News in General

• Fukushima in Japan! Regarding the Potential Nuclear Fallout: Radiation, Over-estimations, Distractions, and Geo-politics

I am building a lead bunker so send the gin....and bring seraphim, I need a good bunker mate...

Had a woman from Oregon contact me asking: "What are we going to do? This radiation is going to kill us all here in Oregon?!" I said, I don't know, why not try calling into Alex Jones' show and ask him?

I am not political. I have no religious motives. I have no agendas to discuss with the wider world. I actually think I am quite sane. However the past few days regarding the Libyan crisis has left me in a state of profound sadness.

Western Media - CNN & the BBC have lied continuously about events on the ground. There is an obvious agenda to remove Gaddafi from power at any costs -& this includes the Westerrn Media lying on a massive scale to support Gaddafi's fall. I have to say as a complete believer in democracy that I am ashamed at what is currently going on. In particular I think that the French president is a complete lying prick.

The "rebels" of course are doing what they can to bring an end to Gaddafi - but hey - how many of these pricks would actually go 1-1 with the MAN.

As I felt in the Kosovo crisis so I feel here; in Kosovo - the historic centre of Serbian culture - the Serbs had to let it go during Nato bombardment - to a scum Albanian criminal state - this is the fate that awaits Libya.

Nearly 20% of Florida homes are vacant


NEW YORK (CNNMoney) -- It's not always easy to feel sorry for sunny Florida. But they just got hit with another blow.

On Thursday, the Census Bureau revealed that 18% -- or 1.6 million -- of the Sunshine State's homes are sitting vacant. That's a rise of more than 63% over the past 10 years.

Having this amount of oversupply on the market will keep home prices depressed and slow any recovery.

During the housing boom, Florida was among the hottest real estate markets in the nation. Homes were snapped up by the state's growing population as well as hordes of investors confident that prices would continue to soar.

"You'd drive through downtown Miami and see 30 or 40 cranes sticking up in the air," said Michael Larson, a housing market analyst for Weiss Research.

The bust brought an end to that. Development ground to a halt. Retirees stopped relocating. And prices started falling and vacancies rising.

"Housing went from being the preeminent investment of choice to toxic waste," added Richard DeKaser, an economist with the Parthenon Group.
Who's buying homes? The rich

The vacancy problem is more dire in Florida than in any other bubble market: In California, only 8% of units were vacant, while Nevada, the state with the nation's highest foreclosure rate, had about 14% sitting empty. Arizona had a vacancy rate of about 16%.

In Florida, the worst-hit county is Collier -- home of Naples -- with a whopping 32% of homes empty. In Sarasota County, 23% of the housing stock sits vacant, while Lee County (Cape Coral) has a 30% vacancy rate. And Miami-Dade County has a vacancy rate of about 12%.

The housing recovery will take years, perhaps many years, to complete, according to Ingo Winzer, a housing market analyst and founder of Local Market Monitor.

Not helping is the the fact that the state's rate of population growth slowed in the second half of the last decade to just 5.7%. Still, the 2000s saw the state population grow overall by nearly 18%, the Census Bureau reported. I

"It will take about eight years just to put the vacancy numbers back into the single digits," said DeKaser.

The inventory overhang has sent home prices plunging. The median price for homes sold in January was just $122,000, according to the Florida Association of Realtors. That was down 7% from 12 months earlier and less than half the price at the peak of the market.

Winzer thinks prices in Florida will drop even more, another 5% in 2011 and 3% in 2012. "Even after that, they're not going to rebound, they'll just sit on the bottom," he said.
Housing markets: Best recovery bets

Celia Chen, a housing market analyst for Moody's Analytics, is also downbeat in her forecasts for Florida. Not only will prices fall another 11%, she said, but the bottom won't hit until mid-2012, about a year later than the nation as a whole. Some metro areas won't get back to their pre-recession peaks until long after the present owners are old and gray.

She doesn't expect Naples, for example, to come all the way back until the late 2030s. Other Florida metro areas with a 20-year wait or longer include Punta Gorda, Palm Bay and North Port.

"If you're buying in Florida for retirement," said Winzer, "maybe you buy next year when prices will be near the bottom. If you're buying for investment -- don't."

Despite the gloom, many Americans remain confident about home buying. A survey released Monday by Fannie Mae revealed that 65% of people believe it's a good time to purchase, with 78% expecting prices will rise or remain the same over the next 12 months.

...But there's a dark cloud in this picture. And it's big – big enough, in fact, to potentially finish off the U.S. banking sector, blotting out the U.S. economy's new dawn.

That dark cloud is the commercial real estate sector. With rent prices falling and vacancies rising due to the recession-weakened economy, delinquencies on commercial mortgages are already escalating steeply. And the credit crunch bred from the recession is often making it impossible for property owners to avoid deeper trouble by refinancing.

"It's a one-two punch combination: First, soaring vacancies take the wind out of positive cash flow; then the credit crisis hits like a rabbit punch, snapping off the main arteries to refinancing," says Money Morning Contributing Editor Shah Gilani, a retired hedge-fund manager and expert on the U.S. credit crisis who predicted the implosion of the commercial real estate sector several years ago. "This is like Samson hitting the ground. The giant asset class we call commercial real estate is not going to get up any time soon."

Here in the U.S. market, commercial real estate is worth about $6.5 trillion, and is financed by an estimated $3.1 trillion in debt.

And that debt is going bad at an escalating rate. In March, the delinquency rate on about $724 billion in securitized debt reached 1.8%. As percentages go, that's a pretty small number. In fact, it's less than a quarter of the housing market's record-breaking mortgage-delinquency rate of 7.88% for the fourth quarter, according to the Mortgage Banker's Association.

But don't let that 1.8% rate fool you: The delinquency rate on commercial-real-estate debt has more than doubled just since September, according to a new Deutsche Bank AG (DB) report called "Commercial Real Estate at the Precipice."

With that increase, experts say the delinquency rate on commercial real estate has already almost equaled the rate achieved during the last U.S. economic slump, which took place at the beginning of this decade. And forecasts now call for the current downturn in the commercial real estate market to rival – and perhaps even exceed – the plunge of the early 1990s, when nearly 8% of all commercial real estate loans went sour. Banks and thrifts took nearly $50 billion in charges, and nearly 1,000 lenders failed, The Wall Street Journal said.

The fallout this time could be much worse – for three key reasons:

* Commercial Real Estate is a Heavyweight Sector: Although soaring defaults on student loans, auto loans or credit cards certainly won't help a nascent economic recovery, those slices of the debt market are dwarfed by their commercial real estate counterpart. What's more, the $3.1 trillion that makes up the commercial real estate debt market is three times the size it was during the early 1990s – meaning the potential for losses is steeper than ever before.
* Commercial Real Estate is Closely Tied to Employment: The second factor is jobs. In the housing market, a loan default essentially affects a single family. In commercial real estate, a default typically signifies big problems at the company that owns or occupies the building or property that the loan finances. And those "big problems" typically translate into reduced jobs. This is debt that's backed by the mostly vacant downtown high-rise where your neighbor worked before his employer downsized; by the neighborhood mall that shoppers avoid after it lost its Starbucks (SBUX), Circuit City (OTC: CCTYQ), Linens ‘N Things and Mervyns retail locations; or by a factory of a now-bankrupt supplier of parts for the General Motors Corp. (GM) passenger car that's been cancelled.
* A Nosedive in the Commercial Real Estate Sector Could Torpedo any Improvements the American Banking Sector Has Seen: Since 2007, 47 lenders have failed, of which one quarter had an exceptionally high exposure to commercial real estate loans. Until recently, the U.S. banking sector has been an economic "black hole," whose unending appetite for capital left nothing for actual economic stimulus efforts. That black-hole syndrome seemed to have been resolved recently, allowing the Obama administration to enact other stimulus plans. But many experts fear that a severe downturn in the commercial real estate sector might be enough to reopen this interstellar capital chasm, blunting all other rebound initiatives. Foresight Analytics LLC estimates that – as a result of the ongoing downturn – the U.S. banking sector could incur as much as $250 billion in commercial real estate losses, enough to cause another 700 banks to fail.

"Any bank that has a sizable book of commercial real estate loans could have serious problems in 2009," Jamie Peters, a bank analyst at Morningstar Inc. in Chicago, told The Minneapolis Star-Tribune.

This time around – compared to the early 1990s – banks left themselves no margin of safety in the form of "Tier I Capital" – a measure of how well a lender can navigate serious levels of losses. The higher the ratio, the less likely a lender will be able to work its way through a stretch when loans start going bad.

In 1993, less than 2% of U.S. banks and thrifts had an exposure to commercial real estate that was more than five times their Tier I capital. By the end of last year, that ratio had spiked to 12%, involving about 800 banks and thrifts.

As Money Morning reported, the U.S. Treasury Department and the U.S. Federal Reserve are working on a program that would induce private investors to buy into debt backed by such income-producing commercial properties as office buildings, retail stores and hotels. The program – the Term Asset-Backed Securities Loan Facility (TALF) – is seen as a way of breaking the toxic-asset logjam, and to bring capital to debt that can't be refinanced because of the ongoing credit crisis.
This is an attempt to avoid the [dangerous] "repeat of what happened on the residential side: A complete choking up, foreclosure disasters and increased stress on the banking system," Jeffrey DeBoer, chief executive of the Real Estate Roundtable, told The Journal.

What has real estate executives really worried is the looming surge in commercial real estate loans coming due. Until now, delinquencies on commercial real estate loans have stayed below historical levels (due mostly to the limited amount of speculative construction that's taken place in recent years. But delinquencies are now surging – in a big way – just as the volume of loans coming due is also spiking – and just as the few remaining lenders willing to make the kind of loans needed to refinance this debt are exiting the market.

"The credit crisis has got so bad that refinancing of even good loans may be drying up," says Richard Parkus, head of commercial-mortgage-backed securities research at Deutsche Bank, and the author of the afore-mentioned "Commercial Real Estate at the Precipice" report.

Commercial real estate loans differ from their residential-loan counterparts, which borrowers repay after a set period of time – usually 30 years. Commercial mortgages usually are underwritten for five, seven or 10 years with big "balloon" payments due at the very end. At that point, the property owner usually turns the loan over and refinances it. A borrower's inability to refinance could force it to default.

All of a sudden, scores of experts are warning federal lawmakers that hundreds – or even thousands – of resort hotels, retail malls and shopping center properties and commercial complexes of all sorts are headed for, on the verge of, or are already in default, a Memphis Daily News report stated. The reason: About $530 billion of commercial mortgages will be coming due for refinancing in 2009-2011 – with about $160 billion maturing this year – even as credit for refinancing remains non-existent, and cash flows from rents and leases are way down due to the recession, property researcher Foresight Analytics concluded.

What's not clear is how soon the crunch will come – or if it will come at all.

The Real Estate Roundtable, a key trade group for the industry, late last year predicted that more than $400 billion of commercial mortgages will come due through the end of 2009. Foresight Analytics estimates that $160 billion of commercial mortgages will mature next year.

"Unfortunately, the commercial real estate market is even more vulnerable to economic cycles, and here I'm talking about deep recession, than residential real estate," Money Morning's Gilani says.

The current recession – which started in December 2007 – could be the wild card, Gilani says. If the U.S. economy continues to improve, as it seems to be, and as many experts predict it will continue to, cash flows from properties won't keep declining, and defaults won't escalate. Unfortunately, however, there's an inertia that takes hold during a downturn: Companies continue to slash jobs, shutter plants, close stores and otherwise cut expenses – often even after the broader economy shows early signs of new life. This inertia could be enough to allow commercial real estate vacancies to rise and defaults to escalate.

If that happens, it's possible the commercial real estate sector becomes the "tipping point" that could keep the U.S. economy ensconced in its current recession, or if the recovery is truly under way, push the U.S. market into a "double-dip" downturn.

Time will clearly tell.

During hearings Sen. Ensign received a handwritten note from the Joint Committee on Taxation Chief of Staff Thom Barthold (a Democrat appointee) who confirmed that those who fail to pay the $1,900 fine for not having health insurance could also face a year in jail or an additional $25,000 fine.

The housing and commercial real estate has CRASHED, yet you can't purchase a house or a commercial building for less than what is owed to the bank. Nope, you can't buy it for what its worth on today's market, you have to buy for what was owed to the bank previously in the bubble market.

Oh wait, I forgot. If we can't PAY for Obummer CARE, we go to prison. I guess we will all become NON UNION STATE WORKERS.