KeNo's Housing and Economic Portal: Monday November 17 Housing and Economic stories

Sunday, November 16, 2014

Monday November 17 Housing and Economic stories

GM ordered new switches months before recall: WSJ - (www.reuters.com) General Motors Co (GM.N) ordered half a million replacement ignition switches almost two months before it alerted federal safety regulators of the issues that prompted a recall of millions of vehicles, the Wall Street Journal reported, citing email exchanges between the automaker and its supplier Delphi Automotive Plc (DLPH.N). The email exchanges, which took place in mid-December 2013 between a GM contract worker and Delphi, indicate GM placed an "urgent" order for 500,000 replacement switches on Dec. 18, a day after a meeting of senior executives, the newspaper said. GM announced its recall in February 2014. (on.wsj.com/142qQhn) Representatives for GM and Delphi Automotive did not immediately respond to emails seeking comment on the matter. "This is simply mind-blowing in its raw evilness," said Bob Hilliard, lead counsel for the personal injury and wrongful death plaintiffs in the Federal Multi District Litigation against General Motors.

Report: Rail contractor owns Mexico leader's home - (finance.yahoo.com) The private home of President Enrique Pena Nieto was built and is registered under the name of a company connected to a controversial high-speed rail contract that he abruptly canceled last week, according to a report by a leading Mexican journalist. The $7 million home on a 15,220-square-foot property in Mexico City's most exclusive neighborhood was built and is owned by Ingenieria Inmobiliaria del Centro, a company belonging to Grupo Higa, according the report published Sunday by Aristegui Noticias, website of journalist Carmen Aristegui. Constructora Teya, another Grupo Higa company, was part of a Chinese-led consortium that received the $3.7 billion, Mexico-Queretaro high-speed rail contract, a project Pena Nieto showcased as part of his push to modernize transportation in the country.

Catalan independence hopes high after symbolic vote on split from Spain - (www.reuters.com) Millions of Catalans voted on Sunday in a symbolic referendum on independence from Spain that supporters hope will propel the issue further despite opposition from Madrid. The "consultation of citizens" in the wealthy northeastern region follows a legal block by the central government against a more formal, albeit still non-binding ballot which regional leaders had been pushing for originally. Because of the legal restrictions set on it, the ballot was set up and manned by grassroots pro-independence organizations, and Spanish unionist parties argue that, even for that reason alone, it could not legitimately reflect the wishes of anyone. The restrictions on the vote also means that the turnout number, more than 2 million of 5.4 million potential voters according to the regional government head Artur Mas, will likely be considered more important than the results of the vote itself, expected on Monday.

Predictors of ’29 Crash See 65% Chance of 2015 Recession - (www.bloomberg.com) In 1929, a businessman and economist by the name of Jerome Levy didn’t like what he saw in his analysis of corporate profits. He sold his stocks before the October crash. Almost eight decades later, the consultancy company that bears his name declared “the next recession will be caused by the deflating housing bubble.” By February 2007, it predicted problems in the subprime-mortgage market would spread “to virtually all financial markets.” In October 2007, it saw imminent recession -- the slump began two months later. The Jerome Levy Forecasting Center, based in Mount Kisco, New York, and run by Jerome’s grandson David, is again more worried than its peers. Its half-dozen analysts attach a 65 percent probability of a worldwide recession forcing a contraction in the U.S. by the end of next year.

The rise of invisible unemployment - (www.theatlantic.com) In the last year, the most important question for U.S. economists and economic journalists has changed from Where are the jobs? to Where are the wages? It's a problem best summed up by Matthew O'Brien in the Washington Post. As the labor market approaches full employment, there should be more pressure on wages to rise. In the graph below, that would look like a trend-line pointing up and to the left. Instead, as you can see in a half-a-second glance, the trend-line is a blob and it's certainly not pointing up. The unemployment rate has fallen below 6 percent, and earnings growth is flat.

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