Bechtel, Blackwater, General Dynamics, Northrup Grumman.........Read on
At this rate how long can you hold on or the economy goes into a full blown depression. Oh I forgot. The news media says we're not in a recession.
Bechtel, Blackwater, General Dynamics, Northrup Grumman.........
42 comments:
I thought this was a blog about LLNL.
Sorry to those who disagree, but I think there are better places to bash the prez than here. We need to focus on our job situation.
It'll just be more of the same or worse if Hillary and the first lady Bill get into office. Anyone have a cartoon of Bill in a skirt, bra and long hair?
Regardless we need real change and in a big way. tearing down what we've become is a great start and I'm talking from the top down starting with the greedy corporate America chumps. It's our politics and it's intertwining with corporate America that suck, and they idea that most everyone at the top is dirty in one way or the other..
hi march 11 10:01PM!
The primary goal of the post was not bash the president but to show that corporate america rules! It is all connected.
Bechtel botched countless projects and yet they and KBR have the highest number of government contracts!
We are not bashing anyone, we are telling the truth and waking you up!
Posted on Fri, Mar. 14, 2008
U.S. economy frayed as oil soars, dollar falls and foreclosures mount
By MARTIN CRUTSINGER
THE ASSOCIATED PRESS
last updated: March 14, 2008 03:29:33 AM
WASHINGTON -- Oil hit a record high, the dollar sank again, and consumers stopped buying pretty much everything.
Stocks kept gyrating, too, Thursday, swinging between gloomy recession evidence and rising hopes that all the bad news would bring another aggressive cut in interest rates when the Fed- eral Reserve meets next week.
The Bush administration, conceding that the economy is facing "difficult" times now, rushed out new proposals aimed at next time -- plans to fix various problems that have led to a severe crisis in credit markets.
Administration officials predicted an economic rebound once the impact of the Fed's credit cuts and the recently passed eco- nomic stimulus package begin to be felt.
Private analysts were not as confident, worrying that the economy is being hit by multiple blows and noting that some of the problems, such as plunging home sales and mortgage defaults, are showing no signs of abating.
"We're in the belly of the recession beast right now and all we really can do is take defensive action," said Bernard Baumohl, managing director of the Economic Outlook Group.
The Commerce Department reported that consumers, battered by falling home values, job losses, soaring energy costs and a severe credit squeeze, stopped going to the malls in February, triggering a 0.6 percent drop in retail sales.
That was the second big drop in retail sales in the past three months, a pattern consistent with the onset of a recession. Sales were down across a broad swath of the economy, from autos and furniture to appliances.
Consumer spending accounts for two-thirds of economic activity, and many economists believe the country is in recession or soon will be.
At the White House, deputy press secretary Tony Fratto said the Bush administration expected a "difficult and challenging" period. But he also said U.S. residents should have confidence in the long-term future of the economy because of the positive impact of the Fed's rate cuts and the eco-nomic stimulus package that will send rebate checks to 130 million households starting in May.
Bush is headed to New York today to de- liver a speech on the economy.
"I think it's important for the president to get out and talk about how he sees the economy, and why he sees the economy improving as the year goes on," Fratto said. But he conceded that surging energy prices were acting as a drag and "higher oil prices and higher gasoline prices are not going to go away overnight."
Northern valley gas above U.S. average
Indeed, crude oil and gasoline prices hit all-time highs Thursday with crude closing at $110.33 per barrel on the New York Mercantile Exchange.
Gasoline prices jumped 2.1 cents a gallon overnight to a national average of $3.267 a gallon, according to AAA and the Oil Price Information Service.
Analysts forecast that gasoline prices will keep climbing.
Gas prices are even higher in the Northern San Joaquin Valley. In Modesto, for example, gas prices were an average of $3.51 a gallon Thursday, down from $3.53 a day earlier. Statewide, the average was $3.60, down a penny from Wednesday.
The dollar, meanwhile, dropped anew as global investors worried about the length and severity of any U.S. downturn. The dollar dropped below 100 Japanese yen for the first time since November 1995. It traded as low as 99.75 yen before recovering some ground to change hands at 102.04 yen, unchanged from Wednesday.
The euro rose to a new high of $1.5625 after a report that showed U.S. retail sales fell in February, beating a day-old record of $1.5559. It later fell back to $1.5587 in late New York trading, still above the $1.5526 it brought in New York on Wednesday.
Analysts agreed that the dollar was likely to remain weak amid financial market jitters.
At the same time, gold hit a new milestone Thursday, rising to $1,000 an ounce for the first time in futures trading. The price of gold has jumped nearly 20 percent since the start of the year after rising nearly 32 percent in 2007.
The huge advance is mainly the result of a weaker dollar and record-high crude oil prices. Lower interest rates, and the prospect of more cuts, bringing the dollar's value down makes dollar-based commodities such as gold cheaper for foreign buyers.
The weak currency has made gold more attractive because the metal is a hedge against inflation.
On Wall Street, stocks slid but then rebounded somewhat as traders grew hopeful about a Fed rate cut Tuesday of one-half point to as much as three-fourths of a point. Investors' moods were bolstered after Standard & Poor's predicted that financial companies are nearing the end of the massive write-downs in the value of subprime mortgages and other assets.
The rating agency estimated that writedowns of subprime asset-backed securities could reach $285billion globally, up from a previous projection of $265 billion. However, it said that "the end of write-downs is now in sight for large financial institutions."
Changes proposed in housing sector
The worst of the U.S. slowdown has been the housing sector, which has been in a two-year slump that has seen sales and prices plunge in many formerly hot real estate markets. Those declines have shaken consumer confidence and triggered rising mortgage defaults.
The president's Working Group on Financial Markets, led by Treasury Secretary Henry Paulson, put forward a broad blueprint of changes Thursday. The proposals were aimed at correcting abuses from mortgage brokers who pushed prospective buyers into loans they could not afford, Wall Street investment firms that aggressively packaged the mortgages in securities and credit rating agencies that failed to assess the risks those securities carried.
While the recommendations could help prevent a repeat of the current crisis, critics said the administration needed to go much further to stave off an expected tidal wave of foreclosures in coming months.
Nearly 60 percent more U.S. homes faced foreclosure in February than in the same month a year ago, according to a report Thursday from California-based RealtyTrac Inc. Nevada, California and Florida registered the highest foreclosure rates.
The Northern San Joaquin Valley is second only to Florida in foreclosures, Realty Trac reported Thursday.
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No president is going to fix these issues by him or heself, period
Posted on Fri, Mar. 14, 2008
Foreclosures hit paradise: Even Napa not immune
By EVELYN NIEVES
THE ASSOCIATED PRESS
NAPA -- For many residents of this, one of the most storied valleys in the world, life is still a bowl of grapes. But beyond the picturesque vineyards and stonewalled estates, times are shaky.
Tourists sipping their way up the 30-mile valley from the city of Napa to Calistoga may never see this other Napa Valley. But this celebrated wine country is proof that there are few places in the nation left untouched by the housing crisis. Napa is experiencing foreclosures, plunging housing prices, unheard of drops in home sales and the nervous sense of foreboding that has spread across the country.
"I don't recall anything like this, and the end is not in sight," said John Tuteur, the Napa County assessor-recorder-county clerk, who has witnessed several recessions in the three decades he has served the county.
In the nine-county San Francisco Bay Area, where home sales tumbled in January to their lowest levels in 20 years, Napa County suffered the sharpest drop -- more than 55 percent from a year earlier, according to Dataquick Information Systems, a real estate research firm. In the same period, houses at any stage of foreclosure jumped by 152.9 percent.
What has happened in Napa mirrors what has happened all over, said Andrew LePage, an analyst at DataQuick. For prospective first-time home buyers, houses sprang up to accommodate their desire to own, LePage said, and mortgage brokers found ways to secure the buyers' loans.
Not that little Napa County (population 134,000), with some of California's highest home values, is ready for bankruptcy. For now, the wine towns of Calistoga, Yountville, St. Helena and Rutherford, where starter homes start at more than $1 million, remain relatively unscathed; the worry in those towns is that the broader economic downturn will depress tourism.
But the city of Napa, which is the county seat and the largest population center with 75,0000 residents, and its lesser-known neighbor, American Canyon, are where Napa's working people live, and they are bearing the brunt of the housing crash, not to mention its collateral damage.
American Canyon, known for the visitors center that is the usual first stop on the Route 29 wine trail, is a new town. It incorporated in 1992 and grew from 6,000 people in 1999 to more than 14,000 residents in 2007.
But excitement over fast-sprouting developments has given way to concern over unsold houses and languishing businesses.
"Everybody knows somebody whose house is in trouble," said Larry Kudrna, a 40-year resident of American Canyon and former president of the city's chamber of commerce.
Houses in new developments are for sale -- either because of foreclosure or because the owners are threatened with it -- even as developers are building the rest of the planned sites.
Richard Ramirez, the city manager, said American Canyon is looking on the bright side. "Obviously," he said, "any community that had a very large spurt in housing starts between 2001 and 2006 would have a disproportionate amount of stress in this environment."
Perhaps the best bellwether of the times is the city of Napa, which has spent the last seven or so years playing catch up with Yountville, St. Helena and its other illustrious neighbors.
Within seven years, median housing prices in Napa rose 99 percent, to $550,000 in June ($532,500 now), according to DataQuick. But the people who flocked to the city seeking refuge from the million-dollar houses in San Francisco, Marin and other parts of Napa County are seeing the same flurry of "for sale" signs that are hitting so many other once-booming cities across the country.
Downtown Napa is a maze of construction as developers proceed apace with plans for more than $300 million in new stores, offices and condominiums. But tourists, at least during the off-season, are few and far between and Main Street has a forlorn, empty feel.
Mary Rocca and her husband, who own two vineyards on the outskirts of town, opened a tasting room on Main Street two and a half years ago. It is too soon to tell whether the national recession will mean fewer tourists coming to buy Napa wines, county leaders said. But Rocca said she is not worried about Napa's promise dissolving in the slow economy.
Even if they have to wait a few years for the economy to recover, she said, she is not concerned.
"I think people will still want their wine," she said. "At least, I hope so."
Posted on Fri, Mar. 14, 2008
Gas, diesel rocket to new records
By JOHN WILENAP Business Writer
last updated: March 14, 2008 01:05:44 PM
NEW YORK
The rally in energy prices gained momentum Friday, with retail gas prices rising further into record territory and diesel and heating oil futures setting records of their own amid concerns about strong global demand and tight supplies.
Crude oil prices fell modestly as a sharp downturn in the stock market and worries about the economy prompted some profit-taking. But with the Federal Reserve expected to cut interest rates again next week, analysts expect the dollar to weaken further, propelling crude to new records.
At the pump, gas prices set records for the fourth straight day, rising 1.3 cents Friday to a national average price of $3.28 a gallon, according to AAA and the Oil Price Information Service. Average prices are nearing $4 in some parts of Hawaii.
Diesel, meanwhile, rose 2.9 cents to a new record national average of $3.938 a gallon. Heating oil, a fellow distillate and close cousin of diesel, jumped to new records on the New York Mercantile Exchange.
Diesel, used by trucks, trains and ships, is used to move the vast majority of the world's goods. While the U.S. economy appears to be slowing, the global economy continues to grow.
"Demand for diesel worldwide has been incredible," said Phil Flynn, an analyst at Alaron Trading Corp., in Chicago.
April heating oil futures rose 2.17 cents to settle at a record $3.1465 a gallon after earlier setting a new trading record of $3.222 a gallon.
Oil prices fell for a change Friday, following stocks lower after Bear Stearns Cos. acknowledged serious financial problems, and the Federal Reserve and JPMorgan Chase & Co. bailed the investment bank out.
Light, sweet crude for April delivery fell 12 cents to settle at $110.21 on the Nymex Friday after rising earlier to within pennies of its latest trading record of $111, set Thursday. It was oil's first decline in a week. Futures rose $5.60, or 5 percent, this week.
Despite the respite, analysts see little on the horizon to change the upward pressure on oil prices, which have set new records for seven straight sessions, and have risen nearly 12 percent since last week.
Analysts blame the weak dollar, which set a new low against the euro on Friday, for oil's recent rally. Crude futures and offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the dollar is weak. Interest rate cuts further weaken the dollar and have helped drive oil's rise.
Another reduction in benchmark lending rates is expected at the Fed's regularly scheduled monetary policy meeting on Tuesday. The Labor Department's report Friday that consumer prices were unchanged last month - a sign inflation remains low - appeared to clear the way for a substantial interest rate cut.
"We still have this link to the dollar, and that's not going to go away at any point," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill.
That means pain at the pump will continue for American consumers. The Energy Department expects gas prices to rise to near $3.50 a gallon this spring, while some analysts say prices could peak as high as $3.75 or even $4 a gallon.
Diesel, which is a big part of the reason prices of food and consumer goods are on the rise, is likely to breach the $4 a gallon level soon.
High fuel prices are sure to cut demand at some point, analysts say. Demand for gasoline has fallen nationwide every week since late January. However, diesel may be more immune from price pressure than gas, analysts say.
Analysts gas and diesel prices will eventually fall, but believe the decline may come only after high prices have pushed the economy into a severe slowdown.
"This is a bubble, and everyone is waiting for it to pop," Flynn said.
In other Nymex trading Friday, April gasoline futures rose 0.66 cent to settle at $2.6894 a gallon, and April natural gas futures fell 36.2 cents to settle at $9.868 per 1,000 cubic feet.
Associated Press writer Gillian Wong in Singapore contributed to this report.
Copyright laws are obviously not being enforced here.
Trivia of the day. The great depression was in large part caused by people not spending money because they were pessimistic about the future.
All the doom and gloom right now is great for Fox's ratings but over stated and self reinforcing. Put another way, eventually perception becomes reality.
March 14, 2008 11:29 PM
The recession is here and the depression is next regardless of what so called PRESIDENT you get in, so stand by and watch your future stocks and investments go right down the poop shoot bubby. So much for your plush retirement plans.I'd say in about 14 years it may turn around but not as fast as you may think. Personally I don't have a problem with that and would enjoy watching the rich dip-heads lose their butts and end up in the gutter going through the trash cans to find something to eat. We need to be brought back to REALITY my fiend.
Yes sir buddy. American's are really smart people. NOT! I guess once gas goes to $7.00 a gallon you may all get your heads out of your "cracks". However by that time you'll be in a depression and it'll be to late to do anything. Just think. If you have taken all the money you spend on the nuclear weapons program since WWII and put it in alternative transportation and alternative fuels we'd been far ahead of the world. As it stand now you're about to become a third world nation with no skilled labor and totally dependent on foreign national for your day to day survivals. How stupid are you? Look around and you'll see answers. BTW: Before you can fly with the eagles of the rest of the world you'll have to shed your gang banging punks that roams the streets in the same manner you did Bonnie and Clyde. Anything less than intolerance will keep you right where you are. ready to play with the big boys. America? Dorks. PS: You also need to dump the trash in Washington, DC who're working against you, that're in bed with coporate America before you can move frowards.
Smart People Will Always Prevail
March 15, 2008 2:41 PM
I agree. If we were spending $11B a month on the bullets trains and ridding the country of gangs banging morons along with spending the taxes we pay on fuel to accomplish this goal I'd be more than willing to pay the debt we're acquiring, but, as it stands now we are spending that much a month on the Iraqi war where in the end will have NOTHING !!!
Oh I forgot one other waste of money that should be cut 100% by midnight tonight and applied these projects. That's the space program. Who in the heck cares about the universe. We have enough problems to resolve right here on earth. Are you listening congress.
Ok 2:52 PM, lets just take your NASA plan for a spin and see how things go:
"NASA CONTRACT AWARDED TO LLNS
by Fox NEWS, Nov 15, 2012
LLNS has just won the contract to manage NASA. As part of the plan, all Shuttle service will be suspended. LLNLS will instead purchase astronaut's seats on Chinese Space flights.
"We can save a lot of money this way, which in turn will double our management salaries."
In phase II, the new conractors plan to rightsize the astronauts, outsourcing new ones from India. "All we really need is the reports on what happened. We can get that from anyone".
Phase III involves demolishing the old NASA buildings, which are outdated. "It is part of our redevelopment plan. We can create new executive office suites and a series of strip malls, all of which Florida desperately needs. I mean, how many consumers actually need a 525 foot tall Vehicle Assembly Building anyway, haha." said a LLNS spokesperson.
March 15, 2008 5:23 PM
I too have no use for NASA except to maintain satellite communications both civilian and military. The rest of the BS of exploring other plants and trying to find other beings in the universe is a big waste of money, time and effort. Solve planet earths problems first. The bottom line is. If there is other life out there they're probably far more intelligent than we are and want nothing to do with mankind. We arejust a "bad experiment" that went wrong many moons ago. The UFO's are probably just unmanned probes that come back to check on us just to see how the morons on earth have evolved. I'll bet when the data is downloaded to their planets mainframe for all to read, we make the headlines of on all of their major news medias. Most are shaking their heads in disgust and probably asking their ULM / governing body to order the termination of those fools before they find a way to explore the universe and find us. They are nothing more than trouble in the making and we can't afford to have them evolve any further.
Notice to all LANL Trolls, you have your own BLOG. Do us all a favor and stay there. Your act is tired, transparent and more than a little pathetic.
Some advise for you fools that like to live beyond your means and think you're God gift to creation:
Kristof: Your finances benefit if you follow these tips last updated: March 16, 2008 12:04:16 AM
You can't do anything about the U.S. consumer price index, the official inflation measurement that is on the rise.
But believe it or not, you are totally in charge of your "personal price index," and tweaking it to save hundreds or even thousands of dollars a year doesn't have to hurt -- too much.
Just follow these 10 easy steps:
FIX MORTGAGE RATE -- If you have an adjustable-rate mortgage, refinance with a 30-year fixed-rate loan. Your biggest monthly expense will flat-line -- and eventually drop off a cliff.
Last week, the lowest rate for a conforming 30-year fixed rate was 5.375 percent, translating into a monthly payment of $2,240 on a $400,000 mortgage. If the best rate is more than what you're paying on your ARM, and you're not threatened with an imminent rate hike, don't call your broker right away. Be patient -- and pay attention, because rates could drop in the near future. Make www.bankrate.com a favorite in your Web browser and check rates at least once a week.
APPEAL PROPERTY TAX -- If you purchased your home in the last few years, there's a good chance you're paying too much property tax. In California, property values in most parts of the state have been plunging.
The silver lining in this black cloud is that the county will reassess your property to reflect the lower value, but you may have to fill out a form to get the ball rolling. That can save you hundreds -- maybe thousands -- of dollars.
The caveat: The law says these reductions in value are temporary. If property values jump back up, the assessor's office can boost yours to the pre-appeal level. Of course, if you think the county is wrong, you can appeal again.
How do you do it? You'll find instructions and forms on the Web sites of your county's assessor's office.
PLAN A WEEKLY MENU -- Arguably the most expensive items in your refrigerator are the ones that spoiled before you ate them -- all cost, no return.
To avoid having your vegetable bin turn into a petri dish, never set foot inside a grocery store without a list. And take a trip back in time. Sit down once a week and make a menu for each day. Post it somewhere that you'll see in the morning so you'll remember to take the pot roast out of the freezer or that today is the day you promised yourself to bring tuna on rye to work for lunch.
Your trips to the market will be reduced, as will be the need for emergency takeout. You'll be better able to mix up the menu, alternating meat dishes with less expensive vegetarian selections.
You'll save maybe one gallon of gasoline, at $3.50 a gallon, and $10 on spontaneous food purchases each week -- a total of $702 a year.
BE SMART ABOUT SNACKS -- As the parent of a constantly ravenous teenage son, I'd guess that a good portion of the average family's eating-out bill -- which exceeds $2,700 annually -- stems from swinging through a fast food joint to pick up an after-school bite. Personal experience says that anything I get at Burger King is going to cost a minimum of $5.
Meanwhile, my 15-year-old will just as happily heat up frozen Costco burritos, which cost 37 cents each (in the handy 24-pack). In other words, one meal at Burger King costs the same as almost a week's worth of burritos, assuming he has two a day, and my guess is that the burritos are marginally more healthful.
TELECOMMUTE -- Now that most phone companies have flat-rate plans, working from home isn't likely to generate a huge phone bill. But driving to work every day can bankrupt you.
If your office is 20 miles away and your car gets 20 miles to the gallon, you're spending about $7 a day. If you telecommute two days a week, you'll save $14 a week, or $728 a year.
SHOP FOR LIFE INSURANCE -- If it's been several years since you've checked out life insurance, you're in for a nice surprise. Term life premiums have dropped dramatically.
A person who bought a $500,000, 20-year level-premium term policy a decade ago, at age 35, is paying $700 to $800 a year, says Byron Udell, president of AccuQuote, a Wheeling, Ill.-based insurance brokerage. If that person is still in good health, he or she can replace the remaining 10 years on the policy at less than half the cost -- about $310 annually. And a 45-year-old would pay about $625 annually for a 20-year level-premium term policy today.
CHECK HEALTH COVERAGE -- If you're in a two-income family and both employers offer health insurance, make sure you spend some time evaluating the costs and benefits of each plan. In recent years, employers have moved toward subsidizing employee- only coverage far more heavily than family coverage. For a couple with no kids, that often means it's far cheaper to cover each spouse at his and her own workplace.
The analysis gets more complex for families with children. In some cases, it's most cost effective to buy family coverage with one employer, though some families are reluctant to put all their health benefits in one basket. The worry is often misplaced because many plans allow employees to enroll midyear if they've had a significant change in life circumstances, such as a job loss, which caused them to lose other coverage.
QUIT SMOKING -- The $4.50 to $5 per pack is just the start of what smoking costs. Those great term life insurance rates quoted earlier, for example, evaporate for anyone checking the box for "smoker." Instead of paying $625 for a $500,000 policy, a 45-year-old smoker would pay about $2,500, Udell says.
So that pack-a-day habit adds up to $1,825 a year for cigarettes alone. Add the life insurance costs of about $1,875 and you get an annual bill of $3,700 -- before you account for the potential additional doctor's visits, dry cleaning bills and other ancillary costs of smoking.
PAY DOWN DEBT -- I don't have to tell you how foolish it is to carry a balance on a credit card: If you buy something and leave the debt on an 18 percent card, you'll have paid for the item twice in less than five years. But some smart people will tell you that the same doesn't hold true when you're borrowing against your home because this debt is tax deductible, and many otherwise savvy advisers will even urge you to use a home equity loan to finance a car.
This is insane.
Yes, mortgage and some home equity debt is tax deductible, so that, in simple terms, each dollar you pay in mortgage interest will cost you only 60 to 70 cents. But you're still out 60 to 70 cents.
If you manage to save some money out of your monthly budget by following the previous tips, use at least a portion of that to pay off -- in this order -- your credit cards, car loans, personal lines of credit, home equity lines and, finally, the mortgage.
USE REWARDS CARDS -- True confession: I am a credit card junkie. I use plastic to buy clothes, books, groceries. Understand, I never have a revolving balance. As soon as the bill comes, I pay it. So, all I get from using a credit card is "float" -- about 20 extra days to pay -- and "rewards" of cash or gift certificates.
In an average year, these rewards pay me $400 to $600.
My criteria for a rewards card is simple: I want a no-fee card that pays cash or provides gift certificates for something I use frequently: books from Amazon and groceries from Costco, for instance.
I don't want miles that I might have trouble using to book a trip, or "points" that can be redeemed only for merchandise, or credit on hotel stays.
Want to find a rewards card that meets your criteria? Point your Web browser to www.cardtrack.com and click on "search cards." The one caveat: Make sure you have the discipline to pay off your cards every month and never purchase anything that you wouldn't otherwise buy just because you're using plastic.
Los Angeles Times columnist Kathy Kristof welcomes your comments but cannot respond individually to letters or phone calls. Write to Personal Finance, Business Section, Los Angeles Times, 202 W. First St., Los Angeles 90012, or e-mail kathy.kristof@latimes.com.
TRIBUNE MEDIA SERVICES
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Posters comments:
Basically this is how you wantta-be's rich should have been living your lives all along, but, you didn't. So now over the next 13-17years you'll have to pay for your mistakes and I mean pay big-time. Enjoy what most of us have been living for decades and some for our entire lives. I hope it hurts "really bad" to the point where no pain killer can take the pain away.
Actually, the news media says we are in a recession. George Bush says we are not in a recession. I suggest you correct the top post.
By J.N. SBRANTI
jnsbranti@modbee.com
February 2008 Home Sales
Foreclosure workshop March 29
Northern San Joaquin Valley home sales Northern San Joaquin Valley home sale prices plunged again in February, dropping to levels not seen since early 2004.
But for the first time in many months, Modesto real estate brokers are practically giddy with enthusiasm over jumps in pending sales and prospective buyers.
First the bad news: Median home sale prices fell to $250,250 last month in Stanislaus County. That was $104,750 below February 2007 and $10,000 less than what homes sold for January.
San Joaquin County saw an even bigger price drop. The median-priced home there went for $275,000 in February, which was $130,750 less than the year before and $20,000 less than in January.
Merced County wasn't much better. Homes there sold for a median $225,000 in February, which was $95,000 below the year before and $9,750 lower than in January.
The sales statistics, from DataQuick Information Systems, show some communities have been hit harder than others.
Home prices dropped most in south and west Modesto (down 54.7 percent in one year), Patterson (down 37.3 percent), Turlock (down more than 38 percent), Waterford (down 40.9 percent), Denair (down 47 percent), Atwater (down 35.1 percent) and Los Banos (down 35.6 percent).
Now the good news:
"The number of homes being sold is increasing substantially," said Mike Zagaris, president of PMZ Real Estate. "The value of homes that have closed in March compared to February is up 31 percent for us."
Other real estate companies agree business is booming.
"Being in the foreclosure capital of the world is actually starting to be to our benefit because it's made it affordable to buy a home again," said Craig Lewis, president of Prudential California Realty. "Prices have been driven down so much that local residents can afford them."
It's now possible to buy "a 1,000-square-foot home in OK condition for $100,000 to $125,000 in Modesto," said John Melo, chief executive officer of Century 21 M & M and Associates.
"We're selling homes priced below $200,000 on a daily basis now," Melo said. "First-time buyers and investors are entering the market, and they're getting steal-of-a-deals."
Melo said 70 percent of pending sales are for bank-owned houses that had been foreclosed on. He said banks are willing to slash prices dramatically just to get those houses off their books.
"Inventory is just starting to shrink," Lewis said. Based on deals in the works, he predicted a surge of sales will close escrow during the next 60 days.
After two years of falling home prices, Zagaris said the increase in sales volume signals that price stabilization is near.
"I believe we've reached the bottom of the market," said Zagaris, who thinks prices will "bounce along the bottom" for a while as the excess inventory of homes for sale clears out.
Melo said that even though additional foreclosed houses are coming on the market every day, banks are pricing them low to sell them quickly. He said such deals are so good that those houses often get multiple people competing to buy.
Attracting buyers to some neighborhoods, however, has forced sellers to drastically cut prices.
Last month in the 95351 ZIP code, which covers west and south Modesto, the median home price was $145,000. That was less than half what homes sold for there a year ago. About 40 homes in that ZIP code are listed for sale with prices at or below $100,000.
Melo warned that some of those very low-priced foreclosure houses are in rough shape, with no appliances, trashed cabinets, holes in walls and other damage.
Potential buyers shopping for homes should get inspections and warranties before buying, Melo suggested.
To get the best deals, Melo said, buyers need to be approved for loans before they make offers to buy. He said banks selling foreclosed properties are most likely to accept offers from those able to close escrow within 30 days.
Bee staff writer J.N. Sbranti can be reached at jnsbranti@modbee.com or 578-2196.
And the good news is, if you can't sell your home for what you paid for it you will pay income taxes on the difference as eanred income, NOT, write it off as a loss. Maybe it's pay back time for all those bay area people who came to the valley to live a lavish lifestyles of the rich and famous. I can't say I feel sorry for them. They just had to move into that 3000-4000 square foot home instead of taking the money they earned from the sale of their home in the bay area and pay CASH for the new one. Now they will lose everyhting they every made in capitol gains. Yippy !
Looking better all the time. Can you say it's time to put a run on the banks, take your money and put it in a coffe can.
Even some who can pay mortgage are doing it, but that's the wrong answer
By VICKI LEE PARKER
THE NEWS & OBSERVER (RALEIGH, N.C.)
Nation's 10 biggest lenders will be at Modesto event March 29
There's a terrible idea apparently spreading amid the mortgage meltdown that the best solution to foreclosure is to stop paying your mortgage and abandon your home.
There even are companies springing up that help homeowners "walk away" for about $1,000.
Among the supposed benefits: You can live rent free for at least eight months or however long it takes the bank to evict you and use the money to pay down other debts. You even could use the money as a down payment on a less-expensive home that you try to buy before the foreclosure appears on your credit report.
Monica Granados regularly encounters people who aren't even trying to fight foreclosure in San Joaquin County. Granados is a process server who delivers eviction notices to houses repossessed by lenders.
"Many times, the houses have been abandoned and the people are long gone. I always wonder: Why did they move? They could have worked something out," said Granados, who recently helped a friend renegotiate "a really good deal" on her Stockton home loan to avoid foreclosure.
Granados said lenders these days seem much more willing to help borrowers save their homes, but that wasn't the case last fall when her Salida house was foreclosed on. Now Granados is trying to prevent foreclosure on another house she owns in Stockton, and she's optimistic about getting her lender to compromise.
But many of those Granados serves with eviction notices don't seem to care. "They're waiting to get kicked out. They're not even afraid."
Even people who can afford the mortgage reportedly are walking away. One reason is that they didn't put any money down and now the home is worth less than they owe. Why should they take the loss? According to published reports, walking away has become popular in California, Florida and Las Vegas, where housing values have declined steeply. But there is evidence that it's becoming a national trend.
Half don't talk to lender
Nationwide, more than half the people who lose their homes to foreclosure never talk with their lenders, according to Freddie Mac.
"People have an easy time walking away," said Gail Cunningham, spokeswoman for the National Foundation of Credit Counseling. "Somehow they feel that they have no skin in the game."
Cunningham has worked with people who feel entitled to walk away. Their arguments are that they were duped into getting a bad loan, weren't told all the facts, or were misled about the condition of the housing market.
"Two wrongs don't make a right," she said. "The consumer needs to act responsibly regardless of what has happened in the past."
Cunningham and I go to the same school of thought.
Maybe some struggling homeowners believe they're getting back at the system by walking away. Maybe they don't mind having a foreclosure on their credit reports for seven years. Maybe they think they can dodge bills and buy a new car or even a new home next year.
But Cunningham said those days of easy credit are over.
"A year ago, a person could file bankruptcy one day and come home to a mailbox full of credit offers," she said. "They were giving credit to anyone who could fog up a mirror. But now they are returning back to more traditional terms."
The ramifications of damaging your credit today are much harsher. Nearly everyone judges you by your credit score. And if it's poor, your cost of living is automatically more.
For instance, you may be able to buy a car after your home forecloses, but the interest rate is going to be considerably higher.
And that new job you want may be denied when a potential boss finds out that you dodged your mortgage.
There are other options
If you get an idea for a business, a bank likely will not offer you financial backing. The utility company and cell phone carrier will require deposits if your credit is weak. And forget buying any big-ticket items with promotions of no down payment and no interest.
Almost every aspect of your life will be affected. But it doesn't have to be. There are other options.
Most importantly, call your lender. Most banks are far more willing to work out a solution to keep you in your home or avoid foreclosure. Banks can adjust interest rates, extend loans, or change a loan from an adjustable rate to a fixed rate.
If all else fails, you can request to do a short sale, where the bank agrees to let you sell the home for less than you owe, or a deed-in-lieu of a foreclosure, where the bank accepts the deed of the home in place of paying off the loan.
Instead of walking away from the problem, experts say it's better to walk toward a solution.
Bee staff writer J.N. Sbranti contributed to this report.
This sounds just like LLNL cost per employee spreadsheet scheme. I guess birds of the same feather do in fact flock together and one corruption desreves another.
+++++++++++++++++++++++++++++++
Consumers fight rising use of hidden fees
By Tony Pugh | McClatchy Newspapers
Posted on Wednesday, February 27,
WASHINGTON — Hidden fees and surcharges that drive up the cost of everything from phone service to concert tickets are spreading like wildfire, creating a nuisance for U.S. consumers and making truth in billing little more than a hollow promise.
Some hotels impose automatic towel, bellman and grounds-keeping fees. Airlines charge up to $25 to check an extra bag. Want to terminate your cell phone service? Don't be surprised by a $200 cancellation fee.
Many of the charges are undisclosed, buried in contract fine print or listed as an unclear line item on a bill.
While the costly fees get our blood boiling, the smaller ones have turned the marketplace into a minefield of nickel-and-dime charges. These smaller fees typically range from less than $1 to roughly $10, depending on the goods or services involved.
For years, consumers ignored them because they were relatively small and weren't worth the hassle to fight. But multiply those small amounts by millions of customers and they become a multibillion-dollar corporate windfall.
A 2006 study by the Ponemon Institute, an independent business-research firm, found that the average adult pays about $942 each year in hidden fees and surcharges.
The study's results are featured in a new book, "Gotcha Capitalism," by consumer advocate Bob Sullivan, who called the fees the "fastest-growing white-collar crime in America," even bigger than identity theft.
After years of being squeezed, customers are fighting back. Just calling to complain satisfies many people. Others use Internet sites such as Complaints.com, PlanetFeedback.com, Callforaction.org and ConsumerXchange.com to help settle disputes. If those channels fail, they turn to the courts.
Class-action lawsuits, which have numerous plaintiffs, are the preferred choice for fee-based suits because individual cases over small amounts of money aren't worth the legal fees and aren't profitable enough for lawyers to pursue.
A federal law that limited securities class actions by shareholders also has caused more lawyers to gravitate toward consumer cases.
"There has a been a significant uptick in consumer class actions as a result," said Andrew Sandler, a co-chair of the American Bar Association's consumer and personal rights subcommittee." . . . There's lots and lots of litigation against financial service (providers), with respect to utility bills, telephone bills, cell phone bills, credit cards, store charges and store value cards."
The disputes reflect a changing marketplace, in which frustrated consumers are pushing to make advertised prices meaningful again.
"Part of what you're seeing is a growing resentment of these abuses that are constant in our daily lives," said Ira Rheingold, the executive director of the National Association of Consumer Advocates.
Commercial banks were on pace to reap $38 billion in fees from deposit accounts in 2007, according to the Federal Deposit Insurance Corp. The entire financial-service sector pockets more than $216 billion annually in related fees, Consumer Reports has estimated.
Corporate America largely dismisses concerns that the extra charges are price gouging. It defends them as a valid way to cover the cost of providing services and of meeting regulatory requirements, among other things.
But problems arise when customers don't know what triggers the fees.
Many class-action cases begin like the suit that Andrew Jones filed against JP Morgan Chase Bank in December.
Jones, the owner of Woody's restaurant in Richmond, Ky., claims that the bank wrongly charged him $30,000 in overdraft fees over several years. Jones' money problems began when restoring the restaurant cost more than expected, but they worsened, he claims, because of his bank's method of posting debits and credits to his account.
Instead of rejecting transactions for insufficient funds, many banks now cover their accountholders' overdrafts and charge an average of $35 for the service.
Consumer advocates say that banks increase their overdraft fees by debiting larger checks before smaller ones that are drawn on the account in the same period. Doing so assures that a larger number of checks bounce if the client has insufficient funds, resulting in more fees for the bank.
Jones, 39, said that this activity, along with the bank's failure to deposit his restaurant credit-card receipts in a timely manner, led him to incur many of the overdraft charges.
"There is nothing that . . . could ever heal the two-and-a-half years of mental and emotional anguish that I endured at the hands of Chase bank," Jones said.
As a possible first step toward a class-action designation for the case, Jones' attorney, Roger Oliver, said he was considering advertising to see whether other Chase customers had had similar experiences.
Chase officials declined to comment on Jones' case, but have denied his allegations and sought a dismissal of the suit in a response filed with the court. Chase asserted, among other arguments, that Jones' problems were of his own doing, the state court lacks jurisdiction and Jones' grievances should be arbitrated.
Regulators also have taken notice of add-on fees, particularly in the hotel industry, which collected nearly $2 billion in such fees last year, up from $550 million in 2002, according to PricewaterhouseCoopers.
Gerald Yetman recalled that when he vacationed at the Casa Marina Resort in Key West, Fla., several years ago, a hotel staffer spritzed cool water on other guests and him as they lounged poolside. Yetman assumed that the standard room rate covered the misting.
But during checkout he noticed fees, which the desk clerk said were to cover this and other amenities. The fees totaled less than $100, Yetman said, but "the dollar amount didn't really matter to me. It was the principle involved."
The fees were noted in the hotel contract that Yetman had signed at check-in but were buried in the fine print, he said.
"Who, when they're on vacation, takes the time to read all the little fine print down there?" said Yetman, of Royal Palm Beach, Fla.
After Yetman wrote to Wyndham International Inc., which owned the resort, he was reimbursed for the fees. But his complaint came to the attention of the Florida Attorney General's Office, which sent investigators to his home to discuss it.
It turned out that the state had launched an investigation of hotel fees in 2001 after state employees incurred similar charges at other Wyndham hotels.
In July 2006, the state settled the case for $2.3 million with LXR Luxury Resorts, a subsidiary of the Blackstone Group that purchased the Wyndham chain in 2005. The company agreed to pay restitution and for the cost of the investigation and to fully disclose automatic charges at 38 Wyndham hotels.
The probe yielded similar settlements with Marriott International and Starwood Hotels and Resorts.
The fact that Yetman's complaint letter got results is lost in the details. The Ponemon Institute study found that consumers had a 37 percent success rate when they complained to hotels.
The success rate for complaints climbed to 60 percent for airlines and 65 percent for credit card companies, the study found. Industries with the lowest complaint success rates include cell phone providers, at 27 percent, insurance companies, at 28 percent, and 20 percent for cable- and satellite-television providers.
Kevin Parks, of Columbus, Ohio, is experiencing that firsthand. He said that he'd expected his cable service to cost $40.95 a month, the amount that the local provider promised. When he got his first bill — for $51 — he was incensed, because the added equipment fee wasn't mentioned or noted in the contract, he said.
After several unsuccessful complaints, Parks called on his neighbor, Carl Shoolman, for help. Shoolman, a former consumer class-action lawyer, founded ConsumerXchange.com, an Internet site that handles most consumer disputes for a $43 fee.
Shoolman has sent letters on Parks' behalf, but gotten no response from the cable company. If that continues, Shoolman said, he'll post details of Parks' dispute on his Web site to increase the pressure.
McClatchy Newspapers 2008
http://gasprices.mapquest.com/?cid=google&sem=1&ncid=MPQMAP00170000000028
Ys sir we are going to catch up with Europe by the end of this year and everything including your life should come to an end, as you knew it. The party is over people. It's time we make you thugs live within your means and that $6.89 a gallon in Europe should do the trick. As of tpday we are over $4.00 a gallon. Take a look.
Going down, down, down
Posted on Wed, Mar. 26, 2008
New home sales fall to 13-year low
By MARTIN CRUTSINGERAP Economics Writer
last updated: March 26, 2008 04:40:22 PM
WASHINGTON
A house for sale at a reduced price is seen in Albany, N.Y., Tuesday, March 25, 2008. Home prices in many cities continued to plunge by record levels in January as sellers cut their asking bids and rising foreclosures took their toll, new data showed Tuesday. - AP Photo - Mike Groll
The government reports that sales of new homes fell in February for a fourth straight month as the steep slump in housing continues.
The Commerce Department reported Wednesday that new home sales dropped 1.8 percent last month to a seasonally adjusted annual rate of 590,000 units, the slowest sales pace since February 1995. The decline was slightly worse than expected.
The median price of a home sold last month dropped to $244,100, down 2.7 percent from the level of a year ago.
The prolonged slump in housing has dragged down overall economic activity. Many analysts believe the slump could combine with other problems, including a severe credit crunch, soaring energy prices and plunging consumer confidence, to push the country into a full-blown recession.
Orders to factories for big-ticket manufactured goods fell for a second straight month in February, a worse-than-expected performance that provided more evidence of the economic troubles gripping the country.
The Commerce Department reported Wednesday that demand for durable goods dropped 1.7 percent last month, disappointing analysts who had been expecting a small rebound after a 4.7 percent decline in orders in January.
The declines showed up in a number of areas. Demand for manufacturing equipment plunged by 13.3 percent, the largest amount on record, while the category that is seen as a good proxy for business investment fell by 2.6 percent, the biggest decline in four months.
The problems in manufacturing are a reflection of weakness in the overall economy as the country struggles with a prolonged slump in housing, a severe credit crunch, soaring energy prices and higher unemployment.
Economic growth slowed to a barely discernible 0.6 percent in the final three months of last year, and many economists believe the gross domestic product will turn negative in the current quarter, signaling the start of a recession.
The 1.7 percent drop in orders for durable goods, items expected to last at least three years, was worse than the 1 percent increase that many economists had expected.
The weakness came even though orders for transportation equipment rebounded with a 0.6 percent rise in February after a big 12.6 percent plunge in January. The swing in both months reflected changes in demand for commercial aircraft, which rose 5.4 percent in February following a 30.2 percent plunge in January. Orders for motor vehicles fell by 2.7 percent in February as U.S. automakers continued to face weak demand, reflecting the weak economy and soaring energy prices.
Excluding transportation, orders fell by 2.6 percent in February, representing the fourth decline in the past five months.
Economists believe that if the country does slip into a recession, the downturn may not be as severe in manufacturing, which is being helped by continued strong growth overseas, which is bolstering U.S. exports.
Report: Gas prices will rise another 75 cents by Memorial Day
(Juan Carlos Pometta Betancourt/Special to The Examiner)
A new report released by the Consumer Federation of America estimates gas prices will increase by 75 cents by Memorial Day. Katie Worth, The Examiner
2008-03-27 11:00:00.0
Bay Area -
If you are aching when you pay $3.65 a gallon at the pump, think of the sting you will feel if gas prices increase another 75 cents by Memorial Day, as predicted by a consumer report released Wednesday.
Despite declining gas consumption, which should lower the price of gas, a cut in production by oil refiners may drive prices ever higher in the coming months, according to the report by the Consumer Federation of America.
Consumers may know that the decreased supply will hit them hard at gas pumps and grocery stores. But they may not know that the drop in supply could hurt them at auto shops, some Peninsula mechanics said Wednesday.
As prices skyrocket, some drivers wait longer to fill up their tanks, use cheaper gas and lower grade gas — all of which can take a toll on engines, said Yader Vargas of LC Electric and Mechanic in San Bruno.
“When gas [prices were] low, you could fill up for $20 or $30. Now it costs $60, so if you don’t have the money, you put in $20 and don’t fill it up,” he said.
In the long run, this practice can damage the car’s gas pump, because it works harder to pump the last quarter tank of gas than the first quarter tank, he said.
“If you wait to fill up till it’s empty, the fuel pump keeps losing and losing pressure, and you have to replace it sooner,” Vargas said. “The problem is some fuel pumps can cost $350 or $400, or sometimes even $650 or $700. It’s a lot.”
Joe Huang, a smoke technician at the 76 station on El Camino Real and Millbrae Avenue in Millbrae, said he’s seen some recent cases of fuel pumps going bad.
“We’ve had cars roll in here on empty and then fill up, but then the car won’t start again,” he said.
He said driving on empty all the time can cause both electrical and mechanical problems. Redwood City resident Maria Gonzalez is well aware that she may be damaging her car by not filling up, but she said she’s guilty anyway.
“Honestly, I never put more than $10 in. My gaslight is pretty much always on,” she said.
kworth@examiner.com
Foriegn national support Klinton's and it's why I don't
Posted on Mon, Mar. 31, 2008
Bill Clinton visits with money in mind
By EMILIE RAGUSO
eraguso@modbee.com
last updated: March 31, 2008 01:26:48 AM
Former President Bill Clinton signs copies of his book and mingles with admirers March 30, 2008 at a private fundraiser for Hilary Clinton at the home of Amarjit Dhaliwal M.D. and wife Rupinder. (Amy Velasco Nfinity Productions) - Amy Velasco, Nfinity Productions - Amy Velasco
Former President Bill Clinton stopped in Del Rio, north of Modesto, on Sunday to raise money for his wife's run for the presidency.
He arrived about 2:20 p.m. after speaking earlier in the day on behalf of New York Sen. Hillary Rodham Clinton at the California Democratic Party convention in San Jose. The former president came to California to court the superdelegates who are likely to settle the close race between his wife and Illinois Sen. Barack Obama.
Clinton spoke at the Bing Way home of Dr. Amarjit Dhaliwal and his wife, Rupinder. Dhaliwal met Clinton in Stockton when the former president campaigned for his wife the day before the Feb. 5 California primary.
It's rare for presidents or former presidents to stop in Stanislaus County.
"It's good for Modesto," Dhaliwal said. "Folks are very excited."
About 170 guests were expected at the fund-raiser, the Modesto oncologist said. Many of them are doctors in the Modesto area, although a few guests came from Fresno and the Bay Area, he said.
Dhaliwal would not say how much was raised, referring that question to Sen. Clinton's campaign. Campaign officials did not respond to an e-mail request.
Some neighborhood children set up a lemonade stand and other neighbors rode around in golf carts decorated with U.S. flags while waiting for Clinton, who was about two hours late. Residents clustered on their lawns hoping for a glimpse or a wave from the former president.
Jordan Dickson said his friend Katie Mussman told him Clinton was coming.
"I thought she was joking," the 17-year-old said. Jordan sat on the front lawn with several other Davis High School students eating strawberries and egg rolls while waiting for the entourage.
Clinton arrived to scattered cheers and neighbors running along the street to get a closer look. Most of the onlookers were too busy trying to take photos to clap, but there was a definite enthusiasm as Clinton stepped out of his sport utility vehicle.
"You really see that crop of white hair," said Elaine Eisenberg from across the street.
Davis High seniors Jordan, Katie, Amy McLaughlin and Lindsey Freeland said they had hoped to get inside the fund- raiser to hear Clinton. They brought press passes from Davis' school newspaper just in case.
"We were going to try to find a way to jump over the fence, but (the neighbors) have three German shepherds," Jordan said. The teens settled for watching the speech from an incline in Katie's back yard.
Katie is a member of The Bee's Teens in the Newsroom program.
Clinton leaned into the microphone after walking into the back yard with Dhaliwal.
"Just testing," he joked before Dhaliwal introduced him. Clinton spoke for about 10 minutes about the importance of the upcoming Pennsylvania, Oregon, Montana, North Carolina and Indiana primaries and urged supporters with influential friends in those states to get their friends to rally behind his wife and donate to her campaign.
Clinton was relaxed, joking with the crowd and apologizing for keeping everyone waiting. He said supporters who couldn't afford to be at an event such as Sunday's private fund-raiser could go online and make small donations. Clinton mentioned the success of the Obama campaign with this strategy.
"We do not have to have the most money," Clinton said. "We just have to have enough."
He made several remarks geared toward an audience with many Indian and Sikh supporters, referring to the Clintons' work in the White House to repair the United States' relationship with India, and stressing that Sen. Clinton had been proud when Obama referred to her in June as "the senator from Punjab," a state in northwest India. The comment was based on her contributions from and work for Indian constituents.
Clinton joked about being a campaigner for and husband of Sen. Clinton.
"(People say) 'He's married to her. He has to say that or he can't go home tonight,' " Clinton said. "Maybe there's some truth to that. ... (But) I would be here for her if we never were married. ... She will be a magnificent president if we can get her elected."
Bill Clinton visited Stockton in February, but it's rare that presidents or former presidents make the trip to Modesto. President Bush rode a train through Manteca, Tracy, Stockton and Lodi as a candidate in 2000. His father, the first President Bush, and Democrat Michael Dukakis campaigned in Modesto in 1988.
In California's Feb. 5 primary, Sen. Clinton carried Stanislaus County with 58.82 percent of the vote and Obama garnered 31.78 percent. Arizona Sen. John McCain took 39.12 percent of the county's Republican vote.
Marsha Davis had watched Clinton's cars pull into Bing Way, stopping across the street from where she stood.
"I wish they'd told more people so the public could have seen him," said Davis, adding that she had fond memories of seeing President Nixon at the airport in the 1970s. "(Clinton) is a past president. We have to share him with everybody. It's a part of history."
Bee staff writer Emilie Raguso can be reached at eraguso@modbee.com or 578-2235.
Ask me if I feel sorey for any of these rich pricks? Not ! I hope they lose their asses and join the rank of the average destitude indivuals. BS, the wealthy do not struggle. They don't even know what the word means.
Posted on Fri, Mar. 28, 2008
Wealthy sruggling with mortages, too
By JANE BIRNBAUM
THE ASSOCIATED PRESS
last updated: March 28, 2008 09:47:35 AM
NEW YORK -- They took out adjustable rate mortgages at the peak of the housing bubble to buy homes they would otherwise not be able to afford. Or they refinanced their mortgages to take cash out.
And now, two or three years later, the day of reckoning is here.
These are not lower- and middle-income borrowers, but more affluent consumers with annual incomes of $100,000 or more who are increasingly being ensnared in the home mortgage crisis.
People in all income categories "are facing the shock of new payments that can be twice as much as previous ones," said Susan M. Wachter, professor of business and a real estate specialist at the University of Pennsylvania's Wharton School.
Nor will falling interest rates help most of these homeowners, as their low initial payments skyrocket and the worth of their homes erodes, said Allen Fishbein, director of housing and credit policy at the Consumer Federation of America.
According to Loan Performance, a unit of First American CoreLogic, a real estate information company in Santa Ana, about 870,000 borrowers took jumbo ARMs -- mortgages of $417,000 or more -- from 2005 to 2007. In the fourth quarter of 2007, 8.10 percent were two or more payments late, it found, while 2.62 percent were in foreclosure and 1.35 percent had been foreclosed. All the numbers were up from the third quarter.
Mark Zandi, chief economist for Moody's Economy.com, predicted that eventually 8 percent of these jumbo ARMs will be foreclosed. In the first quarter of 2008, "the delinquency and foreclosure rate will clearly be higher," he said.
Today's ARMs were "designed to fail, so you have to refinance," Wachter said. "It shouldn't be surprising that values go up and down in this kind of situation. And when you most need to refinance you can't, the crux of the crunch."
Jeffrey Conner, a San Francisco real estate lawyer, said he hears from clients "that lenders assured them they could always refinance." So what are these homeowners to do? Refinancing requires some equity. Even if homeowners put a substantial amount of money down, many have no equity because their homes are worth less than they owe.
Richard Geller, founder of Mortgage Relief Formula, a for-profit venture based in Fairfax, Va., that counsels troubled ARM borrowers, said he has received calls from many affluent consumers in almost every major metropolitan area. Manhattan appears to be the only exception in the weakening market, Geller said.
Sean O'Toole, founder of ForeclosureRadar.com, which tracks California foreclosures, divided borrowers into two camps. "If you have equity, you have choices," he said. "If you don't, you have to work on a loan modification with your lender." Consumers with substantial equity, high credit scores and documented income should be able to find conventional refinancing, he said.
Homeowners with at least 3 percent equity may qualify for refinancing through the Federal Housing Administration. On March 6, it began making loans up to $729,750, a new higher limit that expires Dec. 31 unless Congress extends it. Limits are 125 percent of median home prices, by county. Consumers can find their limits at https://entp.hud.gov/idapp/html/hicostlook.cfm.
To find a qualified lender or broker, consumers may call 800-225-5342 or visit www.fha.gov for the four regional centers.
Loan modifications entail freezing or reducing interest rates and may include balance reductions.
"But if your payments are still going to be more than half your gross income, the lenders won't do it because they figure you're going to default later," Geller said. "It's not rational to dedicate your life to making the next $5,000 monthly payment on an asset declining in value."
Negotiating a loan modification means understanding that in most cases, "the lenders really don't want to force people into foreclosure because that virtually guarantees large losses in the market," said Dean Baker, an economist with the Center for Economic and Policy Research, in Washington, D.C.
Every affluent borrower who took an ARM has a different story.
In Oceanside, north of San Diego, people paid $650,000 to $750,000 in 2003 and 2004 for row houses on Cleveland Street, said Chris McBrearty, a certified mortgage planning specialist in Carlsbad, who wrote many mort- gages there. When prices for the houses rose as high as $1.5 million in 2005, many of those people refinanced with ARMs to take out cash, he said.
But while the borrowers had the best intentions, life -- job losses, divorces, deaths -- changed their financial circumstances, McBrearty said. Now, with a most recent listing at $920,000, "nothing is selling on the street, and even for those with some equity, the products needed to refinance such large loans are not out there."
One of those homeowners, an attorney who spoke on condition of anonymity for professional reasons, said he refinanced his mortgage with an ARM in January 2006 to take $510,000 out to invest in a hotel. "I planned to run the hotel with my lovely wife," he said.
Their strategy was to sell the house after a couple of years, but when they put it on the market in April 2007, there were no buyers. The attorney, now divorced, calculated that the mortgage payments, $6,200 a month, plus taxes consume 96 percent of his net income, which includes occasional rent from vacationers who use the house. He lives with relatives and sleeps on the floor.
"I don't regret what I did," he said. But a foreclosure would hurt his career and finances, he said. "And I was raised to pay back what I borrow." His strategy is to sell when prices revive. But that could take time, because a bank just sold a neighbor's foreclosed home for $850,000.
And you wonder why this nation is falling behind the rest of the world. We can spend $11B a month to help a bunch of Q-tips but we can't spend $11B a month on bullet trains and mag lev's down the middel of every major interstae in this nation. What idiots we are. We're just plain stupid people and deserve what we get in America. NOTHING but the SOSDD with noone wiht the intestinatal fortitude to mandate this will be done in FIVE years.
Posted on Tue, Apr. 01, 2008
Bullet train too expensive for California
By DAN WALTERS
dwalters@sacbee.com
last updated: April 01, 2008 04:50:41 AM
Zipping through California on a 220-mph bullet train -- in just 2½ hours from Los Angeles to San Francisco, it's being said -- is certainly a romantic concept.
They do it in Europe and in Japan, bullet train devotees say, so why not do it in California and relieve highway and airport congestion? California voters may get a chance to answer the question in November. Often postponed, a $10 billion bond to provide initial financing for the system to link the Bay Area with the LA area through the San Joaquin Valley is likely to make the ballot.
Gov. Schwarzenegger, who has praised the bullet train idea but balked at some financial details, appears ready to offer voters a revised version that would include public- private partnership financing, it has been reported recently.
The notion is that the state bonds, which would have to be repaid from a general fund already seeing multibillion-dollar deficits, would trigger a like amount of federal funds, but the $20 billion or so would be less than half the current price tag of $42 billion.
Financing the remainder -- through private funds, a special sales tax or some combination thereof -- has been one of the hang-ups.
It's unlikely, however, that a complete plan, including the additional financing, will be available before voters are asked to pass judgment in November. And that's troublesome, because even the most ardent advocates have not presented a persuasive, fact-grounded rationale for spending so much borrowed money on a new transportation system.
The most romantic bullet train vision is the lightning-fast trip from downtown Los Angeles to downtown San Francisco. But how many people want to make that trip each day, and would it represent a marked improvement over the frequent air travel now available? The High-Speed Rail Commission's environmental impact reports contain some underlying air travel projections that are difficult to swallow. It would have us believe that air travel demand between north and south would nearly double from 2000 to 2010.
That flies in the face of airport traffic figures and seems to conflict with another projection that in the absence of building the bullet train, air travel times would increase only fractionally from 2000 to 2020.
The projections are important because assumptions about bullet train passenger business are based, in part, on the notion that airlines can't handle the demand. And those airlines, Southwest particularly, almost certainly would oppose publicly subsidized competition.
How about auto travel? The commission projects that driving from Los Angeles to San Francisco, seven hours in 1999, would take eight hours by 2020. But as anyone who makes long-distance drives knows, Interstate 5 is lightly used outside urban areas.
California's traffic congestion is an urban condition, and the most likely patrons of high-speed rail wouldn't be long-distance travelers but commuters -- a poor use of expensive, sophisticated technology.
That explains why the most ardent support for bullet train service is to be found in the Central Valley, which is poorly served by airlines and whose main artery, Highway 99, is highly congested with auto and truck traffic.
Bullet trains would make commuting to and from places such as Fresno, Modesto and Bakersfield easier. But wouldn't that merely encourage the sort of sprawl that we are supposed to be discouraging? California certainly needs to upgrade its long-neglected, deteriorating highway system and probably expand commuter transit service. But bullet trains may be a romantic solution in search of a problem.
Reach Walters via e-mail at dwalters@sacbee.com.
THE SACRAMENTO BEE
This has to be a joke, right? Bullet train too expensive for California --last updated: April 01, 2008 04:50:41 AM
Just how stupid are the people of America and their so called leaders. Is there any wonder why this nation is falling behind the rest of the world. We can spend $11B a month in Iraq, but we can't spend $11B a month on bullet trains and mag lev's down the middle of every major interstate in this country. Give me a break. Are the rest of you so foolish to belive that we couldn't have this done in five years? I hope not. If you are then you're a just stupid as they come and deserve what you get. Wonder what that is? The answer is NOTHING, just more of the same old crap. I guess this nation doesn't have any real leaders with the intestinal fortitude to mandate this will be done in FIVE years. How sickening for a once industrial nation. Oh, but wait, I forgot. We can have the Chinese come over and build this rail system for us as they did before since America no longer has anyone with the skill levels required to get the job done or is willing to do manual labor. What morons.
Time to scale back our expectations
By David W. Hill
dhill@modbee.com
last updated: October 30, 2007 05:48:22 AM
The region's top real estate pros warned us a couple of years ago that home values in the Northern San Joaquin Valley were overinflated.
Then gasoline, food and other expenses started climbing. Adjustable-rate loans began to reset to higher payments, and defaults took off. Credit got harder to come by. New homes flooded the market. Sales stagnated and prices sank. Consumers hit the wall.
One of those who identified in early 2005 that the market was headed for a fall, Mike Zagaris, president of PMZ Real Estate in Modesto, said the current slide shouldn't be a shock, given the market's previous peak.
"In our industry, you tend to pay to the extent to which you were rewarded," Zagaris said. "If you have a hot cycle at which you are increasing at double-digit rates, when the market turns, it tends to turn more dramatically."
When that happened, those who were running for cover were left with few options. They couldn't refinance because their houses were worth less than they owed on them, and there weren't enough buyers for all those who needed to sell.
For every person who took out a self-indulgent subprime loan to finance a lifestyle far beyond their means, there are others who got exotic financing to take care of family, pay down debts or get into homes in a market they feared being priced out of. Some weren't savvy enough to understand what they were getting into, some were victims of predatory practices, and some just didn't read the fine print.
Zagaris said people got caught up in the easy credit terms, which created a spend-now, pay-later attitude. "So the availability of money to, in effect, take what was a historically conservative investment asset and convert it into an ATM that can be used for current expenses, has undermined the basic security that investment has had in the past for many people."
Many borrowers believed the people they were dealing with had their best interests at heart. If that single-income family of four couldn't really afford that 3,000-square-foot house, one of those pro-
fessionals would warn them off.
But that's not really how it works. Business is business; it's not personal. People are in business to make money, and consumers have to look out for themselves.
Bob Endsley, founder of Coldwell Banker Endsley and Associates of Turlock, believes people were taken advantage of. "They were talked into low teaser rates and told they can't go wrong. If those loans had not been available, the demand for houses wouldn't have taken off like it did, and we probably wouldn't be in this mess."
So where do we go from here?
Clearly the market is in turmoil.
One of the things driving the downward spiral these days is people's attitudes. But don't blame the messenger, that's just an easy out -- the numbers are the numbers. Being better informed just makes for better consumers who make better choices. Everyone wants that, right?
"People need to make more prudent decisions," Endsley said.
And the best way to do that is to learn as much as you can about the marketplace, understand your own financial situation so you don't overextend and take your time making such a major decision.
Larry Matos, co-owner of Century 21 M&M and Associates of Modesto, said buyers need to find a home that meets, not exceeds, their needs and get a loan they can live with.
"I think for any buyer the thing they need to look at is, 'Can I sustain this loan for five years or 10 years?' " Matos said. " 'Is this sustainable?' And if it is, then I believe you're getting into the right product."
The key for sellers is, don't panic.
Just because sales are painfully slow doesn't mean a house that's priced right and spruced up won't find a buyer. In fact, it almost always comes down to price. Not the price your neighbor sold for at the top of the market in 2005, but the price that makes a house attractive today.
Don't be afraid to put some time and money into your home to make it more appealing. Price is key, but curb appeal and interior flair can set a house apart. So if the real estate agent says get rid of the clutter, just do it.
"If you list your home for sale today, it's entering a beauty contest, and there are many other homes entered in the beauty contest," Zagaris said. To do well in that contest, he said, a home needs to be in top condition, priced right and easily accessible for showings.
For those who can't lower the price enough to be competitive in today's market, finding a way to hang on is critical. The best approach is to be proactive. If you're having problems paying that mortgage each month, contact your lender. Not once, not twice, but daily if you have to, and see what accommodation can be worked out.
Banks and loan companies don't want to foreclose on houses. They make more if borrowers stay and pay, simple as that. Not all of them are willing to negotiate with borrowers who are in over their heads. But the pressure is rising to get them to offer some relief.
If all else fails, selling that sweet SUV, hot ski boat or radical motorcycle just might generate some needed revenue and reduce the debt load. There's also the option of taking on a second job, putting the kids to work to help pay bills or renting out a room -- whatever works.
But finding a way to hang onto that house is important. Why? Because it's your home and a good long-term investment. It's the single biggest asset most families will acquire.
With new home builders bailing or cutting back, that means the demand for existing housing will grow -- in time. And the real estate market will rebound.
Right now it's a buyer's market, Matos said. "There's an abundance of selection, prices continue to decline, sellers are willing to negotiate, and you can get a very favorable loan" because interest rates remain low.
How soon the market turns around is anybody's guess.
Zagaris and Matos already see signs that things are picking up, with bargain-
hunters and investors moving back into the market. Endsley thinks things will continue to cycle down for several more months before leveling off and could remain flat for a year or two.
Don't be surprised if the economy, and housing, takes a beating for a while. The credit problems and realty woes won't disappear quickly.
"I think the housing market has got another year of very weak sales, falling construction and lower home prices. And all of that assumes that the economy holds together reasonably well and we don't have a recession," Mark Zandi, chief economist at Moody's Economy.com., told The Associated Press last week.
Just remember, the house you bought pre-peak, peak or post-peak is still a home. Whatever you thought it was worth in 2005, it's still worth a lot today simply as your residence. Maybe not as much as you thought back then, but that wasn't real money anyway. But as the family home, it's priceless.
"We need to look at it as shelter ... not as an ATM or just as an investment," said Craig Lewis, president of Prudential California Realty in Modesto. "It is home, a place where people can raise their families, hold family gatherings. That is a mind-set we need to start readjusting."
Where this idiot been. As house price go down and gas goes up the economy will dwindle into a recession / depression. hang on snoppy.
By JEANNINE AVERSA, AP Economics Writer
Wed Apr 2, 4:52 PM ET
WASHINGTON - For the first time, Federal Reserve Chairman Ben Bernanke acknowledged the U.S. could reel into recession from the powerful punches of housing, credit and financial crises. Yet, he was coy about the Fed's next move.
With home foreclosures swelling to record highs and job losses mounting, Bernanke on Wednesday offered Congress an unflinching — and more pessimistic — assessment of potential damage to the national economy.
"A recession is possible," said Bernanke, who is under immense political and public pressure to turn things around. "Our estimates are that we're slightly growing at the moment, but we think that there's a chance that for the first half as a whole there might be a slight contraction."
Under one rule of thumb, six straight months of a shrinking economy would constitute a recession, but Bernanke wasn't getting into that. "A recession is a technical term," he said. "I'm not yet ready to say whether or not the U.S. economy will face such a situation."
Whether or not the economy already has fallen into its first recession since 2001 — and many economists believe it has — the housing debacle and other economic woes are a major concern for homeowners, job losers and investors. That means they're a concern to Congress and the presidential contenders, too.
The Fed and the White House have been thrust into crisis-management mode.
Hoping to limit damage, the Federal Reserve has been slashing interest rates since the start of the year in an effort to get people and companies spending again. "We are fighting against the wind," Bernanke said, "at least offsetting significantly the headwinds coming from these financial factors."
But he didn't offer a clear signal about the Fed's interest-rate intentions from here on.
At the last meeting of the central bank's policymakers in March, two members dissented from the decision to sharply cut rates. Those officials, who have reputations for being extra vigilant about fighting inflation, are concerned that cutting rates too much or too quickly could damage the economy by pushing prices higher. Although Bernanke said he hopes inflation will moderate in coming quarters, he said high energy prices have clouded the outlook.
Still, economists believe the Fed probably will drop its key rate again at its next meeting at the end of this month. Some analysts predicted the Fed's key rate would fall as low as 1.50 percent this year, from the current 2.25 percent.
"The Fed has pulled out all the stops to rescue both financial markets and the economy and now is probably hoping for the best," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group.
On Wall Street, stocks initially dropped after the Fed chief's remarks, then fluctuated through the day before ending moderately lower. The Dow Jones industrials lost 45.44 points to finish the day at 12,608.92.
Employers slashed jobs in January and February, and Friday's report for March could show more losses. The nation's unemployment rate, now at 4.8 percent, probably will move higher in coming months, Bernanke told Congress' Joint Economic Committee.
Striking a hopeful note, though, he said he expects economic growth to pick up in the second half of the year and into 2009, helped by the government's $168 billion stimulus package of tax rebates for people and tax breaks for businesses as well as the Fed's aggressive interest rate reductions.
"Much necessary economic and financial adjustment has already taken place, and monetary and fiscal policies are in train that should support a return to growth in the second half of this year and next year," Bernanke said.
On the hot seat, Bernanke was grilled by senators about the Fed's moves to aid the once mighty Wall Street firm Bear Stearns, and about additional actions Congress and the White House should take to provide relief to struggling homeowners.
"I hope that you will use your position to jawbone this administration to get behind the housing relief effort before Congress," said committee chairman Charles Schumer, D-N.Y. "Addressing the housing crisis head-on will do as much to instill confidence in the markets as lowering interest rates or bolstering regulatory oversight of wayward mortgage lenders and financial institutions. We need to do all of it."
Sen. Robert Bennett, R-Utah, said people shouldn't view the situation as Wall Street versus Main Street.
"My experience is that Wall Street and Main Street are inextricably linked," he said. "We've reached the point in our financial system now where a community bank on Main Street has to have a correspondence with a major bank on Wall Street in order to keep things going, and that what happens in the banking system generally permeates down to the very lowest level."
Bernanke urged Congress to take additional steps to bolster the housing market and to aid people in danger of losing their homes. But he refused to be pinned down on making specific recommendations in other areas, such as how to help struggling state governments hit by the crisis. That exasperated Sen. Edward Kennedy, D-Mass., who pleaded: "What are we going to tell the states? ...The states are in a critical situation."
Besides lowering interest rates, the Fed has taken a series of extraordinary steps in recent weeks and months to prop up the nation's financial system, which has been in a state of high jeopardy.
In a controversial move, the Fed backed a $29 billion lifeline as part of JP Morgan's deal to take over the troubled Bear Stearns, the nation's fifth largest investment house, which was on the brink of bankruptcy. Bear Stearns had invested heavily in risky mortgage-backed securities that eventually soured with the collapse of the housing market.
That brought criticism from Democrats and others who contend the Fed is bailing out Wall Street and putting billions of taxpayer dollars at potential risk.
Bernanke defended the move as necessary to avert a meltdown in the entire financial system. "The damage caused by a default by Bear Stearns could have been severe and extremely difficult to contain," he said. The Fed's unprecedented involvement was meant as a one-time event. "It has never happened before, and I hope it never happens again," he told lawmakers.
Although the taxpayers are on the hook for the $29 billion, Bernanke believed they wouldn't suffer any losses. "I feel reasonably confident that we will be able to recover all of the principle and indeed some interest, and there is some chance of even upside beyond that."
To also ease the credit crisis, the Fed — in the broadest use of its lending authority since the 1930s — agreed to temporarily let big investment firms obtain emergency financing.
Bernanke said the Fed "never lost a penny" in the past from various lending maneuvers.
___
Gas due to go up .75 cents by May
http://www.fuelgaugereport.com/CAavg.asp
Huge job losses set off recession alarms
By JEANNINE AVERSAAP Economics Writer
last updated: April 05, 2008 09:56:13 AM
WASHINGTON
Manpower Associates' Branch Manager Pam Johnson, left, and Becky Fuller, staffing specialist, discuss candidate job placement in St. Louis, Mo., on Friday, April 4, 2008. Manpower helps candidates find temporary work. - AP Photo - Sarah Conard
It's no longer a question of recession or not. Now it's how deep and how long. Workers' pink slips stacked ever higher in March as jittery employers slashed 80,000 jobs, the most in five years, and the national unemployment rate climbed to 5.1 percent. Job losses are nearing the staggering level of a quarter-million this year in just three months.
For the third month in a row total U.S. employment rolls shrank - often a telltale sign that the economy has jolted dangerously into reverse.
At the same time, the jobless rate rose three-tenths of a percentage point, a sharp increase usually associated with times of deep economic stress.
The grim picture described by the Labor Department on Friday provided stark evidence of just how much the jobs market has buckled under the weight of the housing, credit and financial crises. Businesses and jobseekers alike are feeling the pain.
"It is now very clear that the fat lady has sung for the economic expansion. The country has slipped into a recession," said Stuart Hoffman, chief economist at PNC Financial Services Group. Indeed, there is widening agreement that the first recession since 2001 has arrived. Even Ben Bernanke, in a rare public utterance for a Federal Reserve chairman, used the "r" word, acknowledging for the first time this week that a recession was possible.
Job losses were widespread last month, hitting workers at factories, construction companies, retailers, banks, real-estate firms and even temporary-help agencies. Also mortgage brokers, hotels, computer design shops, accounting firms, architecture and engineering companies, legal services, airlines and other transportation as well as telecommunications companies.
Those cuts swamped employment gains elsewhere, including at hospitals and other heath-care sites, educational services, child day-care providers, bars and restaurants, insurance companies, museums, zoos and parks. And the government, which is almost always up.
In fact, private employers have shed jobs for four straight months, though December showed an overall gain for the economy because the government increase outweighed the private loss.
March's losses were the most since the same month in 2003, when companies were still struggling to recover from the last recession. Adding to the angst: Revised figures showed losses were actually deeper than first reported for both January and February.
All told, the economy now has lost 232,000 jobs in the first three months of this year.
On Wall Street, investors took the weak employment figures in stride. The Dow Jones industrials lost just 16.61 points, while other indexes edged higher.
All the economy's problems are forcing people and businesses to hunker down, crimping spending and hiring, a vicious cycle.
"Across the board, businesses have become very, very conservative," said Joel Naroff, president of Naroff Economic Advisors. More downbeat about their own sales prospects because of cautious consumers, employers are cutting back. "It only makes sense for them to run leaner if we are going into a recession or already in one" as Naroff now believes.
The new employment figures were much weaker than economists were expecting. They were anticipating a drop of 50,000 payroll jobs.
Michael Gregory, senior economist at BMO Capital Markets Economics, said the employment report was "emitting recession signals."
The national unemployment rate of 5.1 percent, relatively modest by historical standards, is nonetheless the highest since September 2005, following the devastating blows of the Gulf Coast hurricanes.
Some groups are feeling more of the strains from the economy's current woes. The unemployment rate for Hispanics, for instance, jumped to 6.9 percent in March, the highest in over four years. The rate for blacks climbed to 9 percent, a two-month high.
With the public on edge, Congress, the White House and presidential contenders are scrambling to come up with their own relief plans to stem record-high home foreclosures and stabilize housing - even as they engage in a political blame game.
Democrats want more economic assistance, including extending unemployment benefits. The Bush administration has resisted, saying the government's $168 billion stimulus package of tax rebates for people and tax breaks for businesses will be sufficient once it kicks in.
"We don't like to see one job lost, let alone 80,000," Commerce Secretary Carlos Gutierrez said in an interview with The Associated Press. "These are challenging times," he said. Gutierrez was hopeful the economy would turn around in the second half of this year, given the relief efforts by the government and the Federal Reserve. "We'll get through this."
Democrats were skeptical of the administration's efforts.
"Our economy is spiraling downward," said presidential contender Hillary Rodham Clinton. "It is time for this administration to put ideology aside and get serious about stemming this crisis."
Barack Obama said, "Instead of doing nothing for out-of-work Americans, we need a second stimulus that extends unemployment insurance and helps communities that have been hit hard by this recession."
Republican John McCain said the unemployment news "underlines the need to focus on innovation, which grows the economy and creates an urgent need for effective worker retraining."
Given the worsening employment situation, the Federal Reserve probably will lower a key interest rate, now at 2.25 percent, later this month.
The Fed has taken a number of extraordinary actions recently - slashing interest rates, providing financial backing to JP Morgan's takeover of troubled Bear Stearns and opening an emergency lending program for big investment houses. All the actions were aimed at limiting damage to the national economy.
With the pace of hiring slowing, the number of unemployed people increased to 7.8 million in March.
Workers with jobs saw modest wage gains. Average hourly earnings for jobholders rose to $17.86 in March and are up 3.6 percent over the past 12 months. With lofty energy and food prices, workers may feel like their paychecks are shrinking. If the job market continues to falter, wage growth probably will slow, too, making consumers even less inclined to spend, which would further hurt the economy.
Many analysts believe the economy shrank in the first three months of this year and could still be ebbing now. The government will release its estimate of first-quarter economic growth later this month. Under one rough rule, if the economy contracts for six straight months it is considered in a recession. When a determination is made by a panel of experts about when a recession has started and ended - it is usually done well after the fact.
Bernanke and the Bush administration are hopeful the economy will improve in the second half of this year. Even so, Bernanke predicted this week that the unemployment rate would rise further. Some analysts say it could climb to 5.75 percent or higher this year.
Advises Hoffman: "If you've got a job, hang on to it the best you can."
Treasurys rise after March job losses
By LESLIE WINESAP Business Writer
last updated: April 04, 2008 07:01:12 PM
NEW YORK -- ]
Treasury prices rallied March after the Labor Department reported the economy last month forfeited 80,000 jobs, the heaviest labor market losses in five years.
The report suggests that a rocky period for the economy may be getting worse. However, the bad news was widely expected as economists had forecast anywhere from 15,000 to 150,000 job cuts for March.
The unemployment rate rose to 5.1 percent, its highest reading since September 2005.
The labor market has shrunk every month of this year as employers appear hesitant to take on new workers at a time when a deteriorating overall economy is hurting many businesses.
Friday's news backed the view of many economists that a recession is under way. It also benefited the Treasury market, which generally performs well when investors are worried about the economy and seek safe investments.
The benchmark 10-year Treasury note rose 26/32 to 100 3/32 with a yield of 3.49 percent, down from 3.59 percent late Thursday, according to BGCantor Market Data. Prices and yields move in opposite directions.
The 30-year long bond gained 1 4/32 to 100 31/32 with a yield of 4.32 percent, down from 4.39 percent.
The 2-year note rose 5/32 to 99 27/32 with a yield of 1.83 percent, down from 1.93 percent.
And the yield on the 3-month note fell to 1.36 percent from 1.40 percent late Thursday as the discount rate dropped to 1.34 percent from 1.39 percent.
In after-hours trading, Treasurys saw more buying. The 10-year yield fell to 3.47 percent, the 30-year yield fell to 4.31 percent, and the 2-year yield fell to 1.82 percent.
Tony Crescenzi, managing director of fixed income at Miller Tabak, said the job losses seen this year are consistent with a shallow recession. "For starters, the payroll drop of 80,000 is far below the types of losses normally seen in an economic recession when job losses tend to move to as high as 300,000 per month," he said.
The weak report also should provide a rationale for the Federal Reserve to continue its current rate-cutting campaign.
The Fed since September has cut the overnight Fed funds target all the way to 2.25 percent from 5.25 percent. The central bank has made clear it is willing to provide further stimulation to the faltering economy and credit markets, but investors are uncertain whether further reductions will be as generous.
The Fed's next monetary policy meeting is April 29-30.
Stop your whining. In Cambodia the average yearly income is $350 a year and gas is $1.14 a liter or ~ $4.19 cents a gallon. How'd you like to be in their shoes.
CHINOY: Her story is not unique. With the average annual income in Cambodia less than $350, the promise of earning more than that has lured nearly 200,000 people, mostly women, from the rural areas to the urban factories. It's estimated that over a million Cambodians, the extended families, depend on their wages for survival.
Recession / Depression = Escalating Crime Rate
Posted on Sun, Apr. 06, 2008
A burglary victim speaks: 'Probably the biggest feeling I have is a feeling of violation'
By EMILIE RAGUSO
eraguso@modbee.com
last updated: April 06, 2008 02:59:49 AM
Toni Boster's Turlock home was burglarized in December and $6,000 worth of jewelry was stolen including her wedding ring. The burglar entered the home through this small bathroom window. (Brian Ramsay/The Modesto Bee) - Modesto Bee - Brian Ramsay
Within an hour last year, a burglar broke into Toni Boster's home, trashed her belongings, stole her jewelry collection and destroyed her sense of security.
It was Dec. 13, her husband's birthday. Boster, a 40-year-old Turlock homemaker, ran out for an hour with her 3-year-old daughter. About 1:30 p.m., she pulled into the garage and sent her daughter inside.
"Go in, go make a birthday card for Daddy."
"Mommy, the door's locked."
The family only locks that door at night, so Boster tried to push it open, thinking her daughter was wrong. It wouldn't budge. They came around through the front door, which was unlocked.
Inside, Boster found a mess. Drawers pulled open, papers strewn on the floor. Upstairs in her bedroom, clothes were everywhere and her bedding was in disarray. She walked to the closet where she kept her jewelry.
"The closet was completely trashed. All the jewelry was gone," Boster said.
She hadn't put on her wedding ring that morning because she'd planned to spend the day at home. It was gone, along with a sapphire ring, a pair of gold earrings she'd received for her 16th birthday and the rest of the $6,000 collection of jewelry she'd built over 25 years.
"Probably the biggest feeling I have is a feeling of violation. A stranger was in my house, rummaging through my stuff," she said. "It still creeps me out. He touched my underwear. He touched my pillow."
Boster later realized the burglar had come in through a bathroom window she'd left cracked about half an inch. The screen had been pried off and there was a telltale clump of mud on the toilet where the burglar climbed in, feet first.
A community service officer from the Turlock Police Department who came to take fingerprints was sympathetic, Boster said. But in all likelihood, the officer said, if police caught the culprit, he'd probably serve 45 days in jail and then be out again.
"It's a safe bet that (the burglar) was a drug addict, and looking for a quick fix," Boster said. "And his need for drugs was greater than the sentimental value of my wedding ring. I have a pretty new one now, but it's just, every time I look at it, it's just not the one my husband put on my finger. And that, that's sad."
Property crimes rampant
Burglaries and thefts are the most frequently occurring crimes, law enforcement agents say. Though property crimes might not bring with them the same degree of trauma as violent crimes, more people are victims of burglars and thieves than murderers and rapists.
"It's just not a good feeling to know your security has been compromised," said Gary Martinez, a property crimes detective with the Modesto Police Department. "You have to deal with insurance, deal with repairs and figure out what you can do to make yourself safer."
Property crimes are a huge problem throughout the county. As of 2006, Stanislaus County had the second-highest property crime rate in the state, right after San Joaquin County, according to RAND, a national research institution that provides historical criminal statistics based on Department of Justice data. Property crimes include burglary, theft and motor vehicle theft. The object of these offenses is to take money or prop-erty; neither force nor threat of force is involved.
Robbery, on the other hand, is defined as stealing by force or threat of force.
The Modesto and Turlock police departments and the Stanislaus County Sheriff's Department reported large jumps in the number of home burglaries from 2006 to 2007.
In Turlock, there were 37 percent more home burglaries in 2007; in Modesto, about 26 percent more. And the Sheriff's Department showed a 22 percent increase in unincorporated areas.
In 2006, Stanislaus County's burglary rate was fifth in the state, not far behind Kern, San Joaquin, Merced, and Sutter and Yuba counties combined, according to RAND. Orange County had the lowest burglary rate, with about 4 in 1,000 people falling victim to it, compared with nearly 10 in 1,000 in Stanislaus County. On average, state residents have an almost 7 in 1,000 chance of being burglarized, about the same as the national average.
In fact, the California crime index ranked Stanislaus County fourth for overall serious crimes compared with 22 other statistical regions and the state as a whole. It followed San Joaquin County; Alameda and Contra Costa counties combined; and Sacramento, Placer and El Dorado counties combined.
Crime is not cheap for Modesto's residents.
Home, commercial and auto burglaries cost Modestans $6,661,049 in lost property in 2007, according to the Department of Justice. That's more than $1 million above the previous high in 1997, of $5,417,363.
To make matters worse, many of these crimes go unsolved. Nationally, less than 13 percent of burglaries result in an arrest, according to the Department of Justice.
"There's a lack of resources, a lack of money and a lot being thrown at you at the same time," Modesto police Detective Sean Dodge said.
Detectives receive stacks of 100 to 200 burglary reports each week. Many hold few, if any, clues about the culprit. Yet the prevalence of crime shows on television, detectives say, has given burglary victims a skewed understanding of what type of investigation is feasible.
Officers call it "the 'CSI' effect," based on the popular CBS crime show known for its fancy gadgets and fast results.
"They think that we can pull fingerprints out of nothing," Dodge said. "I've had questions about cell phones being used to track burglars via satellite. They think we can hear them through the satellite. It's upped the expectation of what we can actually do. Many of those things aren't possible, either because of financial limitations or because they just don't exist."
In the fraction of arrests that do occur, convictions are hard to come by, authorities say. Juries, too, have unreal expectations of the evidence they will see in court, Martinez said.
"They really expect a dog and pony show," he said. "Video. Surveillance. 'CSI.' If they don't see that in the courtroom, they say, 'You should have done this, you should have done that.' They really believe we're going to get a hair follicle off a carpet for a residential burglary."
John Yoshida directs the Department of Justice's Central Valley Laboratory in Ripon. The lab handles forensic, drug and DNA analysis for 80 law enforcement agencies. The department runs 10 field labs, and several other specialized labs, in California. Agencies that can't afford their own labs can send evidence to these labs for free.
DNA evidence rarely collected
Officers often don't collect DNA evidence from burglary crime scenes because it isn't there, or there isn't enough time, Yoshida said. And there's no way his lab could analyze DNA evidence from burglaries, even if police sent it in.
"I would have to, at a very minimum, triple my staff in order to do that," he said. "We have a tremendously high violent crime rate in the valley. In small towns, maybe the robbery or the burglary is the biggest thing they have. But we have to measure that against a homicide or a sexual assault. We really have to put the violent crimes first."
A handful of law enforcement agencies around the country have begun collecting DNA evidence in burglary cases, arguing that many criminals start out as burglars before moving on to violent crimes. So stopping them, or at least tracking them, from the beginning can be cost-effective and a boon for public safety.
"If it costs $2,000 to $3,000 to process this DNA sample, and you've got a $500 burglary loss, from an economic standpoint the public would probably say it doesn't make sense," said Dean Gialamas, who directs the Forensic Science Services Division for the Orange County Sheriff's Department. "But from a social ecology standpoint, you've taken a perp off the street and stopped someone earlier in their criminal career. How do you put a price on preventing a murder or sexual assault down the road?"
In 2007, Gialamas' lab ran DNA from 786 burglary cases and came up with 261 hits from a database that has DNA samples from convicted offenders as well as samples from other crime scenes. That's twice as many hits as the lab got in 2006. In 2005, the first year the lab started to pursue DNA analysis from burglaries aggressively, the lab got 40 hits.
The lab received a grant in 2005 from the National Institute of Justice that allowed Gialamas to hire more staff and study what type of DNA sampling would be the most revealing.
"We already knew that finding blood or cigarette butts would produce results," he said. "But what if someone handled a doorknob or moved a jewelry box? Would that lend itself to the collection of DNA?"
His staff found that high traffic spots, such as doorknobs, often had the DNA of three to five people, making it hard to separate the DNA and get conclusive results. Other surfaces, such as computer cables that had been unplugged and left behind from a stolen laptop, yielded higher success.
The lab's findings have helped establish best practices for other departments to follow. They've also contributed to its high hit rate in the DNA database. The average national hit rate, Gialamas said, is about 10 percent. In 2007, his lab's was 33 percent.
"We should fund crime labs across the country such that they're not only helping solve crimes that were already committed," he said, but "fund them so they're able to prevent crimes from happening later. If criminals know that there's an aggressive DNA program in that area, they may think twice about committing a crime there."
Victim now uses jewelry decoys
Burglary victim Boster was able to file a claim with her insurance company and replace most of her jewelry. She now leaves decoys out, while her real pieces are hidden.
She and her husband did not tell their other two young children, who were at school during the burglary, about the break-in. Though the couple was shaken by the violation, they decided to spare the kids, she said.
Boster said she fears the burglar could come back to take what he left: antique guns, digital cameras, her husband's laptop. It's not a baseless fear, as police have found that burglars do return to steal what they left behind or even what insurance replaced.
Other factors are against them, too. The Boster home, at the end of a cul-de-sac, sits next to an empty field. Behind them is an empty house for rent, so there aren't as many watchful neighbors as there could be. The family has considered installing an alarm system.
"Every time I come in my house now, I'm very grateful when, the door from the garage, when I can push it open. I'm very relieved. Because that means nobody's been in my house. And I kind of look around when I walk in to see if there's a mess. I probably will always do that," Boster said. "And I guarantee you I don't leave the house now without my good jewelry."
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Should a bad ecomony be used as an excuse for all this crime and the crime to come, NO, but the way our children have been pampered in todays world has produced a body of people with no consideration for anyone or anything. The only solution is to become small arms qualified and possibly get a concealed carry permit. When times get real rough law abiding citizens are going to carry anyway.
Housing market hasn't hit bottom
Homeowners and investors hunting for any indication that the housing market has bottomed out didn't get it Tuesday, as the latest home sales data from a real estate trade group moved that sign further down the road to recovery. The National Association of Realtors said pending U.S. home sales fell in February to the lowest reading since the index began in 2001. The trade group's seasonally adjusted index of pending sales for existing homes fell to 84.6 from January's upwardly revised reading of 86.2. A year earlier, the index stood at 107.6. A reading of 100 is equal to the average level of sales when the index started. The previous low was August's reading of 85.8, recorded at the height of the credit crunch.
WaMu gets relief
Washington Mutual Inc. secured $7 billion in new capital Tuesday, an injection that is aimed at reviving the company despite ballooning loan losses. Washington Mutual said it would get the new capital from an investment group led by private equity group TPG, but will cut its dividend again and post both a wider loss and set aside more in loan loss provisions for the first quarter than had been expected. TPG founding partner David Bonderman, a former WaMu director, will also rejoin the board. Separately, the thrift said it will get out of the wholesale lending business, close all remaining standalone home loan centers and lay off about 3,000 workers.
Fed worried about a deep recession
Worries about a deep recession -- not a shallow one -- drove Federal Reserve policymakers to slash a key interest rate last month, meeting minutes show. Even as the Fed battled in almost unprecedented fashion to stem a widening credit and housing slump, some members fretted over the possibility of a "prolonged and severe" economic downturn. It was in that environment that they voted -- with two dissents -- to cut its most important interest rate by three-quarters of a percentage point to 2.25 percent. That action capped the most aggressive Fed intervention in a quarter-century.
Housing market hasn't hit bottom
Homeowners and investors hunting for any indication that the housing market has bottomed out didn't get it Tuesday, as the latest home sales data from a real estate trade group moved that sign further down the road to recovery. The National Association of Realtors said pending U.S. home sales fell in February to the lowest reading since the index began in 2001. The trade group's seasonally adjusted index of pending sales for existing homes fell to 84.6 from January's upwardly revised reading of 86.2. A year earlier, the index stood at 107.6. A reading of 100 is equal to the average level of sales when the index started. The previous low was August's reading of 85.8, recorded at the height of the credit crunch.
Study: Middle-class outlook downbeat
Hope Yen
Associated Press
Apr. 10, 2008 12:00 AM
WASHINGTON - Growing numbers of middle-class Americans say they aren't better off than they were five years ago, reflecting economic pressures amid growing debt, a study released Wednesday shows.
Their short-term assessment of personal progress, according to the study, is the worst it's been in nearly half a century.
The survey by the Pew Research Center, a Washington-based organization, paints a mixed picture for the 53 percent of adults in the country who define themselves as "middle class," with household incomes ranging from below $40,000 to more than $100,000. advertisement
It found that a majority of Americans said they haven't progressed in the past five years. One in four, or 25 percent, said their economic situation had not improved, while 31 percent said they had fallen backward. Those numbers together are the highest since the survey question was first asked in 1964. Among the middle class, 54 percent said they had made no progress (26 percent) or fallen back (28 percent).
Asked about their financial experiences in the past year, 53 percent of middle-class people said they had to cut spending because money was tight. About one in five said they had trouble getting or paying for medical care, while 10 percent reported they had been laid off or otherwise lost their jobs.
Looking ahead to the coming year, half of the middle class surveyed said they expected to have to cut more spending. Among those employed, one in four, or 25 percent, expressed worries that they would be laid off, that their job would be outsourced or that their employer would relocate in the coming year, while 26 percent were concerned that they would see cuts in salary or health benefits.
Middle-class prosperity overall also lagged compared with richer Americans. From 1983 to 2004, the median net worth of upper-income families - defined as households with incomes above 150 percent of the median - grew by 123 percent, while the median net worth of middle-income families rose by just 29 percent.
At the same time, most middle-class people remained upbeat when asked to measure their progress over a longer time frame, although their level of optimism lagged behind their richer counterparts. Two-thirds, or 67 percent, of middle-class Americans say their standard of living is better than the one their parents enjoyed at the age they are now.
In contrast, 80 percent of richer people said they exceeded their parents' standard of living. Among the lower class, only 49 percent reported better conditions.
"It's been a lousy run for the American economy, and people feel it," said Paul Taylor, director of Pew's Social & Demographic Trends project and lead author of the study. He noted that people's pessimism largely tracks annual median household income, which has seen little gain in recent years. Middle-class people also may be disproportionately feeling the pinch because they tend to borrow more heavily against their homes to support their lifestyles, Taylor said.
"Still, over a span of a generation, it's been a pretty good run, even as there are some recent pressures that I think people are feeling," he said.
The poll involved phone interviews with 2,413 adults, conducted from Jan. 24 to Feb. 19. The margin of error was plus or minus 2.5 percentage points.
Unwelcome records
The upward trend in energy prices showed no sign of abating Wednesday as gasoline set yet another record at the pump and crude oil topped $112 a barrel for the first time in the futures market. The national average price of a gallon of regular unleaded gas rose 1.2 cents to a record $3.343 a gallon, according to a survey of gas stations by AAA and the Oil Price Information Service. With the peak summer driving season still to come and gas following crude higher, the fuel may well reach the retail price of $4 a gallon that the Energy Department has been forecasting.
Drop in home values brings accompanying dip in property taxes in Stanislaus
By J.N. SBRANTI
jnsbranti@modbee.com
last updated: April 01, 2008 08:15:50 AM
Assessed home values -- and property taxes -- will be lowered this year on about 38,000 houses and condos, 4,000 mobile homes and 1,000 multifamily housing units in Stanislaus County.
County Assessor Doug Harms said that's because property values have dropped dramatically in the past two years. He said some homes are worth less than half of what buyers paid for them during the 2005-06 housing boom.
Stanislaus County automatically will lower assessments for every home purchased since July 2003. Harms said assessments will drop 5 percent to 52 percent, depending when homes were purchased, which town they're in and their size.
The biggest drop will be for 2,500- to 3,500-square-foot Patterson homes purchased during December 2005, which Harms calculated are worth about 52 percent less than their original prices.
To break it down, homes purchased from October 2005 to July 2006 will see the biggest declines, which will average 40 percent to 44 percent countywide.
In terms of location, Patterson and Newman home values declined the most, so their assessments will be lowered the most.
Oakdale and Waterford home values declined the least, so their assessments won't be lowered as much.
Homes of more than 2,500 square feet fell in value more than homes less than 1,600 square feet. But the largest homes, those above 3,500 square feet, declined the least, according to the assessor's office.
The lowered assessments will reduce property tax collections.
"It's in the billions," Harms said of the loss. Last month he had estimated that property tax revenues would fall $1.4 billion, but now he estimates the loss will be significantly larger.
While taxpayer-funded agencies may suffer, Harms expects homeowners will be happy to have smaller property tax bills.
Homeowners may not be pleased to hear, however, that falling values will not reduce "direct assessments" for homes in special districts such as Mello-Roos service areas.
Harms said angry homeowners have been calling his office to complain about high special district fees, but those taxes are not tied to assessed values.
Homeowners may be disappointed to hear that property tax bills due April 10 are not affected by the reassessments. Harms' home value calculations are for taxes due in December 2008 and April 2009.
The new assessments will be determined June 1, based on what the houses theoretically were worth Jan. 1. The results will be mailed to homeowners this summer. Owners can appeal if they don't agree with the assessments.
Harms warned homeowners not to be fooled by private companies who promise to help lower property tax assessments.
"Two different businesses are advertising that they can get your property tax valuation reduced if you are willing to pay them as an agent," Harms said. "One is charging $195 per parcel for their service, and the other is charging one-half of whatever property tax savings you might get.
"If people want to pay for this, they can, but it seems to me that they will most likely get a reduction without hiring these people. And if the owner doesn't qualify for a reduction, hiring these people won't help."
Oracle CEO wins property tax case
By Neil Gonzales
Bay Area News Group
Article Launched: 03/27/2008 01:33:32 AM PDT
Larry Ellison just got even richer.
Ellison, worth $25 billion according to Forbes, challenged the San Mateo County assessment of his 23-acre Japanese-style compound in Woodside. And he won.
The reassessment will give the founder and chief executive of Oracle an estimated $3 million tax refund, said Terry Flinn, deputy county assessor.
That reduces funding for agencies countywide that receive property-tax revenues, Flinn said.
The Portola Valley School District could be hit hard, Assistant Superintendent Tim Hanretty said. Portola Valley is a basic-aid district, which means it receives most of its funding from property taxes.
The change in value on Ellison's property is projected to drop the district's revenue from $250,000 to $300,000 annually beginning in the 2008-09 fiscal year, Hanretty said.
"It's a significant chunk," he said Wednesday. "It's a permanent, ongoing reduction."
That money would have gone into the district's general fund, which pays for day-to-day expenses such as teacher salaries, textbooks and supplies.
Ellison's Octopus Holdings challenged the county's assessment of his estate, which was built based on a Japanese emperor's 16th-century country residence and features a main house, a two-bedroom guest dwelling and an artificial lake.
The county assessed the property at $163 million in May 2004. Octopus Holdings had it at $64 million. In December, the county Assessment
Appeals Board sided with Octopus Holdings.
San Francisco-based attorney William Bennett, who represents Octopus Holdings, could not be reached for comment.
According to the board, the county failed to account for the property's "functional obsolescence," which included "the limited market appeal of 16th century Japanese architecture and grounds" and "the limited amenities of the main residential structure due to its design and layout."
Based on the board's ruling, the property's value is projected to be about $70 million this year - a decline from the estimated $173 million in 2007.
March's housing stats grim; no sign of foreclosure peak, expert says
By J.N. SBRANTI
jnsbranti@modbee.com
last updated: April 15, 2008 07:57:45 AM
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No matter how you crunch the numbers, March was a brutal month for foreclosures throughout the Northern San Joaquin Valley.
About 2,000 properties in Stanislaus, San Joaquin and Merced counties were repossessed by lenders last month, statistics from RealtyTrac, ForeclosureS.com and ForeclosureRadar show.
San Joaquin had the highest foreclosure rate in the nation during March, followed closely by Stanislaus and Merced, according to RealtyTrac. Homes in those three counties last month were nearly seven times more likely to be facing foreclosure than the national average.
"There's definitely no sign of a peak in any of these foreclosure numbers," warned Sean O'Toole, owner of ForeclosureRadar.
Stanislaus County, particu- larly, saw a spike last month in the number of homes forced into foreclosure auctions on the courthouse steps. According to ForeclosureRadar, bidders bought only 20 of those homes, with 633 foreclosed properties being returned to lenders. Those lenders lost nearly $208 million on those loans gone bad in Stanislaus County.
That was a record loss and a record number of repossessions.
Lenders have taken back so many homes in the Northern San Joaquin Valley, they've dramatically slashed sales prices in an effort to unload them to new buyers.
"The good thing is that we're getting down to a price point where buyers can rent out the property and make a good return on their investment," O'Toole said. "Those prices also are attractive to first-time buyers."
More than 100 foreclosed Stanislaus houses, for example, will be auctioned by lenders April 29 during a massive sale at Modesto Centre Plaza. Most of those homes have starting bids listed at less than $100,000, and many of them have posted starting bids of $1,000.
Stanislaus home prices have plummeted about 30 percent during the past year, according to sales statistics. Sales volume has dropped so much that more homes are being foreclosed every day than are being sold by real estate agents.
In an effort to save their houses from mortgage default, more than 1,000 homeowners attended a foreclosure prevention workshop last month in Modesto. Representatives from 10 large mortgage lenders at the event met with borrowers to negotiate loan modifications.
More corporate greed:
Praise the Lord! PG&E is paying its property taxes!
If you comply with the law and pay property taxes you are doing your duty as a citizen.
You probably don't expect a pat on the back.
But PG&E does.
The company that gave their former chief executive officer a $12 million bonus as a reward for driving the for-profit agency -complete with eminent domain powers to take your property if they so chose - to the edge of bankruptcy sent out a press release April 10.
In a nutshell, it lets the rest of us know that they are complying with the law and paying property taxes just like all other property and business owners do.
Yes, PG&E thinks what they are doing is so extraordinarily different than the rest of us that they have to toot their own horn.
Here's what PG&E Senior Vice President of Public Affairs Nancy McFadden actually states in the fluff from Beale Street in San Francisco: "Pacific Gas & Electric Company is proud of its ongoing commitment to help fund these vital community services by providing regular and timely payments to local governments..."
Whoa.
Ongoing commitment? Regular and timely payments? Isn't that what the rest of us are doing?
It gets better.
PG&E isn't really paying their property taxes, you are. And it isn't in an abstract "you-buy-their-electricity-so-you-pay-for-their-taxes" PG&E pays.
Quite the contrary.
The California Public Utilities Commission authorized PG&E to collapse property taxes as part of the rate they charge us. They simply collect it from us and pass it on to government. Filings clearly show they do not pay property taxes out of shareholder profits or corporate funds. That stuff is to buy $10 million jets and shower corporate executives with tons of bonus money while they keep whittling back on the number of hardworking front-line PG&E personnel. Go figure.
But, as they say, the devil is in the details of PG&E's self-proclaimed largeness they accomplish by siphoning money out of your pocketbook.
Guess what PG&E says the value of property they own that they pay taxes on that is within the South San Joaquin Irrigation District? Try $50 million.
What has SSJID told PG&E their system is worth if it is taken in eminent domain assuming PG&E won't negotiate in good faith? Try $300 million.
Wouldn't it be great if PG&E lived up to its self-proclaimed good corporate citizens status and cut into mega-million dollar bonuses to pay government agencies within the SSJID territory taxes based on what they say their property is really worth?
Sending that press release out is a nice way of either:
• putting a positive spin on the fact they are paying only one-sixth of what they should while the rest of us poor slobs get hit for the full freight, or
• they have lied about how much their property is really worth within SSJID territory in their ongoing efforts to make sure SSJID can't do what it is allowed to do under the California constitution to purchase the system and reduce electrical rates by 15 percent across the board in Manteca, Ripon, and Escalon.
Given the decrepit condition of much of the system in and around Manteca and the fact many power poles out there in the countryside where farmers pay huge amounts for electricity have dates on them that are 40 years and older, it is safe to assume PG&E fibs a bit about the market value of their system.
And since they're sending out press releases, why don't the powers that be at PG&E praise themselves for one of the slickest business moves of all time?
PG&E used deregulation that they pushed for on the pretense it would lower power rates for Californians to set up a holding company that they sold all of their power-generating assets.
It was a genius move that was made legal by their relentless lobbying to free themselves from the bonds of costly regulation in the name of lowering our electrical rates. In truth, it significantly increased our electrical rates.
It was a shrewd way of them essentially selling themselves their own assets that have been long paid for and depreciated so they could sell the power generated back to themselves at current market costs while getting tax breaks again on the hydroelectric plants they built decades ago.
Why not brag about the tax breaks that PG&E is getting as well on the back of ratepayers? It was a brilliant move that didn't generate a lot of outrage because of the corporate layers involved.
Making things worse, they are essentially using water resources developed by the people of California to generate cheap power - at least for PG&E to produce - and then turning around and selling to us at outrageously high markups thanks to their selling of assets to themselves.
Ronald Reagan had it wrong. The scariest string of words pieced together in the English language isn't: "I'm from the government, and I'm here to help." It's: "I'm from PG&E and I'm going to reduce your electrical rates."
Posted on Thu, Apr. 24, 2008
New home sales plunge to lowest level in 16 1/2 years
By MARTIN CRUTSINGERAP Economics Writer last updated: April 24, 2008 10:38:29 PM
Sales of new homes plunged in March to the slowest pace in 16 1/2 years as a two-year housing downturn extended into the start of another spring sales season. The median price of a new home in March compared to a year ago fell at the fastest clip in 38 years.
Sales of new homes dropped by 8.5 percent last month to a seasonally adjusted annual rate of 526,000 units, the slowest sales pace since October 1991, the Commerce Department reported Thursday.
The median price of a home sold in March dropped by 13.3 percent compared with March 2007, the biggest year-over-year price decline since a 14.6 percent plunge in July 1970.
Housing, which boomed for five years, has been in a prolonged slump for the past two years with sales and home prices falling at especially sharp rates in formerly hot sales areas.
Some analysts said they believe the slide in sales may be close to ending although they said any rebound is likely to be slow and anemic with prices continuing to fall, possibly until this time next year.
Earlier this week, the National Association of Realtors reported that sales of existing homes also fell in March, dropping by 2 percent, with prices declining on a year-over-year basis by 7.7 percent.
"The start of the spring home buying season is turning out to be a bust," said Stuart Hoffman, chief economist at PNC Bank Corp. in Pittsburgh. "It is much better to be a buyer than a seller right now."
Hoffman said he thought sales would stabilize by this fall but that prices could keep falling until the start of the 2009 spring sales season. Prices are being depressed by the continued huge inventory of unsold homes, a backlog that reflects rising numbers of mortgage defaults which are dumping more homes on an already glutted market.
On Wall Street, stocks rallied Thursday as investors were cheered by first-quarter results from Fort Motor Co. and a sizable decline in weekly applications for unemployment benefits. The Dow Jones industrial average rose 85.73 points to close at 12,848.95.
For March, new home sales were down in all regions of the country, dropping the most in the Northeast, a decline of 19.4 percent. Sales fell by 12.9 percent in the West, 12.5 percent in the Midwest and 4.6 percent in the South.
The overall drop was much bigger than expected and the size of the declines in many regions of the country also took economists by surprise.
"Every region shared in the carnage," said Joel Naroff, chief economist at Naroff Economic Advisors. "These are not soft numbers. They are Depression numbers."
Still, economists said they believed that the extent of the downturn may be signaling that at least in terms of sales, things could bottom out by this summer or by the latest, this fall, as falling prices lure buyers back into the market.
"Sellers continue to aggressively price and market new homes," said Patrick Newport, an economist with Global Insight. "Provided that financial markets stabilize, we still expect their efforts to pay off with new home sales turning in the second half of this year."
Economic growth slowed to a near-standstill at the end of last year as the economy was battered by the prolonged slump in housing and a severe credit crunch that has resulted in billions of dollars of losses at many of the nation's largest financial institutions. Many economists believe the country has fallen into a full-blown recession although President Bush earlier this week disagreed, saying the country was in a slowdown but not a recession.
Consumer sentiment has plunged to recessionary lows as Americans have watched gasoline soar to an average price above $3.50 per gallon nationally.
In other economic news, orders to factories for big-ticket manufactured goods fell for a third straight month in March, the longest string of declines since the 2001 recession, while applications for unemployment benefits fell by 33,000 to 342,000.
The Commerce Department said demand for durable goods dropped by 0.3 percent last month, a worse-than-expected performance that underscored the problems manufacturers are facing from a severe economic slowdown. The last time orders fell for three consecutive months was from February to April of 2001, when the country was sliding into the last recession.
The weakness in manufacturing orders was led by a 4.6 percent drop in orders for autos, a sector hard hit by soaring gasoline prices, and the weakening economy, which have cut sharply into car sales. Orders in the category that includes home appliances fell by 6.6 percent.
This industry has been hurt by the two-year slump in home sales.
The Labor Department reported that claims for unemployment benefits fell by 33,000 last week to 342,000. Economists had been expecting claims to rise by 3,000, but even with the improvement analysts said the weak economy is still putting greater pressures on the labor market and unemployment, now at 5.1 percent, is likely to rise further.
Gas prices hit 5th straight record
The price for a gallon of gas sets a new record high at $3.718, according to AAA; crude prices tumble as the dollar strengthens.
Last Updated: May 12, 2008: 3:29 PM EDT
NEW YORK (CNNMoney.com) -- Retail gasoline prices increased for the sixth straight day and hit their fifth consecutive record, auto group AAA's Web site showed Monday.
The national average price for a gallon of regular unleaded gasoline rose to a new all-time high of $3.718, up 1 and one-tenth of a cent from the previous day.
Crude prices, meanwhile, tumbled on the stronger dollar.
Drivers now pay 21% more for a gallon of gas than they did a year ago, when a gallon of gas cost on average $3.064, according to AAA.
Consumers have been pinched at the pump as the price of a barrel of crude oil has doubled in the past year. Crude prices settled at a record close of $125.96 a barrel Friday after breaking $126 a barrel earlier in the session.
Stronger dollar: Crude futures pulled back from those record levels as the dollar gained Monday.
Light, sweet crude for June delivery jumped to a new all-time high of $126.40 a barrel in light trading on the New York Mercantile Exchange before falling back to settle at $124.23, down $1.73 from Friday's closing record of $125.96. It was the first time oil has closed lower in six sessions.
When the dollar is weak, investors often look to commodities like oil as a hedge against inflation. But a stronger U.S. currency can reverse that trend.
The euro was quoted at $1.5405 early Monday, down from $ 1.5480 late Friday in New York. The dollar also strengthened against the yen, rising back above the ¥103 mark.
Many analysts believe the weak dollar has driven oil prices to levels that defy fundamental supply and demand economics. But other investors see continued strong demand for oil and fuel from China and India as a sign that oil prices have further room to rise.
Growing concerns about declining crude production in Mexico, Russia and elsewhere are keeping prices in record territory, analysts say. Goldman Sachs said in a report last week that crude prices could rise to $150 to $200 within two years.
"What's really circulating now is the possibility that world oil production has peaked. There's an idea that we can't change supply but we can change demand, and the only way to do that is to rally the market higher," said James Cordier, founder of OptionSellers.com, a Tampa, Fla., trading firm.
China: Some analysts expect that China's trade data for April will move the price of oil.
China's inflation rose in April to the highest level in a decade, according to a government report released on Monday.
The government also released data on Monday showing China's trade surplus fell by 1% in April. Less money flooding into the economy could ease inflation in China.
According to preliminary data from China's General Administration of Customs, the country's crude oil imports for April totaled 104 million barrels, lower than the 126.3 million barrels imported in March.
Also pressuring oil prices Monday were concerns that a massive earthquake Monday in western China may temporarily slow demand. The 7.8-magnitude quake, which was felt as far away as Vietnam, Pakistan and Thailand, killed more than 7,600 people, toppled buildings and knocked out power lines.
"We know that some power and electricity plants are off-line, so that could have a negative impact on demand," said Phil Flynn, analyst at Alaron Trading Corp. in Chicago. "But obviously the market is still showing strength so it has a lot of bounce in it."
Venezuela: The advance of oil prices at the end of last week was spurred by evidence that Venezuelan President Hugo Chavez has offered assistance to Colombian rebels. Recovered documents from a slain guerrilla fighter show that Chavez has offered assistance to Columbian fighting rebels.
Some U.S. lawmakers think that the White House should add Venezuela to a list of state terror sponsors, including North Korea, Iran, Syria, Sudan and Cuba. If the U.S. were to add Venezuela to that list, however, the country could cut off oil experts to the U.S.
Venezuela is a key supplier of oil to the U.S. and decreasing supplies of oil to the U.S. would push up the price of oil.
More energy prices: In other Nymex trading Monday, June gasoline futures fell 3.7 cents to settle at $3.1642 a gallon after earlier rising to a trading record of $3.218 a gallon. June natural gas futures fell 2.36 cents to settle at $11.301 per 1,000 cubic feet after earlier rising to its own trading record of $11.675.
In London, June Brent crude futures fell $2.03 to $123.93 a barrel on the ICE Futures Exchange.
A drop in heating oil prices also led crude lower Monday, analysts said. Heating oil for June delivery fell 7.62 cents to settle at $3.5598 a gallon on the Nymex.
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