Monday, May 05, 2008

Bloomberg - "Greenspan Says `Pale Recession' May Last Through Year" (5-5-08)

"Former Federal Reserve Chairman Alan Greenspan said the U.S. has slipped into an 'awfully pale recession' and may continue to languish for the rest of the year. 'We are clearly receding,' with economic growth now at about zero percent, he said in an interview with Bloomberg News. Greenspan, who now consults for clients including Deutsche Bank AG, also said it was too soon to declare the end to the credit crisis stemming from the collapse in the subprime mortgage market."

Bloomberg - "Buffett Castigates Wall Street, Bankers on Blunders " (5-5-08)

"Billionaire Warren Buffett castigated investment bankers, home lenders and regulators for letting the financial system spin out of control and causing a run on Bear Stearns Cos. that almost brought down more of the biggest banks. Buffett and investing partner Charlie Munger also lambasted credit raters, bond insurers and policymakers for two days as a record 31,000 attended the annual affair in Omaha, Nebraska. In between scoldings, Buffett told investors more damage lay ahead and dropped hints about where Berkshire is looking for purchases abroad as the dollar falls."

Bloomberg - "Hovnanian Triples Its Cash-Flow Forecast: Shares Rise" (5-5-08)

"Hovnanian Enterprises Inc., New Jersey's biggest homebuilder, tripled its forecast for positive cash flow in fiscal 2008 as it cut prices on homes to stimulate sales. Shares rose as much as 5.7 percent. The Red Bank, New Jersey-based company raised its cash flow forecast to more than $300 million for the year from an earlier target of more than $100 million, it said in a statement today."

Reuters - "BofA may lower Countrywide deal price" (5-5-08)

"Bank of America Corp will likely lower its purchase price for Countrywide Financial Corp, at least two analysts said, with Friedman, Billings Ramsey saying the bank may cut its price to the $0 to $2 level or even walk away from the deal."

Yahoo - "Rep. Frank wants answers on jumbo loan inaction" (5-5-08)

"Rep. Barney Frank, D-Mass., said Monday that the House Financial Services Committee that he chairs will hold a May 21 hearing to try to find out why so-called jumbo mortgages remain difficult to get and continue to carry high interest rates, despite new rules that took effect April 1. Frank will try to get answers from mortgage bankers, Wall Street financiers and government-sponsored mortgage firms Fannie Mae and Freddie Mac."

Yahoo - "Don't Let Your Money Yield to the Fed Rate Cuts" (5-5-08)

"The most aggressive bank savings deals pay out little more than 2.5 percent to 3 percent right now. Given that the official inflation rate is above 4 percent, you're pretty much guaranteed a negative real rate of return. And you're probably feeling a lot more than a 1-percentage-point shortfall; the official Consumer Price Index (CPI) numbers sure don't seem to reflect the much-higher price hikes for basic food and fuel."

Orange County Register - "Demand for O.C. homes nears ‘06 levels" (5-5-08)

"The math of Steve Thomas at Re/Max Real Estate Services in Aliso Viejo says demand for O.C. housing continues to grow. As of last Thursday, 2,540 existing homes and condos had been placed into escrow in the past 30 days, a 677 gain vs. a year ago and just 161 homes short of this late April reading in 2006. It’s a strong hint that when these deals-in-the-works are completed in the next two months we’ll see an end of the county’s homebuying losing streak — per DataQuick’s tracking of closed deals — that’s run 31 months back to September 2005."

Orange County Register - "O.C. distressed-home listings creep up" (5-5-08)

"Home market watcher Steve Thomas at Re/Max Real Estate Services in Aliso Viejo reports that the number of O.C. distressed properties (homes listed by agents as foreclosures or short sales) was 5,576 last week, +115 vs. two weeks earlier or a +2.1% change. As a percent of all listed homes for sale, distressed properties were 36.1% of the market last week vs. 35.1% two weeks earlier and 24.2% at the end of ‘07."

Orange County Register - "Could foreclosures help increase affordable rental stock?" (5-5-08)

"A new report by Harvard University’s Joint Center for Housing Studies argues that the nation’s policy on low-income housing got out of whack when the federal government placed its emphasis on homeownership over increasing the supply of affordable rental properties. As a result, as low-income homeownership rose, the availability of Section 8 and other affordable rentals shrank. But they think the foreclosure crisis could help remedy that."

Realty Times - "As Foreclosure Rates Rise So Does Fraud" (5-5-08)

"As foreclosure rates rise, so does fraud. And as the incidence of fraud rises, foreclosure rates follow. It is as vicious a cycle as any economist has ever witnessed. Which came first is a chicken-and-egg scenario that I do not want to get into. Sometimes rampant fraud can trigger foreclosures. I am currently involved in the investigation of such a case in Detroit. In a classic cash back at closing scheme, a builder who was having trouble selling his homes managed to find someone to pay nearly $800,000 for a home with a true market value of no more than about $550,000, scamming the lender out of over $250,000 in cash."

Realty Times - "Realty Viewpoint: Why Buy Now? Media Is Wrong About Housing Slump" (5-5-08)

"The financial press is worried that they might have gone too far -- paralyzing the nation into recession by piling on housing. So they're finally beginning to question the indexes where they get their data, and whether the news is really as bad as it seems. Slowly but surely, headlines are changing from Don't Buy A Home Now to Is It Time To Buy?"

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