Links 05/15/2009

Clueless Economists Say Recession Will End By Autumn – Clusterstock

The worse news: economists are just as crappy as everyone else at predicting the future.

Six Reasons Housing Could Rally – Minyanville

America: Home of the (Debt) Free – Minyanville

After years of gorging on cheap credit, Americans are reverting to more responsible fiscal lifestyles. Savings are up, spending is down - which is as it should be. This is reducing the urge to borrow and thwarting Washington's plans to pass the bailout buck down to taxpayers.

Mom-And-Pop Loan Sharks Being Driven Out By Big Credit-Card Companies – The Onion

Frank Pistone is part of the dying breed known as the American Loan Shark. Not so long ago, the loan shark flourished, offering short-term, high-interest loans to desperate people with nowhere else to turn. Today, however, Pistone and countless others like him are being squeezed out by the major credit-card companies, which can offer money to the down-and-out at lower rates of interest and without the threat of bodily harm.

European Economy Shrinks 2.5% in Quarter – The New York Times

Penguin kidnaps mortal enemy – BBC News

My Personal Credit Crisis – The New York Times

If there was anybody who should have avoided the mortgage catastrophe, it was I. As an economics reporter for The New York Times, I have been the paper’s chief eyes and ears on the Federal Reserve for the past six years. I watched Alan Greenspan and his successor, Ben S. Bernanke, at close range. I wrote several early-warning articles in 2004 about the spike in go-go mortgages. Before that, I had a hand in covering the Asian financial crisis of 1997, the Russia meltdown in 1998 and the dot-com collapse in 2000. I know a lot about the curveballs that the economy can throw at us.

Five Things for Friday, May 15 – Minyanville

Mexican Data Say Migration to U.S. Has Plummeted – The New York Times

MEXICALI, Mexico — Census data from the Mexican government indicate an extraordinary decline in the number of Mexican immigrants going to the United States.

The recently released data show that about 226,000 fewer people emigrated from Mexico to other countries during the year that ended in August 2008 than during the previous year, a decline of 25 percent.

GM Is Said to Plan Shutdowns for 1,100 U.S. Dealers – Bloomberg

Obama urges Congress to act on credit card bill – The Associated Press

California's Budget Deficit: What The Hell Is It? – Mish

Note that propositions 1A through 1F are supposed to raise $16 billion. However, it's important to remember that the $16 billion supposedly raised by the propositions will be spread over 4 years to miraculously end at that point in time as if every California problem will be cured.
How much of this is front loaded is anyone's guess. If you can untangle that mess, please be my guest.

I have been tracking California for quite some time and this is how I look at the situation: California is sinking further into the hole at a rate of $2 billion per month. I see no end in sight to the carnage. Thus, if California passes the propositions raising $16 billion, it will need another $24 billion (minimum) a year from now.

The solution is not more taxes, the solution is more spending cuts. If you vote for these propositions you are nuts. Schwarzenegger's layoffs are cleverly timed to persuade voters to increase taxes. Don't fall for it.

Hoping for a first: an East Bay community that would do without cars – The San Francisco Chronicle

Plan to Encourage Banks to Allow Short Sales – The Washington Post

In those cases, the lender could get up to $1,000 for allowing a short sale. In such deals, the lender accepts less than the value of the mortgage in what has usually been a time-consuming and cumbersome process. Under the plan, the government will also share the cost of extinguishing second liens on the property, such as those for second mortgages.

If the short sale fails, the borrower can turn over their house keys in a process known as "deed in lieu of foreclosure," transferring ownership to the lender without a foreclosure. At the end of the process, the homeowner could be eligible for $1,500 for relocation expenses.

5-12 April Foreclosure & Servicer Tracker Report – The Field Check Group

Hot Chicks…Legal or Not, Chickens Are the Chic New Backyard Addition – The Washington Post

House Price Puzzle: Mid-to-High End – Calculated Risk