Bloomberg:
- Mortgage applications in the U.S. rose for a fourth consecutive week as a decline in borrowing costs prompted more refinancing. The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan rose 3 percent to 1,194.4 in the week ended March 27 from 1,159.4 the prior week. The group’s refinancing gauge gained 3.7 percent, following a 41 percent gain the prior week, and its purchase index rose 0.1 percent. The average rate on a 30-year fixed-rate loan fell to 4.61 percent, the lowest level since the mortgage bankers group began records in 1990, from 4.63 percent the prior week.
- Bonds backed by mortgages on everything from California homes to New York skyscrapers are rallying on speculation that Treasury Secretary Timothy Geithner’s latest effort to bolster prices will succeed and potentially spur banks to boost lending. Top-rated commercial-mortgage bonds rose 6.2 percent since March 20 to almost 80 cents on the dollar on average, according to Merrill Lynch & Co. indexes. The most-senior class of benchmark 2005 securities backed by fixed-rate Alt-A home loans, or those ranked between prime and subprime, increased about 12 percent to about 54 cents, according to Deutsche Bank AG. “If we can bring a new buyer in, accepting lower yields due to the magic of leverage, maybe prices can close the gap that now exists” between what investors are willing to pay and the price banks are willing to sell at, said Dan Nigro, who helps oversee $2.5 billion of home-loan bonds as a money manager at New York-based Dynamic Credit Partners LLC.
- The number of Americans signing contracts to buy previously owned homes unexpectedly rose in February, reinforcing signs that the housing slump in its fourth year may be near a bottom. The index of signed purchase agreements, or pending home resales, gained 2.1 percent to 82.1, from 80.4 in January, the National Association of Realtors said today in Washington. “We are seeing a bottom in housing sales,” David Wyss, chief economist with Standard & Poor’s in New York, said in a Bloomberg Television interview. “People are coming in as bargain hunters. This is a good time to be buying a house.”
- German Chancellor Angela Merkel and French President Nicolas Sarkozy stepped up their calls on fellow leaders from the Group of 20 nations to agree on tighter regulation of the global financial system. The two leaders, appearing together just hours after President Barack Obama and U.K. Prime Minister Gordon Brown shared a podium to call for unity, demanded new rules governing hedge funds, steps to control executive pay and new financial “architecture” to ensure no repeat of the global crisis. “Germany and France will insist that our intentions don’t just remain statements but that they become reality,” Merkel told reporters at a joint press briefing with Sarkozy in London today before the start of the G-20 summit. “We want results but we don’t want results that have no effect in practice.”
- U.S. regulators accused New York hedge-fund manager Edward T. Stein of running a “classic Ponzi scheme” that moved more than $55 million through accounts while preying on friends and acquaintances. Stein, 59, who manages the Gemini Fund I hedge fund and founded DISP LLC, a firm investing in life settlement policies, has defrauded clients since 1992 and later resorted to stealing their assets, the U.S. Securities and Exchange Commission said in a lawsuit at federal court in Manhattan today.
- Crude oil fell after a government report showed that U.S. oil stockpiles rose to a 15-year high and gasoline supplies unexpectedly increased as the recession curbed fuel demand. Crude-oil inventories climbed 2.84 million barrels to 359.4 million in the week ended March 27, the highest since July 1993, the Energy Department said today. “We will need to see demand come back before there is any sustained rally in this market,” said Kyle Cooper, an analyst at energy consultant IAF Advisors in Houston. “At this point demand is still falling.” “The tanks are brimming,” said Adam Sieminski, the chief energy economist at Deutsche Bank AG in Washington. “The numbers today show there’s plenty of supply.” Total daily fuel demand averaged over the past four weeks was 18.9 million barrels, down 4.4 percent from a year earlier, the report showed. It was the lowest consumption for a four-week period since October.
- U.S. Treasury Secretary Timothy Geithner said there are “encouraging signs” that financial markets are recovering and expressed confidence in the response of global policy makers to the crisis. “You’re seeing encouraging signs of improvement in our markets -- we want to reinforce that,” Geithner said today in a Bloomberg Television interview in London.
- European unemployment increased more than economists expected in February to the highest in almost three years as the recession forced companies across the continent to cut output. The jobless rate in the euro zone rose to 8.5 percent from a revised 8.3 percent in January, the European Union’s statistics office in Luxembourg said today.
Wall Street Journal:
- President Barack Obama conceded the U.S.'s culpability in events leading to the global economic crisis, but, in his first public appearance at a world economic summit here, was quick to warn that other countries must step up with solutions that don't rely on American consumers.
- Republicans in the House Wednesday pressed a budget plan that would cut taxes and radically overhaul Medicare, offering a stark alternative to blueprints offered by President Barack Obama and his Democratic allies. The plan, drafted by Wisconsin Rep. Paul Ryan, the top Republican on the Budget Committee, also freezes overall spending on domestic programs passed by Congress each year and repeals most of the spending in Mr. Obama's recently passed economic-stimulus bill.
- Ticketmaster Entertainment Inc. and Tickets.com Inc. are launching services to let customers buy tickets directly from their mobile phones, in an ambitious attempt to extend Internet commerce to cellphone screens.
- USA Today President and Publisher Craig Moon announced his sudden retirement Tuesday, leaving the country's largest newspaper with its top two jobs unfilled during perhaps the most difficult stretch in its 27-year history. He also said the newspaper has lost about 100,000 subscribers just from the slowdown in travel.
- The home electricity meter is getting a high-tech makeover, and chip makers stand to benefit. With a shove from the Obama administration's stimulus package, utilities are replacing rusty electricity meters in favor of digital "smart meters" as part of a much broader update of U.S. energy infrastructure. The update of meters alone could represent billions in revenue for chip makers over the next decade, though how quickly utilities will roll out the new products remains unclear. Gartner expects more than 150 million smart meters to be installed world-wide in the next five years, with approximately 50% installed in North America. Between 2007 and 2012, Gartner expects smart meters to create $2 billion in business for semiconductor makers. Over the next decade, however, Texas Instruments Inc. expects much more. Mark Buccini, head of TI's smart grid strategic business development, said smart meters could be a $7.5 billion market for chip makers. When including ancillary products -- such as digital, connected thermostats and other devices -- that number could roughly double. Analog chip companies in particular -- such as TI, Analog Devices Inc., STMicronelectronics NV , Freescale Semiconductor Inc. and others -- will see most of the gains as the market expands. Meanwhile, Intel Corp. and others will likely benefit from the need for more computing power to manage data and electricity infrastructure.
CNBC:
- Job cuts appear to be slowing in the US after businesses slashed payrolls in November through February, John Challenger of Challenger, Gray & Christmas said. “It looks at least for now that the heaviest downsizing has started to pass us,” said Challenger.
- Bidding Wars Over a House? Real Estate Pros See Bottom.
- The U.S. economy will have negative growth for 2009 before it improves slowly in 2010, Dallas Federal Reserve Bank President Richard Fisher told CNBC Wednesday. "Obviously we're under duress right now. I expect a gradual lifting of performance, getting less bad as we go through the year, but still I expect negative growth for this year, and improvement for the subsequent year," he said.
Barron’s:
Home Sales May Have Already Bottomed. The steep declines in home prices along with a 200-basis-points decline in conforming mortgage rates from peak 2008 levels have combined to drive housing affordability to record levels. We thus continue to believe home sales bottomed in January and that housing prices will level out later in 2009.
NY Times:
- The Obama administration’s $500 billion or more proposal to deal with America’s ailing banks has been described by some in the financial markets as a win-win-win proposal. Actually, it is a win-win-lose proposal: the banks win, investors win — and taxpayers lose.
Washington Post:
- The Obama administration will play a key role in reshaping General Motors'(GM) board of directors over the next six months, potentially giving it even greater control in the management of the storied American manufacturer. The president said Monday that "the United States government has no interest in running GM." But in practice it is already exerting tremendous influence over it, a situation that has triggered fierce debate over how much power the government should wield over the companies that it aids. Some critics characterize the White House's removal of Wagoner as a move toward European socialism. "They have opened Pandora's box -- the U.S. government has decided they know better than the private company," said Sen. Bob Corker (R-Tenn.) "There is no question that this country is moving down a very different and foreign path. We have crossed this threshold: We own this company and we are telling it what to do."
The Detroit News:
- Lynn Allen is busy squirreling away marijuana seeds - at $5 a shot - as he prepares to take advantage of a new state law that will allow seriously or terminally ill patients to legally smoke pot to ease their pain and suffering. The 52-year-old married father of two from Williamston is confined to a wheelchair and unable to work because of a lack of stamina. He is one of an estimated 50,000 Michigan residents who may qualify for medical marijuana use once the state begins accepting applications on Saturday.
Politico:
- Senate Democrats won an early test vote Tuesday in support of climate change legislation, but the partisan tone was ominous for President Barack Obama if he is to really move ahead on this issue while also coping with a weakened economy. The 54-43 roll call came as top Democrats on the House Energy and Commerce Committee unveiled their own ambitious plan to reduce greenhouse gases, promote energy efficiency and require the greater use of renewable resources to generate the nation’s electricity. Chairman Henry A. Waxman (D-Calif.) set out a schedule of moving to a full committee markup by mid-May, but the early skirmishes on the Senate floor are telling of the steep road ahead. Not a single Republican joined with Democrats in supporting a relatively innocuous budget amendment giving Senate committees the flexibility to design a cap-and-trade system that does not increase “the overall burden on consumers.”
USA Today:
- Smokers are gasping at higher cigarette and cigar prices as the largest federal tobacco tax increase in history takes effect. "Oh my gosh," Bernardo Torres said Tuesday when a clerk at a CVS Pharmacy in Falls Church, Va., told him the new price, which went up in anticipation of the tax increase. Torres wanted to buy his aunt two cartons of cigarette-size cigars, but he walked away empty-handed after hearing the new price: $134. The tax on little cigars went from 4 cents to $1.01 a pack. "I don't know what to do. This is going to hit her hard," Torres said of his disabled aunt, 64, a heavy smoker who won't quit. The increases, which raise the federal cigarette tax from 39 cents a pack to $1.01, applies to all tobacco products. It comes as more than two dozen states, desperate for revenue in a sunken economy, consider boosting their own tobacco taxes this year.
Reuters:
Hedge funds may be sniffing around the growing mountain of troubled European companies, picking out those they see as most likely candidates to undertake bond exchanges as a way to make money, according to market talk. Debt-laden Dutch NXP Semiconductors NXP this week managed to cut its debt by about $465 million in an example of a debt-swap restructuring deal that has been more common in the United States up until now. This type of deal is expected to become more prevalent in Europe now, however, as a way to salvage firms with good business models but which have been saddled with too much debt. Hedge funds can make significant returns by buying bonds that have fallen to low double-digit prices in companies where a possible debt exchange would give them a better recovery rate on their investment.
- Taliban insurgents reject a U.S. offer of "honorable reconciliation," a top spokesman said on Wednesday, calling it a "lunatic idea" and saying the only way to end the war was to withdraw foreign troops. If the U.S. plan fails to show results, analysts say, time is on the Taliban side. U.S. Secretary of State Hillary Clinton told an international conference on Afghanistan on Tuesday that those members of the Taliban who abandoned extremism must be granted an "honorable form of reconciliation."
- A top Federal Reserve official said on Wednesday she expects the U.S. economy to stabilize this year and begin to recover in 2010. "I expect economic conditions to stabilize by the end of the year and then begin to recover next year as the fiscal stimulus boosts spending and as we work off excess inventories," Cleveland Fed President Sandra Pianalto said in a speech to a bankers' group.
Financial Times:
Large US banks like Citigroup , Bank of America and Wells Fargo stand to receive a surprise first-quarter earnings boost from Thursday’s expected loosening of controversial accounting rules by the Financial Accounting Standards Board.Wall Street executives and auditors say the accounting watchdog’s likely approval of changes to “mark-to-market” rules could lead to increases of up to 20 per cent in quarterly profits of large commercial banks.
- Anti-capitalist demonstrations spiraled into violence in the City on Wednesday as protesters smashed their way into a bank branch sparking clashes with riot police. Demonstrators broke windows at the RBS branch on Threadneedle Street, threw missiles and smoke bombs and some forced their way inside. The building was daubed with graffiti, including the slogan “thieves”, and activists vandalised the branch, throwing out computers, chairs and office equipment. The flashpoint came after activists had pledged peaceful demonstrations under the G20 Meltdown banner ahead of the summit of world leaders at the ExCeL centre in Docklands today.
Handelszeitung:
- Fiat SpA CEO Sergio Marchionne said Chrysler LLC is “nothing” and the “big three” US carmakers should all go into Chapter 11 bankruptcy, citing an interview. “Thirty-five percent of nothing is still nothing,” Marchionne was quoted as saying, responding to a question as to whether Fiat is planning to take a 35% stake, free of debt, in Chrysler.
Le Monde:
- European Central Bank President Jean-Claude Trichet said the US and Europe should be careful not to push spending and deficits too far, citing an interview.
Xinhua:
Milliyet:
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