KeNo's Housing and Economic Portal: Tuesday March 30 Housing and Economic stories

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TOP STORIES:

Teachers' union leads list of biggest political spenders - The California Teachers Association has spent more than $200 million on campaign contributions and lobbying efforts in the last decade, leading what the Fair Political Practices Commission calls a "billion-dollar club" of moneyed political interests. The FPPC's report, entitled "Big Money Talks," delves into the 25 biggest - at least in financial terms - political players in the state, which have collectively spent $1.3 billion on political action in the last 10 years. "This tsunami of special interest spending drowns out the voices of average voters," FPPC chairman Ross Johnson said in a statement, "and intimidates political opponents and elected officials alike." The $211.9 million spent by the CTA is nearly twice as much as the $107.5 million committed by the second-highest spender, the California State Council of Service Employees, but after those two union groups, the remaining 13 on the Top 15 list are all either business groups, such as No. 3 Pharmaceutical Research and Manufacturers of America ($104.9 million), individual corporations or casino-owning Indian tribes, which have three of the 15 top spots.

Kansas City, Facing Bankruptcy, Closing Half Its Schools - (www.cnbc.com) Facing potential bankruptcy, the board that governs the once flush-with-cash Kansas City school district is taking the unusual and contentious step of shuttering almost half its schools. Administrators say the closures are necessary to keep the district from plowing through what little is left of the $2 billion it received as part of a groundbreaking desegregation case. The Kansas City school board narrowly approved the plan to close 29 out of 61 schools Wednesday night at a meeting packed with angry parents. The schools will close before the fall. Although other districts nationwide are considering closures as the recession ravages their budgets, Kansas City's plan is striking. In rapidly shrinking Detroit, 29 schools closed before classes began this fall, but that still left the district with 172 schools. Most other districts are closing just one or two schools. Emotional board member Duane Kelly told the crowd of more than 200 people Wednesday night, "This is the most painful vote I have ever cast" in 10 years on the board. Some chanted for the removal of the superintendent, while one woman asked the crowd, "Is anyone else ready to homeschool their children?" Kansas City Councilwoman Sharon Sanders Brooks said the closure plan had prompted some housing developers to consider backing out of projects.

Strike Paralyzes Greece; Protests Turn Violent - (www.cnbc.com) reek public and private sector workers went on strike on Thursday, grounding flights, shutting schools and halting public transport in the second nationwide walkout in two weeks in protest against austerity plans. Athens' streets echoed with loud-speakers blaring slogans calling for the rich to pay for a severe debt crisis, as thousands marched against cuts in civil servants' income, tax hikes, a pension freeze and increase in the retirement age. "No sacrifice for the rich!" protesters chanted, beating drums and holding banners reading: "Where did the money go?" Greek police fired teargas at groups of stone-throwing youths in central Athens. Police first fired teargas at a group of 50 youths in the anarchist neighbourhood of Exarchia, away from the main protest. But soon after, clashes erupted at the march with some 30 youths hurling sticks and stones at police, who returned with several rounds of tear gas. There were no reports of injuries. An official at the Citizen Protection Ministry said some 200 youths, whom he described as anarchists, were participating in the march.

Europe's banks brace for UK debt crisis - (www.telegraph.co.uk) UniCredit has alerted investors in a client note that Britain is at serious risk of a bond market and sterling debacle and faces even more intractable budget woes than Greece. The Italian-German group, Europe's second largest bank, said Britain's tax structure will make it hard to raise fresh revenue quickly enough to restore confidence in UK public finances. "I am becoming convinced that Great Britain is the next country that is going to be pummelled by investors," said Kornelius Purps, Unicredit's fixed income director and a leading analyst in Germany. Mr Purps said the UK had been cushioned at first by low debt levels but the pace of deterioration has been so extreme that the country can no longer count on market tolerance. "Britain's AAA-rating is highly at risk. The budget deficit is huge at 13pc of GDP and investors are not happy. The outgoing government is inactive due to the election. There will have to be absolute cuts in public salaries or pay, but nobody is talking about that," he told The Daily Telegraph. "Sterling is going to fall further over coming months. I am not expecting a crash of the gilts market but we may see a further rise in spreads of 30 to 50 basis points."

Geithner warns of rift over regulation - (www.ft.com) Tim Geithner, US Treasury secretary, has delivered a blunt warning to the European Commission that its plans to regulate the hedge fund and private equity industries could cause a transatlantic rift by discriminating against US groups. A letter sent by Mr Geithner this month to Michel Barnier, Europe’s internal market commissioner, makes it clear that the European Union is heading for a clash with Washington if it pushes ahead with what the US – and Britain – fear could be a protectionist law. The debate over the shape of future financial regulation has reached a critical point in Brussels. Diplomats were on Wednesday night moving closer to a compromise on the sweeping overhaul that has angered the industry and worried institutional investors. The draft EU directive would impose tighter restrictions on hedge funds, private equity and other alternative investment funds. It has caused alarm in the City of London, where some in the industry say it is a thinly veiled attempt by France and Germany to undermine the UK’s dominance of financial services.

Obama’s Student Loan Overhaul Endangered - (www.nytimes.com) With Democratic Congressional leaders and the White House struggling on Wednesday to finalize the details of major health care legislation, House Democrats were desperately trying to prevent another of President Obama’s top legislative priorities – an ambitious overhaul of student loan programs – from becoming a casualty of the health care battle. But Democrats in the Senate, where the private student lending industry has strong allies, predicted on Wednesday night that the education bill would not be part of an expedited budget measure containing the final revisions to the health care legislation. Some Democrats said that such a move would stall the student loan changes at a minimum for several months, and perhaps kill the overhaul altogether. Mr. Obama’s plan would end a program in which the government pays private, for-profit student lending companies to make risk-free loans using taxpayer money. Instead, the proposed overhaul would broaden the government’s existing direct-lending program, saving billions of dollars that the president had proposed using to expand Pell grant scholarships for low-income students.

Politics, shaky economy create no rush to restructure Fannie and Freddie - (www.washingtonpost.com) The federal government has spent the past half year seeking to roll back its emergency efforts at propping up the financial markets -- with the notable exception of its involvement in mortgage giants Fannie Mae and Freddie Mac. As the government has pledged more and more money to cover the companies' losses, it has assured the public that planning was underway for overhauling the firms so the bailouts would end. As recently as December, the Obama administration said it expected to release a preliminary report on how to remake Fannie Mae and Freddie Mac around Feb. 1. But no plan was produced, and in response to questions from lawmakers, Treasury Secretary Timothy F. Geithner clarified last month that it would be another year before the government proposes how to restructure the firms. Sixteen months after they were seized to prevent their collapse, the companies remain wards of the state, running a tab that has now exceeded $125 billion in what has become the single costliest component of the federal bailout for the financial system.

OTHER STORIES:

Beneath the U.S. jobs data, signs of rot - (www.theglobeandmail.com)

Dollar reverses gains after U.S., Chinese data - (www.marketwatch.com)

Stocks trade flat on concern about China inflation - (finance.yahoo.com)

Senate Bill on Finance to Include Agency That Tracks Financial Risk - (www.nytimes.com)

Senate’s Dodd Plans to Release Financial Overhaul Bill - (www.bloomberg.com)

Credit Market Springs to Life - (online.wsj.com)

Sovereign Funds Rise to $3.51 Trillion, Preqin Says - (www.bloomberg.com)

Pimco’s El-Erian Says Public Finance Shock May Deepen - (www.bloomberg.com)

Bond Spreads at Narrowest This Year Lure GMAC: Credit Markets - (www.bloomberg.com)

New York may have to borrow to bridge deficits - (www.ft.com)

Goldman Deal-Maker Now Advocates Regulation - (www.nytimes.com)