Strapped Cities Hit Nonprofits With Fees

Strapped Cities Hit Nonprofits With Fees Facing budget gaps and an aversion to new debt and taxes, states and local governments are slapping residents with an array of new fees—and some are applying them to nonprofits. That marks a sharp departure from long-standing tax exemptions mandated by state law or adopted on the theory that churches, schools and charitable organizations work alongside governments to provide services to the community. The issue is on display in Houston, where some flood-prone roads are in such disrepair that signs warn drivers, "Turn around, don’t drown." Houston’s taxpayers in November narrowly voted to adopt a "drainage fee" to raise at least $125 million a year toward the cost of improving roads and storm-water systems. The city will charge fees to property owners, and it won’t grant exceptions to churches, schools and charities.
Indonesia, Java, Volcano Ijen: sulfur mines – These Indonesian miners,in primitive conditions not seen in most places for more than a century, often wear no protection,carrying up to 100 kilos of sulfur on their shoulders, climbing steep rocky paths and descending the volcano for 3 kilometers, bare foot, twice daily, choking from stinking, toxic fumes.  For this shortened, blinding, gagging life in hell, they are paid 6 Euros a day. These conditions destroy their lungs, eyes and other tissues.  “We work in hell,” said the miners, “our eyes and lungs burn the whole day, but there’s nothing we can do. Otherwise, we’re scared we’ll have nothing to eat.” Here is a very good photo 
 
A Look at Case-Shiller, by Metro Area (December Update) – The S&P/Case-Shiller Composite 20-city home price index, a broad gauge of U.S. home prices, posted a 1.3% drop in October from a month earlier and fell 0.8% from a year earlier, as the housing market faced a new round of trouble six months after the expiration of a federal tax credit for buyers. All 20 cities in the index posted month-to-month declines in October. Only four areas of the U.S. — Los Angeles, San Diego, San Francisco and Washington, D.C. — posted year-over-year gains. Six markets — Atlanta, Charlotte, Miami, Portland, Seattle and Tampa — hit their lowest points since home values started dropping four years ago, pushing prices in those areas below the lows seen in most regions in spring 2009.
 
House Prices and Months-of-Supply, and Real House Prices – This graph shows existing home months-of-supply (left axis), and the annualized change in the Case-Shiller composite 20 house price index (right axis, inverted). House prices are through October using the composite 20 index. Months-of-supply is through November.  We need to watch inventory and months-of-supply closely for hints about house prices. The recent surge in existing home inventory – and increase in the months-of-supply – is one of the reasons I expected house prices to fall another 5% to 10%. S&P is also forecasting additional price declines. The following graph shows the Case-Shiller Composite 20 index, and the CoreLogic House Price Index in real terms (adjusted for inflation using CPI less shelter). In real terms, both indexes are back to early 2001 prices. Also both indexes are at post-bubble lows.
 
Nobody Believes in Supply and Demand – The issue of commodity prices is a curious one; I’m getting a lot of correspondence along the lines of, “Well, which is it? Is it too much money printing, or is it greed?” But why does it have to be either of these? Why can’t it just be supply and demand? What we’re seeing, after all, is a rise in the relative price of raw materials compared with other goods and services. This is what normally happens during a cyclical recovery, and there’s no obvious reason to see it as a sign of ominous inflation (unless you’re determined to see such signs).  Basically, this looks like rapid demand growth in emerging markets (though not here) colliding with limited supply. And it’s curious to see people on the right as well as the left seeing something dark and evil in supply and demand it work
 
Yes, They’re Frauds – From CBPP, House Republican Rule Changes Pave the Way For Major Deficit-Increasing Tax Cuts, Despite Anti-Deficit Rhetoric: House Republican leaders yesterday unveiled major changes to House procedural rules that are clearly designed to pave the way for more deficit-increasing tax cuts in the next two years. These rules stand in sharp contrast to the strong anti-deficit rhetoric that many Republicans used on the campaign trail this fall. While changes in congressional rules rarely get much public attention, these new rules — which are expected to be adopted by party-line vote when the 112th Congress convenes on January 5 — could have a substantial impact and risk making the nation’s fiscal problems significantly worse. I hear that a lot of journalistic insiders were annoyed when I began calling out self-styled deficit hawks like Paul Ryan as flim-flammers. But they are; nobody, and I mean nobody, in a position of influence within the GOP cares about deficits when tax cuts for the affluent are on the line. Deficit hawkery is just a stick with which to beat down social programs.
 
Zombie banks – FT – Are zombies now stalking the west’s banking systems? To be sure, western governments, wary of the Japanese experience, made sure their banks were recapitalised far more quickly after the Japanese crisis. But the life support may not have been sufficient. The underlying assets that brought down the financial system three years ago have not increased in value. Of course, the derivatives based on residential and commercial properties have been largely written down. But 32 per cent of the $13,400bn in bank assets outstanding in the US, for example, are still loans secured on real estate. Mortgage-backed securities account for $1,252bn of the total. Many banks that are not dead today, then, could die very quickly if the housing market turns down again. European banks are also holding billions of dollars in sovereign loans of questionable quality. And, as in Japan, western banks are also being propped up by near-zero interest rates. Of course, banks earn a margin no matter what the lending and borrowing rates. But a sharp rise in rates might inflict mortal wounds on bank revenues and profits, especially if it triggered a recession. Scared of zombies? Better hope that inflation stays low and asset prices keep going upwards.

Stop Servicer Scams, 1: Why You Should Care – Regulating the servicers now is continuing to grow as a political issue.  This Zach Carter story, House Democrats Push For New Foreclosure Regulations, explains how a new letter from Representative Miller is being signed by House Democrats.  This letter joins and references a letter from 52 economists, financial experts and activists. Cheyenne Hopkins of American Banker has an excellent article explaining the different positions taken by regulators and lobbyists. There are a lot of things in the world you can worry about. I want to make the case you should worry about this topic beyond the large amount of abuse stories you are hearing each and every day. Lewis Raneri, the creator of the mortgage-backed security, tried to warn the crowd of financial types that his invention, which had taken over the residential mortgage market, wasn’t capable of doing mass modifications, the kind of thing lenders needed to do to in the aftermath of a nationwide housing bubble.  

 Stop Servicer Scams, 2: Dissecting the Letter and Its Requests – This Zach Carter story,House Democrats Push For New Foreclosure Regulations, explains how a new letter fromRepresentative Miller is being signed by House Democrats.  This letter joins and references a letter from 52 economists, financial experts and activists.  So what specifically does this letter from economists, financial experts and activists call for? This list was organized by Chris Walen and Josh Rosner. Josh Rosner wrote and presented the securitization section of the Roosevelt Institute’s “Will It Work and How Will We Know? The Future of Financial Reform” panel and report. These are two major experts in this field. The nice part of trying to fix a system that is so broken is that there are a lot of low-hanging fruit out there to pick. The letter itself is an excellent read to understanding the problem.  I want to go through their list of demands, and see how common sense they are.
 
ECB fails to fully offset government bond buys – The European Central Bank failed to attract the 73.5 billion euros from banks on Tuesday needed to offset its seven-month run of euro zone government bond purchases, instead managing to draw just over 60 billion. The pace of the ECB’s government bond purchases picked up last week as the bank spent 1.121 billion euros reflecting the bank’s ongoing attempt to calm euro zone debt markets. The central bank takes seven-day deposits from commercial banks on a weekly basis to offset its spending, but the failure to fully sterilize the purchases is likely to reflect the fact banks are keeping hold of their funding around the traditionally tense year-end period.
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