TOP
STORIES:
Illinois Outlook Cut to Negative by Moody’s on Pension
Shortfall - (www.bloomberg.com) Illinois had the outlook on about $28
billion of general-obligation bonds revised to negative from stable by Moody’s
Investors Service, according to a statement from the ratings company. New
York-based Moody’s, which already rates Illinois the lowest among U.S. states,
cited its underfunded pension systems and said the shortfall is “likely to
persist and perhaps worsen.” Illinois in January had its rating cut to A2,
sixth- highest, after a legislative session that “took no steps to implement
lasting solutions to its severe pension underfunding.” The state’s worst-funded
retirement system has 43.4 percent of assets needed to cover its obligations,
according to data compiled by Bloomberg. Illinois also has about $8 billion in
unpaid bills.
Fed's Fisher worried about "Hotel California"
monetary policy - (www.reuters.com) The Federal Reserve's latest
moves to reduce borrowing costs and boost the economy could be hard to reverse, a
top Fed official said on Friday. "I argued that basically we were at risk
of what I call a 'Hotel California' monetary policy," Dallas Fed President
Richard Fisher said in an interview on CNBC. Like the Eagles song of that name,
he said, "You can check out any time you want, but you can never
leave." Fed decided on Wednesday to maintain its monthly asset purchases
of $45 billion of Treasury bonds and $40 billion of mortgage-backed securities,
until it saw a substantial improvement in the outlook for the U.S. labor
market.
Housing
for extended families - (www.nytimes.com)
Tom and Kristin Moser’s new
house — nearly 3,000 square feet in a development outside Tucson — has all the
modern amenities, including solar panels and an open kitchen. But their house
also has a feature that the builders are betting will be a hit, like the dog
showers and craft rooms that beckoned during the boom. Tucked inside is a
one-bedroom apartment with its own garage and a discrete entrance around the
side. The Mosers wanted the built-in apartment not to bring in a renter to help
pay the mortgage, but rather as a home for Mr. Moser’s 82-year-old widowed
father. “More than weekly visits and phone calls, he really needs to be around
family,” Mr. Moser, an investment manager, said of his father, Lee. “It’s the
way he was raised. I think as a society it’s a way we have to step back into.”
Six
Reasons to Fear the Overhang of Unsold Houses - (www.businessweek.com) The huge “shadow inventory”
of unsold homes doesn’t seem to scare people the way it used to. Home prices
are rising and builders are ramping up production. The number of properties for
sale is the smallest in a decade. In an excellent article on Nov. 29,
Bloomberg’s John Gittelsohn and Prashant Gopal reported that some housing
doomsayers are recanting their words. Real estate professor Susan Wachter is
one of those erstwhile doomsayers. She thought that once the big banks resolved
legal issues that had stalled foreclosures, a wave of homes owned by banks
would hit the market, pushing down prices. “I was wrong,” Wachter, who teaches
at the University of Pennsylvania’s Wharton School, told Gittelsohn and Gopal.
Tax
Chill Blows Through Central London Property - (www.cnbc.com)
But the government's
clampdown on property tax avoidance is starting to gather steam in these
mansion-flanked streets. In the central London boroughs of Kensington and
Chelsea and the City of Westminster, there are as many as 3,000 homes, with a
present value of 17.3 billion pounds held in offshore companies, according to
new research from Savills, the property consultancy. As well as the 15 percent
stamp duty applied to the sale of homes worth over 2 million pounds held by
companies introduced in March, these properties will now also be subject to an
annual levy of up to 140,000 pounds and capital gains tax.
