HONG KONG (Reuters) -- Asian stocks slid and government bonds climbed on Tuesday after a steep rise in bad debt at Bank of America (BAC, Fortune 500) renewed credit fears, sparking worries a 25% month-long rally in global equities had peaked.
Major European stock futures were up 0.1%, pointing to a slightly higher open, after better-than-expected results from British retailer Tesco though the health of the banking industry was a nagging concern.
The financial sector was under fire after the largest U.S. bank greatly increased its reserves for non-performing assets, raising uncertainties about future writedowns at a time when investors are already worried about the outcomes of stress tests on the U.S. banking industry.
Shares of global lender HSBC (HBC) tumbled 5.8% while top Japanese bank Mitsubishi UFJ Financial Group fought back some to end down 1%, after gains in financials had led a steep rally in global equities since March.
"One day of a major correction does not break a trend, especially the ferocious rally of the past six weeks," Dariusz Kowalczyk, chief investment strategist with SJS Markets in Hong Kong, said in a note.
"But we do expect a more substantial return to the risk aversion trade some time in the near term, most likely in relation to the U.S. bank stress test results expected on May 4."
Japan's Nikkei share average fell 2.4%, weighed down by a mix of exporters and industrials after U.S. stock markets dropped between 3 and 4% on Monday.
Shares of Toyota Motor Co (TM) dropped 3.9% on a report the automaker will likely produce 12 percent fewer vehicles this financial year because of a sales slump.
The MSCI index of Asia Pacific stocks outside Japan fell 2%, after hitting a six-month high last Thursday. The index is still up some 25% in the last month, in what many strategists regard as a bear market rally.
The financial sector led the region lower, and cyclical stocks were also sold, though technology shares were generally outperformers.
A 5.5% decline in shares of China Mobile was the second-biggest drag on Hong Kong's Hang Seng index, which slid 3.7%. The world's largest wireless provider said subscriber growth showed signs of slowing as the broader economy slows in China.
Government bonds, which have been dogged by fears about large upcoming supply to finance government stimulus spending, got a lift as investors bailed out of equities.
Very steep yield curves generally flattened this week, with investors finding greater value in late maturities. The difference between 10-year and 2-year Australian bonds narrowed 15 basis points in the last week.
Reserve Bank of Australia Governor Glenn Stevens said for the first time that Australia is in the midst of its first recession since 1991, but added that the effects of monetary and fiscal stimulus have yet to come fully through yet.
"I think the reasonable person, looking at all the information available now, would come to the conclusion that the Australian economy, too, is in recession," Stevens told a gathering of company directors.
The swaps market continued to reflect a 75- to 80% chance that the RBA will cut policy rates again in May by a quarter point.
The yield on the benchmark 10-year U.S. Treasury note slid to 2.83% from 2.85% late in New York, with new supply light this week.
The June 10-year Japanese government bond future extended gains after the results of an auction of 20-year bonds to 0.5 point, still working its way back after hitting a 5-1/2-month low on April 9.
A ¥900 billion auction of 20-year bonds had the highest coupon since a December 2008 issue, though demand measured by bid-to-cover was the lowest since a September auction.
"The market is expected to refocus on supply when we have increased issuance after a few months," said Tatsuo Ichikawa, fixed-income strategist with RBS Securities in Tokyo.
The euro rebounded from one-month lows against the yen and U.S. dollar, but support for the single currency was limited ahead of the next European Central Bank meeting on May 7.
Currency investors were focused on what kind of unconventional policy actions the central bank could take to ease credit conditions and whether internal politics will prevent an aggressive stance.
The euro was up slightly on the day at $1.2935, not far from Monday's low of $1.2883. Against the yen, the euro was up 0.4% to ¥127.15 after earlier touching a one-month low near ¥126.
U.S. crude oil prices were just below $46 a barrel after a near 9% drop on Monday sparked by the retreat in global equity markets and worries about the pace of any economic recovery and its impact on oil demand.
The spike in financial market volatility caused dealers to question whether or not the global economy is nearing a bottom.
http://money.cnn.com/2009/04/21/markets/world_markets.reut/index.htm?postversion=2009042104
Wednesday, April 22, 2009
Loonie Dips to 3-wk Low on Rate Cut
The Bank of Canada announced the results of its monetary policy deliberations this morning, unexpectedly cutting its benchmark lending rate by 25-basis points to 0.25%, a record low. The BoC acknowledged that “the recession in Canada will be deeper than anticipated, with the economy projected to contract by 3.0% in 2009”. The Bank noted that “the overall risks to its inflation projection are tilted slightly to the downside” and “conditional on the outlook for inflation; the target overnight rate can be expected to remain at its current level until the end of the second quarter of 2010 in order to achieve the inflation target”.
USDCAD edged up to its highest level since the beginning of April, briefly jumping past the 1.25-level. The pair has since eased off its highs to hover near the 1.2370-region. Resistance is seen at 1.24, followed by 1.2430 and 1.2470. Subsequent ceilings will emerge at 1.25, backed by 1.2540 and 1.2580.
http://www.forexnews.com/na/default.asp
USDCAD edged up to its highest level since the beginning of April, briefly jumping past the 1.25-level. The pair has since eased off its highs to hover near the 1.2370-region. Resistance is seen at 1.24, followed by 1.2430 and 1.2470. Subsequent ceilings will emerge at 1.25, backed by 1.2540 and 1.2580.
http://www.forexnews.com/na/default.asp
Obama to lean on credit card CEOs
WASHINGTON (CNNMoney.com) -- Are the stars finally aligned for a Washington crackdown on credit cards?
President Obama on Thursday will attend a meeting of administration officials and card company executives. He is expected to press CEOs to adopt practices designed to protect consumers.
Meanwhile, Congress is pushing ahead on legislation that in past years has been introduced - and even approved by the House - but that has never advanced very far.
This year might be different. Many insiders on both sides of financial services issues say they expect legislation to ride the populist wave that swept Democrats into the White House and to Congress in greater numbers.
A key House committee could vote as soon as Wednesday.
"If not now, then when?" asked Kathleen Day of the Center for Responsible Lending. "The momentum is certainly there."
The bills would, among other things, ban card companies from abruptly jacking up interest rates and fees and prevent young adults from getting credit cards.
But if the bills advance all the way to President Obama's desk, it won't be without a fight.
Even as legislation last week moved further than ever before, financial sector lobbyists are redoubling their efforts to knock it off course. Their aim: prevent Congress from passing anything stronger than new Federal Reserve changes already set to take effect in July 2010.
Banking lobbyists warn that tougher rules, especially those proposed in the Senate, could make credit card lending more costly or curb the issuance of new cards - and in turn slow the recovery of slumping credit markets.
The credit card sector gave as much as $7.3 million to lawmakers in both political parties during the 2008 election cycle, according to the Center for Responsive Politics. Since last October, Visa spent $1.7 million on lobbying, according to government lobbying registries.
Meanwhile, credit cards are weighing on consumers' minds and wallets. In February, credit card debt that companies can't collect - and thus give up on and write down - reached a 20-year high, according to Moody's Credit Card Index. The rate at which consumers made late credit card payments also rose to a 17-year high.
"Lots of people are calling and writing their representatives and saying: 'You can't let these guys get away with this,' " said Travis Plunkett a lobbyist with the Consumer Federation of America.
Obama hasn't indicated his preference on existing credit card legislation. During the campaign he advocated for many of the same reforms that the tougher Senate bill proposes, such as banning credit card issuers from making "unilateral" changes to the consumer's contract.
If Congress does nothing, Federal Reserve rule changes set to kick in next year would stop higher interest rates from being imposed when consumers are late paying unrelated bills. The changes also stop companies from averaging finance charges from two previous cycles, a practice that dings consumers who carry a balance and pay it off.
The House bill, sponsored by Rep. Carolyn Maloney, D-N.Y., is similar to the Federal Reserve changes, with a few more reforms. It would also prevent card companies from marketing and issuing cards to those younger than 18. And it bans credit card companies from charging a fee for payments made over the phone.
"For too long the playing field has been tilted against the American consumer as they have battled against unfair and deceptive acts and practices related to their credit cards," Maloney said while presenting the bill earlier this month.
A similar bill she sponsored last year passed the U.S. House but never made it out of a Senate committee.
This year, credit card legislation made it out of a Senate committee, but just barely, by 12-11. The Senate bill is even tougher than the House bill, preventing credit card issuers from raising interest rates and fees even if the consumer's general credit risk goes up.
A top industry advocate, Scott Talbott of the Financial Services Roundtable, said that if credit card companies can't charge fees and interest based on general risk, all card holders will have to pay more because customers with good credit scores will have to subsidize those with weaker credit scores.
"It's going to reduce credit and make it more expensive for everyone," he said. "That's not what we need for the financial markets."
Many Senate Republicans and a few Democrats have said they don't like the Senate's legislation, making passage unlikely without concessions. The sponsor, Sen. Chris Dodd, D-Conn., has said he's willing to consider some compromises.
The Senate bill also prevents those under 21 from getting credit cards unless a parent or guardian backs them up or if they take a government-approved financial literacy test. The Senate bill also prevents retailers from charging "dormancy" fees on gift cards that aren't redeemed within a certain period of time.
While veterans political watchers expect a credit card bill of some type to pass this year, the bill may also give the financial sector industry a couple of things they've been seeking. For example, in an attempt to woo the industry, the Senate bill now also offers an unrelated that banking interests like.
It would increase Federal Deposit Insurance Corp.'s ability to borrow from the Treasury to $500 billion, up from $100 billion. It also allows the National Credit Union Administration to borrow from Treasury up to $18 billion, up from $6 billion
http://money.cnn.com/2009/04/21/news/economy/credit_card_crackdown/index.htm?postversion=2009042115
President Obama on Thursday will attend a meeting of administration officials and card company executives. He is expected to press CEOs to adopt practices designed to protect consumers.
Meanwhile, Congress is pushing ahead on legislation that in past years has been introduced - and even approved by the House - but that has never advanced very far.
This year might be different. Many insiders on both sides of financial services issues say they expect legislation to ride the populist wave that swept Democrats into the White House and to Congress in greater numbers.
A key House committee could vote as soon as Wednesday.
"If not now, then when?" asked Kathleen Day of the Center for Responsible Lending. "The momentum is certainly there."
The bills would, among other things, ban card companies from abruptly jacking up interest rates and fees and prevent young adults from getting credit cards.
But if the bills advance all the way to President Obama's desk, it won't be without a fight.
Even as legislation last week moved further than ever before, financial sector lobbyists are redoubling their efforts to knock it off course. Their aim: prevent Congress from passing anything stronger than new Federal Reserve changes already set to take effect in July 2010.
Banking lobbyists warn that tougher rules, especially those proposed in the Senate, could make credit card lending more costly or curb the issuance of new cards - and in turn slow the recovery of slumping credit markets.
The credit card sector gave as much as $7.3 million to lawmakers in both political parties during the 2008 election cycle, according to the Center for Responsive Politics. Since last October, Visa spent $1.7 million on lobbying, according to government lobbying registries.
Meanwhile, credit cards are weighing on consumers' minds and wallets. In February, credit card debt that companies can't collect - and thus give up on and write down - reached a 20-year high, according to Moody's Credit Card Index. The rate at which consumers made late credit card payments also rose to a 17-year high.
"Lots of people are calling and writing their representatives and saying: 'You can't let these guys get away with this,' " said Travis Plunkett a lobbyist with the Consumer Federation of America.
Obama hasn't indicated his preference on existing credit card legislation. During the campaign he advocated for many of the same reforms that the tougher Senate bill proposes, such as banning credit card issuers from making "unilateral" changes to the consumer's contract.
If Congress does nothing, Federal Reserve rule changes set to kick in next year would stop higher interest rates from being imposed when consumers are late paying unrelated bills. The changes also stop companies from averaging finance charges from two previous cycles, a practice that dings consumers who carry a balance and pay it off.
The House bill, sponsored by Rep. Carolyn Maloney, D-N.Y., is similar to the Federal Reserve changes, with a few more reforms. It would also prevent card companies from marketing and issuing cards to those younger than 18. And it bans credit card companies from charging a fee for payments made over the phone.
"For too long the playing field has been tilted against the American consumer as they have battled against unfair and deceptive acts and practices related to their credit cards," Maloney said while presenting the bill earlier this month.
A similar bill she sponsored last year passed the U.S. House but never made it out of a Senate committee.
This year, credit card legislation made it out of a Senate committee, but just barely, by 12-11. The Senate bill is even tougher than the House bill, preventing credit card issuers from raising interest rates and fees even if the consumer's general credit risk goes up.
A top industry advocate, Scott Talbott of the Financial Services Roundtable, said that if credit card companies can't charge fees and interest based on general risk, all card holders will have to pay more because customers with good credit scores will have to subsidize those with weaker credit scores.
"It's going to reduce credit and make it more expensive for everyone," he said. "That's not what we need for the financial markets."
Many Senate Republicans and a few Democrats have said they don't like the Senate's legislation, making passage unlikely without concessions. The sponsor, Sen. Chris Dodd, D-Conn., has said he's willing to consider some compromises.
The Senate bill also prevents those under 21 from getting credit cards unless a parent or guardian backs them up or if they take a government-approved financial literacy test. The Senate bill also prevents retailers from charging "dormancy" fees on gift cards that aren't redeemed within a certain period of time.
While veterans political watchers expect a credit card bill of some type to pass this year, the bill may also give the financial sector industry a couple of things they've been seeking. For example, in an attempt to woo the industry, the Senate bill now also offers an unrelated that banking interests like.
It would increase Federal Deposit Insurance Corp.'s ability to borrow from the Treasury to $500 billion, up from $100 billion. It also allows the National Credit Union Administration to borrow from Treasury up to $18 billion, up from $6 billion
http://money.cnn.com/2009/04/21/news/economy/credit_card_crackdown/index.htm?postversion=2009042115
White House spurns Chrysler lenders' plan
WASHINGTON (Reuters) -- The latest debt reduction offer by Chrysler LLC's lenders is unacceptable because it would yield the lenders an unjustified return, an Obama administration official said Tuesday.
"It is neither in the interest of Chrysler's senior lenders nor the country for them to advance a proposal that would yield them an unjustified return as Chrysler, its employees and other stakeholders are working tirelessly to help this company restructure," the official said.
"Our hope and expectation is that these lenders take a more constructive position in the coming days that reflects the actual situation that they and the company face," the official added. The official spoke on condition of anonymity due to a lack of authority to speak publicly on the issue.
Chrysler's first-lien lenders have offered to take equity in a restructured automaker allied with Fiat SpA in exchange for writing off about 35% of the $7 billion they are owed, according to people with knowledge of the closed-door talks.
Under the terms of the counter-offer conveyed to the U.S. Treasury Monday, the lenders would retain about $4.5 billion in debt and take a stake of more than a third of a new Chrysler supported by new U.S. government investment and a ground-breaking deal with Fiat.
That would mark a much richer payout than U.S. officials first offered the banks that helped finance Chrysler's 2007 sale to private equity firm Cerberus Capital Management.
A committee representing Chrysler lenders including JPMorgan Chase & Co, Goldman Sachs Group, Morgan Stanley, Citigroup said it believed that its offer represented a move toward a "construcive solution" for the automaker.
The gap underscores the tension between a diverse group of creditors, including more aggressive funds, and the government officials dictating turnaround terms for Chrysler with just nine days before a deadline for the No. 3 U.S. automaker to complete its restructuring talks.
Rep. Gary Peters, a Michigan Democrat whose district includes Chrysler's headquarters, called the counter-offer "an affront to taxpayers."
"This is not a serious counter-offer," Peters said in a statement. "These debt holders were offered fair market value for the debt, and the banks have responded by asking for a windfall."
The Obama administration's autos task force had proposed that creditors write off $6 billion of what they are owed, a proposal that would have left the group of institutional creditors holding about $1 billion in Chrysler debt. That would represent a write-down of 85% of the loan value.
The Chrysler counter-offer including equity would allow the roughly 45 banks and funds that hold Chrysler debt to benefit from investment gains if it succeeds in a restructuring that could see operational control shift to Fiat Chief Executive Sergio Marchionne.
Chrysler has been kept afloat with $4 billion in federal loans since the start of the year and could get another $500 million before its month-end restructuring deadline established by the autos task force.
The task force, which is headed by former investment banker Steve Rattner, has said it is willing to invest another $6 billion in Chrysler if the struggling automaker can complete the Fiat alliance and agreements to cut debt and costs with its creditors and major unions.
Deadline looms
Chrysler has about $7 billion in first-lien loans that stem from its breakaway from Daimler AG in 2007. Daimler still holds a stake of nearly 20% in Chrysler although it has written down that investment to zero.
Chrysler, which is now 80% owned by Cerberus, lost $8 billion in 2008 and has warned that it could be forced to liquidate in bankruptcy without new funding.
A liquidation would split off stronger assets like Jeep and Chrysler's minivans while shutting factories and dealerships and eliminating thousands of jobs, analysts have said.
But Chrysler's first-lien creditors could still be paid out at a higher rate than the 15 cents on the dollar they were first offered by U.S. officials earlier this month.
Ratings agency Moody's Investors Service on Tuesday cut its rating to Chrysler to C, saying it was certain that the automaker would restructure its debt in a way that would be tantamount to default or that it would file for bankruptcy.
It said creditors could look to recover 20 cents on the dollar in a default, down from an earlier estimate of 50 cents, because of the decline in the U.S. auto industry.
Other aspects of Chrysler's debt restructuring talks include the United Auto Workers. The automaker has asked the union to take stock in payment for over $10 billion it owes to a retiree health care trust fund.
Cerberus has offered to write off its own $500 million in loans to Chrysler.
The steering committee of Chrysler lenders includes JPMorgan Chase & Co (JPM, Fortune 500), Goldman Sachs Group (GS, Fortune 500), Morgan Stanley (MS, Fortune 500), Citigroup (C, Fortune 500). It was broadened to also include Oppenheimer Funds, Stairway Capital Management, Elliott Management and Perella Weinberg Partners.
Peters and other critics have argued that the major banks that hold the majority of Chrysler's debt were in no position to insist on a higher payout from the government since they too have taken emergency funding from the U.S. Treasury
http://money.cnn.com/2009/04/21/autos/chrysler_loans.reut/index.htm
"It is neither in the interest of Chrysler's senior lenders nor the country for them to advance a proposal that would yield them an unjustified return as Chrysler, its employees and other stakeholders are working tirelessly to help this company restructure," the official said.
"Our hope and expectation is that these lenders take a more constructive position in the coming days that reflects the actual situation that they and the company face," the official added. The official spoke on condition of anonymity due to a lack of authority to speak publicly on the issue.
Chrysler's first-lien lenders have offered to take equity in a restructured automaker allied with Fiat SpA in exchange for writing off about 35% of the $7 billion they are owed, according to people with knowledge of the closed-door talks.
Under the terms of the counter-offer conveyed to the U.S. Treasury Monday, the lenders would retain about $4.5 billion in debt and take a stake of more than a third of a new Chrysler supported by new U.S. government investment and a ground-breaking deal with Fiat.
That would mark a much richer payout than U.S. officials first offered the banks that helped finance Chrysler's 2007 sale to private equity firm Cerberus Capital Management.
A committee representing Chrysler lenders including JPMorgan Chase & Co, Goldman Sachs Group, Morgan Stanley, Citigroup said it believed that its offer represented a move toward a "construcive solution" for the automaker.
The gap underscores the tension between a diverse group of creditors, including more aggressive funds, and the government officials dictating turnaround terms for Chrysler with just nine days before a deadline for the No. 3 U.S. automaker to complete its restructuring talks.
Rep. Gary Peters, a Michigan Democrat whose district includes Chrysler's headquarters, called the counter-offer "an affront to taxpayers."
"This is not a serious counter-offer," Peters said in a statement. "These debt holders were offered fair market value for the debt, and the banks have responded by asking for a windfall."
The Obama administration's autos task force had proposed that creditors write off $6 billion of what they are owed, a proposal that would have left the group of institutional creditors holding about $1 billion in Chrysler debt. That would represent a write-down of 85% of the loan value.
The Chrysler counter-offer including equity would allow the roughly 45 banks and funds that hold Chrysler debt to benefit from investment gains if it succeeds in a restructuring that could see operational control shift to Fiat Chief Executive Sergio Marchionne.
Chrysler has been kept afloat with $4 billion in federal loans since the start of the year and could get another $500 million before its month-end restructuring deadline established by the autos task force.
The task force, which is headed by former investment banker Steve Rattner, has said it is willing to invest another $6 billion in Chrysler if the struggling automaker can complete the Fiat alliance and agreements to cut debt and costs with its creditors and major unions.
Deadline looms
Chrysler has about $7 billion in first-lien loans that stem from its breakaway from Daimler AG in 2007. Daimler still holds a stake of nearly 20% in Chrysler although it has written down that investment to zero.
Chrysler, which is now 80% owned by Cerberus, lost $8 billion in 2008 and has warned that it could be forced to liquidate in bankruptcy without new funding.
A liquidation would split off stronger assets like Jeep and Chrysler's minivans while shutting factories and dealerships and eliminating thousands of jobs, analysts have said.
But Chrysler's first-lien creditors could still be paid out at a higher rate than the 15 cents on the dollar they were first offered by U.S. officials earlier this month.
Ratings agency Moody's Investors Service on Tuesday cut its rating to Chrysler to C, saying it was certain that the automaker would restructure its debt in a way that would be tantamount to default or that it would file for bankruptcy.
It said creditors could look to recover 20 cents on the dollar in a default, down from an earlier estimate of 50 cents, because of the decline in the U.S. auto industry.
Other aspects of Chrysler's debt restructuring talks include the United Auto Workers. The automaker has asked the union to take stock in payment for over $10 billion it owes to a retiree health care trust fund.
Cerberus has offered to write off its own $500 million in loans to Chrysler.
The steering committee of Chrysler lenders includes JPMorgan Chase & Co (JPM, Fortune 500), Goldman Sachs Group (GS, Fortune 500), Morgan Stanley (MS, Fortune 500), Citigroup (C, Fortune 500). It was broadened to also include Oppenheimer Funds, Stairway Capital Management, Elliott Management and Perella Weinberg Partners.
Peters and other critics have argued that the major banks that hold the majority of Chrysler's debt were in no position to insist on a higher payout from the government since they too have taken emergency funding from the U.S. Treasury
http://money.cnn.com/2009/04/21/autos/chrysler_loans.reut/index.htm
Las Vegas tops foreclosure list
NEW YORK (CNNMoney.com) -- The 26 cities with the highest foreclosure rate in the nation are all located in 4 hard-hit states, with Las Vegas topping the list, according to a report released Wednesday.
Metro areas in California, Florida, Nevada and Arizona topped the foreclosure filing list for the first quarter of 2009 in a report from RealtyTrac, an online marketer of foreclosed properties. A foreclosure filing includes default papers, auction sale notices and repossessions.
Las Vegas had the highest rate of foreclosures of any city, with one in every 22 homes subject to a foreclosure filing in the first three months of the year. The rate of foreclosure filings was 4.5%, seven times the national average.
Merced, Calif., had the second highest rate, with Cape Coral-Fort Myers, Fla., Stockton, Calif., and Riverside-San Bernardino-Ontario, Calif., rounding out the top five.
"The metro areas with the highest levels of foreclosure activity in the first quarter of 2009 paint a picture of concentrated problems in a relatively small number of hard-hit areas," said James J. Saccacio, chief executive officer of RealtyTrac, in a written statement.
Foreclosure rates have been very high in the 4 key states throughout the bursting of the housing bubble, and so it was to be expected that cities from those states would pepper the top of the list.
However, it was a surprise to see the list so top heavy, according to Rick Sharga, senior vice president at RealtyTrac.
"The concentration of troubled metro areas within the hardest-hit states, candidly, was even more severe than we expected it to be," Sharga said. "The degree to which those 4 states dominated the rankings surprised even us."
New problem cities: Meanwhile, some metropolitan areas had a surge in foreclosures. Boise City-Nampa, Idaho, in 27th place, Provo-Orem, Utah, in 37th, and Charleston-North Charleston, S.C., in 51st were examples Sharga gave of areas that had particular strong gains in filings.
Sharga said the rise of foreclosures in additional regions indicates new factors influencing the housing market as the recession drags on.
"What we believe we are seeing is some of the areas with unemployment problems," said Sharga. "These are people living paycheck to paycheck and, when the paycheck is gone, suddenly they can't afford to make their mortgage payments."
The data for RealtyTrak's metro area foreclosure report is collected from 2,200 counties across the nation, and those counties represent more than 90% of the U.S. population. Some 203 areas are covered by the report.
Across the nation, foreclosure activity in the first quarter hit a record high, according to another RealtyTrac report issued last week. Total foreclosure filings reached 803,489 in the first three months of the year, the highest monthly and quarterly totals since RealtyTrac began reporting in January 2005.
The national report also found that the worst of the foreclosures were centralized in a handful of worst-hit states. California, Florida, Arizona, Nevada and Illinois accounted for nearly 60% of the total foreclosure activity in the first quarter, with 479,516 properties received foreclosure filings in those states
http://money.cnn.com/2009/04/22/real_estate/foreclosures_msa/index.htm?postversion=2009042203
Metro areas in California, Florida, Nevada and Arizona topped the foreclosure filing list for the first quarter of 2009 in a report from RealtyTrac, an online marketer of foreclosed properties. A foreclosure filing includes default papers, auction sale notices and repossessions.
Las Vegas had the highest rate of foreclosures of any city, with one in every 22 homes subject to a foreclosure filing in the first three months of the year. The rate of foreclosure filings was 4.5%, seven times the national average.
Merced, Calif., had the second highest rate, with Cape Coral-Fort Myers, Fla., Stockton, Calif., and Riverside-San Bernardino-Ontario, Calif., rounding out the top five.
"The metro areas with the highest levels of foreclosure activity in the first quarter of 2009 paint a picture of concentrated problems in a relatively small number of hard-hit areas," said James J. Saccacio, chief executive officer of RealtyTrac, in a written statement.
Foreclosure rates have been very high in the 4 key states throughout the bursting of the housing bubble, and so it was to be expected that cities from those states would pepper the top of the list.
However, it was a surprise to see the list so top heavy, according to Rick Sharga, senior vice president at RealtyTrac.
"The concentration of troubled metro areas within the hardest-hit states, candidly, was even more severe than we expected it to be," Sharga said. "The degree to which those 4 states dominated the rankings surprised even us."
New problem cities: Meanwhile, some metropolitan areas had a surge in foreclosures. Boise City-Nampa, Idaho, in 27th place, Provo-Orem, Utah, in 37th, and Charleston-North Charleston, S.C., in 51st were examples Sharga gave of areas that had particular strong gains in filings.
Sharga said the rise of foreclosures in additional regions indicates new factors influencing the housing market as the recession drags on.
"What we believe we are seeing is some of the areas with unemployment problems," said Sharga. "These are people living paycheck to paycheck and, when the paycheck is gone, suddenly they can't afford to make their mortgage payments."
The data for RealtyTrak's metro area foreclosure report is collected from 2,200 counties across the nation, and those counties represent more than 90% of the U.S. population. Some 203 areas are covered by the report.
Across the nation, foreclosure activity in the first quarter hit a record high, according to another RealtyTrac report issued last week. Total foreclosure filings reached 803,489 in the first three months of the year, the highest monthly and quarterly totals since RealtyTrac began reporting in January 2005.
The national report also found that the worst of the foreclosures were centralized in a handful of worst-hit states. California, Florida, Arizona, Nevada and Illinois accounted for nearly 60% of the total foreclosure activity in the first quarter, with 479,516 properties received foreclosure filings in those states
http://money.cnn.com/2009/04/22/real_estate/foreclosures_msa/index.htm?postversion=2009042203
Tuesday, April 21, 2009
US STOCKS-Wall St sinks on banks' woes; IBM drops late
* Bank of America reports increase in troubled loans
* Oracle offers to buy Sun Microsystems
* IBM, Texas Instruments report earnings after-hours
* Dow off 3.6 pct, S&P off 4.3 pct, Nasdaq off 3.9 pct
* For up-to-the-minute market news click [STXNEWS/US] (Adds Texas Instruments earnings after the bell)
By Chuck Mikolajczak
NEW YORK, April 20 (Reuters) - U.S. stocks slid more than 3 percent on Monday after weak results from Bank of America reignited concerns over the state of the banking industry and the economy.
Wall Street's tumble was broad-based and follows a six-week winning streak, the longest for the S&P 500 since 2007, with the Dow scoring its biggest gain over the period since 1938.
Dow component Bank of America (BAC.N) shares plunged 24.3 percent to $8.02 despite reporting a rise in profits. Bank of America's earnings report raised questions about the sustainability of recent better-than-expected results from banks after the company said its credit quality deteriorated markedly . (For details see [ID:nN20380236]).
http://uk.reuters.com/article/usMktRpt/idUKN2042181620090420
* Oracle offers to buy Sun Microsystems
* IBM, Texas Instruments report earnings after-hours
* Dow off 3.6 pct, S&P off 4.3 pct, Nasdaq off 3.9 pct
* For up-to-the-minute market news click [STXNEWS/US] (Adds Texas Instruments earnings after the bell)
By Chuck Mikolajczak
NEW YORK, April 20 (Reuters) - U.S. stocks slid more than 3 percent on Monday after weak results from Bank of America reignited concerns over the state of the banking industry and the economy.
Wall Street's tumble was broad-based and follows a six-week winning streak, the longest for the S&P 500 since 2007, with the Dow scoring its biggest gain over the period since 1938.
Dow component Bank of America (BAC.N) shares plunged 24.3 percent to $8.02 despite reporting a rise in profits. Bank of America's earnings report raised questions about the sustainability of recent better-than-expected results from banks after the company said its credit quality deteriorated markedly . (For details see [ID:nN20380236]).
http://uk.reuters.com/article/usMktRpt/idUKN2042181620090420
Oracle to buy Sun Micro, enters hardware market
BOSTON (Reuters) - Oracle Corp plans to enter the computer hardware market by buying Sun Microsystems Inc for more than $7 billion, swooping in after Sun's talks with IBM fell apart.
The announcement on Monday surprised many Oracle watchers, who believe the company can boost profitability at Sun's software businesses but were unsure if it can be as successful with Sun's hardware unit amid stiff competition from International Business Machines Corp, Hewlett-Packard Co, Dell Inc and new entrant Cisco Systems Inc.
"It's an out-of-the-box, left-field type of a deal because Oracle is buying a predominantly hardware business," said Jefferies & Co analyst Ross MacMillan. "The push-pull of the deal is the uncertainty of the hardware business with the earnings accretion of the software business."
Oracle Chief Executive Larry Ellison and Sun Chairman Scott McNealy are two Silicon Valley pioneers who have become close friends over the past two decades as their companies worked together to take on rivals like Microsoft Corp and IBM.
Oracle's database and related software already work closely with Sun's Java software and Solaris operating system.
The deal would make Oracle the world's fourth-largest maker of servers, with the No. 2 slot in the high-end of the market, which was worth about $17 billion last year. It is already the world's No 2 maker of business software after IBM.
Oracle will pay $9.50 a share for Sun, which values the high-end server and software maker at about $7.06 billion, based on 743 million shares outstanding as of the end of its fiscal second quarter on December 28, according to Sun.
Sun previously rejected IBM's offer to pay up to $9.40 a share, according to sources with knowledge of the matter.
The announcement on Monday surprised many Oracle watchers, who believe the company can boost profitability at Sun's software businesses but were unsure if it can be as successful with Sun's hardware unit amid stiff competition from International Business Machines Corp, Hewlett-Packard Co, Dell Inc and new entrant Cisco Systems Inc.
"It's an out-of-the-box, left-field type of a deal because Oracle is buying a predominantly hardware business," said Jefferies & Co analyst Ross MacMillan. "The push-pull of the deal is the uncertainty of the hardware business with the earnings accretion of the software business."
Oracle Chief Executive Larry Ellison and Sun Chairman Scott McNealy are two Silicon Valley pioneers who have become close friends over the past two decades as their companies worked together to take on rivals like Microsoft Corp and IBM.
Oracle's database and related software already work closely with Sun's Java software and Solaris operating system.
The deal would make Oracle the world's fourth-largest maker of servers, with the No. 2 slot in the high-end of the market, which was worth about $17 billion last year. It is already the world's No 2 maker of business software after IBM.
Oracle will pay $9.50 a share for Sun, which values the high-end server and software maker at about $7.06 billion, based on 743 million shares outstanding as of the end of its fiscal second quarter on December 28, according to Sun.
Sun previously rejected IBM's offer to pay up to $9.40 a share, according to sources with knowledge of the matter.
Hargreaves Lansdown boss sells shares for stadium
LONDON (Reuters) - Financial adviser Hargreaves Lansdown said on Friday its chairman had raised 47.15 million pounds through the sale of shares to help pay for a planned new stadium for soccer club Bristol City.
Stephen Lansdown, who is also the chairman of the Football League Championship team based in western England, sold 23 million of his 132 million shares at 205 pence each, the group said in a statement.
"Monies raised from the sale will be used to help fund private projects including the proposed new stadium for Bristol City Football Club, of which Stephen Lansdown is chairman," the group said in a statement.
Hargreaves Lansdown said that following the sale of the stake he would have 109 million shares, or a 22.9 percent holding, in the group.
Hargreaves Lansdown shares closed down 6.4 percent at 212.5 pence.
http://uk.reuters.com/article/fundsNews/idUKLNE53F01220090420
Stephen Lansdown, who is also the chairman of the Football League Championship team based in western England, sold 23 million of his 132 million shares at 205 pence each, the group said in a statement.
"Monies raised from the sale will be used to help fund private projects including the proposed new stadium for Bristol City Football Club, of which Stephen Lansdown is chairman," the group said in a statement.
Hargreaves Lansdown said that following the sale of the stake he would have 109 million shares, or a 22.9 percent holding, in the group.
Hargreaves Lansdown shares closed down 6.4 percent at 212.5 pence.
http://uk.reuters.com/article/fundsNews/idUKLNE53F01220090420
BlueBay's assets up 8 percent
LONDON (Reuters) - BlueBay Asset Management said on Tuesday assets under management for the three months to the end of March rose 8 percent to $18 billion (12 billion pounds) as its long-only funds drew net inflows.
The company, which specialises in credit funds, saw net inflows of $1.5 billion during the quarter though outflows continued in the group's long/short funds.
Many market commentators have said corporate debt offers attractive value to investors in the current environment.
Performance fees during the company's third quarter to the end of March are estimated at 10.4 million pounds compared with 8.1 million during the first half of the year, the company said.
"Overall fund performance in the first calendar quarter was good, with the majority of the firm's long-only funds well ahead of their benchmarks and its flagship long/short multi strategy fund returning 6.3 percent net of fees," Hugh Willis, BlueBay chief executive officer, said in a statement.
http://uk.reuters.com/article/fundsNews/idUKLNE53K01L20090421
The company, which specialises in credit funds, saw net inflows of $1.5 billion during the quarter though outflows continued in the group's long/short funds.
Many market commentators have said corporate debt offers attractive value to investors in the current environment.
Performance fees during the company's third quarter to the end of March are estimated at 10.4 million pounds compared with 8.1 million during the first half of the year, the company said.
"Overall fund performance in the first calendar quarter was good, with the majority of the firm's long-only funds well ahead of their benchmarks and its flagship long/short multi strategy fund returning 6.3 percent net of fees," Hugh Willis, BlueBay chief executive officer, said in a statement.
http://uk.reuters.com/article/fundsNews/idUKLNE53K01L20090421
RPI negative for first time in 50 years
LONDON (Reuters) - Annual consumer price inflation eased to a one-year low in March, while retail price inflation turned negative for the first time in nearly 50 years, official data showed on Tuesday.
The Office for National Statistics said consumer prices rose by 0.2 percent in March, taking the annual rate down to 2.9 percent from 3.2 percent in February.
Retail price inflation, used as a benchmark for many wage deals, was flat on the month and fell to -0.4 percent year-on-year, the first negative annual reading since March 1960.
The figures were broadly in line with consensus and support the Bank of England's view that inflationary pressures, which have proved surprisingly resilient in recent months, will subside over the course of the year.
The main downward effects on consumer prices last month came from household costs, particularly a fall in gas bills. Food and drink also exerted some downward pressure, as did transport costs as petrol prices rose less steeply than last year.
The biggest downward impact on the RPI measure came from falling house prices and lower mortgage costs following the Bank of England's recent interest rate cuts.
The central bank cut interest rates to a record low of 0.5 percent in March.
The housing component of the RPI index fell 10.3 percent on the year, the biggest fall since the series began in June 1948.
http://uk.reuters.com/article/businessNews/idUKTRE53K1E020090421
The Office for National Statistics said consumer prices rose by 0.2 percent in March, taking the annual rate down to 2.9 percent from 3.2 percent in February.
Retail price inflation, used as a benchmark for many wage deals, was flat on the month and fell to -0.4 percent year-on-year, the first negative annual reading since March 1960.
The figures were broadly in line with consensus and support the Bank of England's view that inflationary pressures, which have proved surprisingly resilient in recent months, will subside over the course of the year.
The main downward effects on consumer prices last month came from household costs, particularly a fall in gas bills. Food and drink also exerted some downward pressure, as did transport costs as petrol prices rose less steeply than last year.
The biggest downward impact on the RPI measure came from falling house prices and lower mortgage costs following the Bank of England's recent interest rate cuts.
The central bank cut interest rates to a record low of 0.5 percent in March.
The housing component of the RPI index fell 10.3 percent on the year, the biggest fall since the series began in June 1948.
http://uk.reuters.com/article/businessNews/idUKTRE53K1E020090421
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