The Housing Bubble

After next week, federal guarantees for millionaire mortgages will drop to only $625,500, but are set to stay there for an indefinite period of time thereafter. Cry me a river for the poor politicians and other millionaires who will no longer enjoy taxpayer-funded federal loan guarantees quite as ginormous as before.

Are Government-Sponsored Enterprise Loan Limits Coming Down Next Week?
By IB Times Staff Reporter | September 22, 2011 8:05 AM EDT

FBR Capital Markets anticipates that Congress will be unable to pass legislation to lower the loan limits below $625,500 until at least 2013, and expects that it could be even longer.

The current Government-sponsored enterprise (GSE) loan limits in high-cost areas are $729,750, which is 175 percent of the conforming loan limit of $417,000. This is a temporary provision that lasts until Oct. 1.

After Oct. 1, the loan limits adjust downward to 150 percent of the conforming loan limit or $625,500. For the $729,750 level to remain, Congress must pass new legislation.

If Congress does nothing, the loan limits are lowered to $625,500, which is permanent until Congress passes legislation that would lower or increase that amount.

There is a push supported by the housing finance lobby in Washington to extend the current $729,750 loan limits. They are arguing that lowering the loan limits now will harm an already fragile housing market.

“They are looking to attach an increase to the legislation being worked on that will keep the government funded beyond Sept. 30. Based upon conversations with our Washington contacts, we believe this effort will be unsuccessful,” said Edward Mills, an analyst at FBR Capital Markets.
…

I sent my realtor a link to a house (nice, in a ‘hood we like) that just closed at $77/sq.ft. He hasn’t responded… Lol.

It’s that time of year when Florida drives me crazy. It’s still July hot and my soul craves cool, dry fall.

This is what it gets down to: Without those jumbo-sized federal loan guarantees, how will Fannie, Freddie and the FHA find lenders willing to make jumbo loans on a massive pool of government-owned REO (aka “shadow inventory”)? The game plan all along was apparently to stick any losses on the jumbo-priced REO sales on the U.S. taxpayer, through federal guarantees in amounts up to $729,750.

But it seems quite futile to keep the conforming loan limits propped up at Housing Bubble era price levels with so few Californians qualified and interested in buying homes at 2006 prices.

Balanced Approach Needed to Dispose of REO Properties, NAHB Tells Congress
09/20/2011

WASHINGTON — The National Association of Home Builders (NAHB) urged the Administration and Congress to take a balanced approach in disposing of the large inventory of real estate owned (REO) properties held by Fannie Mae, Freddie Mac and the Federal Housing Administration to avoid further disruptions to pricing and markets and to limit further losses to the two government sponsored enterprises and the FHA.

Testifying before the Senate Subcommittee on Housing, Transportation and Community Development on new ideas to address the glut of foreclosed properties, NAHB Chairman Bob Nielsen, a home builder from Reno, Nev., said that Fannie, Freddie and the FHA should avoid bulk sales to large investors that have no stake in the neighborhoods in which these properties are located.

“Local and small businesses that have a stake in the future of the affected communities should be the driving force behind the disposition of the REO inventory. This will result in the creation of jobs and the stabilization of neighborhoods,” said Nielsen.

NAHB also urged Congress to extend the current conforming loan limits for Fannie Mae, Freddie Mac and the FHA, which are due to be lowered on Oct. 1.

“This is not a time to reduce loan limits as the lower limits will exclude many homes and home buyers from FHA and Fannie and Freddie loan programs, particularly in areas like California where there is substantial foreclosure inventory,” said Nielsen.
…

Greek despair over further cuts sees suicide and crime rates on the rise

More austerity measures likely to be passed in return for IMF help, but has nation been pushed beyond breaking point?

Helena Smith in Athens
guardian.co.uk, Saturday 24 September 2011 15.22 EDT
…

Financial Crisis
The Greek tragedy: no money, no hope
Despairing middle classes could be the biggest threat to Greece’s future, writes Paul Mason in Athens.
By Paul Mason, BBC Newsnight’s Economics Editor, Athens
9:00PM BST 24 Sep 2011

Dmitris Andreou made the last sale out of his small estate agents business in June. His wife Mary, makes her living preparing high-school students for English exams.

But her living has dried up. Their savings are exhausted, their disposable income has dropped by about 50 per cent in two years, and they are angry.

“Some days we only buy the basics and a few days lately we were not able to buy even those. We have to count our cents to decide between buying bread, milk or butter,” says Mary.

“Some days are better, but some are difficult. We don’t buy clothes any more. People don’t go out. There is simply no money around out there.”

In their neat apartment in an Athens suburb, surrounded by family heirlooms and lace tablecloths, they are a world apart from the anarchist demonstrators who snatch the headlines whenever opposition to the EU-imposed austerity measures is discussed.
…

Greece faces fresh destruction, pillaging
Sunday, September 25, 2011
By Afrodity Giannakis, Thessaloniki
Greek taxi drivers protest, September 13.

The lead-up to the payment of the sixth installment of International Monetary Fund (IMF) loans to Greece, to be handed out in October, finds Greek people in a state of shock and helplessness.

The first “memorandum” agreement was signed by the Panhellenic Socialist Movement (PASOK) government with the IMF and European Union (EU) representatives in May 2010. It came after two decades of savage neoliberal attacks by successive New Democracy (the major right-wing party) and PASOK (so-called “socialist”) governments.

The agreement included extremely harsh austerity measures, which affected working conditions, services and people’s living standard.

It led to further unemployment, lower wages and pensions, and higher taxes. These, combined with inflation and other related factors, have adversely affected the country’s economy.

The memorandum agreements that came with further loans have given the IMF-EU-European Central Bank “troika” and the Greek government the grounds for even harsher measures.

As a result, Greek society has been plunged into despair. Small and medium-sized businesses have been folding at unprecedented rates and people have lost their jobs in vast numbers. Unemployment is rapidly approaching 20%.

At the same time, salaries, wages and pensions have been cut. Incomes have shrunk dramatically, by about one fifth, or even more in many cases.

Living standards have fallen as funding for health, education and welfare has been slashed. Huge numbers of hospitals and schools have closed.
…

IMF Resources May Not Suffice If Crisis Worsens
By Sandrine Rastello - Sep 24, 2011 3:18 PM PT

The International Monetary Fund’s $384 billion lending chest may not be enough to meet all loan requests if the global economy worsens, Managing Director Christine Lagarde said.

“The fund’s credibility, and hence effectiveness, rests on its perceived capacity to cope with worst-case scenarios,” Lagarde said in an “action plan” distributed to the IMF steering committee today. The current lending capacity “looks comfortable today but pales in comparison with the potential financing needs of vulnerable countries and crisis bystanders.”

Tripling IMF resources was part of the Group of 20 leaders’ response to the global recession in 2009. As the European debt crisis threatens to spread and further damp the global recovery, the IMF was asked by its steering committee today to review whether its resources are sufficient.

“The IMF has a limited financial ability to staunch an escalation of the crisis that envelops major European economies like Spain and Italy,” said Eswar Prasad, a senior fellow at the Brookings Institution in Washington and a professor at Cornell University in Ithaca, New York.

At the same time, “the current economic and political climate in advanced economies makes it highly unlikely that they are in a position to provide additional resources to the IMF,” he said.
…

Europe Weighs Speedier Enactment of Permanent Rescue Fund to Stem Crisis
By James G. Neuger and Aki Ito - Sep 24, 2011 11:26 AM PT

European governments are exploring speeding the start of a permanent rescue fund for their cash- strapped economies amid fresh signs they may bolster efforts to halt the worsening sovereign debt crisis.

Senior finance officials will examine next week the cost advantages of setting up the fund, known as the European Stability Mechanism, a year earlier than its currently planned July 2013 start, according to a document prepared for the meetings and obtained by Bloomberg News.

As Greece’s prospects darken and the 18-month debt crisis threatens to tip Europe and the global economy back into recession, the euro area’s managers are stepping up efforts to identify measures that can stop it from spreading. Their strategy to date has been criticized at the annual meetings of the International Monetary Fund and World Bank, which continue today in Washington.

“Patience is running out in the international community,” U.K. Chancellor of the Exchequer George Osborne told reporters yesterday.

That pressure increased after concerns that a Greek default may be inevitable helped push global stocks into their first bear market in two years. Economists at Citigroup Inc. said yesterday they now expect Greece to begin restructuring its debt as soon as December, while those at JPMorgan Chase & Co. said the euro area will start shrinking in the fourth quarter.
…

For Europe, the criticism piles on at IMF meeting

View Photo Gallery —  From cabinet officials to central bankers, these leaders are making critical policy decisions that could shape the future path of the global economy.

By Howard Schneider and Ylan Q. Mui, Published: September 24

Major economic powers and the International Monetary Fund on Saturday boosted pressure on leaders of the euro zone to resolve their lingering financial crisis, leveling criticism that included a sharp new economic warning from the United States and cultural barbs from the Chinese about the European work ethic.

In an address to the IMF’s chief oversight committee, Treasury Secretary Timothy F. Geithner starkly outlined the worst-case scenario if the 17 euro nations don’t succeed soon: “Cascading default, bank runs and catastrophic risk.”

The threat “must be taken off the table,” Geithner said. “Otherwise it will undermine all other efforts, both within Europe and globally” to keep a tepid recovery from slipping into recession.

Geithner’s warning capped a series of IMF meetings at which the euro zone’s troubles were center stage. The treasury secretary has been pushing for Europe to take dramatic steps to prove that the region’s governments and its central bank will stand behind weaker nations like Greece and prop up the financial system as needed.

The IMF is pushing as well. On Saturday, its International Monetary and Financial Committee said that the euro-zone members had pledged to “do whatever is necessary” to stabilize financial markets that have driven up borrowing costs for relatively large countries like Italy and driven down the value of European banks. The IMFC includes finance officials who represent the fund’s 187 members.

The next few weeks will mark a critical test of the pledge by euro-zone leaders to “act decisively.”

Though the sense of urgency is shared, there is no clear agreement about policy. The European Central Bank is particularly concerned about taking on responsibility for government debt.
…

This is the Housing Bubble story that keeps on giving.

Fannie Mae Cited For Failing To Stop Robo-Signing
by The Associated Press
WASHINGTON September 23, 2011, 11:56 am ET

WASHINGTON (AP) — Fannie Mae missed chances to catch law firms illegally signing foreclosure documents and its government overseer did not take the right steps to ensure Fannie was doing its job, according to a federal watchdog.

The Federal Housing Finance Agency’s inspector general said in a report Friday that Fannie failed to establish an “acceptable and effective” way to monitor foreclosure proceedings between 2006 and early 2011. FHFA then failed to ensure it was complying with demands that it clean up its programs.

Mortgage industry employees — including law firms employed by Fannie Mae — signed documents they hadn’t read and used fake signatures on foreclosure cases across the country. The practices, known collectively as “robo-signing,” resulted in a suspension of foreclosures last fall and a probe by all 50 state attorneys general into how corners were cut to keep pace with the crush of foreclosure paperwork.
…

Three Years After The Market Crash, A ‘New Normal’
by Marilyn Geewax
Los Angeles resident Christian Del Cid waves banners calling for jobs on a bridge over Interstate 110. Exactly three years after the market crashed, some 14 million continue to look for work.
September 25, 2011

Three years ago this month, chaos ruled in financial markets.

Huge financial companies, such as Lehman Brothers, Merrill Lynch and AIG were stumbling, and government officials were scrambling to prevent a global financial meltdown. They threw together bailouts and pushed weak companies to merge with stronger ones.

The central bankers, Treasury officials and lawmakers eventually did manage to reassure investors enough to restore order in the financial system. However, the aftershocks of the crisis are still being felt today.

Some 14 million people continue to look for work in this country, and millions more struggle to hang on to their homes and retirement savings. For them, the tough times continue.

Still, as bad as it may have felt, the period covering the past two years could not be labeled a recession. Economists define a true recession as a sustained period — usually six months or more — when economic activity is declining across the board. During such times, retail sales are falling, jobs are disappearing, houses aren’t selling and factory production is dropping.

That’s the sort of broad-based decline that started spreading in 2007 as the housing foreclosure crisis began taking hold. The National Bureau of Economic Research, which is recognized as having the authority to call a recession, says that by December 2007, the entire U.S. economy was shrinking. It continued shrinking for the next 18 months — the longest recession since the 1930s.

That official recession ended in June 2009, when growth resumed in most sectors. In the first half of 2010, the growth rate was approaching a healthy 4 percent, but then the economic rebound faded. This year, growth has been crawling along at around 1 percent or less.
…

Fannie Mae ignored robo-signing abuses in Florida foreclosures, investigation finds

By Kimberly Miller Palm Beach Post Staff Writer

Federal mortgage giant Fannie Mae was told in 2006 about faulty court documents filed by Florida foreclosure attorneys acting on its behalf but did nothing to correct the practices, an inspector general found.

A report issued Friday by the Federal Housing Finance Agency Office of Inspector General said an outside law firm Fannie Mae hired to investigate allegations of wrongdoing confirmed “unlawful” practices and stated that foreclosure attorneys were sacrificing accuracy for speed by filing false documents.

8 COMMENTS

I have not made a mortgage payment in 38 months and have not even been scheduled for an initial hearing. In the meantime, I am enjoying my home and enjoying life. When the time is right, I will declare bankruptcy and start over. All you holier than thou’s can KMA. I am using the system to my advantage, just as the banks do.

diver4life
2011-09-24 10:45:12.702

diver4life

I got you beat. My last payment was Dec 2007, 45 months. No Lis Penden, nothing. Bank lawyer told me my loan doc’s are so messed up, they don’t which bank owns my loan.

Those “Technical Issues” are coming home to haunt Fannie and B of A.

Key West dad
2011-09-24 14:14:44.342

http://www.palmbeachpost.com/money/foreclosures/fannie-mae-ignored-robo-signing-abuses-in-florida-1876292.html - -

Will clearing foreclosure logjam revive Florida’s economy?

By Kimberly Miller Palm Beach Post Staff Writer
Posted: 7:17 p.m. Saturday, Sept. 24, 2011

With hundreds of thousands of foreclosure cases clogging Florida’s courts and more defaulted loans in the pipeline, Moody’s economists now predict South Florida home prices won’t hit bottom until late 2012 or early 2013.

But whether clearing the logjam through an expedited foreclosure process will equal a shortcut to economic recovery is still up for debate. The current timeline to foreclosure in Florida is 676 days — nearly two years — the third-longest wait time in the country.

Of seven economists interviewed by The Palm Beach Post, six said they generally believe speedier foreclosures will lead to a swifter rebound in the housing market and a more rapid healing of the economy at large.

None of the analysts, however, could point to a region of the United States and definitively say it is doing better today because its foreclosures are being processed more quickly.

“When I see it taking more than 650 days for a foreclosure to go through, I think I am in favor of non-judicial foreclosures,” said Sean Snaith, director of the University of Central Florida’s Institute for Economic Competitiveness. “Think of everyone not going through a foreclosure and what’s happening to them as they see their home values erode. It wears away confidence and wealth.”

http://www.palmbeachpost.com/money/foreclosures/will-clearing-foreclosure-logjam-revive-floridas-economy-1877560.html - -

Palm Beach County foreclosure filings up 19 percent in August from previous month

by Kim Miller

“We’re continuing to monitor the number of foreclosures filed with our office,” said Clerk Sharon Bock. “We were anticipating another wave of filings this year based on some expert forecasts, but so far an influx of new cases has yet to come.”

Foreclosure auctions occurred on 715 properties in August. Of those, 599 were sold back to the plaintiff in the proceeding _ typically a bank or lender _ while 116 were purchased by a third party.

7 Responses to “Palm Beach County foreclosure filings up 19 percent in August from previous month”

1
They’ll do it til you make them stop Says:
September 14th, 2011 at 10:04 am
Wait until interest rates tick up in 2013. It will be just as bad if not worse than the last 3 years.

The real crime is when banks ‘acquire’ a failed bank in an accretive deal financed by the fed and acquiring bank puts the screws to a mortgage holder whose balance was written off already on the target bank’s books. This double dipping is escaping notice.

Why aren’t you writing about that Jeff and Kim????

5
All fixed Says:
September 14th, 2011 at 8:36 pm
Declare bankruptcy on the lender. They get the property back and you get a pass! Chap 13 is a 5 year payback and Chap 7 is a discharge of all debt (your income will determine your route).

Bang the credit cards, the banks, everyone you owe money to. Student loans, child support/alimony and taxes don’t count though.

6
Get in the Game Says:
September 15th, 2011 at 3:52 am
And people wonder WHY banks do not lend to people?

And people are going to wonder WHY banks are charging so much in interest?

On one hand, people complain and complain that banks are not lending money.

And on the other, people just walk away from THEIR financial obligations.

I know you would love to – but cannot have it both ways guys/gals.

If you shirk your bills, the Creditor is not going to be happy and will then factor in your default rate for everyone else.

But, of course, all these people stammering banks are bad LOVE to have the government bail THEM OUT by guaranteeing their financial irresponsibility.

Go figure!

Why the $16 muffin is no jokeBy Matt Welch,

Special to CNN

updated 7:26 AM EST, Thu September 22, 2011

So should we just greet muffinflation with a weary shrug? Not remotely, no.

The lesson of government waste, whether on $16 muffins or $535 million loan guarantees to solar power companies or $48 billion in “improper” Medicare payments, is one worth relearning every day.

Managers whose budgets do not depend on customer satisfaction and who do not face competitive pressure in the marketplace, will not, on balance, spend their money wisely. Vendors selling to those managers know that price matters much less than it does to, say, Wal-Mart. And anywhere there is political urgency and official involvement high up the command chain, conditions will begin resembling a gold rush.

As major Solyndra investor and Barack Obama donor George Kaiser told a crowd of his fellow Oklahomans not long after Obama’s stimulus was announced in 2009, “There’s never been more money shoved out of the government’s door in world history and probably never will be again than in the last few months and the next 18 months. And our selfish, parochial goal is to get as much of it for Tulsa and Oklahoma as we possibly can.”

http://www.cnn.com/2011/09/22/opinion/welch-sixteen-dollar-muffin/index.html - -

Woman Decapitated in Mexico for Web Posting

By MARK STEVENSON Associated Press
MEXICO CITY September 25, 2011 (AP)

Police found a woman’s decapitated body in a Mexican border city on Saturday, alongside a handwritten sign saying she was killed in retaliation for her postings on a social networking site.

The gruesome killing may be the third so far this month in which people in Nuevo Laredo were killed by a drug cartel for what they said on the internet.

http://abcnews.go.com/Technology/wireStory/woman-decapitated-mexico-web-posting-14600050 - -

1 came back to earth and sold fast

Realtor.com
406 Douglas Dr Jupiter, FL 33458
$109,900
Beds:3 Bed
Baths:2 Bath
House Size:2,108 Sq Ft
Single Family Home
•Status: Contingency
Days on site 7 days

Property Appraiser

Property InformationLocation Address:

406 DOUGLAS DR

Owner Information

Name: US BANK NATIONAL ASSOCIATION TR
Mailing Address: 3476 STATEVIEW BLVD
FORT MILL SC 29715 7200

Sales Information

Jun-2011 24601/1138 $99,800 CERT OF TITLE US BANK NATIONAL ASSOCIATION TR

Jul-2006 20693/0297 $270,000 WARRANTY DEED MALAGON MARIA D

I guess San Diego sellers of high-end homes are going to have to rely on the all-cash investors to snap them up, as shrinking household incomes and growing poverty rolls don’t portend well for end-user buyers to join the Ownership Society.

Poverty rate in county hits 30-year high

Children wait in line to get free snacks from Heaven’s Window. Heaven’s Window is a part of New Seasons Church in Spring Valley which provides free snacks for children and food for families from the neighborhood.
Willie Martinez, who has been out of work for three years, fills out a job application at the Employment Development Department. — K.C. Alfred

More county residents faced financial hardship last year than at any other time in the past three decades, a record reflected in the poverty rate’s sharp rise and stagnating median household incomes, according to new data from the U.S. Census Bureau.

The local poverty rate grew to 14.8 percent in 2010, up from 12.6 in 2009 and 11 percent mid-decade, according to the bureau’s yearly American Community Survey.

Median household income fell below $60,000 for the first time in five years, sinking to $59,923 in 2010. That’s down from a high of nearly $65,000 in 2007.

Today’s release of local census numbers offers further proof of the financial toll fueled by the prolonged economic slump and high rate of joblessness. The figures mirror national and statewide trends of amplified poverty and shrinking household budgets.
…
2010 poverty, income and health insurance

14.8 percent San Diego County poverty rate

13 percent: California poverty rate

446,060: Number of county residents living in poverty

5,783,04: Number of Californians living in poverty

11.6 percent: Child poverty rate in San Diego County

$59,923:Median household income in San Diego County

$57,708: Median household income in California

17.6: Percentage of population in San Diego County without healthcare coverage

Source: U.S. Census Bureau

Should I (can I) refinance my mortgage?
By Lily Leung, Reporter - Real estate
Saturday, September 24, 2011 at 6 a.m.

Dan Fox and his wife, Mildred, have refinanced their mortgage not once, not twice or even three times, but four times since they bought their home in North Park three years ago. The financial decision was an obvious one because Dan Fox’s pay was cut and mortgage rates, now at all-time lows, kept tumbling.

For the past two years, U.S. mortgage rates have steadily dropped to the 3 percent range for a 15-year fixed loan and 4 percent range for a 30-year fixed, recent Freddie Mac figures show. Those rates could keep falling, in light of the Federal Reserve’s decision last week to reinvest in longer-term bonds to push down interest rates on mortgages and business loans.

Low rates have lured a small yet determined slice of qualified borrowers who want to reduce their monthly payments, save for the future, or in the case of the Foxes, both.

“Mortgage rates have dropped to a point where refinancing can make sense,” said Greg McBride, senior financial analyst for finance site bankrate.com.

What makes sense varies by borrower, motive and economic situation. If the math continues to make sense over time, some homeowners refinance again and again, even if the savings appear minuscule.

Still, for many San Diegans, refinancing could be impossible because they are severely upside down on their mortgage, their credit scores are too low, or both.
…

Solyndra executives plead the 5th

Steve Hargreaves, On Friday September 23, 2011, 12:10 pm EDT

Lawmakers on the oversight committee are conducting their own investigation. They want to know why one month before it filed for bankruptcy the executives told them and DOE that the company was doing just fine.

Solyndra’s loan guarantee did not come in one chunk, but was handed out in stages after meeting milestones set by the DOE. The company ultimately drew down $527 million of the $535 million offered.

Lawmakers wanted to know the nature of several meetings between the Solyndra executives and White House aids over the last couple of years.

“On advice of my counsel, I invoke the privilege afforded by the fifth amendment to the U.S. Constitution, and I respectfully decline to answer any questions,” was the response from each executive to every question.

http://biz.yahoo.com/cnnm/110923/092311_solyndra_executives.html?.v=1 - 46k -

Quick question…….

Mom owes $18K on her condo, has a 6% mortgage. Worth refinancing, if she can get a 3-4% interest rate? Or will, as I suspect, points and fees eat up any potential savings?

(Haven’t been in the mortgage shopping business in a while, so not up to the latest fees/tricks/scams)

The gap between rich and poor explained in 3 minutes

http://www.financialsense.com/contributors/dominic-frisby/2011/09/23/the-gap-between-rich-and-poor-explained-in-3-minutes

Chin up! Chest out! Get those GD slippers off!

Obama Tells Blacks to ‘Stop Complainin’ and Fight

By MARK S. SMITH Associated Press
WASHINGTON September 24, 2011 (AP)

In a fiery summons to an important voting bloc, President Barack Obama told blacks on Saturday to quit crying and complaining and “put on your marching shoes” to follow him into battle for jobs and opportunity.

“Take off your bedroom slippers. Put on your marching shoes,” he said, his voice rising as applause and cheers mounted. “Shake it off. Stop complainin’. Stop grumblin’. Stop cryin’. We are going to press on. We have work to do.”

http://abcnews.go.com/Politics/wireStory/obama-readies-words-congressional-black-caucus-14597453 - -

Realtors Are Liars®

Government Shutdown Threatens Again
by David Welna
September 24, 2011

The once-rare possibility of a federal government shutdown reared its head again this week. This time it was over House Republicans’ desire to pay for disaster relief costs with money for other, unrelated projects. NPR’s David Welna explains the Capitol Hill machinations ahead of the Sept. 30 deadline.

Copyright © 2011 National Public Radio®. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

SCOTT SIMON, host: This is WEEKEND EDITION from NPR News. I’m Scott Simon. Next Friday marks the end of the federal government’s fiscal year, which means, given the climate in Washington, D.C. these days, there’s once again talk of a government shutdown. Not a single spending bill for the next fiscal year has passed Congress. Yesterday, even a stopgap measure to keep the government in business after October 1st got tangled in a partisan fight - this time over electric cars and disaster aid. NPR’s congressional correspondent David Welna joins us. David, thanks for being with us.

DAVID WELNA: Sure, Scott.

SIMON: And explain to us, please, the link between any kind of car and money for the victims of weather disasters.

WELNA: Well, you know, there’s very little, if anything, connecting them, although some might say that electric cars are part of the remedy for the global warming that many say exacerbates these weather disasters. But in this legislation, those cars are actually tied to disaster aid because House Republicans decided to lop off a big chunk of money from a loan guaranty program for developing electric cars - a program, by the way, that started during the last Bush administration - and to use those savings to help pay for the $3.65 billion for the disaster relief assistance in this bill for FEMA.

SIMON: But if the offsets are that important, why did the Republican leaders in the House come up with only $1.6 billion worth of them when the FEMA funds are beyond three billion as you say?
…

ECONOMY
SEPTEMBER 25, 2011, 12:57 P.M. ET

Europe Split Threatens Rescue Plan
By SUDEEP REDDY, BOB DAVIS and GEOFFREY T. SMITH

WASHINGTON—Critical differences between European leaders threatened to stymie efforts to combat the euro zone’s debt woes, despite mounting international pressure to contain a broadening crisis.

After a weekend of tense meetings among world finance officials here, euro-zone leaders were weighing options to maximize the size of their bailout fund by borrowing against it. The move could provide trillions of dollars of firepower to rescue governments and banks—-but only if all 17 euro-zone legislatures approve a two-month-old agreement to broaden the bailout fund.

Highly public opposition from Germany, the largest and most powerful euro-zone economy, could block the plan.

Policy makers are “focused on their own internal restraints, so that we don’t have the outcome that we need,” Antonio Borges, head of the International Monetary Fund’s Europe department, said Sunday. While key players were understandably acting in self-interest, he said, it was generating “disastrous” collective results.

A deep sense of anxiety hung over the IMF’s annual meeting. Three years ago, finance officials gathered after the failure of Lehman Brothers sent the global economy spiraling into its deepest downturn since the 1930s. This year, the risk of Europe bringing down the financial system topped everyone’s minds.

The latest turmoil is “more serious than the crisis of 2008,” said billionaire investor George Soros. Three years ago the institutions necessary to fight the crisis were in place, he said, but today European leaders need a continental Treasury Department and instead are working with “an embryo” in the form of a €440 billion ($594 billion) rescue fund.

The fear on everyone’s minds after the market turmoil of the past week: Would investors outpace European politics and start a cascading global financial crisis? Rampant rumors about an imminent Greek default, despite denials from Greece and others, threatened to do just that.

Some European leaders acknowledged they are behind the curve in formulating a decisive response. “Time is strategic, and there’s little of it left,” said Italy’s finance minister, Giulio Tremonti. “We’ve wasted too much of it.”
…

Kamala Harris a key player in settlement over mortgage crisis
The importance placed on California puts the state attorney general in a significant position to hold banks accountable for improper foreclosures.

September 23, 2011
By Nathaniel Popper and Alejandro Lazo, Los Angeles Times

Reporting from New York and Los Angeles — California Atty. Gen. Kamala Harris has emerged as a key player in pursuing a nationwide settlement with major U.S. banks accused of wrongful foreclosures and is facing increased pressure from consumer groups seeking help for homeowners devastated by the mortgage crisis.

Harris, who was in closed-door talks with banks Friday, has been negotiating with the five largest mortgage servicers for months as part of a coalition of attorneys general and federal agencies seeking to a hammer out a deal surrounding allegations that banks committed widespread foreclosure errors.
…

Sept. 25, 2011, 12:35 p.m. EDT
IMF tries to coax markets off ledge
Soros says crisis worse than post-Lehman in 2008
By Greg Robb, MarketWatch

Getty Images
International Monetary Fund Managing Director Christine Lagarde talks to World Bank President Robert Zoellick at the beginning of the Development Committee meeting during the annual IMF-World Bank meetings in Washington on Saturday.

WASHINGTON (MarketWatch) — Global economic policy-makers, gathered Saturday for the annual meeting of the International Monetary Fund, tried to sound united and engaged in their latest effort to assuage financial market concerns about European sovereign debt and the region’s fragile banks.

“Today we agreed to act decisively to tackle the dangers confronting the global economy,” the leaders said in their latest effort, a communique from the IMFC, the IMF’s governing body.

The leaders said that Europe would do “whatever is necessary” to resolve the crisis.

Billionaire investor George Soros, speaking on the sidelines of the IMF meeting, said that the crisis is worse than the global financial crisis in the wake of the collapse of Lehman Brothers in the fall of 2008.

“In 2008 the right authorities to deal with the crisis were in place. Now they have to be created,” Soros said.
…

Reaction to Ron Paul shows some Americans are exceptionally stupid
Published: Sunday, September 18, 2011, 2:00 AM
Updated: Monday, September 19, 2011, 12:07 PM
Paul Mulshine/The Star Ledger By Paul Mulshine/The Star Ledger

File Photo
Ron Paul: He irritates more idiots in fewer words than any American politican ever.

Among my least favorite clichés is that one about “speaking truth to power.” It’s easy to speak truth to powerful people. There aren’t many of them and they don’t care what you say.

What really takes nerve is to speak truth to knuckleheads. There are tens of millions of them. And they get to vote.

That is the charm of Ron Paul. I think I can say, without fear of contradiction, that no politician in recent history has irritated so many knuckleheads in so few words.

The high point had to be last week at that tea party debate in Florida. A questioner asked whether the candidates favor cutting defense spending to balance the budget. Given the fact that every candidate opposes tax hikes, the only intelligent response had to be, “Of course.”

But when the Texas congressman said exactly that, he set off a sort of knucklehead revolt. Paul started with an assertion that the armed forces should be used solely for defensive purposes. Many Republicans would agree with that. But Paul felt a need to needle the knuckleheads:

“The purpose of al Qaeda was to attack us, invite us over there, where they can target us and they have been doing it,” said Paul. “They have more attacks against us and the American interests per month than occurred in all the years before 9/11, but we’re there occupying their land.”

After Paul went on to ask how we’d feel if we were invaded by China, the No. 1 knucklehead in the race, Rick Santorum, got a chance to reply. He’d been standing there with his jaw open like a flounder and he rose to the bait like it was a chunk of fresh squid.
…

I’m really surprised by the number of People commenting on this blog who claim gold is a bubble.

Currently with one of the lowest participation rates by investors, how can gold be said to be in a bubble?

Marc Faber wrote on his blog, “…I could make an analysis to show that the price of gold today is probably cheaper than when it was 300 dollars per ounce based on the increase in government debt, based on the increase in monetary base in the United States and based on the expansion of wealth in Asia.”

And, I suppose somehow after 5000 years of gold being money, suddenly it’s not? This time it’s different?

It just seems to me gold does not measure up to any of the qualities housing did.

This is the Syracuse “Oil City Plan”. The south street in Auburn is a nice neighborhood.

http://williammcrossrealty.com/propertydetail.php?propertyID=615&photoID=14

Kangaroo clerk. Get on the ground!

Police: Drunk woman tried to rob store with toy gun

By Arelis R. Hernández
Orlando Sentinel

Posted: 12:37 p.m. Sunday, Sept. 25, 2011

A drunk Brevard County woman tried to rob a convenience store early Sunday morning using a toy gun, police said.

Palm Bay Police spokeswoman Yvonne Martinez said 19-year-old Wilnelia Caraballo walked into the Kangaroo Express at 2595 Emerson Drive about 5:51 a.m., wearing a clear plastic mask, holding a “Uzi-type gun” and intoxicated.

The store clerks were in the back of the store and saw Caraballo walk behind the front counter, police said.

One of the clerks, who was stocking a cooler, yelled at the would-be robber saying, “Palm Bay police. Get on the ground!”

Caraballo did as she was told—initially. As she stood up, a second clerk grabbed her and held on until police arrived moments later.

Martinez said Caraballo was taken to the Brevard County jail and charged with attempted armed robbery.

There has never been a better time to execute a short sale.

For homeowners in trouble, a tough decision to make
By Michelle Singletary, Published: September 24

The time is limited for homeowners who want to ensure they aren’t hit with a big tax bill because they had to walk away from a mortgage obligation.

At the height of the housing crisis, when foreclosures across the country began a troubling increase, Congress passed the Mortgage Forgiveness Debt Relief Act of 2007, designed to provide at least some consolation to folks who had lost their homes.

But it gets complicated.

If you borrow money and the lender then cancels or forgives the debt, you generally have to include the canceled amount as income for tax purposes. As the IRS explains, you aren’t taxed on borrowed money because you have an obligation to repay it. However, if the debt is wiped out, the lender is then required to report the amount of canceled debt to you and the IRS on a Form 1099-C, Cancellation of Debt.

You can imagine the frustration that many people had with this seemingly unfair tax rule. They had lost their homes and then discovered in a “you’ve-got-to-be-kidding-me” moment that they owed taxes on the forgiven debt.

That’s where the mortgage debt relief act comes in. It allows people to exclude income from the discharge of debt on their principal place of residence. In addition to foreclosure, debt reduced because of a mortgage restructuring also qualifies for relief under the new law.

As always, there’s a catch.

The law says that only debt forgiven in calendar years 2007 through 2012 is eligible. Up to $2 million of forgiven debt qualifies for this exclusion ($1 million if married filing separately).

To get the relief, debt must have been used to buy, build or substantially improve a principal residence and be secured by that residence. So if you refinanced and took money out of the house to pay off credit card debt, you won’t receive the exclusion. Debt forgiven on second homes, rental property, business property, credit cards or car loans also does not qualify for the tax relief.

If you’re clinging to your house but it’s looking as though you won’t be able to hang on, the best time to get out from under the mortgage is before the debt relief law sunsets. This is particularly true if you are thinking about a short sale. That’s when the lender allows the borrower to sell the house for less than what is owed. Often, the borrower can negotiate to have the remaining balance on the mortgage forgiven.

Some states have made it easier for folks to go through the short-sale process. For example, a new law in California says that if lenders agree to a short sale — whether they hold a first or second lien — they have to forgive all outstanding loan balances.

The tax rule has become particularly important as more homes are sold through short sales, which accounted for 12 percent of all housing sales in the second quarter, up from 10 percent for the same period last year, according to RealtyTrac.

However, here’s the problem if you wait too long to start the process: Short sales are being dragged out for months. Talk to real estate professionals and many might suggest the term short sale be changed to “long sale.” I’ve seen several people who wanted to buy a home through a short sale walk away because the transaction was moving too slowly.

Pre-foreclosures sold in the second quarter took an average of 245 days to sell after receiving the initial foreclosure notice, according to RealtyTrac.
…

September 25, 2011 9:30 pm
US tax authorities target bank deals
By Vanessa Houlder and Megan Murphy in London and Jeff Gerth in Washington

US tax authorities are targeting cross-border finance deals worth billions of dollars between leading US and UK banks as they step up efforts to clamp down on abusive tax avoidance, a joint investigation by the Financial Times and ProPublica, the not-for-profit news organisation, has found.

Four US banks – BB&T, Bank of New York Mellon, Sovereign (now part of Santander of Spain), and Wells Fargo – are in turn suing the US government over more than $1bn in tax credits that the Internal Revenue Service has disallowed over the past decade. Washington Mutual has settled a similar dispute and Wachovia is pursuing an administrative complaint over a deal.

The UK’s Barclays emerges as a pivotal promoter of the complex cross-border deals, which the IRS claims were designed to generate artificial foreign tax credits.

The cases have become a crucial early battleground between the US and multinational banks and companies in the wider debate over so-called tax arbitrage, and whether companies exploit gaps between international tax systems to benefit their bottom lines.

Foreign tax credits are intended to prevent taxpayers from being taxed twice. Some of the deals now cited by the IRS involve a single payment of tax by a company in one country, yielding credit and benefits for two taxpaying companies in two countries.

Documents in the IRS cases portray financial institutions and their counterparties as symbiotic partners in transactions that played off one country’s tax laws against another’s. At issue is whether the deals improperly lightened US banks’ tax burdens.
…

September 25, 2011 7:35 pm
Debt talks fail to agree solution
By Alan Beattie and Tom Braithwaite in Washington
Greece and the Euro

The International Monetary Fund annual meetings wrapped up in Washington on Sunday with widespread concern over the eurozone sovereign debt crisis but no immediate consensus on the solution.

Participants said they were waiting for the ratification of the action plan agreed on July 21 by the eurozone, particularly by the German Bundestag this week, before starting serious negotiations on increasing the rescue fund’s firepower or asking for a bigger writedown in private sector holdings of Greek debt.

Meanwhile, Greece continued to insist it would not default, despite widespread private pessimism among attendees at the meetings.

Josef Ackermann, chief executive of Deutsche Bank, on Sunday criticised suggestions among some G20 officials about revisiting a planned rescheduling of private bondholdings – a central part of a planned second eurozone-IMF rescue package for Greece agreed in principle on July 21.

Wolfgang Schäuble, Germany’s finance minister, on Saturday said: “One has to see whether what has been envisaged in June, July, is still sustainable in the light of more recent developments.”

But Mr Ackermann, speaking as chairman of the Institute of International Finance, a global association of banks and finance houses, rejected any suggestion of a major revision to current plans, which were based on an IIF proposal. “If we now start reopening that Pandora’s box we lose a lot of time and I’m not sure people will be willing to participate,” he told reporters. “It was not a contract, but it was a clear agreement in Brussels with the official sector.”
…

Financial Crisis
David Cameron: world on brink of new economic crisis
The world stands on the brink of a new economic crisis that would leave countries like Britain “staring down the barrel”, David Cameron has warned.
By Jon Swaine, in New York and James Kirkup
11:01PM BST 22 Sep 2011

The Prime Minister said that the failure of leaders in the US and Europe to tackle government deficits now “threatens the stability of the world economy”.

Mr Cameron spoke as stock markets around the world fell sharply again, with the FTSE–100 suffering its biggest drop for more than two years.

Politicians, central bankers and investors are increasingly worried that the world’s biggest economies are sliding back into a recession, dragged down by government debts.

More gloomy economic data yesterday led one of the world’s leading economists to say that Britain, the US and the eurozone are all already in recession, and warn of a second financial crisis worse than that of 2008–9. The Prime Minister spoke in Canada after delivering a blunt warning to President Barack Obama and eurozone leaders about the need to follow Britain’s example and curb their deficits.

In a speech in Ottawa, Mr Cameron said that Western politicians must show more “leadership” and warned that political indecision would only worsen the crisis.
…

Correlation Bets Climbing as Europe Overwhelms Earnings: Options
By Jeff Kearns and Cecile Vannucci - Sep 16, 2011 8:46 AM PT

A man talks on the phone in front of the New York Stock Exchange in New York. Traders are speculating correlation among equities, already the highest since the crash of 1987, will increase as the threat of a banking crisis in Europe drowns out news about individual companies. Photographer: Paul Taggart/Bloomberg

U.S. options traders see almost no chance that earnings, dividends or buybacks will influence stock prices through the end of 2011, instead placing record bets that equities move in lockstep in reaction to Europe’s debt crisis.

The Chicago Board Options Exchange S&P 500 Implied Correlation Index has jumped 35 percent since the end of July to 80.15 at 11:42 a.m. New York time, and reached 81.52 on Sept. 14, the highest level ever. The gauge uses options to measure expectations for how much Standard & Poor’s 500 Index shares will move together.

Traders are speculating correlation among equities, already the highest since the crash of 1987, will increase as the threat of a banking crisis in Europe drowns out news about individual companies. Equity prices moving in unison have hurt returns for money managers who seek relative value among stocks and industries, leaving hedge fund managers with fewer ways to beat their benchmark measures.

“Europe is a big macro issue and it’s so pervasive that at the top of investors’ minds, there’s nothing to do with individual companies,” Scott Billeadeau, who helps oversee about $17 billion at Fifth Third Asset Management in Minneapolis, said in a telephone interview. “There’s been no individual stock selection going on,” he said. “I’m just buying stocks or I’m selling stocks, versus buying IBM and selling Hewlett-Packard.”
…

POLITICS
SEPTEMBER 26, 2011

Congress Forced to Stay as a Shutdown Looms
BY NAFTALI BENDAVID

Congress was scheduled to be off this week, but lawmakers must stay in Washington because they made no progress over the weekend in settling a dispute over spending that threatens a possible government shutdown.

Despite promises to work together following a public backlash against the bickering that consumed much of the summer, Republicans and Democrats face the reality that disaster aid could run out Tuesday and the government could partially shut down beginning this weekend unless they strike a deal quickly.
…

September 24, 2011, 8:54 AM ET

Morgan Freeman Calls Tea Party ‘Racist’ (Video)
By WSJ Staff

Morgan Freeman says the Tea Party’s hostility towards President Obama and his agenda is rooted in racism.

Speaking on the CNN program “Piers Morgan Tonight,” the Oscar-winning actor said the Tea Party’s goal is “screw the country, we’re going to do whatever we can to get this black man out of here.”

Freeman concluded: “It is a racist thing.”

The actor said the rise of the Tea Party was a disturbing development. “It just shows the weak dark underside of America,” he said. “We’re supposed to be better than that. We really are. That’s why all those people were in tears when Obama was elected president. ‘Ah look at what we are–this is America.’ Then it just sort of started turning because these people surfaced–like stirring up muddy water.”

He said he was “kind of” disappointed that President Obama wasn’t more aggressive in taking on the Tea Party. “He was trying to hold on to his own promise that he would be president of all the people,” Freeman said.

You can watch the video here.
…

22 September 2011 Last updated at 19:06 ET
Has Western capitalism failed?

Twenty years ago, the fall of communism in Eastern Europe seemed to prove the triumph of capitalism. But was that an illusion? Constant shocks to the world’s financial system over the past few years prompted the BBC World Service’s Business Daily programme to ask leading figures whether they thought Western capitalism had failed.
…