News links for 8 March 2013
D.E. Shaw hires Sack from NY Fed, Ubide from Tudor | Reuters
“D.E. Shaw & Co, a $28 billion hedge fund firm, known for its quantitative modeling, has hired a former top official from the Federal Reserve Bank and an economist from a rival hedge fund, to work in its macro investing unit, the firm said on Thursday.
Brian Sack, had been an advisor to the president of the Federal Reserve Bank of New York and prior to that headed the bank’s Markets Group. Angel Ubide, had been director of global economics at Tudor Investment Group and before that worked at the International Monetary Fund.”
‘We’re In Nirvana for Housing’: Zelman
The video
‘We’re in Nirvana for Housing’: Zelman
“”I think we’re in nirvana for housing,” she said. “I think that I have to tell you, I’m probably the most bullish I’ve ever been fundamentally, and I’m dating myself, been around for over 20 years, so I’ve seen a lot of ups and downs.”
On “Fast Money,” Zelman likened consumer sentiment to a battleship pointing down for the past several years.
“And then the inventory cleared, the blight goes away, consumers feel better and now it’s really this urgency to go find a house,” she said. “I’ll tell you, there are Realtors blanketing neighborhoods, asking people to sell their homes.”
Zelman correctly called both the housing market’s top in 2005 and the bottom in 2012.”
Dow 36,000 Is Attainable Again – Bloomberg
This is NOT from the Onion; it is a real commentary by James Glassman.
Calculated Risk: Fed’s Q4 Flow of Funds: Household Mortgage Debt down $1.2 Trillion from Peak
“According to the Fed, household net worth increased in Q4 compared to Q3 2012, and is up 9% from Q4 2011. Net worth peaked at $67.4 trillion in Q3 2007, and then net worth fell to $51.4 trillion in Q1 2009 (a loss of $16 trillion). Household net worth was at $66.1 trillion in Q4 2012 (up $14.7 trillion from the trough, but still down $1.3 trillion from the peak).
The Fed estimated that the value of household real estate increased $447 billion to $17.6 trillion in Q4 2012. The value of household real estate is still $5.0 trillion below the peak.”
ECB cuts eurozone growth forecasts – FT.com
“The European Central Bank declared that it would maintain an easy monetary policy stance “as long as needed” while the eurozone battles record unemployment and shrinking economic activity.
“Our monetary policy will remain accommodative as long as needed,” Mario Draghi, ECB president, said during his monthly press conference.”
Even American Banker is Savaging the OCC’s Mortgage Settlement « naked capitalism
“It’s clear the OCC is winging details it should have nailed down before settling. The excuse it offered in shutting down the consultant reviews was that they’d be able to get money to wronged homeowners faster. But since we have no payout date for this improvised procedure, it ins’t clear how much of a benefit the banks will get on this front. And homeowners were much more interested in getting a hearing of their case and an appropriate payout. Of course, the whole procedure was so stacked against them that only the most egregious cases had any hope of meaningful restitution.
The real excuse was that the reviews were becoming embarrassing, and secondarily, costly. Our sources indicated that ProPublica had gotten Bank of American, Promontory and the OCC in a tizzy by reporting the truth, that the reviews were not independent, and they were scrambling to change procedures. At PNC, the team was told that all its work prior to October would be thrown out due to lack of independence. On top of that, both at PNC and Bank of America, the reviewers were told relatively late to start validating third party charges (most important, find invoices supporting attorneys’ fees). Many did not exist, and this is after the temps were also often finding implausibly and impermissibly high attorneys’ fees). So exposing systematic servicer fee-gouging was something to be avoided.”
Norway Cracks Down on Mortgage Debt to Fight Bubble Risk – Bloomberg
“The Financial Supervisory Authority in Oslo will add stricter risk-weight recommendations to a raft of measures, including curbs on covered bond issuance, all designed to prevent a repeat of the 1990s crisis that sent Norway’s real estate prices plunging 40 percent and left households with unsustainable debt loads.
“The FSA shares the ministry’s concern for household indebtedness and soaring house prices,” Morten Baltzersen, who heads the watchdog, said yesterday in a telephone interview. “We agree with the ministry that the risk weights on house loans need to be increased.”
The Finance Ministry in December proposed tripling risk weights to 35 percent, more than double the recommendation in neighboring Sweden, after Norwegian house prices and private debt burdens soared to records.”
Firms Send Record Cash Back to Investors – WSJ.com
“U.S. companies are showering investors with a record windfall in the form of dividends and share buybacks, helping to propel the stock market’s rally.
Companies in the S&P 500 index are expected to pay at least $300 billion in dividends in 2013, according to S&P Dow Jones Indices, which would top last year’s $282 billion.
American corporations also announced plans to buy back $117.8 billion of their own shares in February, the highest monthly total in records dating back to 1985, according to Birinyi Associates Inc. a Westport, Conn.-based market research firm.”
BBC News – Motorola Mobility to cut 1,200 jobs amid more restructuring
“Google’s Motorola Mobility Unit has said it is cutting 1,200 jobs, or more than 10% of its workforce.
It follows a 4,000 jobs cut last August as Google aims to turn around the loss-making business it acquired last year for $12.5bn (£8.3bn).
The layoffs are expected to affect the United States, China and India, according to a company email.”
Japan edges out of recession | Business | guardian.co.uk
“Official GDP growth revised to 0.2% annual rate for fourth quarter, revised from previous estimates of a contraction”
Dow Jones Record-Setting Rally May Be ‘Near the Top’ – Bloomberg
“The 14-day relative-strength index for the Dow Jones rose to 68.9 yesterday, according to data compiled by Bloomberg. Readings above 70 indicate prices will probably fall. The Dow climbed to 14,354.69, its highest level ever.
“The RSI suggests it’s near the top of the range,” said Hideo Shimomura, who helps oversee the equivalent of $63.2 billion in Tokyo as chief fund investor at Mitsubishi UFJ Asset Management Co., a unit of Japan’s largest publicly-traded bank. “It’s early to say we have reached a peak.””
World shares hit highest since June 2008 | Reuters
“World shares hit their highest level since June 2008 and the dollar touched a fresh 3-1/2-year high against the yen on Friday, ahead of U.S. jobs data expected to point to a continuing pick up in the world’s biggest economy.”
Newt Gingrich: John McCain attacks on Rand Paul ‘sad’ – Kevin Cirilli – POLITICO.com
“Former House Speaker Newt Gingrich is slamming Sen. John McCain for criticizing Sens. Ted Cruz and Rand Paul, saying it’s “sad” for someone who was once known as a maverick in Congress.
“What I find sad about Sen. McCain’s recent comments both to Ted Cruz, when Ted Cruz was frankly raising legitimate questions [about Benghazi] and with Rand Paul, is, you know, when I first knew John McCain in the House — he was a maverick. In the Senate, for years, he was a maverick,” Gingrich said Thursday on Fox News.”
Fed ‘stress test’: banks would lose $460bn if crisis struck again – Telegraph
“The losses of $462bn (£308bn) for the country’s biggest 18 banks were projected by the Federal Reserve’s ‘stress test’, an annual exercise the central bank now conducts to monitor the resilience of the financial system.
The losses would be racked up under the Fed’s most extreme scenario in which unemployment climbs to 12pc, house prices tumble 21pc and stock markets halve in value over the next two years.”
Citigroup asks to spend $1.2 billion on stock buybacks | Reuters
“Citigroup Inc (C.N) said on Thursday it had asked the Federal Reserve for permission to spend $1.2 billion to buy back its own stock through next March but had not asked to raise its quarterly dividend.
The company announced the moves after the Federal Reserve released results of its stress test of bank capital and showed Citigroup scoring better than a year ago.”
Citi Seeks to Sell Brazil Card, Consumer-Finance Units – WSJ.com
“Citigroup, which has struggled to gain a significant foothold in Latin America’s largest economy, is looking to sell its credit-card unit Credicard and consumer-finance arm Credicard Financiamentos for at least 1.5 billion Brazilian reais ($765 million), according to the three bankers.
If completed, a sale would represent Citigroup´s exit from a key segment of the highly competitive retail banking market in Brazil to concentrate on high-income customers and investment banking, according to the three bankers familiar with the plans. A spokeswoman for Citigroup said the bank doesn´t comment on market rumors.
Citigroup is Brazil’s 11th-largest bank by assets”
All but one major U.S. bank pass Fed’s stress test | Reuters
These stress tests are useless. They are pure PR. As we saw with the SNS Reaal bankruptcy in the Netherlands, you can pass and be bankrupt months later.
“At 1.5 percent, Ally Financial was the only bank to miss the 5 percent target. The U.S. government owns a majority stake in Ally, the former General Motors (GM.N) lending arm, after a series of government bailouts.
The firm is working through the bankruptcy of its Residential Capital unit, and is largely exiting the mortgage business to focus on auto lending. It is also selling its international operations.”
Lakewood restaurant customer arrested after trying to use waitress’s stolen ID | 9news.com
“”Four people come in, walk in, sit down. They start ordering drinks. This girl hands me my ID as a fake ID,” Priddy said.
It had been a rough couple of weeks for Priddy.”
“The data, shared directly with TechCrunch, covers 100,000 of Egnyte’s paying customers over the last year-and-a-half+, tracking which OS they are using to access its services on mobile devices and also splitting out iPhone and iPad use. The numbers look strong for Apple, with the iPhone especially growing its proportion of users since the second half of 2011 to-date — perhaps helped by the halo effect of iPads arriving in the enterprise and persuading business folk to trade their BlackBerrys for iPhones. Egnyte’s data doesn’t specifically refer to BlackBerrys but does show Apple taking share away from Android.
“Apple seems to have at least temporarily won the hearts and minds of business users with its products accounting for about 70 percent of our traffic,” Egnyte told TechCrunch.
In Q3/Q4 2011, Egnyte’s data shows the following device breakdown — giving iOS a 68 percent majority of Egnyte’s enterprise user-base”
Amazon, Samsung tablets inch up, but Apple’s iPad still ahead by a mile
“The launch of Apple’s iPad mini appears to have slowed the rate at which competitors have been able to eat into the company’s overwhelming lead in the tablet sector, according to a new study out Thursday, even as Amazon and Samsung tablets continue to carve out their own share.
The new figures from Chitika Insights illustrate tablet use for the North American market, based on an analysis of web traffic between Feb. 15 and Feb. 21. Chitika’s report found that Apple’s iPad devices held 80.5 percent of traffic share among all tablets, down slightly from last month’s share of 81 percent. “
Microsoft’s Patent Lawsuit Against Google Could Shut Down Google Maps In Germany | TechCrunch
“Microsoft and Google are currently involved in a patent lawsuit in Germany that could, according to FOSS Patents’ Florian Mueller and a number of German reports, lead to an outright ban of Google Maps in the country.
Microsoft’s EP0845124 patent in Europe is for a “computer system for identifying local resources and method therefor” and was issued in 1996. The issue was discussed in a regional court in Munich today and as Mueller notes, it doesn’t look like Google was able to convince the judge “that the patent is highly probable to be invalidated at the end of a parallel nullity proceeding.””
ECRIs Achuthan Reiterates Recession Call – Business Insider
I don’t buy this for one second.
Rise in household debt hints at end of deleveraging | Reuters
“Household debt rose at a 2.5 percent annual rate in the fourth quarter, the Federal Reserve said on Thursday in its quarterly Flow of Funds report. It was the steepest gain since the first quarter of 2008 and only the third quarter since then in which debt levels rose.
The data showed that the net worth of American households grew solidly during the fourth quarter of 2012, rising $1.1 trillion to $66.0 trillion, another hopeful sign for future U.S. consumer spending.”
Israel Weighs Whether to Honor Brother of Leading Nazi Hermann Göring – SPIEGEL ONLINE
“Wherever he went, he helped those in desperate need, both before and during the war.
On the few occasions that the Göring brothers saw each other in the 12 years between the Nazi takeover and Germany’s surrender to the Allies, it was at family gatherings. But Albert needed Hermann, and he also used him. He would have been lost without his brother. Without his support, the Gestapo — which knew exactly what Albert Göring was doing and with whom he associated — would have arrested and executed him.
The Göring brothers remained loyal to each other. He is my brother, Hermann would say, reminding the Gestapo thugs that family members were off-limits. The madness of the Nazi era could easily be told from the perspective of these two brothers.”
Arbeitslosigkeit in Griechenland sinkt erstmals seit 2008 – SPIEGEL ONLINE
Unemployment declined in Greece for the first time in nearly five years as the rate fell from the record 26.6% in November to 26.4% in December 2012.
U.S. fourth-quarter productivity falls 1.9% – Economic Report – MarketWatch
“Lower productivity is bad for a country in the long run, a sign of poor or declining economic health. Yet in the short term, declining productivity can be a signal that companies need to hire more workers to keep up with rising demand while maintaining strong profit margins.”
British workers’ real wages fall by 4.5pc – Telegraph
“The TUC said that between 2007 and 2011 real wages fell by 4.5pc in the UK, higher than in countries such as Italy and Japan, while in Australia and Canada there were increases of 6.9pc and 5.4pc respectively.
Most of the decline was in 2011 – the coalition Government’s first full year in office, the research found.
The TUC said the Government’s austerity programme had made the squeeze on living standards even tighter by cutting tax credits and welfare support for low and middle-income families.”
Rand Paul’s Filibuster, Holder’s Unanswered Question on Targeted Killing : The New Yorker
““I think it’s an easy question to answer and it boggles my mind that they haven’t,” Senator Rand Paul said at about fifteen minutes after midnight. Paul had started asking his question—Does President Obama believe he can order the killing of an American citizen, on American soil, based on nothing more than his own judgment that the person is a threat?—more than twelve hours earlier, as he blocked a vote on the nomination of John Brennan for the post of C.I.A. director. You don’t see that kind of “talking filibuster” any more; this was the longest since Strom Thurmond’s, in 1957. But what’s more striking than the theatrics is that the question—which should, indeed, be easy—still hasn’t been answered.”