Existing-Home Sales Plunge

Chinese Drywall Found to Differ Chemically

Florida is a center of homeowner complaints that Chinese drywall is causing health problems. A housing development in Boynton Beach, Fla., tries to take advantage of that to bolster its sales.

The New York Times - Federal investigators reported Thursday that imported Chinese drywall that homeowners have linked to health problems and odors had higher levels of some chemicals than its domestic counterparts.

The investigators, however, were unable to link the chemicals, sulfur and strontium, to the health problems and smells in thousands of homes built during the recent housing boom, and said further testing was under way to determine any possible connection.

The preliminary findings are part of a larger study by federal agencies, including the Consumer Product Safety Commission and the Environmental Protection Agency, into complaints from nearly 2,000 homeowners that their recently built homes emit odors and cause nosebleeds and respiratory problems. The owners also say their electrical appliances have failed and their wiring has corroded. It has been estimated that more than 60,000 homes could have the imported drywall. Large amounts of Chinese drywall were imported over the last few years when domestic supplies ran short. An estimated seven million sheets made in China were used as a substitute. Most of the complaints come from Florida, Virginia and Louisiana, where the widespread destruction after hurricanes lead to rapid rebuilding of damaged homes.

Slump Creates Lack of Mobility for Americans

Stranded by the nationwide slump in housing and jobs, fewer Americans are moving, the Census Bureau said Wednesday.

The bureau found that the number of people who changed residences declined to 35.2 million from March 2007 to March 2008, the lowest number since 1962, when the nation had 120 million fewer people.

Experts said the lack of mobility was of concern on two fronts. It suggests that Americans were unable or unwilling to follow any job opportunities that may have existed around the country, as they have in the past. And the lack of movement itself, they said, could have an impact on the economy, reducing the economic activity generated by moves.

Joseph S. Tracy, research director of the Federal Reserve Bank of New York, said the lack of mobility meant less income for movers and the people they employ and less spending on renovation and on durable goods like appliances. But, Dr. Tracy said, the most troubling prospect is that people were no longer able to relocate for work.

“The thing that would be of deeper concern is if job-related moves are getting suppressed and workers are not getting re-sorted to the jobs that best use their skills,” he said. “As the labor market started to improve, if mobility stays low, you can worry about the allocation of workers.” http://www.nytimes.com/2009/04/23/us/23census.html

Weak Housing Data Has a Bright Spot

The Wall Street Journal - New-home construction in the U.S. fell to a new low last month. But an increase in the construction of single-family homes suggests the slump in home building is drawing to a close.

In April, the pace of construction starts fell to an annual rate of 458,000 new homes, a 12.8% drop from March. That was the lowest level since 1959, when the Commerce Department began tracking the figures.

The decline was wholly the result of a sharp drop in ground-breaking for apartment buildings and other multifamily dwellings. Single-family home construction rose 2.8% to 368,000 in April, after rising slightly in March as well.

The increase in the single-family figures adds to evidence that residential construction has begun to recover. The National Association of Home Builders said Monday that its measure of home-builder sentiment increased for a second month in May. New-home sales appear to be turning upward.

Steve Temkin, owner of T&M Building in Torrington, Conn., has started to see business pick up. After weekends when hardly anyone came by, foot traffic in his model homes is back up, and he just made the first two sales in nearly a year in one of his new projects. To adjust to the weak market, he is building smaller homes starting at about $220,000 -- in places where prices once started at more than $350,000.http://online.wsj.com/article/SB124273484528334297.html

http://online.wsj.com/article/SB124272971219434135.html

Home Depot Girds for Continued Weakness

The New York Times - ATLANTA — When the collapse of Lehman Brothers froze the credit markets last September, Carol Tome quickly ordered hundreds of Home Depot’s store managers to transfer all their spare cash to headquarters — literally cleaning out their registers and each store’s safe.

Then Ms. Tome, the chief financial officer, took other emergency steps to make sure Home Depot would not have to borrow another nickel from the nation’s dysfunctional lenders. Within days, she and her boss, Frank Blake, the chairman and chief executive, had slashed capital spending and suspended a stock buy-back program, saving millions of dollars.

“We no longer needed short-term loans to operate,” Ms. Tome said at the time. And that has remained the case.

The era of operating easily on borrowed money is over, at least for now, for businesses as well as consumers. That in turn is changing the way companies operate, with profound effects on the economy. Unable to borrow on favorable terms, many companies have retrenched and some have gone into survival mode. But their caution has costs: Not only could it prolong the recession, but it could put them at a disadvantage to more aggressive competitors when the economy revives.

While Home Depot has emerged from the credit crisis strong enough to borrow at attractive rates now, it has chosen not to do so. Mr. Blake has charted a course away from expansion, one that he holds out as a template for running a big company in postrecession America. In his view, the hard times and the less generous credit are restricting consumption and undermining the corporate expansion that drove economic growth in recent years. The best response, he decided, is to focus on Home Depot’s most profitable core business: the existing retail outlets.http://www.nytimes.com/2009/05/19/business/19depot.html

Wall Street Journal Article on Home Depot's Plight: http://online.wsj.com/article/SB124272774188334067.html

SEC Poised to Charge Mozilo With Fraud

The Wall Street Journal - The Securities and Exchange Commission staff is readying civil fraud charges against Countrywide Financial Corp. co-founder Angelo Mozilo, in what would be the highest-profile government legal action against a chief executive connected to the financial crisis.

The SEC staff sent a so-called Wells notice to Mr. Mozilo several weeks ago alerting him to the potential charges, people familiar with the matter said. Mr. Mozilo's lawyers could still persuade the SEC's commissioners that there isn't sufficient evidence to bring a case.

David Siegel, a lawyer for the 70-year-old Mr. Mozilo, declined to comment on the investigation and said there is no "fair basis" for any allegations against the former Countrywide chief executive.

The charges the SEC is considering include alleged violations of insider-trading laws and alleged failure to disclose material information to shareholders, according to people familiar with the matter.http://online.wsj.com/article/SB124224647957816523.html

U.S. Median House Price Declines 14%

The median price for a single-family house fell 14% to $169,000 in the first quarter from a year earlier, the National Association of Realtors reported.

The trade group said first-time home buyers accounted for half of all purchases in the quarter, and many of them zeroed in on foreclosed homes. That dragged down the median, the Realtors said.

The median price for the latest quarter is down 26% from a peak of $227,600 in the third quarter of 2005. The latest median price was down from a year earlier in 134 of the 152 metro areas included in the survey.

The biggest increase was in the Cumberland area of Maryland and West Virginia, where the median price climbed 21% to $114,900. Debbie Grimm, manager of the Long & Foster real-estate brokerage in Cumberland, Md., said the area is attracting retirees and second-home buyers, particularly from Washington and Baltimore.http://online.wsj.com/article/SB124217092693512789.html

Home Prices Continue to Crumble

New data shows existing-home sales near a 12-year low, with prices down close to 15%. J.P. Morgan economist Abiel Reinhart says there's evidence of continued pressure on the sector. Kelsey Hubbard reports.

Home Prices Sink Again, but Pace Is a Bit Slower

The Wall Street Journal - Home prices fell sharply in February, but for the first time in 16 months the annual pace of deterioration slowed.

The Standard & Poor's/Case-Shiller index measuring home prices across 20 major cities declined 18.6% in February from a year earlier. That marked a slight improvement from January's 19% annual decline, but half of the cities posted deeper declines than in prior months. On a monthly basis, home prices fell 2.2% from January.

Meanwhile, the Conference Board's measure of consumer confidence surged to 39.2 in April, from 26.9 in March, based on consumers' expectations that the U.S. economy is nearing a bottom. But confidence remains at historically low levels and well below readings associated with strong economic growth.

The latest home-price figures offered an early sign of hope that some of the worst price declines are abating. A separate measure of home prices by the Federal Housing Finance Agency has posted monthly increases for two straight months, though economists doubt that is a sustainable trend. The Case-Shiller measure is expected to fall through much of the year, with smaller declines that would eventually turn into a flattening of home prices.

Prices "are no longer falling off a cliff," said Patrick Newport, an economist at IHS Global Insight. "Instead, they are rolling down a steep hill."

While all cities posted monthly declines, 16 of the 20 declined at a slower pace than they did in January. The Cleveland, Charlotte, N.C., New York and Washington markets showed larger monthly declines in February than they did in the prior month.http://online.wsj.com/article/SB124092346703363431.html

States help with downpayments

The Wall Street Journal - Don’t have enough money to put down on a house? No problem.

States looking to jump-start their housing markets are tapping tactics that fueled the housing boom–and bust. They’re getting creative to help low-to-moderate income buyers make it to the closing table.

Programs differ from state-to-state. Some offer interest-free bridge loans that essentially convert to piggyback mortgages. They loan money to fund down payments and/or closing costs — possibly getting buyers keys for nothing out-of-pocket. The aim is to be a short-term lender, getting the money back once qualified first-time buyers claim a federal tax credit of up to $8,000 for purchases before Dec. 1. States offering deals include Missouri, Ohio and New Jersey in efforts led chiefly by their housing finance agencies.

Participants are screened carefully to ensure they are occupants with documented income and sound credit. Prices are scrutinized to avoid overpayment, buyers undergo education and the loan of choice is a 30-year fixed mortgage, not adjustable-rate loans that reset with crippling payments.

“The borrowers are not entering into more of the exotic loan products that caused a lot of the problems out there today,” said Greg Spurgeon, single-family homeownership administrator for the Missouri Housing Development Commission, which led the way on such programs earlier this year.http://blogs.wsj.com/developments/2009/04/24/cant-afford-the-down-payment-some-states-putting-up-cash/

Sign of the Times: Manor Price Cut by $50 Million

Leona Helmsley's Dunnellen Hall in Greenwich, Conn., seen here in 1986, went on the market a year ago for $125 million. It's now listed at $75 million.

The Wall Street Journal - Talk about deep discounts. The property downturn has wiped $50 million off the asking price of a single home in what may be the biggest cut ever on a U.S. house.

Now, for a mere $75 million, a buyer can snare the Greenwich, Conn., manor house of the late Leona Helmsley, complete with two pools, more than 13 bedrooms (six for servants) and a walk-in silver closet.

The original asking price was $125 million, and industry veterans can't remember a bigger dollar discount. Last July, a Russian billionaire paid Donald Trump $95 million for a Palm Beach, Fla., mansion originally listed at $125 million.

Helmsley-estate representatives put the 40-acre property up for sale just over a year ago. Even then it was an aggressive price, local brokers said. In October, the estate slashed the price to $95 million.

Called Dunnellen Hall, the 20,000-square-foot Jacobean-style brick mansion is set on a park-like property in the Greenwich back country with views of the Long Island Sound. Brochure photos show a large marble reflecting pool and fountain in front and a back terrace leading to a rock- and plant-lined koi pond, flower beds, a large rectangular pool, many trees and a vast green lawn. The home has more than seven main bedrooms plus a staff wing with six bedrooms.

Mrs. Helmsley, one of the most famous names in New York real estate, and her husband, Harry, paid $11 million for the 1918 house in the early 1980s. They later bought more acreage. The ensuing renovation played a role in her undoing. Among the charges leveled at Mrs. Helmsley when she was convicted in 1989 of tax evasion was that she billed her company for millions of dollars in renovation costs. She served time in federal prison and died in 2007 at age 87.http://online.wsj.com/article/SB124024652556335513.html

Today's Headlines

2 Homebuilders Merge in $1.3 Billion Deal

NYT - In a transaction that would create the nation’s largest homebuilder, Pulte Homes and Centex said Wednesday that they would merge in a $1.3 billion stock-for-stock deal.The transaction valued by the companies at $3.1 billion, includes $1.8 billion in debt.The two companies are hoping that the merger will help them survive a severe slump in the housing market that has helped lengthen a recession that started in December 2007. Homebuilders have sharply cut back construction and prices as they try to reduce inventories. Centex lost $664 million in the quarter that ended in December while Pulte reported a $338.2 million loss. http://www.nytimes.com/2009/04/09/business/09build.html

They Pay for Cable, Music and Extra Bags. How About News?

NYT - Just a year ago, most media companies believed the formula for Internet success was to offer free content, build an audience and rake in advertising dollars. Now, with the recession battering advertising online, in print and on television, media executives are contemplating a tougher trick: making the consumer pay. Publishers like Hearst Newspapers, The New York Times and Time Inc.are drawing up plans for possible Internet fees. Jeffrey L. Bewkes, Time Warner’s chief executive, is promoting a plan called “TV Everywhere,” to offer consumers a vast array of television online, provided they are paying cable TV customers. And Rupert Murdoch, who once vowed to make The Wall Street Journal’s Web site free, is now an evangelist for charging readers.http://www.nytimes.com/2009/04/08/business/media/08pay.html


Magazines Blur Line Between Ad and Article

NYT -If the separation between magazines’ editorial and advertising sides was once a gulf, it is now diminished to the size of a sidewalk crack.Recent issues of Entertainment Weekly, Esquire, Time, People, ESPN the Magazine, Scholastic Parent & Child and other magazines have woven in advertisers in new ways, some going as far as putting ads on their covers. In a medium like television, a partnership with advertisers is nothing surprising — look at how often plastic bags and containers from Glad are featured on “Top Chef.” But in magazines, the editorial and advertising sides have stayed distinct, largely because of the American Society of Magazine Editors. The society hands out the annual National Magazine Awards, and its guidelines govern how editorial content and advertising should be kept separate. Cover ads are prohibited.http://www.nytimes.com/2009/04/08/business/media/08adco.html

Big GM Bondholder Sells Its Stake

NYT -As talk continues to circulate about the likelihood of a General Motors bankruptcy, one of G.M.’s significant bondholders has shed the bulk of its holdings, according to a regulatory filing.The bondholder, Southeastern Asset Management, and its investment group, Longleaf Partners, both of Memphis, now hold 9.6 percent of G.M.’s Series B bonds, Southeastern said Tuesday in a filing with the Securities and Exchange Commission.Southeastern held 33 percent of G.M.’s Series B bonds as recently as September. Its bonds were convertible to 13.2 million G.M. common shares, or about 2.3 percent of G.M. stock, according to Bloomberg News.http://www.nytimes.com/2009/04/08/business/08gm.html


As Room Rates Sink, Sleepless Nights for Hotel Investors

NYT - In San Francisco, prices of hotel rooms have “gone off a cliff,” said Karl Hoagland, chairman of Larkspur Hotels and Restaurants. Softening demand has led some luxury hotels to offer rooms for less than $100 a night.“It’s a great windfall for travelers,” said Mr. Hoagland, whose company owns three hotels in the city’s Union Square neighborhood.But it is anything but a windfall for Mr. Hoagland. His company paid about $100 million for the three hotels, in 2006 and 2007. “It was a pretty big bet on San Francisco,” he said.http://www.nytimes.com/2009/04/08/business/08hotel.html

Consumer Borrowing Declined in February

WASHINGTON (AP) — Consumer borrowing plunged in February at a 3.5 percent annual rate, more than analysts had expected, as Americans cut back their use of credit cards by a record amount.The Federal Reserve said Tuesday that consumer borrowing dropped at an annual rate of $7.48 billion in February from January, which amounts to a 3.5 percent annual rate of decline. Wall Street economists expected borrowing to slide by only $1 billion, according to a survey by Thomson Reuters. http://www.nytimes.com/2009/04/08/business/economy/08econ.html

Judge Orders Probe of Prosecutors

WSJ - WASHINGTON -- A federal judge ordered a criminal investigation into prosecutorial misconduct in the trial of former Alaska Sen. Ted Stevens, and suggested that the botched case exposed a deeper problem at the Justice Department.U.S. District Judge Emmet G. Sullivan appointed a special prosecutor to look into possible criminal contempt-of-court charges against six federal prosecutors who the judge said withheld evidence from defense lawyers.Judge Sullivan erased the corruption conviction of Mr. Stevens and dismissed the case, in line with a request last week by U.S. Attorney General Eric Holder. A federal jury in October convicted Mr. Stevens on seven counts of failing to disclose free home renovations and other gifts from friends. The verdict came just eight days before Election Day, and the Republican lost his re-election bid by fewer than 4,000 votes, handing Democrats a crucial seat in the Senate.http://online.wsj.com/article/SB123911047345896733.html

Pirates Seize U.S.-Flagged Ship

WSJ - DUBAI -- Pirates on Wednesday seized a U.S.-flagged container vessel off the coast of Somalia, raising the stakes for American naval commanders battling a recent surge of attacks in the region. A spokeswoman for the U.S. Fifth Fleet in Bahrain said the attack took place early Wednesday about 240 nautical miles southeast of the pirate haven of Eyl, Somalia. The Navy didn't release detailed information about the ship, but A.P. Moller Maersk, the Danish shipping giant, identified the vessel as the Maersk Alabama, a large container ship.http://online.wsj.com/article/SB123918590857500753.html

Today's Top News

Bondholders and the White House now have a CEO they want running GM
New GM Chief Bends to U.S. Pressure
DETROIT -- Facing heavy government pressure, General Motors Corp.'s chief executive spent his second day on the job making a public break from his predecessor, sending a sharply different message of willingness to shake up the ailing auto maker.http://online.wsj.com/article/SB123850236944873521.html#mod=testMod

What's Going On Here - Aren't Things Suppose to be Getting Better?
Global Slump Seen Deepening.
The outlook for the global economy worsened on the eve of a summit of the world's 20 biggest economic powers, as two international agencies warned that global output will fall in 2009 for the first time since World War II. Fresh evidence of the deepening slowdown came from around the world. Euro-zone data Tuesday showed inflation at 0.6% in Europe's single-currency area for the year through March, the lowest level since official records began in 1996. In the U.S., home prices fell 19% in January compared with a year earlier. Japan's business-confidence fell to an all-time low in data released by its central bank early Wednesday, a day after the jobless rate there rose to a three-year high.http://online.wsj.com/article/
SB123849211128473261.html

States Push to Raise Taxes on Richest Taxpayers
The governor and Democratic lawmakers in New York will attempt to patch an $18 billion budget deficit by imposing much higher taxes on the richest residents, joining several states considering such a move this year. Under a proposal by Gov. David Paterson, New York would follow California and Maryland in pushing its top earners into higher tax brackets that are several percentage points more than what most earners pay. And New Jersey is considering raising its top-tier income taxes even higher, to more than 10% compared with the 5.25% marginal rate paid by most household. http://online.wsj.com/article/SB123854978218576549.html

What Are the Implications For Lower Oil Prices and Is Oil Headed Back Up?


Oil Falls Below $50 a barrel
Oil prices slipped below $49 Wednesday as new signs of deterioration in the world's three biggest economies -- the U.S., Japan and China -- undermined crude's recent gains. Benchmark crude for May delivery was down $1.22 to $48.44 a barrel by midday in Europe in electronic trading on the New York Mercantile Exchange. That fall nearly wiped out overnight gains, when the contract rose $1.25 to settle at $49.66. In London, Brent prices fell 96 cents to $48.28 a barrel on the ICE Futures exchange.http://online.wsj.com/article/SB123858224641977803.html

Home Sales are followed closely - is this a leading or lagging indicator?
Home Prices Drop, but Homes Still Not Cheap
Homeowners are watching anxiously for any signs of housing market stabilization. So, too, are all those who believe the market may hold the key to the economy.
And yet the most recent data makes for more gloomy reading.The closely watched Case-Shiller index, which tracks prices across twenty major cities, shows that through January the crash was getting worse, not better. And yet, even after these declines, homes overall still may not be that cheap relative to wages. More on that later.http://online.wsj.com/article/SB123853857749575441.html

Investors follow the Stock Market closely - is this a leading or lagging indicator?
Stock Bull Still Breathing, But Dow Loses 13% Overall in Period.
For investors, the first quarter was a case of one step forward but two steps back.
As the Federal Reserve, Treasury and governments around the world stepped up efforts to address the financial crisis, fears of a systemic collapse abated and investors showed glimmers of willingness to take on more risk. It wasn't enough to prevent stocks from posting their sixth consecutive losing quarter and dashing the hopes of many investors by setting lows in the process. Even a 20% rally over the span of three weeks -- putting the market into a bull market by common definition -- faded in the final days of the quarter as bad news out of the auto industry reminded investors that challenges remain.http://online.wsj.com/article/SB123849617556773343.html


How Much Lower Can Car Sales Go?
Vehicle-sales data for March will print Wednesday and once again the numbers will look depressing. But, just maybe, auto sales have bottomed. Car buyers are expected to have purchased in March roughly 9.5 million new cars on a seasonally adjusted, annualized basis, according to Moody's Economy.com. That will mark the third consecutive month in the sub-10 million range. The past decade saw monthly new-car sales annualized at about 16 million to 17 million a year, spiking at times above 20 million. But what follows "could be less, because if you reason there was a bubble in housing, then there was some degree of bubble in durable consumption," such as car sales, says Peter Kretzmer, senior economist at Bank of America.http://online.wsj.com/article/SB123853992973675517.html

What Does this Mean for Microsoft?


PC Makers Test Laptops Running Google Software
Hewlett-PackardCo. and other PC makers are considering using free software developed by GoogleInc. to run some small computers, a move that would open a new front in the battle between the Internet giant and MicrosoftCorp. PC makers are testing Google's Android operating system—which has so far been used to power mobile phones—for use in new models of so-called netbooks, inexpensive laptops that have become the fastest-growing segment of the PC industry. Google, which dominates Internet search, already challenges Microsoft on other fronts, including with its free word-processing and spreadsheet software, neither of which has succeeded in denting Microsoft's Office suite. The effort to move Android to netbooks targets Windows, which generated more than 60% of Microsoft's operating profit in its last fiscal year.http://online.wsj.com/article/SB123852934905974845.html

If the Dollar Loses its Status - What does that Mean for the U.S. Economy?

Dollar Losing its Status as a Safe Haven
The dollar surged out of the gate in the first months of 2009 only to stumble as the quarter drew to a close. Further obstacles could lie ahead. There are two main impediments in the dollar's path: the latest efforts by the Federal Reserve to jump-start the U.S. economy, and investors' tentative return to riskier types of assets. Both developments mean that investors are less likely to seek out the dollar as a safe port in a storm, something they have done relatively consistently since the global financial crisis intensified last year. Still, the dollar ended the quarter on a positive note. It strengthened 5% against the euro, 9% against the Japanese yen and 4% against a trade-weighted basket of 16 currencies tracked by J.P. Morgan Chase.http://online.wsj.com/article/SB123855139602376717.html

Obama Administration Launches Housing Plan

The Wall Street Journal - WASHINGTON -- The Obama administration Wednesday unveiled key guidelines for its housing market rescue plan that should enable loan servicers to immediately start modifying eligible mortgages.

Two weeks ago, the president laid out a clear path forward to helping up to 9 million families restructure or refinance their mortgages to a payment that is affordable now and into the future," Treasury Secretary Timothy Geithner said Wednesday in a statement. "Today, we are providing servicers with the details they need to begin helping eligible borrowers."

The administration's new housing rescue effort includes a program aimed at reducing the amount homeowners owe per month. Under the program, the lender will have to first reduce monthly payments on mortgages so that the borrowers' monthly mortgage payment is no greater than 38% of his or her income. The program will then match further reductions in monthly payments dollar-for dollar from 38% down to 31% debt-to-income ratio for the borrower.

The modified payments will be kept in place for five years and the loan rate will be capped for the life of the loan, Treasury said in technical documents provided Wednesday morning. After five years, "the interest rate can be gradually stepped-up by 1% per year to the conforming loan survey rate in place at the time of the modification."

Treasury said that in order to reach that 31% debt-to-income ratio level, interest payments will first be reduced down to as low as 2%.

Meanwhile, servicers will receive an upfront fee of $1,000 for each eligible modification meeting guidelines established under this initiative. Servicers will also receive "pay for success" fees, as long as the borrower is successful at staying in the program, of $1,000 each year for three years, said Treasury.

http://online.wsj.com/article/SB123617623602129441.html

Reporter Outburst Against Housing Plan Sparks Controversy

The New York Times - Rick Santelli, the CNBC reporter whose on-air suggestion of a “Chicago Tea Party” to protest President Obama’s housing plan sparked an Internet sensation and a smattering of actual protests across the country, found himself on the defensive Monday.

Mr. Santelli published a long blog post on CNBC’s Web site Monday evening denying any affiliation with the “tea party movements that have popped up” since his comments were broadcast. A number of blogs had questioned whether Mr. Santelli had coordinated his on-camera commentary with right-wing groups.

On Feb. 19, during one of his regular live reports from the Chicago Board of Trade, Mr. Santelli mentioned the tea party idea as part of a longer screed about the homeowner assistance plan.

At one point, as the traders around him booed the president’s housing proposals, he asked: “President Obama, are you listening?” The president’s press secretary, Robert Gibbs, was, and responded the next day by saying that Mr. Santelli “doesn’t know what he’s talking about.”

Since the commentary, which was viewed millions of times on CNBC.com and YouTube, dozens of “tea party” protests have taken place in cities across the country, and some conservative groups are planning a Tax Day Tea Party for April 15.

Mr. Santelli’s televised commentary appeared spontaneous to viewers. However, the Internet domain name ChicagoTeaParty.com was registered in August 2008 — well before his commentary — but not used until afterwards. The registration was first reported by two bloggers for Playboy’s Web site who said it was evidence that Mr. Santelli’s remarks were a “carefully planned trigger” for the protests. (The blog post was removed without explanation Monday.) http://www.nytimes.com/2009/03/03/business/media/03cnbc.html

Bailout Likely to Focus on Most Afflicted Homeowners

The long-awaited housing bailout will finally be announced on Wednesday.

In a speech in Phoenix, a signature real estate boomtown gone bust, President Obama will explain his plan to reduce foreclosures. And the key to understanding that plan will be remembering that there are two different groups of homeowners who are at risk of foreclosure.

The first group is made up of people who cannot afford their mortgages and have fallen behind on their monthly payments. Many took out loans they were never going to be able to afford, while others have since lost their jobs. About three million households — and rising — fall into this category. Without help, they will lose their homes.

The second group is far larger. It is made up of the more than 10 million households that can afford their monthly payments but whose houses are worth less than what is owed on their mortgages. In real estate parlance, they are underwater. If they want to stay in their homes, they will have no trouble doing so. But some may choose to walk away voluntarily, rather than continue to make payments on an investment that may never pay off.http://www.nytimes.com/2009/02/18/business/economy/18leonhardt.html

Senate Adds Homebuyer Tax Credit to Stimulus Bill

Senators Jeff Sessions and Jim DeMint with Representative Tom Price, all Republicans, criticized the stimulus package.

The New York Times - WASHINGTON — The Senate on Wednesday voted to expand the economic stimulus package with a tax credit for homebuyers of up to $15,000, a provision championed by Republicans as addressing a root cause of the recession.

The vote to add the tax credit, at a cost of about $18.5 billion, came as Senate leaders seemed to be nearing completion of negotiations. The majority leader, Senator Harry Reid of Nevada, suggested that a final vote on the stimulus plan could come on Thursday.

Moderate lawmakers in both parties are pushing to reduce the overall cost of the measure and to focus it more tightly on provisions that will quickly spur spending and create jobs. The vote came as President Obama met with centrist lawmakers to address concerns about the package.

Mr. Obama, while expressing willingness to compromise, also issued a warning to some Republican critics who have said they will press for major changes to the bill, including the removal of many spending programs in favor of wider tax cuts.

Presuming Senate Democrats muscle the bill through, the final legislation must be reconciled with the $820 billion measure approved last week by the House. http://www.nytimes.com/2009/02/05/us/politics/05stimulus.html?partner=permalink&exprod=permalink

Chinese Premier Blames Recession on U.S. Actions

The Wall Street Journal - Chinese Premier Wen Jiabao squarely blamed the U.S.-led financial system for the world's deepening economic slump, in the most public indication yet of discord between the U.S. government and its largest creditor.

Leaders in China, the world's third-largest economy, have been surprised and upset over how much the problems of the U.S. financial sector have hurt China's holdings. In response, Beijing is re-examining its U.S. investments, say people familiar with the government's thinking.

Mr. Wen, the first Chinese premier to visit the annual global gathering of economic and political leaders in Davos, Switzerland, delivered a strongly worded indictment of the causes of the crisis, clearly aimed largely at the United States though he didn't name it. Mr. Wen blamed an "excessive expansion of financial institutions in blind pursuit of profit," a failure of government supervision of the financial sector, and an "unsustainable model of development, characterized by prolonged low savings and high consumption."

Chinese leaders have felt burned by a series of bad experiences with U.S. investments they had believed were safe, say people familiar with their thinking, including holdings in Morgan Stanley, the collapsed Reserve Primary Fund and mortgage giants Fannie Mae and Freddie Mac. As a result, the people say, government leaders decided not to make new investments in a number of U.S. companies that sought China's capital. China's pullback from Fannie and Freddie debt helped push up rates on U.S. mortgages last year just as Washington was seeking to revive the U.S. housing market.

To be sure, China's economy now is so closely intertwined with the U.S.'s that major, abrupt changes are unlikely. The U.S.-China economic relationship has become arguably the world's most important. China has been recycling its vast export earnings by financing the U.S. deficit through buying Treasurys, helping to keep U.S. interest rates low and give American consumers more spending power to buy Chinese exports.

China now has roughly $2 trillion in foreign exchange reserves, and has continued to buy U.S. government debt -- surpassing Japan in September as the biggest foreign holder of Treasurys, by one official U.S. measure. China must continue to recycle its trade surplus if it doesn't want its currency to appreciate too quickly.http://online.wsj.com/article/SB123318934318826787.html

Price Cuts Spur Home Sales

BOUNCE: Falling prices in hard-hit places like Henderson, Nev., near Las Vegas, have helped stimulate home sales.

The Wall Street Journal - U.S. home sales registered their biggest monthly jump in nearly seven years in December, as cratering prices began to draw out more buyers and several major housing markets showed some signs of stabilizing.

The 6.5% rise in sales from November was attributed in part to strong sales of foreclosed homes. Economists say it is too early to suggest that broad improvement is at hand, though, and warned that the spring buying season is likely to be sluggish amid growing economic hardship. Indeed, the employment picture continued to darken Monday as U.S. employers announced at least another 65,000 layoffs. (See related article.)http://online.wsj.com/article/SB123298209359015631.html?mod=testMod

Brokerage Chief Sold $13 Million Mansion to Wife for $10

Richard S. Fuld Jr., the former chairman and chief executive of Lehman Brothers, testifying at a Congressional hearing last October.

The New York Times - Housing prices are falling around the country, but this one sounds hard to believe: A seaside mansion on Jupiter Island in Florida, bought for more than $13 million five years ago, was just sold for $10.

That’s right, 10 bucks. But in this case, the transaction is likely to raise eyebrows for reasons other than the price.

The seller, according to county records, was Richard S. Fuld Jr., the former chairman and chief executive of Lehman Brothers. The buyer was his wife, Kathleen.

The motivation is unclear, but Mr. Fuld has been under intense scrutiny since Lehman declared bankruptcy in September.

The longtime leader of the brokerage firm is at the center of a federal investigation into whether Lehman executives misled investors about the state of the company. And he was grilled by lawmakers at a Congressional hearing in October.

Mr. Fuld said in sworn testimony before a Congressional panel last year that while he took full responsibility for the debacle, he believed that all his decisions “were both prudent and appropriate” given the information he had at the time.

The couple jointly bought the home in Hobe Sound, Fla., for $13.75 million in March 2004, and the sale to Mrs. Fuld on Nov. 10 was first reported by Cityfile.com.

It is possible that he is now transferring properties because of his fears of investor lawsuits or a possible bankruptcy, lawyers in Florida said.

“This is the oldest trick in the books” said Eric S. Ruff, a lawyer with Ruff & Cohen in Gainesville, Fla. “It’s common when you hear the feet of your creditors approaching to divest yourself.”http://www.nytimes.com/2009/01/26/business/26fuld.html?partner=permalink&exprod=permalink