And the news from 17% of the US economy:State officials are expected to formally announce today that the gap between spending and revenues in the budget for the current fiscal year has reached at least $10 billion, and may reach $25 billion by the end of the next fiscal year.
If we are going to be forced to look at the horrific blowoff we are being set up for the least they could do is flash some skin to keep us distracted. 
Mondays market is hard to face,
Tuesdays market is full of disgrace,
Wednesdays market is full of woe,
Thursdays market has no gains to show,
Fridays market is tanking not giving,
Saturdays market steals much of your living,
And the market that is open on the Sabbath day
Is volatile and wild, and full of dismay.
I love Lobster.Industry experts say their biggest concern is what will happen in late November when about 40 per cent of Atlantic Canada's lobsters are landed off the southwestern coast of Nova Scotia.
"We're a month away from our big landing season and with the constant barrage of negative news on the economy ... consumer confidence is being destroyed daily," said Morrow.
"It's feeding on itself. ... People are becoming very careful about how they spend their money."
The long suffering Exposition Light Rail line for West Los Angeles has hit yet another snag. It is potentially a huge setback for the Expo Line Construction Authority. If Koss' ruling stands, completing the needed environmental studies and building the two bridges -- with elevators -- could cost $18 million and delay the opening of the line one to three years, said Richard Thorpe, the chief executive of the authority.
From a surprizing source we have this interesting article about homeownership in a deflationary asset environment. From CNBC of all places:About 12 million U.S. homeowners owe more than their homes are worth, compared with 6.6 million at the end of last year and slightly more than 3 million at the close of 2006, said Mark Zandi, chief economist at Moody's Economy.com.
"At the root it's 'the' problem," said Zandi. "If you're going to put your finger on the one thing that's gotten us into this fiasco, it's the fact that millions of homeowners are under water on their homes."
Nationwide, for those who purchased U.S. homes since the beginning of 2003, nearly one in three now have negative equity.[emphasis added]
Nearly half of buyers who purchased in 2006 are under water.
Despite tighter credit and underwriting for home loans this year, Steve Berg, a managing director at research firm LPS Applied Analytics, said mortgages originated in 2008 were on par or trending worse than those originated last year or in 2006.
2259 McNell Rd, Ojai, CA
Release Date: October 22, 2008
For release at 10:00 a.m. EDT
The Federal Reserve Board on Wednesday announced that it will alter the formula used to determine the interest rate paid to depository institutions on excess balances.
Previously, the rate on excess balances had been set as the lowest federal funds rate target established by the Federal Open Market Committee (FOMC) in effect during the reserve maintenance period minus 75 basis points. Under the new formula, the rate on excess balances will be set equal to the lowest FOMC target rate in effect during the reserve maintenance period less 35 basis points. This change will become effective for the maintenance periods beginning Thursday, October 23.
The Board judged that a narrower spread between the target funds rate and the rate on excess balances at this time would help foster trading in the funds market at rates closer to the target rate. The Board will continue to evaluate the appropriate setting of the rate on excess balances in light of evolving market conditions and make further adjustments as needed.
October 22, 2008
WACHOVIA REPORTS 3RD QUARTER LOSS OF $4.8 BILLION EXCLUDING $18.7 BILLION OF NONCASH GOODWILL IMPAIRMENT AND $414 MILLION NET MERGER-RELATED EXPENSE; RESULTS REFLECT PRE-TAX $4.8 BILLION CREDIT RESERVE BUILD
Wells Fargo Merger on Track for 4th Quarter 2008 Close
Businesses Remain Well Positioned and Committed To Serving Customers
Good morning. Looks like Circuit City shorted out before Best Buy and they are choosing the Mervyn's/Linens'n'Things model for dissolution. The company's advisers are trying to line up additional financing but so far lenders have shown little interest, the paper said.
"The management team, board of directors, and its strategic financial advisers are conducting a comprehensive review of all aspects of our business to determine the best methods of accelerating our turnaround," Circuit City spokesman Bill Cimino told the paper without giving details of the plans.
Even that stalwart bastion of liberalism is beginning to question the meme. And for good reason. With a new liberal leader's election all but assured they need to do some serious regrouping lest he be blamed for any lingering effects. Don't get me wrong, there's a lot to be laid at the feet of GW but let's go back a bit more shall we? Mr. Cisneros, 61, had a foot in a number of those worlds. Despite his qualms, he encouraged the unprepared to buy homes — part of a broad national trend with dire economic consequences.
He reflects often on his role in the debacle, he says, which has changed homeownership from something that secured a place in the middle class to something that is ejecting people from it. “I’ve been waiting for someone to put all the blame at my doorstep,” he says lightly, but with a bit of worry, too.
But with Metropolitan Water District of Southern California's short-term loan interest rates shooting through the roof, and the shaky economy's effect on municipal bonds and investments unknown, another hurdle has risen.
The district that supplies most of Southern California with water has managed so far to deal with the flux in the budget by cutting back on capital costs. But that could change.
"If this whole situation blows up, all bets are off," Brian Thomas, Metropolitan's chief financial officer told the Ventura County Association of Water Agencies on Thursday at its monthly meeting.
The challenge Metropolitan and other public agencies face is how their debt will be managed in the short- and long-term, and how much access they will have to credit.
He said water rates are expected to rise, but that's because of the increasing challenges of delivery, energy and lack of water coming from Northern California — not the credit crunch.
Again "w" beats me to a story I was following.Ventura stands to lose up to $10 million of taxpayer money from soured investments in the banking industry — the only city in Ventura County facing such risks.
The meltdown on Wall Street has directly jeopardized $10 million of Ventura's $160 million investment portfolio. The money comes from various sources, including reserve funds, savings for capital projects and millions held in trust to secure loans.
City finance officials remain uncertain what they will recover from two five-year, $5 million corporate notes the city holds in Lehman Brothers Holdings Inc. and Washington Mutual, which both failed last month.
"It's impossible to know at this time," city Chief Financial Officer Jay Panzica said.
Ventura also owns $28 million of notes in other companies, including J.P. Morgan, Goldman Sachs and Morgan Stanley.
The upgrade allows a sworn firefighter to retire at age 55 with a pension equal to 3 percent of his or her last year's pay multiplied by years of service. If a firefighter began work at age 25 and retired at 55, that would be 3 percent times 30 years — or a lifetime pension equaling 90 percent of the final-year salary.
Back to Riverpark. The implosion is really picking up steam and this one is typical. The usual story; bought new Dec 2006 for $580,500. Back to the bank Aug 2008 for a $378,020 outstanding balance. Looks very much like a first reset default eh? An 18 month old house with a $200,000 loss. $11,000 per month. And why didn't somebody want it for $378,020 on thte courthouse steps? That's the kicker and why Riverpark is doomed. 2008 Property Tax: $10,784. $900/month. Every month, month in and month out. 
That's not comforting to Susannah Abel-Crombie. She put her five-bedroom, three-bath, 2,600-square-foot home in Ojai on the market two years ago for about $839,000. She since has lowered the price to $719,000.
"I could drop it to $600,000," she said. "I don't think that will make much difference. People aren't buying. I think everyone's holding their breath and waiting. It's frustrating."
Abel-Crombie takes solace in knowing that home values are also declining in North Carolina, where she plans to move with her family. She hopes to pay cash for a house there.
Just to put things in perspective the CAR thought the median price in 2008 would be $553,000 at their forecast in October of 2007. It will end 2008 below $400,000.
Redfin.
In 1924, over-riding President Calvin Coolidge's veto, Congress legislated compensation for veterans to recognise their war-time suffering: receive a dollar for each day of domestic service, to a maximum of $500; and $1.25 for each day of overseas service, to a maximum of $625. Amounts owed of $50 or less were immediately paid; greater sums were issued as certificates of service maturing in 20 years.
Some 3,662,374 military service certificates were issued, with a face value of $3.638 billion dollars. Congress established a trust fund to receive 20 annual payments of $112 million that, with interest, would finance the $3.638 billion dollars owed to the veterans in 1945. Meanwhile, veterans could borrow up to 22.50 per cent of the certificate's face value from the fund, but, in 1931, because of the Great Economic Depression, Congress increased the loan value to 50 per cent of the certificate's face value, yet, by April of 1932, loans amounting to $1.248 billion dollars had been paid, leaving a $2.36-billion-dollar deficit. Although there was Congressional support for the immediate redemption (payment) of the military service certificates, President Hoover and Republican congressmen opposed that, because it would negatively affect the Federal Government's budget and Depression-relief programmes. Meanwhile, veterans organisations pressed the Federal Government to allow the early redemption of their military service certificates.
Wow, +586 as I type. Still not enough to change my view. We are trading on a ledge of 8800 with some incredible volatility. We went down past my 8600-9000 on Friday. We are currently above the same 9000 right now. 
Fannie, Freddie to Buy $40 Billion a Month of Troubled Assets
By Dawn Kopecki
Oct. 11 (Bloomberg) -- Federal regulators directed Fannie Mae and Freddie Mac to start purchasing $40 billion a month of underperforming mortgage bonds as the Bush administration expands its options to buy troubled financial assets and resuscitate the U.S. economy, according to three people briefed about the plan.
That's Saturday Oct 11th. Personally I don't want my regulators working weekends. It sends the wrong message like maybe there's something wrong with the world financial system. "Contained" means M-F with Wednesday afternoons for business meetings in an informal setting (golf).
Fannie and Freddie began notifying bond traders last week that each company needs to buy $20 billion a month in mostly subprime, Alt-A and non-performing prime mortgage securities, according to the people, who asked not to be identified because the plans are confidential. The purchases would be separate from the U.S. Treasury's $700 billion Troubled Asset Relief Program.
Okay. Show of hands. How many of you feel the need to be buying non-perfoming mortgage securities? Twas as I suspected.
Too tough? Alright then, sophomore civics question. Careful, there's going to be a revolution at the end of the semester and this might count towards your final conviction or acquittal. Question, where in the Constitution and any of its myriad bastard children does it say the directives of Federal Regulators (FHA) are confidential?
The Federal Housing Finance Agency, which placed the two companies in conservatorship on Sept. 7, directed them last month to start increasing their purchases of loans and mortgage-backed securities as the Treasury seeks to absorb underperforming and illiquid assets from financial companies.
``For now, they're under conservatorship and they have to be used to keep the flow of capital going to the housing market,'' former Treasury Secretary Lawrence Summers said in an interview on Bloomberg Television's ``Conversations with Judy Woodruff.'' ``They're important to maintaining the flow of government finance'' and need to be used actively, he said.
Ohhhh, "government finance." Let's look at the FHA mission statement:
• Contribute to building and preserving healthy neighborhoods and communities;
Adding underperforming assets to Fannie and Freddie's combined $1.52 trillion mortgage portfolios would come at a time when the two mortgage-finance companies already hold as much as $210 billion of bad debt that may be eligible itself for the Treasury's relief program, their regulator said Oct. 5.
Is anyone else feeling a little "Through the Looking Glass" here? They need to load up on bad debt so they can get assistance that would otherwise go to bad debt instead?
A spokesman for Washington-based Fannie, Brian Faith, and Doug Duvall at McLean, Virginia-based Freddie wouldn't comment.
I can only hope you all put down your beverage before reading that the spokesperson for Fannie is name Faith.
Overall Goal
Neither Fannie nor Freddie has turned a profit in the past year, accumulating $14.9 billion in combined quarterly losses, largely related to bad subprime and Alt-A mortgage assets.
FHFA spokeswoman Stefanie Mullin declined to comment on the details of the program. Treasury spokeswoman Jennifer Zuccarelli wasn't immediately available to comment.
Yet more evidence of the folly of weekend regulation.
``The overall goal of the program will be to contribute greater stability and liquidity in the mortgage market, which should enhance consumers' access to mortgage financing and ultimately result in reduced mortgage interest rates,'' FHFA Director James Lockhart said in a Sept. 19 statement.
Sept 19th? They were planning on hitting the Treasury $700b two weeks before it was passed?
Subprime loans were given to borrowers with poor or limited credit records or high debt burdens. Alt-A loans were made to borrowers who wanted atypical terms such as proof-of-income waivers, without sufficient compensating attributes. About 35 percent of subprime loans in non-agency mortgage securities are at least 60 days late, while 15 percent of Alt-A loans are, according to a Sept. 9 report by FTN Financial Capital Markets.
The phrase "cascade tripwire" comes to mind.
Growth
Non-agency, or private-label, bonds are issued by banks and don't carry guarantees by Fannie, Freddie or government-agency Ginnie Mae. Freddie held about $207 billion in non-agency debt in its $760.9 billion portfolio as of August, according to its latest monthly volume summary. Fannie had about $104 billion of such securities in its $759.9 billion portfolio in August.
It isn't bad enough that we've guaranteed F&F despite the explicit disavowal of liability but now we are actively seeking new liability.
Regulators initially restricted Fannie and Freddie's growth when they seized control of the government-sponsored enterprises Sept. 7. To ``promote stability'' and lower mortgage costs to borrowers, Treasury Secretary Henry Paulson said the two would be allowed to ``modestly increase'' their mortgage portfolios to as much as $1.7 trillion through the end of next year and said they would no longer be run ``to maximize shareholder returns.''
Read above where there are no shareholders and no profit for at least two years. Apparently some goals are more equal than others.
Less than two weeks later, Fannie and Freddie were told to ramp up their mortgage bond purchases as the financial crisis deepened and credit activity came to near standstill.
By whom?
Fannie and Freddie which own or guarantee almost half of the $12 trillion U.S. home loan market, were given access to $200 billion in emergency Treasury financing as part of their rescue package. The companies may also be able to sell their bad debt to the Treasury through its $700 billion financial-rescue program signed into law Oct. 3.
FHFA has said the companies plan to release third-quarter results next month as scheduled. Analysts surveyed by Bloomberg project losses for both Fannie and Freddie at least through 2009.
Shall we hold our breath?
To contact the reporter on this story: Dawn Kopecki in Washington at dkopecki@bloomberg.net.
These two mountain retreats are within blocks of each other. Let's run the numbers first:
House #2:Take advantage of this price of a short sale!!!!!!!!!!!!!!This cabin is a little gem. Refurbished natural wood. One bedroom plus unpermitted loft for children. Laundry room inside. Economical gas insert in ceramic tiled fireplace. Unique wood storage shed designed to accomodate snow load. Huge private lot with beautiful trees and fencing; older concrete house foundation on lot. Good vacation getaway, ski rental cabin, or rental. Room to build a new house beside this one on lot.$149,000
Charming Mountain Cottage!$240,000
What the Owner Loves: Minutes from Mt. High Ski Resort Extremely cute inside and out
⇒ Compared to September 2007, General Fund revenue in
September 2008 was down by $465 million (-4.4%).
Corporate taxes were below estimate by $485 million
(-21.0%), and personal income taxes were below last
September by $26 million (-0.5%). Sales taxes were $71.7
million greater (3.5%) than last year. The total for the three
largest taxes was below 2007 levels by $440 million (-4.4%).
"⇒ Quarterly estimated corporate taxes in
September were extremely weak, 26%
below last September."
Credit is tight, the political race is not. No doubt any rise in the markets will be reported as a success of government intervention and anticipation of an Obama administration.
Joe cool deserves some notice:joecool329 on October 5, 2008 said:
I wrote my last post for the haters because frankly I think Casey is beyond hope or redemption at this point. That being said I wish the “haters” would go away because this story won’t end well at all-not by a long shot.
The ones who were well intentioned realized long ago that Casey just wouldn’t listen. I want to politely challenge the haters as a collective group to go away. Please stop the enabling of the fraudster by posting on his blog. For myself, this is the last post in spite of what I said earlier. Just back off and let the slide continue. Anything that could have been done already has been done. At this point the train wreck is no fun to see.
To his credit Rob Dawg has mostly ignored him in the year since IAFF and the whole Australian/Galina/Duane Le Gate/LossMit fiasco. Good on you Rob truly. While I wish you had remained in permanent ignore mode, I can reasonably understand why there have been 1-2 posts about Casey on EN.
I fear the worst for Casey’s family at this point since collective grief could cause finger pointing and the worst sort of recriminations. As for Casey I couldn’t care less if he wastes his life then he’ll pay not only in this life but eternity. IMHO we are close to the “Final Days”. Let the comments dry up. Let everyone go back to their own reality. This is a macabre version of the “Truman Show” or “EDTV”. Maybe something good will happen. I hope so but doubt it.
405 pages of pork to choke a glutton. The best and brightest doing their best and brightest work. Let's cut through the crap.
California hasn't paid some health care providers since June. 85 freakin' days without a budget. Talk about bad timing. Now the credit markets are "frozen." Well, not really frozen so much as demanding market rates for California exposed debt instruments. Anybody here ready to lend the Poway School District some money in anticipation of them getting paid back but the State and then paying you? Thought not. 
