Important News - Nov. 05
By Daniel at 5 November, 2009, 5:00 pm
New Role For Goldman: Taking Away People’s Homes
Joining other Wall Street firms that bought millions of subprime mortgages, Goldman companies have gone to courts from California to Florida seeking approval to foreclose on the homes of middle- and lower-income Americans who couldn’t keep up with their loans’ soaring monthly payments.
“Commercial real estate values will fall 40 percent, on average, from their peaks in mid-2007, and up to 50 percent in some sectors, according to the 2010 edition of Emerging Trends in Real Estate, released on Thursday by the Urban Land Institute and PricewaterhouseCoopers LLP.
It will be the worst commercial real estate decline since the Great Depression, eclipsing the 1990s savings-and-loan crisis, according to the report.”
“As the worst recession since the Great Depression appears to be ending, the Social Security Administration grapples with an unprecedented flood of disability applications due to aging baby-boomers and heavy job losses.
Pending claims are expected to jump 70 percent this year, said Dan Allsup, spokesman for Illinois-based Allsup Inc., which represents people applying for disability payments.
“The number of people held up at the initial level is just exploding,” Allsup said, blaming that giant jump on the ailing economy and what he terms the “silver tsunami” of America’s graying population.”
“Delinquencies in commercial mortgage-backed securities (CMBS) accelerated in October, according to a report from Barclays Capital (BarCap).
The 30-plus day delinquency rate jumped 41bps to 5.5% in October as current loans deteriorated and transferred to special servicers. For the past three months, delinquencies have grown an average of 34bps, and BarCap analysts expect the pace to increase through 2009 and into 2010.”
“Nov. 5 (Bloomberg) — Allstate Corp., the largest publicly traded U.S. home and auto insurer, is paring its municipal-bond holdings because state and local governments are “not in great shape,” Chief Executive Officer Thomas Wilson said.
“We’ve just recently begun to reduce our exposure to municipals because we are uncomfortable with some of the fiscal practices of some of the government entities,” Wilson said yesterday in an interview after the Northbrook, Illinois-based company reported a third-quarter profit. “If you look at their balance sheets or income statements and put it in financial terms, they are not in great shape.””
“Nov. 5 (Bloomberg) — The global speculative-grade default rate rose to 12.4 percent in October, the highest proportion of defaults since the Great Depression, according to Moody’s Investors Service.”
“We might as well state this outright: The United States Government is on a trajectory to default on its obligations. In its current financial condition, it will not be able to fund its forecasted budget deficits and unfunded Social Security and Medicare promises on top of its current debt obligations.
This isn’t official yet, and we don’t know when the market will react to it, but there is no longer any doubt about the extent of its trajectory. There simply isn’t enough taxing power, value creation or outside capital willing to support its egregious spending.”
“BIRMINGHAM, Ala. (CN) - JPMorgan Securities will cough up or forego receipt of more than $720 million to settle an SEC complaint about the Jefferson County sewer bond fiasco that left the county on the verge of bankruptcy. Two JP Morgan executives paid more than $8 million in bribes to get the county’s $5 billion bond business, according to the settled federal complaint.”
“In taped conversations, the men acknowledged the payments were “scam transactions” and “payoffs” that were “the price of doing business,” according to the SEC complaint.”
“Maryland will likely have to increase payments to its teacher and employee pension funds by $189 million next year, lawmakers learned this week as officials with the State Retirement Agency broke down its results from fiscal 2009.
Pension officials said the state’s pension funds have promised to pay out $17.5 billion more than Maryland has put aside. The State Retirement and Pension System has about $28.6 billion.”
“To plug a $475 million budget gap — the largest since Daley’s 1995 school takeover — CPS is raising property taxes by $43 million and cutting 450 more jobs. Some of them may be teachers.
Swamped with pension costs, Huberman has warned that next year’s budget gap could approach $900 million. That means “everything is on the table,” including increased class size, teacher layoffs and pay cuts and a reduction in pension contributions, he said.”
- 10) Pennsylvania pension costs (from newspaper editorial)
“To keep the public pension systems solvent, the state expects its $524 million share of pension costs this year to jump to at least $1 billion in 2010-11, $3 billion the following year and $4 billion the year after that, according to the Senate Appropriations Committee. School districts will see their pension contributions increase from a little under 5 percent now to up to 30 percent.”
“The board in charge of San Jose’s police and firefighter pensions today will decide what rate of return on investments to use in its projections. Should it be 8 percent, or 7.5?
It may seem picayune. But this decision will have profound implications for taxpayers, and it will tell them a great deal about the priorities of the board’s members.”
“There is growing consensus among experts that 8 percent is an unrealistically high estimate that hides the true cost of the pensions.
Next year, for example, San Jose is forking over an additional $45 million to its two pension funds — close to the cost of libraries and code enforcement combined — primarily to help make up for the funds’ $1 billion in losses. And that’s in addition to the $137 million or so taxpayers are expected to contribute to meet current funding obligations.”
“The trailing 12-month global speculative-grade default rate edged up to 12.4% in October from a revised level of 12.3% in September 2009, breaking the post-depression record high of 12.2% reached in July 1991, said Moody’s Investors Service in its latest monthly default report. A year ago, the global default rate stood at only 3.0%.”
National debt at $11.97 trillion according to treasurydirect.gov (higher than what the national debt clocks say)
“Thousands of borrowers on the verge of foreclosure will soon have the option of renting their homes from Fannie Mae, under a policy announced Thursday.
The government-controlled company, through its new “Deed for Lease” program, will allow borrowers to transfer ownership to Fannie Mae and sign a one-year lease, with month-to-month extensions after that.”
14A) “This is nothing other than yet another scam to avoid recognition of bad paper Fannie took on their books and has a HUGE embedded loss.”
“This is yet another scam folks, all courtesy of our government who will do anything to avoid admitting the extent of the liabilities that are now in Fannie and Freddie’s portfolio (and by extension, partially in The Federal Reserve as well!)
But the economy is getting better, right?
That’s why we keep seeing scheme after scheme, scam after scam, all intended to do one and only thing - avoid a true and accurate accounting of losses that have already occurred.”
(The info above was posted at Nathan’s Economic Edge)
……….No, you don’t have to ask the government to do this. It’s all they do.
– Saxplayer00o1
No comments yet.