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Archive for the ‘News’ Category

Downwardly Mobile?

In News on April 19, 2011 at 9:25 am

This article about business professionals who have been laid off in the past few years highlights an emerging problem in the economy.  The few jobs that are being created are not replacing the job positions that are eliminated.  The story linked to below highlights one MBA credentialed business executive who spent 2 years on unemployment and then took a part time position teaching bookkeeping for $15 per hour.  There is a shortage of high value executive business positions to absorb the legions of business professionals that were caught up in recent corporate re-sizing measures.

Another problem is that many people have built skills in industries that no longer exist.  The story also profiles a woman who gained experience as a construction estimator.  With new construction at a virtual standstill the question becomes what was that experience worth.  As many are finding out now the value of your skills in the prior economy may not be even close to how today’s economy values the same skills.

Making matters even harder, is that this problem is exacerbated by the housing market that handcuffs professionals to their homes and restricts mobility.  If skilled professionals can’t move to find a job that matches their skills they are forced to accept employment in areas that either cant make use of thier experience or dont value the experience enough to translate it into compensation.

Read More:

http://www.huffingtonpost.com/2011/04/19/trading-down-long-term-unemployed_n_850220.html?page=3

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1 in 7 Nevada homes are vacant

In Data, News on March 15, 2011 at 9:19 am

US Census data shows us the enormity of the housing problem in Nevada and why it will take decades to get out of the hole.

There were 167,564 empty houses in the state last year, according to newly released U.S. Census data, more than double the number in 2000. The number of vacant homes represents about one out of every seven houses across Nevada.

An interesting blip in the statistics is that Nevada has – simultaneously – the highest rate of mobility in the country and the worst market to sell a house.

More than 16 percent of Nevadans relocated to new residences within the state in 2008 alone, the highest mobility rate in the nation, the Census data shows.

So what does that mean? It means that Nevadans are not moving willingly, they are being forced to move. Without a doubt it is going to take Nevada many years to rebuild an economy capable of supporting the excess housing inventory and clear the vacancies.

Read More:

http://www.msnbc.msn.com/id/42084625/ns/us_news/

Miss Colorado USA Wins Crown, Loses a Home

In News on February 26, 2011 at 7:20 am

Blair Griffith crowned Miss Teen USA in 2006, currently Miss Colorado USA and vying for the Miss USA pageant in June, is homeless.

Griffith and her mother are among a growing cadre of homeless families across the United States. The number of homeless families rose from 131,000 in 2007 to 170,000 in 2009 due to the recession, according to the Annual Homeless Assessment Report to Congress

As you might expect Ms. Griffith displays the poise and composure of a title winner despite her hardships. It is currently reported that Griffith and her ailing mother are staying with friends.

Read More:
http://abcnews.go.com/Business/homeless-beauty-queen/story?id=12993666

JPMorgan says get ready for good times in 2011

In News on February 23, 2011 at 7:32 am

In addition to noting that the foreclosure crisis that his firm helped to create and perpetuate is no where close to being over,

“JPMorgan CEO Jamie Dimon sees good times in 2011… new regulation which he says will make banking more expensive for customers. Dimon explains some of the higher fees coming your way”

Good times for whom, Mr. Dimon? It is always astonishing when corporate CEOs especially those in the financial industry openly speak out of both sides of their mouths. The bottom line is that 2011 will get more expensive for average people processing average transactions in normal checking accounts and credit cards.

Dimon assesses that we are half way though the mortgage meltdown, but not one to let a good crisis go to waste he notes that if the financial industry can’t stick it to homeowers by churning refi’s they’ll find another way to increase their profits at the expense of the average consumer.

I don’t buy the implication that regulation is causing higher fees. If terrible business practices were highly profitable and led to the financial ruin of many Americans, increase regulation is not what is causing the higher fees it is inability to get away with raping the American homeowner anymore, so now they’ll just pick our pockets.

Read More:
http://www.usatoday.com/money/companies/management/bartiromo/2011-02-21-bartiromo21_CV_N.htm

See Also:
USA TODAY: Credit card rates move higher, but it’s unclear exactly why [ed. unclear?]

Housing data ‘may’ have understated extent of collapse

In Data, News on February 22, 2011 at 5:40 am

The National Association of Realtors is reporting that they may have “overstated home sales by as much as 20 percent” dating as far back as 2007.

This comes as no surprise because it has been in their best interest to present a better than normal picture of the real estate market that they represent. It seem that only after four consecutive years of being called out by California real estate analysis firm, CoreLogic, did NAR admit that they ‘may’ have made an error.

Unfortunately, the biggest tragedy here is Reuters shoddy reporting in which they say:

The crash of U.S. housing markets, in part because of shoddy lending practices, was at the heart of the economic meltdown that started in the United States and spread around the world.

As we know, the shoddy lending practices were a symptom of the meltdown — not the cause of the problem, the causes having been well documented, as the US Federal Reserve keeping the interest rate artificially low in support of a misguided federal housing policy, lack of meaningful discretion by Fannie Mae and Freddie Mac, complete lack of regulation of syndicated mortgage market, and the fraudulent or negligent participation of the rating agencies who duped the market and fueled the appetite.

The shoddy lending practices were a part of the system, but even the worst mortgage originators, merely ordered a drink at the bar that was staffed by the Federal Reserve and Fannie Mae, supplied with an unending supply of money from investors who were being led to the party by Moodys and the major investment banks.

Read More:
http://www.reuters.com/article/2011/02/22/us-usa-economy-housing-idUSTRE71L10U20110222

Average Milwaukee Teacher Makes $100k/year

In News on February 18, 2011 at 7:26 pm

For the first time in history, the average annual compensation for a teacher in the Milwaukee Public School system will exceed $100,000.

via Average MPS Teacher Compensation Tops $100k/year.

Housing Crash Is Hitting Cities Once Thought to Be Stable

In News on February 14, 2011 at 3:11 pm

The New York Times is repoirting today that:

In the last year, home prices in Seattle had a bigger decline than in Las Vegas. Minneapolis dropped more than Miami, and Atlanta fared worse than Phoenix.

The bad news is that there are few, if any safe spots in the country.

The good news is that as more cities feel the pain, the reality becomes more clear, that this crisis is not a over-speculation bubble in a few geographically isolated markets. The reality is that this crisis is a the result of a market wide fraud that has had deep implications throughout the country.

Read More:
http://www.cnbc.com/id/41574051

Obama offers 3 vague alternatives for mortgage reform

In News on February 11, 2011 at 10:33 am

CBS Moneywatch has this summary of the Obama administration proposal for taking action to reform the government backed mortgage system of Fannie Mae and Freddy Mac.

There are three alternative plans in the administration’s proposal. The first would still provide insurance for some mortgages, but the role of Fannie and Freddie would be substantially reduced. The second and third proposals would only provide relief during crises when the mortgage market is threatened with failure, and are therefore likely to have the larger consequences than the first proposal.

Less government involvement in the mortgage market should help to ensure that banks have to manage their own risk instead of handing off all of their risk to the american taxpayer. Thats the good news.

The bad news, as always, is in the details which are, reportedly, TBD.

Read more:
http://moneywatch.bnet.com/economic-news/blog/maximum-utility/the-administrations-proposal-for-fannie-and-freddie-will-increase-mortgage-costs/1161/#comments

JPMorgan says ‘Sorry’ for breaking the law and Foreclosing on Soldiers

In News on February 10, 2011 at 9:09 am

JP Morgan failed to comply with key provisions of the Service Members Civil Relief Act, including honoring a 6 percent cap on mortgage interest rates and a prohibition of imposing other fees while a service member is on active duty and for one year after they are discharged.

Instead, JP Morgan completely ignored the law, continued with illegal fees, forced American heroes into foreclosure and required them to file lawsuits to defend themselves and enforce the law. The big banks keep getting away with these reprehensible bully tactics and destroy American’s lives in the process.

Ask your Congressman where are the charges, penalties and punishments for these flagrant violations of the law designed to protect homeowners?

Read more:
http://abcnews.go.com/Politics/jpmorgan-testifes-congress-apologizes-foreclosures-hiking-interest-rates-soldiers/story?id=12873749&page=2

Home prices to fall more in 2011

In News on February 9, 2011 at 7:41 pm

The Economist reports thet the complete failure of Obama administration policies designed to combat the housing crisis means that there will be more foreclosures in 2011 than in 2010. Not exactly a record we want to set.

The HAMP program anticipated to permanently modify 3-5 million mortgages has only helped a little more than five hundred thousand. The problem seems to be that the administration completely misunderstood the characteristics of the “at risk” homeowner and designed policies that excluded anyone earning a decent income despite being hundreds of thousands of dollars underwater.

The continuing high level of foreclosures is expected to continue to put downward pressure on home prices.

Read more:
America’s housing market: Suspended animation | The Economist http://t.co/1sLqMh3