The Housing Bubble

Greetings from India!

Perhaps there is cause for hope that free speech on the internet will survive, after all.

Internet uprising shuts down anti-piracy bill
Internet uprising pressures shaken Congress to shelve Hollywood’s anti-piracy bill
By JIM ABRAMS, Associated Press
Published 11:36 p.m., Friday, January 20, 2012

WASHINGTON — Caving to a massive campaign by Internet services and their millions of users, Congress indefinitely postponed legislation Friday to stop online piracy of movies and music costing U.S. companies billions of dollars every year. Critics said the bills would result in censorship and stifle Internet innovation.

The demise, at least for the time being, of the anti-piracy bills was a clear victory for Silicon Valley over Hollywood, which has campaigned for a tougher response to online piracy. The legislation also would cover the counterfeiting of drugs and car parts.

Congress’ qualms underscored how Internet users can use their collective might to block those who want to change the system.
…
The scuttling, for now, of PIPA and SOPA frustrates what might have been one of the few opportunities to move significant legislation in an election year where the two parties have little motivation to cooperate.

Until recently “you would have thought this bill was teed up,” with backing from key Senate leaders and support from powerful interest groups, said Sen. Jerry Moran, R-Kan., who cosponsored the original bill but quickly dropped his backing on the grounds the bill could undermine innovation and Internet freedom.

Moran said the “uprising” of so many people with similar concerns was a “major turnaround, and in my experience it is something that has happened very rarely.”
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Gee, what a surprise..

http://www.chicagotribune.com/news/sns-rt-us-crime-head-hollywoodtre80k04s-20120120,0,3914924.story

I’m shocked, I tell you, shocked!

How is the Fed’s housing bubble reflation program shaping up so far?

The Wall Street Journal
REVIEW & OUTLOOK
JANUARY 11, 2012

The Fed’s Housing Politics
The central bank compromises its independence with rank electioneering.

These columns have defended the independence of the Federal Reserve from attacks on the right and left, but after last week the central bank is on its own. It’s impossible to defend the Fed’s rank electioneering as it lobbies for more political and taxpayer intervention in the housing market—just in time for the election campaign.

This extraordinary political intrusion came in the form of a 26-page paper that the Fed sent to Capitol Hill last Wednesday, without invitation, graciously offering what Chairman Ben Bernanke called a “framework” for “thinking about certain issues and tradeoffs.” He was underselling his document. The paper is a clear attempt to provide intellectual cover for politicians to spend more taxpayer money to support housing prices.

In case there was any doubt on this point, New York Fed President William Dudley put them to rest Friday when he called specifically for bridge loans for jobless borrowers, more government-assisted refinancings, a new program for principal reductions for underwater borrowers, and floated the possibility of getting Fannie Mae and Freddie Mac into the rental housing business. Your average HUD secretary wouldn’t dare go this far.

As America’s central bank, the Fed is responsible for monetary policy and bank regulation. During and since the financial panic, and in the name of preventing a meltdown, the Fed has bought mortgage-backed securities to provide liquidity for housing and keep down mortgage rates. This is a form of credit allocation and should be winding down, though it is at least arguably within the emergency purview of monetary policy.

It is a far different matter to tell Congress and the executive branch that they ought to rescue homeowners who borrowed more than they can afford to repay, or strong-arm banks to loosen credit standards for borrowers, or further entrench government-sponsored enterprises (Fan and Fred) that have already cost taxpayers $142 billion in losses. These are core political questions that belong to elected officials.

The intrusion is especially ill-timed because it looks like an attempt to further isolate Edward DeMarco, Fannie and Freddie’s politically beleaguered regulator. House Republicans have closed off another housing bailout from Congress, so Administration officials and Capitol Hill Democrats are desperate to unleash Fannie and Freddie to spend even more to rescue underwater homeowners.

Their main obstacle is Mr. DeMarco, who has bent a little to accommodate the Treasury’s expanded refinancing program but rightly says he has a legal mandate to protect taxpayers. The Fed white paper acknowledges that committing more taxpayer money to its housing brainstorms could stick Fan and Fred with more losses, but it suggests this is worth promoting a faster housing recovery. How about we put that gamble to a taxpayer vote? In any event, it’s disgraceful for the Fed to contribute to the mau-mauing of a fellow regulator.

The advice to let Fan and Fred rent out foreclosed properties they own until prices rise also goes against the lesson of previous housing recoveries. Prices recover faster—recall the Resolution Trust Corp. after the savings and loan bust—when the government sells property as quickly as possible, so prices can find a bottom. The last thing housing markets need is an extended Fannie and Freddie inventory overhang.

The Fed also suggests having Fan and Fred weaken their standards for loan modifications and expand an existing refinancing program to include private-insurance-backed mortgages participate. But weak lending standards is part of what created the subprime mortgage mess. No wonder the mortgage bankers, the homebuilders and the rest of the housing lobby greeted the Fed’s white paper with enthusiasm. They’d love to see Fannie and Freddie more politically and economically entrenched so reformers can’t slowly reduce their market dominance.

The Fed will no doubt justify all of this by claiming that the larger economy can’t recover until housing does. Yet this confuses cause and effect. Housing recoveries don’t lead economic recoveries; they occur as part of the larger recovery as incomes begin to rise and consumer confidence grows. It’s precisely this “housing must save the day” mentality that caused the Fed to keep interest rates too low for too long after the dot-com bust and 9/11. This promoted the housing bubble and led to the mania and crash. By force-feeding a housing recovery, the Fed is misallocating resources that will make the expansion less durable.
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The Masters of the Universe ain’t all that…

1/13/12 at 8:14 AM
The Fed Really Couldn’t Comprehend Economics in 2006
By Joe Coscarelli

Treasury Secretary Timothy Geithner testifies on Capitol Hill in Washington, Wednesday, June 22, 2011, before the House Small Business Committee hearing on “The State of Small Business Access to Capital and Credit”. (AP Photo/Evan Vucci) Timothy Geithner.

The problem with private conversations that later become public is that they’re almost always humiliating, because the passage of time brings with it new information that often invalidates past opinions or illuminates old ignorance. For the Federal Reserve, whose 2006 meeting transcripts have been released after a standard five years, it’s all that and more, considering the financial meltdown that followed their talks and the depth of their cluelessness. Despite some signs that the housing market was beginning to crumble, officials showed few signs of concern — actually, they worried that the economy was growing too fast.

The transcripts “clearly show some of the nation’s pre-eminent economic minds did not fully understand the basic mechanics of the economy that they were charged with shepherding,” the New York Times reports. “The problem was not a lack of information; it was a lack of comprehension, born in part of their deep confidence in economic forecasting models that turned out to be broken.”

“We think the fundamentals of the expansion going forward still look good,” said Timothy Geithner, then president of the Federal Reserve Bank of New York, in December 2006, a few years before he became Treasury secretary. A few months earlier, of the housing market issues, he said, “We just don’t see troubling signs yet of collateral damage, and we are not expecting much.”

Others concurred, and thought maybe the housing slump would actually improve the economy. “I really believe that the drop in housing is actually on net going to make liquidity available for other sectors rather than being a drain going forward, and that will also get the growth rate more positive,” said Fed governor Susan Bies. “Of course, housing is a relatively small sector of the economy, and its decline should be self-correcting,” said another official.

“It’s embarrassing for the Fed,” said an economics professor of the transcripts. “You see an awareness that the housing market is starting to crumble, and you see a lack of awareness of the connection between the housing market and financial markets.”

“It’s also embarrassing for economics,” he added. “My strong guess is that if we had a transcript of any other economist, there would be at least as much fodder.”
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Fed Will Delay Action on Potential ‘QE3′
Jan. 20, 2012

WSJ’s Jon Hilsenrath reports Federal Reserve chairman Ben Bernanke has indicated the Fed will hold off on any new potential rounds of bond purchases to inject cash into the economy, known as quantitative easing. AP Photo/Carolyn Kaster

Franklin Raines, Ghost Defendant
Posted 01/20/2012 07:17 PM ET

Subprime Scandal: Obama adviser Franklin Raines is glaringly absent from an SEC lawsuit against Fannie Mae and Freddie Mac executives for defrauding investors. How convenient.

Raines first plunged Fannie into the subprime abyss as its chairman and chief executive from 1999 to 2005 while cooking the mortgage giant’s books to score fatter bonuses for himself and other Democrats on its board.

In its complaint against Fannie, however, the Obama administration covers only the period from 2006 to 2008 and names Raines’ successor and former protege, Daniel Mudd, as the main defendant. Raines is nowhere to be found in the SEC’s 60-page court filing.

Instead, Mudd and two of his top aides are accused of covering up the full extent of Fannie’s subprime exposure. But that exposure and cover-up began under Raines, who rolled out Fannie’s first subprime mortgage line, known as Expanded Approval.

The program let Fannie’s customers rubberstamp borrowers who would have been formerly classified as “Refer with Caution” by Fannie’s automated underwriting system.

Raines had Fannie buy billions of dollars worth of the risky mortgages, which were described in internal emails as “clearly subprime,” to meet “affordable housing” quotas set by HUD. In May 2001, Mudd wrote a memo to his boss warning that EA loans “are the highest default risk loans we have ever done.”

It was also under Raines that Fannie partnered with Countrywide Financial to buy, in increasing volumes, the subprime lender’s Fast & Easy no-documentation mortgages. These loans were specifically targeted toward borrowers with weaker credit histories.

When these high-risk loans started defaulting by the mid-2000s, Fannie did not include them in its portfolio disclosures to Wall Street. It claimed a fraction of the subprime exposure it actually had.

But Fannie’s mission regulators in Washington were perfectly aware of the subprime exposure. After all, it was HUD that set them on that dangerous path in 2000 when it raised the affordable-home loan target to fully 50% of total mortgage holdings — and demanded Fannie specifically load up on subprime home loans to meet the higher target.

The new policy remained in effect through late 2004, when Raines was forced to resign under an ethical cloud, and beyond.

Raines, who was appointed to Fannie’s board by President Clinton, coordinated the reckless foray into subprime with former HUD chief Andrew Cuomo, who announced the new goals in 2000, explaining:

Fannie’s and Freddie’s “expanded presence in the subprime market could be of significant benefit to lower-income families, minorities and families living in underserved areas.”

Gov. Jerry Brown urges Obama to appoint new housing regulator
January 16, 2012 | 3:18 pm

Then-California Atty. Gen. Jerry Brown gives a speech at the Moving America Forward rally on the USC campus Oct. 21, 2010

Joining California’s congressional Democrats, Gov. Jerry Brown is calling on President Obama to appoint a new federal housing regulator, saying the acting director is “hindering California’s economic recovery and harming state efforts to promote clean energy.”

In a letter to the White House last week, Brown echoed the concerns of more than two dozen House Democrats, arguing that the Federal Housing Finance Authority under Acting Director Edward DeMarco has “ignored” the Golden State’s foreclosure crisis by “failing to exercise its full authority over residential mortgages underwritten by Fannie Mae and Freddie Mac,” the housing finance agencies seized by the government in September 2008 as mortgage losses mounted.

According to Reuters, DeMarco, who has never been selected as the FHFA’S permanent director, has argued that the roughly $169 billion in taxpayer-funded support paid out to Fannie Mae and Freddie Mac was meant to get them back on their feet, not to provide relief to the housing market.

Brown also said DeMarco had “completely sabotaged” the Property Assessed Clean Energy program, which encouraged homeowners to use bond-backed property tax assessments to install solar panels and make insulation improvements. The program, suspended in 2010, “could be delivering tens of thousands of jobs in communities throughout America,” Brown wrote.

As California’s attorney general, Brown tried to restart the stalled program by suing the FHFA two years ago.

In his letter last week, the governor asked Obama to appoint a permanent director “who will truly represent your policies.”

This article reminds me of a doctor who mistakes severe constipation for a sign of recovery from a disease whose symptoms include diarrhea.

January 19, 2012, 1:46 PM
Housing Inventory Ends Year Down 22%
By Nick Timiraos

There were fewer homes listed for sale at the end of 2011 than in any of the previous four years, a positive sign for the housing sector.

But appearances can be deceiving, and it remains to be seen whether the drop is the beginning of a real recovery or if inventory is being held down by sellers waiting for prices to pick up and banks moving slowly on foreclosures.

The 1.89 million homes on the market at the end of December represented a 6% decline from November and a 22.3% decline from one year ago, according to data compiled by Realtor.com.

Low inventories are an important ingredient for any housing recovery because prices could firm up in markets that have worked through their inventory.

Still, some real-estate agents aren’t celebrating because there’s a large backlog of potential foreclosures that haven’t yet been taken back and listed by banks. The inventory declines are particularly pronounced in certain states where banks have sharply slowed down foreclosures to correct document-handling abuses.

Moreover, some sellers have pulled their homes off the market to wait for a turn in prices, and that “pent up” demand from sellers could keep inventories higher once prices do rise.

Inventories were down for the year in all but one of the 145 markets tracked by Realtor.com, with Springfield, Ill., posting the only year-over-year inventory gain. The largest declines were recorded in Miami (-49.7%), Phoenix (-49.1%), and Bakersfield, Calif. (-46.6%).
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Next up in the slowest market collapse ever on record:
Accelerating home sales accompanied by sliding prices.

Bargain prices may hurt housing market
Ohio follows trend of distressed areas, where growth is sluggish.

The troubled real estate market contributes to a slow economic turnaround, said Ken Mayland, president of ClearView Economics, a suburban Cleveland-based firm specializing in economic research and forecasting.

By Randy Tucker, Staff Writer Updated 10:57 PM Friday, January 20, 2012

Ohio last year posted its first gain in single-family home sales since 2005, but until the inventory of distressed properties is cleared, a quick recovery in the housing market remains unlikely, an economic researcher said.

The troubled real estate market also contributes to a slow economic turnaround, said Ken Mayland, president of ClearView Economics, a suburban Cleveland-based firm specializing in economic research and forecasting.

“Many mortgages are seriously delinquent and soon will default or come close to defaulting,” Mayland said. “It’s going to take awhile for us to clear that overhang, and that means housing as a contributor to the economy’s recovery and job generation is going to be very, very much on the light side.”

Total home sales in Ohio rose 0.1 percent to 99,881 last year compared with 2010, according to figures released Friday by the Ohio Association of Realtors.

But average sales prices fell by 3.6 percent to $127,838 for Ohio and 5 percent to $115,891 in the Dayton area, according to state and local Realtors associations. Sales fell 2.7 percent in the Dayton area to 10,463 homes.

Experts say the trends reflect bargain-hunting in distressed markets, where deeply discounted foreclosures and short-sales stimulate sales but push down home prices.
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“The Florida banking industry has returned to profitability, and bad loans have subsided, and that’s why you’ve seen fewer failures.”

I wonder if any of the mortgages the Federal Reserve purchased were from Florida? Nah couldn`t be.

Failures of Florida banks slowed in 2011

By Jeff Ostrowski
Palm Beach Post Staff Writer
Posted: 7:15 p.m. Friday, Jan. 20, 2012

Failures of Florida banks slowed in 2011, a welcome respite for the state’s financial industry and for the Federal Deposit Insurance Corp.’s beleaguered insurance fund.

The number of failures of Florida-based banks peaked at 29 in 2010, then fell to 13 last year.

In a more dramatic decline, the total cost of Florida bank failures fell from $2.4 billion in 2010 to $619 million in 2011, according to a Palm Beach Post analysis of FDIC data.

“I wouldn’t paint too rosy a picture for Florida, but there is improvement,” said Gene Kirsch, senior banking analyst at Weiss Ratings in Jupiter.

“The Florida banking industry has returned to profitability, and bad loans have subsided, and that’s why you’ve seen fewer failures.”

Florida’s banking industry returned to profitability in 2011 for the first time since 2007, Kirsch said. However, Florida banks remain less profitable than the national average, and they continue to carry more bad loans.

“Our banks are a reflection of the economy,” said Alex Sanchez, president of the Florida Bankers Association. “We’re hopefully getting to the end of this.”

http://www.palmbeachpost.com/money/failures-of-florida-banks-slowed-in-2011-2114926.html - 75k

Eurozone to suffer recession in 2012 - report
1/20/2012 5:58:00 PM | Kuwait News
تصغير الخطتكبير الخط
Kuwait Finance House

KUWAIT, Jan 20 (KUNA) — The European Central Bank (ECB) is expected to continue its tough policy after the latest drop in the rates of interest on the euro, as a result of the uncertainty and looming economic risks that pose a threat to most countries in the euro region, a specialized economic report showed Friday.

The report, issued by Kuwait Finance House’s Research Department, pointed out that further drops are expected on the interest rate of the euro, where the ECB is expected to resort to a further shedding of interest rates by 25 points during the first quarter of this year.
It also forecasts that the euro zone will enter total recession this year in light of the current unfavorable conditions that were topped by Standard Poor’s downgrading of sovereign debts for European countries.
As widely expected, the European Central Bank (ECB) left its key interest rate on hold at 1.00 percent during its council meeting on 12 January 2012- the first monetary policy decision of the New Year. The Bank also left the rate of the deposit facility unchanged at 0.25 percent, just as the rate on the marginal lending facility remained at 1.75 percent.

The report added that no further non-conventional measures had been announced this time around. We believe that the bank would to see the effectiveness of the previous measures to funding in the banking system before making any moves.
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Greek talks continue despite creditors ‘leaving Athens’
Crunch talks to thrash out how big a haircut Greece’s private bondholders can withstand are set to continue despite representatives of the creditors reportedly leaving Athens.

Greek Finance Minister Evangelos Venizelos leaves Maximou mansion
after a meeting with Charles Dallara and Jean Lemiere from the Institute of International Finance on Friday. Photo: AP
Rachel Cooper

By Rachel Cooper, and agencies
1:51PM GMT 21 Jan 2012

Greece’s finance minister Evangelos Venizelos said that negotiations would continue on Saturday after a four-and-a-half hour meeting with officials broke up in the early hours of the morning.

But at lunchtime on Saturday, there were reports that representatives of Greece’s private creditors had left Athens unexpectedly without a deal on the debt swap plan that is vital to avert a disorderly default.

Charles Dallara, managing director of the Institute of International Finance, a Washington-based lobby group representing creditors negotiating with the government, was said to have flown to Paris. Jean Lemierre, special adviser to the chairman, was also thought to have left for the French capital.

Negotiations will continue over the phone, but it is thought to be unlikely that an agreement can be clinched before next week.

Athens is anxious to strike a deal with its creditors before a meeting on Monday of eurozone finance ministers, just in time to set in motion the paperwork and approvals necessary to receive the next tranche of aid and avoid a messy bankruptcy in March when it faces €14.5bn of bond repayments.
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It’s great to see the MSM has moved on past the question of whether the Chinese economy lives in a bubble to important related issues, such as where the bubble originated.

Jan. 20, 2012, 12:01 a.m. EST
China’s stock bubble was made in the U.S.A.
Commentary: Eager investors bought first and asked questions too late
By Junheng Li

NEW YORK (MarketWatch) — When a hot investment theme feeds on investor greed, ignorance and laziness — and is further inflated by unscrupulous, opportunistic investment banks — ugly things tend to happen, as U.S. investors in Chinese stocks are learning.
…

In interesting example of how the corporatist-owned MSM attempts to consign a major but inconvenient news story to the memory hole is thwarted by more than a million visitors who logged onto the RT site to get the real story on the Megaupload shutdown. It is truly pathetic that Americans who desire real news and real truth have to seek it out from foreign media or blogs rather than our major media outlets. It’s encouraging, of course, that a small but growing number of non-sheep are actively taking responsibility for informing themselves and thinking for themselves, rather than parking in bovine complacency in front of their Tee Vee a la Obama Zombies or McCain Mutants to take in Ministry of Truth corporatist propaganda or “soft news” about Lindsey Lohan, et al.

https://rt.com/usa/news/rt-megaupload-anonymous-online-317/

Over one million unique visitors logged on to RT.com in the last 24 hours, and while we can’t say that a particularly well-crafted headline or social media campaign got us that far, we do have an idea how it happened.

At RT, we suspect that the recent surge in traffic has something to do with us serving as the only major news source following the biggest story of the day.

On Thursday afternoon, news broke that some of the biggest websites belonging to the US government and the entertainment industry were collapsing, one-by-one. The action, retaliation for a raid earlier that day on the file sharing service Megaupload, escalated over the course of hours and eventually crippled the websites for the Federal Bureau of Investigation, the US Justice Department and the Recording Industry Associate of America, among others.

But even if you weren’t trying to get a job with the FBI, browsing case records or checking sales stats on the new Justin Bieber EP, you might not know that several major entertainment and government websites were shut down.

That’s because even though thousands of hacktivists attacked the websites for the FBI, the US Copyright office, the DoJ and the RIAA — along with several other related sites — on Thursday, the mainstream media by and large were blind to a massive campaign launched by some very angry users of the World Wide Web.

The mainstream media did cover, to a degree, an early Thursday raid on the website Megaupload, a crackdown that involved arresting several affiliated persons for their role in what US authorities say was a massive conspiracy that raked in millions of dollars, robbed the entertainment world of potentially billions and violated an entire slew of copyright laws. The aftermath, however, an online attack launched at both the Hollywood and Washington DC entities responsible for the raid — went unnoticed.

That is, of course, except for on RT.

Apparently, the U.S. housing market is not the only industry in the globalized economy which is currently suffering from an inventory glut.

Shipping Index Drops Below 1,000 for First Time Since 2009 on China Demand
By Michelle Wiese Bockmann - Jan 17, 2012 7:09 AM PT

The Baltic Dry Index, a measure of commodity shipping costs, fell below 1,000 points for the first time since January 2009 on signs Chinese demand for iron ore cargoes is slowing, exacerbating a glut of vessels.

The index slid for a 20th session to 974 points, extending this year’s slump to 44 percent, data from the London-based Baltic Exchange show. Charter rates fell for all four vessel types within the gauge. The largest decline was for capesizes carrying the steelmaking raw material, which fell 8.3 percent.

Weakening demand for iron ore in China, the biggest consumer, is resulting in fewer charters of the vessels, said Kasper Moller, director of shipbroker Maersk Broker Asia. Capesizes represent about 40 percent of the global fleet of commodity carriers, estimates Clarkson Plc, the world’s largest shipbroker.

“If the Chinese market just takes its foot off the accelerator for a second that has an immediate impact,” Moller said by phone from Beijing today. “We’re having a lot of new ships being delivered, too.”

China, the biggest source of global shipping demand, is slowing iron ore imports before Lunar New Year holidays that start on Jan. 23, Oslo-based RS Platou Markets AS said yesterday. Weather-related port disruption curbed shipments from Australia and Brazil while rains in Colombia and Indonesia have constrained coal exports.

The slowdown coincides with deliveries of new ships that are expanding faster than demand, according to Maersk Broker. Trade will swell 8 percent this year compared with 12 percent for the fleet, it estimates.
…

So long as the U.S. stock market keeps on rallying the way it has so far in 2012, I see nothing to worry about here.

WSJ Blogs
The Euro Crisis
Real-time updates and analysis of Europe’s debt crisis

January 18, 2012, 7:43 AM

Baltic Dry Index Falls to 2009 Levels

The Baltic Dry Index is collapsing again.

This composite of commodity shipping costs has fallen below the 1000 level for the first time since January 2009. Moreover, it’s been down for 20 successive sessions and is having a dismal 2012, having shed 44% already.

Now, of course, this raises the Ghost of Crises Past. For the BDI also leapt off a cliff back in 2008. From an astonishing peak of 11,793 in May, it had plunged 94%, to 663, by December 3. This was a horribly clear sign that the financial crisis had come raging out of the trading rooms to throttle global trade and the credit on which it depended. And our 20:20 hindsight glasses tell us that, in effect, the index was carrying around more than 11,000 points’ worth of groundless optimism at that peak. So much for the wisdom of markets.

So, what’s different now? Why is this latest swoon confined to shipping journals rather than rampant on mainstream front pages.

Well, Sigmund Freud is said to have once trumped those who endlessly search for deeper meaning by pointing out that ‘sometimes a cigar is only a cigar’. In a similar vein, sometimes a shipping price index just tells us about shipping.

And there are rather a lot of ships.

Shipowners were no more immune to pre-crisis irrational exuberance than anyone else. So, sure enough, they ordered a vast fleet, fit for the gleaming future so assured before credit crunched.

Well, you know what happened next. However, building and delivering ships takes a long time so what we have, it seems, is a pre-crisis global fleet for a post-crisis global economy.

It was reported at the start of last year that, if all the vessels due for delivery in 2011 could sail bow to stern, the line would stretch for more than 30 miles. There will have been cancellations and mothballing since, but Maersk Brokers still forecasts that trade will increase by 8% this year, compared with a 12% increase in the fleet.

Of course, you can’t talk about shipping for long these days without talking about China. And the price of hiring Capesize vessels, the key ships taking iron ore there, has led the overall BDI decline.
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Hi. When peoplle talk about deleveraging is ti businesses or more the economy htat is deleveraging? And it is it deleveraging from the debt or easy credit? What the proper use of the term(s)? Thanks.

More inflation (not)
The Dawn of Lower Pay on Wall Street (NYT, 21 Jan)
http://www.nytimes.com/2012/01/21/business/a-new-era-of-lower-pay-on-wall-street-common-sense.html?_r=1&hp

A few days I wrote to someone looking Wash, DC that prices might not drop as quickly as she would like but one would get more house for the same price. That is happening here (suburban Boston) as the spring inventory hits the market. The new inventory gets better and better while the overpriced just sits and looks almost laughable. The contrast in pricing gets more stark all the time. There are some houses that have been for sale for two years with an occassional price drop of a whopping 1% or 2% and total price drop of 5% to 10%.

Timmy’s “medium” coffee is suddenly a lot larger in Canada. You might think you’re getting something for nothing, but actually you are getting more than you asked for and paying for every bit. They simply changed the name of the “large” size to “medium”. You still pay the “large” price. Biggie sized without being asked. Brilliant!

They got me on that one, once.

On the short sale “deal” I mentioned here a while back: The bank actually never returned a document that they would go through with the short sale, merely gave a verbal indication that we should continue forward with preparations for a closing. Lawyer advises me that this gives the bank the option to jack the price days before the closing. He has seen it happen. Meanwhile, there appears to be a second that we weren’t informed about that needs to be discharged. Just to top things off, the bank is not picking up the seller’s expenses other than paying the Realtor commission, and poor Mr. FF (Failed Flipper) has no “means”.

Do I have the means to pay seller’s expenses, the Realtor askes, because Mr. FF only makes 200/wk and isn’t getting any proceeds from the sale. Lawyer asks me how much I want this property, becasue it could cost a bundle for him to handle all the seller’s legal fees, and me paying for title abstract, discharge of the second, survey and all……

You all can figure where this goes.

NYT has an article on “Bill from Tampa” types - We’ve got it all wrong with the 1%, its the mobile workers who are making the bucks:

For the last 20 years — from the end of the cold war through two burst bubbles in a single decade — the U.S. has been casting about for its next economic narrative. And now it is experiencing another period of panic, which is bad news for much of the work force but particularly for its youngest members. The U.S. has always been a remarkably itinerant country, but new data from the Census Bureau indicate that mobility has reached its lowest level in recorded history. Sure, some people are stuck in homes valued at less than their mortgages, but many young people — who don’t own homes and don’t yet have families — are staying put, too. This suggests, among other things, that people aren’t packing up for new economic opportunities the way they used to. Rather than dividing the country into the 1 percenters versus everyone else, the split in our economy is really between two other classes: the mobile and immobile.

Part of the problem is that the country’s largest industries are in decline. In the past, it was perfectly clear where young people should go for work (Chicago in the 1870s, Detroit in the 1910s, Houston in the 1970s) and, more or less, what they’d be doing when they got there (killing steer, building cars, selling oil). And these industries were large enough to offer jobs to each class of worker, from unskilled laborer to manager or engineer. Today, the few bright spots in our economy are relatively small (though some promise future growth) and decentralized. There are great jobs in Silicon Valley, in the biotech research capitals of Boston and Raleigh-Durham and in advanced manufacturing plants along the southern I-85 corridor. These companies recruit all over the country and the globe for workers with specific abilities. (You don’t need to be the next Mark Zuckerberg to get a job in one of the microhubs, by the way. But you will almost certainly need at least a B.A. in computer science or a year or two at a technical school.) This newer, select job market is national, and it offers members of the mobile class competitive salaries and higher bargaining power.

Many members of the immobile class, on the other hand, live in the America of the grim headlines. If you have no specialized skills, there’s little reason to uproot to another state and be the last in line for a low-paying job at a new auto plant or a burgeoning green-energy cluster. The surprise in the census data, however, is that the immobile work force is not limited to unskilled workers. In fact, many have a college degree.

The San Diego economy is tilting towards an employment recovery. The dead-tree version of this article had some details I can’t find in the online version:

I often wonder whether the term “shadow inventory” entered the lexicon on this blog, as when I started using it here, there was no mention of it in the MSM, at least to my awareness.

SD jobless rate dips to 8.9%
Seasonal hiring and year-to-year growth push jobless rate to lowest point in nearly 3 years

Written by
Dean Calbreath
8:47 a.m., Jan. 20, 2012
Updated 7:28 p.m.

Holiday retail hiring in December helped push San Diego County’s jobless rate below 9 percent for the first time since April 2009, according to data released Friday from the state Employment Development Department.

The local jobless rate dropped from 9.2 percent in November to 8.9 percent in December.

After adjusting for the year-end surge in hiring at shopping malls and department stores, those numbers would be more like 9.5 percent in November and 9.2 percent in December, said Lynn Reaser, economist with Point Loma Nazarene University.

But even then, it would be the lowest rate since May 2009.

“San Diego’s strengths deriving from the presence of the military, technology, tourism, and health care were clearly evident in 2011,” Reaser said. “San Diego still is not creating enough jobs to absorb the sizable number still looking for work, but the economy is improving. And it outperformed both the U.S. and California in 2011.”
…

This may well have already been posted here - haven’t been reading much this week - but if not, here’s coverage of a study of college majors vs unemployment rate:

http://www.washingtonpost.com/business/not-all-college-majors-are-created-equal/2012/01/12/gIQAfz4XzP_story.html

In Ca R E Law if you don’t have the condition of the unit/house documented at the time of the post 30 day notice initial walk thru, your tenant rights to a full security refund is probably circumvented. I looked up the law, and of course our slumlord 27 yo resident manager told me it was about carpet and paint, which already exceeded its lifespan. So in other words, if your cleaning of the stove, oven, shower, etc… isn’t on a document with her initials, they can charge us even if the place is clean. CCC 1950.5

What ever happen fair honest business dealings? I’ve worked for a few owners/developers/REIT and most were really honest good firms. I guess the fish does stink from the head down. Most of this firm’s business is the criminal invaderl sec 8 racket. Like they would even know about the Consumer Affairs Dept of a state or Civil Code (which has more loopholes than swiss cheese).I’m no Attorney, but I can read basic laws and the loopholes that pertain to them.

Palm Beach County home sales up 24 percent in 2011

By Kimberly Miller
Palm Beach Post Staff Writer
Posted: 11:21 a.m. Friday, Jan. 20, 2012

One looming cloud on the real estate horizon is the shadow inventory of foreclosures destined to hit the market after a long slog through the courts. In Palm Beach County, about 34,820 foreclosure cases are pending. Statewide, there’s an estimated backlog of 260,815 cases.

With only 5.9 months’ worth of single-family home inventory in Palm Beach County - the lowest since 2006 - Realtor Sherry Lee hopes to see some of that shadow inventory soon. Lee, whose Lee Property Sales is based in West Palm Beach, said clients are shocked at today’s paltry selection.

“They try to bid on something only to realize that there are multiple offers,” Lee said. “I’m looking six times a day for every little new listing.”

http://www.palmbeachpost.com/money/real-estate/palm-beach-county-home-sales-up-24-percent-2114057.html

The Bay Citizen
Harris Out on a Limb on Mortgage Settlement
By AARON GLANTZ
Published: January 14, 2012

Four years ago, when most of the Democratic Party establishment stood firmly behind Hillary Rodham Clinton, Kamala D. Harris, then San Francisco’s district attorney, spent a winter week in Iowa stumping for Barack Obama.

When she ran for attorney general two years later, the mixed-race Ms. Harris (her mother is Indian, her father Jamaican-American) drew frequent comparisons to Mr. Obama, as a rare candidate who inspired young people and ethnic minorities often alienated from the political process. The PBS newscaster Gwen Ifill once referred to her as the “female Obama.”

“Like Obama, she represents the next generation of leadership that talks about issues in a new way,” said Steve Phillips, co-founder of Power PAC, which backed Mr. Obama with millions of dollars in 2008 and then spent nearly $400,000 to support Ms. Harris’s campaign for attorney general.

But since taking office as attorney general a year ago, Ms. Harris has clashed with the Obama administration over one of her signature issues: foreclosures and mortgage fraud.

In September, Ms. Harris walked away from settlement talks with the nation’s five largest mortgage servicers, saying the proposed deal to have them pay roughly $25 billion in restitution for mortgage abuses was too weak. She said the proposed settlement sought by the Obama administration asked California to “excuse conduct that has not been adequately investigated.”

Three and a half months later, she remains outside the talks. On Tuesday, she attended a meeting of 15 state attorneys general — including Joseph R. Biden III of Delaware and Eric Schneiderman of New York — intended to compare notes about legal options outside the settlement framework and to devise a tougher approach to the negotiations.

Her posture has generated praise from MoveOn.org and other liberal advocacy groups. Rick Jacobs, executive director of the Los Angeles-based Courage Campaign, said Ms. Harris had distinguished herself by meeting with troubled homeowners. “She is steely, fiery and passionate that people are not run over by banks,” Mr. Jacobs said.
…

Cramdowns are coming.

One million homeowners may get mortgage writedowns: U.S.

Department of Housing and Urban Development Secretary Shaun Donovan speaks during a news conference at the Department of Justice in Washington D.C. December 21, 2011. REUTERS/Benjamin Myers

By Margaret Chadbourn and Aruna Viswanatha
WASHINGTON | Wed Jan 18, 2012 5:22pm EST

(Reuters) - About one million American homeowners would get writedowns in the size of their mortgages under a proposed deal with banks over shady foreclosure practices, U.S. Housing and Urban Development Secretary Shaun Donovan said on Wednesday.

The deal, which could be struck within weeks, would mark the largest cut in the mortgage load since the start of the credit crisis.

“We’re very close to a settlement that would both fix the servicing problems, but also help over a million families around the country stay in their homes and get help,” Donovan said at a U.S. Conference of Mayors meeting in Washington.

Talks between federal officials, state attorneys general and major banks to resolve allegations of “robo-signing” and other misconduct in foreclosures have dragged into their second year.

Donovan’s announcement came the same day that two big regional U.S. banks disclosed they had set aside funds related to mortgage servicing matters, a sign that lenders beyond the five largest mortgage servicers may join the expected settlement.

In exchange for between $20 billion to $25 billion in relief to distressed homeowners, the banks - Bank of America Corp, Wells Fargo & Co, JPMorgan Chase & Co, Citigroup and Ally Financial Inc - will put behind them potential government lawsuits about improper foreclosures and abuses in originating and servicing the loans.

Using Donovan’s estimate, the settlement could provide roughly a $20,000 reduction each for the one million borrowers.

Prior administration efforts to jumpstart the housing recovery have fallen short of how they were promoted.

Some states, including California and New York, have criticized negotiators as being too lenient on the banks and suggested the proposed settlement would not provide enough relief to the housing market.

The Obama administration has seen the broader foreclosure settlement as an opportunity to help reach more borrowers struggling financially as the five-year collapse in home prices persists. Currently, banks have granted at-risk borrowers principal reductions on a limited basis.

“Principal reduction can have a substantial impact on the housing market nationally,” Donovan said.

With more than a 30 percent decline in home prices since 2007 and a huge number of vacant, foreclosed homes flooding the market, the housing sector has struggled to rebuild itself.

About 22 percent of U.S. homes have negative equity totaling about $750 billion, according to CoreLogic.

Donovan said the deal would be “far and away the largest principal reduction of the crisis” and a number families would also “get direct compensation as a result of the settlement.”
…

I agree with this writer about directly busting dotcom pirates rather than passing anti-piracy law which impinges on free speech.

I also wonder why a similar approach to that used to bust Kim Dotcom couldn’t be used to go after financial felons who perpetrated fraud against the American public? The top-down one-size-fits-all regulatory approach favored by DC seems inferior for stamping out financial crime to direct prosecutorial action against perps.

If feds can bust Megaupload, why bother with anti-piracy bills?

A growing battle over copyright on the internet came to a head this week as digital protests scuttled two anti-piracy bills, police arrested Megaupload’s millionaire filesharing pirate, and hackers brought down the Department of Justice website.

By Patrik Jonsson, Staff writer / January 21, 2012

Megaupload founder Kim Dotcom (R) appears with other employees in Auckland’s North Shore District Court after their arrest January 20, 2012. New Zealand police broke through electronic locks and cut their way into a mansion safe room to arrest the alleged kingpin of an international Internet copyright theft case and seize millions of dollars worth of cars, artwork and other goods.
…

I also wonder why a similar approach to that used to bust Kim Dotcom couldn’t be used to go after financial felons who perpetrated fraud against the American public?

That presupposes a political will to go after the financial fraudsters. Which is never going to happen as long as both parties are bought and paid for by Wall Street, and as long as the sheeple continue to vote for the Republicrat duopoly’s Hollow Man candidates.

I thought this kinda sh#t didn`t happen in Colorado.

Colo. girl escapes apparent kidnapper, calls 911

Updated 49m ago

DENVER (AP) – A missing 9-year-old girl escaped from an apparent kidnapper and called 911 herself from a convenience store in Colorado Springs on Friday.

The Pueblo girl was reported missing Thursday night after she didn’t return home from school.

The suspect, Jose Garcia, 29, is also a suspect in an alleged molestation involving a different girl, Pueblo police Capt. Eric Bravo said.

The car of the man accused of kidnapping the girl broke down Friday morning in Colorado Springs, and a passerby gave them a ride to a Circle K, police said.

The girl ran into the convenience store and asked to use the phone to call her uncle but instead called 911, which prompted the man to take off, authorities said.

Efren Vialpando told The Gazette he saw the girl come in the Circle K with two black eyes and a bruise on her lip and face. She had refused to leave the store with the man, saying, “I ain’t going nowhere. I’m waiting for my momma.” He said the suspect fled after that.

Garcia was in custody Friday. Pueblo police haven’t said how they connected him to the kidnapping and where Garcia was with the girl for more than 15 hours overnight. Pueblo police Sgt. Darren Velarde said Garcia is being held on suspicion of kidnapping and could face a charge of sexual assault on a child.

Pueblo County court records said Garcia was wanted for suspicion of kidnapping and sex assault on a child, and Bravo said allegations in that case involved Garcia’s 9-year-old former stepdaughter. Both the former stepdaughter and the girl who escaped Friday attended Columbian Elementary School in Pueblo.

http://www.usatoday.com/news/nation/story/2012-01-21/missing-girl-escapes-kidnapper/52706816/1 - 42k

http://www.bloomberg.com/news/2012-01-20/debate-exposes-tensions-as-republican-primary-race-reshaped-by-surprises.html

Cousin-marrying in South Carolina must be more widespread than I thought.

http://www.bloomberg.com/news/2012-01-20/puritan-operator-made-fortune-killing-evil-witches-lewis-lapham.html

This is what happens when you combine a for-profit justice system, a religious charlaton, and an abysmally stupid and gullible population.

It’s good to know that some crimes get prosecuted

HOUSTON (Reuters) - No one calls him Sir Allen Stanford anymore. He is inmate number 35017-183.
On Monday, the Texas financier heads to court in Houston to battle charges that he operated a $7 billion Ponzi scheme from Stanford International Bank Ltd, his offshore bank on the Caribbean island of Antigua. By all accounts, his was a life of luxury, filled with private jets, yachts, mansions and the sport of cricket.

Deemed a flight risk in June 2009 by a federal judge, the 6-foot billionaire has been in jail, sporting prison-issue green and orange jumpsuits and shackles instead of the dark, tailor-made suits he once ordered in bulk.

Stanford, a native Texan who was knighted by the government of Antigua in 2006, is accused of misleading investors about certificates of deposit (CDs) issued by his offshore bank, in one of the biggest white collar fraud cases since Bernard Madoff.

Stanford’s health has declined since his arrest. He was injured in a jailhouse brawl in 2009 and suffered from an addiction to a powerful anti-anxiety medication. He has hepatitis B and cirrhosis of the liver, and, if convicted, will likely spend he rest of his life in prison.

The SEC seized all of Stanford’s assets in February 2009 after filing a civil lawsuit. His lawyer at the time, Dick DeGuerin, said the government’s action did not even leave enough money for his client to buy underwear.

Once No. 205 on Forbes’ list of richest Americans, Stanford’s defense is paid for with U.S. tax dollars and his 81-year-old mother is struggling to help.

After his arrest, Stanford had a bevy of women, four of whom are mothers of his six children, attend his court hearings. He had a “fiancee” half his age even though he remains legally married.

Stanford lavished the women in his life with trips on private jets, luxury homes and, in one instance, spousal support payments of $100,000 per month, according to court documents.

His oldest daughter, Randi, lived in a luxury Houston high-rise paid for by her father, for whom she worked.

Court records from a 2007 paternity case, that was settled, showed Stanford also paid about $150,000 a year in child support for two other children who lived with their mother in a $10 million house in Florida.

Do victims get to go after all this money?? probably not.

MILAN (Reuters) - Plans to launch a European ratings agency to compete with S&P, Moody’s and Fitch are at an advanced stage and a new private institution could start business as soon as the first half of this year, German businessman Roland Berger told an Italian newspaper.

The founder of consultancy Roland Berger said he hoped a new private, non-profit organization, in the form of a foundation, could be ready in “the first half or the first nine months of the year,” according to Saturday’s Corriere della Sera.

Berger, who has been lobbying European governments and companies to gather support and financing for a new agency, hopes to have raised the 300 million euros of capital needed from European investors by that time, the paper said.

“The proposed model is of an agency where the service is paid by the clients, who have an interest in having reliable and objective results,” Berger said.

Roland Berger partner Markus Krall, who is largely tasked with setting up the agency, told Germany’s Euro am Sonntag weekly that it would differentiate itself from competitors by accepting liability for its analysis.

The question is how will clients be forced to pay for this, and how do big clients get charged vs little mom and pop clients?

I think the EU realizes that the rating agencies in the US are being used as a club for the PTB to strip sovereignty from the smaller EU countries and advance the US agenda. Democracy we don’t need no stinkin democracy.

Wilmington, DE REO for Realtors are Liars ™:

http://mandtreo.com/app.aspx?st=1&e=reodetail&propertyid=6655

“America is great because she is good. If America ceases to be good, America will cease to be great.” (Alexis de Tocqueville)

I don’t think lenders see too many FICO’s above 800 these days

kind of freaks them out I guess

So a person ( couple I guess) buys a home in 2006 for 600K now trying a short sale and is motivated because their new home is almost done.

I knew this would happen because this is exactly what my neighbors did back in the 1990’s. Buy a new house bail on the old one, at least these guys are trying a short sale.

I’m going to find out how low the bank will go ? Comps are about 375K at this time.

America’s Choice 2012
Gingrich: U.S. should reconsider gold standard

By Chris Isidore @CNNMoney January 18, 2012: 4:06 PM ET
Republican presidential candidate Newt Gingrich said the U.S. should look at returning to the gold standard.

Republican presidential candidate Newt Gingrich said the U.S. should look at returning to the gold standard.

NEW YORK (CNNMoney) — Republican presidential candidate Newt Gingrich is calling for the United States to think about returning to the gold standard.

Speaking at a foreign policy forum in South Carolina on Tuesday, Gingrich advocated a “commission on gold to look at the whole concept of how do we get back to hard money.”

Gingrich, a former Speaker of the House, has spoken in favor of a “hard money” policy in the past, but these were his strongest comments to support reinstating the gold standard.

Gingrich would model his “gold commission” after one put in place after Ronald Reagan was elected, when the nation was battling double-digit inflation. But even then, the commission overwhelmingly rejected the idea of a return to the gold standard.

One of only two members of the 17-member commission to endorse a return to the gold standard was Ron Paul, one of Gingrich’s rivals for the GOP nomination.

The United States first moved away from the gold standard, under which the dollar was backed by the nation’s gold reserves, in 1933, and dropped it altogether in 1971. Despite support for its return by some on the political right, few mainstream economists support its reinstatement.

Local currencies: ‘In the U.S. we don’t trust’

Chief among the problems is that with a dollar pegged to gold, U.S. goods could become uncompetitive on the global markets compared to goods priced in euros or yen.

The return to a gold standard is a central point in the campaign of Paul, a Congressman from Texas who also advocates abolishing the Federal Reserve.

In his comments Tuesday, Gingrich also spoke sharply against the Fed, saying it should focus on keeping prices in check, dropping the dual mandate of job growth and fighting inflation.

“We need to say to the Federal Reserve: Your only job is to maintain the stability of the dollar because we want a dollar to be worth thirty years from now what it is worth now,” he said. “Hard money is a discipline. It means you can’t inflate away your difficulties.”
…

http://www.telegraph.co.uk/news/worldnews/asia/afghanistan/9030919/Afghan-soldier-killed-French-troops-over-US-abuse-video.html

To Perry and the morons who supported him: This is why we don’t tolerate GIs making “simple mistakes” like pissing on dead enemies.