This was sent to me today: The government was expected to pass the Bailout proposal today, but things didn’t quite happen as expected and the bill failed to pass.  This occurred as the Federal Reserve looks to make $600-700 billion available to the market over the next several months.  In the face of the surprise failed bill, the Treasury Department made a last second change to issue a commemorative dollar bill that will be used to inject into the market.  See below:

OK.  Don’t kill me.  I am just trying to add humor to a tough time in our economy.

Loan guidelines have changed and now that the government has bailed out Fannie & Freddie loan rates dropped dramatically, which has had many people taking advantage of the lower mortgage rate options.  If you haven’t, then read this article in the Star Bulletin.

There was an interesting article in BusinessWeek about the World Economic Forum and China’s economic focus domestically and globally.

…a key question at the forum: leadership. Will China now be willing to take a larger international role, continue to open its economy to the world, and in particular play a leading role in the creation of a new financial regulatory system?

BusinessWeek’s Eye on Asia wrote:

Chalk up another one for China. Not only does it have the biggest haul of Olympic gold medals. Now it can claim the most super rich individuals in Asia… The revelation that its class of super rich exceeds Japan’s is testament to how quickly China is reaching the loftiest rungs of the affluence ladder.

The 2005 Pacific Rim Trade Pact, has now added a new member.  The United States.  In an effort to tear down trade barriers and increase trade between Pan-Pacific countries, the U.S. has agreed to join Singapore, New Zealand, Chile and Brunei.

The agreement, the first trade pact involving a group of Pacific Rim countries, was signed between Singapore, Chile and New Zealand in 2005 before Brunei joined it a year later. The US decision to join the agreement will give impetus to a long term initiative within the 21-member Asia-Pacific Economic Cooperation (APEC) to forge a Free Trade Agreement of the Asia Pacific, officials said.

APEC, comprising such nations as the United States, China, Russia, Chile, Japan, Canada, Australia and key Southeast Asian economies, account for nearly half of world trade.

Think this will have a positive effect on Hawaii?  Just the name of the pact “Pacific Rim” should give us that answer.

Just recently, we were celebrating the fact the interest rates dropped sharply.  I even posted a picture of people jumping for joy dressed in their business suits.  As I said then, it was a time to refinance. 

Two weeks later and the tune has changed as interest rates moved higher by as much as a quarter point at some Hawaii banks. 

“Mortgage rates followed Treasury bond yields higher this week amid market uncertainty over the current state of the economy,” said Frank Nothaft, Freddie Mac’s vice president and chief economist. “Compared with last Thursday, 10-year Treasury yields are up about 0.3 percentage points, and 30-year fixed-rate loans moved up about the same amount.”

This isn’t to say that 5.625-5.75% isn’t low, cause it is, but with the trend is to head higher.  Here is the NAR’s prediction for interest rates:

• Average 30-year fixed mortgage rate in December: 6.1%

• Average 30-year fixed mortgage rate by mid-2009: 6.5%
• The next Fed policy change: a rate hike in April 2009.

The state of Hawaii ranked #1 in the U.S. for the highest rental costs.  This would be the third straight year Hawaii as a state has finished #1.

The median monthly rent in Hawaii was $1,194 in 2007. California followed with a median rent of $1,078. New Jersey ranked third for its median rent of $1,026; Maryland, fourth, at $1,000 a month; and Nevada ranked fifth with its median rent at $980 a month.

I found the Honolulu Advertiser article a little humorous.  Here is an exerpt:

Rapoza’s husband, a banker, recently found a short-term rental in Waikiki — a studio with no parking for $1,650 a month — to live in until Nov. 1. But Rapoza questions whether she and her husband can find something more reasonable for a longer term. “We might not stay because of rents,” she said. “I really think we’ll come back to the Big Island.”

OK. First off, this rent comparison is for the ENTIRE STATE, so for them to find someone for dramatic effect that says they will move back to the Big Island because rents are too high on Oahu, is funny.  It is not like they are moving to another more affordable state, they will still be living in the most expensive state in the U.S.  Which shows that just because you are in the most expensive state for renting you can still find an affordbale rental.  This would explain why New York wasn’t on the list. Compare rents in New York city to rents in Albany.

Also, they happened to have found the most extreme circumstance.  Short-term rentals are hard to come by here.  The rental market is tight enough to command the long term leases and if you want something short term you are definitely going to pay for it.  Add to it that you are in Waikiki and you will pay more, so $1,650 per month in Waikiki with no parking for a studio sounds high to me, but not too far off, but if they can’t find a longer term rental for cheaper, then they aren’t looking because they are definitely out there.  There are places in Diamond Head (one of the wealthiest neighborhoods on the island) that are available for that price with 2bd/1ba/1pk right now.

I know of a fully renovated studio in Makiki, complete with granite countertops, travertine flooring, a great view and no parking for $1,000/month.  And yes Brett, I will tack on a fee for referring the Rapoza’s.

The Pacific Business News released an article titled, “Nearly 11,000 More Hawaii Jobless Than A Year Ago.”

The Hawaii Department of Labor and Industrial Relations recently reported there were 28,100 people unemployed last month, an increase of 62 percent compared to 17,350 people unemployed a year ago.

You would think a 62% increase in the unemployment would really be bad, but Hawaii has the 8th lowest unemployment in the country at 4.2%.  Hawaii actually has more people employed this year in August, than in August of last year. (636,050 employed, up from 628,850)

The big problem would be on the outer islands, which are not as diversified economically:

Among the isles, Molokai fared the worst, with an unemployment rate of 13.7 percent in August, up from 11.9 percent in July and 6.3 percent in August 2007.  Hawaii County’s unemployment rate of 6.1 percent was higher than the state’s, and even with the national unemployment rate

The closing of Molokai Ranch really hurt Molokai. The shutdown of Aloha effected the Big Island more than any other island and the slowdown in tourism hurt the Big Island as well.

That’s right, $1!  No it wasn’t in Hawaii.  It was in DETROIT.

So desperate was the bank owner of 8111 Traverse Street to unload the property that it agreed to pay $2,500 in sales commission and another $1,000 bonus for closing the $1 sale; the bank also will pay $500 of the buyer’s closing costs. Throw in back taxes and a water bill, and unloading the house will cost the bank about $10,000.

Now, read the article and you will understand why.  This isn’t the most desirable neighborhood, the government has stiff penalties for not maintaining the properties, and add on top of that the fact that it is in Detroit (pretty much enough said J/K).

But the home was foreclosed last summer, and it wasn’t long until “the vultures closed in,” Upshaw said. “The siding was the first to go. Then they took the fence. Then they broke in and took everything else.” The company hired to manage the home and sell it, the Bearing Group, boarded up the home only to find the boards stolen and used to board up another abandoned home nearby. Scrappers tore out the copper plumbing, the furnace and the light fixtures, taking everything of value, including the kitchen sink.

As reported by the PBN, Honolulu has been ranked by Sustain Lane, as the number 1 city in Air Quality and ranked number 17 overall. (Why they chose a picture of the airport runway to represent this is beyond me.)

Just in case you needed one more reason to visit Honolulu, Hawai’i—other than the breezy, cloudless 80-degree weather, the surf, and gorgeous views of the dormant volcano Diamond Head—we’ve got one: the air. You can breathe deeply in Honolulu, which again tops SustainLane’s rankings for air quality.