KeNo's Housing and Economic Portal: Tuesday October 18 Housing and Economic stories

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Home-Health Firms Blasted - (online.wsj.com) An inquiry by the Senate Finance Committee has found that the nation's three largest home-health companies tailored the care they provided to Medicare patients to maximize their reimbursements from the federal program. The committee launched its investigation following an article last year in The Wall Street Journal that used Medicare-claims data to analyze the companies' patterns of dispensing care. The article described how the companies' Medicare patients received a high number of the most profitable home-therapy visits but few of the least profitable ones. The three companies, Amedisys Inc., LHC Group Inc. and Gentiva Health Services Inc., get most of their revenues from Medicare. Home-health care, which involves sending nurses to patients' homes in an effort to cut down on costly hospitalizations, is one of the fastest-growing areas of spending for the $524 billion-a-year health plan for the elderly and disabled. The Senate committee, citing emails and other internal documents obtained from the companies, alleges that they encouraged employees to make enough home-therapy visits to reach thresholds that triggered bonus payments, whether or not the visits were medically necessary.

Texas cattle industry withered by drought - (www.ft.com) Many of the cattle at the weekly auction in Columbus, Texas, were so weakened by the state’s year-long record drought that Tanya Reeves decided against buying. “Even the younger ones look so thin their bones are showing,” Mrs Reeves said, watching the steady parade of cattle with her two-year-old son, Ian. Auctions across the state are being inundated with similar animals as ranchers are forced to sell amid a drought that has left them with insufficient grass, hay and water. While drought has also affected Oklahoma, New Mexico, Kansas, Georgia and Louisiana, Texas is its biggest victim – with more than $5.2bn in agricultural losses and heavy blows to its cattle industry – the nation’s largest, which provides 16 per cent of the country’s beef cows. Cows selling for 50 cents a pound would have sold for 80 cents two weeks ago. That adds up to a significant loss on a 2,000lb cow.

Dexia Plunges Most in 2 1/2 Years on Moody’s Review; Banks, Insurers Slump - (www.bloomberg.com) Dexia SA (DEXB) and Societe Generale SA led a slide among European financial shares amid growing concern that banks are having trouble funding themselves. Dexia, the municipal lender rescued by France and Belgium in 2008, fell as much as 14 percent in Brussels trading, the most since March 2009, as Moody’s Investors Service placed its operating units on review for a possible downgrade. Paris-based Societe Generale fell as much as 9.8 percent. Dexia faces “concerns about further deterioration in the liquidity position of the group in light of the worsening funding conditions in the wider market,” Moody’s said. Belgian and French finance ministers plan to meet today to discuss financing options for the lender, Les Echos reported on Sept. 30, citing unidentified people involved in the talks. “The big worry for Dexia shareholders is a massive dilution of shares,” said Jawaid Afsar, a trader at Securequity Ltd. in Sheffield, England. “There’s speculation that Dexia may be on the receiving end of a bailout. Dexia is the most exposed, and the news of a possible downgrade by Moody’s does not help.”

Oil Falls After Closing at One-Year Low - (www.bloomberg.com) Oil fell in New York, after closing last week at a one-year low, on concern that Greece will default on debt payments, leading to slower economic growth and fuel consumption. Futures slipped as much as 2.3 percent after dropping 17 percent since the end of June in the worst quarter since 2008. Reports this week may show manufacturing in the U.S., the world’s biggest oil consumer, barely grew last month, while job growth failed to cut unemployment. European finance ministers meet today in Luxembourg to weigh the threat of a Greek default. Saudi Arabian Oil Co. canceled a crude shipment to Royal Dutch Shell Plc after a fire at Shell’s largest oil refinery. “A Greek default is becoming more and more likely amid reports the country will miss debt-reduction targets,” said James Zhang, a strategist at Standard Bank Plc in London, who forecasts Brent will average $98 a barrel in the fourth quarter. “The weaker euro and falling equity market are pulling oil prices lower.”

Homeowner advocates laud Harris for break with mortgage settlement - (www.latimes.com) Advocates for homeowners in California applauded California Atty. Gen. Kamala Harris' decision to bow out of talks aimed at reaching a national foreclosure settlement with the nation's biggest banks. Harris has said that the proposed settlement, the product of nearly 11 months of negotiations, let the banks off too easily. She has said that her office will conduct a more rigorous investigation. “She stayed at the table on the settlement as long as was reasonable,” said Brian Heller de Leon, a representative of PICO California, an advocacy group for homeowners. “It became clear that there was no longer a reasonable path for California to stay in these negotiations.” Heller de Leon said the proposed settlement would only have helped a tiny minority of California homeowners. Harris has recently come under pressure from politicians and progressive groups inside and outside the state who wanted her to reject the settlement that was being discussed by the banks and the committee of state attorneys general. Richard Hopson, chairman of the Alliance of Californians for Community Empowerment, said Friday that "a thorough investigation" is needed. "We applaud Attorney General Harris for pulling out of this proposed 'settlement,' " Hopson said in a statement. "The banks need to pay for what they have done."