KeNo's Housing and Economic Portal: Friday August 15 Housing and Economic stories

Thursday, August 14, 2014

Friday August 15 Housing and Economic stories

CYNK's Once $6 Billion Market Value Has All But Disappeared - (www.businessinsider.com) Cynk Technologies, which was briefly worth billions of dollars last month, saw its shares fall below $1 on Monday, and traders say it is only a matter of time before the stock is once again worth next-to-nothing. Cynk became a big market story as trading volumes soared and the company was briefly valued at more than $6 billion despite having no revenue and being described as "development stage." Trading was halted by U.S. regulators on July 11 for 10 days. Since that suspension ended, trading has been solely in privately brokered transactions, and brokerages are not allowed to solicit buyers or sellers. The stock dropped to 60 cents a share on Monday, after hitting a high of $21.95 on July 10. Most traders interviewed said the stock is likely to keep falling until it is once again worth no more than a few cents. Volume-weighted average price was $1.04.

Russia Eyes Banning U.S. Chicken And Some European Fruit - (www.bloomberg.com) Facing tougher sanctions over its incursion into Ukraine, Russia announced today that it may ban imports of chicken from the U.S. and fruit from Europe and is investigating McDonald’s Corp. (MCD) cheese for safety. While Russia and the U.S. have long sparred over agricultural trade, today’s actions fueled speculation they could be retaliatory. The 28-nation European Union and the U.S. plan to announce as soon as this week additional actions to punish Russian President Vladimir Putin’s government. “It’s a troubling continuation/expansion of trade as a geopolitical tool,” Gary Blumenthal, president of World Perspectives Inc., a Washington-based agricultural consulting firm, said in a phone interview.

China food crisis spreads to foreign brands - (www.marketwatch.com) For foreign food-and-beverage companies, China’s successive food-safety crises have generally been good news. Not only have they boosted sales as Chinese shoppers flock to more-trusted foreign brands, but valuations have also been lifted by a merger spree as Chinese companies headed abroad in the search of safe food. But as the latest food scandal puts foreign brands in the dock, perhaps investors need to reconsider the risks of the lucrative Chinese food market. Last week, reports revealed that a U.S.-owned, Shanghai-based supplier to McDonald’s and Yum Brands’s KFC in China was found to be selling rotten meat. The issue impacted not just McDonald’s restaurants in mainland China, but also in Japan and Hong Kong, with some outlets forced to pull suspect items from their menus.

GM Sets Aside at Least $400 Million for Ignition Recall Victims - (www.bloomberg.com) General Motors Co. (GM), posting a second-quarter profit that missed analyst estimates, said it will spend at least $400 million to pay victims of the 2.59 million compact cars with a potentially faulty ignition switch linked to at least 13 deaths. Profit excluding one-time items was 58 cents a share, helped by redesigned pickups and large sport-utility vehicles in the U.S. and improved sales in China,GM said today in a statement. That compared with an average estimate of 59 cents from 14 analysts, according to data compiled by Bloomberg. The biggest U.S. automaker reported earning 84 cents on that basis a year earlier. GM slid 4.5 percent to $35.74 at the close in New York, marking its biggest one-day drop since March 11 and leaving the shares down 13 percent for the year.

Former Goldman Options Trader Becomes Argentina Taxi King - (www.bloomberg.com) After 23 years trading stock options at Goldman Sachs Group Inc., Merrill Lynch & Co. and his own hedge fund, Russell Abrams is piling into his most exotic gamble yet: as a Buenos Aires taxi impresario. Abrams, 48, plans to invest as much as $100 million of his own money to build a fleet of Buenos Aires cabs, undaunted by the prospects for Argentina’s second default in 13 years, the fallout from the peso’s devaluation in January, inflation of about 40 percent and the economy’s first quarterly contraction since 2012. For Abrams, the financial morass in South America’s second-biggest economy is an opportunity to buy medallions on the cheap from drivers in need of cash, a gambit he predicts will pay off should economic policies change when President Cristina Fernandez de Kirchnersteps down next year after two terms in office. Barclays Plc and JPMorgan Chase & Co. are among banks that say Argentina is on track to repair its economy and regain access to overseas credit markets after the 2015 presidential elections.

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