Wednesday, October 31, 2012

Thursday November 1 Housing and Economic stories


President of France Wants to Ban Homework Because It's "Not Fair" to Disadvantaged – ( ) I wish I was making this up, and it certainly sounds like it's something straight out of The Onion, yet here it is, on a Washington Post headline: French president pushing homework ban as part of ed reforms.  Reason for the homework ban? Francois Hollande doesn’t think it is fair that some kids get homework help from their parents while children who come from disadvantaged families don’t. Instead, Hollande wants to hire more teachers without saying where the money will come from (but you know the answer is tax hikes). He also wants to increase the length of the school week from four days to four-and-a-half days. Note that school days in France start at 8:30 a.m. and end at 4:30 p.m 

Postal Service barred from borrowing more - ( The cash-strapped U.S. Postal Service has reached its $15 billion debt limit as capped by Congress and is barred from borrowing more. The Postal Service hit the cap on Sept. 28, a spokesman confirmed, reinforcing the fact that its cash reserves are running dangerously low. To run its business, the Postal Service can only borrow money from the U.S. Treasury, as opposed to private banks. Congress has barred the Treasury from lending it more than $15 billion at one time. With people cutting back on snail mail, the post office has faced a survival crisis in recent years. If Congress doesn't act soon, the service could face insolvency this spring. "Our liquidity concerns are ongoing now, and especially as we get into the second half of the current fiscal year," said David Partenheimer, a spokesman for the Postal Service. The crunch time could kick in sometime between next April through the end of September 2013.

Greece, troika talks hit snag on labour reforms - ( Greece's labour minister and international lenders briefly suspended talks on austerity cuts on Tuesday to confer with their leaders on the thorny issue of labour reforms, which have prompted objections from government coalition partners. After weeks of tense negotiations on 11.5 billion euros (9.3 billion pounds) of budget cuts in 2013-2014, the talks hit a fresh snag on the issues of scrapping automatic wage increases and reducing severance payments, part of labour marketmeasures the lenders say are needed to make Greece more competitive.

Spain must decide whether to seek aid: German official - ( Spain must decide whether it will tap funds from the euro zone's new bailout facility and should not look to Germany for guidance, a senior German official said on Wednesday ahead of an EU summit where Spain's woes will be on the agenda. The official, speaking on condition of anonymity, said Spain was on the right course with its reforms and reiterated Berlin's support for Prime Minister Mariano Rajoy's center-right government. "It is up to Spain to decide whether it wants to seek support," the official said. "It is not Germany's role to give Spain a red or green light."

American Airlines posts bankruptcy-related loss - ( American Airlines' efforts to emerge from bankruptcy caused it to post another quarter of red ink Wednesday. AMR, the airline's holding company, reported a net loss of $238 million. During the same period last year, it lost $162 million, which was the last full quarter before filing for bankruptcy in November 2011. But the company said it would have been profitable if not for various charges related to the bankruptcy, including $211 million in severance payments. The airline is offering some of its unionized employees, such as ground workers and flight attendants, voluntary buyout packages as part of the labor deals reached with those unions. American disclosed Wednesday that because 2,200 flight attendants took a $40,000 buyout offer, it will need to begin hiring 1,500 replacement flight attendants starting next month.

Tuesday, October 30, 2012

Wednesday October 31 Housing and Economic stories


Lower mortage rates are unlikely, banks say - ( Fed actions to reduce mortgage rates may be helping banks more than borrowers.  JPMorgan Chase and Wells Fargo, the nation’s largest mortgage lenders, said Friday they won’t make home loans much cheaper for consumers, even as they reported booming profits from that business. Those bottom lines have been padded by federal initiatives to stimulate the economy. The Federal Reserve is spending $40 billion a month to reduce mortgage rates to encourage Americans to buy homes. Instead, its policies may be generating more benefits for banks than borrowers. A new study suggests that the Fed shouldn't have just cut interest rates. It should have made them negative. “The government can’t force banks to give out loans at lower rates any more than they can force Macy’s to sell me sheets for a dollar,” said Karen Shaw Petrou, managing partner at consulting firm Federal Financial Analytics.

S&P cuts Spain credit rating to near junk - ( Standard & Poor's on Wednesday cut Spain's sovereign credit rating to BBB-minus, just above junk territory, citing a deepening economic recession that is limiting the government's policy options to arrest the slide. The S&P downgrade comes with a negative outlook reflecting the credit ratings agency's view that there are significant risks to economic growth and budgetary performance, plus a lack of clear direction in euro zone policies. "In our view, the capacity of Spain's political institutions (both domestic and multilateral) to deal with the severe challenges posed by the current economic and financial crisis is declining," S&P said in a statement.

Doomsday cycle targets America next - (  Warning bells, alarms scream louder. But our banks and politicians can’t hear, are deaf, in denial. Won’t take action ... not until it is too late. That’s the latest from Simon Johnson and Peter Boone in “The Doomsday Cycle Turns: Who’s Next?” Who is next? America, Japan, the euro zone are the triple threat next in the line of fire, in danger of collapsing, thanks to a doomsday conspiracy where global “political and financial systems have aligned to build these dangers rather than suppress them.” Three years ago, the first warning: “The Doomsday Cycle.” Since then Simon Johnson, former IMF chief economist, co-authored two bestsellers, “13 Bankers: The Wall Street Takeover and the Next Financial Meltdown,” and recently, “White House Burning.” Peter Boone is a research associate at the London School of Economics, which published their doomsday warnings.

Questions from a bailout eyewitness - ( IT has become almost unpatriotic to question the many and munificent bank rescues of 2008 and beyond. If you have the temerity to do so, you’re likely to hear that the bailouts were the only thing standing between us and financial obliteration. You will also be told that, four years on, many of the bailouts have made money. It’s hard to argue against this narrative, not knowing what would have happened had cooler heads prevailed. But Sheila C. Bair, former chairwoman of the Federal Deposit Insurance Corporation, is well positioned to question the dogma of the bailout brigade. And she does so repeatedly in “Bull by the Horns,” her new book about the crisis. As one of the main participants in the battles surrounding the rescues, and perhaps the coolest head in attendance, Ms. Bair provides some straight talk that represents an important piece of history and a rebuttal to the conventional wisdom.

The self-destruction of the 1 percent - ( IN the early 14th century, Venice was one of the richest cities in Europe. At the heart of its economy was the colleganza, a basic form of joint-stock company created to finance a single trade expedition. The brilliance of the colleganza was that it opened the economy to new entrants, allowing risk-taking entrepreneurs to share in the financial upside with the established businessmen who financed their merchant voyages. Venice’s elites were the chief beneficiaries. Like all open economies, theirs was turbulent. Today, we think of social mobility as a good thing. But if you are on top, mobility also means competition. In 1315, when the Venetian city-state was at the height of its economic powers, the upper class acted to lock in its privileges, putting a formal stop to social mobility with the publication of the Libro d’Oro, or Book of Gold, an official register of the nobility. 

Monday, October 29, 2012

Tuesday October 30 Housing and Economic stories


Spain Waits, and Europe Frets - ( As long as Spain’s borrowing costs remain below 6 percent, as they have since the European Central Bank said it would buy the country’s bonds if asked, the Rajoy government might seem to have no reason to rush. But the downgrade of Spanish debt to near junk status last week by Standard & Poor’s underscored the fragility of the country’s finances. And the seeming political paralysis in Madrid may be reinforcing a wider economic stasis. “The economy has stopped,” said Ángel Berges, the chief executive of AFI, an economic consulting firm based in Madrid. The indicators are grim: Cement production has reached its lowest level since the 1960s. Car sales are down 37 percent from last year. And on weekdays the public squares of Madrid are filled with the unemployed — young and old — whiling away the hours. Even the wealthy are feeling the strain. In the boat slips of Barcelona, “For Sale” signs hang on nearly every moored yacht.

Electric Vehicle Battery Maker Bailed Out By Obama Files For Bankruptcy - ( Electric vehicle battery maker A123 and its US subsidiaries filed for Chapter 11 bankruptcy protection this morning, it announced. It will sell its automotive business assets to Johnson Controls, another battery producer. After Mitt Romney's attack on Tesla and other clean energy investments as "losers" in the last debate, expect this news to come up in round two, tonight. A123 benefitted from a $249 million grant from the U.S. government in 2009. In 2010, President Obama hailed the company as a success.

Spain prepares to make rescue request - ( The Spanish government is prepared to make a rescue request that would allow the European Central Bank to begin buying its debt, but the issue is being delayed by the needs of other countries in the single currency. Madrid has now found a formula that it feels comfortable with to make a rescue request – a significant shift in position compared to before the summer. It is waiting for external factors – such as the way it would influence other countries, for example Italy – to be resolved. A senior official within the Spanish ministry of economy said Spain did not require any money from the European Stability Mechanism, the eurozone’s state rescue fund, but would be comfortable making a request for a credit line only in order to satisfy the conditions of the ECB to begin buying bonds.

Sugar Glut Extending to Longest in More Than Decade: Commodities - ( The global sugar glut is extending into a third year, the longest stretch in more than a decade, as Brazil and Australia expand output and imports contract to the smallest since 2008. Production will exceed demand by 5.9 million metric tons in the year that began Oct. 1, more than the U.S. consumes in six months, the International Sugar Organization estimates. Global supply including inventories will be the highest ever, the London-based group says. Raw-sugar futures traded in New York may drop 10 percent to 18 cents a pound by the end of the year, according to the median of 15 estimates from traders and analysts compiled by Bloomberg. Futures fell 45 percent since reaching a three-decade high of 36.08 cents in February 2011 as farmers from Russia toThailand planted more crops. 

In Reversal, Cash Leaks Out of China - ( China, once a catch basin for the world's money, is now watching cash stream out. Wealthy Chinese citizens are buying beachfront condos in Cyprus, paying big U.S. tuition bills for their children and stocking up on luxury goods in Singapore, frequently moving cash secretly through a flourishing network of money-transfer agents. Chinese companies, for their part, are making big-ticket foreign acquisitions, buying up natural resources and letting foreign profits accumulate overseas.

Sunday, October 28, 2012

Monday October 29 Housing and Economic stories


Cash Tap Stays Dry for EU Banks - ( Executives at Italy's Banco Popolare SC BP.MI -0.66% were hoping this week to highlight their strength, as well as the resilience of the European banking system, by selling a batch of so-called senior unsecured bonds for the first time in 18 months. Instead, Popolare, Italy's fifth-largest commercial bank by market value, got a reminder of how fragile the Continent's financial system remains, even after the European Central Bank's extraordinary series of rescue efforts. Popolare on Monday had to yank its bond sale off the market at the last minute after its bankers failed to drum up adequate demand from investors. Another lender, UniCredit Bank Austria,UCG.MI -1.92% also had to pull a planned bond sale Monday for similar reasons, according to bankers who worked on both deals. A Popolare spokesman declined to comment. A UniCredit Bank Austria spokesman said the bond sale "was postponed because the market environment was not as favorable as expected." He added that the bank will "intensify its work with investors and try to float the issue at a later point in time."

CEO emails employees: Defeat Obama or else - ( David Siegel, the resort CEO who is building the biggest private home in the country, really, really doesn't like President Obama. And while Siegel hasn't sent any money to Republican presidential candidate Mitt Romney, he has gone a step farther to support him. On Monday he sent an e-mail to all 7,000 employees of privately-held Westgate Resorts, many of them in the battleground state of Florida, warning them their jobs are at risk if the president is re-elected. "The economy doesn't currently pose a threat to your job. What does threaten your job however, is another 4 years of the same Presidential administration," he said in the e-mail.  "If any new taxes are levied on me, or my company, as our current President plans, I will have no choice but to reduce the size of this company," he says in the nearly 1,400-word e-mail. "Rather than grow this company I will be forced to cut back. This means fewer jobs, less benefits and certainly less opportunity for everyone."

IMF sounds alarm on Japanese banks - ( The huge and rising government bond holdings of Japanese banks leave them vulnerable to a spike in interest rates, the International Monetary Fund has warned.
Sounding an alarm over the stability of Japan’s banking system, IMF officials said domestic bank holdings of government bonds in the country could rise to a third of their total assets within five years, from a quarter now. The officials, speaking at the IMF and World Bank international meetings in Tokyo, added that could this magnify the potential impact of turmoil caused by a loss of confidence in state finances. Peter Dattels, assistant director, said fears over Europe could be replicated in Japan, the only country with gross government debt more than twice the size of the economy.

 filed its proposal Feb. 1 to go public, it touted the effectiveness of ads linked to customers’ friends, citing research from Nielsen, the audience-counting company. Barbara Jacobs, an assistant director for corporation finance at the U.S. Securities and Exchange Commission, was skeptical, as she and her staff vetted the filing to ensure Facebook
 had disclosed all material information to investors. The claim appeared to be drawn from marketing materials, not a Nielsen study, she wrote to Chief Financial Officer David Ebersman, 42. She gave him an ultimatum: Produce the study and provide Nielsen’s consent for use of the data -- or don’t use it, she wrote to Ebersman on Feb. 28. Facebook dropped the reference after initial resistance.

IMF Sees European Banks Facing $4.5 Trillion Sell-Off - ( The International Monetary Fund said European banks may need to sell as much as $4.5 trillion in assets through 2013 if policy makers fall short of pledges to stem the fiscal crisis, up 18 percent from its April estimate. Failure to implement fiscal tightening or set up a single supervisory system in the timing agreed could force 58 European Union banks from UniCredit SpA (UCG) to Deutsche Bank AG (DBK) to shrink assets, the IMF wrote in its Global Financial Stability Report released today. That would hurt credit and crimp growth by 4 percentage points next year in Greece, Cyprus, Ireland, Italy, Portugal and Spain, Europe’s periphery. “There is definitely a need for deleveraging in Europe,” said Michael Seufert, an analyst at Norddeutsche Landesbank in Hanover, Germany, with a “negative” rating on the European banking sector. “The danger is that this produced a downward spiral as the regulation gets stricter and stricter and the global economy cools, potentially meaning more writedowns for banks. States in the periphery are hit hardest.”

Thursday, October 25, 2012

Friday October 26 Housing and Economic stories


Spain Foreclosures Spread to Once Wealthy: Mortgages - ( Home foreclosures in Spain, which disproportionately affected lower-income immigrants after the real estate bubble burst, are spreading to formerly well-to-do families and businessmen as they run out of ways to pay mortgages in a deepening recession. Spanish business people, upper middle class families and their loan guarantors, typically parents of first-time buyers, now account for 60 percent of foreclosures in Madrid, according to AFES, an association that advises homeowners facing repossession. Three years ago, 80 percent of foreclosures were on the homes of immigrants, usually the first to lose jobs and fall behind on loan payments in a souring economy. They now comprise 40 percent of the total, according to AFES. “Repossessions are encroaching further into the city centers, like an overflowing river,” said Emilio Miravet, head of real estate finance at the Spanish property unit of advisory and investment firm Catella AB.

Germany faces image problem in Greece, thanks to its growing clout - ( Amid a massive security operation that locked down much of this ancient capital, German Chancellor Angela Merkel on Tuesday staged a gutsy foray into the heart of Europe’s debt crisis. If her protest-plagued trip shined a spotlight on struggling Greece, it also highlighted a problem for a resurgent Germany: its image. As Europe’s largest and healthiest economy, Germany has risen to the height of its post-World War II power over the past three years, effectively serving as the region’s paymaster through a series of debt-crisis bailouts. As Germany has led demands for harsh cuts in exchange for cash, Merkel has emerged as Europe’s symbol of austerity. A country keenly attuned to any perception of itself as aggressor, Germany witnessed the price of its rising clout Tuesday as 7,000 police officers sought to contain tens of thousands of chanting demonstrators who at least partly blame Berlin for Greece’s economic nightmare of soaring unemployment and cascading bankruptcies.

Rajoy’s Deepening Budget Black Hole Outpaces Spain’s Cuts - ( The black hole in Spain’s budget has expanded faster than Prime Minister Mariano Rajoy’s attempt to shrink it, portending the same unrest roiling Greece. The harshest austerity since the return to democracy in 1978 has failed to contain the deficit as the economy sinks deeper into recession. The shortfall increased in the first half of the year, as it did in the previous 12 months. Even after a sales-tax increase and health-care cuts kick in this quarter, it may still approach last year’s 9.4 percent of gross domestic product, said Ignacio Conde-Ruiz, an economist at the independent Applied Economic Research Foundation in Madrid. The fiscal and political consequences of demanding austerity in a shrinking economy highlight the dilemma facing Rajoy. To trigger a European financial lifeline, he may have to impose yet more cuts, repeating the pattern seen in Greece, Portugal and Ireland.

Greece's debt nightmare just got worse - ( German Chancellor Angela Merkel offered words of support for her counterpart, Greek Prime Minister Antonis Samaras in Athens on Tuesday, even as new data showed Greece's debt situation was worsening and as two former Greek government ministers told CNBC, international lenders would have to restructure its debts yet again. "I think that recently the pace of reform has picked up considerably," Merkel said on her first visit to Greece since the debt crisis erupted here in 2009. Seven thousand police officers and rooftop snipers and commandos were in place to provide protection for the German leader. Thousands of protestors streamed into Syntagma square despite a ban on protests and a security lock down. TV pictures showed protestors dressed as Nazi soldiers holding Nazi flags, while other protestors threw rocks at police who fired tear gas. 

Oakland aims to prevent foreclosures - (  Like other homeowners in his East Oakland neighborhood, Manuel De Paz is underwater on his house and behind on his payments. His attempts to get a loan modification from his bank were frustrating and fruitless, he said. De Paz, 45, who provides social services to immigrants and refugees at a Berkeley church, hopes that a new Oakland initiative to prevent foreclosures will help him persuade the bank to make his mortgage more affordable. "I think we needed this a long time ago and very badly," he said. Oakland, one of the Bay Area cities hardest hit by the foreclosure crisis, plans to roll out details Tuesday of its "Comprehensive Foreclosure Prevention and Mitigation Plan," which takes a multipronged approach to assist struggling homeowners and tenants in foreclosed homes.

Wednesday, October 24, 2012

Thursday October 25 Housing and Economic stories


Prepping for Obamacare, Chain Cuts Workers' Hours - (  The owner of Olive Garden and Red Lobster restaurants is putting more workers on part-time status in a test aimed at limiting the impact of looming health coverage requirements. Darden Restaurants declined to give details but said the test is only in restaurants in four markets across the country. The test entails increasing the number of workers on part-time status, meaning they work less than 30 hours a week. Under the new health care act, companies will be required to provide health care to full-time employees by 2014. That would significantly boost labor costs for businesses.

Private equity paying up for Mervyn's bankruptcy - ( In what could be a game-changing settlement for the private equity industry, three PE firms and several banks agreed to pay Mervyn's department store creditors $166 million to settle allegations that the firms took fraudulent profits and drove the retailer into bankruptcy four years ago. The creditors, which include vendors like clothing companies Li & Fung, Levi Strauss, and VF Corporation (VFC), accused Sun Capital, Cerberus Capital Management and Lubert-Adler of paying themselves rich rewards, while setting Mervyn's up for failure. After buying out the retailer from Target in 2004 for $1.25 billion, the PE firms added roughly $800 million in debt, while paying themselves $200 million in fees and dividends between 2004 and 2006, according to bankruptcy court filings. More egregious perhaps is how the firms profited from splitting Mervyn's into two businesses: a real estate firm and a retail chain that now had to pay rent at each of its location. That allowed the PE firms to quickly hike rents and pocket a nice profit.

Langone Sides With Welch: Jobs Numbers 'Don't Square' - ( Government numbers showing the unemployment rate has fallen under 8 percent for the first time in nearly four years don't reflect actual business conditions, venture capitalist Ken Langone said on CNBC. Joining a heated debate over the state of the U.S. jobs picture, the Home Depot founder and Geeknet CEO said the most recent U.S. Bureau of Labor Statistics report was probably inaccurate. Langone defended former General Electric CEO Jack Welch, who caused a stir Friday morning when he charged on Twitter: "Unbelievable jobs numbers ... these Chicago guys will do anything ... can't debate so change numbers." "I give Jack a lot of credit for being there and standing out. It makes it easier for me because he and I share the same point of view," Langone told CNBC’s “Squawk Box.” "But I give him a lot of credit for saying publicly, 'Damn it, these numbers don't make sense.'"

IMF Sees ‘Alarmingly High’ Risk of Deeper Global Slump - ( The International Monetary Fund cut its global growth forecasts as the euro area’s debt crisis intensifies and warned of even slower expansion unless officials in the U.S. and Europe address threats to their economies. The world economy will grow 3.3 percent this year, the slowest since the 2009 recession, and 3.6 percent next year, the IMF said today, compared with July predictions of 3.5 percent in 2012 and 3.9 percent in 2013. The Washington-based lender now sees “alarmingly high” risks of a steeper slowdown, with a one-in-six chance of growth slipping below 2 percent. “A key issue is whether the global economy is just hitting another bout of turbulence in what was always expected to be a slow and bumpy recovery or whether the current slowdown has a more lasting component,” the IMF said in its World Economic Outlook report. “The answer depends on whether European and U.S. policy makers deal proactively with their major short-term economic challenges.”

Merkel Urges Greece to Maintain Austerity as Way to Stay in Euro - ( German Chancellor Angela Merkel used her first visit to Athens in five years to maintain pressure on Greek Prime Minister Antonis Samaras to meet austerity pledges, proclaiming her desire to keep the country in the euro. The two leaders stood side by side at a press conference as protesters massed outside the Parliament building in a capital on virtual lockdown. Merkel has become the face of austerity in a country suffering a fifth year of recession, which many Greeks blame on German-led conditions attached to emergency loans. “I want Greece to remain in the euro,” Merkel told reporters today halfway through her six-hour visit. “A lot has been done, much remains to be done.”

Tuesday, October 23, 2012

Wednesday October 24 Housing and Economic stories


Snipers, Commandos to Welcome Merkel in Greece - ( Debt-swamped Greece braced for two days of strikes, protests and potential violence as German Chancellor Angela Merkel, long demonized for her tough-talking, austerity-minded approach to Europe’s deepening woes, prepared to visit the epicenter of the crisis, three years since it began here. To fend off potential attacks, at least 7,000 plainclothes police and hundreds more undercover agents have been mobilized from across the country to lock down the capital and erect steel fences around parliament. Snipers were already visibly stationed on the roof tops of government buildings in Athens; Commando Seals and Frogmen were also ordered on standby as helicopters began patrolling the Athenian skyline from Monday.

RECORD GAS PRICES - ( Gas prices across California have soared to record highs, shooting up 50 cents a gallon in just the last week. But even as prices are expected to rise slightly higher in California before falling, the West Coat price spike is not likely to spread to other parts of the country, experts say. The average price of a gallon of regular gas in California hit $4.67 a gallon on Monday, according to AAA. It stood at $4.17 on Oct. 1 but has risen every day since then. The worst was a 17-cent spike on Friday, followed the next day by a 13-cent increase. On Sunday, California environmental regulators, acting on a request from Gov. Jerry Brown, agreed to allow refineries to start making a cheaper, winter blend of gasoline as soon as possible -- a move that could solve shortages of the more expensive summer blend that sparked the price spike.

Greek Prime Minister warns 'the cash box is empty after November' - ( Steffan Siebert, a spokesman for the German government, said: “The message that Germany can take to Greece ... is that we want to help Greece stabilise itself within the eurozone. We are doing that by massively contributing to the two aid packages that are supposed to help Greece come out of the crisis. The Greek government reacted immediately, hailing the visit as "very positive" for bilateral ties and an additional step towards solving the crisis.”

The muni bond market, mired in the past - ( In yet another attempt to pull this market into modern times, regulators put states, cities and municipal issuers on notice three years ago. No longer would they be allowed to stint on disclosing basic financial information — the kind that investors in, say, public corporations, have long relied on. With an expanded and accessible Web sitedesigned by regulators, municipal bond investors could finally find out what was going on. Or not. Some issuers of municipal bonds don’t seem to have gotten the message. More disturbing, regulators don’t seem to care. Consider the West Penn Allegheny Health System, a struggling hospital system in Pittsburgh that is one of the nation’s larger issuers of tax-exempt debt. It sold $750 million in revenue bonds in May 2007. West Penn has had its share of problems. It restated earnings in 2008, prompting an inquiry from the Securities and Exchange Commission. (The investigation is continuing but seems moribund.) The system’s financial standing is deteriorating. For the nine months that ended on March 31, the most recent figures available, West Penn Allegheny posted an operating loss of $88 million. Its cash is dwindling: it had enough to cover 50 days of operations in the most recent quarter.

California's Poorest Are Getting Crushed – ( But the gas price nightmare may soon be over. The average California family uses about 100 gallons of gas a month, according to AAA's Michael Green. So with an average price of about $4.50 a gallon, that adds up to $450 they will spend on gas, starting from last week. "That hurts families," Green said. "They can't spend that money on something else, it's money can't save." Spending on restaurants and movies usually goes first, he said. And low-income families, who spend around 10 percent of their discretionary income on gas, will be hurt hardest. The $450 figure doesn't even include indirect costs families will pay as consumer items become more expensive to ship, Green added.

Monday, October 22, 2012

Tuesday October 23 Housing and Economic stories


Depositors Turn Up Heat on Ailing Spanish Banks - ( Eugenio Nuñez Cobás stormed into a bank branch in this coastal town one morning in August with three dozen fellow customers yelling "Thieves! Thieves! Thieves!" Then they returned to the street and pelted the facade with eggs, forcing the branch to close for the day. Mr. Nuñez had been coming to the Novagalicia Banco SA branch for eight months with a placard that reads: "I have all my savings trapped in Novagalicia Banco until the year 2999." The 70-year-old retiree said: "I really should be at home playing with my grandchildren. Instead, I'm here every week, fighting for my savings." Mr. Nuñez was one of more than 700,000 Spanish depositors who poured money—in some cases their life savings—into high-yielding preferred shares and subordinated bonds issued by their banks. When the economic crisis erupted in Spain, the securities plunged in value, making  it effectively impossible to resell them.

The Patent, Used as a Sword - ( When Apple announced last year that all iPhones would come with a voice-activated assistant named Siri, capable of answering spoken questions, Michael Phillips’s heart sank. For three decades, Mr. Phillips had focused on writing software to allow computers to understand human speech. In 2006, he had co-founded a voice recognition company, and eventually executives at Apple, Google and elsewhere proposed partnerships. Mr. Phillips’s technology was even integrated into Siri itself before the digital assistant was absorbed into the iPhone. But in 2008, Mr. Phillips’s company, Vlingo, had been contacted by a much larger voice recognition firm called Nuance. “I have patents that can prevent you from practicing in this market,” Nuance’s chief executive, Paul Ricci, told Mr. Phillips, according to executives involved in that conversation. Mr. Ricci issued an ultimatum: Mr. Phillips could sell his firm to Mr. Ricci or be sued for patent infringements. When Mr. Phillips refused to sell, Mr. Ricci’s company filed the first of six lawsuits.

Euro zone to launch bailout fund with Spain in focus - (  Euro zone finance ministers launched their permanent 500 billion euro bailout fund on Monday but said Spain, the country widely expected to be first to draw on it, was taking steps to overhaul its economy and did not need a bailout for now. Arriving at a meeting in Luxembourg also set to discuss Greece and differences over how to recapitalise Europe's wobbly banks, German Finance Minister Wolfgang Schaeuble said Madrid had made clear it wanted no assistance. "Spain needs no aid program. Spain is doing everything necessary, in fiscal policy, in structural reforms," he told reporters as he arrived for a gathering that will also discuss plans to establish a single supervisor for euro zone banks.

Europe’s Richer Regions Want Out - ( Catalonia may be the catalyst for a renewed wave of separatism in the European Union, with Scotland and Flanders not far behind. The great paradox of the European Union, which is built on the concept of shared sovereignty, is that it lowers the stakes for regions to push for independence. While a post-national European Union may be emerging out of the euro zone crisis, with a drive for more fiscal union and more centralized control over national budgets and banks, the crisis has accelerated calls for independence from member countries’ richer regions, angry at having to finance poorer neighbors.

Europe Still at Odds Over the Workings of Its Bailout Fund - ( It has been referred to as “the bazooka” — the 500 billion euro European bailout fund that after much dispute will have its first board meeting on Monday. Dreamed up two years ago by euro zone ministers and officials as a permanent weapon against any financial problems that might besiege the region, the $650 billion bazooka might eventually be aimed at Spain’s banking crisis. Or it could be wielded to scare off bond market speculators who might otherwise try to drive up the borrowing costs of beleaguered governments in Madrid or other euro zone capitals.