KeNo's Housing and Economic Portal: Saturday December 31 Housing and Economic stories

Friday, December 30, 2011

Saturday December 31 Housing and Economic stories

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TOP STORIES:

A Bubble Down on the Farm? - (online.wsj.com) Farmers like Terry Pratt are a big reason Midwest farmland prices seem to be defying gravity—for now. Inside the tidy red-brick community center here, a hushed crowd of town merchants and growers watched as two of their own bid against each other at an auction for 50 acres of corn and soybean land. With slight nods and the waggling of a finger, the rivals yanked the price higher and higher as auctioneer Troy Louwagie chanted into his hand-held microphone: "Will you give 61 and 62, and a two and a two?

ING Cuts Staff in New York, Mexico From Emerging-Market Dollar Debt Group - (www.bloomberg.com) ING Groep NV (INGA), the biggest Dutch financial services company, cut jobs from its Latin America dollar-denominated debt group in Mexico and New York. ING fired five people in Mexico, said Elaine Clark, a spokeswoman in New York. She declined to specify how many positions were eliminated in New York. The changes won’t affect foreign-exchange trading, she said. ING will shift some positions to London from New York as it prepares for new capital requirements set by the Basel Committee on Banking Supervision, she said. “New York will remain relevant,” Clark said in a telephone interview.

Morgan Stanley to Cut About 1,600 Jobs - (www.bloomberg.com) Morgan Stanley (MS), the financial firm whose shares have declined 45 percent this year, plans to cut about 1,600 jobs amid an industrywide drop in revenue from investment banking and trading. Reductions will occur in the first quarter of 2012 at all levels of the firm, Mark Lake, a company spokesman, said in an interview today. The figure amounts to about 2.6 percent of the 62,648 employees New York-based Morgan Stanley had at the end of September. Chief Executive Officer James Gorman is grappling with Europe’s debt crisis and concern that U.S. economic growth will slow, reducing demand for trading and investment-banking services. Morgan Stanley’s revenue from those businesses dropped 36 percent in the third quarter from the previous three months, excluding accounting adjustments.

Traders Confounded as Volatility Extends Run - (www.bloomberg.com) Duke Buchan III’s $1 billion hedge fund beat U.S. stocks by 46 percent in the decade through March, a period that included the steepest equity-market losses since the 1930s. Then came the selloff in August when global stocks suffered their worst nine-day drop since the 2008 financial crisis. For four days, The Dow Jones Industrial Average (INDU) alternated between gains and losses of more than 400 points, the longest streak ever, and itsintraday swings have averaged twice the level seen during the first seven months of the year. Last week, Buchan told clients he is shutting his firm Hunter Global Investors LP. “Markets seem to be driven more by the latest news out of Europe than by a company’s earnings prospects,” Buchan, 48, said in a Dec. 8 investor letter. “We have not weathered the ensuing volatility well.” Traders who used to profit from price swings are struggling as record stock market volatility shows no signs of abating. Hedge funds are on track to post their second-worst year on record, with managers such as John Paulson seeing bets undermined by Europe’s two-year sovereign-debt crisis and concerns over the U.S. economic recovery.

U.S. Shoppers Foot Bill for Soaring Pay in China - (online.wsj.com) One of the things that's showing up in Christmas stockings this year: higher prices, courtesy of China. After decades as America's go-to destination for low-cost consumer goods, China is undergoing a profound shift. Rapid economic development and a smaller supply of young migrant workers are pushing up labor costs. Tack on rising raw-materials prices, driven largely by Chinese demand, and a strengthening currency, and China-made goods aren't the bargains they used to be. In the past year, labor costs have risen 15% to 20% at Michaels Stores Inc.'s Chinese suppliers, says John Menzer, chief executive of the arts-and-crafts retailer. He says his company has spent much of the year seeking ways to partly offset those increases, such as by grouping goods from different suppliers into a single container to cut shipping costs.