LA Daily Blog Update for 2/12/08: Bond Crisis to Affect City Municipal Bonds, Villaraigosa Admits To Tough Year, and Nunez Getting Out of Politics

TREASURY DEPT & HUD TO HELP PREVENT FORECLOSURES: Lenders offer broader mortgage plan, extends to borrowers of all loans, not just subprime. The plan will allow seriously overdue homeowners to suspend foreclosures for 30 days while lenders try to work out more affordable loans, according to AP
. The plan, called Project Lifeline, will be announced Tuesday by the Treasury Department and the Department of Housing and Urban Development, said a person familiar with the plan who confirmed earlier news reports about the plan but spoke on condition of anonymity because it had not yet been made public.


Bond insurer crisis may affect the City of Los Angeles Bond Holders:
Guess who is gonna get hit first, and hit the hardest, if this whole bond insurer crisis unravels. MUNICIPAL BONDS, like the one's the City and State issued. When the insurance companies tank, guess who will be on the hook for all those municipal bonds people will be cashing in?

See, here's why the city is trouble. With property values falling faster than an anvil off a cliff in a Road Runner cartoon...people will be having their homes and property re-accessed. And since they have all plummeted in value, the City will be taking in much less property taxes. And they won't have enough money to cover all these municipal bonds, either. It's a lousy time to be Mayor. IT'S GONNA BE WORSE THAN ANYONE HAS DISCUSSED PUBLICLY. But all the insiders know this. (Otherwise, how do you think I know this? Do you really think I figured this out myself?) HEY NEWSPAPERS...HOW ABOUT SOME COVERAGE?

LACER/CALPERS PENSIONS BEWARE: Will sure as hell be affected too, because they invested way too much in builders and construction. (How are the builders and property values doing?)

And with all these vacant units, dropping in value -- not only is L.A. about to get a bunch of nice, new affordable housing -- but I think the State is going to have to bail out the pension fund when the retirees find out the people running the pension funds have been betting like a gambler on Superbowl Sunday.

BUFFET STEPS IN JUST IN TIME: The above story was posted late last night (2/11/08), and this morning Warren Buffett called into CNBC to announce that he will offer to re-insure municipal bond portfolios, like the ones mentioned above!) Now one of the three insurers he made the offer to already rejected the offer -- and this is only a tip of the bond insurer/credit derivative iceberg. But Buffett's announcement will at least send some false hope into the market today, so enjoy the rally. But ZD sides with the experts who say we have one more bottom to hit in the short run.

Some independent votes won't count in L.A. County
An estimated 49,500 primary nonpartisan ballots are marked wrong, due to design and poll instruction problems. The mis-marked ballots were the result of a confusing ballot design and poor education of poll workers and the public, Logan said.

For a politician who has been victorious in many of his endeavors, Mayor Antonio Villaraigosa did not seem a happy man last Wednesday. (from daily news)

(Regarding a possible $600-$700 million budget deficit) "I don't want to sugarcoat what we've done here. Even with the passage of Measure S, we have a very tough budget in the year ahead," L.A. Mayor Antonio Loserosa said.

"That word `crisis' cannot be underestimated. When you're looking at this magnitude of a budget deficit, clearly we are looking at an uphill fight."

Villaraigosa's political operative, and frequent Mayor Sam blogger Mike Trujillo, also is being rewarded with a spot on the Clinton campaign, heading to Texas to work for her on that state's primary March 4.

The big losers in Tuesday's voting were Assembly Speaker Fabian "Nucklhead" Nunez and Senate President Pro Tem Don Perata, who saw Proposition 93 - designed to extend legislative term limits and their own time in office - rejected widely by voters..

Nucklehead Nunez is unclear what the future holds after he is termed out this year. (I'M CLEAR IT WON'T BE IN POLITICS...LOL!)

Ther has been wide speculation he is interested in returning to Los Angeles to run for mayor.

But Nucklehead dismisses those rumors.

"I'm not interested," Nunez responded tersely to the question, adding that he is looking to take a break from politics. (HE'S looking to take a break from politics. I'm sure his expenditure investigation has nothing to do with it. He just feels like pulling the plug on his political career. Must be those racists who didn't vote for his term extention.)

And CM Bill Rosendahl's solution to the budget crisis is to turn of the lights at city hall when you leave a room: Councilman Bill Rosendahl wants to return to the lessons taught by his parents of turning off lights in empty rooms. But, like all things in city bureaucracy, it's not so easy.

"I was told I can't turn them off - that every other light has to be on for safety reasons," he complained.

(That's a shame, because that would have made a HUGE impact!)

DO OR DIE FOR SCHILLARY: Senator Hillary Rodham Clinton and her advisers increasingly believe that, after a series of losses, she has been boxed into a must-win position in the Ohio and Texas primaries on March 4, and she has begun reassuring anxious donors and superdelegates that the nomination is not slipping away from her, aides said on Monday, according to NY Times.

back to lacityupdate.com