The FBI and SEC investigating on PHM price pumping

The FBI & the SEC has started an investigation on Pulte Homes stock price pumping.

No Assets? No Problem

You probably thought nothing-down mortgage loans disappeared in the wake of the American subprime lending crisis, which has ensarled much of the world in a credit crunch.

They didn't. Even more surprising, many Americans can still buy homes with nothing down thanks in large part to the federal government and a legal loophole that lets builders and bankers ensure a steady stream of asset-challenged borrowers for taxpayer-insured loans.

With quietly expanded powers, the Federal Housing Administration is already offering the next-best thing to nothing down on a house: a payment of just 3.0% will get practically any American with a pulse and a job a mortgage of up to $729,000, at least until the end of this year.

But for those who lack the wherewithal to put even a little skin in the game, there's a workaround: a not-for-profit organization can give prospective buyers the teensy downpayment. The spigot is wide open. Of the 180,881 loans that the FHA insured in the first half of fiscal 2008, 36.7%, or 66,337, were seller-funded. With home builders and sellers desperate to make sales in a slowing real estate market, this percentage is likely to grow. (See "Builder's Block")

The FHA has traditionally allowed family and friends to gift a downpayment to homebuyers. In the last 10 years, homebuilders and sellers have gotten into the act by funneling their upfront consideration through down-payment assistance not-for-profits. Technically wiping out a conflict of interest, the charitable outfit collects the cash and hands it over to the mortgage lender taking a bit off the top for all its trouble.

According to a 2005 U.S. Government Accountability Office report, the sleight-of-hand results in higher home prices for FHA borrowers. The agency found that homes sold with nonprofit assistance were appraised and sold for prices about 2 to 3 percentage points higher than comparable homes without such assistance. The report said that appraisers interviewed had sometimes been pressured by lenders, real estate agents and sellers to increase home prices to “bring in the value.”

Not only does this practice burden FHA borrowers with pricier homes, it also increases the odds that the new homeowners can't afford their monthly mortgage payments. Indeed, seller-financed, no-downpayment loans have default rates that are three times the FHA average.

No need for loan originators to worry about defaulting loans; taxpayers shoulder the risk that these loans bring to the FHA's pool of loans. All of the mortgages insured by the agency are backed in full by the U.S. government so when borrowers default, Uncle Sam takes the hit and makes the mortgage payment instead.

The FHA tried and failed to unilaterally prohibit the seller-funded loans last year. After it issued a decree that the practice's end was nigh, Sacramento-based Nehemiah, a market leader in seller-backed financing, challenged the agency's ban and won. The judge ruled against the Department of Housing and Urban Development 's policy shift for failing to provide follow protocol in announcing the change.

Seller-funded nonprofit operations are being investigated by the Internal Revenue Service. In May 2006, the agency said it had found "that organizations claiming to be charities are being used to funnel down payment assistance from sellers to buyers through self-serving, circular financing arrangements." Since February 25, 2008, 47 of these middlemen have had their not-for-profit status revoked by the IRS.

The financiers of these not-for-profits are naturally reluctant to advertise their back-door lending, but after requesting permission from its partners Nehemiah said that builders that work with it include Lennar (nyse: LEN - news - people ), Pulte Homes (nyse: PHM - news - people ), and Shea Homes. A glut of inventory in a slowing market has the builders scrambling for sales. (See "Falling Prices Haunt New Houses")

Nehemiah also identified some of its lending partners: Wells Fargo (nyse: WFC - news - people ), Bank of America (nyse: BAC - news - people ), JPMorgan Chase (nyse: JPM - news - people ), and National City (nyse: NCC - news - people ). Interestingly, the FHA has not pulled its certification of these lenders, even though it opposes their participation in the financing arrangements.

Pulte Homes Reports First Quarter 2008 Loss At $696.1 Million

BLOOMFIELD HILLS, Mich., April 23 /PRNewswire-FirstCall/ -- Pulte Homes (NYSE: PHM) announced today financial results for its first quarter ended March 31, 2008. For the quarter, the Company reported a net loss of $696.1 million, or $2.75 per share, compared with an $85.7 million net loss for the prior year first quarter, or $0.34 per share. The first quarter 2008 net loss included $663.6 million of pre-tax charges related to inventory impairments and other land-related charges. Impairments and land-related charges for the prior year quarter were $132.1 million. Consolidated revenues for the quarter were $1.4 billion, a decline of 23% from prior year revenues of $1.9 billion.

"The difficult housing environment continued to erode during the first quarter of 2008," said Richard J. Dugas, Jr., President and CEO of Pulte Homes. "Buyer demand for new homes continues to be soft, home prices remain under pressure, and overall buyer confidence is weak. Despite these market challenges, Pulte continues to make progress on its cash position, selling homes and reducing its cost structure. Our results were better than the guidance previously provided of a loss of $0.15 to $0.30 per share from continuing operations, exclusive of any impairments or land-related charges. This performance was accomplished through a company-wide commitment to sell and close homes during the quarter and continued efforts to control overhead. We also reduced both our level of speculative inventory and number of controlled lots. We ended the quarter with a $1.1 billion cash balance, inclusive of a $212 million tax refund, and no debt outstanding under our $1.6 billion revolving credit facility. Pulte will continue to position the company to capitalize on any market stabilization and eventual recovery."

Revenues from homebuilding settlements in the first quarter decreased 22% to $1.4 billion compared with $1.8 billion last year. The change in revenue for the quarter reflects a 13% decrease in closings to 4,733 homes, and an 11% decrease in average selling price to $295,000.

First quarter homebuilding pre-tax loss was $705.1 million, compared with a $148.4 million pre-tax loss for the prior year quarter. The pre-tax loss for the 2008 first quarter reflects a decline in gross margins primarily related to the impact of impairments recorded in connection with our land inventory. Homebuilding SG&A expense decreased $79.7 million, or 28%, compared with the prior year quarter. During the first quarter of 2008, the Company recorded $663.6 million of impairments and land-related charges, including $598.8 million related to land impairments, $0.3 million associated with the write-off of land deposits and pre-acquisition costs, and $64.5 million of impairments of land held for sale. For the prior year quarter, these impairments and land-related charges totaled $132.1 million.

Net new home orders for the first quarter were 5,402 homes, valued at $1.5 billion, which represent declines of 36% and 50%, respectively, from prior year first quarter results. Pulte Homes' ending backlog as of March 31, 2008 was valued at $2.6 billion (8,559 homes), compared with a value of $4.7 billion (13,334 homes) at the end of last year's first quarter. At the end of the first quarter 2008, the Company's debt-to-capitalization ratio was 49%, and on a net debt-to-capitalization basis was 40%.

The Company's financial services operations reported pre-tax income of $15 million for the first quarter 2008, compared with $13.2 million of pre-tax income for the prior year's quarter. The increase in first quarter 2008 pre-tax income was partially due to a shift in the mix of mortgage loans closed toward more profitable agency-backed products. This was partially offset by a 32% decline in mortgage loans originated during the quarter compared with the prior year's quarter. The mortgage capture rate for the quarter was 89.9%, compared with 93% for the same quarter last year.

Hillary Clinton Wins Pennsylvania Primary

Dear Greg,

Thanks to you, we won a critically important victory tonight in Pennsylvania. It's a giant step forward that will transform the landscape of the presidential race. And it couldn't have happened without your generous support.

There will be much more to do beginning tomorrow. But tonight, let's just celebrate the fact that you and I are part of a remarkable community of people tough enough, passionate enough, and determined enough to win big when everything is on the line.

Thanks so much for all you do.

Sincerely,



Hillary Rodham Clinton

VisualTube.com

Chelsea Clinton

March 26, 2008

Dear Greg,

When I heard that Elton John was throwing a concert in New York for my mom's campaign, I knew it was going to be a night I didn't want to miss.

Want to join me there?

My mom's campaign is bringing two supporters and their guests to New York on April 9 for both Elton John's one-night-only concert and the party after the concert. It's going to be a great night and a great time.

It's such an important time to support my mom's campaign. There are big contests coming up, starting with Pennsylvania, and I know she can win with your support. She's working so hard out on the campaign trail, and I know that your support makes a real difference to her and this campaign.

Join me, my mom, and Elton John for his one-night-only concert in New York on April 9.

I talk to a lot of people who are excited to see my mom win and be the president we all need -- and who are working hard to help make that happen. It means so much to me to know that there are so many people like you who believe in my mom and are working to help her win. I know that she'll be such a great president and she will win, but not without all our help. And what better time to help than right now?


I'm so grateful for everything you're doing to help my mom win!

Thank you!
Chelsea

Campaigning For Hillary Clinton

Hello everyone,

Sorry I haven't been around much lately, but I have been out campaigning for Hillary Clinton. Hillary is the smartest & safest choice for the Presidency of The United States, I felt it was very important for me to join her campaign & help her win the highest office. Please visit my YouTube Channel to learn more about the candidates & the political videos that I create.

http://www.youtube.com/user/newyorkgreg

EH Systems Purchases SIP Equipment From Pulte Homes

By Greg Bowden

"Pulte Homes Going Out of Business Sale"

March 19, 2008

Sounds to me that they are liquidating anything not nailed down. Going out of business sale coming?

NEW BRAUNFELS, Texas, EH Systems Holdings, LLC, (www.ehsystemsllc.com ) announced today it has purchased equipment from Pulte Homes, including structural insulated panel (SIP) manufacturing and fabrication systems, open web floor truss assembly systems, pre-assembled flooring equipment and metal stud forming and wall panel machinery. This purchase will allow EH Systems to quadruple their production capacity making them one of the top three SIP manufacturers in the country.

A SIP typically consists of two sheets of oriented strand board (OSB) which sandwich a rigid sheet of expanded polystyrene (EPS) foam that is coated with a structural adhesive. EH Systems provides SIP panels to single family homebuilders throughout Texas and along the Mississippi Gulf Coast. SIP panels make buildings stronger and more energy efficient and can be built in less time than traditional stick-built construction.

"Prior to the purchase of this equipment, we manufactured panels that were four feet wide and up to 24 feet in length, which limited our distribution to mostly single family home builders," said Mac McDonald, president, Andover Capital Group, parent company of EH Systems Holdings, LLC. "EH Systems will now manufacture single panels up to nine feet wide and 24 feet in length and wall sections up to 32 feet in length. The larger panels will provide our current customers with a more versatile product and will allow us to expand into other markets segments such as institutional, government, commercial and multi-family construction."

EH Systems will combine their specialized SIP roofing system to the SIP wall systems developed by Pulte, which will create an even stronger and more durable home. When the building envelope is combined with the open web truss, floor decking and metal stud wall panels it is energy efficient, can be built in less time with less on-site labor and provides superior strength.

EH Systems Holdings, LLC, is headquartered in New Braunfels, Texas, and is a subsidiary of Andover Capital Group, Nashville, Tenn. EH Systems manufactures SIPs for commercial and residential construction. The company developed a "systems approach" to building by integrating different products to help create a stronger, safer, and more energy efficient structure. For more information on EH Systems, visit www.ehsystemsllc.com .

SOURCE EH Systems Holdings, LLC

Hillary Clinton

March 15, 2008

Dear Greg,

I am so inspired by all you have done for my campaign. You've made calls, you've volunteered, you've voted, you've given -- and I'm so grateful for all you've done.

And there's one thing in particular that you've done by participating in my campaign that fills me with pride. You've let every little girl in America know that she can be anything she wants to be. I couldn't be more proud.

My campaign has put together an album of some recent photos from the campaign trail in Texas, Ohio, and Pennsylvania. I hope you'll take a look and enjoy!


Thank you for everything Greg,


Hillary Rodham Clinton

Hillary Clinton

Dear Greg,

Your hard work and dedication mean so much to me, and I know you played a critical role in our wins on March 4.

I recorded a special message for you the night of March 4, and I hope you'll take a look.

We still have challenges ahead, but I know that we can win if we work together, just like we did in Ohio, Texas, and Rhode Island.

I'm so proud to have your support. Thank you for everything you do.

Sincerely,



Hillary Rodham Clinton

Bill Clinton

Dear Greg,

Did you feel the race shift?

Those last few days before Hillary's big wins, could you feel the difference? The crowds, the energy, the momentum of the whole race seemed to be shifting in Hillary's direction.

That was you.

Greg, you fueled Hillary's stunning comeback, and she and I both know that this campaign would not be where it is today without you. You should be incredibly proud of what you have accomplished.

And in the last 24 hours, you did it again, raising an extraordinary $3 million. Thank you so much for helping Hillary's campaign with your recent gift.

We worked too hard to get to this point to do anything except drive towards victory in Pennsylvania and beyond. And doubling the $3 million you just raised -- reaching $6 million in 48 hours -- will make it clear to everyone watching that we're playing to win. I wouldn't be asking you to make another contribution if it weren't so important.

Give Hillary a head start with another $3 million day.

Let me put what you accomplished yesterday in perspective. More than 45,000 of you contributed to Hillary's campaign in the wake of her wins in Texas, Ohio, and Rhode Island.

You didn't just make her comeback possible. You are providing the resources it takes to win big races. We need to hit the ground running in Pennsylvania, and thanks to your commitment to Hillary, we are doing exactly that.

No one thought we could compete on the air in Ohio and Texas -- but thanks to you, we did. You are making the impossible possible and meeting every challenge.

That's just what Hillary will do as president, just so long as we keep working with her to win. Can you help put Hillary in the position to win Pennsylvania with your contribution today? Hitting another $3 million goal in 24 hours will give her a big head start.

Contribute now to give Hillary another $3 million day.

I know I speak for Hillary when I tell you that we both know how deep your commitment to her campaign runs. And she is matching that commitment with her effort every day on the campaign trail, because your support deserves nothing less.

Thank you so much for everything you are doing to help Hillary win.

Sincerely,

Bill Clinton

Congratulations Hillary Clinton

Congratulations Hillary Clinton on winning Rhode Island-Texas & Ohio primaries!!

GO HILLARY!!!!!!!!!

Hillary Clinton

Dear Greg,

We defied the odds last night -- yes, WE -- and with our stunning victories, the momentum is now all on our side. We're going on, we're going strong, and we're going all the way.

Against all the odds, facing an opponent with more momentum and twice as many ads on the air, you kept working, giving, and believing. And that hard work is going to put us in the White House.

We put everything on the line for these wins, and now it's time to put our hard-earned momentum to work. Without skipping a beat, we need to match the Obama campaign's effort in Pennsylvania -- our next big contest -- and that means I am relying on you again. We need $3 million in the next 24 hours to ramp up our efforts immediately.

Millions of Americans have yet to speak. In states like Wyoming, Mississippi, and Pennsylvania, people are watching this campaign and want their voices to count. It's up to us to give them that chance.

That means keeping this race competitive. Thanks to you, we cut his four-to-one advertising advantage in half in March 4 states. Now our next step is to quickly replenish our resources. We don't intend to play catch-up with the Obama campaign.

With your help, we're opening volunteer headquarters all across the state of Pennsylvania before the week is out. We will launch a campaign ready, willing, and able to reach out to voters all across a state that now finds itself at the absolute center of the 2008 campaign.

Help us kick off our Pennsylvania campaign by reaching $3 million in the next 24 hours.

This nation is coming back, and so is this campaign.

Thank you for being there for me. I promise in the White House, I will be there for you every day.

Sincerely,



Hillary Rodham Clinton

More Bad News on New Home Sales

By Greg Bowden

March 1, 2008

As the new home sales report was released, there was not a lot of good news. Sales fell to a seasonally adjusted annual rate (SAAR) of 588K, a decline of 2.8% from the 605K rate in December (revised slightly higher from 604K). Relative to a year ago, sales are down 33.9%. Sales are languishing despite declines in prices. The median price fell to $216K, down 4.3% from December and down 15.1% from a year ago.

If one really wants to search for good news, inventories are down, with 482K houses for sale -- that's a 2.2% decline from last month, and 10.1% lower than a year ago. However, if one looks inside even the 'positive' inventory numbers, things are not all that good. New home inventories are broken into three groups, not started (basically improved lots), under construction, and completed.

Relative to a year ago, the number of improved lots is down 11.0%, the number under construction is down 23.1%, but the number of fully finished houses waiting for people to buy and move in is actually up 10.2%. The decline in under-construction inventories is to be expected given the dramatic decline in housing starts, but homebuilders really need to clear out the inventories if they ever hope to return to profitability.

The months supply figures are based on the total inventories and they rose to 9.9 months from 9.5 months in December and 7.2 months a year ago. These figures are roughly comparable to the 10.3 months of existing homes supply.

As usual, there was a fair amount of regional difference in the numbers this month. The West fared the best, with sales actually rising 2.2% on the month and down 16.5% for the year. Worst hit for the month was the Northeast, which fell 10.3% and is down 16.1% on a year-over-year basis. The extremely important (54.6% of total sales) South region was down 2.4% for the month and is down 34.8% year over year. The Midwest fell 7.6% for the month and is down a whopping 56.0% on a year over year basis.

In terms of price range, starter houses (under $200K) actually posted an increase in sales of 18.8% on a monthly basis, move-up houses (between $200 and $500K) were down 8.3% and McMansions (over $500K) were flat. On a year-over-year basis, however, starter homes are down 20.8%, move-up houses are down 37.1%, and McMansion sales have plunged 62.5%. The price range numbers are based on actual sales, not the seasonally adjusted annual rate, and there are some serious rounding problems in making them fit with the SAAR numbers.

The homebuilders have had a very serious bounce over the last few months, but I seriously doubt that can continue. The fundamentals of the business are still downright awful, and before all is said and done, serious capacity has to be taken out of the industry. That means that several of the big publically traded builders have to go belly up. Continue to avoid all of the builders like Lennar (NYSE: LEN - News), Pulte (NYSE: PHM - News), Standard Pacific (NYSE: SPF - News), D.R. Horton (NYSE: DHI - News) and Beazer (NYSE: BZH - News).

Form 4 Filed on Previously Announced Transaction Involving Pulte Homes Chairman William J. Pulte

By Greg Bowden

Form 4 Filed on Previously Announced Transaction Involving Pulte Homes Chairman
Thursday February 28, 4:13 pm ET


BLOOMFIELD HILLS, Mich., Feb. 28 /PRNewswire-FirstCall/ -- A Form 4 was filed today with the Securities and Exchange Commission by William J. Pulte, founder and Chairman of Pulte Homes, Inc. (NYSE: PHM - News), reflecting a previously announced proposed transaction covering the intended sale of 3.8 million shares of company stock controlled by Mr. Pulte through a prepaid variable forward contract worth over $54 Million. This completes the steps required to establish the contract, which has a settlement date of March 4, 2009.

Pulte Homes Headed For Bankruptcy

By Greg Bowden

March 1, 2008

Pulte Homes has been a major contributor to the current housing crisis and they need to be held accountable for their actions. They have knowingly sold hundreds of houses in distressed markets in the Southwest USA to investors who they knew had no intention of occupying them, solely in order to mazimize their short term profits. When one investor buys six houses, do you think they will be owner occupied? These neigborhoods are now full of foreclosed homes and renters. Homeowners who bought from them in good faith have been burned and will not buy from them again. First time buyers will not be able to obtain loans due to knee-jerk tightening of underwriting criteria by lenders, who used to lend to anyone who had a pulse, but jacked up their rates despite the lowering of rates by the FED. The current housing crisis cannot end until companies like PMH are flushed out.

Hillary Clinton

March 1, 2008

Dear Greg,

Yesterday, I asked you to make a statement, and you shouted from the rooftops.
I set an ambitious goal -- 30,000 contributions in 48 hours -- and you're almost there just one day later. So we're setting a new goal to reflect your commitment to this campaign: 50,000 contributions in 72 hours.

Your energy and enthusiasm match what I'm seeing on the campaign trail. Every day I talk to crowds of thousands of people in the March 4 states who are ready to get to work to solve America's biggest problems. Just like you and me, they want to win this race, and together, I know we will.

Your recent contribution has made a big difference to this race, and I'm so thankful.

Together we are doing the hard work it's going to take to win. You are giving us the support, the resources, and the momentum we need at this critical moment, and I can't possibly thank you enough.

Sincerely,



Hillary Rodham Clinton

Pulte Reports 5th Consecutive Quartely Loss

By Greg Bowden

Pulte Homes reported its fifth consecutive quarterly loss last month as orders fell 29 percent to 4,562 homes for the period ending Dec. 31. Closings declined 31 percent to 8,714. The builder finished the year with $1.1 billion in cash and Dugas said he expects to add another $1 billion in 2008.

"We've got more than enough cash flow coming in to sustain ourselves for quite sometime," Duggas said. Well if that is the case, why did Bill Pulte sell 3.8 million shares? Lies-Lies & more Lies. Remember, there were numerous people at Pulte's Detroit headquarters who were fired because they were telling others how bad Pulte is doing.

America's Free-Falling Housing Markets

By Greg Bowden

2-15-08

Residents of Sacramento, Calif., where home sale prices for November 2007 fell a startling 18.6% over the year before, are likely breathing a sigh of relief.

That's because homeowners there stand to benefit from the Bush administration's initiative, announced this week, aimed at helping homeowners facing foreclosure. Called "Project Lifeline," and assembled by six of the nation's largest financial institutions, which service almost half of the country's mortgages, the program allows qualified homeowners to suspend proceedings for 30 days while providing them with rewriting and refinancing assistance.

The lenders involved--JPMorgan Chase, Bank of America, Countrywide Financial, Citigroup, Washington Mutual and Wells Fargo--say they will contact homeowners who are 90 days or more overdue on mortgage payments and work with them on ways to make their mortgages more affordable.

"There'll be homeowners who still take no action, and some will still walk away," said Treasury Secretary Henry Paulson at a news conference today. "But some borrowers facing immediate foreclosures may find solutions."

While resetting rates on many of these mortgages are causing homeowners to default, falling prices, which lead to negative equity, are also playing a part. Negative equity occurs when the homeowner owes more on the home than the home is worth, and thus has little incentive to make payments.

Then there are the homeowners who took out "piggyback" loans--getting a second mortgage to pay the down payment on the first--leaving them saddled with mounting debt, yet unable to unload a home that's dramatically dropping in value.

Behind The Numbers

To assess which cities are hardest hit, we used data from Radar Logic, a New York-based real estate research firm. Radar Logic differs from the more familiar Case-Shiller index in that it tracks more markets (25), includes data on foreclosures, condos and new construction, and is a spot price, not a running average.

ZipRealty, a San Francisco-based real estate tracking firm that aggregates multiple listing service data, provided us with the number of homes on the market that have been relisted below their initial asking prices.

In Sacramento, 43.6% of homes on the market have been lowered in price. There are currently 36,097 homes on the market there, with very few potential buyers.

Just lagging Sacramento is Las Vegas, where between November 2006 and November 2007, prices plunged 17.2%. What's more, from December 2006 to December 2007, the number of homes on the market surged by 30%, further stalling sales, and likely leading to more price depreciation down the road.

A city you might have expected to see higher on the list-- Detroit--finished ninth. Simply put, there just isn't much further for the city's housing prices to fall; in percentage terms, it doesn't look as depressed as other (once over-inflated) markets. In some areas of Motor City, banks are literally giving homes away if the buyer agrees to bring it up to code.

Florida nabbed three spots on the list of 10 fastest-falling markets, with Tampa down 11.7%, Miami depressed by 10.6% and Jacksonville in an 8.7% decline from last year.

The one sign of good news in these markets is that construction has all but stopped, and sellers are starting to get realistic about cutting prices.

For full-year 2007, almost every market experienced an inventory spike, but in the last month of the year, according to ZipRealty's numbers, inventories started to decline nationwide. Even in Sacramento and Las Vegas, inventory numbers have started to fall, if only marginally.

Chelsea Clinton

2-14-08

Dear Greg,

My friends ask all the time: "What can we do to help your mom win?"

Well today I have an answer for them and for all of us who support my mom: we can make 1,000,000 calls.

OK, no one person has to make all 1,000,000 calls! But supporters like you and my friends are the best people to speak out on my mom's behalf -- and we need to talk to a lot of voters in the next few weeks.

It's simple: the more people we talk to about why each of us so strongly supports my mom, the more people will get out and vote for her.

If you sign up today to make calls for as little as an hour a week, you can help us reach 1,000,000 voters over the phone before the next big contests.

Please help my mom -- and all of us -- win by signing up to call voters for her campaign!

It's an amazing experience to meet so many people who are working so hard on my mom's campaign and to meet so many more who want to get involved and make a difference in this critical moment.

In less than three weeks, we're facing big races in states like Ohio and Texas. In fact, there are races all over the country where my mom needs help -- and we have to contact a lot of voters in a very short time! I know so many of you have shown a ton of dedication to my mom since Super Tuesday, and I'm sure that working together we will have no problem making our 1,000,000 call goal!

Can you help out? I hope so! Sign up for as little as an hour of calls a week, and you can make a huge difference toward reaching all those people in the next three weeks.

Sign up now to help us call 1,000,000 people for my mom.

Thank you so much for all you're doing to help my mom win!

Chelsea

FBI probes 2 more companies in subprime crackdown

By Greg Bowden

2-14-08

WASHINGTON - The FBI recently opened two more investigations, bringing to 16 the number of corporations now being probed as part of its crackdown on subprime mortgage industry fraud, a bureau spokesman said on Thursday.

FBI spokesman Bill Carter said the two other investigations started after January 29, when FBI officials told a news briefing that 14 corporations involved in subprime lending were under scrutiny as part of an initiative launched last year.

FBI officials have said the companies range across the financial services industry, from mortgage lenders to investment banks that bundle loans into securities sold to investors.

The FBI also is investigating possible insider trading by some executives, (9 Pulte Executives involved in insider trading) the officials have said. Carter said the FBI was working closely with the Securities and Exchange Commission in some of the investigations.

FBI and U.S. Justice Department officials said criminal charges were imminent.

At a House Judiciary Committee hearing last week, Attorney General Michael Mukasey said he could not comment on the FBI's investigations, but said the subprime issue would be a priority.

Mukasey said there first needs to be a gathering of the facts and then decisions would be made on whether prosecutions need to be brought.

(Pulte Homes) (Pulte Mortgage) are in the cross hairs.

Hillary Clinton

Dear Greg,

"You touched my heart"

I will never, ever forget how you were there for me when I needed you the most. When you learned that my campaign needed your help, you didn't hesitate. And the overwhelming generosity that you showed in the past week is like nothing I have ever seen.

As the race for the nomination continues, I hope you'll remember that you have made this campaign your campaign. Our victories are your victories. I know that you are standing with me and that I can rely on you for help. And with your support, I know we'll win.

I wanted to share some of the kind words and stories you've shared with me over the past week, along with some of my favorite recent moments from the campaign trail. Take a look at the album on my website here:

http:/www.hillaryclinton.com/thankyou

Again, thank you so much for all you have done. My heart is truly full.

Sincerely,



Hillary Rodham Clinton

William J. Pulte Is Bailing Out

By Greg Bowden

2-11-08

Bill Pulte is selling 3.8 million shares, gets the cash now, and still retains control over the stock, AND should it go up, he still gets any potential profit!! AM I missing something? I wish I had such a deal......it's a 100% no lose situation. This is a prime example of abuse in my opinion, but hey, sell if you don't like it. I know I wouldn't go near this any time in the future.

BLOOMFIELD HILLS, Mich. (AP) -- Pulte Homes Inc. said late Monday Chairman William J. Pulte has filed with the Securities and Exchange Commission to sell up to 3.8 million shares, or 9 percent of his personal stake in the homebuilder, through a prepaid variable forward contract.

The contract allows the chairman to receive cash now, while also having the right to maintain ownership of the stock at the end of the contract's one-year term by settling it with cash. He may also keep an interest in a possible increase in the shares' value over the next year.

Pulte Exits Wiregrass Ranch Project In Florida

By Greg Bowden

2-10-08

WESLEY CHAPEL - The developers of Wiregrass Ranch confirmed Monday that Pulte Home Corp. has pulled out as the massive project's master builder.

"We've had a divorce," said Don Porter, head of the family-owned company that four years ago set out to develop its 5,000-acre homestead in the heart of Wesley Chapel.

Plans for the ranch called for creating a city-sized project - complete with a hospital, shopping mall and government complex - that could become the downtown core of a sprawling area that lacks one. At the time, Pulte was tapped as the project's lead developer.

Pulte still owns more than 900 acres of the ranch, but is no longer responsible for the long-term development of roads and other infrastructure, said Scott Campbell, president of Pulte's Tampa division.

Pulte's pullout casts doubt on the future of the grid of public roads across Wiregrass that county officials saw as a way to improve traffic in the region. Those roads were to have been built by Pulte.

The lone road project still moving forward - the eastern extension of State Road 56 - is now the responsibility of Forest City Enterprises and Goodman Co., the two companies developing the Shops at Wiregrass mall at the junction of S.R. 56 and Bruce B. Downs Boulevard. Pulte was to have built the extension.

With the unraveling of its Wiregrass plans, Michigan-based Pulte has effectively vanished as an active builder in Pasco's housing market. Pulte recently sold off its Lakeside project in Hudson, where it holds a few home lots. It also sold off another project, Lake Hutto in Hillsborough County.

There are no plans to sell the Wiregrass property, Campbell said.

"As of Jan. 28, we're going to hold onto it," Campbell said. Pulte plans to seek rights from the county to one day build homes on the property, he added.

Pulte began rethinking its Wiregrass plans last summer, Campbell said. The decision was influenced, in part, by the years spent striking a deal with county and state regulators and also by more than $560 million in county-mandated improvements required of the project, he said.

County commissioners approved the Wiregrass Ranch deal by a 3-2 vote in July. The approval made Wiregrass the largest development ever approved in Pasco and the first time the county had agreed to help a developer build its roads. Pulte's decision to pull out of the project won't affect those approvals.

The vote came just as the housing market hit the skids.

"As the process went along, it did not make sense to us to continue to be the master builder," Campbell said.

Pulte's decision to step aside formally killed its plans to build an age-restricted golf community under its Del Webb subsidiary. That land was returned to the Porters in an August land swap for property on the western side of the ranch, Campbell said.

"The parcel we had envisioned for Del Webb still has age-restricted zoning, so someone could build an age-restricted community there," Campbell said.

At the moment, Pulte's Wiregrass holdings consist of two parcels - land designated for multifamily use near the Shops at Wiregrass mall under construction and a tract to the north originally designated for Pulte's DiVosta brand.

The DiVosta property contains the beginnings of Chancey Road's western end and the early stages of residential development. Work there stopped abruptly last summer, about the same time Pulte was having second thoughts about continuing with Wiregrass.

Campbell said the DiVosta property has no utilities or other infrastructure to maintain. The company has no plans to seed the bare ground with grass or take other measures to avoid erosion of the land, he said.

"There's nothing that needs to be done there to keep it viable," Campbell said.

In an interview with The Tampa Tribune last summer, Porter said his family was willing to wait out changes in the housing market, should a downturn come.

On Monday, Porter said he's seeking another company to develop the ranch.

"I would not be forthright if I said we aren't talking to people. We are," Porter said. "Some stuff I am not at liberty to give a lot of flesh to."

Investors

By Greg Bowden

2-8-08

Fed Chairman, Ben Bernanke is frantically lowering interest rates and pumping billions of newly-printed dollar bills into the economy. It’s a valiant attempt to stop the ever-expanding housing crash and mortgage meltdown from sending the economy into a recession.

Yet, the subsequent plunge of the dollar has been rapid. Moreover, market volatility has serious investors concerned about what to do next.

PULTE HOMES INC/MI/ Files SEC form 8-K, Entry into a Material Definitive Agreement

By Greg Bowden

2-5-08

Looks like Pulte Mortgage bankers are getting nervous.

If any of the rating agencies were to lower any of Pulte's unsecured debt below a certain threshold, the bank has the option of demanding payment right away.

This could seriously reduce Pulte's flexibility in how they conduct business. Especially if they have to come up with funds in a hurry to satisfy any outstanding balance.

Pulte is being put on a shorter leash since the maximum availability of borrowings under this facility has been cut in half.

It's going to be much worse in 2008

By Greg Bowden

2-4-08

I am predicting a recession in the U.S. economy and I am shorting the shares of now-tanking Wall Street investment banks. And with fears of a recession sparking both a worldwide market sell-off and emergency action from Federal Reserve chairman Ben Bernanke. You should be extremely worried. I just see things getting much worse this time around than expected. Bernanke's decision to ride to the market's rescue with a 75-basis-point cut in the Fed's benchmark rate only a week before its scheduled meeting (at which time they cut it another 50 basis points) is the latest sign that the central bank isn't willing to provide the fiscal discipline that he thinks the economy desperately needs.

"Conceivably we could have just had a recession, hard times, sliding dollar, inflation, etc., but I'm afraid it's going to be much worse. "Bernanke is printing huge amounts of money. He's out of control and the Fed is out of control. We are probably going to have one of the worst recessions we've had since the Second World War. It's not a good scene."

The Fed's willingness to add liquidity to an already inflationary environment and the history of the 1970s repeating itself. Does that mean stagflation? "It is a real danger and, in fact, a probability.

Where the opportunities are:

"A Bull in China: How to Invest Profitably in the World's Greatest Market."

I was rooting for a serious correction in China to cool off an overheating market and bring back prices to a reasonable level. With the bourses in Shanghai and Hong Kong both some 20% off their recent highs as of late January, I am starting to consider new investments.

"I'm delighted to see what's happening in Shanghai and Hong Kong. "As I've said, if things hadn't cooled off, the Chinese market was in danger of turning into a bubble. I find this most encouraging. The government's been doing its best to try and cool things off. Mainly they've been trying to deal with real estate but it's having an effect on stocks, too. I would suspect the correction isn't quite over in China. But I'm gearing up. I didn't put in any orders for tomorrow but I'm starting to prepare my list of things to buy in China. Whether I buy this week or this month or this quarter, who knows. But I'm starting to think about buying new shares in China for the first time in a while. And I'm not thinking about buying in America."

Ultimately, I don't think that the troubles in the United States will be much of a drag on the prospects for the People's Republic. "Anybody who sells to Sears (SHLD, Fortune 500) or Wal-Mart (WMT, Fortune 500) is going to be affected, without question. "Some parts of the Chinese economy are going to be untouched, however. They won't even know America's in recession. They won't care if America falls off the face of the earth."

“We are probably going to have one of the worst recessions we've had since the Second World War. It's not a good scene.”

What's on my China buying list? It will depend in large part on which stocks come down to the right level, but I'm keeping my eye on certain high-growth sectors including tourism, agriculture, power generation and airlines.

The pullback in commodity prices on recession fears haven't dampened my enthusiasm for resources investments, either. More like a cyclical correction in the middle of a long-term bull market. "Certainly some commodities are going to be affected. "But it's not as if the markets haven't figured this out. Remember the old expression: Dr. Copper is the best economist in the world. Well, Dr. Nickel and Dr. Zinc figured out a few months ago what I thought I had figured out, that we were going to have a recession. Nickel is already down 50%. Other commodities may fall more. But I don't see the economics of agriculture being much affected at all. Maybe there will be a few less cotton shirts bought. Maybe there will be a few less tires bought. But the supply is under more duress than the demand.

Once again I am drawing on the 1970s analysis. "Think about the story of gold in the '70s. "Gold went up 600%, and then it started correcting. It went down nearly every month for two years, nearly 50% from the high point. And everybody said, Well, that's the end of the gold market. It was just a fluke. It's over. It scared everybody out. And then gold turned around and went up 850% from that level. This is what happens in markets. But the fundamentals of the secular bull market in commodities are not over any more now than they were for gold in the '70s.

Where I expect the pain to be most intense is on Wall Street. I haven't covered my short positions on the investment banks or Citigroup (C, Fortune 500) and won't for a while. "Those things are going to go way, way, way down. "The investment banks are down now because of the problems in the credit market. Wait until the effects of the bear market come along. If you just go back and look at other bear markets, investment bank stocks have gone down enormously. We haven't gotten to that stage yet. It's going to bring their balance sheets under duress. This is going to get much worse. But that's where there have been excesses for the past decade or so. And whenever you have a bear market come along the great excesses of the previous period are the ones that get cleaned out the most.

The darker side of interest rate cuts:

For now, all those worries aside, the market expects to see interest rates go lower. Given the scale of losses tied to the collapse of the housing bubble - the decline in real estate prices in coming years could cut household wealth by $4 trillion to $6 trillion, according to some estimates - economists say it's understandable that the Fed is doing what it can to support growth.

Rising inflation "is not a factor restraining the Fed at the moment. The Fed views the current situation as "maybe a little scarier than the typical downturn" because of problems in the credit markets that threaten to starve businesses of capital needed to fund expansion.

Because of hefty losses on mortgage-related debt, banks like Citi (C, Fortune 500) and Bank of America (BAC, Fortune 500) have been raising billions of dollars just to boost their capital cushion for future losses. Setting aside bigger reserves means less money for lending to businesses and consumers.

That's why economists like David Rosenberg, chief North American economist at Merrill Lynch, expect the rate cuts to keep on coming. Rosenberg wrote Wednesday that he expects the Fed to cut the fed funds target by half a percentage point, to 3 percent, at the Jan. 29-30 regular meeting of its Federal Open Market Committee policymaking arm. If the Fed does as Rosenberg expects, it will have cut short-term interest rates by 1.75 percentage points in just four months, all in the name of defending an economy that so far hasn't dipped clearly into recession.

But that's not all: Rosenberg believes that in view of warning signs ranging from weakening employment data to soft manufacturing numbers, the Fed should keep on cutting. He is calling for the fed funds rate to fall as low as 1 percent, in a bid to limit the economic damage from falling house prices and tightening lending standards. A fed funds rate of 1 percent would match the low reached in the aftermath of the mild 2001 recession. "This may sound aggressive, but Fed easing cycles in recessions almost always see the prior tightening cycle completely unwind," Rosenberg writes. "The serious nature of the current housing deflation and credit crunch environment makes the case for an aggressive easing in policy all the more compelling."

Compelling as it may be, a rate-cutting policy may not always have the desired salutary effect; after all, Japan effectively had interest rates of near-zero percent for years without emerging from its economic gloom. And it carries its own costs. Lower rates boost the economy by making big purchases such as houses more affordable. They can also help banks rebuild their balance sheets, by enabling them to borrow at lower rates and lend at higher ones. But lower rates also tend to reduce the value of the dollar, which has already fallen sharply in recent years amid a surge in U.S. consumption funded by overseas borrowing. Further declines in the dollar raise the risk of boosting inflation, which hurts consumers by reducing their purchasing power.

Even with real estate prices poised to keep falling for some time, inflation worries can't be deferred forever. The Fed "may have to wrestle with that beast" down the road and warns that even if it's possible for the Fed to cut interest rates further, Bernanke and his colleagues should be careful about heading down the road toward 1 percent rates. "Anything below 2.5 percent would have me worried. Cutting rates more sharply runs the risks of "sowing the seeds for the next problem" in the economy, very much as the Fed's low-rate policy during the recovery of 2003 and 2004 fed the housing bubble that is now deflating.

Keeping rates too low even as a recovery starts is an error that central bankers have been making for years, and will presumably continue to make, to everyone's chagrin. "This is a problem monetary policy has been making for half a century.

DR Horton Warns of Grim 2008

By Greg Bowden

2-4-08

The chairman of Fort Worth-based D.R. Horton home builder warned Thursday that the sharp downtown in housing sales nationwide is expected to continue in 2008.

Donald R. Horton told company shareholders at their annual meeting that 2008 is going to be more difficult than 2007.

"The home-building industry is not in a recession," he said. "It's in a depression."