KeNo's Housing and Economic Portal: Sunday March 6 Housing and Economic stories

Saturday, March 5, 2011

Sunday March 6 Housing and Economic stories

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TOP STORIES:

Cotton traders and US farmers clash - (www.ft.com) The world’s biggest cotton traders and Texas farmers are clashing over supplies as the price of a bale reaches an all-time high. Merchants buying cotton from the high plains encircling the western Texas city of Lubbock have been accusing some growers of walking away from contracts signed when prices were less than half current levels. The dispute has prompted lawsuits, arbitration claims and the setting up of an anonymous phone line for informants. Given that the US is the largest exporter, the dispute could reverberate in international markets as textile mills in China, Bangladesh, Turkey and elsewhere scramble for cotton while supplies dry up. Texas last year grew 44 per cent of the 18.3m-bale crop in the US. The dispute highlighted the risks that commodity trading houses such as Louis Dreyfus of France, Cargill, Singapore-based Olam International, Noble Group of Hong Kong and Switzerland-based Ecom Agroindustrial face as they buy, sell and transport cotton between continents.

GOP Bill Takes Aim at Pension Disclosures - (online.wsj.com) Legislation being pushed by House Republicans could require many states to disclose larger shortfalls in their pension plans and force them to take more aggressive steps to get their finances in order. The Public Employee Pension Transparency Act, introduced by Rep. Devin Nunes (R., Calif.) earlier this month, would compel states and municipalities to meet stringent standards for reporting on the finances of employee-pension funds, and would expressly ban any federal bailouts. Opponents view it as another congressional Republican swing at public-employee unions, which have come under fire as federal and state governments seek to tame budget deficits.

The Stealth Return of $100 Oil - (online.wsj.com) The days of $100 oil are back—and not just in Europe, where the Brent crude benchmark vaulted past $108 a barrel on Monday. While U.S. prices haven't scaled such heights—the benchmark oil contract on the New York Mercantile Exchange briefly surged Tuesday past $94—many U.S. oil refiners and consumers are finding their costs have already escalated. Refiners such as Valero EnergyCorp. are paying prices that mostly track Brent, not the U.S. benchmark often referred to as West Texas Intermediate, and those costs are being passed on to gas stations. Gasoline prices averaged $3.14 a gallon in the U.S. last week, according to the U.S. Energy Information Administration, up 2.9% from Dec. 27. In February 2008, when oil prices settled in triple digits for the first time in history, retail gasoline prices in the U.S. were at $3.13 a gallon.

German Voter Disapproval of Greek Bailout Muddles Aid Talks: Euro Credit - (www.bloomberg.com) German Chancellor Angela Merkel’s resolve to defend the euro is being tested after her party suffered one its worst defeats since World War II in the first of seven state elections this year. Merkel’s Christian Democratic Union lost power in Hamburg for the first time in a decade in a Feb. 20 vote. A European Union summit on March 24-25 to thrash out a permanent rescue facility to address the debt crisis that prompted Greeceand Ireland to seek bailouts is sandwiched between polls that may echo what Merkel called “a stinging defeat.” “We are in a ‘muddling through’ scenario,” said Steven Major, global head of fixed-income research at HSBC Holdings Plc in London. “Come the end of March, things could come to a bit of a head. The negotiations can get knocked off course.” Germany wants stiffer sanctions against nations whose budget deficits top 3 percent of gross domestic product in exchange for cheaper rescue loans. Merkel’s coalition partner, the Free Democratic Party, opposes increasing the scope of the European Financial Stability Facility rescue fund. The opposition Social Democrats, winners in Hamburg, have called for joint euro-area bonds and a bigger EFSF.

Japan Debt Outlook Lowered by Moody’s on ‘Inexorable’ Debt - (www.bloomberg.com) Japan’s debt rating outlook was lowered to negative from stable by Moody’s Investors Service on concern that political gridlock will constrain efforts to tackle the biggest debt burden of any nation. Economic and fiscal policies “may not prove strong enough to achieve the government’s deficit reduction target and contain the inexorable rise in debt,” Moody’s said in a statement today. The rating is Aa2, the company’s third highest. Standard & Poor’s cut its rating last month to fourth highest. Today’s move adds pressure on Prime Minister Naoto Kan as his public approval rating slides and he struggles to secure lawmakers’ support for measures to reduce debt, including a possible sales-tax increase. Japanese shares accelerated declines after the announcement and amid tensions in the Middle East. The Nikkei 225 Stock Average slid 1.8 percent today.