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US slump to prop up India as next offshoring hotspot 14 May, 2008, 0750 hrs IST,Chiranjoy Sen, TNN BANGALORE: Belt-tightening by global technology giants—a fallout of US economic slowdown—is likely to reinforce India as the most preferred offshoring destination. Top technology firms are actively moving part of their workforce from the US, UK and European markets to lower-cost destinations. They cite availability of local talent, better delivery and conducive enviroment as key offshoring reasons. While they may not admit it, firms would be looking at stepping the gas on offshoring to curb bloating costs and to lift margins. Networking and...

The number of properties with a filing...declined 5 percent from March. California had the most properties facing foreclosure at 64,683, an increase of 112 percent from April 2007. The number of properties declined less than 1 percent from March. The state posted the second-highest foreclosure rate in the country, with one in every 204 households receiving a foreclosure-related notice. California metro areas accounted for six of the 10 U.S. metropolitan areas with the highest foreclosure rates, led by Merced, with one in every 66 households receiving a foreclosure notice.

America May Well Be Only Halfway through the House-Price Bust < SOUNDING more like a cartographer than central banker, Ben Bernanke this week showed off the Federal Reserve's latest gizmo for tracking America's property bust: a series of maps that colour-code price declines, foreclosures and other gauges of housing distress for every county in the country. The Fed chairman's goal was to show graphically that falling prices meant more foreclosures, and he went on to urge lenders to write down the principal on troubled loans where the house is worth less than the value of the mortgage. But the jazzy...

The subprime mortgage meltdown has cost the world 15% of its market capitalization, about $9 trillion. The primary culprit who caused all of this financial loss, pain and suffering is not the mortgage companies. Neither is it the overextended borrowers. It is our own federal regulations interfering with the free market. ... The unintended consequences of good intentions can do more economic harm than all the mean-spirited greed within capitalism. Part of the good intention was forcing banks to be good neighbors by making altruistic loans that discriminated in favor of underprivileged communities. Any attempts by banks to set higher...

Former Federal Reserve Chairman Alan Greenspan said on Thursday that the worst of the credit crisis is over, according to attendees at a New York speech. Greenspan also said house prices still had a long way to fall and it was unlikely they would stabilize by year-end, according to meeting attendees who provided Reuters details of the speech delivered at the Alternative Public Strategies Conference. The attendees, who declined to be identified by name, said Greenspan mentioned that U.S. growth was likely to be sluggish for an extended period of time. The U.S economy is reeling from a housing-led slowdown,...

In a speech Monday night before the Columbia Business School’s 32nd Annual Dinner, Fed Chairman Ben Bernanke said that, “”About one quarter of subprime adjustable-rate mortgages are currently 90 days or more delinquent or in foreclosure.” He also said that, “Delinquency rates also have increased in the prime and near-prime segments of the mortgage market, although not nearly so much as in the subprime sector. As a consequence of rising delinquencies, foreclosure proceedings were initiated on some 1.5 million U.S. homes during 2007, up 53 percent from 2006, and the rate of foreclosure starts looks likely to be yet higher...

Obama's subprime pal PENNY PRITZKER Finance chief's bank failed in 2001, costing 1,400 customers some of their savings April 28, 2008 BY ABDON M. PALLASCH Political Reporter/apallasch@suntimes.com White House hopeful Barack Obama talks a lot on the campaign trail about how failing banks have used subprime loans to victimize customers. "Part of the reason we got a current mortgage crisis has to do with the fact that people got suckered in to loans that they could not pay," he told a crowd in Reading, Pa., last week. "There were a lot of predatory loans that were given out, a lot...

...Up until 1995 the Community Reinvestment Act was largely a requirement to support "community groups" in poor neighborhoods. Of course, this often meant left wing groups like ACORN, etc. But after 1995 the scope of the law was dramatically increased. Over the strenuous objections of the banks themselves and some Republicans in Congress, CRA was renewed and modified in such a way that it gave far more power to the federal government to punish banks for not lending more widely in poor neighborhoods. The classic "fair housing" laws from the Martin Luther King Jr. era of civil rights were deemed...

Expectations for a pause in U.S. monetary policy were bolstered by an article in Thursday's Wall Street Journal, where noted Fed watcher Greg Ip said, "The Federal Reserve is likely to cut its short-term interest rate by a quarter of a percentage point next week -- but then may be ready for a breather." However, the Journal article also points out that a pause in rate cuts would not necessarily signal the end of the financial turmoil in the U.S. economy. "It is almost certain to signal continued concern about economic growth and a willingness to cut rates further if...

Plaintiffs have filed approximately two private lawsuits a day related to subprime mortgages in the US this year, setting case volumes on course to exceed levels not seen since the aftermath of the savings-and-loan ­crisis, a study has found. During the first quarter of this year, 170 new civil cases were filed in federal courts, approaching the 181 filings made during the final six months of 2007, according to a review by Navigant Consulting, published on Wednesday. They were overwhelmingly dominated by class-action lawsuits, which accounted for 76 per cent of new cases. “Like the credit crunch itself, the litigation...

Bank of America, slammed by writedowns and rising credit costs, on Monday said earnings dropped nearly 80 per cent in the first quarter to $1.2bn. The largest US bank by market value said provision for credit losses soared by $4.78bn to $6.01bn, driven by problems in home equity and small business loans as well as loans to homebuilders. The bank had $1.47bn in writedowns on its collateralised debt obligations and $439m on its leveraged loan commitments. The numbers were down significantly from the fourth quarter, in which BofA had $5.15bn in writedowns leading executives at the bank to stage a...

UBS details subprime losses By Haig Simonian Published: April 21 2008 07:21 | Last updated: April 21 2008 13:56 UBS on Monday revealed that its massive losses in securities related to US residential mortgages stemmed largely from the fact that three separate parts of the group had amassed large positions, without sounding the Swiss bank’s once-vaunted alarm bells for risk. In a report to shareholders two days ahead of its annual meeting, the biggest European casualty of the subprime crisis explains how its elaborate risk detection procedures failed to detect that UBS had built up more than $70bn in potentially...

...The suggestion behind such talk... is that the slowdown is like the Great Depression of the 1930s. You almost expect Senators Obama and Clinton to repeat the lines from President Roosevelt’s inaugural address of 75 years ago: “The only thing we have to fear is fear itself.” The analogy is absurd.... So far, the Dow has declined about 12% from its record high of last fall. In the Depression, it dropped more than 80%. Unemployment is about 5%. In the Depression it was 25%. Maybe 2% of mortgages are in trouble, and abandoned homes line some parts of Cleveland Heights.......

WASHINGTON (Reuters) - The U.S. government should expect to lose up to $6 billion if a leading Democratic lawmaker's mortgage rescue plan is adopted, according to a Congressional memo citing non-partisan research. The legislation introduced by Rep. Barney Frank, chairman of the House Financial Services Committee, would retool the Federal Housing Administration so that it could soak up more troubled loans. As outlined, the bill would allow the FHA to finance $300 billion of home loans and up to 2 percent of that amount is expected to be lost, according to a memo produced by Frank's office that cites research...

A lot of blame has sloshed around for the sub-prime meltdown, from greedy borrowers to greedy mortgage brokers to Alan Greenspan, but if you want the real culprit, it was the repeal of the Glass-Stegall Act. On November 12, 1999, the champagne must have been shooting from the walls at Citigroup, which had worked behind the scenes for over 30 years to get the act overturned. Snip - Snip Robert Rubin was (Clinton's) Secretary of Treasury, which had oversight over Glass-Steagall regulation. Days before he resigned, Glass-Steagall was repealed. Just over a year later, he became chairman of the Citi...

The subject of race is all over the media headlines. Reverend Jeremiah Wright told it like it is and conservative America could not take the strong medicine. Sen. Barack Obama had to prepare his greatest speech to address the frenzy that was and is taking place about it. Imagine, Black people having to explain to White America that there is a racial problem in this nation. That alone signifies the degree of importance this issue has. Denial can be the worst enemy and biggest problem. Most recently, Secretary of State Condoleezza Rice had to weigh in on the issue. She...

(snip) In February, Nautilus (nyse: NLS - news - people ) said it swung to a fourth-quarter loss of $47.7 million, or $1.51 per share, versus a profit of $12.9 million, or 41 cents per share, amid weak demand for home exercise gym equipment and a weak economic environment. (snip)

The median sales price of Southern California homes fell below $400,000 in March, as the real estate market's traditional spring bounce was far weaker than normal, a real estate research firm reported today. Houses and condominium units in Los Angeles, Orange, Ventura, San Bernardino, Riverside and San Diego counties sold at a median price of $385,000 last month... down 5.6% from February's $408,000, and down a record 23.8% from $505,000 in February 2007.

In a major speech on the economy last month, John McCain correctly diagnosed the mortgage crisis. “A sustained period of rising home prices made many home-lenders complacent, giving them a false sense of security and causing them to lower their lending standards,” he observed, adding, “Some Americans bought homes they couldn’t afford, betting that rising prices would make it easier to refinance later at more affordable rates.” “I have always been committed to the principle that it is not the duty of government to bail out and reward those who act irresponsibly,” McCain explained, “whether they are big banks or...

After saying last month that he was “prepared to examine new proposals” for addressing the mortgage crisis, John McCain instead came out on Thursday and unveiled a new plan of his own. With yet another monthly government report showing more job losses — and some economists describing the country as already in recession — McCain’s stepped-up response reflects the political peril of not doing enough to respond to homeowners. So in a speech at a window contacting business in Brooklyn, the presumptive GOP nominee rolled out a plan to aid those who have lost their homes or are in danger...

The Bush administration yesterday unveiled a plan to rescue 100,000 homeowners at risk of foreclosure by relaxing eligibility standards for government-backed loans and encouraging lenders to forgive a portion of their debt. The proposal was quickly criticized by consumer groups, who said it would do little to slow a mortgage meltdown that last year threw more than 1.5 million households into foreclosure. But it was embraced by key Democrats, who said the White House is acknowledging that more aggressive government action is needed to help the most hard-pressed borrowers who owe banks more than their homes are worth because of...

Making every American adult a homeowner was always imprudent and impractical; now that's obvious. Four years ago, President Bush declared: "The more people who own their home, the better off America is." And as his administration proposed federal guarantees for mortgages without requiring down payments, then-Federal Housing Commissioner John Weicher told me in 2004: "We will have some defaults, but nearly all those families will remain homeowners." The challenge is to tighten consumer-protection rules to discourage abuse and fraud, but not so much that only the better-off half of Americans can buy homes. One option is to require lenders to...

Growth worries prompt aggressive ease, but prompts vigorous dissent WASHINGTON (MarketWatch) -- When Federal Reserve officials gathered behind closed doors last month to set monetary policy, they confronted new projections of much slower growth, leading them to brush aside worries about rising prices and cut rates aggressively, according to a summary of the meeting released Tuesday. The officials learned that the Fed staff had slashed its growth forecast for 2008 in its projection prepared for the meeting. Although spending and production data early in the year wasn't much weaker than the staff had expected, "many other indicators of real activity...

NEW YORK (CNNMoney.com) -- Some members of the Federal Reserve are worried about the possibility of a "severe and protracted downturn" in the U.S. economy, according to the minutes of the central bank's latest minutes released Tuesday. The minutes show that some Fed policymakers are concerned that the problems in the "housing sector had deepened and that considerable uncertainty surrounded the outlook for housing." The Fed cut its key federal funds rate by three-quarters of a point at the March 18 meeting, its sixth rate cut since September. The Fed has been cutting rates in an effort to keep the...

You have enjoyed a debt-financed spending spree. But times are now harder: you find it impossible to roll over your debt; you have to pay much higher interest rates than before; or you find that the value of the assets you pledged as collateral is now less than your loan. What can you do? Provided enough of you are in trouble, you call for help from the fairy government-mother. Thus, George Magnus of UBS, among the wisest analysts of this crisis, has already observed, with some approval, that the crisis “is spawning an array of well scripted but highly unconventional...

Is the worst over? For the first time since financial turmoil began in August last year, some respected experts are beginning to speculate that the worst of the credit crisis may now be past. Stanley Fischer, governor of the Bank of Israel, says the Bear Stearns rescue might be a “turning point”. His view is shared by Larry Summers, the former US Treasury secretary, who wrote in the FT last week: “It is not unreasonable to hope that, in the US at least, the financial crisis will remain in remission.” Some analysts also agree. “Increase risk exposures,” JPMorgan advised clients...

District Attorney Scott Storey of Jefferson County, Colorado is one busy lawman. The local housing market is chock full of mortgage fraud varmints. One particularly pesky ring, operating for roughly 5 years, recruited hundreds of illegal immigrants to act as “straw buyers,” the lowest players in the mortgage fraud game. Ringmasters were mortgage brokers, realtors, and loan officers in local banks. Straw buyers were supplied with stolen identities, including drivers licenses, social security cards, and income tax returns. Some were given green cards of legal immigrants. What couldn’t be stolen was forged. False docs in hand, straw buyers obtained mortgage...

[snipped] Could tightened regulation of subprimes have contained some of the reprehensible, and presumably criminal, acts of lenders? Probably. But the broader crisis would likely have arisen even with increased micro-surveillance. The core of the subprime problem lies with the misjudgments of the investment community. Subprime did not break from its localized niche status until 2005. As Ben Bernanke recently put it: “The deterioration in underwriting standards …appears to have begun in late 2005.” I assume that judgment reflected the increased delinquency behavior that is now evident for loans initiated in late 2005 and subsequently. Subprime securitization exploded because subprime...

This is a very short article. But on the left side there is a picture one can hit and get percentage of subprime mortgages in your area as well as the percent foreclosed. For Minneapolis/St. Paul Minnesota 9-12% of all mortgages are subprime. Of these 17% are now in default.

A most astounding program has appeared on national Japanese TV, viewed by millions, in prime time. Just this last Friday night, April 4th. It is a new show called "Wakaru TV", or "TV You Can Understand". They take five or six topical news buzzwords of the day which are often heard, but not truly understood by everyone--and then they give a core explanation of the word, with graphics, statistics and reenactments.The Americans' "SUB PRIME DISASTER" was one of these words this last Friday night. What the Japanese moderator/announcer stated, and the panel agreed (some in true disbelief) showed that...

THERE IS NO question that the federal government plus many lenders and financial professionals shoulder a lot of the blame for our current economic crisis. But many of the individuals who are overloaded with debt need to take responsibility for their bad choices, too. Take credit card debt, for example. Certainly there has been a tremendous push -- for decades -- by financial institutions to get people to view credit cards as indispensable. And consumers gladly went along with no complaint, using other people's money until life's hardships -- a job loss, illness or divorce -- got in the way...

...But the real cause of the housing mess is a classic bubble in the housing market, the bursting of which has hammered lenders as well as borrowers. If the market had continued to rise, we never would have heard complaints about subprime loans. In fact, Washington had long encouraged these sorts of loans through the Community Reinvestment Act (CRA) as a way to make marginal - largely minority - borrowers into homeowners. What's the difference between socially responsible loans extending the American dream to deserving people with poor credit histories and predatory lending? It's whether those loans work out or...

ZURICH — Battle lines are forming in banking that pit bigger-is-better against break-up advocates, and some of the largest conglomerates – like subprime victims UBS and Citigroup – could fall prey. Such sprawling financial groups are facing pressure from regulators and shareholders to look back to the future and simplify, sell assets and focus on what they do well. Big banks have long held that they profit from broad strategies in two ways: one business unit often feeds another, and diversified activities lessen earnings volatility. But new risks have come to the fore with the subprime crisis which saw, for...

Ever since the government bailout of Chrysler in 1979-80, this country has been on a course of raising the safety net so that the market’s discipline, in a capitalistic economic system, has been truncated. We have witnessed a growing level of decisions that are based upon expediency rather than sound long-term decision making. Each time these expedient decisions are made, the level of risk within the U.S. economy has been increased. The market’s discipline is not allowed to work for fear of the potential economic fallout. In light of the above comments, the partners of FPA came to a unanimous...

Germany's second biggest state-owned bank, Bayerische Landesbank, revealed Thursday that the global credit crunch (more...) has cost the bank €4.3 billion ($6.7 billion) -- far more than it had previouly predicted and more than any German state-owned bank has suffered so far. BayernLB, which is based in Munich, reported writedowns of €2.3 billion in 2007 and another €2 billion for the first quarter of this year as a result of the fallout from the US housing market crisis.

SHANGHAI -- The city's banks have been told to exercise caution on mortgage lending to help combat speculation and stabilize property prices. Shanghai's banking regulator said on Sunday all local banks must abide by strict mortgage lending policies and spot checks will be conducted. The statement is a response to recent media reports that domestic banks were lowering lending standards to second-home buyers to boost mortgages, which bring a large share of bank profits. Analysts said the government will stick to its tightening policy to cool the overheated property market, although an investment slowdown and housing price dips have been...

Imagine listing your home for sale, but there are no buyers. You drop the price. Again. And again. The house across the street's now for sale. And the one two doors down, plus a dozen others in a two-block radius. Nothing's selling, and every time one home is reduced, all are affected. This property used to represent wealth. Now it's a wealth trap. Most of what you have is here, and with each day passed, it diminishes. Imagine your first home - a dream in granite and stainless. You bought it from the region's largest builder, for 1.5 per cent...

UBS set for further writedowns By Haig Simonian in Zurich and Chris Hughes in London Published: March 31 2008 22:01 | Last updated: March 31 2008 22:01 UBS is poised to reveal further writedowns of up to $18bn and seek a capital increase of about SFr13bn ($13.1bn) only weeks after shareholders approved a similar-sized injection from outside investors. Switzerland’s largest bank, which wrote off $18bn last year as it became the most serious European casualty of the US subprime mortgage crisis, has suffered from further falls in the value of mortgage and other credit securities during the first quarter, especially...

Kent and Mysti Cope met and fell in love working for one of the nation's top subprime lenders. Now, their life has been turned upside down after the sudden implosion of the subprime mortgage industry. Mysti was one of the last people out the door at New Century Financial Kent worked for several of the firms that helped give birth to the industry, which specializes in making loans to people with less-than-perfect credit Today, they're trying to get by on his unemployment benefits of about $450 a week, which covers only about an eighth of the basic payments they owe...

Construction skid sidelines Latino immigrant workersBy Susan Ferriss - sferriss@sacbee.co Published 12:00 am PDT Sunday, March 30, 2008 Story appeared in METRO section, Page B3 Jose Espinosa worked his way out of the strawberry fields of Central California in the early 1990s, determined to learn a profitable trade. **SNIP** Latino immigrants like Espinosa, legal and illegal, were the backbone of California's housing boom, and they are feeling the pain of what Espinosa calls "una recesion." **SNIP** About a quarter of the nation's construction workers are Latinos, according to the Pew Hispanic Center, a research institute in Washington, D.C. Pew also...

The US administration Monday proposed a broad overhaul of financial market regulation in an effort to restore confidence in a system reeling from the subprime mortgage mayhem. The announcement comes as the US regulatory system is blamed for failing to prevent rampant excesses in mortgage lending that set off what is now seen as the worst financial crisis in decades. "Government has a responsibility to make sure our financial system is regulated effectively. And in this area, we can do a better job," Treasury Secretary Henry Paulson said in unveiling the plan. Although the plan was announced amid a crisis...

Fear is the culprit So why hasn't the cure worked? The problem is that vital markets that most people never see - the constant borrowing and lending and trading among huge institutions - have been paralyzed by losses, fear, and uncertainty. And you can't get rid of losses, fear, and uncertainty by cutting rates. Giant institutions are, to use the technical term, scared to death. They've had to come back time after time and report additional losses on their securities holdings after telling the market that they had cleaned everything up. It's whack-a-mole finance - the problems keep appearing in...

Report States KPMG Allowed Fraud At New Century (RTTNews) - A report released Thursday suggested that auditor KPMG LLP either initiated accounting fraud at New Century Financial (NEWCQ.PK) or stood by as the mortgage lender committed fraud in 2005 and 2006. The independent report penned by court examiner Michael Missal had been requested by the U.S. Department of Justice. The massive report concluded that the mortgage lender "engaged in a number of significant improper and imprudent practices related to its loan originations, operations, and financial reporting." The study focused in on how New Century accounted for losses on troubled loans...

Careers vanish after subprime 'free fall' Kent and Mysti Cope were well-paid executives at subprime lenders who never thought the industry could disappear overnight. Now they're just trying to get by. By Chris Isidore, CNNMoney.com senior writer March 31, 2008: 5:30 AM EDT SAN CLEMENTE, Calif. (CNNMoney.com) -- Kent and Mysti Cope met and fell in love working for one of the nation's top subprime lenders. Now, their life has been turned upside down after the sudden implosion of the subprime mortgage industry. Mysti was one of the last people out the door at New Century Financial, once the nation's...

Sunday, Mar. 30, 2008 McCune Foundation loses $130 million in subprime mortgage crisis - The Associated Press PITTSBURGH — The McCune Foundation, one of the largest in western Pennsylvania, blames the subprime mortgage crisis for a $130 million loss in assets that has forced the foundation to suspend grant giving until at least June. In 2007, the foundation awarded $28.9 million in grants, benefiting institutions from Carnegie Mellon University to the Carnegie Museums of Pittsburgh. But this year the foundation has awarded no money so far because one of its major stocks, National City Corp., has lost almost two-thirds of...

This is a powerpoint presentation which explains the subprime debacle graphically (warning: graphic language, specifically a Norwegian villager using the F word). To view online using google click here: http://docs.google.com/TeamPresent?docid=ddp4zq7n_0cdjsr4fn&skipauth=true To download and view with powerpoint or save, click here: http://boombustblog.com/images/stories/what_happened_in_stick_figure_simplicity.pps

A year ago Irvine, Calif., was still riding high on the subprime boom; then almost overnight the industry and more than 4,000 good paying jobs vanished.___ IRVINE, Calif. (CNNMoney.com) -- The subprime mortgage meltdown has shaken the entire U.S. economy. But nowhere might the impact be as stark as Irvine, California, a planned community nestled between Los Angeles and San Diego. A year ago at this time, Irvine was home to 18 subprime lenders, including many of the leaders in the field, such as New Century Financial and Option One. Then, in what seemed like the blink of an eye,...

Last year, forty-three states reported increased home foreclosure rates. Nevada led the way for eleven consecutive months; in Clark County, which includes Las Vegas, nearly one in twenty homes is in foreclosure. Whole blocks have been foreclosed in Chicago. Nationwide, rates are nearing Depression-era highs--ravaging working- and middle-class neighborhoods that fell prey to the soft sell and outright chicanery of predatory lenders in the heyday of the housing boom. These lenders have targeted the most vulnerable--black and Latino borrowers have been twice as likely to receive subprime loans as whites; female homeowners, 30 percent more likely than male; black women,...

WASHINGTON - Congressional leaders are racing to push through an array of election-year housing measures that already have stirred up much political wrangling and the White House is examining its own plan to further help homeowners caught in the mortgage meltdown. With foreclosure signs prevalent and a Wall Street rescue reverberating, majority Democrats want the government to step in and back up to $400 billion in troubled loans. The goal is to help strapped borrowers and thaw a credit market plagued by uncertainty about the value of subprime mortgages made to people with spotty credit or low incomes. As lawmakers...

As a source of the current subprime mortage mess, economist Larry Kudlow and Wall Street Journal editorial board member Steve Moore point to the Carter-era Community Reinvestment Act (CRA) of 1977, which purported to prevent "redlining" -- that is, the denial of mortgages to minority borrowers -- by pressuring banks to make home loans in "low- and moderate-income neighborhoods." The two economists, speaking today on Larry Judlow's weekly radio show, noted how the CRA was the creation of the same liberal political establishment that is now blaming banks and Wall Street for the subprime mortgage crisis. The connection between bad...