Tuesday, May 27, 2014

Wednesday May 28 Housing and Economic stories


US Postal Service loses $1.9B, pleads for help - (www.cnbc.com) The Postal Service says it lost $1.9 billion over the first three months of this year and is pleading again for Congress to pass reforms to its financial system. The agency said Friday that the loss for the quarter ended March 31 matched the $1.9 billion in red ink in the same period last year. And it came despite a 2.3 percent rise in its operating revenue and continued cost-cutting efforts. Postal officials have been asking for comprehensive legislation that includes a different delivery schedule, greater control over its personnel and benefit costs and more flexibility in pricing and products. Though various legislative proposals have been advanced, Congress has been unable to pass a bill with the requested changes.

Chinese developers pull back as property downturn hits economy - (www.reuters.com) China's efforts to cool its property sector look to have been more effective than intended, as a sharp drop in construction activity and falling prices threaten what had been one of few firing engines of the world's second-largest economy. Developers know the market is struggling -- their inventory is rising and prices are falling -- but expect that authorities will relax their tight grip on the sector in coming months. The government has long made it clear that economic growth would moderate as it tries to reform the economy. But by keeping the pressure on property too long, analysts fear the fallout will be more severe than anyone had expected. "To us, it is no longer a question of 'if' but rather 'how severe' the property market correction will be," Nomura analysts said in a report. New housing starts in the first quarter fell 25.2 percent compared to a year ago, Nomura calculated, as tighter credit conditions, oversupply and falling prices undermined the market.

Putin marks Victory in Crimea, more bloodshed in Ukraine - (www.reuters.com) President Vladimir Putin flew in to Crimea on Friday, marking the Soviet victory in World War Two and proclaiming the success of the peninsula's seizure from a Ukraine that Russia says has been taken over by fascists. In east Ukraine, where pro-Moscow rebels plan a referendum on Sunday to follow Crimea in breaking from Kiev, between three and 20 people were reported killed in the port of Mariupol, one of the biggest clashes yet between Ukrainian forces and separatists. The head of NATO, locked in its gravest confrontation with Russia since the Cold War, condemned Putin's visit to Crimea, whose annexation in March has not been recognized by Western powers. He also renewed doubts over an assurance by the Kremlin leader that he had pulled back troops from the Ukrainian border.

Geithner in Book Says Obama Aides Weighed Nationalizing Banks - (www.bloomberg.com)  Former Treasury Secretary Timothy F. Geithner said in his new book that members of the Obama administration “talked openly” about nationalizing banks such as Citigroup Inc. (C) in the aftermath of the financial crisis, according to an article in the New York Times Magazine. Geithner disagreed when Lawrence Summers, then head of the White House’s National Economic Council, suggested to President Barack Obama that the administration “pre-emptively nationalize” banks including Citigroup and Bank of America Corp., or try to embarrass them into changing their pay structures, according to the Times. The article includes quotes from the book, “Stress Test: Reflections on Financial Crises,” and interviews with Geithner.

Barclays Cuts Mark Europeans’ Retreat as Rules Pinch  - (www.bloomberg.com)  Barclays Plc (BARC)’s decision to shrink its investment bank shows how tighter rules and dwindling revenue are forcing Europe’s lenders to scale back operations and efforts to compete globally. In a break from his predecessor’s strategy to create a global securities operation, Barclays Chief Executive Officer Antony Jenkins said yesterday the lender will eliminate 7,000 jobs, a quarter ofemployees at the investment bank, shrink its fixed-income business and focus on fewer clients in the U.K. and U.S. The fixed-income market faces a structural rather than a cyclical decline and investment-banking revenue will be “weak for some time,” Jenkins told reporters. “European banks haven’t had sufficient time to build capital, and investors and managers have become impatient,” said Paul Vrouwes, who helps oversee about 6 billion euros ($8.3 billion) at ING Investment Management in The Hague, including Barclays shares. “Banks are having to think about returns at the group level, and they are seeing a more promising environment in other areas.”





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