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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Think4Yourself who wrote (169428)	12/5/2008 8:41:54 PM
From: DebtBomb	Respond to of 306849

More U.S. Homeowners Have Mortgage Higher Than House Is Worth By Dan Levy Oct. 31 (Bloomberg) -- Almost 20 percent of U.S. mortgage borrowers owed more on their loans in the third quarter than their house was worth as foreclosures depressed prices and the economy weakened, according to First American CoreLogic. More than 7.5 million properties already have negative equity and another 2.1 million will follow should home prices decline another 5 percent, Santa Ana, California-based First American, a seller of economic and real estate data, said in a report today. Six states account for almost 60 percent of homes with negative equity, led by Nevada and Michigan. ``As long as job losses continue and people face resets on their mortgages, the housing market will be under severe distress,'' Sam Khater, a senior economist at First American in Tysons Corner, Virginia, said in an interview. ``We've created an entire class of homeowner that is very sensitive to price changes.'' Home prices fell in August in all 20 metropolitan areas measured by the S&P/Case-Shiller home-price index, which dropped 16.6 percent from a year earlier and has fallen every month since January 2007. U.S. foreclosure filings rose to a record in the third quarter, and will probably increase as the economy worsens and the availability of financing shrinks, RealtyTrac Inc., a seller of default data, reported on Oct. 22. The number of houses with loans higher than the property's value may increase to almost 25 percent should prices keep falling, First American said. Economy Weakens The economy suffered its biggest decline since 2001 in the third quarter, ushering in what may be the worst recession in a quarter-century. Polls show that economic turmoil is boosting the chances of presidential candidate Senator Barack Obama of Illinois and fellow Democrats in next week's elections. Gross domestic product contracted at a 0.3 percent pace from July to September, according to a Commerce Department report yesterday in Washington. The decline was smaller than forecast. Even so, the economy may be in for a larger drop this quarter as the record two-decade expansion in consumer spending came to an end. The weak economy has hurt Republican candidate Senator John McCain of Arizona, who fell further behind Obama as the financial crisis intensified. A Bloomberg/Los Angeles Times survey taken Aug. 15-18 showed McCain leading with 42 percent to Obama's 41 percent; five weeks later, the poll showed Obama ahead by 49 percent to 45 percent. First American's home-price index, compiled from public property records that go back 30 years, showed a national drop of 11.2 percent in August from a year earlier. The rate of decline may increase to 12 percent by year end, Khater said. Rescue Plan A $500 billion plan under consideration by the U.S. Treasury and the Federal Deposit Insurance Corp. may help as many as 3 million homeowners in danger of default refinance their mortgages into affordable loans, people familiar with the matter said yesterday. FDIC Chairman Sheila Bair acknowledged this week that ``a framework'' for modifications was being discussed. The states with the highest shares of homes with negative equity either had rapid appreciation in prices, manufacturing declines or a higher proportions of subprime loans, according to First American. Nevada had the highest share at 48 percent, followed by Michigan at 39 percent, Florida and Arizona each at 29 percent, California at 27 percent, Georgia at 23 percent and Ohio at 22 percent, First American said. New York had the lowest share of homes with negative equity at 7 percent, followed by Hawaii at 8 percent, Pennsylvania at 9 percent and Montana at 10 percent, according to the report. The negative equity report was compiled from 41.7 million first and second mortgages and covers single-family homes, cooperatives, condominiums, town homes and multiunit attached properties up to four units, Khater said. bloomberg.com

To: Think4Yourself who wrote (169428)	12/5/2008 10:13:27 PM
From: ChanceIs	Respond to of 306849

>>>If it makes you feel any better I lost 4 figures on Calpine myself.<<< Mine was five - no kidding. Samuel Clemens (aka Mark Twain) lost his fannie backing some printing press. He later made a remark about knowing too much could be one's undoing. Apparently the press he backed was by far and away technically superior to the competition. It should have been a winner. For whatever reason, politics, bad business management, volatile credit costs - Twain's proposition went bust. But he hing in and hung in and hing in - because it was a good product. I have talked to two Calpine Vice Presidents, a FERC commissioner (Presidential appointee), a senior Capitol Hill staffer, the CEO of a major merchant power trade organization, and a senior member of a large Washington merchant power lobbying group. They all just shake their heads. A perfect storm against Calpine. (That phrase - perfect storm - is over used. My apologies.) It was a great concept. Over-leveraged for sure. A long time ago I read a book - "Winning Through Intimidation." It was generally about sales and life in business. The author was a commercial real estate salesman. He opined that there are three types of people in the business world: 1) those who are out to screw you and say so, 2) those who are out to screw you but pretend that they are your best friend, and 3) those who are honest and really trying to help you and themselves succeed through a healthy transaction, but because of their incompetence end up doing great harm. The author usually had profitable relationships with the first, and could smell out the second and "get by." The third always tripped him up and he would lose his fannie. So it was with Pete Cartwright and Calpine. There was a day that Grey Davis proclaimed that the power contracts were "the background of California's future energy policy," and that "through them he had slain the dragon of the energy crisis." I thought that Grey was a nice man. That he appreciated a fair deal. A year later he said he was beaten with a rubber hose in a back room and forced to sign the contracts....all $40 billion of them. Of course these days $40 billion is a laughable amount. I have a friend I have known since we were 4 years old - lo these 47 years ago. He became an attorney. He always tells me...."you can never be too cynical."

To: Think4Yourself who wrote (169428)	12/5/2008 10:39:57 PM
From: ChanceIs	Respond to of 306849

Miss. AG files lawsuit against Entergy >>>One other gaff Calpine made was to borrow a lot to build plants in Dixie, where they - foolishly - thought that there was an open, fair, and competitive market. Perfect storm.<<< By TIMOTHY R. BROWN Associated Press Writer © 2008 The Associated Press Dec. 2, 2008, 7:15PM JACKSON, Miss. — Mississippi's attorney general filed a lawsuit against Entergy Corp. and its subsidiaries Tuesday, claiming the companies illegally manipulated the purchase and sale of electricity to maximize profits. The fraud and antitrust lawsuit filed in Hinds County Chancery Court claims Entergy buys electricity from sister companies at a higher rate than it could on the open market, then passes the inflated costs along to consumers. "Entergy's duty to Mississippi rate payers is that they have to provide us with the cheapest energy that is reliably available," Attorney General Jim Hood said. Entergy spokeswoman Mara Hartmann declined comment on the lawsuit, saying the company was still reviewing it. However, the company has previously said its practices were sound and Hood's allegations of wrongdoing were without merit. Hood's suit is similar to two lawsuits against the company in Louisiana that claimed customers were overcharged. Entergy Louisiana was ordered in 2000 to refund $72 million to customers in one lawsuit and ordered this year to refund $34 million in the other. Neither of those lawsuits were filed by the state of Louisiana. Entergy provides electricity to 2.7 million customers in Arkansas, Louisiana, Mississippi and Texas. The company has annual revenues of more than $11 billion. Hood, for months, has sought thousands of Entergy internal documents while the utility has denied Hood's allegations. Entergy also sought to block him from obtaining company records related to fuel purchases. Entergy has maintained its practices are fair and that the Mississippi Public Service Commission is the proper overseeing body, not Hood's office. But the MPSC issued a resolution last week, saying Entergy should hand over the internal documents sought by Hood for his investigation into the company's fuel purchasing practices. Haley Fisackerly, president and chief executive officer of Entergy Mississippi, said Tuesday that he was shocked by the PSC resolution. "Resolutions are nonbinding. Commissions direct us to do things, raise our rates, build power plans, substations, whatever may be through orders," Fisackerly said. "Those become binding documents. Second of all, they did it with no due process granted us." Fisackerly said Entergy has requested a formal hearing to discuss the issue before the three-member Public Service Commission. The PSC is reviewing the request. The commission issued a subpoena to Entergy in October, ordering the company to turn over documents in the two Louisiana court cases. The company complied and Hood said those documents show Entergy's parent company sold Entergy Mississippi electricity at $26 per 1,000 kilowatt hours that it bought on the open market for $12 per kilowatt hours. Hood claims Entergy committed fraud by telling the Public Service Commission that it was providing Mississippi customers with the cheapest energy it could find. Entergy has called all of Hood's claims "irresponsible, without merit, a waste of taxpayer money and harmful to the state's business reputation."