Thinking about subtleties By Fred Cederholm

Column for on/after Apr. 27th, 2008

I’ve been thinking about subtleties. Actually I’ve been thinking about inflation, gas and food, frozen pizzas, my green bean casserole, instant coffee, and T-paper. Runaway inflation is a fact of life that far exceeds the under 3% that is still presently being hawked by the spin meisters for the Bush Administration and the Federal Reserve Bank. By definition “core inflation” conveniently excludes energy and food items which might be OK if we didn’t have to power the things we own and feed ourselves and our families. These two categories of necessities will continue to constitute a growing part of our expenditures. We now pay more for what we buy, or pay the same and get less!

You see last Friday I topped off my PT Cruiser which was down to about half a tank. After the most recent jump to $3.749 per gallon for the 10% ethanol blend, this cost me $26.80. When I got the car in June of 2000, I could coast up to the same pump “on the fumes in the tank” and fill it up for about $22.00. This represents almost a 144% increase over the eight years. My weekly trips to the grocery store to purchase/ replenish the same items cost me a bit over 60% more since my mother’s death five-and-a-half years ago. I was aware of THESE spiraling costs every time I opened my wallet to pay. However, I am (and all of US/us are) also paying more for the same stuff even if the so-called “sticker price” has NOT changed. These are the subtle (or covert) increases for which we get dinged because the quantities and/or the packaging have conveniently been “downsized.”

Last Saturday evening I treated myself and my little Scottish Terrier, Mac II, to a frozen pizza when “we” watched the Harry Potter movie on ABC. When I put the pizza on the pan before I slipped it into the oven, I noticed that there was at least 3/4^th of an inch of more pan showing around the edge. The pan hadn’t spread; the pizza’s diameter had shrunk by an inch and a half! Mac gets the pepperoni and sausage chunks, and I swear the little guy counts. At the end of the pizza, I got “the look” that I had held back on his allotment – I hadn’t, but he didn’t TH*NK so! This was a subtle price increase of about 8 to 10% even though I thought I had paid the same price for the same brand.

The culinary repertoire of things I fix for pot luck or cooperative meals at church is kind of limited. Two weeks ago I made my green bean casserole. I opened the usual four cans of green beans, drained them off, and emptied them in the usual bowl to mix them with a can of crème of mushroom soup. Not only was the bowl not at its normal level, but the grey-brownish goop of the condensed soup didn’t have any visible mushroom pieces! I had to open and drain a fifth can of beans and add a can of mushroom stems and pieces to restore my concoction to its regular level and appearance. I already knew from recent experience that I had to add a cup of self-rising flour and three tablespoons of cocoa powder to the get the usual volume of batter I needed for the brownies I make to take to events. These actions also mark a “food-flation” increase - subtle yes, but still there!

A recently purchased jar of instant coffee was compared to a jar from a year ago that I had saved to store nuts and bolts in my basement. The new jar was about an eighth of an inch shorter and narrower by the same measure. With all this in mind, I also noticed that the chrome shaft of my T-paper holder was now showing a visible inch when I replaced the roll. Without my realizing, the roll had actually evolved/ narrowed by an inch for the same brand at the same price. Hum, what gives?

“Eternal vigilance” in not only the price we pay for freedom, it is also what we must all do to truly know the price we are actually paying for the things we purchase. Like so many households across America we are finding that there is just too much month left at the end of the money – and the roll! I’m Fred Cederholm and I’ve been thinking. You should be thinking, too.

Copyright 2008 Questions, Inc. All rights reserved.

Discussion about the people and the forces that are bringing down America

Saturday, April 26, 2008

The entire show this week originates from the GATA Conference in Washington, DC.

Segment 1 - Al discusses the possibilities of gold manipulation with Bill Murphy, Chris Powell and Ed Steer of GATA.

Segment 2 - Al continues the discussion began in Segment 1.

Segment 3 - Al discusses GATA, gold prices and other issues with James Turk, founder of GoldMoney.

Segment 4 - More discussion at the GATA conference with a panel consisting of James Turk, Bill Murphy, Chris Powell and Ed Steer.

Segment 5 - Al discusses gold and resource investing with John Embry, Chief Investment Strategist of Sprott Asset Management.

Segment 6 - Al and Joe Martin, Chairman of Cambridge House, discusses the value of the GATA conference.


Hear the entire program
http://www.kereport.com/audio/0426.mp3

Thinking about shakiness By Fred Cederholm

Apr. 20th, 2008

I’ve been thinking about shakiness. Actually I’ve been thinking about earthquakes, the US dollar, the February 2008 trade numbers, our trade deficits, our energy deficits, interest rates/ the “auction,” and inflation. Official numbers for our energy imports and our trade deficit(s) for this past February, and the cumulative trade deficit(s) for the calendar year thus far were released last week. While the media may have focused on the anomalies of a growing cluster of hundreds of unexplained quakes in the Pacific Ocean off the State of Oregon and the Friday morning 5.2 shaker in Southeastern Illinois, the real “shakiness stories” should have chronicled the further downward slide of the US Dollar relative to the other major world currencies. Unfortunately there is presently no “Richter Scale” for the precarious shakiness of the Buck. The Dollar is having major seizures!

You see while equity markets appeared to enjoy a favorable performance for the week just ended, this is a fluke reflecting that certain “index heavy” companies had a better first quarter from their international operations - mainly because the Dollar continued to tank. Because we import far in excess of what we export, we all have paid dearly for the benefits of these few. We now see the repercussions of recent interest rate cuts and the continued printing of more dollars. There is a time value to money and that is called interest. Each cut or anticipated cut in interest rates paid to holders of Dollars results in a downward re-pricing in the purchasing value of the Buck. This is the true cause of the run amok inflation we are ALL experiencing at BOTH the gas pump and grocery store.

Our eight largest trade deficits for the month of February 2008 (and 2008 Year to Date) are as follows: China $18.355 Billion ($38.667 Billion YTD), Japan $6.877 Billion ($13.469 Billion YTD), Canada $6.450 Billion, ($12.316 Billion YTD), Mexico $5.467 Billion ($10.638 Billion YTD), Saudi Arabia $3.501 Billion ($6.891 Billion YTD), Germany $3.416 Billion ($6.320 Billion YTD), Nigeria $2.884 Billion ($6.297 Billion YTD), and Venezuela $2.600 Billion ($6.020 Billion YTD). Our hands-down overall biggest dollar denominated imports are for crude oil and petroleum distillates, so just WHAT all are we still hocking our souls for in what we are getting from China, Japan, and Germany? February imports AND exports were both at records, yet imports grew faster!

The top eight sources of Uncle $ugar’s crude oil imports for February 2008 were: Canada (1.888 Million barrels per DAY--MBPD), Saudi Arabia (1.614 MBPD), Mexico (1.231 MBPD), Nigeria (0.982 MBPD), Venezuela (0.927 MBPD), Iraq (0.780 MBPD), Angola (0.341 MBPD and Kuwait (0.261 MBPD). Uncle $ugar’s top eight sources of total petroleum imports for February 2008 were: Canada (2.419 MILLION barrels per DAY--MBPD), Saudi Arabia (1.627 MBPD), Mexico (1.324 MBPD), Venezuela (1.112 MBPD), Nigeria (1.025 MBPD), Iraq (0.780 MBPD) Russia (0.451 MBPD), and the Virgin Islands (0.351 MBPD). Crude imports averaged 9.514 MBPD at a February import average price per barrel of crude oil ($84.76). It is important to note that last Friday’s crude pricing reflected an all-time high of $ 117 per barrel. Pump prices locally are now $3.57/ gallon for a 10% ethanol blend, $3.67/ gallon for regular, and $4.18/ gallon for diesel!

The FED has cut their lending rate to banks by 3.0% to 2.25% to “save the banks and their borrowers,” but it is the savers who really took the hit on their deposits. Borrowers actually saw their rates rise, or MAYBE stay the same! Last week’s Treasury auction composite average rate at 1.38% for 26 weeks “suggests” further rate cutting by the FED. Should this major error in policy occur, the Dollar will plummet, and crude will soar above $130. A few may benefit; but… we will ALL pay at the pump AND the store! I’m Fred Cederholm and I’ve been thinking. You should be thinking, too.

Copyright 2008 Questions, Inc. All rights reserved.

Foreclosure, Fraud, Internal Revenue forms 1099-A's and 1099-C's By Barbara A.Jackson

Using my name and social security number, Wells Fargo filed a
falsified form 1099-A  --and it could happened to anyone who had or has
a mortgage loan.  Inaccurate or false information on an Internal
Revenue form 1099-A is significant.  The salient problem about an
untrue form1099-A, or 1099-C, is that either forms could cause
extensive and NEEDLESS tax consequences for TAX FILERS -especially, if
the tax filer is oblivious that a1099-A has been reported!

Lenders and creditors probably receive undeserved tax write-offs and
have distorted Securities Accounting as a result of untrue 1099's.
Also, particularly when real estate is being illegally, fraudulently
FLIPPED; and when Investors are being deceived; when foreclosures
occur via frauds, after evidence of Wells Fargo filing FALSIFIED
1099's surfaces, THERE IS CAUSE FOR SWEEPING PROBES INTO the 1099's
that Wells Fargo files with the IRS!  In fact, such an investigation
is probably warranted nationwide in communities which Wells Fargo does
business and reports tax information on 1099-A's and 1099'C's.

I am Katrina-displaced from New Orleans.  In LOUISIANA, Wells Fargo is
among certain  mortgage companies involved in REAL ESTATE and MORTGAGE
FRAUD schemes.  Because scores of people were displaced by the
hurricanes of 2005, companies like Wells Fargo have much greater
capacities to expand its various frauds and deceptive practices.
Emphatically, the fact that thousands of people become displaced via
disaster, the conceivability for Wells Fargo (and any other companies)
to file false 1099-A's or 1099-C's is vast and very easy to carry off.

This past February of 2008, I learned from the IRS that in year 2006,
WELLS FARGO filed a 1099-A for my former New Orleans property.  (Wells
never gave me a copy of that 1099-A.)   The year 2005 tax transcript I
obtained from the IRS shows that Wells Fargo filed an "acquisition" /
"abandonment" form 1099-A, wherein Wells Fargo represents May 19, 2005
as the date of my home being "abandoned" / "acquired" by Wells Fargo.

To the contrary, ON MAY 19, 2005, allegedly ON BEHALF OF GE Capital
Mortgage Services, Inc., a debt collector foreclosed and made his own
auction bid in an amount of $120,000.00. THE DEED to my home was
recorded IN THE NAME of GE Capital Mortgage Services, Inc.  Thus,
clearly Wells Fargo DID NOT acquire my property as Wells Fargo
reported to the IRS; and at the least, a 1099-A would appear more
logical if filed by GE Capital Mortgage Services.  Also, Wells Fargo?s
1099-A reported $12,000.00 as the Fair Market Value for my property.
However, IRS publication 544 states that the FMV is deemed by the
auction bid price -$120,000.00.  Another notably fraudulent thing
about Wells Fargo's 1099-A, is its FALSE representation of my owing to
Wells Fargo $86,149.00!  There's more I could point out, but the fact
of the matter is that I filed a form 3949-A to rebut the 1099-A that
was filed by Wells Fargo.

Also, it is worth investigating and comparing how many properties
Wells Fargo under-reported the Fair Market Value to IRS, and what
benefit(s) did Wells Fargo derive from those lower fair market values
-which, as in my case, the FMV that Wells Fargo reported was
absolutely and verifiably false.  (There is MORE to this particular
real estate fraud scheme -including a July 2005 report of Freddie Mac
paying $86,150.00 to GE Capital Mortgage Services, Inc., for my
property; Freddie Mac's purchase was printed in the August 2005 local
newspaper real estate transfers section.  Thus, even Freddie Mac?s
payment refutes the FMV reported on the 1099-A filed by Wells Fargo.
Another twist to this saga is the fact that GE Capital Mortgage
Services became DEFUNCT on October 25, 2002!  See the Louisiana
Secretary of State website, Corporations Division.)
_______________________
Barbara Ann Jackson
Law & Grace, Inc.
www.lawgrace.org

Thinking about art By Fred Cederholm

Column for on/after April 13th, 2008

I’ve been thinking about art. Actually I’ve been thinking about beauty, St. Johns, the Erickson family, memorials/ remembering/ honoring, peace, and joy. Presently there is so much happening in the world that is negative, hateful, and destructive to the human spirit that we so often forget (or choose to ignore) the counterbalancing side to the human condition which builds our spirits, and gives us the strength to cope and continue on. Sometimes we need to stop and appreciate the things of beauty, of hope, of love, and of peace which are there to enrich and to strengthen us.

You see this past Sunday my little hometown congregation of St. Johns Lutheran Church in Creston officially became the permanent home of “I have prepared a place for you,” the latest creation of artist, illustrator, and muralist extraordinaire - Randy Halverson. This roughly four foot by thirteen foot mural surrealistically depicts the Christ figure with outstretched arms walking on air from the golden heavenly place he has prepared for us to the earth below. The clouds to the right and left subtlety suggest people and angels in prayer. It is truly an inspirational masterpiece.

This marks the fourth Halverson mural painting/ creation in our area. His “Life of Christ” and “The Last Supper” can be viewed in Trinity Lutheran Church in DeKalb. His outdoor work “Communiversity” (which commemorates DeKalb’s Sesquicentennial) can be seen when driving to the West on the Lincoln Highway in the downtown area. Art is often used to celebrate memorials, remembrances, and commemorations. Art in churches plays a major role in Western Civilization.

The Erickson family has a long history in the Creston area and at St. Johns Lutheran Church. The mural is the gift of the surviving seven children of Clarence and Mary Alice Erickson and their families. It is given in their parents’ memory and the memory of their brother, Lt. Colonel Alan Erickson, USAF. It is a fitting tribute to a wonderful couple who served their community and their church in so many ways. It honors a brother who served his country in Korea and Germany. Clarence Erickson was selected to receive Creston’s Annual Cederholm Award for Community Service in 1997. He was unable to participate in those festivities as he remained by the side of his very ill wife who passed away just weeks later. He joined her in death the following year. Their son, Alan, joined them in 1999.

It is a common tradition that families remember and honor their parents with memorials and/ or gifts to their communities. This is in keeping with the commandment to “honor thy father and thy mother that thy days may be long upon the land which the Lord thy God has given thee.” The gift to St. Johns is a truly beautiful additional to the church sanctuary. It is all the more special in that the artist, Randy Halverson, is both the grandson of Clarence and Mary Alice, and the nephew of Lt. Colonel Alan Erickson. After the dedication service, which was part of the Sunday worship; the family, guests, and members of the congregation joined together in fellowship for a meal together. It was a celebration of remembrance and sharing. We often forget how we draw upon our family, our friends, our neighbors, our communities for strength, for love, and for support in times of challenge.

As the members and guests took one last look at the newest addition to St. Johns before leaving the church, you could literally sense the love and joy and peace that they felt. They “knew” that Jesus the Christ had prepared a place for them as depicted by the mural. I thought of the words from John Keats epic “Endymion” written in 1818 and how they captured the essence and spirit of this dedication day: “A thing of beauty is a joy forever; its loveliness increases; it will never pass into nothingness.” I’m Fred Cederholm and I’ve been thinking. You should be thinking, too.

Copyright 2008 Questions, Inc. All rights reserved.

What is a BILLION?? By James Jaeger

What is a BILLION??

This is too true to be funny

The next time you hear a politician use the word 'billion' in a casual manner, think about whether you want the 'politicians' spending YOUR tax money.

A billion is a difficult number to comprehend, but one advertising agency did a good job of putting that figure into some perspective in one of its releases.

A. A billion seconds ago it was 1959.

B. A billion minutes ago Jesus was alive.

C. A billion hours ago our ancestors were living in the Stone Age.

D. A billion days ago no-one walked on the earth on two feet.

E. A billion dollars ago was only 8 hours and 20 minutes, at the rate our government is spending it.

While this thought is still fresh in your brain, let's take a look at New Orleans. It's amazing what you can learn with some simple division.

Louisiana Senator, Mary Landrieu (D), is presently asking the Congress for $250 BILLION to rebuild New Orleans. Interesting number, what does it mean?

A. Well, if you are one of 484,674 residents of New Orleans (every man, woman, child), you each get $516,528.

B. Or, if you have one of the 188,251 homes in New Orleans, your home gets $1,329,787.

C. Or, if you are a family of four, your family gets $2,066,012.

Washington , D.C .. HELLO!!! ... Are all your calculators broken??

The Liquidity Society By Michael J. Panzner

April 01, 2008

TV pundits and Wall Street "strategists" believe that "cash on the sidelines" can only mean one thing: it's time to be bullish. In their view, such a build-up of liquidity has always signaled a pent-up demand for stocks.

But what if the money's there (and growing) because individual investors, in particular, are beginning to realize that:

• Equities are a riskier asset class than they thought (or were led to believe by their brokers and the rest of the financial services industry)
• True diversification means having a portion of their portfolios in an asset class called "cash"
• Portfolio volatility may not be such a good thing, especially for those who are in or near retirement

If any or all of these apply, then the recent cash-raising, which the "experts" -- I use that term loosely -- believe is bullish, may actually be pointing to a secular change in attitudes towards the stock market. If so, such perspectives could weigh on share prices for the foreseeable future....

more

http://www.financialarmageddon.com/2008/04/the-liquidity-s.html

Lehman Loses $300 Millon on Stated Loans By Mr Mortage

Lehman brothers has anounced today that they have lost $300 million from one borrower on their super stated income loan business....

So these are the banks that we need to bail out? Did they "lend" $300 million to a couple of Modern Day Ocean's 11 style financial heist crew? They realized there was a problem when they didn't get the payment?! Maybe they should have examined a little more than two executives and some letterhead. Mr.Mortgage's opinion regarding your tax dollars is NO BAILOUT!

more
http://thegreatloanblog.blogspot.com/

Blood From Student Stones Loans By Elaine M.Supkis

April 8, 2008

First of the big student loan security sales organizations files for bankruptcy. This annoys me no end. No student is ever allowed to file for bankruptcy! But the guys peddling this stuff may protect themselves this way! Charming. Hedge funds are no longer the destination of trillions of inflationary dollars and they are going under, one by one. Roubini and Misch and others debate the letter that describes the recession we are in. Is it a W, a U or an L. One commentator says, it is an F-U-C-K recession. I say, this is correct. And rail roads are sidelining much of their rolling stock due to lack of customers: a classic depression gage of dropping commerce....

more

http://elainemeinelsupkis.typepad.com/

The Fed Is Terrified By Mish

The Wall Street Journal is reporting Fed Weighs Its Options in Easing Crunch.

The Federal Reserve is considering contingency plans for expanding its lending power in the event its recent steps to unfreeze credit markets fail.

Among the options: Having the Treasury borrow more money than it needs to fund the government and leave the proceeds on deposit at the Fed; issuing debt under the Fed's name rather than the Treasury's; and asking Congress for immediate authority for the Fed to pay interest on commercial-bank reserves instead of waiting until a previously enacted law permits it in 2011.

The Fed holds assets to manage the nation's money supply and influence the federal-funds rate, which banks charge each other on overnight loans. When the Fed buys Treasurys or makes loans directly to banks, it supplies financial institutions with cash; in effect, it prints money. The cash ends up as currency in circulation or in banks' reserve accounts at the Fed.

Since reserves earn no interest, banks lend cash that exceeds their required minimum. That puts downward pressure on the federal funds rate, currently targeted by the Fed at 2.25%. The Fed could purchase securities and make loans almost without limit, expanding its balance sheet. That would cause excess reserves to skyrocket and the federal funds rate to fall to zero. The Fed would contemplate such "quantitative easing" only in dire circumstances. The Bank of Japan took this step this decade after years of economic stagnation.

Weighing the Possibilities

So the Fed is seeking ways to expand its balance sheet without causing the federal funds rate to drop. The likeliest option, one the Fed and Treasury have discussed, is for the Treasury to issue more debt than it needs to fund government operations. The extra cash would be left on deposit at the Fed, where it would be separate from bank reserves on deposit and thus would have no impact on interest rates. The Fed would use the cash to purchase an offsetting amount of Treasurys in the open market; for legal reasons, it generally cannot buy them directly from Treasury.

Treasury's principal constraint is the statutory limit debt. Treasury debt was $453 billion below the limit Monday. In the past, Congress always has responded to administration requests to raise the limit, sometimes only after political theatrics.

Fed officials also are investigating the feasibility of the Fed issuing its own debt and using the proceeds to purchase other assets or make loans. It has never done so; the legality is unclear. Some foreign central banks, such as the Bank of Japan, do so.

....

The Fed is Terrified

Read the entire WSJ article. It's a good one. That the Fed officials are having these kinds of discussions at all shows just how terrified of the perception setting in that we are following Japan, which of course we are.

The Fed is effectively in a position of not to being able to print money to buy Treasuries from banks, because of restrictions mentioned in the WSJ article and also because the banks are insolvent. Simply put, banks do not have the cash to accumulate Treasuries on their books to sell to the Fed this time around. And more writedowns on commercial real estate, auto loans, credit card debt, Alt-A mortgages, and pay option arms are coming. This will require still more capital raising efforts.

more
http://globaleconomicanalysis.blogspot.com/2008/04/fed-is-terrified.html

Thinking about couple By Fred Cederholm

Column for on/after April 6th, 2008

I’ve been thinking about couples. Actually I’ve been thinking about the 2008 Presidential Election, spouses, financial disclosures, money, power, the cult of celebrity, and “two-fers.” The American public is being treated to a temporary hiatus in the media blitz of the 2008 Presidential campaign. It’s not that the race for the oval office is over – far from it. Because of the gap in the timing of the remaining primary elections and caucuses before the political conventions are held this summer and the “real campaigns” begin in earnest after Labor Day, we are getting a breather.

You see from just about any angle you approach it, this is a campaign for the record books. It is the longest campaign ever. It will be the costliest campaign ever. It began with the most number of contestants. It features the first potential African-American candidate, it features the first potential female candidate, it is the first race involving a former President as a direct player, and it already features the first real “World Wrestling Federation tag team bout” involving the battle of the potential first spouses. Never before have “significant others” of candidates been so formidable.

The recent revelations from the Clintons going public with their tax returns since they left the White House were noteworthy. Sure the disclosures about the MEGA- millions earned by them since they vacated 1600 Pennsylvania Avenue were eye-openers, but… this should really come as no surprise. Former Presidents and their spouses have opportunities to make HUGE amounts of money. There are book deals, paid public appearances, corporate board directorships, and highly lucrative speaking engagements. Such opportunities are NOT available to mere mortals like us or even the glitziest of entertainers, ex-corporate chieftains, sports figures, or those celebrities who are famous for being nothing more than “famous!” This is unique in that it was/is the first time we have been privy to an actual accounting/ publication of just how much “loot” is available to our “ex’s!”

We are a nation captivated and preoccupied by the cult of celebrity. Such status not only comes from power and money, it also breeds even more power and money. Never before in my adult lifetime have our Presidential candidates had spouses whose stage presence, articulation abilities, groupies/ fans, and celebrity aura eclipsed those of the actual candidates themselves in the election phase. This is REALLY something to watch. One actually has reason to ask if it is Barack and Hillary who is the true lime-light magnet? Or… is it Michelle and Bill?

Meanwhile on the GOP side of the coming election, the McCains – the presumed Republican nominee for President and First Spouse – have been amazingly silent, with the media coverage of them being virtually non-existent. There was a recent flurry of activity casting Senator John as some sort of “Dr. Strangelove/” warmonger character in the coverage of his pilgrimage to the Middle East and Israel (with Connecticut Senator Joe Lieberman in tow as a rabbinical “spiritual” advisor) to assure the Israelis and AIPAC that any McCain administration would mark NO change in US policy for the region. His beautiful spouse Cindy has followed the more traditional role of being supportive - yet soft-spoken, non-controversial, and in the background. Given the center stage roles and hoopla/ free-for-all surrounding the Democrat’s candidates’ spouses, subdued silence is proving GOLDEN!

It is a fluke in this go around that the “coupling” on the ticket does not involve the usual spin, hype, and Kaka del Toro about who will be President and Veep. The spotlight on the duo/ “two-fers” this time (and the ensuing debate thereon) could well prove to be all about just who will be the President, who will be the First Spouse, and what will be the ultimate role for each of them in any coming administration. I’m Fred Cederholm and I’ve been thinking. You should be thinking, too.

Copyright 2008 Questions, Inc. All rights reserved.

asklet(at)rochelle.net

Thinking about “standing and standings By Fred Cederholm

Column for on/after March 30th, 2008

I’ve been thinking about “standing and standings.” Actually I’ve been thinking about the S&L crisis vs. our current banking/ financial mess, cash flow, foreclosures, liens and “perfection,” and rankings by locale. The more things change, the more they seem be the same. The bad NEWS just keeps on coming with more daily negatives seemingly eclipsing the (bad) “records” set just weeks or months prior. We are seeing a synergy at work now where the cumulative sum of the components of the single negatives are producing an increasing gloom for the picture as a whole. You see the statistics for real estate delinquencies and foreclosures are growing on a weekly/ monthly basis. Most communities, counties, and states now find themselves having more of both than at any time since the Great Depression of the 1930s. In some cases the current status is already worse than that horrific time frame of some 70 years ago. Despite the “don’t worry, be happy – we have the situation under control” chanting(s) from the Administration, the Treasury, and the FED; reality suggests otherwise. We are a long way from turning the bend on this anytime in 2008 or even in 2009! “Prosperity is right around the corner” didn’t prove true for Herbert Hoover – and neither will it prove the case during the last year of Bush - nor during the first YEARS of his successor.

There are similarities between the national S&L crisis of some 20 years ago and the national banking crisis weighing on us now. There are also differences. This one is far greater and will prove more costly in both time and money to resolve. Both have their roots in a building boom done in an environment of deregulation run amok. In both cases financial institutions were being dragged down by a deficiency of cash flow. The S&Ls hemorrhaged money because they lent long term and funded those loans short term with funding that ended up costing more than the loans generated. The banks currently hemorrhage money because they just aren’t receiving the mortgage payments timely – that is, if they are receiving them at all! It’s impossible to meet the interest payments to your depositors (or investors) if you aren’t receiving payments, you are having problems foreclosing on your delinquent properties, and you can’t readily sell them even if you get them and TRY to market them.

Foreclosure is a time consuming and costly process in the best of times. In optimal conditions you are looking at a minimum 90 to 180 days before you get title/ possession to even have a chance to put the property up in a decent sale’s market. This is predicated on your having a “perfected” lien with all “I”s dotted and all “T”s crossed showing you have proper “standing” before the judge in the foreclosure proceedings. It is also predicated on that the delinquent occupant will vacate “premises” without requiring eviction. Here we are now seeing that people are increasing unwilling to move out voluntarily or quickly. We have also seen (in three different court jurisdictions in three different states) where judges threw out the cases because the plaintiff/ investors (in the mortgage derivatives) could not prove they had standing to foreclose, showing a lien to the actual properties in foreclosure. When the mortgages were packaged/ sold to investors, necessary lien transfer work was not done!

Foreclosure stats are now the worst in Nevada, Florida, and California. Illinois is #17. Ogle County (where I live) has some of the fewest (31) in our State. My hometown of Creston presently has 1 and nearby Rochelle has 7. DeKalb County just East currently has 710 with 217 in the City of DeKalb, 135 in Sycamore, and 14 in Malta. Winnebago County to the North has 2,438 with 729 in Rockford. Stephenson County to the Northwest has 47 with 33 in Freeport. While these numbers are bad and will grow, they pale in comparison to the rank standings of those on the East coast, the West Coast, and the South. I’m Fred Cederholm and I’ve been thinking. You should be thinking, too.

Copyright 2008 Questions, Inc. All rights reserved.

To “audit” this column and check out the current stats on your community, please check out:

http://www.foreclosure1.com (Foreclosure listing database updated thru March 31, 2008)

http://www.realtytrac.com/freesearch.asp (Foreclosure rankings and database updated thru January 2008

Grown Men Are Crying In Florida By B. Jones

The Bradenton Herald reports from Florida. “In February, the prices of existing-homes continued to fall - to $254,200 from $319,000 from February to February. Locally, the median price of a single family home was down 20 percent, tying with Miami for the second-largest price tumble. Punta Gorda experienced the largest price fall with a median price 25 percent below where it was just one year ago… according to numbers released by the Florida Association of Realtors.”

“Condos in Bradenton/Sarasota fared much worse. Only five of Florida’s 20 Metropolitan Statistical Areas saw fewer sales than Bradenton/Sarasota despite a 41 percent drop in condo prices from February 2007, bringing the median cost of a condo to $211,500.”

“‘We’re seeing that beginning offers are low even if the house is priced appropriately,’ said broker Michael Taylor.”

“Short sales may be a large reason behind the continued drop in prices. Joanne Owens, operating principal of Keller Williams of Greater Manatee has 54 listings and 40 percent of those are short sales. ‘I’ve had grown men coming into our office crying,’ Owens said.”

more
http://thehousingbubbleblog.com/?p=4312

Inside Bear Stearns By D. Schechter

March 28, 2008

INVESTMENT NEWS: Fiscal sky is falling, Goldman Sachs says. The final tab of the current financial crisis will $1.2 trillion globally — with almost half that amount borne by Wall Street.

more
http://www.newsdissector.com/

'We're From the Government And We're Here to Help' By M J. Panzner

Maybe it's my imagination, but it seems like a lot of people -- rich and poor, young and old, Republican and Democrat -- are expecting the Federal Reserve, the President, Congress, the Treasury Department, or sundry federal, state and local agencies to "rescue" America from the clutches of a growing financial crisis.

Yet few are asking the obvious question: based on past experience, is it really likely that their efforts will succeed? In fact, you don't have to be all that cynical to believe that rather than solving the problems we now face, our "leaders" -- elected or otherwise -- will, in fact, make matters worse.

That appears to be the view of Tom Engelhardt, who runs the Nation Institute's Tomdispatch.com (a regular source of interesting and insightful commentary) and who is the co-founder of the American Empire Project. In "The Little Administration That Couldn't" (which is included in a broader post, "Tomgram: The Fate of the Bear Market"), he aptly sums up, in my view, the prospects for a Washington-led turnaround.

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http://www.financialarmageddon.com/2008/03/were-from-the-g.html

The $1.1 Trillion HELOC Problem By Mish

The New York Times is writing Home Equity Loans as Next Round in Credit Crisis.

Americans owe a staggering $1.1 trillion on home equity loans — and banks are increasingly worried they may not get some of that money back.

When borrowers default on their mortgages, lenders foreclose and sell the homes to recoup their money. But when homes sell for less than the value of their mortgages and home equity loans — a situation known as a short sale — lenders with first liens must be compensated fully before holders of second or third liens get a dime.

In places like California, Nevada, Arizona and Florida, where home prices have fallen significantly, second-lien holders can be left with little or nothing once first mortgages are paid.

Consider Randy and Dawn McLain of Phoenix. The couple decided to sell their home after falling behind on their first mortgage from Chase and a home equity line of credit from CitiFinancial last year, after Randy McLain retired because of a back injury. The couple owed $370,000 in total.

After three months, the couple found a buyer willing to pay about $300,000 for their home

CitiFinancial, which was owed $95,500, rejected the offer because it would have paid off the first mortgage in full but would have left it with a mere $1,000, after fees and closing costs, on the credit line.

“If it goes into foreclosure, which it is very likely to do anyway, you wouldn’t get anything,” said J. D. Dougherty, a real estate agent who represented the buyer on the transaction.

Underscoring the difficulties likely to arise from home equity loans, a Democratic proposal in Congress to refinance troubled mortgages and provide them with government backing specifically excludes second liens. Lenders holding a second lien would be required to write off their debts before the first loan could be refinanced. That could leave out a significant number of loans, analysts say.

People with weak, or subprime, credit could be hurt the most. More than a third of all subprime loans made in 2006 had associated second-lien debt, up from 17 percent in 2000, according to Credit Suisse. And many people added second loans after taking out first mortgages, so it is impossible to say for certain how many homeowners have multiple liens on their properties.

“This is turning out to be a real impediment to solving this problem,” said Mark Zandi, chief economist at Economy.com, “at least, solving it quickly.”

The article notes that 5.7 percent of home equity lines of credit were delinquent or in default in December 2007, up from 4.5 percent in 2006, according to Moody’s Economy.com. It's not unreasonable to assume with the the recession picking up steam that 10-15% of those $1 trillion in HELOCs and second mortgages will default. If so, add another $100-$150 billion in writeoffs. That number can easily be low.

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http://globaleconomicanalysis.blogspot.com/

DEBT INC SEEKS FILM MAKER/PRODUCER

If you are interested in this material that could save the world from itself, please email your full details and a resume to: interest_free_money(at)juno.com

All kinds of predatory lending practices are exposed in this psychological dramatization punctuated by the discovery of economic flaws and crimes. From credit cards to the so-called humanitarian packages.

In short, it is not a script for veterans-conspiracy theorists but educating the masses that never heard of the economic serfdom. Thus not too conspiratorial and its economic jargon is understandable by high school students.