Wednesday May 7 Housing and Economic stories

TOP STORIES:

Student debt holds back many would-be home buyers - (www.latimes.com) Sarah Luna wants to buy a home in up-and-coming northeast Los Angeles before it's too late. At 31, she has a master's degree and earns more than $70,000 as a court reporter and freelance editor. She daydreams about trading the Glendale apartment she shares for a little condo, maybe in Echo Park or Highland Park. Just one thing holds her back: The $700 she's paid every month since 2008, after she graduated from the University of Southern California — with $75,000 in student debt. With about half that total left to pay, buying that condo seems a long way off. "Honestly, I don't know if it'll ever happen," she said. "Barring some sort of awesome miracle, a down payment is hard to wrap my head around right now."

Putin Has Taken Control Of Russian Facebook - (www.businessinsider.com) Russian president Vladimir Putin has essentially taken control of VKontakte, the home-grown Russian social network which is that country's version of Facebook. The founder and CEO, 29-year-old Pavel Durov, posted on his VK page that he had finally given up control of the company to two investors allied with Putin, Buzzfeed reported: Announcing his firing on his VKontakte page, Durov said: “Today, VKontakte goes under the complete control of Igor Sechin and Alisher Usmanov.” Usmanov is a metals tycoon who expanded into tech via his company Mail.ru, which has steadily upped its stake in the Russian social network. Until recently, Usmanov owned a 10% stake in Facebook. Sechin is the leader of the hardline silovik faction that backs Putin, is CEO of Rosneft, the state-owned oil company, and is believed to be one of the Russian president’s closest advisors.

China Court Impounds Japanese Ship in Unprecedented Seizure - (www.bloomberg.com) A Shanghai court ordered the seizure of a Japanese ship owned by Mitsui OSK Lines Ltd. (9104) as compensation for the loss of two ships leased from a Chinese company before the two countries went to war in 1937. The 226,434-ton Baosteel Emotion was impounded on April 19 at Majishan port in Zhejiang province as part of a legal dispute that began in 1964, the Shanghai Maritime Court and Mitsui OSK said in notices on their websites.

Amazon Sales Take a Hit in States With Online Tax - (www.bloomberg.com) Amazon.com Inc. (AMZN) is taking a hit in states that are collecting an online sales tax. In one of the first efforts to quantify the impact of states accruing more tax revenue from Web purchases, researchers at Ohio State University published a paper this month that found sales dropped for Amazon when the online charge was introduced. In states that have the tax, households reduced their spending on Amazon by about 10 percent compared to those in states that don’t have the levy. For online purchases of more than $300, sales fell by 24 percent, according to the report titled “The Amazon Tax.” The findings add to concerns about how much the world’s largest online retailer can expand. The Seattle-based company, which reports quarterly earnings on April 24, has been grappling with decelerating revenue growth amid heavy spending by Chief Executive Officer Jeff Bezos on new initiatives. Amazon has enjoyed an edge against brick-and-mortar retailers because consumers didn’t have to pay a sales tax for purchases from the e-commerce site, yet that has eroded as states including California and Texas have unveiled the levies.

Dividend Deal ‘Epidemic’ Intensifies Junk Alarm - (www.businessweek.com) Companies owned by private-equity firms are borrowing money to pay dividends like it’s 2007, adding to concern among regulators that excesses are emerging in the riskier parts of the debt markets. Borrowers including Madison Dearborn Partners LLC’s mobile-phone insurer Asurion LLC obtained almost $21 billion in junk-rated loans this year to enrich their owners, the most in seven years, according to Standard & Poor’s Capital IQ LCD. Some of the least-creditworthy companies are even selling notes that may pay interest with more debt, which BMC Software Inc. did for its $750 million payout to a group led by Bain Capital LLC. With defaults by the neediest U.S. borrowers approaching record lows, buyout firms are taking advantage of the Federal Reserve’s (FDTR) easy-money policies to extract payouts by piling more junk debt onto the companies they own. The central bank, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency have warned in recent months that underwriting standards for speculative-grade issuers are weakening as investors become more willing to accept looser terms.

OTHER STORIES:

Sales of Existing U.S. Homes Fall for Third Straight Month - (www.bloomberg.com)

Williams Urges Fed to Avoid Stoking Risk as It Boosts Employment - (www.bloomberg.com)
Property-Tax Collections Rising at Fastest Pace Since U.S. Crash - (www.bloomberg.com)

Tightest Job Market Since 2008 in U.S. Cities Prompts Higher Pay - (www.bloomberg.com)

Stocks Are More Expensive Now Than At The Peak Of The Dotcom Bubble - (www.businessinsider.com)

'Wall Street Has Gone Insane' - (www.businessinsider.com)

Americans Have Already Forgotten One Of The Biggest Lessons Of The Financial Crisis - (www.businessinsider.com)

Russia, U.S. Trade Blame as Ukraine Accord Nears Collapse - (www.bloomberg.com)