KeNo's Housing and Economic Portal: Thursday January 27 Housing and Economic stories

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TOP STORIES:

New Jersey Agency Debt Costs Soar as Yields Rise: Muni Credit - (www.bloomberg.com) The New Jersey Economic Development Authority scaled back the week’s largest bond offering as tax- exempt municipal yields climbed and Governor Chris Christie made comments about the state’s financial well-being. A New Jersey general-obligation note due in August 2015 traded at an average yield of 2.51 percent yesterday afternoon, or 90 basis points over top-rated four-year debt, according to a BVAL index. The same security traded at 2.1 percent a week ago, 57 basis points above the benchmark. Municipal bonds suffered their worst quarterly performance in 16 years in the three months ended Dec. 31. Investors pulled a net $22.7 billion from muni mutual funds in the past nine weeks, according to data from the Investment Company Institute in Washington. Vanguard Group Inc., the world’s largest mutual- fund company, withdrew a request filed last year with regulators to open three municipal-bond index fundsamid concern that state finances may deteriorate.

Solar Panel Maker Moves Work to China - (www.nytimes.com) Aided by at least $43 million in assistance from the government of Massachusetts and an innovative solar energy technology, Evergreen Solar emerged in the last three years as the third-largest maker of solar panels in the United States. But now the company is closing its main American factory, laying off the 800 workers by the end of March and shifting production to a joint venture with a Chinese company in central China. Evergreen cited the much higher government support available in China. The factory closing in Devens, Mass., which Evergreen announced earlier this week, has set off political recriminations and finger-pointing in Massachusetts. And it comes just as President Hu Jintao of China is scheduled for a state visit next week to Washington, where the agenda is likely to include tensions between the United States and China over trade and energy policy.

Arbitration, Litigation, Aggravation - (www.nytimes.com) WHEN investors file complaints against their brokers, the matters are almost always heard by an arbitration panel rather than by a judge or jury. Arbitration forums like those run by the Financial Industry Regulatory Authority typically adjudicate cases more quickly than the courts and less expensively, because costs associated with discovery and extensive legal filings are minimized if not eliminated. But a swift and inexpensive outcome is not always assured in Finra arbitrations, as an investor case under way in California shows. By cleverly circumventing Finra’s rules, the financial firm that was sued by its former client has brought a related case in California state court, adding significantly to the investor’s costs of seeking relief. And to make matters even more exasperating, Finra’s rules preclude it from investigating the firm and its tactic until after the damage is done. The story begins in 2005, when Helen Cohen, an elderly widow, opened an investment account with the brokerage unit of what is now called the State Employees Credit Union, in Raleigh, N.C. Ms. Cohen, who died three years later, at the age of 86, was in poor health at the time she was dealing with S.E.C.U. Notes taken by an S.E.C.U. employee after meeting with Mrs. Cohen at her San Diego home stated that she “confuses easily.”

So much for Chicago talk of poaching Oregon business - (www.oregonlive.com) In the wake of the Measure 66 and 67 tax increases approved by Oregon voters a year ago,Chicago Mayor Richard Daley quickly said he'd be recruiting Oregon businesses to move to his own supposedly more business-friendly city. Wonder what Daley is saying now that Illinois legislators have approved a stunning 66 percent increase in the state's income tax? Here's some of the fine print, if you want to more deeply compare the two states: Under the new bill, the Illinois personal income-tax rate - 5 percent - will still be much lower than Oregon's. But Illinois has high sales taxes. In 2008, just as the recession was first hitting, the total state and local tax burden in Illinois $4,346 per capita compared to $3,719 in Oregon, according to the Tax Foundation. Because Oregon had a lower per capita income, however, Illinois residents paid 9.3 percent of their income in state and local taxes and Oregonians paid 9.4 percent.

Will democracy, Illinois style, ever change? - (www.illinoisissues.uis.edu) Illinois' reputation for corruption is well-documented. Nine men have served as governor in the past 50 years. Two — Democrat Otto Kerner and Republican George Ryan — were convicted of crimes they committed while in office. (Ryan is appealing his conviction.) Democrat Dan Walker also was imprisoned after he left office, but for crimes unconnected to his tenure as governor. And Republican William Stratton was indicted for tax evasion in connection to his use of campaign funds, but he was ultimately acquitted. As Democratic Gov. Rod Blagojevich begins his second term, federal investigations of his administration's hiring and contract practices continue. His fundraiser and political adviser Antoin "Tony" Rezko has been indicted for an influence-peddling scheme. Though Blagojevich has not been charged with any wrongdoing himself, based on the persistent federal prosecutor's previous record, it's fair to say that could change. It is possible, in other words, that the majority of Illinois governors who served during the past half century could end up being indicted on corruption charges. That so many Illinoisans at state government's apex have been accused of crime raises the question of whether there is a culture of corruption.