Realtors Want Their Chunk of BP (NYSE:BP) Fund

In what will probably be the most challenging and controversial part of the BP (NYSE:BP) escrow fund, realtors are now entering the fray to get their piece of the $20 billion compensation fund pie.

One major problem is how does Feinberg and his team separate what is a horrific real estate market in general, from the real effects of the oil spill?

How do you separate claims with nothing to do with the spill and have everything to do with a down real estate market, from those that are.

Commercial real estate is going to be a disaster in the second half of 2010, and that has absolutely nothing to do with the oil spill, but rather the banking and mortgage fiasco.

This would require the fund to measure past sales before the real estate crisis, during the crisis, and now. But then they have the task of determining which individual properties were affected by the crisis. How could anyone prove it or make the determination?

Feinberg's response to the pressure from powerful organizations like the National Association of Realtors isn't comforting at all.

Feinberg has publicly questioned a number of claims from agents and brokers from a legal standpoint, but said they have made a “credible argument” that “something should be done for them.”

This is why you don't create czars to run these types of funds. He's going to treat it like a government operation while using BP's money.

Why should something be done for these realtors and agents, who in some cases are undoubtedly trying to use the fund for personal gain and not compensation for loss?

In other words, it's a great opportunity to cash in on the disaster by generating income they weren't producing at all in the market.

Why should Feinberg even make the statement they "something should be done for them?" Something should be done only if there are individual cases that an be proven to be caused from the BP oil spill. Anything else isn't legitimate.

It sounds to me like these Gulf real estate agents and brokers are attempting to use the fund as a source of jobless benefits because of the slow market.

To make it worse, Feinberg and the realtors are negotiating on criteria to be used in the claims. How in the world does an outside organization weasel its way into this fund and get a place at the table to decide the criteria for themselves?

This is why I've opposed the creation of this fund from the beginning, and we're seeing the reasons why in this money grab by the real estate industry.

Consumer Credit Drops as US Economy Falters

Government interference in the marketplace has hidden the true weakness of the U.S. economy, and the release of the census workers from their temporary jobs, underscored the reality of the ongoing recession, as 131,000 workers were laid off.

The so-called jobless recovery that never was, has caused consumer credit to drop for the fifth month in a row, this time by 0.7 percent in June, or $1.3 billion.

In April U.S. consumer credit plunged 6.4 percent, and in May it dropped another 2.6 percent.

The lack of job creation in the private sector continues to be the impetus behind consumers pulling back on going into debt, and there is nothing in the short term that indicates this will change; as a matter a fact it'll probably get a lot worse before it begins to turn around.

Picking and choosing the economy data to focus on no longer cuts it, as even at that it brought mixed outlooks, while those that understood knew it was far from mixed, but an outright sham as far as cherry picking what the media chose to emphasize when they reported.

Not only are payrolls weak, but the housing market is almost assuredly going to go into recession again, debt levels remain high, and we haven't even heard much lately about the projected disaster of commercial real estate for the second half of 2010, which could begin at any time, as far as focusing on the issue.

With a job market that could take years to turn around, and the same with housing and commercial real estate, one does have to ask what the optimism is all about.

I think we're going to find out the economic optimism is much ado about nothing.

Citigroup (NYSE:C) Taiwan Commercial Property Rising

Citigroup and Taiwan Commercial Property

Citigroup (NYSE:C) said Taiwan commercial property prices could rise as high as 15 percent over the next year, based on the upcoming signing of a trade agreement between the two countries.

According to Citigroup analyst Dave Chiou there are a lot of companies from mainland China who want to set up offices in Taiwan after the deal is signed, which is sure to increase the value of properties in the country.

The agreement mentioned is in regard to what is being called an economic cooperation framework agreement or ECFA, which will lower tariffs between the two countries and generate more investment between them.

Those close to the situation say even after signing the agreement though, it'll be a gradual entry into the country because of the inherent animosity between the two countries.

Uncertainty about the market and regulations in Taiwan could also make it a slow process. But if 15 percent is slow, they could really experience a commercial property bubble over the next several years once the uncertainties are removed.