I’m sure you’ve all heard the story. Michael Jackson was behind on his house payments on the Neverland Ranch in California. He apparently hasn’t even lived there since 2005.

The exotic zoo and carnival rides were dismantled a long time ago.

The bank was all set to auction off the house on March 19 in a foreclosure auction.

But, he’s managed to “save” the house from foreclosure. From the AP:

The pop star’s attorney, L. Londell McMillan, told The Associated Press his client has worked out a confidential agreement with Fortress Investment Group LLC allowing him to retain ownership of the estate.

Whether he’ll keep it for long, however, remains to be seen. Jackson is said to be living in various places, including overseas, and his family has said that when dozens of sheriff’s deputies raided the place in 2003 they destroyed the fond feelings he once had for Neverland.

What I find interesting is that Jackson’s lawyer specifically says, “allowing him to retain ownership.”

What kind of a deal was it?

Jackson reportedly owes the bank $24.5 million.

So Jackson made a deal with Fortress Investment Group LLC that they would pay off his debt- in exchange for…what?

Fortress Investment Group is a publicly traded hedge fund. Ticker FIG.

On a separate issue: how would you feel if you were a shareholder in FIG? Would you think Neverland was a good investment?

Why not just let it go to the foreclosure auction if you’re Fortress?

Presumbaly, there could have been other possible bidders at $24.5 million at the auction. Maybe Fortress believed they were getting a better deal by bailing him out at $24.5 million.

The ranch is 2500 acres in a very ritzy and expensive area of California.

A few days ago I wrote about a woman in Oregon who wrote a memoir and claimed that she had worked at Starbucks and, using stock options, ended up buying a home.

It turns out none of it is true. The book was made up, as was much of the author’s background. From the New York Times:

In “Love and Consequences,” a critically acclaimed memoir published last week, Margaret B. Jones wrote about her life as a half-white, half-Native American girl growing up in South-Central Los Angeles as a foster child among gang-bangers, running drugs for the Bloods.

The problem is that none of it is true.

Margaret B. Jones is a pseudonym for Margaret Seltzer, who is all white and grew up in the well-to-do Sherman Oaks section of Los Angeles, in the San Fernando Valley, with her biological family. She graduated from the Campbell Hall School, a private Episcopal day school in the North Hollywood neighborhood. She has never lived with a foster family, nor did she run drugs for any gang members. Nor did she graduate from the University of Oregon, as she had claimed.

Riverhead Books, the unit of Penguin Group USA that published “Love and Consequences,” is recalling all copies of the book and has canceled Ms. Seltzer’s book tour, which was scheduled to start on Monday in Eugene, Ore., where she currently lives.

How disappointing. Yet again, another “memoir” that is made up- because, apparently, not enough Americans live interesting real lives.

What can you say?

My question is: why aren’t these people writing novels then? Is it really that much easier to get a memoir published? Apparently.

Nevertheless, I’m still waiting for home prices to return to “affordable” levels so that someone really COULD work at the Starbucks for a few years, take their stock options, cash them in and buy a place to raise a family.

Stay tuned.

I vote for Bob Toll, the CEO of Toll Brothers, to be the posterboy of this particular bust.

In 2000 and 2001, as the dot-com boom was busting, that title was held by John Chambers, CEO of Cisco Systems, who used to say during the conference calls every quarter something like, “things still look cloudy out there.”

Aka, we have no idea what is going on with the tech industry but we’re hoping for the best.

Cisco, of course, survived and thrived (as did John Chambers, who is still CEO of Cisco today.)

Why do I vote for Bob Toll? Because he tells it like it is.

Yesterday, Toll Brothers released preliminary fourth quarter numbers (through December 31, 2007.)

The numbers were, frankly, awful. But they’ve been that way for nearly two years now. Toll Brothers builds “luxury” homes. During the boom, that meant homes averaging over $800,000. Now, as prices decline, the average home price for Toll has also declined: into the $600k range. (Toll says that’s because they’re building more townhouses than houses, which are cheaper in price.)

Either way- the numbers out weren’t good.

Contracts in the western states such as California were down 76% from a year ago period. That is stunning. The North was down 57%. The Mid-Atlantic 37% and the South was down 26%.

Here’s what Bob said about the current housing market:

He still doesn’t see “much light at the end of the tunnel” in the housing malaise.

On Wednesday, Toll Brothers said home building revenue fell by 22 percent in the first quarter, its seventh consecutive quarterly decline. Toll said that despite historically low mortgage rates and falling home prices, a slowing economy could be spooking buyers.

“Buyers seem to be hiding,” Toll said. “The market’s problem is a lack of confidence, not just regarding the direction of home prices, but … the overall economy.”

He usually has even more to say on the conference call - which won’t be until the end of the month.

Bob Toll tells it like it is. For several quarters he has been saying he sees no bottom to the housing bust.

Much like Chambers said “things were cloudy” quarter after quarter for seemingly forever- eventually Cisco saw the sun.

Eventually.

Toll Brothers will too. Question is: when?

Yesterday, Countrywide Financial had to issue an official statement saying they were NOT going to declare bankruptcy. From Marketwatch.com:

“There is no substance to the rumor that Countrywide is planning to file for bankruptcy,” the company said in a statement emailed to MarketWatch.

The stock was crushed. It finished down over 28% and is the lowest its been in decades.

A few months ago, they received an infusion of $2 billion in cash from Bank of America. It likely wasn’t enough. Their real problem is that mortgages have just dried up. And they are not lending outside of the conforming loan limit (or rarely lending outside of it.) The conforming loan limit is $417,000.

But the real question is: what happens if Countrywide actually DOES go under? It’s likely they would be bought out by someone and mortgages would continue to be issued. If they don’t go under, they will need more cash. Who is willing to lend it in this environment? Some analysts say they need another $4 billion.

Who would have thought only a year ago that the country’s largest mortgage insurer that has been in business for decades could be at risk. But it is.

We are already feeling the ramifications of Countrywide’s struggles. Loans are harder to get. If it’s a jumbo, you must have perfect credit history and a large downpayment. If Countrywide goes BK, it could become even more difficult.

Some real estate experts are calling this the bottom of the housing market. If Countrywide goes under, the bottom could be far, far, away.