Tuesday, August 18, 2015

Wednesday August 19 Housing and Economic stories


Asking Everyone’s Rich Uncle to Pay for School - (www.bloomberg.com)  Laura Strong, a 29-year-old in suburban Chicago, owes $245,000 on student loans for the psychology Ph.D. she finished in 2013. This year, she says she hopes to earn $35,000 working part-time jobs as a therapist and yoga teacher—not enough to manage a loan payment of about $2,000 a month. But Strong isn’t paying anything close to that. She’s one of at least 3.8 million Americans who’ve qualified for federal programs that tie payments to income and eventually forgive debt for some struggling borrowers, leaving taxpayers to pick up the tab. President Obama has praised the programs for offering a lifeline to borrowers who’d otherwise default, scarring their credit. Strong pays about $100 a month on her federal loans, which she used to finance her graduate studies at Argosy University, a for-profit institution. “I wouldn’t know how I would pay it back otherwise,” she says.

College Lays Off Hundreds, Blows 900k On President's Mansion - (www.dailycaller.com) The University of Akron, a public college in Ohio, is attracting ridicule over the revelation that it has spent lavishly to renovate its president’s house while also trying to plug a $60 million budget hole. In an emergency effort to rapidly cut its expenses by $40 million, Akron has announced that it is eliminating 215 positions at the school. Victims of the cuts include the school’s non-profit publishing company, a big chunk of its theater staff, and its baseball team. Scrutiny over the deep, rapid cuts has led to local press discovering that one reason for the school’s big financial hole is a massive splurge last year on the university president’s house. According to documents obtained by the Northeast Ohio Media Group, the school spent about $950,000 renovating a house for current president Scott Scarborough, who arrived at the school late last year. The house already belonged to the school, but had received no significant work in 15 years under Scarborough’s predecessor.

Currencies in Freefall Handcuff Bankers From Chile to Colombia - (www.bloomberg.com)  Central bankers in commodity-dependent Andes economies aren’t even considering interest-rate cuts to revive growth, even as prices for oil, copper and other raw materials collapse. That’s because the deepening price slump is also dragging down currencies in Colombia and Chile -- a swoon that’s fanning inflation and tying policy makers’ hands. Fixed-income traders have now ratcheted up cost-of-living expectations for Colombia and Chile after their tenders sank more than 10 percent in the past three months. “It’s causing a headache,” Luis Oscar Herrera, the chief Andean region economist at BTG Pactual SA, said by telephone from Santiago. “All the Andean countries have headline and core inflation above their target ranges.” In an interview with local newspaper La Tercera published Sunday, Chile central bank President Rodrigo Vergara said rate cuts are completely off the table as the sinking peso fuels price acceleration. That’s even after Chile’s economy shrank 0.07 percent on a seasonally adjusted basis in the first five months of the year, buffeted by the nosedive in copper prices. Chile is the world’s biggest exporter of the metal, which has tumbled 26 percent in the past year.

Explorers In Need of Cash Are Selling Oil Fields as Last Resort - (www.bloomberg.com) Energy explorers reeling from the rout in oil prices are looking for liquidity in an obvious place: their rocks. Having exhausted other ways to raise cash as a glut of global supply depresses prices, a slew of producers from Anadarko Petroleum Corp. to Comstock Resources Inc. announced more than $2.4 billion in asset sales last month, according to data compiled by Bloomberg. Selling oil and gas fields to pay off lenders and fund new drilling -- often a wildcatter’s option of last resort -- is surging after a six-month lull. There’s more to come -- by one estimate, another $20 billion this year -- as executives at Occidental Petroleum Corp., Whiting Petroleum Corp., Penn Virginia Corp., Exco Resources Inc., Chesapeake Energy Corp. and Ultra Petroleum Corp. have all said in recent weeks that they are selling assets or exploring sales. The surge shows how the industry’s two-pronged strategy for staying financially healthy since oil prices started tanking -- raising capital while tightening belts -- may not be enough, particularly for companies with a lot of outstanding debt. Bank regulators are getting nervous about the industry’s exposure to drillers, creating another incentive to sell assets.

Bank of America Pulling Clients’ Money From Paulson Fund - (www.bloomberg.com) Bank of America Corp. is pulling its wealthy clients’ money from one of billionaire John Paulson’s hedge funds and reviewing another because of concern that large positions may be hard to sell. The bank sent a memo to financial advisers telling them to withdraw about $80 million from Paulson’s Advantage Fund because of illiquid investments and elevated volatility, according to two people familiar with the matter. It also said they shouldn’t put any more client money into the firm’s Special Situations Fund and put it on heightened review because of concern over some large illiquid investments, said the people, who asked not to be named because the funds are private. “As part of our commitment to our clients, we provide rigorous initial due diligence and ongoing detailed analysis of all funds on our platform, and remain in constant dialog with fund managers regarding changes to the funds or their management,” said Susan McCabe, a spokeswoman at the bank.




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