Thursday May 1 Housing and Economic stories

TOP STORIES:

Tensions over money flows bode poorly for global economy - (www.reuters.com) For a bunch of people who just agreed the global economy is doing better, top officials from the world's rich and poor nations sound rather worried. For poor nations, the easy monetary policies in advanced economies are leading to big swings in capital flows that could destabilize emerging markets. For rich countries, the hoarding of currency by developing nations is blocking progress toward a more stable global economy. Those tensions, which have been brewing for years, seemed to be rising as finance ministers and central bank chiefs from the Group of 20 economies gathered last week in Washington, as evidenced by harsh words from Washington and Delhi. Both rich and poor say they are acting in their own self interest, and what makes the conflict so intractable is that both have very rational arguments. Even though the G20 agreed the global economy was on better footing, the tensions suggested little progress ahead in rebalancing the global economy away from a state where the rich world borrows massively to buy things from the poor world. "This is not a healthy place," Raghuram Rajan, governor of India's central bank, told a panel ahead of the G20 meeting.

Small U.S. Colleges Battle Death Spiral as Enrollment Drops  - (www.bloomberg.com) At a Dowling College campus on Long Island’s south shore, a fleet of unused shuttle buses sits in an otherwise empty parking lot. A dormitory is shuttered, as are a cafeteria, bookstore and some classrooms in the main academic building. “There’s a lot of fear here,” said Steven Fournier, a senior who lived in the now-closed dorm for his first three years. “It’s not the same college I arrived at.” Dowling, which got a failing grade for its financial resources from accreditors last month, epitomizes the growing plight of many small private colleges that depend almost entirely on tuition for revenue. It’s been five years since the recession ended and yet their finances are worsening. Soaring student debt, competition from online programs and poor job prospects for graduates are shrinking their applicant pools. “What we’re concerned about is the death spiral -- this continuing downward momentum for some institutions,” said Susan Fitzgerald, an analyst at Moody’s Investors Service in New York. “We will see more closures than in the past.” Moody’s, which rates more than 500 public and private nonprofit colleges and universities, downgraded an average of 28 institutions annually in the five years through 2013, more than double the average of 12 in the prior five-year period.

J&J gives up on Botox rival - (www.cnbc.com) Johnson & Johnson said on Friday it was ending its efforts to bring to market a rival drug to Allergan Inc's popular Botox anti-wrinkle treatment. J&J had acquired the drug, PurTox, with its 2009 purchase of Mentor, a leading maker of breast implants for cosmetic augmentation and reconstructive surgery. "After careful consideration, our Mentor business has decided to discontinue its neurotoxin program, commonly known as PurTox, in order to focus on its core breast surgery business, where we are an established leader and see greater opportunities to benefit patients and grow our business," J&J spokesman Thomas Sanford said in an emailed statement. Ending the PurTox development program will result in the elimination of a small number of jobs in the United States, the company said. Botox is Allergan's biggest selling product with annual sales of more than $2 billion and little serious competition.

Ukraine's east braces for anti-rebel operation as deadline passes - (www.reuters.com) Pro-Russian separatists on Monday ignored an ultimatum to leave occupied government buildings in easternUkraine while another group of rebels attacked a police headquarters as a threatened military offensive by government forces failed to materialize. Rebels in the town of Slaviansk, which was expected on Monday to be the focus of a broad government "anti-terrorist" operation involving the army, issued a bold call for Russian President Vladimir Putin to help them. Ukraine's interim president Oleksander Turchinov said on Monday the offensive would still go ahead. But in a sign of discord behind the scenes in Kiev, he sacked the state security chief in charge of the operation.

Finance Officials Push for Bold Action to Sustain Economic Growth - (www.nytimes.com) At the World Bank and International Monetary Fund annual spring meetings, concerns about crisis have given way to concerns about complacency. The euro zone has re-emerged from recession. Emerging-market jitters have quieted. The fiscal battles in the United States have abated. But the recovery remains fragile and in many cases, growth remains sluggish, leaving a jobs gap of 62 million. “The overriding topic for discussion will be the topic of growth, quest for higher growth, better quality growth, more inclusive growth and sustainable growth,” said Christine Lagarde, the managing director of the fund, speaking with reporters on the eve of the weekend conference. “We need to act now.” Underlying the discussions of inflation, interest rates, fiscal balance and trade policy among the assembled ministers were concerns about Ukraine, as news of pro-Russian activists seizing official buildings in the eastern part of the former Soviet republic sent jitters through the meetings. Officials said they hoped that the situation would not escalate. But if it did, it might pose serious consequences to Europe’s fragile recovery.

OTHER STORIES:

No doubt that Russia behind unrest in Ukraine: UK's Hague - (www.reuters.com)
Ukraine Tension Turns Deadly in ‘Worst Case Scenario’ - (www.bloomberg.com)

BOJ Kuroda's meeting with PM Abe won't alter policy stance: sources - (www.reuters.com)

Markets wrong to think euro crisis over: UBS chair
Technology Bears Miss Payouts After Giving Up on Shorts - (www.bloomberg.com)
Putin Turn to China Heralds New Look at Yuan Debt: Russia Credit - (www.bloomberg.com)

ECB Haggles on Pain to Inflict in Bank Health Check - (www.bloomberg.com)

China targets trust firms in shadow-bank crackdown: sources - (www.reuters.com)

Wednesday April 30 Housing and Economic stories

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The looming bankruptcy that could paralyze transit - (www.cnbc.com) A real budget crisis is festering that could make the fiscal cliff seem like a molehill. It will paralyze the nation's bridge, highway and mass transit construction this summer and potentially set back many state economies. Yet, it has received scant attention from Congress, at least until now. The federal highway trust fund that finances more than $50 billion annually in highway and bridge construction is running out of cash and will be bankrupt by late July or early August, at the height of the construction season, according to Department of Transportation (DOT) projections. Coming off one of the worst winters in memory, some state and local governments have already begun pulling back on plans for filling potholes and paving highways. Things could get much worse if Congress and the Obama administration allow a four-year transportation funding authorization law to expire this fall without a replacement.

Coldwater Creek Files Bankruptcy After Apparel Sales Fall - (www.bloomberg.com) Coldwater Creek Inc. (CWTR), a women’s clothing retailer that hasn’t posted an annual profit since 2007, filed for bankruptcy protection with a plan to start going-out-of-business sales in time for Mother’s Day. Coldwater, founded as a catalog business 30 years ago, said it intends to start liquidating inventory just before the May 11 holiday, a peak sales period for the retailer. The company listed assets of $278.5 million and debt of $361.3 million in Chapter 11 papers filed today in U.S. Bankruptcy Court in Wilmington, Delaware. The chain said revenue peaked at $1.1 billion in 2006. It expanded from 198 stores in 2005 to 336 locations in 2007 before the global economic downturn stunted its financial success and triggered a series of management changes, according to court filings. Sales at stores open at least a year plunged 17 percent in the quarter ended Nov. 2. The company joins women’s clothing chains Dots LLC and Ashley Stewart Holdings Inc. in bankruptcy. Dots, with 400 stores, shut down after filing in January. Ashley Stewart, with 168 stores in 24 states, sought Chapter 11 protection on March 10. A drop in mall traffic also has helped to drive pizza seller Sbarro LLC, toasted-sandwich chain Quiznos and the owner of Hot Dog on a Stick to seek court protection since February

7 doctors got more than $10M from Medicare in 2012 - (www.usatoday.com) hey are the $10 million men of Medicare. In 2012, seven physicians in the country received more than $10 million in reimbursements for services billed to Medicare, according to newly released federal data. They range from ophthalmologists who submitted claims for specialized, high-cost drug treatments to pathologists who billed the program for thousands of clinical tests performed by their labs. Some built large, successful practices; others face investigations for fraudulent billing. The doctor with the highest reimbursement total is enmeshed in a criminal inquiry involving a U.S. senator. It's the first time since the 1970s that Medicare, the public insurance program for seniors, has provided claims and payment figures for individual providers. Among the 880,644 health care practitioners who billed Medicare for services in 2012, the average reimbursement for the year was $87,883. Yet more than 2,000 of those providers broke $2 million in Medicare receipts.

US 'hostile' environment for business: Langone - (www.cnbc.com) Excessive regulation has created a "hostile" environment for business owners in the United States, curbing liquidity and putting a drag on the economy, billionaire investment banker and business magnate Ken Langone said Friday on CNBC. "We are in a period of intense and unreasonable regulation and we're seeing the fruits of that environment," said Langone, co-founder of Home Depot, on "Squawk on the Street." "We have to accept the fact that what's going on today doesn't come without cost and the cost is economic growth." To Langone, heavy regulation has spooked business owners from investing in their companies. So instead of spending excess cash or taking out a loan to hire more employees or update equipment, Langone said many CEOs are choosing to return that capital to shareholders by way of a stock re-purchase or dividend increase.

Detroit settlement approved—at what cost? - (www.cnbc.com) Detroit, like many other cities, was sold the swaps as a way to guard against rising interest rates. At the time, in 2005 and 2006, a fixed rate of 6 percent seemed like a good bet. The deals also allowed the city to skirt state borrowing caps and shore up its pension funds. Then, interest rates plunged and the city was stuck paying the higher rate. In 2009, already teetering on the brink of default, the city pledged revenue from its casinos as collateral. Without those funds for city services, Detroit hurtled toward the largest municipal bankruptcy in U.S. history last year. In rejecting the previous settlements, Rhodes suggested the city could have sued the banks to declare the swaps illegal. That gave Detroit Emergency Manager Kevyn Orr the leverage to push the banks for a better deal. The city will pay the banks in monthly installments. In return, the banks will eventually give up their claims to the casino revenue.

OTHER STORIES:

Dennis Gartman: Avoid stocks for a month or more - (www.cnbc.com)
Gundlach: Global economy could see 'deflationary scare' - (www.reuters.com)

Turkish Lira Drops With Bonds as Moody’s Lowers Rating Outlook - (www.bloomberg.com)
Exclusive: SEC eyes test that may lead to shift away from 'dark pools' - (www.reuters.com)

China Bond Sale Fails First Time Since June on Rate Outlook - (www.bloomberg.com)

Bloody market sends 4 IPOs into witness-protection - (www.cnbc.com)

This could derail my Dow at 18,000 call: Siegel - (www.cnbc.com)

2014 crash will be worse than 1987's: Marc Faber - (www.cnbc.com)

Tuesday April 29 Housing and Economic stories

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Report: 85% of pensions could fail in 30 years - (www.usatoday.com) You might have thought your public pension was on shaky ground, but you’re likely still being too kind. Influential and well-regarded hedge fund Bridgewater Associates Wednesday warns public pensions are likely to achieve 4% returns on their assets, or worse. If Bridgewater is right, that means 85% of public pension funds will be going bankrupt in three decades. Bridgewater came to these conclusions by stress testing the nation’s public pension plans, much the way banks need to be evaluated on what could happen given a wide range out outcomes. Public pensions have just $3 trillion in assets to invest to cover future retirement payments of $10 trillion over the next many decades, Bridgewater says. An investment return of roughly 9% a year is needed to meet those onerous obligations. Many pension observers make the claim pensions will achieve 7% to 8% returns. But even if that assumption is correct, which is unlikely, public pensions are looking at a 20% shortfall, Bridgewater says. A 4% return is much more likely, the firm says.

France Wants To Ban Work Emails After 6 - (www.businessinsider.com) French workers have long enjoyed shorter workweeks and plenty more vacation time than Americans. Now, 1 million workers in France may be free from any work-related emails or phone calls after 6 p.m., The Guardian reports. Unions and employers there have agreed in principle that no work communications are sent after work hours. The deal would affect a portion of the technology and consultancy sectors and includes the French branches of Google, Deloitte, and PwC, according to The Guardian. It will not take effect until it is ruled on by a judge.

Down 300 in 3 days: Here's what's killing the Dow - (www.usatoday.com) It’s another bad day for the Dow Monday and investors are already trying pointing blame at the stocks causing the most trouble. Stocks at large are rolling over a bit as investors take off some of their speculative bets from last year. The Dow has fallen more than 300 points over the past three trading days, as investors turn from being bullish to nervous. It’s the biggest three-day fall for the Dow on a point and percentage (2.0%) basis since Feb. 4, 2014. But there’s a group of Dow stocks that are the biggest contributors to the downfall. Visa, Goldman Sachs and Boeing are among the biggest drags on the Dow Monday, falling 2.1%, 2.9% and 1.4% respectively. Weakness in these stocks is especially problematic since the Dow gives greatest weight to the stocks with the highest per-share prices. And at $203.41, $158.56 and $125.59 respectively, Visa, Goldman and Boeing are the stocks that really matter to the measure. And the trouble in these stocks isn’t just today. So far this year, Visa is down 8.7%, Goldman is off 10.5% and Boeing is down 8.0%.

Russia can't support Ukrainian economy forever - Putin - (www.rt.com) Russia can’t continue to prop up Ukraine’s faltering economy, and this responsibility should fall on the US and EU, which have recognized the authorities in Kiev but not yet given one dollar to support the economy, President Putin has said. “The situation is - to put it kindly, strange. It’s known our partners in Europe have recognized the legitimacy of the government in Kiev, yet have done nothing to support Ukraine – not even one dollar or one euro,” Putin said at  a meeting with government officials at his residence outside of Moscow. “The Russian Federation doesn’t recognize the legitimacy of the authorities in Kiev, but it keeps providing economic support and subsidizing the economy of Ukraine with hundreds of millions and billions of dollars. This situation can’t last indefinitely,” Putin said. In December, Russia provided Ukraine with a $3 billion loan, which was a part of a bigger $15 billion aid package agreed the same month. Russia also offered a 33 percent gas price discount that would have saved more than $7.5 billion.

Russia warns Europe of gas supply cuts over Ukraine debt - (www.reuters.com) President Vladimir Putin warned European leaders on Thursday Russia would cut natural gas supplies to Ukraine if it did not pay its bills and said this could lead to a reduction of onward deliveries to Europe. In a letter to the leaders of 18 countries, he demanded urgent talks with Europe on pulling Ukraine's economy out of crisis but made clear his patience was running out over Kiev's $2.2 billion gas debt to its former Soviet master. His comments were Russia's most explicit threat to cut off gas to Ukraine, a move that could worsen a dispute over Moscow's annexation of Crimea that has resulted in the worst East-West crisis since the end of the Cold war in 1991. "...Gazprom is compelled to switch over to advance payment for gas deliveries and, in the event of further violation of the conditions of payment, will completely or partially cease gas deliveries," Putin said in the letter, sent to European leaders including German Chancellor Angela Merkel, whose country is the largest consumer of Russian gas in the 28-nation EU.

OTHER STORIES:

Biggest U.S. airlines among worst in customer service: study - (www.reuters.com)
Wal-Mart to boost organic food lineup - (www.latimes.com)

Fed's hard line on funding to bring more pain to Wall Street - (www.reuters.com)
Toyota to recall nearly 6.5 million vehicles for steering, other faults - (www.reuters.com)

China says no major stimulus planned; March trade weak - (www.reuters.com)

Bundesbank's Weidmann: Deflation risks are 'pretty limited' - (www.cnbc.com)

G-7 Finance Chiefs to Discuss Ukraine as Turmoil Persists - (www.bloomberg.com)

China Exports Unexpectedly Fell in March - (www.bloomberg.com)

Monday April 28 Housing and Economic stories

TOP STORIES:

Fund Manager Allegedly Killed Bank CEO In Firm's Parking Garage - (www.businessinsider.com) On Monday morning a Liechtenstein-based bank CEO was shot dead as he was heading into the office, according to statements from the firm and police via Bloomberg News. Jürgen Frick, the CEO of Bank Frick & Co., was allegedly shot dead in the firm's underground parking garage in the village of Balzers by former fund manager Jürgen Hermann, the statements said. Frick was 48. "The employees of the bank are stunned by the senseless act," COO Edi Wögerer said in a statement. "Words cannot express our grief at the loss of Jürgen Frick. We extend the mourning family Frick our sincere condolences."  The incident happened at about 7 a.m. Hermann fled the scene, authorities said. His car was later discovered in the nearby town of Ruggell along the Rhine River.  Police believe Hermann has committed suicide. They said in a statement they found Hermann's passport, driver's license, and handwritten notes with a confession and parting words. A body has not yet been found, though. Police said they're using helicopters, thermal imaging cameras, and dogs to search the area. 

According to the bank, Hermann had tried unsuccessfully for many years to blackmail the firm. The bank said that Hermann claimed it was responsible for the collapse of his fund Hermann Finance in 2005.

Here's what really fueled the Obamacare surge - (www.cnbc.com) And many of those people qualified for government subsidies to help them offset the cost of the insurance plans. Those subsidies are available to people who earn less than 400 percent of the federal poverty limit—about $46,000 for a single person and about $94,000 for a family of four. "Those subsidies just changed the game," LaMontagne said, crediting them with being a significant motivating factor for enrollees. About 80 percent of enrollees on the exchanges qualified for the subsidies. Another skeptic of the power of the mandate, Bankrate.com analyst Doug Whiteman, who noted that his company's surveys of the uninsured "found a very surprising lack of knowledge" about the ACA "just a couple of weeks" before the sign-up deadline. Only 48 percent, for example, could correctly identify the deadline, Whiteman said.

Rotation cost this fund 17% of assets...in one day - (www.cnbc.com) The First Trust Large Cap Value Opportunities Alpha fund lost 17.4 percent of its $940.3 million in assets for the day. The firm's Large Cap Core Alpha surrendered 15 percent, the Small Cap Core Alpha dropped nearly 13 percent and the Mid Cap Core Alpha lost about 15 percent of assets, according to data from ETF.com. While only time will tell whether the selloff is short or long term, the recent moves certainly have caught the eye of market pros. "Everyone's getting rid of the momentum companies. They're nervous (over whether this is) a bubble gain," said Nadav Baum, executive vice president at BPU Investment Management in Pittsburgh. "The reality is there are some great growth companies that are down, that have better rates of return. Those are good for the long-term investors once prices start to drop the way they have."  The one-day drop for the First Trust funds is remarkable in that the funds have been popular for most of the past year and have performed well. The Large Cap Alpha is up 23.5 percent over the past 12 months, outdistancing the nearly 19 percent return from the S&P 500. For the year, the fund has net inflows of $20.5 million.

Lifetime SEC Lawyer Totally Shreds The Agency On His Way Out - (www.businessinsider.com) The SEC has become “an agency that polices the broken windows on the street level and rarely goes to the penthouse floors...On the rare occasions when enforcement does go to the penthouse, good manners are paramount. Tough enforcement, risky enforcement, is subject to extensive negotiation and weakening.” “I have had bosses, and bosses of my bosses, whose names we all know, who made little secret that they were here to punch their ticket,” Kidney said. “They mouthed serious regard for the mission of the commission, but their actions were tentative and fearful in many instances.” Kidney was working on the SEC's case against Goldman Sachs after the mortgage crisis, and pushed for charges against Goldman Sachs execs. That only got him demoted on the case.

Wall St. peddles whopping 16 IPOs this week. Are you buying? - (www.usatoday.com) Aiming to get IPOs done while the window for deals is open, Wall Street hopes to sell a whopping 16 initial public offerings this week. If all 16 deals go off, which would be a feat in itself, it would be the busiest week in quite some time, even rivaling the 20 and 17 IPOs that were sold in all of February and January, respectively, says Renaissance Capital. Investors would have to go back to the week of Nov. 12, 2007 to remember a week with more IPOs, 21, says IPOScoop.com. There are some big deals among the bumper crop of IPOs. Ally Financial, the former financing arm of General Motors, is expected to raise $2.5 billion by selling 95 million shares between $25 to $28 a share. This deal will be a good test of investors’ appetite for deals, since the company has been trying since 2011 to sell shares to the public.

OTHER STORIES:

Japanese Offload Record Dutch Sovereign Debt, Sell Treasuries - (www.bloomberg.com)

Puerto Rico’s GDB Says It Hired Cleary Gottlieb as Adviser - (www.bloomberg.com)

Treasury Official Warns Against China Reviving Controls on Yuan - (www.bloomberg.com)
Exclusive: SEC forms squad to examine private funds - sources - (www.reuters.com)

Schaeuble Says Franco-German Debt-Rule Break Was Grave Mistake - (www.bloomberg.com)

Globex trading shut due to technical issue: CME - (www.cnbc.com)

Biggest billionaire losers of the market's slide - (www.cnbc.com)

Prepare for a deluge of wintry earnings excuses - (www.cnbc.com)

World Bank trims China, East Asia 2014 growth forecasts - (www.reuters.com)
Draghi’s $1.4 Trillion Question Lingers as ECB Mulls QE - (www.bloomberg.com)