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

Monday, February 17, 2014

Tuesday February 18 Housing and Economic stories

Ukraine PM resigns amid unrest, parliament revokes anti-protest laws - (www.reuters.com) Ukrainian Prime Minister Mykola Azarov resigned on Tuesday while deputies loyal to President Viktor Yanukovich, acting to calm violent street protests, back-tracked and overturned anti-protest laws they rammed through parliament 12 days ago. The first real concessions by Yanukovich since the crisis erupted two months ago brought cheers from several thousand demonstrators on Kiev's Independence Square, focal point of the protests. Opposition leaders said they would continue to harness street power to wring more gains. "We have to change not only the government, but the rules of the game as well," declared boxer-turned-politician Vitaly Klitschko. "We are sure the struggle will continue," he said.

Russian Wage Growth Stumbles to 34-Month Low as Economy Wilts - (www.bloomberg.com) Russian retail sales, real wages and disposable incomes missed economist estimates, posing a dilemma for policy makers reluctant to deploy monetary stimulus. Wages adjusted for inflation grew 1.9 percent in December from a year earlier, the slowest since February 2011, after a downwardly revised 4.1 percent increase in November, the Federal Statistics Service in Moscow said today in an e-mailed statement. The median estimate of 15 economists in a Bloomberg survey was for a 4.5 percent gain. Income growth decelerated to 1.5 percent from a revised 2.4 percent, surprising analysts who projected a jump of 2.2 percent. The central bank is opting to forgo policy easing as officials including Economy Minister Alexei Ulyukayev say the government is running out of options to boost growth. Hobbled by weaker global demand for its exports of oil, natural gas and metals, Russia’s $2 trillion economy is expanding at the slowest pace since a 2009 contraction.

Argentina’s Lying Prices Show Capital Control Limits: Currencies - (www.bloomberg.com) Argentina allowed the peso to plunge 15 percent after the central bank began scaling back interventions in the foreign-exchange market on Jan. 22, spurring price increases of as much as 30 percent on consumer goods as international reserves fell to a seven-year low. The black-market price in Argentina rose last week to a record 12.75 pesos per dollar, compared with the official rate of about 8, according to Buenos Aires newspaper Ambito. “Capital controls signal that a country is very worried about preserving its foreign exchange,” Steve Hanke, a professor of applied economics at Baltimore-based Johns Hopkins University and an adviser to the Argentine government in the 1990s, said in an interview. “That means bad things are in the wind.” The restrictions spawn illegal traffic in the local currency that creates “lying prices” in the economy, he said.

The Unspoken Reason Obama Can't Raise the Minimum Wage - (www.bloomberg.com) But whatever the reason, the long-term slide in support for helping the poor suggests that Obama needs to focus on more than just changing the minds of Republican lawmakers -- a task that's not only futile, but one the Pew data suggests misses the point. Instead, he needs to persuade more of the public that helping the worse off should be a priority of government. So long as the public rates aiding the poor so low on Washington's to-do list, Republicans will continue to calculate that blocking a higher minimum wage carries no significant political cost -- even if a majority of Americans say they support raising the minimum wage. Until that changes, Obama will be left to work with marginal fixes, such as raising the minimum pay for federal contractors.

Argentina Devaluation Gambit Backfires in Worst Bond Rout - (www.bloomberg.com) Argentina’s bond losses are deepening on concern the nation’s efforts to stem a plunge in foreign reserves will backfire in the absence of a reduction in government spending and higher interest rates. The country’s dollar-denominated debt has tumbled 4 percent since Jan. 23, when the government devalued the peso by the most in 12 years. The selloff was the biggest among 58 developing nations tracked by JPMorgan Chase & Co. Argentina’s move to scale back support for the peso may accelerate the fastest drop in foreign reserves in a decade if the country doesn’t double its 22 percent interest rate to ease demand for dollars and rein in government largess that’s stoking inflation, according to Bank of America Corp. President Cristina Fernandez de Kirchnereased a ban on purchases of foreign currency for savings instituted in July 2012 as she seeks to preserve dollars the country uses to pay debt.

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