KeNo's Housing and Economic Portal: Friday January 17 Housing and Economic stories

Thursday, January 16, 2014

Friday January 17 Housing and Economic stories

Detroit manager sought SEC probe of banks over interest rate swaps - (www.reuters.com) Detroit asked a U.S. regulator to consider bringing charges against two banksfor costly interest-rate swaps that factored in the city's record-setting municipal bankruptcy case, Detroit Emergency Manager Kevyn Orr testified on Friday. Orr said Detroit asked the U.S. Securities and Exchange Commission to investigate its deals with UBS AG and Merrill Lynch Capital Services for interest rate swaps to hedge risk on some of the $1.4 billion of pension debt Detroit sold in 2005 and 2006. Orr did not say whether the SEC responded to his request to investigate UBS and Merrill Lynch Capital Services, a unit of Bank of America Corp. The city thought there were "serious questions" about whether it owed the banks anything at all, Orr testified, and Detroit weighed trying to invalidate the swaps. But officials decided chances of prevailing in court were only "more or less 50/50," so it decided to bargain with the banks instead.

Greece: Numbers improve, problems worsen in 2014 - (finance.yahoo.com) Greece assumes the presidency of the European Union Wednesday, starting 2014 with a promise by the government to pull the country out of a six-year recession, keep a balanced budget, and effectively end a financial crisis that rattled the euro. "In 2014, Greece will return to the markets and start to become a normal country again," Prime Minister Antonis Samaras said in a televised New Year's address. "After six unending, painful years, 2014 will herald the prospect of growth ... What's important is that we've avoided the worst." But have they? With most of the 240 billion euros ($330 billion) in bailout loans already paid out, Greece still has an unsustainably high national debt, faces the threat of renewed political instability, and has more than one-in-four jobless and steadily sliding into poverty. Greeks greeted the New Year after many spent hours lining up in tax offices to pay austerity levies on time. And heavy smog has returned to the country's capital after decades this winter as households left with no heating throw scrap wood and garbage onto the fireplace to try to keep warm.

Boeing union to vote on crucial contract - (www.reuters.com) Some 31,000 Boeing machinists vote on Friday on a crucial labor contract that affects the location of thousands of jobs and billions of dollars of economic activity. If the workers accept the deal, Boeing Co (BA.N) would build its new 777X jetliner and wings in the Seattle area, where Boeing has built aircraft for more than 90 years. If they reject it, Boeing says it will make the wings and possibly the whole plane, elsewhere, marking a major employment and economic loss for Washington state.

Job searches still fail for the long-term unemployed - (money.cnn.com) Lena Rouse has merely one resolution for 2014: Finally get a job. It's a goal that was out of reach in 2013, despite her best efforts. After she was laid off from an IT analysis job at a regional bank, Rouse was unemployed all year long. What's the problem? It certainly wasn't a lack of skills. She has two masters degrees (one in business and another in IT) and about 22 years of work experience. "Hiring managers tell me I'm overqualified," she said. It also wasn't a lack of trying. She sent out hundreds of job applications, and even told recruiters she would be willing to work for less than her previous salary. And it wasn't the location either. Rouse lives in Columbus, Ohio -- the largest city in the state, home of five Fortune 500 companies, and one of few Midwestern cities which has gained back just about all the jobs it lost in the recession, according to the Labor Department.

Idaho to take over big, privately run state prison - (www.cnbc.com) Idaho's governor says the corrections department will take over operation of the largest privately run prison in the state after more than a decade of mismanagement and other problems at the facility. Nashville, Tenn.-based Corrections Corporation of America has contracted with the state to run the prison since it was built in 1997. Taxpayers currently pay CCA $29 million per year to operate the 2,080-bed prison south of Boise. Gov. C.L. "Butch" Otter made the announcement Friday at a preview of the upcoming legislative session. For years, Otter has been a champion of privatizing certain sectors of government, including prisons. In 2008, he floated legislation to change state laws to allow private companies to build and operate prisons in Idaho and import out-of-state inmates. In 2008, he suggested privatizing the 500-bed, state-run Idaho Correctional Institution-Orofino.

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