The Housing Bubble

Offices of Detroit short sale king are raided by FBI:

FBI agents on Wednesday raided the real estate offices of William Elias, the self-described “Short Sale Expert” of metro Detroit whose operations came under regulatory scrutiny late last year.

Detroit FBI spokesman Simon Shaykhet declined to comment on the morning raids, noting that documents in the case had been sealed.

In an interview with the Free Press Wednesday, Elias, a licensed realty broker, said he did not know the reason for the FBI’s visits, but said agents sought files on 23 properties that his firm helped sell in short sales.

Elias, 38, was until this fall a familiar presence on local radio and television, where he advertised his real estate services with a showman’s flair. He encouraged frustrated homeowners who were underwater on their mortgages to erase their debt by dialing 877-CALL-WILL.

The ads went off the air soon after Elias received notice in October that the Federal Home Loan Mortgage Corp., known as Freddie Mac, would add his businesses to its “Exclusionary List” of agents and lenders with which it will not do business because of alleged unsavory practices.

In its October letter, Freddie Mac cited several reasons for adding Elias Realty to its exclusionary list, including a claim that Elias Realty employees instructed Freddie Mac borrowers to secretly buy a new home before applying for short sale assistance on their current home’s Freddie Mac mortgage.

Freddie Mac also alleged that Elias’s short-sale consulting business — Taxfaster — charged “attorney fees” that were actually seller taxes that should have been paid to Freddie Mac.

Housing is a depreciating asset and a loss, ALWAYS.

I love me some craterton.

From yesterday:

————
Comment by calcan
2013-02-27 21:16:58
I agree… fire sales in Vegas and Florida too.

As to the earlier quote that “Canada is also missing ingredients that made the U.S. market so toxic — subprime borrowers”…
I think most are forgetting that Canada mortgage rates are only guaranteed 5 years. That is (in a nutshell) a suicide loan at its core.
————-

This is news to me, could you expand? Are you saying that there are NO fixed-rate mortgages in Canada? Is that how they afford their built-in TARP (whatever it is)?

I know the financial structure that caused the Ameican bubble. I know the bubble popped when we ran out of buyers. But I don’t get what’s going on in Canada.

What is that saying about useful idiots again?

——————————-

Bob Woodward says he was threatened by White House
CNN.com

Veteran journalist Bob Woodward said Wednesday he was threatened by a senior Obama administration official following his reporting on the White House’s handling of the forced federal spending cuts set to take effect on Friday.

“They’re not happy at all,” he said on CNN’s “The Situation Room,” adding that an e-mail from a senior administration official - who he would not name - communicated a message which caused him great concern.

“It was said very clearly, you will regret doing this,” he said.

Woodward penned a 2012 book reporting that the idea for the spending cuts, known as the sequester, originated with the White House. It’s a claim President Barack Obama originally denied, but the White House has since acknowledged.

“[W]hen the president asks that a substitute for the sequester include not just spending cuts but also new revenue, he is moving the goal posts,” Woodward wrote.

China enslaving the world: Beijing’s ruthless leaders subjugate armies of foreign workers
dailymail | 27 February 2013 | Tony Rennell

China’s progress has entered its second phase - entry into Western markets Ongoing financial crisis in the West has opened more doors to the East

China’s businessmen are rarely troubled by conscience or consequence

They travelled in secret to many of the world’s poorest and most backward places, in Africa, Asia and South America. There, they discovered how Chinese companies, backed by state-run banks with unlimited resources, are buying up oil, minerals, precious metals and timber to fuel the economic miracle back home — leaving those countries raped of their natural resources.

Their usual trick is to offer ‘infrastructure’ in return — a few motorways, perhaps a magnificent national football stadium, smart homes for the elite — but leave the bulk of those countries untouched, their people as poor as ever.

In an act of colonialism much more oppressive and widespread than anything the British Empire was accused of, China is subjugating vast tracts of the globe to its economic dominance, and giving virtually nothing back.

Short sales surged in 2012
CNNMoney.com - By Les Christie | 28 FEB 2013

Struggling homeowners increasingly turned to short sales to get out from under mortgage debt last year.

There were nearly three times as many short sales as there were sales of foreclosed homes in 2012, according to RealtyTrac. Foreclosures accounted for 11% of all sales, down from 13% a year before. Meanwhile, short sales rose 5% year-over-year, accounting for 32% of all home deals.

“We’re seeing fewer of the most disruptive sales, the [bank-owned foreclosures], hitting the market but there are still a lot of distressed property sales,” said Daren Blomquist, spokesman for RealtyTrac. “They’re shifting to short sales, though.”

In a short sale, homeowners sell at a price that is less than what they owe the bank, and the bank agrees to absorb the loss. Typically, a seller has to demonstrate some kind of financial hardship before the bank will approve the deal — and forgive the unpaid debt. The bank then sells the house, typically at a better price than it would have gotten had the home gone into foreclosure.

During the fourth quarter, the average discount on a foreclosure was a whopping 39%, while the average short sale sold for 23% below market, RealtyTrac found.

Many underwater homeowners were also scrambling to unload their properties before the Mortgage Forgiveness Debt Relief Act was set to expire December 31. Had the act been allowed to lapse, homeowners would have had to start paying income taxes on the portion of their mortgage that is forgiven in a foreclosure, short sale or principal reduction.

The growing number of short sales helped buoy the housing market and push distressed home prices higher last year. During the fourth quarter, for example, homes that were either bank-owned or in foreclosure sold for an average of $171,704, an increase of 4% from a year earlier.

In Arizona, prices were 22% higher in the fourth quarter compared with late 2011. In Nevada, prices jumped 21%; and in California — where short sales comprised more than a third of all sales — they increased 14%, RealtyTrac reported.

Generational Theft Needs To Be Arrested…..

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CDoQFjAA&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424127887323485704578257753243530078.html&ei=smEvUaSqJYKMigKX34GgDQ&usg=AFQjCNFFSZav9ix7FAC4ILOgIFw6r9Zknw

NFL to investigate team asking prospect: ‘Do you like girls?’

By Larry Hartstein | CBSSports.com
February 27, 2013 10:48 am ET

The NFL said Wednesday it is looking into the questioning of Nick Kasa at the combine, where the Colorado tight end said a team asked, “Do you like girls?”

“They ask you like, ‘Do you have a girlfriend?’ Are you married?’ Do you like girls?’” Kasa said in the interview Tuesday. “Those kinds of things, and you know it was just kind of weird. But they would ask you with a straight face, and it’s a pretty weird experience altogether.”

Kasa did not identify the team he was referring to.

http://www.cbssports.com/collegefootball/blog/nfl-rapidreports/21779833/nfl-team-asks-combine-prospect-do-you-like-girls - -

They could just play this in the waiting room and save some time in the interview process.

http://www.youtube.com/watch?v=457N1m4oUZw - 120k -

Yes We Can

“The sense is growing around Washington, and this increasingly includes Democrats, of living in an alternate universe. Barack Obama gives his State of the Union speech, the sequester looms, and the president flies around the country giving speeches.

Mr. Obama likes to convey the impression that he doesn’t think or do business like other presidents. It’s time to take him at his word. If Washington is starting to look like an alternative universe, that’s because the president is creating an alternative universe, the Obamaian Universe.”

http://m.wsj.com/articles/a/SB10001424127887323478304578330462496290652?mg=reno64-wsj

Immigration detainee release under fire

Federal immigration officials have released hundreds of detainees from detention centers around the country in recent days in a highly unusual effort to save money as automatic budget cuts loom in Washington, officials said Tuesday.

A spokeswoman for Immigration and Customs Enforcement, or ICE, an arm of the Department of Homeland Security, said the detainees selected for release were “noncriminals and other low-risk offenders who do not have serious criminal histories.”

They refused to specify exactly how many detainees were released, or where the releases took place. But immigrants’ advocates around the country have reported that detainees were freed in several places, including Hudson County, N.J.; Polk County, Tex.; Broward County, Fla.; New Orleans; and from centers in Alabama, Arizona, Georgia and New York.

Pete Peterson: The man who focused Washington on the national debt
Chip Somodevilla/Getty Images

Peter G. Peterson delivers opening remarks during the Peter G. Peterson Foundation 2011 Fiscal Summit at the Mellon Auditorium May 25, 2011 in Washington, D.C.

Interview by Kai Ryssdal
Marketplace for Tuesday, February 26, 2013

Pete Peterson’s long campaign against the national debt
More from Marketplace: Six degrees of sequestration

Talk of debt and deficit drag on Washington in large part because of or thanks to, depending on how you look at it the efforts of one man: Pete Peterson and his 35-year campaign that he financed himself to make debt topic number one.

We put the debate in context yesterday. Today we talked to Pete Peterson himself. And he’s not exactly thrilled with the way Republicans and Democrats in Congress have approached the deficit.

“A program like Simpson-Bowles that had about $3 of spending cuts for every dollar of revenue and wanted to tax all the aspects of the budget in which everything is on the table — and by everything, I mean entitlements, I mean tax reform, I mean defense, are all on the table — is the right way to approach this problem,” said Peterson. “And the Republicans have taken the point of view that you can’t raise taxes, and the Democrats are taking the point of view that you can’t reform entitlements are ways of blocking meaningful progress.”

Peterson says he wouldn’t be against the government borrowing more money if it meant investments in infrastructure and education, or in making social safety nets self-sustaining.

But is a long-term solution from Washington likely? “I’m going to keep working until we do, because until we do, we are not talking about the underlying problem that confronts the long-term future.”

Nobody had anything to say about my question the other day regarding the effect of the sequester on housing markets where many area residents are federal workers, like SD and DC. I guess there is nothing to worry about?

Everybody with a used home to sell, from individual households to banks, seems to be waiting “for prices to come back” before putting their homes on the market. Makes me wonder whether Japanese households are still waiting to sell, two decades after their market crashed?

Whad’ya know: Turns out GDP actually grew in Q4.2012 — BUT JUST BARELY.

The upshot: If GDP came in negative this quarter, we would NOT be in a recession yet.

Hope and Change

“A shortage of affordable housing for larger families with four or more children is a big factor behind crowded conditions at the District’s main family homeless shelter in Southeast Washington. The shelter has been filled to capacity this winter, with more than 900 people, including a record 600 children some nights.

Such families stay far longer than average in the converted rooms of the abandoned D.C. General Hospital, creating a bottleneck at a shelter initially intended to provide only temporary respite from the cold. One mother of 13 — five of whom lived with her in the shelter — was there for more than a year.

D.C. Department of Human Services officials say the rapidly gentrifying city has lost more than half of its affordable housing in the past decade. That makes it difficult to find an affordable house or apartment big enough for larger families, even with government help, they say.

Family homelessness in the city, up 74 percent since the economic downturn, has continued to increase, even as it has stagnated or dropped in neighboring jurisdictions.

Rising poverty, unemployment and a lack of housing options among single parents who are heads of households are driving the city’s problem, experts say. The vast majority of parents living in D.C. General are single and female, according to the Department of Human Services.

In the District, 18 percent of families living below the poverty level have one or two children, compared with 38 percent with three or four children and 67 percent with five children or more.”

http://m.washingtonpost.com/local/dcs-main-shelter-crowded-with-large-families/2013/02/27/efdbdb38-7d0a-11e2-a044-676856536b40_story.html

Bulletin Chicago purchasing gauge hits highest level in nearly a year

Feb. 28, 2013, 7:43 a.m. EST
Danger as stock-market ‘Greedometer’ flashes red
Commentary: Key indicators look ominous for the market
By Brett Arends

“Danger, the emergency destruct sequence has now been activated. The ship will self-destruct in t-minus, ten minutes. The option to override automatic detonation will expire in t-minus, five minutes…” — Mother, “Alien” (1979)

Have you ever felt like Ripley — Sigourney Weaver — at the end of Alien? After the monster has wiped out all of her fellow crew members, she decides to kill it by blowing up her spaceship, the Nostromo. She sets the ship’s self-destruct mechanism and races for the escape shuttle — only to find the alien now blocking her way.

The next few minutes are a hair-raising race against time. As Ripley barrels back through the long corridors of the space ship, “Mother,” the voice of the ship’s computer, ominously counts down the time left until everything will go kaboom in a blinding, space-bending explosion.

The stock market feels a little like this. The higher it goes, the more euphoric the cheerleading, the more the airheaded Gamma-class humans put on the happy face and hum their way to work, the more terrifying it becomes for anyone who actually bothers thinking. (Luckily, this excludes most of Wall Street). At best we feel like Jones, the ship’s cat, getting banged around in a portable cage.

I hate to state the obvious, but stocks are just a claim on companies’ future dividends. That’s it. By definition, the higher they rise in price, the worse a deal they are. (I am amazed this is ever a subject of debate, as it is a tautology). Mom and Pop, with an instinct for self-preservation which suggests human beings are descended from the lemmings, usually pile on board at the peak.

Is it happening again?
…

If you don’t like watery beer, just don’t buy Anheuser-Busch products. It’s just that simple!

Food and Beverage Industry
Lawsuit Says Anheuser-Busch Beers Are Even More Watered Down Than You Think
By Brad Tuttle
Feb. 27, 2013

Have Budweiser drinkers been getting less buzzed? Former employees at Anheuser-Busch breweries say that they routinely watered down popular beers such as Budweiser, Michelob, Natural Ice, and Bud Light Platinum. Class-action lawsuits have been filed in three states accusing the brewery giant of selling beers that overstated the amount of alcohol they contained.

This week, lawyers filed suits in New Jersey, Pennsylvania, and California on the behalf of drinkers who may have purchased beers that packed less punch, alcohol-wise, than their labels led consumers to believe. Each of the three suits is seeking damages of more than $5 million, and more lawsuits are expected to be filed against Anheuser-Busch, specifically in Ohio and Colorado. Lawyers say that the watering down of beers can result in beers that contain 3% to 8% less alcohol than their labels indicate.
…

Why the Sequester Won’t Solve America’s Debt Problems

While Congressional leaders squabble about the sequester, scheduled to take effect March 1, Making Sense contributor Larry Kotlikoff says that the United States has bigger financial problems that could affect generations to come. Photo by Dave Reede/Getty Images.

Paul Solman: With the sequester just days away, we could have bombarded you with opinions from economists of various stripes. But everyone’s doing that. So instead, we give you the most opinionated economist we know and yet love: Making Sense stalwart Larry “Ask Larry” Kotlikoff, whose Social Security Q-and-A is published every Monday.

Larry has been warning that our national debt is unsustainable for almost as long as I’ve been at PBS NewsHour. And I started in 1985!

Personally, I think Larry is a little bit of an alarmist and we have argued about our debts and prospects in 2010 and again recently, when Larry described Congress’ deal to stop the so-called fiscal cliff the “latest victory in the war on our children.”

In short, I would read Larry’s post with a grain of salt, but I still recommend the read.
…

Forward

“Official communications in recent weeks have shown that some agencies are better positioned than others to avoid furloughs if the Friday sequester deadline passes without Congress passing an alternative deficit reduction plan.

So how have those agencies managed to avoid the likelihood of furloughs while others are talking doom and gloom?

Some union leaders and lawmakers, especially Republicans, say planners just have to put their mind to it.

“They really haven’t done their homework,” said John O’Grady, president of a Chicago region chapter of the American Federation of Government Employees.

O’Grady said most agencies haven’t yet maximized reductions in contractor spending and that some have provided five-figure bonuses to managers during the past fiscal year, despite the automatic cuts looming.

Indeed, the Pentagon, Department of Homeland Security and Federal Aviation Administration have said in recent weeks that they expect furloughs to be necessary under a possible sequester, and all dedicate a relatively high percentage of their budgets toward pay and benefits.

Lester said agencies that rely heavily on grants and contracting are less likely to depend on unpaid leave to meet their reduction targets. “They have the ability to push the cuts into their contracts — they can delay them,” he said.

Conservatives have challenged agencies to identify and trim more waste, while union leaders have urged them time and again to reduce spending on private contractors — even pressing Congress to pass legislation to that effect.”

http://m.washingtonpost.com/blogs/federal-eye/wp/2013/02/28/how-are-some-agencies-avoiding-likelihood-of-furloughs-under-sequester/

Posted: 5:00 a.m. Thursday, Feb. 28, 2013

Short sale approvals before default on the rise
By Kimberly Miller

Palm Beach Post Staff Writer

Banks are increasingly willing to approve short sales before borrowers go into foreclosure, a bright spot for struggling homeowners hoping to escape an underwater mortgage with the least damage to their finances.

About 27 percent of home sales in Palm Beach, Broward and Miami Dade counties last year were short sales where the lender had not filed foreclosure papers against the homeowner, according to a distressed property report released today by the Irvine, Calif.-based RealtyTrac.

It’s a turnaround from a time when borrowers had to default on their mortgages before persuading their bank to do a short sale, which is where the lender agrees to accept less for the home than what is owed on the mortgage. In South Florida, the average difference between the unpaid mortgage balance and non-foreclosure short sale price last year was $116,505, the RealtyTrac report said.

South Florida Realtor Joanne Epstein said the paradigm shift by banks is a reaction to federal rules that went into effect Nov. 1 allowing homeowners to qualify for a short sale even if they are current on payments. Banks also earn credits to satisfy their obligations under the $25 billion National Mortgage Settlement by approving short sales.

“Some people are so scared to not pay their mortgage because they don’t have bad credit and don’t want bad credit,” said Epstein, who works for the Keyes Company/Ragbir Team. “But they can’t afford to pay anymore and are just throwing out good money.”

The federal rule changes only affect loans backed by Fannie Mae and Freddie Mac.

Under the November changes, borrowers who are current on their mortgage but suffer a hardship such as a death, divorce, or a job change requiring them to move more than 50 miles from their home can be qualified for a short sale by their loan servicers without additional approval from Fannie or Freddie.

The RealtyTrac report notes that the number of South Florida short sales conducted in 2012 before a foreclosure was filed increased 30 percent from the previous year.

Statewide, 33 percent of all home sales last year were short sales completed before a foreclosure was filed. The average difference between the unpaid principal balance and non-foreclosure short sale price was $94,950.

Housing experts say short sales benefit homeowners and lenders. A homeowner suffers a lighter ding to his or her credit than if a foreclosure was completed. Lenders save the cost of a lengthy court proceeding.

An increase in short sales may also lead to a quicker housing recovery, said RealtyTrac Vice President Daren Blomquist. South Florida short sales had a higher average sale price last year _ $133,816 _ than bank-owned homes, which went for an average of $129,320.

“Allowing these homes to change hands more quickly will put them with new homeowners who have loans they can afford, which means they are more likely to maintain the property,” Blomquist said. “They’ll be more motivated to be responsible homeowners.”

Kevin Kent, a broker-associate with Platinum Properties in Palm Beach County, questions RealtyTrac’s numbers. He said the percentage of non-foreclosure short sales seems high and that many lenders remain stalwart about having homeowners go into default before considering a short sale.

“Until someone misses payments, the lenders aren’t paying a lot of attention,” Kent said.

But banks are more amenable in general to doing short sales because “they get hurt a lot less,” Kent said.

Bessball been belly, belly good to me.

http://tampa.craigslist.org/hil/etc/3647961132.html

Calling all tech industry workers. It’s the end of February, which is typically the period when you find out what your bonus is going to be for the previous year and if you’re going to receive a raise for the current year. Just doing an informal poll of what percentage of your total bonus is being paid out (if at all) and what percentage raise if any is on the table.

I’m looking at a 3% increase in salary and 42% payout on the bonus. The company didn’t hit it’s numbers for 2012, so we didn’t get anywhere near a full payout on the bonus…

In other news, I’ve gotten a few interesting emails over the last month from corporate recruiters, so it may be time to make a move (now that the bonus is done).

Feb. 28, 2013, 11:27 a.m. EST
U.S. consumer debt rises for first time since 2008
By Jeffry Bartash

WASHINGTON (MarketWatch) - American consumers increased their debt in the final three months of 2012 for the first time since the fourth quarter of 2008, which was during the middle of the last recession, the New York Federal Reserve Bank said Thursday. Consumer credit rose $31 billion to break a four-year downtrend. The bank said the increase mainly occurred in non-housing related debt such as student and auto loans and credit cards. Overall mortgage debt was basically flat, though new mortgage debt rose $553 billion and increased for the fifth straight quarter. All together, consumer debt edged up 0.3% to $11.34 trillion in the 2012 fourth quarter. Yet debt is 10.5% lower compared to the peak of $12.68 trillion in the third quarter of 2008, the bank said.

Today’s the Pope’s last day. There is talk the next Pope could be Brazilian. I’m not Catholic but I think a Brazilian Pope would make a lot of sense for the Catholic Church. South and Central America are Catholic to the max. Brazil is the largest Catholic country in the world, but like all of South America, Catholics are leaving the Brazilian Catholic Church in droves to become Evangelicals. A Brazilian Pope (also being South American) could stem or reverse this tide in the whole of South America. This is big.

Brazilians are not Hispanic but they are Latin. The entire Latin America and all the Latin countries in the world (including Italy) would have that Latin thing in common with a Brazilian Pope.

Another reason is Africa. Africa contains 16% of the world’s Catholics and is the fastest growing region for the Catholic Church. (Many African Catholic Priests are allowed to marry) Brazil and Africa have a history and share many cultural and ethnic aspects. They are also (albeit on different levels) developing countries. I think a Brazilian Pope would strengthen the Catholic Church in Africa as well for the reasons just mentioned.

Just throwing out some thoughts for comments. (Not because a Brazilian Pope would raise the comps in Rio)

Hope and change

Forward

Who will the next president blame?

————————

Delinquencies On Student Loans Surpass Those On Credit Card Debt
Tyler Durden - 02/28/2013 - Zerohedge

Those who have been following our year-long series exposing the student debt bubble are by now well aware that this latest $1 trillion+ reincarnation of subprime will have a very unhappy ending. Which is why today’s release of the quarterly Fed report on household debt and credit will hold few surprises for them. There is however, one data point which is notable: as of December 31, 2012, the soaring delinquency rate on student loans (first reported here, and subsequently confirmed by the Fed itself), has surpassed that of credit card debt.

Until we see this on the cover of Time magazine we have not hit the height of the obama housing bubble v2.0

“The Great American Housing Rebound”
Tyler Durden’s - 02/28/2013 - Zerohedge

When it comes to provocative financial magazine covers, until now this has been the domain mostly of the Economist and Barrons. Which is why we were not surprised to see Bloomberg do all it can (and it sure can afford to do a lot) to steal the spotlight. With this week’s cover page of “The Great American Housing Rebound” it may have done just that, for obvious reasons, or rather one politically uncomfortable reason.

Snore…

Bulletin Gold’s 5% loss in February is fifth straight monthly decline

Feb. 28, 2013, 12:36 p.m. EST
Gold falls, set for 5th straight monthly loss
By Myra P. Saefong and Sarah Turner, MarketWatch

SAN FRANCISCO (MarketWatch) — Gold futures fell for a second session Thursday, poised to suffer a fifth straight monthly loss, as mostly upbeat U.S. economic data took away some of the precious metal’s investment appeal.

A firmer dollar added even more pressure to gold prices, as the market digested news on the nomination of Haruhiko Kuroda to the post of governor at the Bank of Japan, which fanned dovish monetary-policy hopes.

Gold for delivery in April GCJ3 -1.06% dropped $18.70, or 1.2%, to $1,577 an ounce on the Comex division of the New York Mercantile Exchange. It fell $19.80, or 1.2%, on Wednesday.

Tracking the most-active contracts, prices were trading around 5.1% lower for the month. They’ve already posted monthly declines for each of the last four months.

“Good U.S. economic data is neutral to bearish for gold,” said Chintan Karnani, an independent bullion analyst based in New Delhi.

“A certain extent of good U.S. economic data has already been priced in gold prices, so there is nothing exceptional to cheer for gold bears,” he said.
…

The stock market is once again falling up.

Bulletin S&P, Nasdaq notch 4th straight monthly gains even as Thursday rally fizzles
Feb. 28, 2013, 4:18 p.m. EST
U.S. stocks slip at the close; up in February
By Kate Gibson

NEW YORK (MarketWatch) — U.S. stocks on Thursday finished mildly lower after a last-minute retreat from gains that had the Dow Jones Industrial Average (DJIA -0.15%) coming within 15 points of its all-time closing high. “We’ve had a great run here, so it’s perfectly natural for a little selling to come in after such a move,” said Alan Skrainka, chief investment officer at Cornerstone Wealth Management. “We have two enormous opposing forces. On the one hand we have deleveraging, which we saw in the GDP numbers with government spending down. Then we have enormous stimulus, and it’s pretty clear which side is winning,” he added. The Dow Jones Industrial Average (DJIA -0.15%) ended at 14,054.49, down 20.88 points, or 0.2%, leaving it up 1.4% for its third consecutive monthly gain. The S&P 500 (SPX -0.09%) shed 1.31 point, or 0.1%, to 1,514.68, up 1.1% for February, which extended its monthly winning streak to four. The Nasdaq Composite (COMP -0.07%) lost 2.07 points, or 0.1%, to 3,160.19, leaving it up 0.6% for the month.

Interesting CNBC piece on how the average person can’t afford to buy a new car.

http://finance.yahoo.com/news/cars-increasingly-reach-many-americans-145957880.html

If the typical new car costs $30,550, with an average monthly payment of $550, the five cities most able to meet - or come close - are:

1) Washington

Average Household Income: $86,680

Affordable Purchase Price: $31,940

Maximum monthly payment: $628

2) San Francisco

Average Household Income: $71,975

Affordable Purchase Price: $26,786

Maximum monthly payment: $537

3) Boston

Average Household Income: $69.455

Affordable Purchase Price: $26,025

Maximum monthly payment: $507

4) Baltimore

Average Household Income: $65,463

Affordable Purchase Price: $24,079

Maximum monthly payment: $468

5) Minneapolis

Average Household Income: $63,352

Affordable Purchase Price: $24,042

Maximum monthly payment: $470

At the other end of the scale, those five cities least able to handle a car payment are:

21) Phoenix

Average Household Income: $50,058

Affordable Purchase Price: $17,243

Maximum monthly payment: $348

22) San Antonio

Average Household Income: $48,699

Affordable Purchase Price: $17,137

Maximum monthly payment: $334

23) Detroit

Average Household Income: $48,968

Affordable Purchase Price: $17,093

Maximum monthly payment: $332

24) Miami

Average Household Income: $45,407

Affordable Purchase Price: $15,188

Maximum monthly payment: $295

25) Tampa

Average Household Income: $43,832

Affordable Purchase Price: $14,516

Maximum monthly payment: $282

http://www.nytimes.com/interactive/2013/02/28/us/politics/proposals-to-avoid-sequestration.html

A nice summary of the proposals.

http://www.lpsvcs.com/LPSCorporateInformation/NewsRoom/Pages/20130228.aspx

5.3 million non-current loans as of 12/31/12
5.2 million non-current loans as of 1/31/13

Just watching the paint dry.

State-by-state data will be out next week.

According to Rep. Maxine Waters, over 170 million could lose their jobs if the sequester cuts happen. Which is troubling when you consider there are only a little over 140 million jobs in the U.S.

Rep. Maxine Waters: 170 million people could lose their jobs due to …
http://washingtonexaminer.com/rep.-maxine-waters-170-million-people-could-lose-their-jobs-due-to-sequestration/article/2522843 - -

Financial Times
February 28, 2013 7:01 pm
Spain suffers worst corporate slide of crisis
By Miles Johnson and Tobias Buck in Madrid

Spain’s largest companies suffered the worst drop in quarterly earnings since the country’s crisis began as new data showed the Spanish economy was shrinking at a faster rate than expected.

On a day when more than a third of Spain’s Ibex 35 index reported full-year results Bankia, the nationalised lender, reported a net loss of €19.2bn, the largest in Spanish corporate history. Meanwhile, ongoing restructuring woes at Spanish carrier Iberia saw International Airlines Group swing to a near €1bn full-year pre-tax loss from a profit the year before.

“It has been the worst year for corporate earnings in Spain since the crisis began,” said Emmanuel Cau, European equity strategist at JPMorgan. “Earnings have collapsed in Spain for domestically focused businesses, which reflects a sharp fall in domestic GDP.”

With eight companies still to report, the Ibex 35 index as a whole reported a net loss of €2.7bn in the fourth quarter, according to analysis by Mirabaud, the worst since the crisis began, with banks contributing to the bulk of the losses.

But while the earnings reports highlighted the depth of the economic downturn last year, several corporate leaders voiced confidence that their companies would enjoy a better performance in 2013. The turnround is set to be especially pronounced at Bankia, which predicted it would post a full-year profit this year, while Telefonica pleased investors by showing signs that the deterioration in its Spanish business was stabilising.

Other large Spanish companies continued to be sheltered by profits from their international businesses while earnings at home were hurt by domestic woes, with one in four people jobless. Telefonica, Spain’s former state telecoms monopoly, said sales at home slumped 13 per cent over last year, while Repsol, the oil group, saw fuel sales at domestic petrol forecourts fall 9 per cent.

The flurry of earnings reports came as new data revealed that the Spanish economy contracted at a faster pace than previously thought late last year.

In a sign of the continuing weakness in the country’s credit-starved economy, output fell 0.8 per cent in the last three months of 2012 – the sharpest quarterly drop in more than three years – Spain’s national statistics office said.

Analysts said the fall highlighted the challenge faced by the Spanish economy this year. “Official forecasts for the economy look far too optimistic,” said Jonathan Loynes of Capital Economics, pointing out that the government was predicting a fall in GDP of only 0.5 per cent in 2013, about one point less than consensus forecasts.
…

In December 2012, 11% of sales in CA were “REO” (which I presume includes foreclosures), 25% were short sales (which most definitely do NOT include foreclosures). The rest were “equity” sales–”normal” sales.

So, back to the stupid CA law.

Dual tracking would mean that ALL 36% of the sales were in the foreclosure process, but 25 of the 36 points didn’t complete the process (ie. were sold short rather than complete the process).

If you were to keep the ratio the same, 11 foreclosures for every 25 short sales, but NOT pursue a dual-tracking strategy (as is now forbidden), you would need to decrease foreclosure filings by 25/36, or…70%.

Foreclosure filings in CA fell from December to January by 60%.

The drop is easily explained by ceasing the dual tracking.

Time will tell if the non-current loan rate in CA continues to fall as it has been.

I guess the Blade Runner took the Joe Biden Firearms Safety course.

Joe Biden Has More Gun Advice: ‘Just Fire the Shotgun Through the Door’

Feb. 27, 2013 10:00pm Jason Howerton

BIDEN: Well, the way in which we measure it is—I think most scholars would say—is that as long as you have a weapon sufficient to be able to provide your self-defense. I did one of these town-hall meetings on the Internet and one guy said, “Well, what happens when the end days come? What happens when there’s the earthquake? I live in California, and I have to protect myself.”

I said, “Well, you know, my shotgun will do better for you than your AR-15, because you want to keep someone away from your house, just fire the shotgun through the door.”

http://www.theblaze.com/stories/2013/02/27/joe-biden-has-more-gun-advice-just-fire-the-shotgun-through-the-door/ - -

“Get what you can get for your house today because it’s going to be less tomorrow for many years to come.”

Obama Civilian Security - YouTube
http://www.youtube.com/watch?v=Tt2yGzHfy7s - 209k -
Jul 17, 2008 …

Why I didn`t even know we had full-time 18-24 year old FEMA Corps. Didn`t Germany have something like this in the 1940s?

Welcome to the FEMA Corps Inaugural Class

September 14, 2012
2:05 pm

The inductees are pioneers, combining the exceptional record of citizen service at AmeriCorps’ National Civilian Community Corps with FEMA’s specialized mission of supporting survivors with their recovery after a disaster. The new members, who range in age from 18-24 years old, will contribute to a dedicated, trained, and reliable disaster workforce by working full-time for ten months on federal disaster response and recovery efforts. As we announced in March, FEMA Corps sets the foundation for a new generation of emergency managers; it promotes civic engagement and offers an educational and financial opportunity for young people; and is designed to strengthen the nation’s disaster response by supplementing FEMA’s existing Reservist workforce.

I commend and thank every member of the inaugural class of FEMA Corps for their dedication to helping communities in need. Welcome to FEMA Corps!

http://www.dhs.gov/blog/2012/09/14/welcome-fema-corps-inaugural-class - 35k -

The Obama presidency has been the best thing that ever happened to gun manufacturers.

Obama’s re-election drives gun sales
By Aaron Smith @CNNMoney
November 9, 2012: 11:43 AM ET

President Obama’s re-election is driving gun sales because of concerns about tighter regulations on semiautomatic rifles, like this pistol-gripped Hi-Point, pictured far-right at a Tallahassee firing range.
NEW YORK (CNNMoney)
Gun sales are up in the wake of Barack Obama’s re-election on Tuesday, driven by fears of tighter regulations under a Democratic president, especially for firearms that might be classified as assault weapons.

“Sales are up,” said John Kielbasa, owner of Fernwood Firearms in Hankins, N.Y. “I had a guy waiting here first thing in the morning [after the election.] He came in, bought two AK-47s.”

Kielbasa said that he sells semiautomatic versions of the fully automatic Kalashnikov rifles, as is permitted by law. He said the demand for semiautomatic rifles is being stoked by memories of the assault weapon ban pioneered by another Democrat, former President Bill Clinton.

That ban, which expired in 2004, didn’t eliminate the weapons entirely, but restricted their features, limiting magazine capacity to 10 rounds and regulating pistol grips, bayonet attachments and flash suppressors.

Lawrence Keane, vice president of gun industry group National Shooting Sports Foundation, says that modern sporting rifles — a term that he prefers to assault weapons — are “the most popular type of rifles being bought today by Americans.” He says they’re used by hunters, target shooters, veterans returning from Iraq and Afghanistan, and citizens who want to protect their property from looters in the wake of recent storms.

Fears that a ban on the weapons might come back under Democratic leadership drove gun enthusiasts to buy firearms when Obama was first elected in 2008. The most reliable way to track the number of gun sales is via background checks, and they spiked after the last election.

The Federal Bureau of Investigation conducted 97,848 firearms background checks on Nov. 28, 2008, according to the National Shooting Sports Foundation. That’s the third-highest number of background checks ever recorded in a single day. The FBI conducted 12.7 million background checks during all of 2008, compared to 11.2 million the year before. They’ve been climbing ever since.

“It’s going to be good for me for business,” said Kielbasa, who specializes in “tactical firearms,” according to his web site. “But eventually, if they’re going to ban all this stuff, what am I going to sell?”

If China’s manufacturing is already slowing down, just wait until the U.S. federal workforce collectively tightens their belts to wait out the sequester. This party is just getting started, folks.

China February official PMI to dip, hurt by weak export demand

A labourer works at a steel factory in Dalian, Liaoning province December 4, 2012. REUTERS/China Daily

BEIJING | Tue Feb 26, 2013 11:08pm EST

(Reuters) - Chinese factory activity probably grew at its slowest pace in four months in February as foreign demand remained sluggish, shoring up expectations that China’s economy is set for a only feeble recovery this year.

The median forecast from a Reuters poll of 14 economists showed the official purchasing managers’ index (PMI) likely edged lower to 50.2 in February after seasonal adjustments, from January’s 50.4.

That suggests Chinese factories still grew in February on a monthly basis, but only modestly since the 50-point level separates expanding from contracting activity.

“The focal point will be new export orders, which dipped into the contraction zone in January,” said Connie Tse, an economist at Forecast Pte in Singapore.

China’s large export sector has been one of the worst-performing parts of its economy in the past two years as belt-tightening by European and U.S. shoppers slashed demand for Chinese goods, a trend analysts say should subsist in 2013 if global consumption gradually recovers.

Growth in Chinese exports averaged 8.4 percent each month last year, down sharply from monthly expansion of 20.7 percent in 2011.

In a possible sign of things to come, China’s official PMI for January showed export orders shrank on a monthly basis as the sub-index fell to 48.5.
…

Fed food fight continues…

Feb. 28, 2013, 5:19 p.m. EST
Fed’s Fisher: Fundamentals don’t back stock levels
By Greg Robb

WASHINGTON (MarketWatch) - Economic fundamentals don’t justify the level of equity markets though “that is for the market to decide,” said Richard Fisher, president of the Dallas Federal Reserve Bank on Thursday. The Fed has been consciously helping the stock market by driving bond rates down, Fisher said. The Dallas Fed president wants the central bank to begin to scale back its $85 billion-a-month bond buying program. “I think it is time to really, perhaps, just taper this off. That doesn’t mean to stop it, we’re not going to go from wild turkey to cold turkey, but I do think we’ve run up to the limits of the efficacy of what we’re doing,” he said in an interview on CNBC. Asked if that would cause market disruption, Fisher replied: “there is a lot of momentum” and volume in equity markets, making it a good time to at least “socialize the concept” that the Fed will slow down purchases. U.S. stocks retreated Thursday from all-time highs.

Pimco’s Gross says get ready for lower returns
February 28, 2013, 7:15 AM

With the Dow Jones Industrial Average within spitting distance – make that 89 points — of its record closing high, traders are on the lookout for signs things are getting overstretched.

For what it’s worth, Federal Reserve Chairman Ben Bernanke doesn’t think we’re in a stock market bubble. But the question of what causes markets to overheat is an enduring one, bond firm honcho Bill Gross warned Wednesday in his monthly investment letter.

Diagnosing “irrational exuberance” isn’t easy to do, but there are signs “irrationality” is on the rise, which means lower returns may be in store from corporate bonds and, possibly, stocks, he said, while expanding on a speech by Fed Governor Jeremy Stein.

“On a scale of 1-10 measuring asset price ‘irrationality,’ we are probably at a 6 and moving in an upward direction,” Gross wrote.

So what are the implications? Gross writes:

Corporate credit and high yield bonds are somewhat exuberantly and irrationally priced. Spreads are tight, corporate profit margins are at record peaks with room to fall, and the economy is still fragile. Still that doesn’t mean you should vacate your portfolio of them. It just implies that recent double-digit returns are unlikely to be replicated and that when today’s 5% to 6% high yield interest rates are adjusted for future defaults and recovery values, that 3% to 4% realized returns are the likely outcome.
…

San Diego is a federal hotspot
The region experienced spike in size of U.S. budget, now will see cuts
By Matt Clark7:28 p.m.Feb. 28, 2013

Wait times at the San Ysidro Port of Entry could rise from three hours at peak weekend times to five hours if sequestration cuts go through, the White House says. [U-T file] Wait times at the San Ysidro Port of Entry could rise from three hours at peak weekend times to five hours if sequestration cuts go through, the White House says. [U-T file] — John Gibbins

The federal government due for automatic budget cuts starting Friday is a large and growing operation, perhaps nowhere more so than San Diego County, home of wide-ranging Naval operations, a bustling border and vibrant biotech and drone sectors.

About $37 billion flows into the county each year, a number that includes billions of dollars for defense contracts and $500,000 for researchers to study safer sex intervention for clients of sex workers in Tijuana.

Federal spending here has grown from $19 billion at the start of the century. The county’s economy, over the same period, grew at about half that rate.
…

Speaking of who bears the costs of ownership, yesterday morning some pest control guys were working in front of the other unit of the duplex we live in. I casually asked what the chances were the termites were also in our place.

The exterminator’s reply: “If I were a gambling man, I’d have it inspected.”

I told my wife to notify our landlords that they need to get a termite inspection. Since they bear the risk of loss on the property, I don’t intend to pay a dime for termite control. Been there / done that when I used to be an owner.