Miami's media still MIA on housing crash impacts, by gimleteye

Miami-Fort Lauderdale is the most overbuilt market in the nation for subdivision homes, according to a report released last Thursday by housing market data provider Metrostudy. You didn't read the story in The Miami Herald.

Six out of the top ten areas of the nation with the most oversupply of subdivision housing are in Florida. That's quite a record, but local readers at the epicenter of the political and economic ground zero of the housing asset bubble and collapse wouldn't have seen it. You had to read the Fort Myers News-Press for that.

Instead on Saturday, the Herald published "New rules raise the bar for condo mortgages in Florida." (Miami Herald, Jan 24, 2009). The story skips past the vast oversupply of condos in Miami and focuses on grievances against Fannie Mae's new lending bar against certain condominiums in Miami.

The article could easily have moved in the direction of reporting how Fannie Mae was responding to its own dire financial circumstances, brought about by greedy executives paid hundreds of millions to inflate the risk to taxpayers to the bursting point. That point is buried in the middle of the story: "Charles Foschini, vice chairman of debt and equity finance for brokerage CB Richard Ellis in Miami, said Fannie was protecting investors, borrowers and taxpayers, as it should in a climate of increased risk."

Instead the focal point of the Herald's report is that Fannie Mae will be making it even harder to fill buildings that are struggling under the weight of low occupancy, high maintenance costs, and foreclosures as credit tightens. The story leans to the point of view of South Florida real estate consultant Jack McCable, who says Fannie Mae's timing "couldn't be worse." Then it goes on, to end: ''To have the major source of loans draw a line through us is terrible; it's wrong and it shouldn't happen,'' Dodge said. "The feds can't pull the rug out from under us.''

The timing couldn't be worse; a result in part because Miami's media was part and parcel of the building boom and housing asset bubble. Without independent criticism of the bubble as it was inflating by the media, how was any countervailing force to build? Critics of the boom--environmentalists, for instance-- were given short shrift by the mainstream media; it was OK to be an advocate for wildlife, for instance, but not for economics which were, by some form of reasoning influenced by advertisers, only the provenance of qualified, sober, community-minded business interests. The Miami Herald, in particular, stifled any reporting of dissent or breath of consequences. It is still missing in action, on connecting the dots of the political origins in Miami of the housing bust despite strong investigative reporting like "Borrowers Betrayed" and "House of Lies". Those focus on poor exploited victims of fraud. In 2005, former president of the Latin Builders Association Willy Bermello was given the space on the Herald editorial page to write, "The bubble is not latex, it is stainless steel," the Herald editorial board allowed no counterpoint, no hint of doubt; it still is missing the story of the political origins of this economic disaster and its conception in subdivisions allowed to proliferate in Miami-Dade farmland.

Not only should the rug be pulled out, the US Department of Justice should go after those who caused this economic calamity.Would Alex Acosta, the US Attorney for Miami, be willing to test the principle of the "Honest Services Act" rule, as DOJ did in Palm Beach County?

The concept of “honest services” is derived from 18 U.S.C. Chapter 63 on Mail Fraud.
Under 18 U.S.C. § 1341 (Frauds and swindles),
Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious coin, obligation, security, or
other article, or anything represented to be or intimated or held out to be such counterfeit or spurious article, for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined under this title or imprisoned not more than 20 years, or both.

And, pursuant to 18 U.S.C. § 1343 (Fraud by wire, radio, or television): Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both.


Fixin' to pitch a fit over Wall St. greed

By Jay Bookman

The Atlanta Journal-Constitution

Monday, January 26, 2009

If you're looking for a place to put the pittance you salvaged from
the stock market, I've spotted the next hot commodity, the next growth
industry. Under these conditions, demand is going to soar for this
item, and there's money to be made.

You ready? I'll whisper it in your ear, just between us friends:

"Pitchforks."

Yup, pitchforks. With good solid handles and sharp tines. When the
angry mobs start assembling to march on Wall Street and Washington,
ready to take out their anger at the greed and excess of the last few
years, they're gonna need pitchforks and torches. We'll sell 'em by
the thousands, like Obama buttons at the inauguration.

Tar-and-feather futures might not be a bad investment either.

I'm kidding of course, but only sort of. Like a lot of Americans, I'm
aggravated and frankly astonished to see the sense of royal
entitlement to other people's money that developed over the years on
Wall Street. And nothing seems to shake it.

The story of Bank of America, Merrill Lynch and Merrill's former CEO
John Thain illustrates that sense of entitlement all too well.

Last year, Merrill Lynch lost tens of billions of dollars —- $15
billion in the last quarter alone. Yet even after that performance,
Merrill executives felt they were entitled to billions in bonuses paid
with stockholders' money.

It didn't matter that Merrill's losses were so bad that in effect the
brokerage had to be rescued by taxpayers. It didn't matter that the
U.S. Treasury had to give Bank of America a total of $45 billion in
TARP funds to help the bank buy Merrill and save it from bankruptcy.

Not even that was enough to shake the sense of royal entitlement. Late
last month, just before the merger was made official and with Bank of
America still finalizing the taxpayer subsidy, Merrill executives
collected an estimated $3 billion to $4 billion in bonuses. They even
accelerated the payment schedule by a month to make sure the money
flowed their way before anybody could stop it.

Like I said: Pitchforks.

Thain, Merrill's CEO, at first tried to include himself in the gravy
train, pushing for a $10 million bonus even as the company collapsed.
Public outrage prevented that injustice, but it did not stop Thain
from pocketing a separate $9.7 million payment triggered by the change
of ownership. That was on top of the $15 million bonus he received
just for taking the Merrill job just a year earlier.

And as the cherry on the sundae, Thain had also spent an estimated
$1.2 million just redecorating his office.

On the scale of threats to the economy, such sums are admittedly
almost too minor to notice. Officials in government and on Wall Street
are trying to free up the flow of credit; they're trying to bolster
confidence in the banking industry; they're trying to save the jobs of
millions of Americans. And the honest ones admit that they aren't
really sure what will turn things around.

"The answer is nobody knows. The economists don't know. All you know
is you throw everything at it …" Warren Buffett said last week. "What
we do know is to stand by and do nothing is a terrible mistake or to
follow Hooverlike policies would be a mistake."

The American people seem to understand that. President Obama said in
his inaugural address that it's time to put away childish things, and
most Americans have taken a pretty mature approach to a frightening
situation.

However, their support for committing hundreds of billions of
additional taxpayer dollars to corporate bailouts hangs on the belief
that Wall Street shares their understanding of the gravity of this
situation. People have lost half of their life savings, and perhaps
their homes and jobs too, and they want some assurance that the greed
and excess has ended. They want to know that they're not being scammed
again.

And if government officials aren't willing or able to provide that
assurance —- well, the public probably won't respond with pitchforks.
They'll just insist the bailout be stopped in its tracks, and it'll be
hard to blame them.

jbookman@ajc.com