The Housing Bubble

We’re number six!

January 18, 2013

10 states with the most homes in foreclosure

6. California
2012 foreclosure rate: 2.33%
November, 2012 unemployment: 9.8% (3rd highest)
Home price change (2007Q2-2012Q2): -41.0% (4th largest decline)
Processing period: 117 days

From the second quarter of 2007 through the second quarter of 2012, home prices in California fell by 41%, a larger decline than all but three other states. But in the aftermath of the U.S. recession and housing crisis, home prices in the state have rebounded. Over the three years ending in the second quarter of 2012, home prices increased by 7.3%, more than all states except Virginia and North Dakota. Still, the widespread and long-lasting effects of the recession—the state’s 9.8% unemployment rate remains among the worst in the U.S.—prevent many homeowners from affording their mortgage.

The Biggest Housing Bubble in the World Is in … Canada?
By Matthew O’Brien
Jan 25 2013, 10:52 AM ET 46

How real is Canada’s housing bubble anyway? More real than any other country’s.

Canada has a new worthwhile initiative. After years of booming prices, that bastion of politeness north of the border is looking to avoid a catastrophic housing bust for something more, well, boring. Initiatives don’t get more worthwhile, and perhaps not more difficult considering Canada just might have the biggest housing bubble in the world right now.

Not exactly boring, eh?

The distinction between higher prices and bubbly prices isn’t as subjective as it might sound. Like any other financial asset, there should be a fairly steady relationship between the price of housing and the stream of income — rent — it produces. Should be. The chart below, from The Economist, looks at the price-to-rent ratios across different countries, and measures how under-or-overvalued housing is, with negative numbers corresponding to the former and positive ones to the latter.

As realtors like to remind us, every market’s different, but there are three big takeaways here.

1) Rich Chinese buyers tend to make for overheated markets. Some of the priciest housing markets in the world have one thing in common, besides low-interest rates (which prevail most everywhere): Chinese expats. Vancouver, Hong Kong, Singapore, and Sydney are among the most popular destinations for wealthy Chinese looking to hedge their bets, and this exit-strategy buying has helped push prices in these locales into the stratosphere.

2) Housing busts can take awhile. After a decade of boom and bust, prices are back to fair value, below it actually, in the U.S. and Ireland, but still have a way to come down in Spain and Britain. Zombie banks tend to be reluctant to realize losses on bad loans, propping up prices in the process, but eventually reality has its day. The sooner that happens, the sooner housing, and construction, can come back.

3) Housing recoveries can take even longer. It was just 20 years ago that the land below the Imperial Palace in Tokyo was supposed to be worth more than all of the land in California combined. But beware the enduring costs of bad macro policy. Too tight money for too long has kept housing prices in hibernation decades on.

Canada is quietly trying to deflate its bubble without any eye-catching headlines. And that means keeping interest rates low while making mortgages harder to get. Now, raising rates to pop a bubble sounds like the kind of hard-hearted long view central bankers pride themselves on, but it’s more hard-headed. Higher rates don’t just make housing (or any other asset bought with borrowed money) less affordable for new buyers; they make them less affordable for old buyers with adjustable-rate loans too. That sends prices spiraling down and savings racing up, as heavily indebted households, which Canada has no shortage of, try to rebuild their net worths. Higher desired savings outpaces desired investment — in other words, the economy collapses — and subsequently cutting rates, even to zero, won’t do much to reverse this, as houses and businesses are mostly indifferent to lower borrowing costs while they focus on paying down existing debts. It’s what economist Richard Koo calls a “balance sheet recession,” and it’s a good description of how an economy can get stuck in a liquidity trap.

But by keeping rates where they are and slowly tightening mortgage requirements, Canada hopes to engineer a more gradual price decline that won’t set off a vicious circle. In the best case, prices wouldn’t fall, except belo the rate of inflation, so that real prices decline without hitting household net worths. This strategy is hardly unique — China has done the same the past few years — but it has the very Canadian name of “macroprudential regulation”.
…

The Biggest Housing Bubble in the World Is in … Canada?
By Matthew O’Brien
Jan 25 2013, 10:52 AM ET

How real is Canada’s housing bubble anyway? More real than any other country’s.
(Reuters)

Canada has a new worthwhile initiative. After years of booming prices, that bastion of politeness north of the border is looking to avoid a catastrophic housing bust for something more, well, boring. Initiatives don’t get more worthwhile, and perhaps not more difficult considering Canada just might have the biggest housing bubble in the world right now.

Not exactly boring, eh?

The distinction between higher prices and bubbly prices isn’t as subjective as it might sound. Like any other financial asset, there should be a fairly steady relationship between the price of housing and the stream of income — rent — it produces. Should be. The chart below, from The Economist, looks at the price-to-rent ratios across different countries, and measures how under-or-overvalued housing is, with negative numbers corresponding to the former and positive ones to the latter.

As realtors like to remind us, every market’s different, but there are three big takeaways here.

1) Rich Chinese buyers tend to make for overheated markets. Some of the priciest housing markets in the world have one thing in common, besides low-interest rates (which prevail most everywhere): Chinese expats. Vancouver, Hong Kong, Singapore, and Sydney are among the most popular destinations for wealthy Chinese looking to hedge their bets, and this exit-strategy buying has helped push prices in these locales into the stratosphere.

2) Housing busts can take awhile. After a decade of boom and bust, prices are back to fair value, below it actually, in the U.S. and Ireland, but still have a way to come down in Spain and Britain. Zombie banks tend to be reluctant to realize losses on bad loans, propping up prices in the process, but eventually reality has its day. The sooner that happens, the sooner housing, and construction, can come back.

3) Housing recoveries can take even longer. It was just 20 years ago that the land below the Imperial Palace in Tokyo was supposed to be worth more than all of the land in California combined. But beware the enduring costs of bad macro policy. Too tight money for too long has kept housing prices in hibernation decades on.

Canada is quietly trying to deflate its bubble without any eye-catching headlines. And that means keeping interest rates low while making mortgages harder to get. Now, raising rates to pop a bubble sounds like the kind of hard-hearted long view central bankers pride themselves on, but it’s more hard-headed. Higher rates don’t just make housing (or any other asset bought with borrowed money) less affordable for new buyers; they make them less affordable for old buyers with adjustable-rate loans too. That sends prices spiraling down and savings racing up, as heavily indebted households, which Canada has no shortage of, try to rebuild their net worths. Higher desired savings outpaces desired investment — in other words, the economy collapses — and subsequently cutting rates, even to zero, won’t do much to reverse this, as houses and businesses are mostly indifferent to lower borrowing costs while they focus on paying down existing debts. It’s what economist Richard Koo calls a “balance sheet recession,” and it’s a good description of how an economy can get stuck in a liquidity trap.

But by keeping rates where they are and slowly tightening mortgage requirements, Canada hopes to engineer a more gradual price decline that won’t set off a vicious circle. In the best case, prices wouldn’t fall, except below the rate of inflation, so that real prices decline without hitting household net worths. This strategy is hardly unique — China has done the same the past few years — but it has the very Canadian name of “macroprudential regulation”.

…

1/20/2013 @ 12:35PM
Shanghai Building 30% More Housing Than Year Ago
Kenneth Rapoza, Contributor

Developers in the city of Shanghai are trying to avoid a steadily increasing housing bubble, putting up 30 percent more properties this coming February than they did in February 2012.

The city’s major real estate developers are said to be building just 13 new residential properties in February, the same number that they planned late last year, real estate website Soufun.com said Saturday. The number is up, however, from the 10 projects Shanghai developers built last February.

The Shanghai Daily reported the figures from the Chinese language website today, saying that out of all the new housing projects, which include high rises and stand-alone housing, half will be built beyond the city’s center.
…

Hope and Change

“It should come as no surprise that the Communist Party USA is on board with President Obama’s plan to attack Americans’ right to keep and bear arms as a means to “end gun violence.” A cardinal feature of communist regimes, like all dictatorships, is the prohibition of private ownership of arms, creating a monopoly of force in the hands of the State.”

http://www.infowars.com/communists-cheer-on-obamas-gun-grab/

With the help of an emergency law usually used at times of war, the Greek government has finally cracked a strike by subway workers that had brought Athens to a standstill for a week.

After a fierce showdown that had seen the political temperature rise, employees gradually returned to work in the wake of the ruling coalition’s high-risk decision to forcibly mobilise them under threat of arrest. “The workers didn’t have an option,” said Manthos Tsakos, a prominent unionist representing metro workers. “We are exploring legal options.”

With the strike seen as a test of the government’s resolve to take on unions opposed to austerity measures demanded by the European Union and International Monetary Fund, the move by the prime minister, Antonis Samaras, brought a storm of protest, with politicians and unions condemning it as resonant of authoritarian rule.

http://www.guardian.co.uk/world/2013/jan/25/greece-athens-metro-strike

Anyone who missed watching Frontline’s “The Untouchables” can watch it here:

http://video.pbs.org/video/2327953844

China’s smog issues have been in the news a lot lately, and for good reason: Beijing’s smog levels in particular reached a level deemed hazardous earlier this month.

In Shanghai, a new animated mascot tries to make the whole smog thing a little more palatable. When the air is clear, she’s green and smiley. When air pollution is at its worst, she cries. Guess what she’s doing right now?

http://www.fastcoexist.com/1681273/chinas-dangerous-smog-levels-now-in-cartoon-form

Some highlights:

“it just so happens that people in government use guns to kill the most people by far. Surely that’s something to keep in mind when talking about gun control.”

“With all the shrieking we hear about “saving the children,” you don’t hear much about saving them from a government that has already indentured them in the future to pay off its current debts.”

“So before our insolent and audacious “public servants” start getting all uppity with their repeated calls for private citizens to lay down their weapons, we feel they should set a good civic example and lay down theirs first.”

http://takimag.com/article/uncle_sam_give_us_your_guns_takimag/page_2#axzz2J5PBPi7h

Obama Picks a Prosecutor: Mary Jo White Appointed to Head SEC
James Gattuso
January 25, 2013 at 1:10 pm
Kevin Dietsch/UPI/Newscom

President Obama, moving quickly to complete the lineup for his second-term regulatory team, nominated attorney Mary Jo White yesterday to chair the Securities and Exchange Commission (SEC). The selection is a critical one, as the agency is still struggling to complete the rulemakings required under the Dodd–Frank financial regulation act, while facing pressure from the courts and Congress to improve the sometimes sketchy quality of its regulatory analysis.

The SEC has been a key regulatory agency since it was launched in 1934 under the leadership of Joseph Kennedy Sr. But it has never before been challenged as it is now. Under Dodd–Frank, the agency was required to complete some 95 rulemakings, ranging from tightened regulation of derivatives to reform of corporate governance rules. Nearly three years after Dodd–Frank’s passage, the SEC—like other agencies such as the Commodity Futures Trading Commission—finds itself far behind schedule. As of the beginning of 2013, only 33 rulemaking proceedings have been completed. Deadlines have been missed for 49 more.

But the quantity of the SEC’s output may be a lesser concern than the quality of its analysis. In 2011, an appeals court unceremoniously threw out the Commission’s rules on shareholder proxy access, finding that the agency’s analysis of the rules’ cost and effect was severely flawed. This wasn’t a one-time hiccup—the problems found by the appeals court, many say, have long been typical of the SEC’s approach to analysis. The controversy led to the passage last year by the House of Representatives of a bill to require the SEC to complete formal cost-benefit analysis before adopting significant new rules.

It is unclear how well Ms. White’s background prepares her for these challenges. Her background is in litigation—as a prosecutor and defense lawyer—rather than as an administrator or policymaker. This presents the danger that she may see maximizing jail terms rather than expanding wealth creation as her goal. Alternatively, her litigation background could be an advantage—if it leads to focus on prosecuting actual crimes (think Bernie Madoff) rather than expanding regulation. These are questions that should be explored by Senators as they consider confirmation of White to this position.
…

Legal/Regulatory | The Trade
January 9, 2013, 12:00 pm
New Target in Finger-Pointing Over Housing Bubble
By JESSE EISINGER, ProPublica

Edward J. Pinto of the American Enterprise Institute has criticized the government’s role in the housing bubble.Brendan Smialowski for The New York TimesEdward J. Pinto of the American Enterprise Institute has criticized the government’s role in the housing bubble.

No matter how many times people debunk the notion that government policy created the housing bubble, it doesn’t die. It’s part of what the blogger Barry Ritholtz has called the “big lie” of the financial crisis. Now, we are having another argument about whether the government is creating a new housing disaster for taxpayers.

The target this time: the Federal Housing Administration, the government mortgage insurer, mostly for low-to-moderate income and minority borrowers. Late last year, the F.H.A. issued its annual report to Congress. According to estimates, over its lifetime the agency will have to pay more out on the mortgages it has insured than it has taken in. The report estimated the potential shortfall at $16 billion, which is a lot in absolute terms, but minuscule in relation to the federal budget and the $1.1 trillion F.H.A. portfolio.

Despite these modest numbers (more on that below), the same crew that assailed the government’s role in the housing bubble is now rending its garments about the F.H.A. Critics, like Edward J. Pinto of the American Enterprise Institute, argue that the agency has not only failed to help low-income communities, but is actually destroying them with reckless loans.

Next month, we may end up doing it all again, when the Office of Management and Budget issues its analysis of the agency’s finances, using a different methodology.

So is the F.H.A. in trouble and in need of an imminent bailout?
…

ANALYSIS AIR DATE: Jan. 13, 2012
Records: Federal Reserve Officials Foresaw, Joked About Housing Bubble in 2006

SUMMARY
Newly released transcripts from the Federal Reserve’s 2006 meetings reveal the extent of what Chairman Ben Bernanke and his colleagues actually knew as the country was about to hit the cusp of the financial crisis. Ray Suarez discusses the board’s detailed conversations with The New York Times’ Binyamin Appelbaum.

…history has not dealt kindly with the aftermath of protracted periods of low risk premiums.

– Alan Greenspan, Jackson Hole Speech, August 26, 2005

Fed Members Laughed As Housing Bubble Grew
Published: Monday, 30 Jan 2012 | 7:04 PM ET
By: John Melloy

It was good times at the Federal Reserve five years ago: Low interest rates instituted by then-Fed Chief Alan Greenspan had housing prices booming, the stock market was rising and Fed members were—literally—laughing their way to the…well, central bank.

History shows they may have been laughing a bit too hard.

In what may be the strangest market indicator ever, a blogger found that the amount of laughter recorded in the official transcripts of Federal Reserve Open Market Committee meetings from 2000 to 2006 correlates almost perfectly with the rise in housing prices taking place at the time.
…

ft dot com
January 14, 2011 10:37 pm
Fed misread housing risks, minutes show
By Robin Harding in Washington

The Federal Reserve spotted most of the issues that would cause the 2007-08 crisis in a discussion on the housing market in mid-2005, according to a newly released transcript of the meeting.

Members of the Fed’s rate-setting open market committee discussed a possible bubble in house prices, the growing role of unconventional mortgages, and how the use of securitisation was leading to low-quality lending. But they decided that they either could not or should not do anything about it.

“Our story basically is that we’re worried about valuations in the housing market, but we don’t necessarily see that as having profound consequences for your policy going forward,” a Fed staff economist, David Stockton, told the FOMC during its June 2005 meeting.

The transcript makes clear that the housing crash did not catch the Fed by surprise, but that it seriously underestimated the consequences of falling house prices and the danger to the financial system.

The Fed publishes full transcripts of FOMC meetings with a five-year lag. In June 2005 committee members requested a full-day discussion of the rapid rise in house prices that was then under way.

During the meeting Fed staff told the FOMC that housing seemed to be overvalued by about 20 per cent, based on price-to-rent ratios, but they played down the role of aggressive mortgages such as interest-only loans, and said that monetary policy could respond effectively to a house price slump.

“In the event of a sharp drop in housing prices, the odds of a spillover to financial institutions seem limited,” said Michael Moskow, then president of the Chicago Fed, who said the staff research made him “somewhat less concerned about the size and consequences of a housing bubble”.
…

BUSTED: Unsealed Docs Show The Fed Was Fully Warned Of A Housing Crisis
Gregory White | Jan. 15, 2011, 11:22 AM

New minutes released today show Fed members were fully aware of the growing housing bubble in the U.S. in June of 2005.

The materials include several presentations made on the subject of the emerging housing bubble in the U.S. economy. They have titles like “Is Housing Overvalued?” by Joshua Gallin and “Monetary Policy Implications of a House Price Bubble” by John C. Williams of the San Francisco Fed.

In October of 2005, future Federal Reserve Chairman Ben Bernanke told Congress he didn’t think we were in a housing bubble. Bernanke was not at the June 2005 meeting, having recently become Chairman of President George W. Bush’s Council of Economic Advisers.
…

Inside the Fed in 2006: A Coming Crisis, and Banter
U.S. Federal Reserve, via Reuters
A Federal Open Market Committee meeting on March 28, 2006.
By BINYAMIN APPELBAUM
Published: January 12, 2012

WASHINGTON — As the housing bubble entered its waning hours in 2006, top Federal Reserve officials marveled at the desperate antics of home builders seeking to lure buyers.

The officials laughed about the cars that builders were offering as signing bonuses, and about efforts to make empty homes look occupied. They joked about one builder who said that inventory was “rising through the roof.”

But the officials, meeting every six weeks to discuss the health of the nation’s economy, gave little credence to the possibility that the faltering housing market would weigh on the broader economy, according to transcripts that the Fed released Thursday. Instead they continued to tell one another throughout 2006 that the greatest danger was inflation — the possibility that the economy would grow too fast.

“We think the fundamentals of the expansion going forward still look good,” Timothy F. Geithner, then president of the Federal Reserve Bank of New York, told his colleagues when they gathered in Washington in December 2006.

Some officials, including Susan Bies, a Fed governor, suggested that a housing downturn actually could bolster the economy by redirecting money to other kinds of investments.

And there was general acclaim for Alan Greenspan, who stepped down as chairman at the beginning of the year, for presiding over one of the longest economic expansions in the nation’s history. Mr. Geithner suggested that Mr. Greenspan’s greatness still was not fully appreciated, an opinion now held by a much smaller number of people.

Meanwhile, by the end of 2006, the economy already was shrinking by at least one important measure, total income. And by the end of the next year, the Fed had started its desperate struggle to prevent the collapse of the financial system and to avert the onset of what could have been the nation’s first full-fledged depression in about 70 years.

The transcripts of the 2006 meetings, released after a standard five-year delay, 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 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.

“It’s embarrassing for the Fed,” said Justin Wolfers, an economics professor at the University of Pennsylvania. “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 continued. “My strong guess is that if we had a transcript of any other economist, there would be at least as much fodder.”
…

Foreclosed homeowner arrested in Martin County fire that critically injured firefighter

Posted by Scott T. Smith / CBS12 News
Friday, January 25 2013, 12:57 PM EST

MARTIN COUNTY, Fla. — The man who Martin County sheriff’s deputies say set his own house on fire — a blaze that critically injured a firefighter — goes before a judge for the first time Friday.

Joseph Haas was just arrested for setting his house on fire. It was in foreclosure and police say he wanted to burn it down before the bank could take it.

Haas is now facing arson and grand theft charges. He’s being held on $1 million bond. If he is convicted on all charges he faces 50 years behind bars.

The firefighter injured in the fire, Jahwann McIntyre, is still recovering after surgery. He’s expected to stay in the hospital for several more months. He suffered severe burns on 40 percent of his body.Foreclosed homeowner arrested in Martin County fire that critically injured firefighter

http://www.cbs12.com/news/top-stories/stories/vid_4725.shtml - -

1 month? He`s not a squatter, he`s a dinner guest.

Eviction notice for Boca Raton mansion squatter

Posted by Miranda Grossman / CBS12 News
Friday, January 25 2013, 11:16 PM EST

BOCA RATON, Fla. — The party could soon be over for the South Florida squatter living inside the Boca Raton mansion. CBS12 has been knocking on the door, ringing the door bell, but no one has answered. But because of recently filed paperwork, this squatter is going to have to answer soon.

The eviction paperwork is signed. Andre Barbosa’s month-long, rent-free ride is almost over. His neighbors are relieved. But will always have an interesting story to tell about the time Andre the squatter took over someone else’s $2.5 million mansion.

“Boca becomes a magnet for this odd behavior.”

“If you can beat the bank. I say go for it.”

The stunt at 580 Golden Harbour drive is getting national attention. Lynn Cherepy said he’s happy news crews are in the neighborhood.

“Covering the story is going to let other neighborhoods, other cities know that this is possible,” said Cherepy.

At first, police couldn’t do anything because of an obscure Florida law called ‘adverse possession.’ Real estate attorneys says the law allows someone to move into an empty home and claim the title. The squatter needs to stay for seven years, pay the property taxes, and hope that the owner forgets about the home. In this case, it only worked for one month.

Bank of America owns the foreclosed house, and now they filed paperwork to take back what is theirs.

Signs that were posted on the windows before have since been taken down. The only logical explanation is that somebody with access to the house has been inside to take it down.

Real estate attorneys say it appears Bank of America is trying to evict Andre civilly instead of pressing criminal charges. That could take a few days because just like any eviction, Andre will have the opportunity to respond.Eviction notice for Boca Raton mansion squatter

http://www.cbs12.com/news/top-stories/stories/vid_4745.shtml -

Anonymous hacks US Sentencing Commission, distributes files

Hacktivist group Anonymous took control of the U.S. Sentencing Commission website Friday, January 25 in a new campaign called “Operation Last Resort.”

The first attack on the website was early Friday morning. The second - successful - attack came around 9pm PST that evening.

By 3am PST ussc.gov was down (it has since been dropped from the DNS), yet as of this writing the IP address (66.153.19.162) still returns the defaced site’s contents.

http://www.zdnet.com/anonymous-hacks-us-sentencing-commission-distributes-files-7000010369/

The head of SF Housing Authority is stepping down. He’s facing three lawsuits from employees for abuse / discrimination. HUD provides much of the funding for SFHA. Of course we can’t look at all at the spending side of the federal budget equation. The problem is taxes are too low. Cut entitlement spending and the sky will fall. Look at the pay package.

Pay, car, benefits
Alvarez makes $210,500 annually and receives a car and seven weeks off each year of combined vacation and sick leave. The Housing Authority also covers his pension contributions and his dental, vision and health care benefits.

Read more: http://www.sfgate.com/bayarea/article/S-F-Housing-Authority-chief-heads-for-door-4225254.php#ixzz2J6C4u1bA

The dudes this happens to down here always have messed up faces and resisting arrest among their charges when they appear in the online booking blotter.

You Tube video emerges of Bridgeport police stomping suspect …
http://www.ctpolitix.com/you-tube-video-emerges-of-bridgeport-police-stomping-subject/ - -

One of my predictions for the New Year was that Iraq was going to come apart due to the Sunni/Shiite split. I thought it would occur after Assad fell but it is well on its way even before that occurs. To the degree Google helped create the Arab Spring it has done evil. That is the hard part of life deciding what is doing good. Do you think that the medical people that saved Hitler’s life when he was gassed during WWI ever regretted that decision?

http://www.bbc.co.uk/news/world-middle-east-21206163

Illinois seems to have run out of OPM:
http://wgntv.com/2013/01/26/illinois-credit-rating-downgraded-state-drops-to-worst-in-the-nation/

Emanuel To Banks: Stop Supporting Gun Makers

January 25, 2013 9:28 AM

CHICAGO (CBS) — Chicago Mayor Rahm Emanuel is putting more pressure on gun makers to get behind his push for an assault weapons ban and criminal background checks for gun purchasers.

This time, he wants to go after their bottom line.

Emanuel is pushing two major financial institutions to stop their financial backing of gun makers, unless those companies support “commonsense reforms, including requiring criminal background checks on all gun sales.”

The mayor is urging that banks to stop lines of credit, financing for acquisitions and expansions and financial advising.

In a letter sent Friday to the CEOs of Bank Of America and TD Bank, Emanuel said: “In the past, the gun industry has stood in opposition to these safety measures. They opposed a ban on assault weapons on America’s streets, opposed a ban on military-style clips, opposed a criminal background check on all gun purchases and opposed any effort to crack down on criminal gun traffickers.”

In the letter, Emanuel says TD Bank offers a $60 million line of credit to Smith & Wesson, which produces the AR-15. That is the weapon used by James Holmes in the Aurora, Colo., theater massacre that killed 12 people. Emanuel wrote.

Emanuel told CEO Bharat Masrani “to use your influence to push this company to find common ground” on an assault weapons ban and gun background checks.

In a separate letter, Emanuel urged Bank Of America CEO Brian T. Moynihan to do the same thing with Sturm, Ruger & Co., which has a $25 million line of credit with the bank.

“Collectively we can send a clear and unambiguous message to the entire gun industry that investors will no longer financially support companies that support gun violence,” Emanuel wrote.

Last week, Emanuel ordered a portfolio analysis from the five pension and retirement funds for Chicago employees to determine if fund managers hold financial interests in companies that manufacture or sell assault weapons.

This week, the Chicago Municipal Employees Annuity and Benefit Fund (MEABF) board voted to divest more than $1 million from three companies that manufacture assault weapons – Freedom Group, Smith and Wesson and Sturm Ruger.

http://chicago.cbslocal.com/2013/01/25/emanuel-to-banks-stop-supporting-gun-makers/ -

Good news, Futters finally shipped my order albeit two weeks late. Still tastes great; I hope they pull through. Fingers crossed!

Reverse drive-by shooting in Akron

Wylene Edwards, 59, was driving near her home Thursday night with her hazard lights flashing as snow blanketed the city.

As she approached East Tallmadge Avenue on Elma Street, Edwards said, she came upon two men walking in the middle of the road.

Edwards said she turned on her high beams so they would move out of the way.

“I would think the natural inclination would be to get out of the middle of the road,” Edwards said. “Who wants to get hit by 2 tons of steel?”

The two men stepped to the side of the road, Edwards said. Then as she drove past, shots rang out.

“You immediately get this stabbing, throbbing sensation,” she said.

The first bullet is still lodged in her left shoulder as surgeons decide how to remove it since it is close to an artery.

The second bullet left a bruise on the back of her left shoulder. A third bullet shattered her windshield.

As blood ran down her back and the pain intensified, Edwards said, she drove to the Italian Center on Tallmadge Avenue.

Staff and patrons at the Thursday night spaghetti dinner at the club helped her inside and phoned police and an ambulance. They also called Edwards’ daughter, Ashanti, who along with other family members rushed to Summa Akron City Hospital to be by her side.

“We have your mother here and she’s been shot,” Ashanti said were the first words she heard over the phone.

Police are still investigating the shooting and have no suspects.

“This specific incident is isolated,” Akron Police Lt. Rick Edwards said. “It’s the first time that someone has been shot at after flashing lights and passing.

Lt. Edwards said the victim couldn’t identify the shooters through her snow-covered windshield.

Wylene Edwards said she has traveled the street many times because it is a good shortcut from Tallmadge Avenue to Cuyahoga Falls Avenue.

During the summer, she said it’s common to see drivers flash their headlights or beep their horns to disperse people walking in the street.

Edwards said she’s not sure why her flashing her lights angered the men.

“I happened to piss him off,” she said “And I tell you what, he was a pretty accurate shot.

I drive through this neighborhood a couple of times a week to get to the Akron hackerspace. In warm weather it is usual to see groups of young men (with an rare young woman) walking in the streets. When large amounts of snow have fallen, anyone might be forced into the street - but recent snowfall was nowhere near that amount. Mild to moderate snowfalls usually keep all pedestrians indoors & off the streets. It’s not the best neighborhood, but it is one I’ll be avoiding in the future.

“Sellers are on the sidelines. Some homeowners have no reason to move. Others aren’t motivated because they would take a loss at current prices or they still owe more than their homes are worth.”

and millions haven`t made a mortgage payment in 5 years so why would they move.

Where have all the for-sale houses gone?
By Marcie Geffner • Bankrate.com

Homebuyers are back. But they’re not finding many for-sale houses to choose from.

This dearth of for-sale homes isn’t imaginary. In fact, the pool of properties actually has shrunk in housing markets across the nation.

Only 2.32 million existing homes were available for sale in the U.S. at the end of September 2012, according to the National Association of Realtors. That figure represented a 5.9-month supply of for-sale homes at the September pace of sales. A year earlier, the supply of for-sale homes would have lasted 8.1 months at the then-current pace of sales.

So, what happened to all the houses?

Leslie Appleton-Young, chief economist for the California Association of Realtors in Los Angeles, and Rick Sharga, executive vice president of Carrington Mortgage Holdings, a mortgage company in Aliso Viejo, Calif., offer some answers.

Sellers are on the sidelines. Some homeowners have no reason to move. Others aren’t motivated because they would take a loss at current prices or they still owe more than their homes are worth.

“They’re not sure what they want to do,” Appleton-Young says.

Rising prices might help those who aren’t deeply underwater reach a break-even point. Meantime, negative equity has an unexpectedly positive effect on house prices in markets hardest hit by the housing downturn, according to a recent report from CoreLogic, a real estate data and analytics company in Irvine, Calif. That’s because negative equity restricts the number of homes available for sale, and the reduced supply of homes keeps prices from falling further.

Investors are buying houses as rental properties instead of fix-and-flip opportunities. “Typically investors buy, rehab and flip, and that’s not happening much because prices are low and demand for rental units is high,” Appleton-Young explains.

Well-priced homes are selling fast, reducing the for-sale supply. “If properties aren’t priced right, they do sit, so (sellers) have to be realistic. But if it’s in the ballpark, it goes quickly,” Appleton-Young says.

Even notoriously slow short sales are moving faster due to new rules that are intended to streamline and standardize short sales for homeowners who have mortgages backed by Fannie Mae or Freddie Mac.

The supply of so-called distressed homes has declined due in part to legal snafus in the foreclosure process. Distressed homes include short sales, preforeclosures and bank-owned real estate.

“The robosigning issues and the national mortgage settlement essentially stopped foreclosure procedures in a number of states,” Sharga explains.

Banks still own hundreds of thousands of homes, and millions of homeowners are still late or delinquent with their mortgage payments, but those homes aren’t on the market and Sharga says that backlog will take time to work through.

Lenders and government agencies are selling distressed loans to servicing companies that are offering homeowners workouts and loan modifications. “A certain number of those loans will never go into foreclosure,” Sharga explains. “They’ll be modified or short-sold, so that backlog won’t all hit the market really ever.”

REO properties also are being sold in bulk to investors. The Federal Housing Finance Agency recently announced sales of 970 properties in California, Arizona and Nevada; 699 properties in Florida; and 94 properties in Chicago.

So, what does the tight supply mean for buyers and sellers?

Appleton-Young says sellers need to be wary of overconfidence and recognize that overpriced properties won’t sell soon, if at all. Buyers, meanwhile, need to recognize that markets are competitive and that all-cash offers, preferred by sellers, aren’t uncommon.

Sharga says patience is a must for buyers.

(hazard says a fountain of youth is a must for buyers)

Read more: http://www.bankrate.com/finance/real-estate/where-have-for-sale-houses-gone.aspx#ixzz2J7e745EZ
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Attack on family in Compton latest incident in wave of anti-black violence

A Latino gang is intimidating blacks into leaving the city that was once an African American enclave. It’s part of a violent trend seen in other parts of the L.A. area.

By Sam Quinones, Richard Winton and Joe Mozingo

January 25, 2013, 6:46 p.m.
The trouble began soon after they arrived.

The black family—a mother, three teenage children and a 10-year-old boy—moved into a little yellow home in Compton over Christmas vacation.

When a friend came to visit, four men in a black SUV pulled up and called him a “nigger,” saying black people were barred from the neighborhood, according to Los Angeles County sheriff’s deputies. They jumped out, drew a gun on him and beat him with metal pipes.

It was just the beginning of what detectives said was a campaign by a Latino street gang to force an African American family to leave.

The attacks on the family are the latest in a series of violent incidents in which Latino gangs targeted blacks in parts of greater Los Angeles over the last decade.

Compton, with a population of about 97,000, was predominantly black for many years. It is now 65% Latino and 33% black, according to the 2010 U.S. census. But it’s not only historically black areas that have been targeted.

Federal authorities have alleged in several indictments in the last decade that the Mexican Mafia prison gang has ordered street gangs under its control to attack African Americans. Leaders of the Azusa 13 gang were sentenced to lengthy prison terms earlier this month for leading a policy of attacking African American residents and expelling them from the town.

Similar attacks have taken place in Harbor Gateway, Highland Park, Pacoima, San Bernardino, Canoga Park and Wilmington, among other places. In the Compton case, sheriff’s officials say the gang appears to have been acting on its own initiative.

“This family has no gang ties whatsoever,” Sheriff’s Lt. Richard Westin said. “They are complete innocent victims here.”

The 19-year-old family friend managed to break free that first day and run into the house, where the children were the only ones at home.

The attackers left, but a half-hour later a crowd of as many as 20 people stood on the lawn yelling threats and epithets. A beer bottle crashed through the living room window as the youngsters watched in horror.

“They were scared if they called the sheriff they’d be killed,” Westin said. “So they called their mom, who called the Sheriff’s Department.”

The gang members were gone by the time deputies arrived, but they kept coming back, almost daily, driving by slowly until they got someone’s attention, then yelling racial insults and telling them to leave. The mother sent the children to live with relatives and is now packing up to leave herself.

“This gang has always made it clear they have a racial hatred for black people,” said Westin, who has worked in the area for more than two decades. “They justify in their own sick minds because of their rivalry with the Compton black gangs. They repeatedly used racial epithets, they use racial hatred graffiti and they tag up the black church a lot.”

http://www.latimes.com/news/local/la-me-0126-compton-20130126,0,977110.story - 215k -

Is the Apple-loving bull growing long in the teeth?

Information technology
Has Apple peaked?
The world’s most valuable firm may be past its prime
Jan 26th 2013 | SAN FRANCISCO |From the print edition

TECH blogs are abuzz. Pundits are busy pumping out predictions. The company that makes the new device that is attracting so much attention is teasing reporters by being coy about its innovative features. Apple’s product launches are always like this. But this time the fuss is not about an Apple product: it is about Samsung’s latest Galaxy smartphone, which is likely to be launched in March.

Stiffer competition in smartphones and tablets from the likes of Samsung has spooked investors in Apple. They got another fright on January 23rd when the firm revealed that its latest quarterly profit of $13 billion was flat because of higher manufacturing costs. That triggered a rout in after-hours trading: at one point some $57 billion was wiped off Apple’s market capitalisation, roughly the equivalent of the entire value of Ford, a carmaker.

Apple’s shares have been mauled by bears many times before (see chart 1), but they have always recovered. The big question on many investors’ minds is whether the firm can rebound again. Two things have whetted the bears’ appetites.

First, Steve Jobs, Apple’s founder and creative genius, is dead. The iPhones and iPads he sired still generate gargantuan profits. But his successor, Tim Cook, has yet to prove himself capable of bringing new breakthrough products to market. Second, Apple’s fantastic profit margins—38.6% on sales of $55 billion—attract competitors like sweetshops attract six-year-olds.

The company’s fans pooh-pooh the idea that Apple has peaked. The firm’s price-earnings ratio—11.6 at close of business on January 23rd—is not much different from Microsoft’s (see chart 2). That makes Apple’s shares look relatively sexy. Unlike Microsoft, which depends heavily on the ailing personal-computer business, Apple concentrates on sectors that are growing fast, such as smartphones and tablets. Only one of 60 analysts tracked by Bloomberg had a “sell” recommendation on Apple before this week’s stockmarket fallout.
…

I think the current bubble is in ammunition. Just the mention of change in the gun laws has made it impossible to find in the store. .22 LR is even gone.

Not there for work: Connecticut’s disappearing labor force

Rob Varnon
Published 12:34 am, Saturday, January 26, 2013

Donald Klepper-Smith, chief economist of New Haven-based Data Core Partners, said the number of people actively engaged in the work force in Connecticut, defined as those who are working or looking for work, fell 51,000, or 2.68 percent in 2012, the largest drop in the nation.

“We’re moving in the wrong direction, and we’re moving there fast,” Klepper-Smith said of the chart he produced using U.S. Bureau of Labor Statistics data.

In December, the state’s unemployment rate fell 0.3 percent to 8.8 percent despite losing 1,800 jobs. The reason the unemployment rate fell was because there were fewer people in the labor force, not because there were more jobs.

http://www.ctpost.com/news/article/Not-there-for-work-Connecticut-s-disappearing-4225211.php -

Interesting thing if you go to http://www.finance.yahoo and plot the graph of the S&P 500 from 1994 to present. You see three peaks: One at the year 2000, one in 2008 or so, and one now.

Colleague at work discussed technical indicators of unemployment versus the S&P. Looks like November 2012 was the potential to dip back into a 2009-style recession.

Perhaps the stock bear market will be postponed a couple years and this time the S&P 500 index will go higher than 2000 and 2008. At some point we say interest rates will return with a vengeance. This is why I still like adding to T-bills A 60% allocation in equities is not really so scary. But a couple months ago my allocation was 57.5% and I’m now pondering selling off some of my 401k stock funds and moving them to the most conservative fund in the 401k.