U.S. home builder sentiment plunges in February - (www.reuters.com) U.S.
homebuilder confidence suffered its largest one-month drop ever in February,
heightening concerns that recent signs of weakness in the economy reflect
deeper problems than the severe weather that has gripped much of the country. The
National Association of Home Builders said on Tuesday its Housing Market Index
plunged by 10 points to 46 in February, with a majority of builders seeing
market conditions as poor. The NAHB, which produces the index together with
U.S. bank Wells Fargo, said cold temperatures kept potential home buyers out of
the market across much of the country. But the trade group said high costs were
also holding back the housing industry, and the data adds to worries the U.S. economy might
actually be losing momentum following a year of break-out growth.
California
Cities Strained by Retiree Health: Muni Credit - (www.bloomberg.com) The Los Angeles Unified School District, the nation’s largest outside New York City, owes so much for retiree health
care that paying off its debt would cost $17,500 for each student -- and there
are 640,000 of them. Local governments typically haven’t been punished by
investors for underfunding retiree health care and insurance, unlike pensions.
Investors believe that, in a pinch, the governments can walk away from the
obligations, said Michael Ginestro, head of fixed-income research for Bel Air
Investment Advisors LLC, which manages $2.8 billion in Los Angeles. A group of California state court decisions have upended that
assumption, treating “other post-employment benefits,” or OPEB, as vested
rights that can be changed only through contract negotiations. The decisions
threaten to add to the fiscal strains of cities and counties whose pension
obligations are already putting pressure on their creditworthiness.
George Soros Doubled His Bet That The Stock
Market Is Going Down - (www.businessinsider.com) One
day every quarter, the world's big fund managers reveal some of what they're
buying and selling in their 13-F regulatory filings. Generally speaking, these
revelations aren't taken too seriously as they are 45-day-old snapshots. But
over the weekend, one gigantic $1.3 billion position raised some eyebrows.
Soros Fund Management disclosed that it held put options on 7,090,000
shares of the SPDR S&P 500 ETF (SPY) at the end of Q4. Puts protect the
holder of the option from declining prices. Soros' position makes money if $1.3
billion worth of the SPY declines in value. And at $1.3 billion, this represents
the largest position in the portfolio.
VW
workers may block southern U.S. deals if no unions: labor chief - (www.reuters.com) Volkswagen's
top labor representative threatened on Wednesday to try to block further
investments by the German carmaker in the southern United States if its workers
there are not unionized. Workers at VW's factory in Chattanooga, Tennessee,
last Friday voted against representation by the United Auto Workers union
(UAW), rejecting efforts by VW representatives to set up a German-style works
council at the plant. German workers enjoy considerable influence over company
decisions under the legally enshrined "co-determination" principle
which is anathema to many politicians in the U.S. who see organized labor as a threat
to profits and job growth. Chattanooga is VW's only factory in the U.S. and one
of the company's few in the world without a works council.
Puerto
Rico Plans $2.86 Billion Offering for 16 Months of Cash - (www.bloomberg.com) Puerto Rico is planning to offer about $2.86 billion
of general-obligation bonds next month, providing the island with sufficient
liquidity through June 2015, Government Development Bank officials said. The
GDB, which handles the commonwealth’s borrowings, offered details for the
tax-exempt general-obligation bond sale in an investor webcast yesterday. The
bank had $2.7 billion of cash and investment securities as of Dec. 31, said
Jose Pagan, its interim president. Puerto Rico’s first debt sale since August
will gauge investor demand for its debt after the three largest ratings firms
cut the island’s credit grade to junk this month. Hedge funds and other
alternative investors have been buying the Caribbean getaway’s securities since
at least September as yields soared to speculative-grade levels. “We will
continue our aggressive agenda to create jobs, expand our industrial base and
attract foreign investment in order to shape and diversify our economy,” David
Chafey, chairman of the GDB, said during the webcast.
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