The Housing Bubble

Happy T-day everyone.

Here is a possible “resolution” (it is really a minor adjustment with a promise for more) of the austerity crisis. Ezra Klein has better access to the Dems, but this is a reporting piece, not an opinion one.

Is this the deal that will end the austerity crisis?

Posted by Ezra Klein on November 20, 2012 at 12:00 pm

http://www.washingtonpost.com/blogs/wonkblog/wp/2012/11/20/is-this-the-deal-that-will-end-the-austerity-crisis/

I’m off. Taking Amtrak this year instead of flying. All aboard….

BLS announced state by state job creation data yesterday. Under the assumption that:

1. Job creation happens alongside household formation; and
2. Household formation happens alongside vacancy rates falling (absent adding new supply)

What does it mean when:

1. The State of CA has low vacancy rates (about 5% for rental, about 1.4% for owner-occupied)–about as low as they were leading to the bubble, and significantly lower than the US averages;
2. The State of CA is only adding approximately 50,000 housing units per year at the current pace of construction; and
3. In the last 12 months, CA added 295k new jobs?

Answer: We better build more housing units in CA, or the pressure on home prices and rents to rise will increase.

http://www.bls.gov/news.release/laus.nr0.htm

Ben Bernanke warns Congress to avoid ‘fiscal cliff’
By Associated Press
Wednesday, November 21, 2012 - Added 3 hours ago

WASHINGTON — Federal Reserve Chairman Ben Bernanke on Tuesday urged Congress and the Obama administration to strike a budget deal to avert tax increases and spending cuts that could trigger a recession next year.

Without a deal, the measures known as the “fiscal cliff” will take effect in January.

Bernanke also said Congress must raise the federal debt limit to prevent the government from defaulting on Treasurys debt. Failure to do so would impose heavy costs on the economy, he said. Bernanke said Congress also needs to reduce the federal debt over the long run to ensure economic growth and stability.

Uncertainty about all these issues is likely holding back spending and investment and troubling investors, the Fed chairman said in a speech to the Economic Club of New York.

Resolving the fiscal crisis would prevent a sudden and severe shock to the economy, help reduce unemployment and strengthen growth, he said. That could make the new year “a very good one for the American economy,” he said.

“A stronger economy will, in turn, reduce the deficit and contribute to achieving long-term fiscal sustainability,” Bernanke told the group.

When asked during a question and answer session after the speech whether the Fed could soften the impact of the fiscal cliff, Bernanke was firm in his warning.

“In the worst-case scenario where the economy goes off the broad fiscal cliff … I don’t think the Fed has the tools to offset that,” Bernanke said.
…

“What do you do for a living?”

“I appraise houses. I determine what they are worth and then report my findings to my customer, the lender, the guy who pays me. My motto is ‘Honesty is the best policy’.”

“How about you? What do you do for a living?”

“I’m also an appraiser. Just like the other guy the lender is the one who pays me, the lender is my customer. But unlike the other guy my motto is a bit different. My motto is ‘The customer is always right’. If my customer thinks my appraisal is too low and the customer is a bit miffed then I will adjust my appraisal accordingly because, after all, ‘The customer is always right’.

“Which one of you two make the most money?”

“Now that, my friend, is a very stupid question.”

Fiscal Cliff for Dummies: Bush Tax Cuts, Sequester & More Explained
Nov 21, 2012 4:45 AM EST

Been too crazed stockpiling vittles for Thanksgiving to learn anything about this fiscal cliff we’re careening toward? Impress the relatives with tidbits from our guide on everything from the sequester to the supercommittee.

Sorry, I’ve been too busy buying wine for Thursday to pay much attention to this “fiscal cliff” everyone talks about. I need to stay warm camping out for Walmart’s 8 p.m. opening. So, what is it?

The “fiscal cliff” isn’t just one thing, it’s a bunch of tax rates and government spending levels that are scheduled to change on Jan. 1, 2013.

Umm, OK. What?

It’s easier to think of it as coming in two main parts. The first is the expiration of the Bush tax cuts. These tax cuts brought income and investment taxes down for everyone, with some of the biggest cuts coming for high-earners. The most contentious tax cuts that Democrats want to get rid off were for income and investment income at the top. The Bush tax cuts brought down the marginal rate for the highest earners from 39.6 percent to 35 percent. The maximum tax rate for income from long-term capital gains rate was brought down to 15 percent from 20 percent, and the tax rate on dividends dropped to 15 percent.

Back when they were passed in 2001 and 2003, they included a sunset provision, meaning they would expire at the end of 2010. President Obama cut a deal with congressional Republicans to extend the tax cuts for another two years in exchange for extended unemployment benefits and a 2 percentage-point reduction in the payroll tax. That extension, along with the payroll tax reduction, is scheduled to expire at the end of the year. That’s the first big chunk of the fiscal cliff.

And the second?

The second is the so-called sequester.

Sylvester? What does Rocky have to do with this?

No, no, sequester. This refers to one portion of the spending cuts included in the Budget Control Act, passed and signed in August 2011.

Does this have something to do with the debt ceiling?

Ding! Ding! Ding! Come on down and accept your prize of cuts in discretionary spending!

The Budget Control Act did three main things. First, it allowed the president to raise the debt ceiling by $2.1 trillion, thus making it possible for the government to increase its debts at least through this year. But more important, it instituted two rounds of significant spending cuts. The first was implemented “immediately.”

Why the scare quotes?

It was implemented “immediately” in a way only a Washington policy wonk could appreciate. Government programs whose budgets are set every year—defense spending, education funding, the FBI, and so on—would see those budgets collectively reduced, relative to their scheduled growth, by just more than $1 trillion over the next 10 years.

Wait, so is it a cut or a reduction in projected growth?

This is more of a philosophical question than anything else. Think about it this way: the revenue the government gets through taxes grows more or less along with the economy. So the status quo for the budget of a government program is that it will grow in real terms over time. Slowing down that projected growth means money can be freed up to be spent elsewhere. In the case of the Budget Control Act, the government would have to borrow less money to fund its operations.

But there’s a second part?

Yes, this is the sequester. The second portion of the cuts were supposed to be decided on by Congress.

A committee called the Joint Select Committee on Deficit Reduction was to come up with a list of cuts that would then be put to Congress for a full vote. If the committee, commonly referred to as the “supercommittee,” couldn’t agree on the cuts, $1.2 trillion in further spending reductions over 10 years would be implemented starting Jan. 1. This is the “sequester.” And combined with the expiring tax cuts—along with other annual tax and spending policies that are renewed every year, like adjusting the Alternative Minimum Tax so that it doesn’t hit too many people and maintaining the current Medicare payment rates for doctors—you have your fiscal cliff.

So what happens Jan. 1?
…

A very good morning to you all.

Are you still thinking about the Fiscal Cliff? So much uncertainity?
I hope it happens and some fat is cut in spending. We are spending way too much.

And to top it, the debt ceiling. Some leaders are trying for unlimited spending on this credit card. I’ll call my credit card company and ask for unlimited spending. Would they do it? As people go in power, their ability to think wisely goes away.

How about a $0 cap on the mortgage interest deduction, with a grandfather clause to protect those who bought their homes with the full deduction and a gradual phase-out over the next few decades for future buyers.

We’ve got to take this country back — from the finance, insurance and real estate industries!!!

Is the mortgage interest deduction a “charitable deduction”? I hadn’t thought of that before, but it is quite a bit like forced charitable giving from all Americans to those who work in the real estate industry.

Can anyone who “gits it” kindly explain how the stock market could have seen massive withdrawals all year long, coupled with stellar performance? I’m scratching my head over this one…

AP News
Cash pulled from stock funds for 8th month in row
By Mark Jewell on November 14, 2012

BOSTON (AP) — Mutual fund shareholders aren’t budging from their recently conservative approach to investing, despite this year’s stock market gains. Cash was pulled from stock funds for the eighth month in a row in October, while bond funds attracted cash for the 14th consecutive month.

Industry consultant Strategic Insight reported on Wednesday that a net $15.2 billion was withdrawn from U.S. stock funds last month.

Despite a modest decline last month, the Standard & Poor’s 500 index was up 12 percent for the year through October. Bond fund returns averaged nearly 8 percent over the same period, and Strategic Insight estimated stock and bond fund assets have appreciated in value by more than $1 trillion this year to $8.8 trillion.

“So far, 2012 shapes up as one of the best years ever for wealth creation for mutual fund investors,” said Avi Nachmany, research director with New York-based Strategic Insight.
…

How come U.S. stocks keep going up when so much money is getting taken out of the market?

“Can’t we all get along?”

Twinkies’ demise proves the stupidity of U.S. labor relations

http://www.latimes.com/news/politics/topoftheticket/la-na-tt-twinkies-demise-20121121,0,7440063.story

…..Two questions come to mind. First, did the workers understand how close to ruin the company was when they decided to go on strike? Second, did the owners bother to listen to employees’ concerns about improving the product line or did they just let the brand drift into financial crisis?

And, here’s a third question: When will employers and workers stop acting like adversaries and learn that they are on the same side?….

……I am not at all anti-union. In fact, I believe the fading of labor power has contributed to the stagnation of middle class incomes over the past 30 years. Far too many American workers now stand alone, forced to accept pay cuts, longer hours, reduced benefits and arrogant disregard from their employers. But strikes are a blunt instrument, a club used to hammer insensitive bosses until they cry uncle. In the 21st century, it seems as if there should be a better way.

How about this? In any larger company, give employees as big a voice as investors. Give them a place at the table — the table in the board room. Do not treat them as faceless cogs in a machine, treat them as what they are: the essential people who make the product or provide the service with good ideas of their own. Spread the rewards of success beyond the CEOs and stockholders. Workers should not have to strike to be given a fair share of company profits, they should have a real stake and a real voice in the success or failure of a company.

I will bet there was a way for Hostess to organize itself that would have brought employees into the process of saving the company. Instead, management and labor went to war and everyone lost.

AP/ November 14, 2012, 6:05 PM
Cash pulled from stock funds 16th straight week

WASHINGTON — Investors withdrew money from stock mutual funds for the 16th consecutive week during the period ended Nov. 7. Bond funds continued to attract new money, as they have on all but one week this year.

The movement of cash was in line with the conservative approach that many investors have taken since the financial crisis of 2008. Money has consistently been withdrawn from stock mutual funds and added to lower-risk bond funds.

Stocks:

Investors withdrew a net $2.12 billion from U.S. stock funds, the Investment Company Institute said in a preliminary report Wednesday. Withdrawals have exceeded deposits for 16 weeks in a row, dating to July 18.

Cash was pulled out during the latest week as the Standard & Poor’s 500 stock index fell 1.3 percent.

The ICI said a net $300 million was deposited into funds investing primarily in foreign stocks. That snapped a 15-week string of net withdrawals from foreign stock funds, dating to mid-July. Those funds attracted cash through most of the first half of this year.
…

The government has screwed up the US housing market. And for a long time. But also, what was businesses’ role in the government’s action?

PINTO: Government keeps meddling in the housing market
Taxpayers on the hook for another bailout

Friday’s grim financial report from the Federal Housing Administration (FHA) — it’s insolvent to the tune of negative $31 billion — is prompting fresh scrutiny of the government’s role in housing, particularly the mayhem caused by federal backing of mortgages involving low down payments and low credit scores.

Despite the likelihood of yet another taxpayer bailout of a government agency, industry and community groups insist that the housing market can’t survive without an explicit guarantee. The facts demonstrate it cannot survive with one. Government housing policies have played a leading role in industrywide abandonment of underwriting standards to promote affordable housing. This has been well-documented.

Less well-known are the consequences of the government’s policy of attempting first to prolong and then to reinflate the bubble. From 2006 to 2009, various arms of the government mortgage complex backed trillions of dollars in mortgages as home prices collapsed. The result was more than $400 billion in defaults and 2.5 million expected foreclosures. It ultimately would take until 2012 — seven years after the bubble’s peak — for prices to stabilize.

Neither of these acts of folly were accidents.

All second homes should be eliminated from receiving MID. The MID should be eliminated going forth on all new purchases and those grandfathered in should lose the benefit upon sale of the property, refinancing of the property, or after 20 years. All HELOC money should not be tax deductible. You rent, buy a car on loan and don’t get a break; you buy a house, get a HELOC, and deduct the interest. Renters screwed again.

How To Fix The Housing Market

http://scoopsandiego.com/online_features/money_and_finance/how-to-fix-the-housing-market/article_2275e590-ad1b-5d63-816d-fd8a4a131f27.html

(NAPSI)—At the height of the financial crisis in 2008, the U.S. government bailed out our nation’s banks and nationalized our home mortgage system.

Four years later, most of those bailouts have ended and taxpayers have been repaid in full. Unfortunately, that is not the case for mortgage giants Fannie Mae and Freddie Mac. Remarkably, they remain in government control, continue to dominate the mortgage market, and still owe taxpayers over $140 billion.

Neither Congress nor the White House has a viable plan to get that money back or to get the government out of housing finance. As a result, taxpayers—not banks or investors—are now on the hook for trillions of dollars of mortgage risk. And the government continues to add to that risk, accounting for over 90 percent of new mortgage credit today, double the amount it provided just a few years ago. Even worse, recent actions in Washington threaten to make Fannie Mae and Freddie Mac permanent wards of the state.

Moreover, millions of potential homeowners cannot get a mortgage because private sources of housing credit are scarce. Many of those private sources cannot compete with the government.

Your elected representatives in Washington aren’t paying attention to this problem!

But there is a plan to fix it. Former officials from the Obama and Bush administrations, Jim Millstein and Phillip Swagel, have crafted a way to restart private housing markets, ensure access to affordable 30-year mortgages, protect taxpayers from future bailouts, and repay them for saving the two largest sources of housing finance in our country: Fannie Mae and Freddie Mac. Millstein and Swagel discussed their plan in their recent article for The Washington Post.

Call your representatives in Congress. Let them know that we need to end the last bailout and the nationalization of our home mortgage system. Go to http://www.whoismyrepresentative.com to tell them that you support housing finance reform.

Under a new proposal to restructure the housing market, the mortgage guarantee businesses would be privatized.

Here’s a “fun” one.

Latest Threat to SoCal Housing Market: Climate Change
by Jeff Kaufman

http://www.kcet.org/shows/socal_connected/rawfeed/from-the-control-room/latest-threat-to-socal-housing-market-climate-change.html

…..nature abhors a vacuum. So maybe it isn’t surprising that the latest dark cloud on the state’s economic horizon may be climate change. If, as scientists predict, sea levels along the California coastline rise four and a half feet over the next century, about $2,500,000,000 worth of real estate in the state would be under water. Not underwater meaning your home is worth less than the amount you owe on your mortgage, but underwater meaning your house now functions as an artificial reef.

I’m sure this didn’t hurt Pres. Obama in Ohio but the Auto bailout was probably key there.

Northeast Ohio housing market feeds on strong rebound

http://www.wksu.org/news/story/33845

Home sales jump more than 17 percent so far this year compared to the same period last year.

Home sales in Northeast Ohio are rebounding in a big way so far this year. Sales increased more than 17 percent from January through October compared to the same period last year. The total amount of money that changed hands also increased, by more than 22 percent.

The figures cover 17 counties from Cuyahoga to Cochocton and from Mahoning to Medina.

Carl DeMusz of the Northern Ohio Realty Multiple Listing Service says Northeast Ohio’s housing market is back to the levels of the year 2000.

Chow: “Down”

‘Day of Reckoning’ Looms for Asia’s Priciest Property Markets

http://www.cnbc.com/id/49912522

Weak economic growth, oversupply and measures to keep a lid on house prices suggest that Asia’s priciest property markets, Singapore and Hong Kong, now face a ‘day of reckoning’ after several years of robust gains, Nomura analysts warn.

Singapore property prices surged 50 percent between 2007 and 2011, driven partly by foreign buying. While developers reacted to the rise by ramping up homebuilding, the market now faces oversupply.

Nomura analysts Min Chow Sai and Paul Lin said a surge in the number of apartments expected to be put up for sale next year will curb house-price increases and some developers may even have to slash prices.

They expect the number of homes due for completion next year could reach 42,309, including 24,551 public-housing units built by the government. This compares with the estimated 21,859 units completed this year and the average annual housing demand of just under 20,000 units since 2001.

But can they make twinkies?

Bill George: What Minnesota can learn from Germany

http://www.startribune.com/business/136776593.html?refer=y

Germans are well-paid, have excellent health care and pension benefits, and save 11 percent of their income. Yet German health care costs only 9 percent of GDP compared with 17 percent in the U.S.

Politically, the country operates like a grand coalition, with narrow differences between moderates on both sides. Politicians put the country’s interests ahead of their parties. A decade ago the government went through a restructuring that moderated the cost of wages and benefits to be competitive with Asian countries. Germany is fiscally responsible: inflation is just over 1 percent, and deficits are 3.3 percent of GDP compared with 11 percent for the U.S.

German industrial strategy focuses on sectors where its technology and highly skilled workforce provide competitive advantage: machine tools, automobiles and auto parts, chemicals, electrical equipment and construction. Its financial sector finances German industry at home and around the world. It operates with conservative ratios that enabled most German banks to escape the 2008 financial meltdown.

Leading German companies like Siemens, BMW, Volkswagen, Daimler, BASF, and Thyssen-Krupp are flourishing these days. But there are deeper reasons for Germany’s success: relationships between labor and management; its apprentice system, and the Mittelstand — small and medium-size privately held enterprises.

Labor-management relations. German unions have long practiced “co-determination” with management on corporate boards, but their approach differs dramatically from American counterparts. They are committed to ensuring that their companies do well, produce superior products, and are cost-competitive. Work rules are flexible. Strikes are rare. They focus on collaborative relationships to make their enterprises competitive on a world scale.

Apprentice system: German education utilizes a rigorous system of preparing students for jobs and careers. Students are divided into those who enter gymnasium (high school) to prepare for university education and others who are better suited for careers in skilled positions in 342 recognized trades. They complete their education prepared for a career suited to their talents; dropouts are rare. Those in skilled-labor tracks move into three-year apprenticeships where they learn specific skills…

…Mittelstand companies. These small and medium-sized firms are export-oriented and focus on high-value manufactured products utilizing skilled apprentices. Typically, they are rural and privately owned and occupy worldwide niche market leadership positions.

Extend and pretend saves the planet?

I had to LOL when paying the bills this morning, From citibank, I quote:

“Thank you for helping save another tree. Because you have not made a payment by mail during the last three months, we may have removed the remit envelope from your statement”

The reason I haven’t paid by old fashioned postal mail for many years is I online bill pay. No idea why I haven’t gotten around to online statement delivery too. Soon enough. Anyway I’m thinking most people getting that line on their statement are in a different situation, deadbeat mortgage loanowners, so I had to LOL at the tiptoeing around the financial problem to get a little politically correct enviromentalist pat on the head for not wasting envelopes on mortgages that will never be paid.

An amusing anecdote, but it contains an interesting fact that citibank thinks if you haven’t paid your bill in three months, you’re probably never going to pay it again, which is an interesting (useless?) data point. I’m surprised they give up so soon.

Sounds about right.

Greatest Real Estate Bubble In Modern History Not Done Bursting

Harry Dent, Contributor
10/03/2012 @ 2:43PM

The real estate bubble is like a popcorn popper with different markets frothing over and peaking at different times, but all will burst ultimately. Given that real estate is so local, the best way to gauge the downside potential of your home or commercial real estate is to find out what it was worth at the beginning of 2000 at best and the beginning of 1996 at worst. If you can’t take that much heat consider selling and renting for the next three years plus. From around early 2015 forward we could see the greatest bargains in real estate of our lifetime.

http://www.forbes.com/sites/greatspeculations/2012/10/03/greatest-real-estate-bubble-in-modern-history-has-yet-to-really-burst/ - 76k -

http://phys.org/news/2012-11-curiosity-earth-shaking-discovery.html

“In an interview on NPR today, MSL Principal Investigator John Grotzinger said a recent soil sample test in the SAM instrument (Sample Analysis at Mars) shows something ‘earthshaking.’”

Has to be evidence of life, right?

I seldom look back at past postings, but since I hadn’t been on line in a couple of days, I thought I would see if there was any intelligent commentary around some of my posts. There wasn’t, but I found this particular post astounding.

It concerned my comments about Danzig at the Start of WWII, which was a comment about border wars from the prior comments about the Greece/Bulgarian secession commentary. My presentation was that WWII began over the City of Danzig and the claim by the German Leadership that the Versailles Treaty was illegitimate, taking a portion of Germany and giving it to Poland. Danzig was 90 to 95% German. I won’t go into all the details of the controversy. It is a historical fact that this was what precipitated the War. To which I received the following post:
Comment by pdmseatac
2012-11-19 18:29:35

Huh!!? You are actually saying that Germany took back Danzig, then England declared war and this was what led to WW2 ?!

This is the most spectacularly ignorant thing I have read in this blog. Even the Nazi propaganda from 1939 wasn’t this stupid.

I found that absolutely astounding that someone with a Jr. High Civics education should post such commentary. The “most spectacularly ignorant thing I have read on this blog”.
Really? Well, here genius. Here’s a brief excerpt from just a simple Google of WWII and Danzig.
Look it up, and see if you find any concensus:

There are few dates in recent human history that cause more of an emotional stir in historians than that of September 1, 1939. On this day, Adolph Hitler, then chancellor of Germany declared to his parliament (Reichstag) that enough was enough that Danzig in Poland was a German city full of German people and should be taken back.
The fact that it is the date that signals the beginning of World War II and the dramatic reformatting of the European landscape and culture is a matter of hindsight. In 1939, Hitler invaded Poland.

Because of a pact Britain and France had with Poland, they were forced to declare war on Germany on September 3 and just like the First World War, nation after nation followed suit until the disastrous global conflict was played out once again, only this time religion and ethnic persecution would play a large and deadly role.

I pulled those excerpts off another blog, but you can do your own research.
http://blog.aurorahistoryboutique.com/world-war-ii-begins-germany-occupies-danzig-poland-september-1-1939/

I did note the other comments on my attempt to post something humorous concerning the “Ich bin ein Berliner”, to find that “factcheck” and “snopes” are the most reliable sources to refute the claims of native German speaking people, who really ought to know what something means in their own language.
I’ve noted that there are some people here that simply want to try and refute anything some of us have to say. It’s grown tiresome and the blog is much less informative than it was 3 years ago.

The usual offenders seem to have ALL DAY, everyday, to post on this site. Obviously, they don’t have much else to do, except to try and parse every word in a text and find some way to twist it around to say something else in order to “win” some argument. I don’t have the time. It is unfortunate that the level of conversations have declined over time, but I think we lost some of the best posters who have grown tired of the commentary of others. After reading such drivel to some of my posts, I am inclined to join them.

My in-laws are moving to Seattle, WA (the eastside), and their preference is to buy a place. I spend the past 3 days with them looking for potential places….and wow, this blog still has a place. People have lost their minds once again.

We first checked out two new communities: both were sold out, and yet there’s a steady flow of folks driving by. The agents have the same cockiness as around 2005, and prices getting up there. One builder increased his prices by $30k over the past month, and still was sold out for inventory until next June. i.e. folks bought houses where construction hadn’t even started. In a third new community, the posted hours were 11am - 5pm. We drop by at noon, no one is there….we call the agent, turns out she is late. The complacency is back, all realtors have to do is hold up their lazy hands and collect the dough! I had a few informal chats with listing agents, all had the same talking points, roughly: “market is redhot, interest rates are low, pricing pressure is building, we’re running out of land, great time to buy.”

In my immediate area, there are 78 houses on the market. According to redfin, 56 of those 78 are pending, and 22 are for sale. i.e. anything palatable is snooped up immediately. I then called a realtor acquaintance, he said: “I’ve written up several offers for houses on the the (seattle) eastside over the past month; all had at least 3 offers.” We had less than 1 month of inventory here now. If you remove the crap/overpriced listings, we probably have about 2 weeks of inventory.

To top it all off, my inlaws did find a house they liked. However, the listing agent said “Sorry, it’s almost Thanksgiving, no more showings. If you want to see the house, submit a full-price offer and I’ll see what I can do. No promises.” hahahahahahaahahahaha!!!!

Even my in-laws (hardened believers in homeownership, agree that now is a great time to rent. They are now looking for rentals, which you can get for $1200-$1400/month.

Thanks for listening. Times continue to be interesting here in Seattle, WA. I’ll be visiting more regularly here….

Ed DeMarco, Top Housing Official, Defies White House; Geithner Fires Back

Posted: 07/31/2012 2:29 pm Updated: 08/01/2012 2:05 pm

The housing regulator also restated his position that allowing some homeowners off the hook for some of what they owe would pose “a moral hazard.”

“This could give borrowers who are current on their mortgages a message that the government endorses forgiving a portion of mortgage debt if hardship can be demonstrated, creating a very broad incentive for underwater borrowers to seek ways to become eligible.”

He also repeated his argument that steps Fannie Mae and Freddie Mac are already taking, such as reducing the interest rate on loans and offering to postpone, or “forbear,” mortgage payments, will help struggling borrowers without posing the moral and financial hazards that come with reducing the value of a loan.

http://www.huffingtonpost.com/2012/07/31/ed-demarco-principal-reduction_n_1724880.html - 395k -

——————————————————————————–
The Conscience of a Liberal
Paul Krugman

July 31, 2012, 2:56 pm

Fire Ed DeMarco

Do it now.

Who? you ask. DeMarco heads the Federal Housing Finance Agency, which oversees Fannie and Freddie. And he has just rejected a request from the Treasury Department that he offer debt relief to troubled homeowners — a request backed by an offer by Treasury to pay up to 63 cents to the FHFA for every dollar of debt forgiven.

http://krugman.blogs.nytimes.com/2012/07/31/fire-ed-demarco/ - 60k

hmmm… wow.

It looks like SF bay area housing prices fell 2% in a single month.

http://www.zillow.com/local-info/CA-Santa-Clara-County-home-value/r_3136/#metric=mt%3D36%26dt%3D1%26tp%3D5%26rt%3D6%26r%3D3136%26el%3D0

Down we go again.

Federal Workers to Congress: Leave Us Out of Deficit Deal

By Eric Katz, Government Executive
November 20, 2012 | 6:16 p.m.

The Federal-Postal Coalition — a group representing more than two dozen federal employee unions — pleaded with Congress on Monday to spare their members in any deal related to the “fiscal cliff.”

Federal workers, the coalition wrote in a letter, have contributed more than their fair share toward reducing the debt and are the only group that has been targeted so heavily.

“Federal and postal employees and their families are hardworking, middle-class Americans who are struggling during these tough times just like other Americans,” the group wrote. “No other group has been asked to financially contribute the way they have, and it is time our nation’s leaders found other ways to reduce the deficit than continually taking from those who have dedicated their lives to public service.”

Top Democratic lawmakers on committees related to the federal workforce told Government Executive last week that they would like to leave federal-employee benefits out of any potential debt deal. After President Obama’s reelection, top federal unions said they were confident their members would not be targeted in such a deal and a pay raise would be instituted.

http://www.nationaljournal.com/congress-legacy/federal-workers-to-congress-leave-us-out-of-deficit-deal-20121120 -

Feds allege Michigan Supreme Court Justice engaged in fraud and money laundering (Detroit News)
Yet no criminal charges have been filed. Lansing — The U.S. government is seeking forfeiture of Michigan Supreme Court Justice Diane Hathaway’s posh second home in suburban Orlando, Fla., claiming she and her husband hid the asset to defraud a bank and escape $600,000 in mortgage debt.
U.S. Attorney Barbara McQuade’s civil complaint filed Monday claims the justice and her husband, attorney Michael Kingsley, “systematically and fraudulently transferred property and hid assets in order to support their claim to (ING Direct) that they did not have the financial resources to pay the mortgage on the Michigan property.”
Justice Hathaway, who makes $164,610 annually as a justice, and her husband did not inform ING Direct that they transferred the Windermere, Fla., home to a relative before applying for a short sale in 2011 on a $1.5 million Grosse Pointe Park home on Lake St. Clair, according to the federal forfeiture complaint.

Hathaway, a licensed real estate broker, has been under political scrutiny since May when questions were raised in a WXYZ-TV report about why she and her husband transferred two homes to her husband Michael Kingsley’s children before the short sale.
Didn’t need to read much past the fact that she’s a licensed real estate broker.

China is building the world’s tallest building in only 90 days:

http://gizmodo.com/5962070/china-will-build-the-tallest-building-in-the-world-in-just-90-days

5 floors per day!