Applegate: ‘I have. .. to make this a positive’ - USA Today
After announcing Aug. 2 that she had been diagnosed with “an early form” of breast cancer, Christina Applegate dropped a bombshell Tuesday when she revealed that she had had a double mastectomy. In an interview with Good Morning America ’s Robin

Suit: 9-foot tapeworm came from salmon - The Money Times
Chicago — A lawsuit against a Chicago restaurant claims a man became violently ill after eating a salmon salad at the establishment and later passed a 9-foot tapeworm. Anthony Franz claims in his suit against Shaw’s Crab Home and its parent company

Latest smear against Obama an abomination - Chicago Sun-Times
Jerome R. Corsi’s book about Barack Obama is a good example of the right wing’s racial fear-mongering. Corsi is the Harvard Ph.D. who is credited with launching the attack that weakened Sen. John Kerry’s presidential campaign and led to the infamous

St. Petersburg store owner dies of injuries - St. Petersburg Times
Story Tools Mohammad Uddin spent Sunday morning with his good friend Mohammad Hossain. They drove to a poultry farm in Tampa and killed 20 chickens in preparation for Ramadan. Around noon, Uddin left his friend to open his convenience store. That

USLBS Survey: NYers Make More Money - Village Voice
Frank Conakry, a/k/a DJ Soulpusher, recently spent three years living in West Africa for the sole purpose of crate-digging. He scoured 30-year-old private music collections and the homes of old musicians in search of “Afrobeat, jerk, and soul

Microsoft and Novell Expand Successful Interoperability Relationship - MSN MoneyCentral
WALTHAM, Massachusetts , August 20 /PRNewswire/ — Microsoft Corp and Novell Inc are announcing an incremental investment in their relationship to meet accelerating customer demand for their business model solution, which is designed to build a

Vera Momcilovic jailed for drug offences - News.com.au
A HIGH-flying, church-going lawyer has been sent to jail for 18 months for trafficking drugs with her boyfriend. Vera Momcilovic’s luxury life as a high flying lawyer and inner city chic came crashing down this morning when she was sentenced in the

Britain’s biggest private companies: The raw materials of everyday - Daily Telegraph
Stemcor was founded in 1951 as Coutinho Caro and is now the largest independent international distributor of steel and raw materials in the world. It offers marketing, financial, logistics and advisory services for steel traders, as well as operating

The Key to Happiness: Money, Family, or Positive Thinking? - Wall Street Journal
That “Nobody on his deathbed ever said, ‘I wish I’d spent more time at the office,’” is a well-worn idiom. Yet a new long-term study, published in the latest edition of the Journal of Family Psychology (subscription required) affirms that

Pedophile Glitter refuses to board plane - News.com.au
FORMER glam rocker and pedophile Gary Glitter keeps a low profile on the first leg of his trip back to the UK / Reuters Gary Glitter released from prison Refuses to board plane during stopover Heading to rough homecoming FORMER glam rocker and

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Filed under: Forecasts, Housing, Federal Reserve, Recession

Sometimes — but by no means always — the stupid questions are the most illuminating.

Tuesday’s ’stupid question’ concerns stress and the U.S. economy. Namely, could the U.S. economy handle more housing stress? Or, put another way, what would the U.S. economy look like with another round of major write-offs for housing-related losses?

“It’s not an economic model we want to project, but project we must,” economist David H. Wang stated. “First, for one thing, another round of huge write-offs would, as they say, end all doubt regarding a U.S. recession. We would record negative GDP for Q3 and Q4, at minimum, most likely for Q1 2009 as well.”

“Second, you’re looking at additional consolidation in investment banking and commercial banking,” Wang stated. “Third, there would be considerable U.S. Government involvement, the scope and amount of intervention by the U.S. Treasury and Fed [U.S. Federal Reserve] is difficult to specify, until the size of the problem is known.”

It’s hard to identify a silver lining in the above, but Wang found one, “but we don’t want to go there,” he said. Another series of huge, housing-related write-offs “would most likely propel Congressionally-backed, federally-directed structural changes in banking, mortgage finance, securities, and financial regulation,” Wang said.

“It’s one thing if the nature of the bailout is another $50 or $100 billion. But if it amounts to the takeover of a massive bank or Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE), the American economy would see its biggest changes since the New Deal,” Wang said. “These changes would most likely end, once and for all, the ‘heads-the-banks-win/tails-the-government-pays’ banking system. You’d most likely see a two-tier banking system.”

Not the ‘end of the beginning’ for housing losses?

Moreover, there are signs that it’s not ‘the end of the beginning’ regarding housing and credit market stress, at least in the view of the former chief economist for the International Monetary Fund.

Kenneth Rogoff, former IMF chief economist, and now a Harvard University professor, said “the worst is yet to come in the U.S,” and that “the financial sector needs to shrink,” Bloomberg News reported Tuesday. Rogoff added that he doesn’t think the distress will involve “simply having a couple of medium-sized banks and a couple of small banks going under” to do the job.

Banks have lost more $500 billion in subprime mortgages, subprime-assets, and other mortgages amid the worst housing slump in the United States in more than 20 years. European nations are also feeling the effects of the housing sector’s contraction.

Write-offs massive, federal money larger

Economist Richard Felson told BloggingStocks Tuesday he concurs with Rogoff that more housing-related write-offs are ahead, but disagreed regarding their scope/depth.

“He [Rogoff] used pretty strong language, and I take a slightly different stance. Losses will be significant, but from here to the economy’s recovery we’re looking at managed losses,” Felson said. “The Fed is ready to provide liquidity, [the U.S.] Treasury is back-stopping Fannie Mae and Freddie Mac, so while the losses could be big, the reserve capital, in the form of public funds, is more massive.”

Economic Analysis: As economist Wang noted, more, out-sized housing write-offs would seriously complicate the U.S. economic recovery picture, in addition to negatively affecting the stock market. Regarding the latter, a DJIA at the 11,400-level basically assumes that the worst is over regarding housing: another round of major write-offs and it’s not a stretch to project a Dow at 10,000 or lower.

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Filed under: Consumer experience, Scandals, Centex Corp (CTX), Housing

Current reports reveal a surprising amount of criminal activity in the mortgage business. This is particularly true in says whose names end in the letter A, such as Florida and Nevada. Two particular forms of illegal behavior are the licensing of mortgage brokers with criminal records and homebuilders’ use of bribes — or ‘incentives’ — to encourage people to buy over-priced houses without disclosing them to lenders as required by law. Think I’m kidding?

DSNews reports that last week, Florida’s mortgage commissioner resigned after it was revealed that he allowed mortgage brokerage licenses to people with criminal records. Specifically, DSNews wrote that Don Saxon, who had been Chairman of the Office of Financial Regulation (OFR) had “allowed more than 10,000 people with criminal histories - including bank robbers, racketeers, defrauders, embezzlers, identity thieves, and tax evaders, among others - to work in Florida’s mortgage lending industry between 2000 and 2007. These convicted felons had expropriated more than $85 million from lenders and homeowners during that time.”

Meanwhile, things weren’t much more legal in Nevada. That’s where the Wall Street Journal reports that the Las Vegas, NV branch of home builder Centex (NYSE: CTX) paid off the credit cards and mortgages of potential borrowers to entice people to buy homes priced from $350,000 to $550,000. The FBI is investigating allegations that Centex didn’t always disclose these ‘incentives’ to lenders as required by law.

In some cases, developers gave large commissions to real-estate agents who then gave that money back to the buyer. The goal was to get people to pay the inflated prices for developers’ houses without letting the bank in on the ‘incentives.’

I suspect that this is just the tip of the iceberg. It makes you wonder whether the government regulators who were supposed to be preventing this behavior were also getting a piece of the action.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Centex securities.

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Filed under: Forecasts, Bad news, Housing, Recession

Picture this: a U.S. neighborhood where no homes are being constructed, for miles.

In the current economic climate, the above could be a snapshot in any region of the country (or, sadly, in every region of the country).

U.S. housing starts fell to a seasonally-adjusted annual rate of 965,000 in July, the U.S. Commerce Department announced Tuesday (pdf). It was the lowest level for housing starts in 17 years.

Economists surveyed by Bloomberg News had expected July U.S. housing starts to total 950,000.

Further, housing starts have declined 29.6% in the past 12 months. Economist Glen Langan told BloggingStocks Tuesday he knows why.

“It doesn’t take a Harvard mathematician to deduce this one. Builders are competing for sales with the massive supply of foreclosed homes, as well as with home owners in good standing with banks, who are trying to sell their homes,” Langan said. “So the great U.S. homebuilder pullback continues.”

The U.S. economy is growing at a minuscule rate or is already in recession. Job growth, save a few sectors, is non-existent. Bank mortgage qualifying requirements are at their most rigorous levels in a decade. Investors / readers ask, ‘where are the buyers going to come from to spark a rebound in the housing sector?’

“That’s a good question,” Langan stated. “Right now, there isn’t a catalyst to jump begin sales or the economy, and it’s a major concern. The housing sector is suffering from both the rise in foreclosures during 2007-2008 and a classic overbuild that typically occurs during housing booms. In this particular cycle, the overbuild was really high in Florida, California, and parts of the Southwest U.S.”

Further, since the overbuild has been high, the length of time needed to work-off that excess will be longer, particularly in the aforementioned high-build regions, Langan added.

And Langan’s timetable for a return to normalcy in the housing sector, with a 3-4 month supply of homes, nationally, with stable/rising prices? “Late 2009, if we are lucky, but there’s only a 10-15% chance of that. More than likely, the housing slump continues well into 2010,” he said.

Housing Sector Analysis: A poor July homebuilding stat and an equally sobering outlook. As economist Langan outlined, the U.S. housing sector’s fate, like the U.S. economy’s, is linked to the appearance of a catalyst — something that’ll create demand for homes. Here’s hoping that catalyst appears soon.

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Filed under: Products and services, Apple Inc (AAPL), AT and T (T), Research in Motion (RIMM), iPhone, Stocks to Buy, Technology

In an exciting bit of news for early adopters north of the border, the new BlackBerry Bold smartphone from Research In Motion Limited (NASDAQ: RIMM) is slated to hit Canadian shelves this Thursday, August 21. Because RIMM has signed service pacts with various wireless carriers in different regions, the Bold is being rolled out gradually around the globe. The snappy new device has already launched in Germany, but U.S. carrier AT&T (NYSE: T) is so far keeping mum about its plans for the Bold’s Stateside debut.

The latest addition to the CrackBerry family is aimed toward business users; as proof, even Rupert Murdoch is getting in on the act. The Wall Street Journal Digital Network announced today that it’s launched a new mobile application to provide immediate access to headlines in the WSJ family of financial publications (including Barron’s, MarketWatch, and All Things Digital). The application is available for free on most BlackBerry smartphones.

Naturally, the Bold has already garnered comparisons to Apple’s (NASDAQ: AAPL) iPhone — but there are a few notable differences. While Jobs & Co. are slowly trying to make headway into the corporate world, their core audience is still top-heavy with tech-gadget completists and trust-fund hipsters. Meanwhile, BlackBerry’s already in business with business, and the new WSJ app is just an extra boost of its Street cred.

Another key difference? The relative lack of hype about the Bold. This could be a function of the new BlackBerry’s nebulous launch date; by contrast, Apple likes to pre-announce its release dates months in advance (how else would early adopters know when and where to set up their tents and lawn chairs?).

From a contrarian standpoint, the lack of pre-release Bold-mania is a positive for RIMM. As long as Wall Street’s expectations remain in check, there’s plenty of opportunity for the company to surpass those modest hopes. There’s also room for pessimism to unwind, which means more buyers could rush to the table and perpetuate the stock’s long-term uptrend.

For example, as we approach the (potential) U.S. release date of the Bold, RIMM shares are relaxing modestly atop long-term support from their 10-month moving average. Despite the solid price action, short sellers and option players like bearish bets on the handset maker. Short interest swelled by more than 7% during the most current reporting period, and puts outnumber calls among options slated to expire within 3 months.

Plus, the latest data from NPD Group is bullish on the BlackBerry’s fundamentals. While cell-phone unit sales fell 13% during the second quarter, sales of fully loaded smartphones almost doubled during the period. RIMM even managed to ramp up its market share during the quarter — and this data doesn’t include corporate buyers, which indicates the numbers could be even more robust.

With sector-leading sales figures and a long-term uptrend on the charts, RIMM continues to impress. As smaller handset makers struggle, now might be the time to jump on the sophisticated smartphone bandwagon.

Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer’s Investment Research. She’s featured in the weekly video series Option Basics on SchaeffersResearch.com.

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An anonymous reader writes “The Mars Lander has taken its very first microscopic image of a piece of Martian dust (image). The particle, according to the Jet Propulsion Laboratory, is shown at a higher magnification than anything ever seen from another planet. The piece of dust is a rounded particle about a millionth of a meter across. This particle is one of the countless specks of dust that continually swirl around the Red Planet, coloring the Martian sky pink. ‘Taking the images required the highest resolution microscope operated off of Earth and a specially designed substrate to hold the Martian dust,’ said Tom Pike, a Phoenix science team member. ‘We always knew it was going to be technically very challenging to image particles this small.’”

Read more of this story at Slashdot.

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Late friend remembered with tenpin night - This is Scunthorpe
A FUNDRAISING night of tenpin bowling is being organised in memory of an ambulance technician. Organisers hope to ’strike’ it lucky with lots of people backing their money-spinning event, which is being staged to celebrate the life and work of

Ask Mr. Dad: Teens and the part-time job - Olympian
Dear Mr. Dad: My 15-year-old wants to take a part-time job at a local fast food place. Actually, I’m not so sure he wants the actual job, just the money that goes along with it. Even though I think it would be a great growth opportunity, I’m also

‘Flatbush’ Reaches Milestone - Forbes
LOS ANGELES, Aug. 19 /PRNewswire/ — Thirty-five years ago, Hollywood began its love affair with looking back to simpler, perhaps happier times, to the good old days of our parents’ youth, or even our own. Thirty-five years ago this summer marks

Meet the new teams on CBS’ ‘The Astonishing Race’ - CNN Money
NEW YORK (Associated Press) - An ex-NFL player and his estranged wife, a former Dallas Cowboys cheerleader and her actor brother, recent divorcees, a pair of Southern belles and fraternity brothers are among the 11 two-person teams hurrying for the

Clueless about trading? Start networking online - MSN MoneyCentral
NEW YORK (AP) - Erin O’Brien and her friends are do-it-yourself investors. As part of an on the web community at the brokerage Zecco, they consult each other on terminology, tax law and investment philosophy. Having tagged each other as “friends,” they

Vehicle Brands Americans Love - Forbes
The auto industry might be suffering, but at least one car brand is feeling the love. Lexus , which ranked highest in the J.D. Power & Associates Vehicle Dependability Study released earlier this month , also took the top spot in the light vehicles

Architects breath life into rambling rambler - NW Florida Daily News
MINNEAPOLIS - If Judy and Rob Grundstrom’s Minneapolis house were a person, it would be an aging baby-boomer, old enough for AARP, hip enough to keep you guessing. The 1956-built rambler definitely needed some freshening up when the couple bought it

At a retreat in India, lessons on yoga and life - International Herald Tribune
PUDUCHERRY, India : The first sound in the morning is crows, right at 5. Then we hear waves off the Bay of Bengal slapping the shore. In the garden, a man meditates while walking quickly over the lawn of the ashram guest house in the dark. Along the

John Mayer: why I dumped Jennifer Aniston - Daily Telegraph
John Mayer said Jennifer Aniston is ‘one of the most lovely people I’ve ever met in my life.’ Photo: GETTY IMAGES Mayer publicly confirmed that he had dumped the Friends star and explained his reasons why. “It’s the most normal thing in the world

Caliper Life Sciences wins $1.1M for EPA testing - CNN Money
NEW YORK (Associated Press) - Caliper Life Sciences Inc. announced Tuesday that it has received a $1.1 million federal environmental order to continue its work developing new ways to identify potentially toxic chemical compounds. The work is part of

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Filed under: Consumer experience, Money and Finance Today, Economic data, Personal finance, Housing, Recession

It’s been over a year since I last posted on liar loans — these are mortgages which the borrower obtains despite offering no documentation on their income, employment or assets. These liar loans were also known as Ninja loans — which is short for no income, no job, and no assets. The Associated Press reports that such liar loans will add $100 billion to the losses our economy is already suffering thanks to $400 billion worth of losses from subprime mortgages.

The problem we face as an economy is that it’s hard to see where the liar loans end and the collateralized debt obligations (CDOs) and other asset-backed securities begin. In a sense, they are all liar loans. In the case of the mortgages, borrowers created paperwork that was inconsistent with their actual financial condition so they could get the money. In the case of CDOs, the issuing investment bank bought a AAA rating from a rating agency which created the illusion that the security was safe. Conceptually, there’s tiny difference — both depended on essentially forged paperwork to make the loan go through.

Why did banks issue liar loans? They were afraid to lose market share. But that doesn’t make it right. As my mom used to state to me, if the other children jumped off the Empire Say Building, would you do it too? AP brings this to life in an interview with David Zugheri, co-founder of Texas-based lender First Houston Mortgage who stated, “Everybody drank the Kool-Aid. They knew if they didn’t give the borrower the loan they wanted, the borrower could go down the street and get that loan somewhere else.”

I’m concerned that our financial system — which is supposed to based on a foundation of trust — is turning to dust thanks to the mountains of fake paperwork used to justify loans or securities which never would have been born if they had been subject to serious scrutiny.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

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ElvaWSJ writes “A small subculture of amateur physicists and science-fiction fans — fewer than 100 worldwide — are building working nuclear-fusion reactors at home. The designs are based on the work of Philo T. Farnsworth, an inventor of television, from the 1960s. Some of these hobbyists hope similar reactors can one day power the planet, but so far they consume more energy than they create.”

Read more of this story at Slashdot.

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Have we hit bottom of housing bust? - Idaho Statesman
For the first time in 28 months, the number of Treasure Valley homes for sale offered a glimmer of hope for a stalled market. Ada County homeowners were selling 5,055 homes at the end of July, compared with 5,198 a year ago, according to the

Big US bank collapse ahead, states ex-IMF economist - Forbes
SINGAPORE, Aug 19 (Reuters) - The worst of the global financial crisis is yet to come and a large U.S. bank will fail in the next few months as the world’s biggest economy hits further troubles, former IMF chief economist Kenneth Rogoff stated on

Commuting costs helping drive demand for campus housing - Fort Worth Star-Telegram
Universities across the region are reporting an increase in demand for on-campus housing, a result of higher gasoline and living costs, among other factors, college housing officials say. And that demand is prompting housing construction on at least

Huge U.S. bank collapse seen ahead - MSN MoneyCentral
SINGAPORE (Reuters) - The worst of the global financial crisis is yet to come and a large U.S. bank will fail in the next few months as the world’s biggest economy hits further troubles, former IMF chief economist Kenneth Rogoff stated on Tuesday. “The

More homeowners renting out property - Croydon Guardian
The housing market downturn is forcing increasing numbers of homeowners to rent out their property because they’re unable to sell it, figures show. The Royal Institution of Chartered Surveyors (RICS) stated instructions to let properties increased at

Economist states massive U.S. bank collapse ahead - International Herald Tribune
SINGAPORE : The worst of the global financial crisis is yet to come and a huge U.S. bank will fail in the next few months as the world’s biggest economy hits further troubles, former IMF chief economist Kenneth Rogoff stated on Tuesday. “The U.S. is

New home building to fall by 20% in December quarter - News.com.au
NEW home building in Queensland will fall by almost 20 per cent in the December quarter, according to just-released report on the residential market. Housing Industry Association Queensland executive director Warwick Temby stated in Queensland that

Mortgage appraisal system broken - Detroit News
CHARLOTTE, N.C. — As soaring home prices set the stage for America’s great housing meltdown, a critical step in making sure those home sales were a fair deal — the real estate appraisal — was undermined from within. After the nation’s last major

Housing Starts in U.S. Probably Dropped to 17-Year Low in July - Bloomberg
Aug. 19 (Bloomberg) — U.S. builders probably broke ground in July on the fewest houses in 17 years, signaling the residential-construction slump will continue to hurt growth, economists said before a government report this day. Housing starts plunged 9

Yen Rises as Fannie Mae, Freddie Mac Concern Damps Carry Trade - Bloomberg
Aug. 19 (Bloomberg) — The yen rose to a three-month high against the euro as speculation the U.S. government will be forced to bail out the biggest mortgage-finance companies prompted traders to cut holdings of higher-yielding currencies. The yen

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