Feed aggregator

JCPenney shuttering up to 140 stores as sales weaken, more sluggish growth seen ahead

IEHI News feed - 2 hours 24 min ago
``J.C. Penney finally lifted the lid on its plans to downsize its fleet, telling investors on Friday that it would close between 130 and 140 of its stores over the next few months. The retailer made its comments while reporting fiscal fourth-quarter earnings that topped Wall Street's expectations, though revenue and same-store sales fell shy of expectations. ''

Bitcoin is nearing its all-time high on ETF anticipation

IEHI News feed - Thu, 02/23/2017 - 22:17
Bitcoin came within $3 of its all-time high on Thursday as expectations mounted that the Securities and Exchange Commission could soon authorize the creation of the first bitcoin exchange-traded fund.

...

The SEC is expected to deliver a decision on the proposed Winklevoss Bitcoin Trust by March 11. Two other bitcoin-focused ETFs are also under consideration.

Though some have speculated that the path to a bitcoin ETF may be easier under the administration of President Donald Trump, Spencer Bogart, a bitcoin analyst at Needham and Co., believes chances of approval are less than 1-in-4.

Mnuchin: Stock market 'absolutely' Trump admin's economic report card

IEHI News feed - Thu, 02/23/2017 - 22:15
``Treasury Secretary Steven Mnuchin tied the success of the Trump administration's economic policy to the success of the United States stock market Thursday, a rare step for high-ranking government officials. Mnuchin told CNBC that the stock market is "absolutely" a good report card for the Trump administration, citing massive gains since President Trump's election.''

Dow pulls off a stunt it hasn't done in 30 years

IEHI News feed - Thu, 02/23/2017 - 22:14
``With 10 Dow records in a row, it wouldn't be a surprise if Wall Street's bull caught its breath in the near future. Stocks closed mixed Thursday, but the Dow was the leader, in its longest streak of record closes since the first 13 trading days of 1987. Traders often wince when 1987 is mentioned since it is remembered well as the year of the famous October stock market crash.'' -- What, anyone, worry?

Einhorn Shorts Sovereigns, Affirms Gold on Trump Uncertainty

IEHI News feed - Thu, 02/23/2017 - 22:12
``Still, "our long-term outlook remains bullish," for the metal, Einhorn said. "The new administration comes with a high degree of uncertainty, and its policy initiatives appear to be focused on stimulating growth and, with it, inflation."''

Paris attempts to lure business from London with new skyscrapers; Streamlined rules

IEHI News feed - Thu, 02/23/2017 - 11:37
Paris will build seven new skyscrapers in its business district as part of an aggressive campaign to lure financial services companies from London after the UK leaves the EU.

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Marie-Célie Guillaume, chief executive of Defacto La Défense, the body responsible for managing the financial hub in western Paris, said that they wanted to send a "powerful message to businesses that are uncertain about their future in London".

Paris is vying with Frankfurt, Luxembourg and Dublin to attract banks, insurers, start-ups and other companies worried about what will happen when Britain leaves the political bloc. Paris has been one of the most aggressive in its efforts.

Immediately after the June 23 referendum, President François Hollande's socialist government changed the tax rules for expatriates in Paris to make it more generous, and put together a high-level team to lobby international companies.

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In January, HSBC became the first big bank to confirm plans to move jobs out of London after the Brexit vote, saying it aims to relocate 1,000 roles in its London-based investment bank to Paris.

UBS said about the same number of its London employees could be affected by Brexit, while Jamie Dimon, chief executive of JPMorgan Chase, said that more than 4,000 of his bank's 16,000 UK staff could be displaced. Neither has yet said where they might move, however.

In September, French financial regulators said they were simplifying the process of registering new financial companies in Paris, in part by allowing documents to be filed in English. They said this came "in the context of the Brexit vote".

Prudential May Charge Wells Fargo as Fake-Account Fallout Spreads to Other Business Lines

IEHI News feed - Wed, 02/22/2017 - 18:27
Prudential "has provided notice to Wells Fargo that it may seek indemnification," the Newark, New Jersey-based insurer said in a Feb. 17 regulatory filing, referring to their agreement to sell MyTerm life coverage to Wells Fargo customers. Prudential didn't quantify the sum that it might pursue.

Wells Fargo's sales practices are being scrutinized on multiple fronts after authorities fined the bank $185 million in September for signing customers up for bank accounts and credit cards without permission. On Wednesday, ProPublica said the firm placed the head of a mortgage-lending unit in Los Angeles, Tom Swanson, on leave while examining allegations some customers were charged to lock in low interest rates when the bank delayed applications.

Prudential suspended MyTerm sales through Wells Fargo in December ... That case, in which the ex-workers say they were fired for blowing the whistle on misconduct, is one of several Prudential headaches from the Wells Fargo relationship. The insurer is also facing a suit from a customer seeking class-action status. And regulators from New Jersey and California have announced probes.

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ProPublica raised the separate concern about Wells Fargo's mortgage practices last month. Some branches in Los Angeles and Oregon broke with the company's policy of eating fees to lock in low interest rates when it was at fault for delays in mortgage applications, the publication said in its report on Wednesday, citing current and former employees. Swanson didn't respond to a message seeking comment.

Wells Fargo is conducting an internal review to ensure it handled rate-lock extensions consistently and with "customers' best interests in mind," company spokesman Tom Goyda said, declining to comment on Swanson. "While that process has not been completed and we can't discuss the results, we want this review to be comprehensive." The firm may take additional steps and "make things right for customers" as warranted, he said.

U.S. home sales hit 10-year high, prices soar on low inventory

IEHI News feed - Wed, 02/22/2017 - 18:21
U.S. home resales surged to a 10-year high in January as buyers shrugged off higher prices and mortgage rates, signaling rising confidence in the economy and bolstering expectations of a pickup in growth in the first quarter.

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Though the nation's housing inventory increased from December, it remained near a record low. As a result, the median house price vaulted 7.1 percent from a year ago to $228,900 in January. That was the biggest increase since January 2016.

Demand for housing is being underpinned by a strengthening labor market, which is improving employment opportunities for young adults and, in turn, boosting household formation... But a persistent shortage of properties available for sale, which is lifting house prices, remains an obstacle to a robust housing market. That is likely to put pressure on homebuilders to ramp up construction.

Last month, the number of homes on the market rose 2.4 percent to 1.69 million units, still remaining close to an all-time low of 1.65 million units in December. Housing inventory was down 7.1 percent from a year ago. It has declined for 20 straight months on a year-on-year basis.

Economists say homebuilders are struggling to plug the inventory gap because of difficulties securing funding as well as shortages of land and labor. The NAR estimates housing starts and completions should be in a range of 1.5 million to 1.6 million units to alleviate the chronic shortage.

U.S. home sales hit 10-year high, prices soar on low inventory

Implode Explode - Wed, 02/22/2017 - 18:21
U.S. home resales surged to a 10-year high in January as buyers shrugged off higher prices and mortgage rates, signaling rising confidence in the economy and bolstering expectations of a pickup in growth in the first quarter.

...

Though the nation's housing inventory increased from December, it remained near a record low. As a result, the median house price vaulted 7.1 percent from a year ago to $228,900 in January. That was the biggest increase since January 2016.

Demand for housing is being underpinned by a strengthening labor market, which is improving employment opportunities for young adults and, in turn, boosting household formation... But a persistent shortage of properties available for sale, which is lifting house prices, remains an obstacle to a robust housing market. That is likely to put pressure on homebuilders to ramp up construction.

Last month, the number of homes on the market rose 2.4 percent to 1.69 million units, still remaining close to an all-time low of 1.65 million units in December. Housing inventory was down 7.1 percent from a year ago. It has declined for 20 straight months on a year-on-year basis.

Economists say homebuilders are struggling to plug the inventory gap because of difficulties securing funding as well as shortages of land and labor. The NAR estimates housing starts and completions should be in a range of 1.5 million to 1.6 million units to alleviate the chronic shortage.

Fed Officials Not "Losing Patience" Fast Enough to Hike in March

IEHI News feed - Wed, 02/22/2017 - 18:15
``The Federal Open Market Committee is preparing to lose its patience, but probably won't do so in time to raise interest rates next month... The committee wants to shift out of this ultra-gradual mode, and they seem to have more conviction about a series of increases this year. They penciled in three moves in quarterly projections released in December, but aren't convinced that now is the right time to take the next step. That could change at any time if the data confirms their forecast or beats it, minutes of the Jan. 31-Feb. 1 meeting released Wednesday in Washington showed.''

A Simple Subpoena For Trump's Tax Returns Could Sink Him

IEHI News feed - Wed, 02/22/2017 - 17:53
``So-called President Trump is becoming increasingly at odds with Senators John McCain (R-AZ) and Lindsay Graham (R-SC). They could be deciding votes as to whether to subpoena his tax records in conjunction with investigating Russian collusion with Trump. The so-called President has said both that he knows Putin well--to the point where Putin supposedly confided in him years ago his lack of respect for Obama--and that he had never met or spoken to him. His son, Don, Jr., claimed a lot of Russian money in Trump enterprises whereas Daddy just said the opposite.''

A Simple Subpoena For Trump's Tax Returns Could Sink Him

Implode Explode - Wed, 02/22/2017 - 17:53
``So-called President Trump is becoming increasingly at odds with Senators John McCain (R-AZ) and Lindsay Graham (R-SC). They could be deciding votes as to whether to subpoena his tax records in conjunction with investigating Russian collusion with Trump. The so-called President has said both that he knows Putin well--to the point where Putin supposedly confided in him years ago his lack of respect for Obama--and that he had never met or spoken to him. His son, Don, Jr., claimed a lot of Russian money in Trump enterprises whereas Daddy just said the opposite.''

Robert Reich: Why Trumponomics Will Fail Spectacularly

IEHI News feed - Wed, 02/22/2017 - 11:38
Notably, [the foreign companies that supply parts for Boeing's Dreamliner] don't pay their workers low wages. In fact, when you add in the value of health and pension benefits--either directly from these companies to their workers, or in the form of public benefits to which the companies contribute--most of these foreign workers get a better deal than do Boeing's workers... So why is so much of Boeing's Dreamliner coming from these high-wage, high-tax, high-cost places? Because the parts made by workers in these countries are better, last longer, and are more reliable than parts made anywhere else.

There's a lesson here. The way to make the American workforce more competitive isn't to put economic walls around America. It's to invest more and invest better in the education and skills of Americans, in on-the-job training, in a health care system that reaches more of us and makes sure we stay healthy. And to give workers a say in their companies through strong unions.

Reich has some good points -- one has to be careful about throwing the baby out with the bathwater in rolling out anti-trade measures; not every foreign country is a worker- and currency-abusing locale. Of course, Reich is as usual somewhat-blindly ensconsed on the political left when he makes "economic" arguments, so take some of this with a grain of salt (e.g., "just add unions and healthcare" falls flat for us as an explanation of why foreign developed countries are able to produce superior parts; we tend to think the 800-lb gorilla in the room is the monetary dysfunction that led to both union dismantling and health care cost stresses in the first place...).

Deutsche Bank Says Next Big Short Is on CMBS as Malls Suffer

IEHI News feed - Wed, 02/22/2017 - 09:24
``Analysts at Deutsche Bank AG, one of the biggest underwriters of bonds tied to U.S. commercial mortgages, say now it's time to bet against the securities. The bonds are vulnerable because they are supported in part by leases from retailers, a lagging part of the economy, wrote Ed Reardon and Simon Mui in a note this week. A combination of bankruptcies and closures could lead to faster-than-expected mortgage defaults for stores and malls, as long-term pressure from internet competitors wears many companies down, the analysts wrote.''

Deutsche Bank Says Next Big Short Is on CMBS as Malls Suffer

Implode Explode - Wed, 02/22/2017 - 09:24
``Analysts at Deutsche Bank AG, one of the biggest underwriters of bonds tied to U.S. commercial mortgages, say now it's time to bet against the securities. The bonds are vulnerable because they are supported in part by leases from retailers, a lagging part of the economy, wrote Ed Reardon and Simon Mui in a note this week. A combination of bankruptcies and closures could lead to faster-than-expected mortgage defaults for stores and malls, as long-term pressure from internet competitors wears many companies down, the analysts wrote.''

Le Pen Faces Setback as Bodyguard, chief of staff in custody

IEHI News feed - Wed, 02/22/2017 - 09:11
``Marine Le Pen's bid to become French president has become embroiled in a police investigation after her bodyguard and chief of staff were questioned and placed in custody Wednesday. Thierry Legier and Catherine Griset are alleged to have been paid for non-existent jobs at the European Parliament.''

Banks Retreat From Apartment Market

IEHI News feed - Wed, 02/22/2017 - 09:03
Swelling supplies of apartment units are prompting big banks to pull back from new projects, forcing developers to scramble for capital, in a sign that the U.S. apartment industry headed for a downturn.

The apartment sector, which contributes some $284 billion to the economy annually, has been a winning bet for investors since the housing crash, as the economy recovered and more renters sought out units. Since 2010, average U.S. apartment rents have increased by 26%, according to data tracker MPF Research, a division of RealPage.

But fresh supply is beginning to overwhelm demand. More than 378,000 new apartments are expected to be completed in 2017, a 30-year high, according to real estate researcher Axiometrics Inc. In the fourth quarter of last year, 88,000 units were completed but only 50,000 of those were rented by tenants, according to MPF.

"Our business has radically changed," said Toby Bozzuto, president and chief executive of the Bozzuto Group, which owns or manages 59,000 apartments in cities across the U.S. "I haven't seen anything this seismically different since 2008, when credit dried up."

Banks Retreat From Apartment Market

Implode Explode - Wed, 02/22/2017 - 09:03
Swelling supplies of apartment units are prompting big banks to pull back from new projects, forcing developers to scramble for capital, in a sign that the U.S. apartment industry headed for a downturn.

The apartment sector, which contributes some $284 billion to the economy annually, has been a winning bet for investors since the housing crash, as the economy recovered and more renters sought out units. Since 2010, average U.S. apartment rents have increased by 26%, according to data tracker MPF Research, a division of RealPage.

But fresh supply is beginning to overwhelm demand. More than 378,000 new apartments are expected to be completed in 2017, a 30-year high, according to real estate researcher Axiometrics Inc. In the fourth quarter of last year, 88,000 units were completed but only 50,000 of those were rented by tenants, according to MPF.

"Our business has radically changed," said Toby Bozzuto, president and chief executive of the Bozzuto Group, which owns or manages 59,000 apartments in cities across the U.S. "I haven't seen anything this seismically different since 2008, when credit dried up."

Why Toronto (and Other Cities) Inflate Housing Bubbles to the Bitter End

Implode Explode - Wed, 02/22/2017 - 08:56
``Home prices in Greater Toronto have become "dangerously detached" from economic fundamentals and are soaring simply on the belief that they will continue to soar, he wrote. "The market is far too hot for comfort."...

... Toronto is just an a example. There are many jurisdictions in the US that face similar budget problems, and the only thing that keeps them from falling deeper into a financial and fiscal sinkhole is the rich tax revenue that the local property bubble extracts from the economy. Homeowners and investors might grumble, but they usually put up with it, mollified by soaring property prices. So this system works until suddenly, it doesn't.

Why Toronto (and Other Cities) Inflate Housing Bubbles to the Bitter End

IEHI News feed - Wed, 02/22/2017 - 08:56
``Home prices in Greater Toronto have become "dangerously detached" from economic fundamentals and are soaring simply on the belief that they will continue to soar, he wrote. "The market is far too hot for comfort."...

... Toronto is just an a example. There are many jurisdictions in the US that face similar budget problems, and the only thing that keeps them from falling deeper into a financial and fiscal sinkhole is the rich tax revenue that the local property bubble extracts from the economy. Homeowners and investors might grumble, but they usually put up with it, mollified by soaring property prices. So this system works until suddenly, it doesn't.