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Celebrations are busting out all over.
Housing Bubble, credit bubble, public planning, land use, zoning and transportation in the exurban environment. Specific criticism of smart growth, neotradtional, forms based, new urbanism and other top down planner schemes to increase urban extent and density. Ventura County, California specific examples.
Despite the scary statistics, things could be looking up in '08
By Kenneth R. Harney, Washington Post Writers Group
December 30, 2007
WASHINGTON -- Queen Elizabeth II once famously referred to her annus horribilis -- a horrible year during which almost everything went badly, from royal family scandals to a raging fire that destroyed parts of Windsor Castle.
The U.S. housing market experienced its own form of annus horribilis in 2007 -- a year when all the sins and excesses of the prior six years were visited upon nearly everyone in the system:
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Enough. Could 2008 be better? I think the odds are reasonable that it will. Here's why: Even through the grimmest headlines of 2007, there were a number of positive underlying economic forces propping up real estate. If those forces continue, they should help cut the time needed for the correction cycle to bottom out and the historically inevitable recovery cycle to begin.
Costa Mesa's policy results in 360 deportations
Focus on immigration status of jail inmates began a year ago. Other area communities are following the city's lead.
By Jennifer Delson
Los Angeles Times Staff Writer
December 27, 2007
In the year since Costa Mesa became the first Southern California city to have a federal immigration officer at its jail full time, 360 suspects who were in the country illegally have been deported.
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Hayes said the problem is that some of these people will sneak back into the United States. Already, 12 have been rearrested, he added.
The steady construction work that had allowed him to send home as much as $1,000 a month in recent years had disappeared. The 36-year-old father of four said desperation was growing among the day laborers with whom he was competing for odd jobs.
Legislative Analyst Elizabeth Hill's recommendations on tax breaks, which she says mostly benefit the rich and corporations, are drawing attention. She even addressed the largest, seemingly most untouchable tax break: allowing homeowners to deduct mortgage interest off their state personal income taxes.
Hill said in a report that the deduction, which exceeds $5 billion a year, no longer serves its intended purpose of encouraging home ownership. She believes there are more targeted, less costly ways to aid those who need the assistance, without subsidizing wealthy homeowners.
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Without commenting on any specific tax break, Senate leader Don Perata, D-Oakland, and Assembly Speaker Fabian Nunez, D-Los Angeles, said Friday the Legislature will seriously consider Hill's recommendations.
And Steve Maviglio, a spokesman for Nunez, said closing tax loopholes - including possibly changing the mortgage interest deduction - will be part of Democrats' broad considerations of deficit solutions.
California debt gets a worst-in-the-U.S. rating from Moody's.
By Dale Kasler -- Bee Staff Writer
Published 2:15 am PDT xxx, xxx 23rd, 200x
Unconvinced that California has solved its budget problem, a second Wall Street firm lowered the state's bond rating Monday.
This time the downgrade came from Moody's Investors Service, which chimed in the first day of business after Gov. Gray Davis signed the new state budget into law. Moody's action, coming two weeks after its rival Standard & Poor's issued a downgrade, reinforced California's plummeting standing on Wall Street as it prepares crucial bond sales to stay afloat financially.
Moody's said it was disappointed that the new budget leaves an $8 billion deficit into the next fiscal year, a gap that could top $10 billion if the state's economic forecasts don't prove true. Although it didn't mention the recall election, Moody's cited California's political gridlock and said "the state will have substantial difficulty closing this gap in the next budget cycle."
Moody's lowered California's bond rating a notch to a worst-in-the-nation "A3," or four notches above junk bond status. It had been "A2," tied with New York and Louisiana.
The downgrade will increase California's borrowing costs but it's not clear by how much. That's because Moody's was far gentler on California than was S&P, the other big Wall Street rating agency.
S&P, acting before the budget stalemate was broken, lowered California a resounding three notches July 24 to "BBB," or just two notches above junk status. S&P uses a different lettering system than Moody's.
The financial troubles of major bond insurers are rattling the municipal bond market, where about half the bonds issued in recent years have carried private insurance -- including in California.
If you own muni bonds, it might be wise to take a closer look at your portfolio to see how it could be affected by the insurers' woes. But there's a very good chance the bonds you hold didn't really need insurance in the first place, analysts say.
Many states and municipalities have long used private insurance as a way to enhance the appeal of their tax-free securities for investors -- turning, say, an A-rated bond into a AAA-rated one.
Now, Wall Street is worried about the health of the insurers that backed those gilded ratings because of the potential claims the companies face from insuring other bonds, particularly mortgage-backed securities.
"Their ability to meet their claims-paying obligations is being called into question," said Jon Schotz, co-founder of Saybrook Capital, a Santa Monica-based investment fund that focuses on muni bonds.
By Michael Liedtkeand:
Associated Press
Sunday, December 23, 2007; Page F02
SAN FRANCISCO -- The California Public Employees' Retirement System will sell more than $20 billion in stocks and bonds as the largest U.S. public pension fund aims for higher returns from venture capital, commodities, real estate and several other investment options.
About 10 percent of Calpers's portfolio will consist of real estate investments, up from 8 percent. Hitting the target will require additional real estate investments of about $4 billion.
Mass Inmate Release Possible in Calif.
SACRAMENTO, Calif. (AP) — Gov. Arnold Schwarzenegger is considering the early release of more than 20,000 low-risk prison inmates from the nation's largest prison system as a way to save money amid a worsening budget crisis, a newspaper reported Thursday.
Bank of America CEO Ken Lewis told editors of the Wall Street Journal that he's worried about borrowers with strong credit scores not making loan payments if the housing crisis worsens.
"There's been a change in social attitudes toward default," Lewis told the Wall Street Journal. "We're seeing people who are current on their credit cards but are defaulting on their mortgages. I'm astonished that people would walk away from their homes."
Apparently even borrowers with strong credit scores are finding it easier to walk away from their mortgages, especially if they put little or no money down on houses and condos purchased for investment purposes.
The annual study by the Department of Finance showed that 89,000 more people moved out of California than moved here from elsewhere in the United States. California's population did grow in fiscal 2007 -- but the growth rested on births and the arrival of more than 200,000 immigrants from other countries.
The shift dovetails with the state's weakening economy and is most likely related, said Howard Roth, chief economist for the Department of Finance.
Ventura County continued to grow very slowly last year, fueled by a steady increase in births coupled with an influx of foreign immigration that barely neutralized the exodus of residents to other counties and states.
...the county experienced a fourth consecutive year of domestic out-migration, meaning that more residents moved out of Ventura County to other parts of the state and country than moved in. They estimated this year's net exodus to be 3,150 people — down from a loss of 3,832 in 2006 and 5,216 in 2005.
The trend, said Bill Watkins, executive director of the UC Santa Barbara Economic Forecast Project, is a reflection of economic reality: high housing prices coupled with fewer opportunities to land a job that pays enough to afford a house.
"Opportunities are declining," he said, noting layoffs at the county's two largest private employers, Amgen Inc. and Countrywide Financial Corp.