Links: 2012-12-27
I hope to be commenting on some of these links over the next few days. Today and tomorrow, will be in transit and won’t be able to post. But afterwards I will have a lot to say, especially on Japan.
Best,
Edward
Housing
“The Case Shiller data is showing a steady increase in home prices across the United States. The headline figures are clear but rarely make the connection that much of this gain is coming on the back of unprecedented Federal Reserve intervention. Data is clear that household income is not making any significant gains. These gains are coming largely from added leverage produced by lower mortgage rates. “
Slim inventory pushes O.C. home prices up 16% – Lansner on Real Estate : The Orange County Register
“The latest Orange County home inventory report from Steve Thomas and ReportsOnHousing.com – data as of Dec. 20 – shows just 3,254 homes listed for sale – down 61 percent from a year ago and the lowest number in records dating back to June 2004.
Meanwhile, the latest Orange County homebuying report – for the 22 business days ending Dec. 7– shows a median selling price for all residences of $464,000 – that is up 16 percent vs. a year ago.”
Home prices rose for ninth straight month: S&P | Reuters
“U.S. single-family home prices rose in October for nine months in a row, reinforcing the view the domestic real estate market is improving and should bolster the economy in 2013, a closely watched survey showed on Wednesday.”
Calculated Risk: New Home Sales and Distressing Gap
” The flood of distressed sales kept existing home sales elevated, and depressed new home sales since builders weren’t able to compete with the low prices of all the foreclosed properties.
I don’t expect much of an increase in existing home sales (distressed sales will slowly decline and be offset by more conventional sales). But I do expect this gap to close – mostly from an increase in new home sales. “
Japan
Japan PM adviser urges unlimited BOJ easing, higher price goal | Reuters
“The views of Hamada, who had been privately advising Abe before he was sworn in as Japan’s prime minister on Wednesday, are likely to have a significant impact on the new government’s policies.
“The BOJ should not only buy long-term bonds but purchase a wider type of assets such as commercial paper, real estate investment trusts (REITs) and shares, which will help to have an impact on the economy,” said Hamada, who taught BOJ Governor Masaaki Shirakawa when he was a student at Japan’s prestigious Tokyo University.
“I think buying foreign currency-denominated assets can also be a part of an effective monetary policy.””
Japan’s Nikkei share index hits 21-month high | Business | guardian.co.uk
“New Japanese prime minister’s vow to battle deflation, and strong yen, helps boost Nikkei’s year-to-date increase to 22.1%”
Abe turns back clock to stimulate economy – FT.com
“Japan’s new government appears to be turning back the clock on economic policy, with plans for large-scale public spending recalling the investment sprees of the 1990s.”
Missing The Big Japan Story – Tim Duy’s Fed Watch
“omething much more significant is afoot – the possibility of explicit cooperation, albeit perhaps forced cooperation, between fiscal and monetary authorities. The loss of the Bank of Japan’s independence to force the direct monetization of deficit spending is the real story.”
United States
Gross Doubles New York Bet as California Loses Lead – Bloomberg
“The $285 billion Total Return Fund, which Gross runs at Pacific Investment Management Co., boosted its New York state allocation to about a $3 billion market value in the quarter ending Sept. 30, from $1.4 billion as of June 30, according to a semiannual filing the firm released this month. It was the largest increase by amount among U.S. states.”
“Reid’s downbeat assessment triggers market sell-off as Obama and senators return to Washington in search of a deal”
Geithner Warns Lawmakers Debt Standoff Risks U.S. Default – Businessweek
“Treasury Secretary Timothy F. Geithner said he will take “extraordinary measures” to postpone a U.S. default into early 2013 while President Barack Obama and Congress work out a deficit-reduction deal.
Geithner, in a letter to congressional leaders today, said the government will hit its statutory debt ceiling on Dec. 31. To avert a default, the Treasury will take action to create about $200 billion in headroom under the debt limit, which would normally last about two months.”
U.S. Holiday Sales Rise 0.7% as Washington Hurts Confidence – Bloomberg
“Retail sales grew by 0.7 percent from Oct. 28 through Dec. 24, the Purchase, New York, research firm said yesterday, without providing a dollar figure in the billions. Sales grew at a 2 percent pace in the same period a year ago. SpendingPulse tracks total U.S. sales at stores and online via all payment forms.”
Europe
Special Report – How the UK tax authority got cosy with big business | Reuters
“In 2001, Labour Chancellor Gordon Brown directed the tax collector to take a new approach which would come to be known in the financial world as an “enhanced relationship.” The aim was to lighten the regulatory burden on business. The authority now says it aims to work closely with big businesses in an atmosphere of “mutual trust.”
The government has found the approach to be “the most cost-effective way to increase revenue flows,” an HMRC spokesman said in an email.
However, a Reuters analysis found that large corporations in the UK now pay less corporate income tax than a decade ago even though profits have risen sharply. According to one measure compiled by the Office for National Statistics, overall annual corporate profit has risen 65 percent since 2000, to 329 billion pounds ($532 billion) last year. In the same span, the amount of corporation tax paid by large companies fell, to 21 billion pounds, down 21 percent or 5 billion pounds since 2000/01.”
Pensioners are about to be robbed yet again – Telegraph
” Next month, a report from the Office for National Statistics (ONS) is to be published on the future of the RPI. The ONS has carried out a brief and not very well publicised consultation on a number of options, including whether and how to bring it more into line with the CPI. Doing so would save George Osborne £3 billion a year in interest – and hammer yet another nail into the coffin of private pensions, especially those still linked to the RPI. It would also cut the returns on the £18 billion worth of inflation-linked policies which have been sold by National Savings and Investments.”
IMF Head Lagarde Warns Germany over Possible Austerity Plan – SPIEGEL ONLINE
“International Monetary Fund head Christine Lagarde has said that Germany should not be looking at measures aimed at consolidating its finances, apparently in concern over a SPIEGEL report indicating that the German Finance Ministry is working on a far-reaching package of spending cuts and tax hikes for introduction following general elections next autumn. In an interview with the Thursday edition of the influential weekly Die Zeit, she said that Germany needs to continue to work as a counterbalance to the biting austerity programs passed in crisis-stricken countries in Southern Europe.”
BBC News – Bankia shares slide on ‘negative value’ assessment
“Shares in Bankia have slid almost 14% after Spain’s bank rescue fund said the troubled lender had a negative value of minus 4.2bn euros (£3.4bn; $5.6bn).”
Euro zone crisis batters holiday sales prospects | Reuters
“Shoppers in euro zone nations battered by years of recession and crisis are on the hunt for bargains, delaying their purchases until the last minute, or simply not buying at all as post-Christmas sales get underway.”
Technology
“Samsung, the south Korean electronics giant, could face fines running to billions of pounds from the European commission over its attempts to use its “standard-essential” patents on 3G to ban sales of Apple’s iPhone and iPad in Europe.”
Over half of American homes don’t have or use their landline — Tech News and Analysis
“The survey found that more than one-third of American homes (35.8 percent) had only wireless telephones during the first half of 2012 while 15.9 percent of all households had both landline and wireless telephones but received all or almost all calls on the wireless phones. This means 51.7 percent of U.S. homes don’t have or didn’t use their landlines in the first half of 2012. That’s a 1.8 percent increase from the same period a year ago.”
Majority of Tablet Web Visits Still Coming From iPads – Ina Fried – Mobile – AllThingsD
“Roughly 87 percent of tablet Web surfing comes from an iPad, according to the latest numbers from mobile ad company Chitika. That’s down just 1 percent from the ad network’s November survey.
A few rivals did show some impressive gains, however. Kindle Fire models accounted for 4.25 percent of all tablet Web traffic, up 20 percent from the prior survey. The Samsung Galaxy family posted a slight gain, to 2.65 percent, while Google Nexus tablets increased from 0.91 percent to 1.06 percent in December.”
Customers say Apple’s online store has become less satisfying to shop
“Customers who participated in the survey by ForeSee gave Apple a score of 80 out of 100. That’s down from last year’s score of 83, and represents a four-year-low for the company.”
“Customer experience analytics company ForeSee released its eighth annual holiday online satisfaction report this morning, which rates the top e-retailer websites in 2012. This year’s newly expanded list puts Amazon.com again at the top, while Apple, Dell, and JCPenney.com all slid down in customer rankings.”
India
Hundreds demand stricter anti-rape laws, victim critical in Singapore hospital (Roundup)
“Hundreds of protesters, mostly young people, came out on the streets Thursday after two days of relative peace, demanding strict rape laws, even as the gang-rape victim was in “an extremely critical condition” in a Singapore hospital.
The 23-year-old victim was admitted to the Mount Elizabeth Hospital in Singapore early Thursday after her condition deteriorated in the Safdarjung Hospital here. Hospital chief executive Kelvin Loh said in a statement in the evening that the young woman remains in “an extremely critical condition”.
“Prior to her arrival, she has already undergone three abdominal surgeries and experienced a cardiac arrest in India,” said Loh.”
Indian women vent harassment fury – FT.com
“while quiet has been restored to the streets, the protests have laid bare the fury of young Indian women at their vulnerability in New Delhi’s public spaces, where verbal harassment, groping, stalking and more violent aggression against women are all too common, and almost never punished.”
Other News
Iron ore prices hit eight-month high – FT.com
“The cost of the commodity used in steelmaking has risen almost 60 per cent since early September as Chinese steelmakers restock after running down their inventories during the third quarter of the year. Steel production in China remains robust, analysts said.”
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