Monday, July 28, 2008

Lies, Damned Lies, and Whatnot...

From the Department of IMPENDING DOOM:

Foreclosures in region increase 66%
And, from the Certainly-Bad-News-But-Definitely-Not-Something-To-Crap-Your-Pants-Over Department:
Pittsburgh foreclosures stay behind the national average
Zee facts:
In the five-county region, 418 homes were lost to foreclosure in June 2008, which is 167 more than in June 2007, according to RealSTATs, a real estate information company.
Considering that there are... well, at least more than 500 homes in the City of Pittsburgh alone...many, many more I would say... actually, tens of thousands more...I would say that this isn't necessarily something to get all that worked up about. Granted going from 351 to 418 foreclosures is an increase, but (and this is the important bit) it all depends on the context.

The Business Times, however, puts Chicken Little into perspective:
Pittsburgh ranks 79th out of the country's 100 biggest metro areas in foreclosure rate, with one in every 383 households in foreclosure, according to the study by Irvine, Calif.-based RealtyTrac Inc.

Other Rust Belt cities fared far worse. Cleveland ranked 26th; Columbus, Ohio, ranked 31st; and Detroit ranked 12th on the list.

Pennsylvania as a whole is near the middle of the pack in terms of foreclosures. The commonwealth is ranked 31st, with one in every 524 Pennsylvania households receiving foreclosure notice during the quarter, according to the report.
So there you go: yes, there's been an increase in foreclosures and, yes, that's bad, but, no, it's not that bad. It is certainly not time to bludgeon our bankers to death and feast on their gooey entrails.

If anything, a good banker needs to be marinaded for at least 12 hours and roasted.

Now, hysterical newspaper reporters, well that's a different story...

Saturday, July 26, 2008

John McCain on Foreign Travel

I don't usually do this, but the irony (I think irony, could be pathos) was too good to pass up. From TPM, via a Time Magazine article dated March 21st, 2008:

Flanked by fellow Senators Joe Lieberman and Lindsey Graham, McCain noted they'd undertaken their week long fact-finding tour of Iraq, Jordan, Israel, England and France as members of Congress's Armed Services committee -- not as some sort of campaign foreign road show. Perhaps, but discussing international affairs with foreign leaders and enhancing McCain's presidential hopes aren't mutually exclusive. Still, McCain acted the apt pupil. "I wish every senator, every senator would make this same trip," McCain said, noting several of the first-hand educational experiences he'd gotten. "They'd be better informed."
Somebody better tell Senator McCain that you can use the Internet* to look stuff up now. His best bet is probably to say nothing until November.

*And that the Internet is on computers* now.

**And that a computer is a television with a typewriter attached to it

Thursday, July 24, 2008

Aw Craps...

I didn't think that gambling was supposed to be a spectator sport, but apparently we're all doomed, DOOMED! From the P-G:

HARRISBURG -- The latest deal to save a casino in Pittsburgh faces major uncertainty by as early as July 30 if it is not approved by then by the state Gaming Control Board.

That's what Chicago billionaire Neil Bluhm today told a state Senate committee that is looking into the deal where Mr. Bluhm and other investors would take over for Don Barden, who now holds the slots license for the partially built North Side casino.

"We have a situation where the project could be in default by July 30. The bridge lenders have sent a notice of default and foreclosure. They have threatened to sell the property in foreclosure. This project could go into bankruptcy. That would mean a long delay," Mr. Bluhm said....
All of which is, you know, super for the City when, of course.

I mean, it's not like Bluhm is going up to the Legislature and the Gaming Board, sticking a gun to their head and saying 'approve this or die'. It's not that at all. Rather, he's going up to the Legislature and the Gaming Board, sticking a gun to their head and saying 'approve this or you lose the casino, the tax revenue, property tax relief, money for the new arena and any money that would have gone to the Hill District.' It's not like it's a threat or anything.

And then, of course, there's this:
Mr. Bluhm's comments came a day after Standard and Poor's rated his firm, Holdings Gaming Borrower, at "B" -- often referred to as "junk bond" level, saying the firm's fixed-charge burden for the property is high, that current economic conditions are weak and that its first-loss term loan holds a recovery rating of 6, "indicating that lenders can expect negligible (0-to-10 percent) recovery in the event of a payment default."
Which, I'm sure makes everyone feel real confident.

Now, I'm not saying that this Bluhm guy is bluffing, but, as a Government apparatchik, I've seen more than my fair share of clients that come into my office, scream hysterically that if approval is not granted on their particular project in the next thirty seconds, blood will rain down from the skies, the seas will dry up, and Carrot Top will star in a major motion picture, only to see, when I do grant the appropriate approvals, the projects languish anyway.

So, I say: burn the Casino down and sell the license to Wilmerding or Pennsbury Village or something.

Penalty for Early Withdrawl


National City Corp., Cleveland, reported a net loss of $1.8 billion Thursday for the second quarter, more than 10 times the hit it took in the first quarter. Net income for the second quarter of 2007 was $347 million. National City (NYSE:NCC) posted a loss of $2.45 per diluted share, far worse than analysts' estimates of -26 cents; the company made 60 cents per diluted share a year ago.

Brought low by the subprime crisis and its troubled mortgage portfolio, National City has battled takeover rumors, talk of division sales and a skidding stock price that has traded at a range of $2.99 to $31.58.
Makes me wonder how many of those foreclosures in Cleveland are NatCity products and whether it's time to start investing in the repo industry.

I Got Your Ride Sharing Ride Here

Fluff Department over at the P-G:

City Councilman Bill Peduto gave up the keys to his black Mini Cooper yesterday, joining 16 others in taking the "low-car diet" that is being promoted by Zipcar in 12 cities nationally...

Mr. Peduto said he replanned his week.

"Monday and Tuesday, I will ride-share with Dan [Gilman, his assistant]. Wednesday and Thursday, I'll take the bus, and Friday is the bike" that he dusted off and had retuned. For bike day, he said, "I changed all my Friday meetings so they are in my district."
Not to belittle the need for Americans to stop suckling from the teat of the Automobile industry, but it's not like Otis is going to have a whole lot of trouble here. I mean, if you look at his neighborhood (Point Breeze - without giving away his home address) it has a pretty decent score at, and if you look at where he *really* lives (Mardi Gras), it has a very walkable score. Now, setting aside all my problems with, it seems that Otis will actually have a really easy time at not using his car.

What would really be challenging would be if he was a single, low-income parent in, say, Fairywood, and then see how easy it would be to survive.

Perhaps it's not Bill's fault that he's Mayor of Shadyside, but I think it serves to illustrate the disparity that we have in the City, and may prompt people to question both urban design and the disbursement of service to all residents.

Landmark Announcements

So I saw this in the paper the other day:

An eight-month-old fund that has already loaned $1.6 million to nonprofit groups that boost urban areas will dramatically ramp up its lending, officials said yesterday.

That's because PNC Financial Services Group has loaned $5 million to the Urban Economic Loan Fund, part of Landmarks Community Capital Corp. Landmarks plans to quickly turn that money into capital for street-level revitalization.

"We expect to have a good portion of the $5 million [loaned] out in the next 60 days," said Howard B. Slaughter Jr., chief executive officer of Landmarks, which has as its parent organization the Pittsburgh History & Landmarks Foundation...

Loans from the fund are geared toward neighborhoods in communities throughout the Pittsburgh region. PNC's low-interest, five-year loan allows the fund to offer below-market rates and flexible terms, and to back more risky projects than banks would normally accept, Mr. Slaughter said.
Now, I'm a little leery about all this?

Why you might ask? Well for a couple of reasons:

(1) I'm no expert on housing finance in inner-city neighborhoods, but one must think that this kind of development must be inherently risky, otherwise banks would be taking the lead on it and foundations and the City would be taking a back seat. Compound that with the current state of the lending market, and I have this sneaking suspicion that either the risk hasn't been thought out *or* there's some sort of massive underlying source of funds that's propping up this program.

(2) I'm always suspicious of the tentacles of the Scaife Leviathan, whether that's the Trib, the Scaife Foundation(s), the Allegheny Institute, or the PH&LF and subsidiaries. I can't help think that there's some sort of underlying evil at play here, possibly to undermine and discredit Lukey...

Well, undermine and discredit *more*.

One foreclosure on any one of these projects, and its a big black eye for Luke. Or, alternatively, a string of successful projects and it discredit's the Mayor's economic development agency: the URA.

(3) Dr. Slaughter, until 8 months ago was the head of Fannie Mae in Pittsburgh. You know who Fannie Mae is, right? Not to say that there's any relationship here, but he really got out of there at the right time, didn't he?

Anyway, my Spidey Sense is killing me...

Monday, July 21, 2008

Onorato Wants New Casino Developer to be "Committed"

We couldn't agree more... but suggest that certain State and Local officials be "committed" as well.

War Against Windshield Flyers

Councilman Bruce Kraus will introduce legislation to ban fliers placed on windshields. Personally, I'm in agreement with him, so to get the word out, I've printed out thousands of the following and put copies on the windshields of every car in my neighborhood. I suggest that everyone else do the same.

Click to embiggen and freespeachify

The Dog That Has Not Barked...yet

The big local story that did not break over the weekend was the announcement that Pat Ford would be investigated by the State Ethics Committee or not. We did hear, however, that Mr. Ford has been talking with the U.S. Attorney about some unspecified something, whatever that means.

So, I don't know what the conventional wisdom is on this kind of thing. If I remember correctly, the longer jury deliberations go on for, the greater the chance is that the defendant is found not guilty. Not to say that anyone is guilty of anything here, but it's the only comparable that I have to work with. The fact, however, that there's been no announcement as of yet, may make one think that there is actually something that needs investigating.

Of course, the longer that this thing lingers, whether that thing is an ethic investigation or a grand investigation into the Housing Authority (of which Mr. Ford was chair), the greater the chance is that this thing will impact next year's mayoral race. Lord knows that it would not be good to have this kind of albatross around Luke's neck come next November.

...I mean May.

Friday, July 18, 2008

Tuesday, July 15, 2008

Eldery Greenfield Residents Begin Queuing in Bread Line

In the wake of months of nationwide financial troubles, elderly residents of Pittsburgh's Greenfield community have already staked out their place in front of the Greenfield Senior Center waiting for the inevitable breadlines.

"I was 14 when I last lined up for bread," says Elmer Boehm of Lydia Street. "Me and my Pappy stood in line for six hours for a crust of dry bread and a cup of soup. So, I'll be damned if some 60-something hooligan is going to take my spot."

Dolores Hoffmann of Greer Street offered similar sentiments:

"We all slept in one room, no lights, barely any heat and only a half an apple core to sustain all thirty-seven of us in our house. If Fannie Mae and Freddie Mac continue their downward spiral, I don't want to be stuck eating squirrel again."

The line of citizens awaiting free bread and soup to be doled out by the government in the hopes of alleviating the upcoming Depression now stretches half a city block. Several people have already begun to build permanent encampments. There have been rumors of several fights amongst the elderly.

Many in the economic community see the actions of these Greenfield residents to be a bit extreme according to Robert Waltz, professor of economics at Carnegie Mellon University.

"You see, back during the early days of the Great Depression, you had a corrupt Government, corporate kleptocracy, a failing banking system, large scale environmental degradation, and a stock market that was based on speculation. Today you have a situation that's totally different, I'm sure."

Still, many see the pre-emptive queuing as a smart move.

"I'm actually glad I'm out here," says Brian Klapchick, 23, of Loretta Street. "I mean, I've learned all the words to 'Brother Can You Spare a Dime'. And, I figure, it's not like the degree in English is getting me anywhere other than Starbucks anyway."

Monday, July 14, 2008

Bush Apologizes for Berlusconi insult

(BBC Newswire) Washington D.C. - The White House has apologized to Italian PM Silvio Berlusconi for a briefing describing him as a political "amateur" who is "hated by many".

The "insulting" biography was included in a press kit distributed to reporters traveling with President George W Bush to a meeting of world leaders in Japan.

The four-page description of Mr Berlusconi had been taken from the Encyclopedia of World Biography.

It refers to the Italian prime minister as a man "hated by many but respected by all at least for his bella figura (personal style) and the sheer force of his will".

It says Mr Berlusconi was said to be "regarded by many as a political dilettante (amateur) who gained his high office only through use of his considerable influence on the national media".

Acknowledging the error, White House spokesman Tony Fratto issued an apology.

Mr. Fratto, however, refused to apologize for several other comments about other attendees that appeared in the same press kit:

On Canadian Prime Minister Stephen Harper: "Not a bad leader for a second rate country. Gets really snippy when you ask him if he's ever going to try to get the Stanley Cup back. Does not respond well to Dudley Do-Right jokes."

On German Chancellor Angela Merkel: "Sweats less than most fat chicks; doesn't like to be touched. Mentioning the War, not recommended."

On UK Prime Minister Gordon Brown: "Doesn't look at all like any character from Wuthering Heights. Does look like a Muppet with Downs Syndrome."

On French President Nicolas Sarkozy: "A creepy frog speaking elf, but with a hot wife."

On Russian President Dmitry Medvedev: "Unlike his predecessor, your eyes don't bleed when you talk to him."

On Japanese Prime Minister Yasuo Fukuda: "Well, a Fuk-a-you too."

And finally, on European Commission President Jose Manuel Barroso: "Cocksucker."

Belgians to Acquire Anheuser-Busch; Belgian Government Resigns En Masse

(BBC Newswire) Brussels, Belgium - Belgian Prime Minister Yves Leterme is tendering his government's resignation to the king after the recent move by Belgian firm InBev to buy U.S. brewer Anheuser-Busch.

King Albert II will have to decide whether to accept his resignation.

Mr. Leterme had assumed office with an agenda to devolve governmental powers to the regions and maintain the "purity of essence" of Belgian Beer.

The governmental coalition which put the Prime Minister into office has fractured into the Dutch speaking socialist of the North who believe that the move by InBev is a move to solidify the country as the world leader in fermented beverages, and the French speaking Wallonians who think that drinking Budweiser "is like having sex in a canoe."

While the announcement by InBev that they do not plan on changing Budweiser or Bud Light has placated most Americans, riots have broken out in Brussels and several dozen City blocks remain ablaze at this hour.

The riots are the worst beer related violence in the Country since the Hefeweizen Putsch of 1854, which resulted in the execution of the King of Beers.

Tanking Made Simple

Slipped in between the news of the Freddie Mac and Fannie Mae debacle was this little bit of news from Wall Street:

The financial sector took another beating yesterday as concern mounted over the vulnerability of regional banks in areas hit hard by the housing downturn, analysts said. The pressure on financial stocks is "almost unmerciful," said Andy Brooks, head equity trader at T. Rowe Price in Baltimore. "There is a lot of anxiety, and it is being fueled by a lot of people. For those of us who are longer-term investors, it's been a challenging time."

Trading in National City, a Cleveland-based bank, was halted early yesterday after the price fell more than 20 percent. In a statement, the bank said its capital position was strong. Its stock closed down 15 percent on the New York Stock Exchange after trading resumed.
This is actually quite troubling news for a bank with a very large presence in the Pittsburgh Region. Indeed, through a series of acquisitions and mergers throughout the 80s and 90s, it became our 2nd largest bank (behind PNC).

The company has already been hit hard by the mortgage turbulence, so the situation (which was bad before) seems down right scary now.

Sunday, July 13, 2008

Bank Threatens Forclosure on Freddie Mac

Washington D.C. (Reuters) - Despite an impassioned plea from its President & CEO, the Federal National Mortgage Association, commonly known as Fannie Mae, is being driven into foreclosure by it's primary shareholder according to reports.

Henry F. Potter said that he had made had decision “to promote the availability of home mortgage credit during a period of stress in financial markets.”

CEO George F. Bailey was highly critical of the move, which he characterized as an attempt of Potter to gain complete control of Fannie Mae.

"If Potter gets hold of Fannie Mae there'll never be another decent house built in this town. He's already got charge of the bank. He's got the bus line. He's got the department stores. And now he's after us. Why? Well, it's very simple. Because we're cutting in on his business, that's why. And because he wants to keep you living in his slums and paying the kind of rent he decides."

Bailey's words did little to sooth worried investors, who demanded to know where billions of dollars of investment have gone to over the last 10 years.

"You're thinking of this place all wrong. As if I had the money back in a safe. The money's not here. Your money's in Joe's house...right next to yours. And in the Kennedy house, and Mrs. Macklin's house, and a hundred others. Why, you're lending them the money to build, and then, they're going to pay it back to you as best they can."

Bailey has already made a call to the Federal Reserve alleging that Mr. Bailey has misappropriated funds.

George Bailey became CEO of the multi-billion dollar government backed corporation at the death of his father peter Bailey. Even though the younger Bailey was determined to "see the world", personal responsibility lead him to take over Fannie Mae. Mr. Potter has tried on several occasions to gain controlling interest in the firm.

After his brief press conference, George Bailey was unreachable for comment.

Minor investors in Fannie Mae have already begun to raise the nearly $5.4 Billion necessary to bail out Fannie Mae, mostly through donations of $5 or less.

Thursday, July 10, 2008

Business Casual Friday

Because it's been that kind of week month year:

From the Department of Who Didn't See This Coming?

And then there's this:

International lender Credit Suisse has notified North Shore casino developer Don Barden he is in default of a $200 million bridge loan for the project according to a petition filed with the state Gaming Control Board.

The board today is considering a request by Mr. Barden to approve a new financing plan for the casino that includes a change in the company holding the license for the project. Mr. Barden would no longer be the majority owner of the casino, according to his spokesman...

The proposed investment would be used to pay off the bridge loan and to help complete construction.

If Credit Suisse enforces the default, it could result in construction disruption and significant delays in finishing and opening the casino. Work was halted at the site last month after contractors said Mr. Barden hadn't paid for work since April.
Color me shocked.

Now, I don't know much about Credit Suisse, but I can tell you that there a whole lot of folk 'round these here parts that are determined to make this casino work: the Governor, the Legislature, the County Executive, the Mayor, the Hill District (for the promised cash), etc. etc. Unfortunately, Mr. Barden may have written a couple of checks that his butt couldn't cash, bitten off more than he could chew, leaped before he looked, or any number of various cliches.

The world of high finance escapes me, but one would think that this restructuring of ownership is not going to be easy, lead to major delays, and probably result in a cut back to the promises that were made early on. However, because the main excuse for these casinos has always been the fig leaf of "tax relief" the Gaming Control Board may opt to allow for such a move with assurances that revenue will come in shortly.

One has to wonder, however, if Barden's plan all along was to "low ball" the Gaming Board, get his foot in the door and be forced, FORCED to change his plans.

One also has to wonder if the Rooney family might be looking at gaming oppportunities a wee bit closer to home.

Tuesday, July 08, 2008

Mike from Delmont to Provide Capital Investment in Steelers

In a surprise call to Stan Savran this afternoon, long time listener, first time caller Mike from Delmont floated a proposal to buy out up to 30% of the current Steeler leadership.

"Stan, Guy, love the show. Just wanted to tell you that I think that da Stillers [sic] are goin' all the way to the big dance this year, and I'm offering the Rooney brothers up to $250 Million for their shares of the team."

In order to comply with National Football League guidelines that prohibit association with racetrack and gambling interests, the Rooney family is working to restructure the ownership of the Steelers, a process that is forcing several brothers of team chairman Dan Rooney to seek to sell their shares in the franchise, according to news reports.

"I'm looking to make sure that Mr. Rooney retain ownership of the team, and free ahrns [sic] to the first 120,000 callers," said Mike from Delmont in a follow up interview, "Maybe I'll get Donnie Iris to play all the halftime shows up through 2014. I hear he rocked some guys face off once. Clear off. That's awesome."

The Rooney family could not be reached for comment, although sources close to the team say that the management is "considering all offers".

Little is known about "Mike from Delmont," although it is suspected that he is involved with Jim from Edgewood who once called former Steeler Plaxico Burress "Plexiglass Duress".

Federal Reserve to Clamp Down on Exotic and Subprime Loans

Horse laughs at barn door in the distance.