that’s been done says that it brings in donations, but it costs more than the donations it brings in,” Siegel said in an interview. “It’s much bigger than it should be, and Schiano’s salary is totally ridiculous. But the real problem is the administration is top-heavy.” He said he resents football spending less than other examples of waste.

Under the terms of Schiano’s contract, Rutgers sold the football coach 0.86 acre (0.34 hectare) in nearby Piscataway and spent $142,185 preparing the lot. The university then loaned him $800,000 interest-free for construction of his house. Each year he stays on, Rutgers forgives $100,000 of the balance, which was down to $400,000 as of this year, Miranda said.

http://www.bloomberg.com/news/2011-08-16/rutgers-boosting-athletics-at-expense-of-academics-fails-to-emulate-texas.html

Can’t say how this debt crisis will end, but I will predict that international investment banks with too-big-to-fail operations will reap the yield from a few more central bank bailouts before it is over.

Debt Crisis Threatens to Taint Broader Economy
By JACK EWING
Published: August 16, 2011

FRANKFURT — Europe’s sovereign debt crisis threatened to spill over into the broader economy as official figures released Tuesday showed that growth in the euro zone fell to its lowest rate in two years. Germany — the Continent’s powerhouse — slowed almost to a standstill.

All of Europe’s main stock indexes lost ground after the data suggested that the debt and economic problems in countries like Greece and Italy were infecting the rest of the 17-country euro zone. The debt crisis has led a number of governments to sharply cut spending, while creating market turmoil that has damaged business and consumer confidence.

Gross domestic product in the euro zone rose a mere 0.2 percent in the second quarter of 2011 from the first quarter, when growth had advanced by a healthy 0.8 percent, according to Eurostat, the E.U. statistics agency. Quarterly economic growth across the 17-nation euro zone was the slowest since mid-2009.

G.D.P. growth in Germany, which has been the tractor hauling the rest of Europe, barely budged, rising only 0.1 percent from the previous quarter, when the economy had expanded a robust 1.3 percent, the German Federal Statistical Office said. Quarter-on-quarter growth in the three months through June was well below forecasts of 0.5 percent.

The German figures come after data released on Friday showed that the French economy was at a standstill in the second quarter, leaving Europe’s two largest economies barely growing.
…

I wish I would have bought me some of the Evergreen Solar at 60 a share.

CNBC anchor ranting about how stupid it is to give tax payer money to these companies, then just let them be destroyed by cheap Chinease imports. You have to protect your investments.

Ummmmm…

Hey moron! Protect our markets from cheap foreign imports, and you wouldn’t NEED tax payer money to build these companies in the first freakin’ place.

Man Charged With ‘Using’ Treasury Secretary’s Account to Pay Off Mortgage. By Mike Levine August 16, 2011 | FoxNews.com

As the nation’s financial system collapsed and millions of Americans struggled to pay off their home mortgages in 2009, a Maryland man now under investigation allegedly wiped away his $353,000 mortgage debt by convincing financial giant CitiGroup to accept a money order purportedly backed by then-Treasury Secretary Hank Paulson.

The one-of-a-kind ruse amazingly worked, current and former law enforcement officials told Fox News.

According to court documents filed in the case, 35-year-old Bryan Gardner of Waldorf, Md., sent CitiMortgage a $353,000 money order in January 2009 and indicated that it would be his final payment for a property in nearby Bowie, Md.

The money order stated it was “drawn on the account of ‘Secretary of the Treasury Henry M. Paulson, Jr.,’” and Gardner signed it as Paulson’s “Authorized Representative,” the court documents allege.

“CitiMortgage erroneously accepted the document and credited Gardner’s mortgage account in full,” according to a Secret Service affidavit.

Within months, Gardner sold the property for $254,900 and then “distributed the proceeds to others,” according to public records and the Secret Service affidavit. Investigators believe Gardner may have initially secured the mortgage under false pretenses.

Through a spokesman, an FBI agent who investigates mortgage fraud said he was surprised the scheme succeeded, and a former Justice Department official who helped lead fraud enforcement efforts in the wake of the financial meltdown agreed, calling the approval of the money order “bizarre.”

“I’ve never heard of a case where a mortgage for such a large amount was satisfied with a fraudulent instrument — an instrument that’s so on-its-face fraudulent,” said Paul Pelletier, who until a few months ago was a top-ranking official in the Justice Department’s Fraud Section. “You’d be amazed at how many people try and pass off (fraudulent) stuff. But does it ever work? No, it rarely works.”

In fact, Gardner’s alleged scheme didn’t work the first time he tried. In November 2008, two months before his successful attempt, Gardner sent a nearly identical money order to CitiMortgage, but it was rejected, according to the Secret Service. The only difference the second time around: Gardner requested slightly more money, court documents say.

Pelletier said this case is “extraordinarily unusual” not only because CitiMortgage ultimately honored a fraudulent money order, but the company allowed it to be credited to Gardner’s mortgage and likely issued a “satisfaction” on the mortgage, as reflected by Gardner’s ability to sell the property.

A CitiGroup spokesman said he was limited in the details he could offer about the case.

Does it make one wealthier if the mortgage/rent from the bank payment covers your place on “Rockefeller Road”?

Where the heck is Niles anyway?

Ohhh…haha! Auburn. That lake in the background is perhaps Skaneateles.

To make it all the more curious, this little $975k gem is only a 2 bedroom. At least I could afford the taxes. Probably because you don’t get Skaneatles schools.

Retirement home for retiring vampire squid employees?

http://cnyhomes.com/Listing/Search/info.cgi?mlnum=S258165

Coastal Lumber Co. closing, hundreds let go
Associated Press, 08.16.11,

CHARLOTTESVILLE, Va. — Coastal Lumber Co. said Tuesday that it was going out of business, laying off more than 350 people in West Virginia and three other states.

In a statement to customers and suppliers, the Charlottesville, Va.-based company blamed the “prolonged downturn” in the economy and the company’s inability to obtain financing for a plan to keep it afloat. But the statement said that the company is still pursuing alternative financing in hopes of resuming its business.

Coastal Lumber said the layoffs were the deepest in West Virginia, where the company employed nearly 200 in five locations. It also employed 67 workers in North Carolina, 68 in Pennsylvania, six executives in Virginia and 30 companywide in sales, accounting, clerical and transportation.

In the statement, Coastal Lumber said it had pursued a new business plan, but its bank would not support its proposed reorganization.

“Instead, it asked Coastal’s owners to make certain concessions that they were not willing to make,” the statement said of the bank. The company was unable to immediately secure new financing, which led them to close the locations Friday.

The company declined further comment.

Heat pops pipes nationwide; brace for higher bills

(CNN) — Critical water pipelines are breaking from coast to coast, triggered by this summer’s record high temperatures. It’s not a phenomenon or coincidence, experts say. It’s a clear sign that Americans should brace for more water interruptions, accompanied by skyrocketing water bills.

The heat wave of the past few weeks has burst hundreds of crucial pipes in California, Kansas, Oklahoma, Texas, Indiana, Kentucky and New York, temporarily shutting off water to countless consumers just when they needed it most.

“It’s one of the worst summers,” said Debbie Ragan of Oklahoma City’s Utilities Department. As days of 100 degree-plus temperatures bake the region, the utility reports 685 water main breaks since July alone. That’s an estimated rate of four times normal. To keep up with repairs, Ragan said, workers have been putting in 12-to 16-hour shifts 24/7.

“It’s the heat and the high water usage,” Ragan said.

High temperatures can dry soil so that it shrinks away from buried pipes. Increased water usage raises pressure inside the water lines. Both factors add strain to pipeline walls, making older pipes more susceptible to bursting.

It underscores the fact that much of the nation’s underground water lines are 80 to 100 years old — and approaching the end of their lives.

Experts call it America’s “Replacement Era,” when hundreds of water utilities nationwide will be forced to replace their aging infrastructure — or suffer the consequences.

Who will probably have to pay for those hundreds of thousands of miles of new pipelines? Utility customers, industry experts say.

For towns like Kemp, Texas, population 1,150, the situation reached emergency levels this week.

A historic drought throughout Texas has left Kemp with what Mayor Donald Kile described as “cracks so big in the ground, you could lose a small dog in them.”

Fourteen major water line breaks August 7 emptied water towers and forced Kemp to shut off water service until Tuesday, officials said.

The mayor blamed the crisis on 80-year-old pipelines and high demand as temperatures rose above 100 degrees for 37 straight days.

Texas town turns off water, leaving residents boiling mad

It’s even worse in the Texas town of Robert Lee. The hellish heat has left its entire reservoir dry as a bone. Community leaders are considering trucking water in from elsewhere or laying a 12-mile pipeline to connect to water in a nearby town.

Get ready for more of the same, environmentalists say. Shifting climate change in the coming decades, they warn, will probably bring more droughts, record high temperatures and other weather conditions that will damage water infrastructure.

Wonder what the banks will do? Pass along the increase to their loyal customers?

Nicolas Sarkozy Just Announced Plans For A New Tax On Financial Transactions Joe Weisenthal | Aug. 16, 2011

French President Nicolas Sarkozy has expressed plans to introduce a “Tobin tax” in Europe: This means taxes on financial transactions, which is something the banks will hate.

Obviously we need details, but this is not minor news if it’s carried forth.

On the surface, we’d expect banks to scream bloody murder, but given that the whole point of this ongoing bailout exercise is to protect banks, it’s hard to imagine this being too damaging ultimately.

Nobel Laureate economist James Tobin was the first to propose this idea, originally envisioning this as a tax on currency transactions.

How quickly the worm turns…..

Corporate/General Aviation has been dead since 2008. In 2009, went six months without getting a return call/interview.

Since May, I’ve been getting calls from employment agencies, inquiring on my availability. (would have been nice if these calls had started a month earlier…..)

My SIL, who got his A&P in late 2008, but until now hasn’t been able to find a mech job, because everybody wanted 5 years of experience.

Suddenly, he’s getting calls from multiple sources. Starting pay with no experience is the same as they were offering guys with 5-10 years experience 4 months ago.

In the meantime, work at the major shops is starting to stack up. I have a problem with my current a/c that needs specialist equipment and training. Soonest they can get to it is the first half of next week.

Whatta country. I can see it coming now.

This time next year, it will be damn near impossible to get anything done without scheduling it six months in advance. Nobody has parts, because all of the vendors have laid everyone off, or gone out of business.

Nobody has staff, because they have all been laid off, and the high skill 25-40 year olds have taken the opportunity to get into another line of business that pays better. Nobody getting into the business, because they can make more money working on KIAs, than they can by working on airplanes.

So, the “mandatory overtime” will start. This will work for a few weeks/months, but you can only go to that well so many times. In my experience, you can do it for about 4 weeks before the mistakes start happening. Then you waste your O/T hours on fixing mistakes, instead of progressing.

Guys don’t mind overtime to help out an AOG, or to work an unanticipated issue. They start getting pi$$ed when they have to work O/T weeks on end, because someone is trying to hit a revenue number, and they know the airplane’s schedule is screwed, even before it rolls in the door.

And then, you run into the management that thinks that “If an inspection takes ten guys ten hours to do, putting 100 guys on it means we can finish it in an hour…..”

Mark my words, by next spring, we’re going to hear of a couple of maintenance related “incidents”. And the bleats about “we can’t find anyone trained/qualified to do the job……”. So the lobbying will start to allow more maintenance work to be done in China/Mexico/Central America……

The idiots who run the show in this country have never figured out that, while money gives people an incentive to become realtors/mortgage brokers/banksters, the lack of money for the past 30 years has been a dis-incentive for people to either get into, or stay in, some pretty important, safety critical industries.

And why deal with the hassle, when other jobs pay more, or demand a lot less, or both? Pay scales have been so screwed for so long that a lot of people have adapted to the crap salaries, and can live on a lot less money.

Multiply this, by about every technical job done in the US of A.

If the Chinese were smart, they would offer every pilot with an ATP, and every A&P with 5 years of jet experience $100K/year, to move to China for 5 years. The US aviation business would be Tango-Uniform in 90 days.

Combo, the shake-up I mentioned yesterday: there are often “regime changes” that happen in public education. People may think they’re on a track, or have a given career path, and then, BLAM, if someone from the top retires/dies/resigns,etc. unexpectedly the fallout can produce some interesting results. Smart people will seize opportunity, but people that aligned themselves based on the past, may not have noticed subtle changes and now find themselves aligned with the wrong crowd.

I’m laying low, but by default I will need to form a “crew” at the next level up. So far I am noticed for doing my job well, which is, and always was, the plan.

This is the kind of thing where 30+ year careers end overnight.

Campaign rhetoric is more interesting than usual this time around…

16 August 2011 Last updated at 19:35 ET

Rick Perry warns Fed’s Ben Bernanke against ‘treason’
Republican presidential candidate Rick Perry in Walcott, Iowa, on 16 August 2011 Rick Perry succeeded former President George W Bush as Texas governor

Republican presidential hopeful Rick Perry has been criticised by the White House over remarks he has made about the head of the US central bank.

The Texas governor said he would view it as “treasonous” if Federal Reserve Chairman Ben Bernanke printed more cash between now and the 2012 election.

The White House accused him of threatening Mr Bernanke.

Mr Perry entered the race on Saturday for next year’s Republican nomination to challenge President Barack Obama.

The 61-year-old, who succeeded former President George W Bush as Texas governor in 2000, is tipped as a strong contender to be the party’s nominee.

‘Pretty ugly’

In his first three days as a presidential contender, he has already antagonised Democrats by implying that the US military does not respect Mr Obama as commander-in-chief.

On a campaign stop in the US state of Iowa on Monday, Mr Perry said: “If this guy [Ben Bernanke] prints more money between now and the election, I don’t know what y’all will do to him in Iowa, but we would treat him pretty ugly down in Texas.

“Printing more money to play politics at this particular time in American history is almost treacherous, treasonous in my opinion.”
…

http://www.telegraph.co.uk/news/celebritynews/8705621/Burt-Reynolds-faces-being-thrown-out-of-home.html

Bury Reynolds joins the ranks of celebrity FBs.

Who says government employees are all dummies?

Pierre de Fermat
1601 - 1665

Pierre de Fermat was a French lawyer and government official most remembered for his work in number theory; in particular for Fermat’s Last Theorem. He is also important in the foundations of the calculus.

August 16, 2011, 1:15 PM ET

Behind the Numbers: Housing Starts Fall
By Robbie Whelan

The nation’s home builders are on pace to start 425,000 new single-family homes, which would work out to the lowest level added annually to the country’s inventory since the Census Bureau started tracking this data in 1959. Bad news, right?

It certainly is for publicly traded builders, which typically build about 1 in 5 new homes nationally. Low starts numbers probably indicate that the industry is reacting to weak demand. As the economy has gotten worse, families have doubled up, with younger generations staying at home instead of buying one.

Builders depend on a robust pipeline of new communities in development and orders for new homes. There’s also another jobs factor: home construction is a big employment sector, and fewer homes means fewer jobs for carpenters, window-framers, drywall-hangers and electricians. Already Wall Street is reacting to the Census numbers: the share prices of all but three of the nation’s 12 big builders were in the red as of mid-morning in New York Stock Exchange trading.

But suppose you’re just the average homeowner, concerned about your plummeting home value, the foreclosure crisis, and your neighborhood going to seed as more and more of your neighbors ditch their mortgage payments for cheaper rental houses or apartments. For you, falling housing starts are just fine. You don’t need any brand-spanking-new houses down the road, boosting local inventory and competing with your house when you decide to sell.

Already, the U.S. housing market has shown some signs of progress as far as burning through existing inventory, as fewer houses were listed for sale, probably because of delays in the foreclosure process.

And finally, if you’re an investor, looking for deals on foreclosed properties to buy and hold as rentals, Tuesday’s Census numbers are heartening because they show that demand for single-family homes as purchases is down, while demand for rentals may be on the rise.
…

AUGUST 16, 2011, 10:57 A.M. ET

US Stocks Fall As Euro Zone Growth Worries, Housing Issues Weigh

By Steven Russolillo
Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)–U.S. stocks dropped Tuesday, following three straight trading days of gains, as weak European economic data and a downbeat reading on the domestic housing market put growth concerns back in the spotlight.

The Dow Jones Industrial Average recently fell 66 points, or 0.6%, to 11417, recently led lower by Bank of America’s 3.2% drop and J.P. Morgan Chase’s 1.7% decline. The blue-chip index is coming off a 214-point rally on Monday. It has gained 7.1% over the last three trading days, its biggest such move since March 2009.

The Standard & Poor’s 500-stock index lost 10 points, or 0.8%, to 1195. Financial and material stocks were the biggest decliners in a broad selloff. All 10 of the S&P 500 sectors traded in the red. The Nasdaq Composite shed 24 points, or 1%, to 2531.
…
On the U.S. economic front, the Commerce Department said home construction dropped in July as the battered housing market continues to struggle. Housing starts dropped 1.5% from a month earlier to a seasonally adjusted annual rate of 604,000. The decline in July follows two consecutive monthly gains.

The results were a little better than economists were forecasting. But construction remains below a healthy level, which economists say would be 1 million to 1.5 million starts.
…

AUGUST 15, 2011, 10:35 A.M. ET

Fannie Mae Housing Survey Shows 64% Pessimistic On US Economy

Fannie Mae’s (FNMA) second-quarter national housing survey reveals that 64% of American homeowners and renters say the economy is on the wrong track, the most pessimistic view since the survey’s inception in the first quarter of 2010.

“Consumers are more cautious due to concerns over employment and household finances,” said Doug Duncan, vice president and chief economist of Fannie Mae. “As a result, consumer spending, which accounts for about 70% of the economy, ground to a halt in the second quarter. Consumers are more hesitant to take on additional financial commitments, and a setback to confidence means a setback to the recovery of the housing market.”

For the month of July, the survey found that 70% now believe the economy is on the wrong track, with just 23% saying the economy is heading in the right direction.

Most Americans, 53%, think it would be difficult to get a home mortgage today, and the doubt increases to 71% among renters.

Furthermore, 26% of mortgage borrowers say they are underwater, up from 23% in the first quarter survey.

The results are based on 3,002 telephone interviews of Americans aged 18 and older from April 4 to June 28.
…

Single-family home slump drags down July housing starts
The Associated Press
Updated 13h 57m ago

WASHINGTON — U.S. builders broke ground on fewer single-family houses in July, leaving home construction at depressed levels.

The Commerce Department said Tuesday that builders began work on a seasonally adjusted 604,000 homes last month, a 1.5% drop from June. That’s half the 1.2 million homes per year that economists say must be built to sustain a healthy housing market.

Single-family homes, which represent 70% of home construction, fell 5%. Apartment building rose more than 6%.
…

Is there any data on how many former Toll Brothers employees now live in their parents’ basements?

Single-family home slump drags down July housing starts
The Associated Press
Updated 13h 57m ago
…
Despite historically low mortgage rates, few Americans are prepared to buy a home as the economy fizzles and job growth is painfully slow.

“The now-extended period of ultra-low interest rates is not squeezing any new demand out of the rock,” said Pierre Ellis, an analyst at Decision Economics.

U.S. homebuilders are just as pessimistic about the depressed housing market as they were two years ago.

The National Association of Home Builders said Monday that its survey of industry sentiment was unchanged at 15 this month. The index has been below 20 for all but one month during the past two years. The index is just seven points above the lowest reading on record, in January 2009.

Any reading below 50 indicates negative sentiment about the housing market. The index hasn’t reached 50 since April 2006, the peak of the housing boom.
…

Busted Recovery: How Much is Housing to Blame?
Posted by Stephen Gandel Tuesday, August 16, 2011 at 9:29 am
Related Topics: real estate, recession, recovery
(Rick Wilking / Reuters)

In early spring, when the news came out that housing had entered a double dip - prices were falling again - it seemed like an outlier. The jobs market was picking up steam. Corporate profits were up. The stock market was rising. A lot has changed in just a few months. Now the question is whether housing was a leading indicator for the economy, or was it just leading the economy.

Today, there was relatively good news out of the housing sector. The Census Department reported that housing starts fell 1.5% in July, which was less than the nearly 5% forecasters had expected. That means home builders are on pace to build only 25,000 fewer homes in the next year than they were just a month ago. The fact that this registers as good news is the biggest sign of how weak the housing market is. At the height of the housing bubble builders were putting up homes at a rate of about 2.25 million a year, or nearly four times as fast as now. Later this week, the National Association of Realtors will release data for the number of existing homes that sold in July. Most forecasters think sales will rise slightly. But housing expert Thomas Lawler thinks even the today’s diminished expectations for real estate are too rosy. He expects sales to drop slightly.
…

Home prices, sales in decline
Staff Reports
Posted: 08/16/2011 04:28:57 PM PDT

Yet another housing price survey shows a decline in home prices and sales volumes.

In July, Southern California housing prices fell about 4 percent to $283,000 on a year-over-year basis, La Jolla-based DataQuick Information Systems reported Tuesday.

San Bernardino County’s median prices fell 2.6 percent to $151,000 last month. Los Angeles County median prices slipped 5.6 percent to $320,000.

Southern California sales volumes also fell 4.5 percent to the lowest levels for a July in the past four years, DataQuick reported. The real estate tracking firm blamed a weak job market, economic uncertainties and last month’s mere 20 business days.

“The latest sales figures look a bit worse than they really are, given this July was a fairly short month, but they still suggest some potential homebuyers got spooked,” DataQuick president John Walsh, said in a statement.

Notably, July was the month when President Obama and Congress engaged in a prolonged debate over the national debt ceiling during which some pundits and officials raised the spectre of a national debt default.

“Reports on the economy became increasingly downbeat and, no doubt, some people fretted over the possibility the country would default on its obligations,” Walsh said.
…

Southern California Home Sales Drop 4.5% as Buyers Hold Off on Purchases
By Dan Levy - Aug 15, 2011 10:16 AM PT

Home sales in Southern California fell 4.5 percent last month from a year earlier as mortgages were hard to obtain and the U.S. debt crisis rattled some high- end buyers, according to DataQuick.

A total of 18,090 houses and condominiums sold in July in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties, a 12 percent decline from June, the property research firm said today in a statement. The median price paid was $283,000, down 4.1 percent from July 2010 and the fifth consecutive decline on a year-over-year basis.

“Reports on the economy became increasingly downbeat and, no doubt, some people fretted over the possibility the country would default on its obligations,” John Walsh, president of San Diego-based DataQuick, said in the statement. “If there’s a shred of good news in the data it’s that last month’s sales weren’t much worse than a year earlier.”
…

Kudos to HBB posters circa 2006 who saw the depression coming and predicted it. At the time, I thought the more extreme predictions were unduly dire, but it turns out they were on target.

Man on the Street: Recession or Depression?
by Dora Bromme, published on August 16, 2011 at 7:47 PM

We’ve all felt the pangs of Sacramento’s economic downturn, from some people losing jobs to others finding it more difficult every day to get one, and the more unfortunate circumstance of many even losing their businesses or homes. But how much longer is it expected to last, and is this the worst of it?

The Sacramento Press asked people in Capitol Park their thoughts on whether Sacramento is in a recession or a depression.

Capitol area resident, 55-year-old Diana Williams, program technician for the Department of Health, said she sees both:

“The reason for it is that I’ve been on the service (for the State) a little while, and I’ve experienced difficulties in politics where it’s influenced, as a state worker, our income, our self-worth. Not only just a state worker just being as a neighbor, listening to other people, the negativity that’s going on in California, people not handling the books right and what have you,” Williams said.

“I think we’re in a recession because you can see it around you. Starting with income – we don’t have the money to take care of business anymore – people are losing homes … It started with businesses – when they started closing. When we (saw) that, then it started affecting our homes. It’s a recession, and we’re depressed because we can’t enjoy what we worked for.”
…

Affordable housing policy inflicted the most financial damage on the low income minority families it was supposed to help, by encouraging them to become home owners. Where are the apologies from the likes of liberal Democratic Congressmen like Barney Frank and Chris Dodd, who were the biggest proponents of these programs?

P.S. When you read these stories like this one about how much American families net worths have dropped, perhaps it will make you feel better to remember that Wall Street investment bankers managed to keep pulling in multi-million dollar bonuses right through the worst of the great recession. It’s almost as if Wall Street had a giant straw (or was it the Fed’s printing press?) available to suck away wealth right out from under Main Street American families’ feet.

Posted on Tue, Aug. 16, 2011 07:11 AM
Our financial problems extend far beyond D.C.
By LEWIS DIUGUID
McClatchy Newspapers

The Great Recession with soaring unemployment and plunging home and stock values hurt African-Americans and Hispanics far more than whites.

Hispanic household median wealth fell 66 percent and black wealth fell 53 percent from 2005 to 2009.

It may take a generation for minorities to recover from the losses, said the Rev. DeForest “Buster” Soaries Jr., senior pastor of First Baptist Church of Lincoln Gardens in Somerset, N.J. He was among the speakers on a “Building Wealth in Tough Times” panel at this month’s National Association of Black Journalists convention in Philadelphia.

A report from the Pew Research Center - the focus of the panel discussion - said the recession led to the largest wealth disparities in at least 25 years for minorities compared with whites. The median wealth of white households was 18 times greater than the median net worth of Hispanic households and 20 times that of black households.

Median wealth is the value of all assets such as home equity, stocks, savings and vehicles minus liabilities such as mortgages, auto loans and credit card debt. The study, based on 2009 census data, found that the typical black household had just less than $6,000 in wealth compared with just over $6,000 for Hispanics and more than $113,000 for whites.

Minority families were disproportionately hurt when home values crashed. Foreclosures and plunging home equity in Nevada, Arizona, Florida and California hit Hispanic families hardest because of their concentration in those areas. Asian families’ concentration in California caused their home values also to burst with the housing market.

“White households were also affected by the housing crisis,” the Pew report said. “But home equity accounts for relatively less of their total net worth, and that served to lessen the impact of the housing bust.”
…

Stupid is as stupid said.

UCLA forecast sees no California recession
They say economy is likely to weather housing collapse
March 11, 2008|By Sam Zuckerman, Chronicle Staff Writer

Is the housing bust taking the California economy down?

Not necessarily, says an influential forecasting group. In a report set for release today, economists at the UCLA Anderson Forecast predict that damage from the collapse of housing will be contained and that the state’s feeble economy will avoid a headlong dive into negative territory.

“Real estate weakness will remain a significant drag on the economy, leaving us treading water in 2008, but not slipping under the waves into recession,” the report concludes.

The Fed’s berserko liquidity pump is inspiring copper thieves to cash in on climbing metals prices.

By Adrian Covert Aug 16, 2011 5:30 PM
Why in the Hell Is Everyone Stealing Copper?

Search the news for “copper theft” and look through the headlines. LOOK. Why are there so many stories? Stealing wire to sell the copper? From a cell tower? What is this, the Great Depression?

Reports from the Department of Energy estimate that copper theft is responsible for $1 billion worth of damage every single year. The problem is so rampant that there’s a coalition to prevent copper theft. State laws are being passed left and right, requiring close monitoring of all copper sales. What gives? It’s the economy, stupid.
…