Nobel Economist Stiglitz Outraged That Fannie (FNM), Freddie (FRE) Paying Dividend With Our Bailout Money

Nobel Economist Stiglitz Outraged That Fannie (FNM), Freddie (FRE) Paying Dividend With Our Bailout Money: "WHAT BOTHERS ME FROM THE POINT OF VIEW OF PUBLIC POLICY IS THAT FREDDIE MAC AND FANNIE MAE CAME TO THE AMERICAN TAXPAYERS, ASKED FOR THE RIGHT TO WRITE A BLANK CHECK. CONGRESS GAVE THEM THAT RIGHT. WHILE WE ARE, AS TAXPAYERS, IN A POSITION TO PUT MORE MONEY INTO FREDDIE MAC AND FANNIE MAE.THEY'RE TAKING OUT MONEY. TO ME THIS DOESN'T MAKE ANY SENSE. IF THERE IS A THREAT OR A LACK OF LIQUIDITY IN THE FIRM, WHY ARE THEY STILL PAYING DIVIDENDS AT ALL? ANY DIVIDEND."
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So, the taxpayers commit to financial support for Fannie Mae and Freddie Mac because they are having liquidity problems, i.e., not enough $$$ given the loans they have outstanding. So waht do they do? Right away they both pay dividends to their stockholders, sending $$$ out. As Stiglitz says, did they have liquidity problems or not? If yes, they need to keep that money in house and not send dividend checks to stockholders. If no, then why on earth are they getting bailed out by the taxpayers?

Prince George's raid prompts call for probe -- baltimoresun.com

Prince George's raid prompts call for probe -- baltimoresun.com: "When the shooting stopped, two dogs lay dead. A mayor sat in his boxers, hands bound behind his back. His handcuffed mother-in-law was sprawled on the kitchen floor, lying beside the body of one of the family pets that police had killed before her eyes.

After the raid, Prince George's County police officials who burst into the home of Berwyn Heights' mayor last week seized the same unopened package of marijuana that an undercover officer had delivered an hour earlier."
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All this for marijuana? Shooting the family pets seems to be a recurrent theme in these no-knock police drug raids.

Scoopit - Miami residents stay in near-condemned condos / NZ News

Scoopit - Miami residents stay in near-condemned condos / NZ News: "Only 17 residents remained in the 51-unit Cedar's Point building along Northwest 15th Street and 16th Avenue after the housing market went bust, and those living there were left to try to manage the building on their own.

After Tuesday's near forced evacuation, only 10 remain (the others will stay at hotels with aid from the Salvation Army until they find some other form of shelter)."
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Another CID dying on the vine.

Bloomberg.com: Worldwide

Morgan Stanley freezing home equity credit lines: "Aug. 6 (Bloomberg) -- Morgan Stanley, the second-biggest U.S. securities firm, told thousands of clients this week that they won't be allowed to withdraw money on their home-equity credit lines, said a person familiar with the situation.

Most of the clients had properties that have lost value, according to the person, who declined to be identified because the information isn't public. The New York-based investment bank will review home-equity lines of credit, or HELOCs, monthly from now on, the person said yesterday.

Wall Street firms including Morgan Stanley are ratcheting back on risks after the collapse of the subprime mortgage market and ensuing credit contraction saddled banks and brokerages with almost $500 billion of writedowns and losses. Consumers fell behind on home-equity credit lines at the fastest pace in two decades in the first quarter, the American Bankers Association reported last month."
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A Morgan Stanley spokesperson confirmed it but won't state the dollar value involved.

S.F. mayor proposes fines for unsorted trash

S.F. mayor proposes fines for unsorted trash: "Garbage collectors would inspect San Francisco residents' trash to make sure pizza crusts aren't mixed in with chip bags or wine bottles under a proposal by Mayor Gavin Newsom.

And if residents or businesses don't separate the coffee grounds from the newspapers, they would face fines of up to $1,000 and eventually could have their garbage service stopped.

The plan to require proper sorting of refuse would be the nation's first mandatory recycling and composting law. It would direct garbage collectors to inspect the trash to make sure it is put into the right blue, black or green bin, according to a draft of the legislation prepared by the city's Department of the Environment."
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Great. Remind me not to move to San Francisco. What bin do the leftover leeches from bass fishing go into?

I think San Francisco has become an intensely moralistic community representing the far left, and now seeks to parade its perceived moral superiority in the most public ways possible.

JS Online: Milwaukee man faces foreclosure because he didn’t pay parking fine: "Peter Tubic ignored a $50 parking fine in 2004, and on Monday, it cost him his $245,000 house. In what city officials believe is the first case of its kind, the city foreclosed on Tubic's house on W. Verona Court after repeated attempts to collect the fine - which over the years had escalated to $2,600 - had failed...Tubic takes the blame for disregarding the 15 or more notices he received seeking payment and warning of the pending foreclosure on the house, which was fully paid off, but says he had good reason. He was physically and psychologically unable to handle the situation, he says. According to the Social Security Administration, Tubic, 62, has been disabled since 2001. He has been diagnosed with psychological disorders that limit his "ability to understand, remember and carry out detailed instructions," according to documents from the administration. In addition he suffers from chronic pain caused by degenerative diseases of the knees and spine, as well as chronic respiratory disease, diabetes and obesity, among other ailments. "
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I have been observing from time to time that municipalities seem to be emulating HOAs, and this example now holds the floor as the champion.

California Forum - David Holwerk: Get out the buckets; it'll start raining money any time now - sacbee.com

California Forum - David Holwerk: Get out the buckets; it'll start raining money any time now - sacbee.com: "The defining aspect of life in California is that people here have an enduring belief that money is bound to fall from the sky any minute now."
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Fred Pilot sent this take on the California mentality. That's about one-sixth of the US population, by the way. The belief that real estate values are like an escalator that always goes up is particularly strong in California. That's why people were buying new tract homes in the desert and commuting 70 miles each way to work in LA. They thought they couldn't lose.

Is this another housing crisis? | The Sun |News|Weird

Is this another housing crisis? | The Sun |News|Weird
Check out the photo and decide for yourself.

And Now Brace For the Bigger Wave of Mortgage Defaults

And Now Brace For the Bigger Wave of Mortgage Defaults: "There are signs that the sub-prime collapse is, finally, beginning to stabilize: The rate at which delinquencies are rising has started to flatten, especially on pre-2007 vintages (in part because mortgages that are paid or or houses that are foreclosed on don't count). But now, says Vikas Bajaj at the NYT, a larger wave of prime and Alt-A defaults is likely to take over. If so, this will likely finish blowing many bank balance sheets to smithereens."
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These analysts say "the problems in the broader market may not peak for another year or two." So that means the overall economy will continue to be fragile, and any additional major shock, such as oil prices doubling if war starts with Iran, could make for memorable times.

FT.com / In depth - Wells Fargo cheer lifts banks

FT.com / In depth - Wells Fargo cheer lifts banks: "Shares in Wells Fargo, the fifth-largest US bank, leapt by more than 32 per cent on Wednesday after it reported better-than-expected second-quarter results and lifted its dividend, leading other financial stocks and broader equity markets higher."
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Here is some good news for a change. Wells Fargo is one of the top banks in housing loans, so at least somebody is surviving this meltdown. They had declining earnings for three quarters, but stayed in the black.

FT.com / In depth - FDIC warns four US banks over liquidity

FT.com / In depth - FDIC warns four US banks over liquidity: "Losses on mortages and other loans have helped bring down eight US banks this year, including one small Florida institution on Friday. Last month, Indymac, a California lender with $32bn in assets, became one of the largest banks to go under in US history. It filed for Chapter 7 bankruptcy protection on Friday.

The banks receiving cease-and-desist orders in June were MetroPacific Bank in Irvine, California; Bank Haven in Haven, Kansas; Clarkston State Bank in Clarkston, Michigan; and Hastings State Bank in Hastings, Nebraska."
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Eight failures so far this year. The big Indymac failure last year. Four more just warned for lack of liquidity, i.e., not enough cash. As I understand it, when the FDIC decides to close a bank they just show up on Friday afternoon without notice and take over. That way the depositors can't rush to the bank to get their money out. So who knows what nasty surprises are on the horizon?

Federal judge says Mount Soledad cross can stay - San Jose Mercury News
The federal judge is Larry Burns, a friend of mine from the DA's office in San Diego and our paperboy for the Pasadena Star-News when I was a kid. What a great decision.

Urban America: The New Solid South | Newgeography.com: "Today, America’s urban areas have evolved into a political monoculture that increasingly resembles the “solid South” that provided a base for Democrats from the late 19th century to the 1960s. Since 1972, the year of the Nixon landslide, the Democratic share has grown 20 percent or more in most of the largest urban counties."
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Chicago is a great example. There is no functional Republican party opposition to the Democrat machine. No matter how bad the corruption and incompetence, the people vote for the Democrats. And that culture spread to the state government, which, thanks to corrupt Republican Governor Ryan, is now all Democrat-controlled and coincidentally corrupt and incompetent and dysfunctional. And if the coronation of Lord Obama proceeds as planned by He-Who-Must-Not-Be-Criticized and the media, a huge herd of Chicago/Illinois corrupticrats will descend on Washington and enjoy a feast at the public trough the likes of which this country has never seen. So this urban political monoculture will have disastrous consequences. Boss Tweed would have loved it.

Lake Bluff seeks records that led to tax exemption -- chicagotribune.com

Lake Bluff seeks records that led to tax exemption -- chicagotribune.com: "Lake Bluff requested financial records Thursday from a resident who got an $80,000 property tax break from the Illinois Department of Revenue after he converted his lakefront mansion into a church."
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Nice idea, but the city won't go along with it. Thanks to Dennis James, founder of Quantum Pork, for the link.

About The Lawsuit

Involuntary HOA?The Sand Lake Hills Homeowners Association, hereinafter SLH, and a group of property owners who own 57 lots in Section 3, have taken it upon themselves to attempt to remake Sand Lake Hills into something it was never intended to be: a development controlled by a homeowner association which can levy mandatory assessments against all of the owners, even those who don’t want a homeowner association and who don’t want to pay assessments. SLH has stated that membership in the association is not mandatory for current owners. However, they say that even those members who didn’t join will still have to pay. Taxation without representation was bad enough. Taxation without affiliation is even worse.
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This reminds me of those episodes of Star Trek when the Borg cube shows up and you hear, "Resistance is futile. You will be assimilated." Thanks to Beth Young for the link.

Mutual of Omaha Bank to Acquire Deposits of Failed First National Bank - FOXBusiness.com

BANK FAILURE: Mutual of Omaha Bank to Acquire Deposits of Failed First National Bank--including Community Association Banc: "OMAHA, Neb., Jul 25, 2008 (BUSINESS WIRE) ----Mutual of Omaha Bank has agreed to acquire from the FDIC the deposits of the failed Reno, Nev.,-based First National Bank of Nevada and its affiliate, First Heritage Bank of Newport Beach, Calif., the company announced...Federal regulators on Friday declared First National Bank of Nevada and its affiliates insolvent and the FDIC was named receiver...The acquisition also includes two First National operations: the Wealth Management Division and Community Association Banc, which serves neighborhood and condominium homeowners associations.
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Thanks to an alert correspondent who sent this along. Community Association Banc's website has already been changed to reflect the takeover. AHRC noted that the bank was making loans to condo and homeowner associations, was active with CAI, and was a supporter of aggressive foreclosure practices and laws in order to collect on those loans from debtors. Well, now it seems that it has gone into the "debtor" class itself.

Bloomberg.com: Worldwide

Bloomberg.com: Worldwide: "The S&P/Case-Shiller home-price index dropped 15.8 percent from a year earlier, the biggest decline since records began in 2001, after decreasing 15.2 percent in April. The gauge has fallen every month since January 2007.

Stricter loan rules, rising mortgage rates and an increase in foreclosures are making it more difficult for prospective buyers to get financing, hurting home sales. The prolonged real-estate slump, along with higher fuel prices a shrinking job market, is weighing on consumers and the economy."
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This is report I referred to below that showed LA and Miami dropping by 28%.

The Unraveling of the Suburban Fringe

The Unraveling of the Suburban Fringe: "Annual price changes in most of the largest metro areas, including New York, Los Angeles, Chicago, Miami, San Francisco, Seattle, Baltimore, Washington D.C., and Philadelphia, followed a similar pattern: Values were most stable within a 10-mile radius of the center of the city, but generally worsened with each successive radius ring as far as 50 miles from the center of the city."
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This article is an overheated analysis of the situation, but with gas prices and overbuilding on the fringe, there is more of a decline in value out there. Or actually out here, considering that I live 50 miles from Chicago.

HOA Watch - Home

HOA Watch - Home
This link was sent to me by somebody who I will keep anonymous for the moment. What we have here is a firm that offers to drive around your HOA finding violations. Check this out:

"We will do a house by house drive-through of your entire property anytime of the day or night you require. Digital photos are taken of the violations reported. This service can be done weekly, biweekly, monthly or a one-time basis. We report based on what your specific violations are for your community."

This outfit claims "over 18 years in the Homeowner Association Management field," and they even capitalize every word of it for some reason.

Bloomberg.com: Worldwide

Housing slump fuels bear market--Bloomberg.com: Worldwide
U.S. stocks fell and the Dow Jones Industrial Average lost more than 200 points for the second time in three days after the International Monetary Fund said there is no end in sight to the housing slump.
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There was also a report today saying that housing prices fell 16% over the last year. Las Vegas and Miami lost 25%.

On a lighter note, I will be on WBEZ today at 9:00 and you can check out the podcast. This is Chicago's NPR affiliate. The topic is condo associations banning the mezuzah, something I have blogged about here. Check it out by going to the program "Eight Forty Eight", or find the program at this location:
http://www.chicagopublicradio.org/Program_848.aspx