Disgraced Ponzi schemer Bernie Madoff's (former) Montauk, Long Island home is no longer on the market. A buyer willing to pay more than the $8.75 million asking price has picked up the property, only two weeks after the U.S. Marshals Service listed it for sale.

Anne Lacombe, spokeswoman for the Corcoran Group, a real estate broker involved in the transaction, said the home was under contract for more than asking but did not have information on the exact amount, buyer or closing date, according to the Associated Press.

Deutsche Bank (NYSE: DB) expects almost half of all U.S. homeowners to be underwater -- figuratively, of course -- by 2011.

Declines in home prices and the fact that some of those difficult mortgages just aren't going away put 26% of homeowners in this situation by the end of last March, and it seems the situation is only going to get worse. Unlike the early stages of the credit crisis, which were driven by subprime mortgages, the next iteration will have a greater effect on prime mortgage borrowers, which comprise two-thirds of the loans outstanding.

It goes without saying that I favor the power generation sector, and operators in Florida, in particular. The Sunshine State may be down but it's hardly out, and with above in mind Teco Energy (NYSE: TE) is worth a review.

Teco Energy is a holding company for several energy plays, including Tampa Electric, and Peoples Gas System.

I've got a deal that you can't refuse. How would you like to buy a bank worth nearly $13 billion by assets for a measly $900 million?

That's what a group led by Blackstone Group LP (NYSE: BX) did. The bank in question is BankUnited, which failed and was taken over by the FDIC. Regulators decided to put it up for auction. Blackstone will share in $10.7 billion of the bank's 12.8 billion in assets. The government will will take 80% of the first $4 billion in losses and 95% of any remaining losses. In return the government will receive warrants giving it a share on any further upside.

Nary a good word can be said about this market in the first week of March 2009. The U.S. economy seems set to register at least an 18-month recession, and probably a longer one. U.S. Treasury Secretary Timothy Geithner went to Capitol Hill Tuesday to essentially tell the U.S. Congress more money will be needed for the banking bailout, and Fed Chair Ben Bernanke did the same to brace elected officials for more, essential help for American International Group (NYSE: AIG). As 'The Great One,' Jackie Gleason would chime, "Oh, wonderful!"

Translation: rough sledding, at best, for equities, and a defensive posture is the rule. Still, so long as one expects the U.S. economy to return to some semblance of normalcy -- and that's the view here -- there are bargains to be had for those investors who can tolerate moderate risk. And with the above in mind utility, FPL Group (NYSE: FPL) is worth a review.

The state of California is nearly out of money and nearly out of options.

According to the San Francisco Chronicle, Gov. Arnold Schwarzenegger sharpened his attack Wednesday against his fellow Republicans as he declared that California's budget shortfall has grown to $14.8 billion for the current fiscal year -- several billion more than the shortfall legislators already have been unable to solve.

One option to balance the budget is to cut state services. Politicians rarely like that. It looks bad to the voters. The Legislature could raise taxes on homes and businesses. That looks bad to the taxpayers, too. With falling home prices, failing businesses, and rising unemployment, getting more money into the state treasury may also be impractical.

That brings the conversation around to what happens on the day California can't pay its bills -- any of them. State workers don't get checks. Neither do contractors. Business failures and unemployment gets worse. The house begins to collapse in on itself.

It is too early to make a definitive statement about the eventual solution, but the only ready source of the magnitude of capital needed is the federal government. That would be the same federal government that is printing money to save banks, car companies, and mortgages. How many states will get into real trouble in the next couple of months? Add Michigan and Florida to the list. Unemployment is rising and property prices are plunging. The situation could give the bailout war a whole new front to fight on.

Douglas A. McIntyre is an editor at 247wallst.com.

Picture this: a U.S. neighborhood where no homes are being constructed, for miles.

In the current economic climate, the above could be a snapshot in any region of the country (or, sadly, in every region of the country).

U.S. housing starts fell to a seasonally-adjusted annual rate of 965,000 in July, the U.S. Commerce Department announced Tuesday (pdf). It was the lowest level for housing starts in 17 years.

Economists surveyed by Bloomberg News had expected July U.S. housing starts to total 950,000.

Further, housing starts have declined 29.6% in the past 12 months. Economist Glen Langan told BloggingStocks Tuesday he knows why.

"It doesn't take a Harvard mathematician to deduce this one. Builders are competing for sales with the large supply of foreclosed homes, as well as with home owners in good standing with banks, who are trying to sell their homes," Langan said. "So the great U.S. homebuilder pullback continues."

The U.S. economy is growing at a minuscule rate or is already in recession. Job growth, save a few sectors, is non-existent. Bank mortgage qualifying requirements are at their most rigorous levels in a decade. Investors / readers ask, 'where are the buyers going to come from to spark a rebound in the housing sector?'

During the roaring 1990s, it was called 'merger Monday' -- due to the plethora of corporate mergers announced on the day, driven by the robust U.S. economy.

In the current sluggish (or perhaps worse) U.S. economy, it's becoming known as 'morbid Monday' -- due to the spate of unpleasant predictions publicized on the day.

Oppenheimer analyst Meredith Whitney filled the August 4 installment of the latter by predicting that housing prices will fall more than 30% and banks will remain reluctant to lend until the credit crisis wanes, CNBC reported Monday.

To be sure, the housing sector is a jumbled, uncertain morass, so in order to provide some clarity on the sector (and to either confirm / refute several conventional wisdom points), BloggingStocks Monday corralled economists Peter Dawson and David H. Wang.

Point 1: Those states hardest hit by the housing sector, California, Florida, Nevada, will be the first to recover.

Dawson: Not true. Wang: Most un-true.

"You may find a $300,000 or $350,000 bargain in California or Florida, but understand that five years down the road that home may be roughly the same price in real terms, after inflation," Wang said. "Job creation in an area will determine which way house prices are going in a region in the years ahead, much more than how bad the local housing market is now."

One of the most controversial proposals for dropping the price of oil is to allow drilling in protected parklands and in restricted off-shore areas. Since there are deposits of crude and gas in these areas, it is also one of the more sure-fire ways of adding to production.

It now appears that the waters off Florida are among the most promising. According to the AP, "The early activity here stems from a 2006 Congressional compromise that allows drilling on 8.3 million acres more than 125 miles off the Panhandle."

The promise of the Florida coast is both good news and bad, depending which side of the debate one is on. A find of any real significance is likely to be proof of the fact that opening protected lands will yield results.

For the "green" crown, it could mean the the government will be encouraged to drill of near protected beaches. There may even be wells in Yellowstone.

Douglas A. McIntyre is an editor at 247wallst.com.

This post is part of our Big Company, Small Town series, featuring large companies and the small towns in which they are headquartered.

Publix Super Markets is the largest employee-owned supermarket chain in the U.S. with 936 stores in Florida, Georgia, South Carolina, Tennessee, and Alabama. You must be an employee of Publix to buy stock in the company. More than 30% of the stock is owned by employees, and more than 30 million shares are owned by members of the founding family -- Jenkins. Its chairman is a family member -- Charlie Jenkins, Jr.

Publix ranks number 11 on the Forbes list of largest private companies, and 107 on the Forbes 500 list. It employs more than 100,000 employees, with revenues over $23 billion.

Yes, if you haven't figured it out, the company was founded by a Jenkins -- George W. Jenkins, Jr., in Winter Haven, Florida, in 1930. In 1940, Jenkins built Florida's first supermarket by mortgaging an orange grove. Jenkins moved the headquarters for Publix to Lakeland, Florida, in 1951, and built its first distribution warehouse there. In 2005, Publix celebrated its 75th anniversary.

The United States is an enormous, diverse nation, and there's perhaps no better evidence of that than the U.S.'s current economic cycle.

The finances of many states have deteriorated to such a degree that they appear to be in recession, even though the nation as a whole may not be, a survey of 50 state fiscal directors concluded.

The states: budget deficits abound

The National Conference of State Legislatures' survey says that "arguing whether the national economy is in recession is almost beside the point" because the fiscal condition of some states has declined so much that they appear to be in a recession.

In all, 23 states, including hard-hit housing slump states Florida, California, and Nevada, expect to report budget deficits in the next fiscal year, fiscal 2009, with the aggregate revenue shortfall reaching $26 billion. Further, more than two-thirds of the states said they are concerned or pessimistic regarding their F2009 revenue outlook.

Historically, most states experience a decline in revenue as the U.S. economy contracts, as the economic slowdown results in lower retail sales, which lowers sales tax revenue -- a major source of revenue for many states. Job layoffs also decrease state income tax revenue. Further, state social service costs typically increase, as unemployment claims increase and applications for income/food/energy assistance rise.

Florida, California hard hit

Economist Peter Dawson told BloggingStocks Friday the NCSL data is in-line with the profile of this cycle's economic slowdown. "From the research we can see that the states under most stress are those that rank very high regarding mortgage default and housing foreclosure lists, with Florida and California being the most obvious examples," Dawson said. "These states are going to be under fiscal stress for a considerable period of time due to the size of their housing correction."

Moreover, Dawson said because of California's and Florida's size, "it will be very hard for the nation to grow at capacity until these states have started to grow." Hence, a return to robust economic conditions nationally, "could be a year to 18 months off, assuming growth resumes nationally by late 2008," he said.

I grew up in Miami. Yes, I was born and raised there and am under 40-years-old. One of the few. I love the city. I love the people. I love the Latin flavor of the town, its food and nightlife. I also enjoyed owning and selling a home there in the early 2000s.

Things are different now. Homeowners have been hit with the downside of a strong housing market and have seen prices snapback much greater than some other parts of the country. After seeing a pullback in net worth, Floridians have been tightening their belts this year in some creative and not-so-creative ways.

Today's Bloomberg has an article about how the changes in the Florida housing market are being dealt with by Dolphins fans. Floridians, and Miami residents in particular, are dining out less, seeing fewer movies, foregoing on travel plans, and in some extreme cases, drinking less expensive beer.

According to Bloomberg, Miami real estate prices fell 19.3% year-over-year in January, tied with Las Vegas for the largest drop among 20 metro areas. Some homeowners feeling the pinch are no longer drinking Guinness and Royal Extra beers, but instead buy something domestic and cheaper.

This change in net worth is real and is affecting consumption decisions. While it hurts everyone involved, the process of (trying!) to realign the split between assets and debts is ultimately a healthy one for our country and something, I believe, will help strengthen the U.S. dollar and regain respect for American ingenuity, strength and democratic values around the globe.

Zack Miller is the managing editor of IsraelNewsletter.com ,a former equity analyst for a leading multinational hedge fund, and a proud former Floridian.

With the U.S. economic landscape becoming more uncertain, it's prudent to add a defensive stock or two to your portfolio, and utility FPL Group, Inc. (NYSE: FPL) is worth an evaluation.

FPL Group boasts the fundamentals analysts like to see in a utility company: steady cash flow, above-par customer growth, adequate generating capacity, and favorable power market conditions. Further, analysts also like the cooperative regulatory environment in Florida, FPL's primary state, and the company's 2.3% dividend. With operations in 24 states, FPL has diversified operationally, but the focal point, for investors, is its Florida market: 4.4 million customers, and ample land for commercial and residential growth. The Reuters FY 2007/FY 2008 EPS consensus estimates for FPL are $3.46 to $3.88.

The risks? Analysts are keeping an eye on Florida's population growth and household formation for signs of any changes in long-term trends.

Stock Analysis: FPL Group is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from FPL's shares. Sell/Stop Loss if you were to purchase shares in this company: $48.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.

Population growth has slowed in the prior housing boom states of Arizona, Florida and Nevada, The Wall Street Journal reported Thursday [subscription required], citing U.S. Census Bureau data for the 12 months ended July 1, 2007.

Further, the U.S. Census Bureau's report continued to confirm a decades-long trend of U.S. population shift from the Northeast and Midwest to the West and South.

Florida, arguably the state that's been hardest hit by the housing slump, experienced the largest decline in population growth, The Journal reported. Florida's population increased by 35,301, or 1%, during the 12-month period, compared to an increase of 134,798 during the previous 12-month period.

Marketwatch published a story today about the State of Florida halting withdrawal from a $15 billion local government fund. Concerns surfaced over the past few weeks over losses in the fund related to exposure to subprime mortgages.