Roseville to pry land from owners

North Metro Insider Sarah McCann, Star Tribune The Roseville City Council voted 3-2 last week to approve using eminent domain to acquire four commercial properties needed for the Twin Lakes redevelopment project. The mixed-use development includes housing, retail and office space. Developer Rottlund Companies, which owns most of the land, has been trying to buy the properties but hasn't come to an agreement with some owners. The council vote approving eminent domain could result in more serious negotiations, as eminent domain procedures can be costly and time-consuming for all parties involved. If the property owners don't agree to sell, the city could file for eminent domain in court as early as January. Although many local government officials say they use eminent domain as a last resort, a U.S. Supreme Court decision last summer said it was OK for cities to use eminent domain for economic development http://www.startribune.com/142/story/144702.html

Train Wreck of the Week: The end of the housing bubble.

by Bob Chapman The housing bubble is in the early stages of implosion. We do not know for sure how long the adjustment will take or are we sure how deep it will be, but we do know it has to happen and that the risks to our economy and the world economy are enormous. The only thing the Fed can do is keep interest rates relatively low and keep increasing M3, money and credit at a 12% plus rate. The downside is hyperinflation. If they move interest rates higher and cut back on monetary aggregates, they’ll have a depression. If they keep doing exactly what they are doing now, the economy will slide downward and inflation will relentlessly increase. The housing boom has reached almost every area of the country, money fled a collapsing stock market and was lured by low interest rates into housing. Low rates were assisted by lax lending standards engineered by the Fed. Sub-prime loans now make up over 50% of mortgages and with those come all sorts of exotic mortgages that borrowers do not understand and eventually won’t be able to service. That means many millions of Americans will go broke and bankrupt over the next several years. $11 trillion in real estate values in just a few years time could become $6 trillion in value. Sixty-five million Americans own homes and many put zero to 5% down, plus they have ARMS and zero savings to bail themselves out. Their other personal debt has doubled over the past three years as well. In addition, never has our financial system been more vulnerable. Thirty-six percent of recently purchased homes were second homes or speculative purchases. That is accompanied by record fiscal and current account deficits, derivatives and a stock market that cannot stay up while real estate is falling. The consumer is 76% of the economy and real estate and stock dislocation means less consumption and a falling economy. Low interest rates, endless credit and monetary printing presses won’t stop the onslaught. Just look at Japan when their real estate and stock bubbles began to implode in 1989. They lost $12 trillion in real estate values and a 42,000 Nikki Dow became 7,600. Why would our collapse be any less vicious? As the real estate bubble breaks and the bear market in stocks resume, Americans are faced every day with the loss of good paying jobs via offshoring and outsourcing. Thus, we can only conclude that our elitist Fed planned it that way. How can any nation consciously allow free trade and globalization in an advanced high-income economy? It’s simply suicide. We have been set up to deliberately fail along with Canada and Europe. By bringing these economies to their knees, citizens will be forced to accept universal, fascist, one-world government. Today’s debt and leverage makes the 1920s look like child’s play. You cannot have an economy that is 60% dependent on real estate. Industries such as construction, commodities, lending, brokerage, mortgages and insurance are holding America economically together. The parallels between now and the 1970s are huge, only this time we have enormous debt and leverage. We have another guns and butter economy. Look at our weekly statistics from the Fed, which they are going to cancel in March. Tremendous amounts of moving is being absorbed by the real estate market. Once that demand declines we would expect those funds to find new homes, perhaps Treasuries, gold and silver would be options. If the stock market is falling not many would want to risk funds there. The options for placing funds will be limited. The real question is how much money will come out of real estate? How much can as the losses pile up? All that equity will be disappearing and the piggy bank will be empty. Consumption could easily fall back to 62-64% of GDP. How can a market be solid and safe when you have to have new buyers whose average down payment is 3%? They’ll walk away from negative equity in a nanosecond. How many had to have mom and dad dig into their own home equity to buy that house? Worse yet, 45% of first-time buyers put down nothing on their new digs. Vertically rising markets are inevitably followed by vertically falling markets. And, remember, houses are not liquid. You cannot sell them on the spot and get payment in three days. You can be financially entrapped in your home. What happens when home equity falls and the market falls and you have your house as collateral in your brokerage account? It’s called a disaster - wipeout. We are seeing all the classic assumptions of an asset bubble. This frenzy underway over the past two years has given us 1.1 million real estate brokers, up 36% in five years. What idiot really expects house prices to rise 20% annually in the next 10 years? They’d have to be on drugs, which unfortunately, many of them are on. Just to show you how docile homeowners have become, 77% believe real estate is much safer than the stock market. What fools, all investing is gambling. More signs of mania in real estate as ads in newspapers rose 45% in the second quarter. That is 25% of all ads. That is $4.15 billion of $16.6 billion in classified ad revenue nationwide. In addition, online real estate ads now make up 15.9% of the total real estate ad market. Are you one of the people interviewed by the University of Michigan Consumer Confidence Index who believes now is a good time to buy a house, because its risk-free and virtually guaranteed to keep rising? If you are, we are sure we have a bridge that we are sure you would be interested in. Building is still booming. This year 38.1% put 5% down on their new homes and 45% put down nothing. If that doesn’t concern you it should. Forty percent of Californians are paying about 40% of their take home pay on their mortgages. They call this affording the unaffordable. We believe real estate market prices are unsustainable. Interest-only mortgages nationwide average 31%. In California, they make up 61%, and in Santa Rose and Vallejo, where they are 77% and 78% respectively. Would you have ever believed that bankers and the Fed would let this distortion go that far? Next year, 2006, about $300 billion in mortgage debt will enter its adjustable period. Borrowers will have to begin repaying interest and principal at new higher interest rates. Then there are buyers who take out two mortgages at once to buy a home. Standards there are no standards. It’s whatever the lender wants to do. There are no qualifications for a loan. You can be blind, crippled, crazy, bankrupt, unemployed, have no credit or income or be an illegal alien. Mortgage related assets now make up 50% of total bank assets and in just last year alone 24% of loans were sub-prime. While all this officially sanctioned madness goes on, foreigners are clamoring to buy mortgage-backed securities. If we are right they are going to have a terrible financial hangover. They are prolonging the boom by chasing a very dangerous yield. That yield is guaranteed by Fannie Mae and Freddie Mac, both of which we believe will be bankrupt in three years. Do you really believe the government will make these securities good in a depression? We don’t think they will. It is not only foreigners who’ll get bagged, it will also be hedge funds, insurance companies, and pension funds. These purchasers of these mortgages are buying desirable and undesirable loans. Last year they bought over $400 billion in sub-prime loans. Last year 70% of these loans had less than full documentation of the borrower’s income and assets. You know if house prices fall these loans will be a bag of worms. In the last four years homeowners have removed $550 billion in equity from their homes. Cash out financings are over 18% this year of all refinancings. Home equity is now 56.3% of real estate value. Forty-seven percent of all residential mortgages by dollar volume are now non-traditional. Equity from refinancings is being used to put food on the table. The Fed says homeowner loans added $600 billion to consumer spending last year and who are we to contradict the Fed. That is 7% of disposable income versus 3% in 2000 and 1% in 1994. If it weren’t for this infusion we’d already be in recession. If you’ve been attentive you now know real estate is in for changes. Sir Alan Greenspan is telling us the truth on his way out. “In the US there is a pernicious drift towards fiscal instability and the adjustment process will be painful.” Sir Alan, along with our elected dolts in Washington and the neocon White House have buried the US economy. This is not fiscal and monetary instability; it’s been insanity. Sir Alan said Congress has to make significant adjustments, in reducing benefits for future retirees because the US has promised benefits it cannot afford. He said government demands for investment would squeeze private capital formation and cast an even larger shadow over growth of living standards. In the end, he warned, the consequences for the US economy of doing nothing could be severe. Web source: http://www.theinternationalforecaster.com/trainwreck.php?Id=103&PHPSESSID=9dab509e24326857b1c41f16545eb47a

Curitiba: A Global Model For Development

Tuesday, November 8, 2005 CommonDreams.org by Bill McKibben I could see as much green as I could concrete. And green begets green; land values around the new parks have risen sharply, and with them tax revenues. …At the moment, in the center of Novo Bairro, COHAB is building "Technology Street," an avenue of 24 homes, each built using some different construction technique-bamboo covered with plaster, say-so that people can get ideas for the kind of house they might want. The houses are all smaller than most Americans would want to live in, but they all say something about the people who built them. "It's a house built out of love," says the housing chief. "And because of that, people won't leave it behind. They're going to consolidate their lives there, become part of the city." …Hitoshi Nakamura is the city parks commissioner and one of Lerner's longtime collaborators. "We have to have communication with the people of the slums," he said one day as we were talking about the problems posed by settlers invading fragile bottomlands along the rivers. "If we don't, if they start to feel like falvelados, then they will go against the city....If we give them attention, they don't feel abandoned. They feel like citizens." Ed The most vaguest article I have ever read. To deliberate evade an explanation for the existence and perpetuating condition of vagabonds and pauperism and worse the author announces to the worlds Rentiers, 'there's a new crop of wage slaves ripe for the owning via the title to land they inhabit'. To not associate the cause of disparity, dispossession and inequality is an injustice. Instead reporting (pandering) to the speculative interests. Bloody typical. 4,000 word version