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STORIES:
Refi
Madness Is Finally Running Out of Steam - (www.cnbc.com)
When Fed Chairman Ben Bernanke
left the door open to an early end of
asset purchases, he set off a burst of activity in the markets. Stocks fell,
interest rates roseand those in the mortgage business
braced themselves. Sure enough, overall mortgage application activity was down
8.8 percent in the week ended May 24; within that, refinancing activity fell an
even more dramatic 12.3 percent. Is the refi party over? It's certainly winding
down, according to the Mortgage Bankers Association, which reported the decline
in mortgage applications. "We have been expecting that refinancing volume
would drop pretty sharply in the second half of 2013," said Mike
Fratantoni, the MBA's vice president of research and economics. "This
refinancing boom has been going since late 2008, early 2009. The best credit
borrowers have been able to refinance a couple of times. As rates tick above
those levels, that group of borrowers is no longer going to have an incentive
to refinance."
Italy Jobless Rate Reaches 12%, 36-Year-High Amid Recession
- (www.bloomberg.com) Italy’s jobless rate reached
a 36-year high in April as companies didn’t hire staff amid pessimism about the
outlook of an economy that’s probably in its eighth quarter of recession. Joblessness (ITMUURS) rose to 12
percent after the March reading was revised up to 11.9 percent from an initial
11.5 percent, the Rome-based national statistics office Istat said in a
preliminary report today. The April rate was higher than the 11.6 percent
median of seven estimates in a Bloomberg News survey. Unemployment remained
above 10 percent for a 15th month and reached the highest since the data series
began in the first quarter of 1977. Europe’s
fourth-biggest economy will contract 1.8 percent in 2013 as weak household
demand extends the longest recession in over two decades, the Organization for
Economic Cooperation and Development said this week. “Employment and hours
worked will continue to fall, constraining household budgets and consumption
spending,” the Paris-based OECD said.
Alcoa
Rating Cut to Junk by Moody’s After Aluminum Price Drop - (www.bloomberg.com) Alcoa Inc. (AA), the largest U.S. aluminum
producer, had its credit rating cut to one level below
investment grade by Moody’s Investors Service after the metal’s price fell amid
a global oversupply. The long-term rating on Alcoa’s $8.6 billion of debt was
lowered by one step to Ba1 from Baa3, Moody’s said in a statement yesterday.
The outlook is stable, indicating the rating won’t be reduced again soon. “The
aluminum price has been in a downward decline since reaching post-recession
highs in 2011,” Moody’s said in the statement. Strength in the automotive and
aerospace industries isn’t sufficient for a “significant” recovery in
profitability and Alcoa won’t achieve investment-grade metrics within Moody’s
rating horizon, Moody’s said. While Alcoa, based in New
York, has shuttered high-cost smelting capacity, expanded profitable
segments and reduced costs, aluminum prices have fallen as a result of slowing
economic growth in China and rising global production. “We
believe Moody’s decision is a greater reflection of macroeconomic conditions
and the volatility of metal prices than a true statement of the financial and
operating strength of Alcoa,” the aluminum producer said in a separate
statement.
Rogue
Oregon Wheat Inflames Foes of Gene-Altered Crops - (www.bloomberg.com) The discovery in an Oregon field
of gene-altered wheat developed by Monsanto Co. (MON)(MON) that was not
approved for sale shows a failure of oversight that safety advocates say may
endanger consumers and U.S. trading relationships. Scientists said the rogue
wheat was a strain tested from 1998 to 2005 by Monsanto, the world’s largest
seed-maker, which withdrew its application for approval amid concern buyers
would avoid crops from the U.S., the world’s biggest wheat exporter. The U.S.
Department of Agriculture said yesterday it is investigating how the unapproved
seeds slipped out and were growing nine years after St. Louis-based Monsanto
ended its wheat program. The discovery prompted Japan to
suspend imports of western-white wheat and feed wheat. Other overseas buyers
may follow suit, according to critics including the Union of Concerned
Scientists and the Center for Food Safety. “This will have an impact worldwide,
because our trading partners do not want genetically modified wheat,” Michael
Hansen, senior scientist at Consumers Union in New York, said in an interview.
“This crop may be safe to eat, or it may not be. We don’t know because we
haven’t done the proper scrutiny.”
Americans have rebuilt less than half of wealth lost to the
recession - (www.washingtonpost.com)
American households have
rebuilt less than half of the wealth lost during the recession, leaving them without
the spending power to fuel a robust economic recovery, according to a new analysis from
the Federal Reserve. From the peak of the boom to the bottom of the bust,
households watched a total of $16 trillion in wealth disappear amid
sinking stock prices and the rubble of the real estate market. Since then,
Americans have only been able to recapture 45 percent of that amount on
average, after adjusting for inflation and population growth, according to the
report from the St. Louis Fed released Thursday. In addition, the report showed
most of the improvement was due to gains in the stock market, which primarily
benefit wealthy families. That means the recovery for other households has been
even weaker.
Richest
20 percent get half the overall savings from U.S. tax breaks, CBO says - (www.washingtonpost.com)
Japan
deflation persists, industrial output falls -
(finance.yahoo.com)
India Growth Holds Below 5% as Policy Logjam Hurts Economy - (www.bloomberg.com)
India Growth Holds Below 5% as Policy Logjam Hurts Economy - (www.bloomberg.com)
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