News: 2014-02-26

News links for 26 February 2014

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North America

America’s Hottest Housing Market Has Suddenly Cooled Down – Real Time Economics – WSJ

“Home prices in Phoenix posted their first monthly decline since 2011 in December, according to the S&P/Case-Shiller price index released Tuesday. Because it was among the country’s first hardest-hit markets to stabilize, Phoenix has served over the past two years as a bellwether of sorts for much of the Sunbelt that also experienced high levels of foreclosures and severe price declines. If Phoenix cools, that could portend ominously for parts of California, Nevada, and Florida that have shown similar rebounds in recent years. Meanwhile the number of homes sold in January fell 17% from last year, the sixth straight month in which sales have fallen from a year earlier.”

A Look at Case-Shiller by Metro Area – Real Time Economics – WSJ

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Home prices rise more than forecast in December | Reuters

“”The S&P/Case-Shiller Home Price Index ended its best year since 2005,” David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, said in a statement. However, gains are slowing from month-to-month and the strongest part of the recovery in home values may be over.””

Consumer Confidence Falls in February – WSJ.com

“The board’s present situation index, a gauge of consumers’ assessment of current economic conditions, increased to 81.7 from a revised 77.3 in January, first reported as 79.1. The February current index is the highest in almost six years. “

Tesla Model S named Consumer Reports’ top auto pick | Reuters

Moody’s warns on specialised mortgage servicers – FT.com

“Non-bank mortgage servicers are poised to become the “next generation” of subprime lenders as the companies seek to diversify their rapidly expanding businesses in the face of mounting regulatory scrutiny, Moody’s says.”

Many big U.S. corporations pay very little in taxes: study | Reuters

Calculated Risk: Richmond Fed: “Manufacturing Sector Softened” in February

Bubble to Bust to Recovery

J.P. Morgan’s Chief Compliance Officer Leaves Firm – WSJ.com

JPMorgan Chase to cut thousands more jobs – FT.com

“JPMorgan Chase is planning more job cuts in its mortgage business on top of the 13,000-15,000 positions already due to be slashed because of plunging demand for home loans. Several thousand more cuts are planned, according to people familiar with the matter, and could be announced at JPMorgan’s annual investor day on Tuesday. “

Roubini Advocates More Aggressive Policy to Weaken Loonie – Bloomberg

The ‘paycheque to paycheque’ myth: How Canada’s middle class is getting richer, a lot richer | Financial Post

This is total bollocks. The wealth is all housing related and it is due to a bubble. What people are concerned about is wage growth. “The study, released Tuesday, shows the median net worth of Canadian families jumped 44.5% to $243,800 in 2012, up from $168,700 in 2005. Over the past 15 years, the median net worth figure leaps 80%. The numbers are adjusted for inflation and measure the amount of money left over if all debts were paid and all assets were sold. “This shows the middle class isn’t withering away,” said Philip Cross, research fellow for the Macdonald-Laurier Institute and former chief economic analyst at Statistics Canada. “

 

China

Chinese Banks Match Tech Firms in Race for Deposits – WSJ.com

Shadow banking in China: “A number of banks, including big state-owned lenders as well as smaller ones, have launched a flurry of investment products to compete with the money-market funds introduced by their tech-sector rivals. In June, China’s e-commerce giant Alibaba Group Holding Ltd. launched a money-market-like fund called Yu’e Bao or “leftover treasure.” It had scooped up 400 billion yuan ($66 billion) in assets by mid-February. The success has prompted other tech firms, including Tencent Holdings Ltd. and Baidu Inc. to follow suit in recent months.”

Air purifier rush as smog shrouds northern China

“Levels of small airborne particles which easily penetrate the lungs and are known as PM 2.5 have repeatedly reached more than 400 micrograms per cubic metre in recent days, according to a count by the US embassy in Beijing, more than 16 times the World Health Organization’s (WHO) safety guideline of 25 micrograms.”

China should prepare for ‘instability’ from home-price cooling – editorial | Reuters

“Investor jitters over the housing market heightened after data showed on Monday house price growth slowed for the first time in 14 months in January, with prices in five cities having a decline on a month-on-month basis. The news triggered a selloff in shares of property developers and pulled down the overall market on Tuesday to its lowest level in two weeks. China Daily, noting local media reports about angry homeowners in the southeastern city of Hangzhou protesting offers of deep discounts by some developers, said policymakers also need to be prepared to deal with any social impact that may result from a weaker housing market.”

 

Ukraine

Russia is right to be upset over events in Ukraine – FT.com

“the main reason for Russian sensitivity is geopolitics. One of the causes of anti-American feeling is the deep and bitter frustration borne of the conviction that Russia has been marginalised. Its former allies in eastern Europe and the Baltic states are not only gone but quite unfriendly toward Moscow. The cold war zero-sum game mentality is by no means dead. Russia’s leaders regard the west, particularly the US, with much suspicion. They do not believe that Washington is bent on war, but they assume that, given an opportunity, the Americans will never miss a chance to do something nasty to Russia.”

Ukraine: at least it isn’t Venezuela | beyondbrics 

Ukraine disbands its Berkut riot police – FT.com

“Arsen Avakov, Ukraine’s acting interior minister, has signed a decree to disband the Berkut riot police, the force involved in the violent clashes which ultimately led to the toppling of President Viktor Yanukovich. “

Pressure on Ukraine’s Currency Intensifies – WSJ.com

“The dollar is now up almost 10% since Monday and was most recently quoted at 10.15 hryvnia. Trading in the currency is extremely light. Citigroup said that “next to nothing” had been transacted at those levels.”

Ukraine’s Naftogaz slashes Russian gas imports in February | Reuters

“Ukraine’s state oil and gas company, Naftogaz, has slashed gas imports from Russia’s Gazprom to 28 million cubic metres per day as of Feb. 24 from 147 million, two Russian industry sources told Reuters on Tuesday.”

Ukraine’s economy still near the edge | FT Alphaville

“The economy finished last year in recession, and it “appears to have deepened further since the start of the year, with industrial production slumping 5% from a year before in January after contracting 4.3% last year as a whole, and probably collapsing in February amid the political standoff and the violence that followed”

Is the U.S. Backing Neo-Nazis in Ukraine? | Alternet

“As the Euromaidan protests in the Ukrainian capitol of Kiev culminated this week, displays of open fascism and neo-Nazi extremism became too glaring to ignore. Since demonstrators filled the downtown square to battle Ukrainian riot police and demand the ouster of the corruption-stained, pro-Russian President Viktor Yanukovich, it has been filled with far-right streetfighting men pledging to defend their country’s ethnic purity.” 

Ukraine: OCCRP, Local Reporters Upload Revealing Documents to “Yanukovych Leaks”

 

Emerging Markets

India ready to pay $1.5 bln to Iran -oil official | Reuters

“India is ready to pay $1.5 billion to Iran to clear part of a backlog of payments for shipments of oil following the partial easing of western sanctions on Tehran, Oil Secretary Vivek Rae said on Tuesday.”

Brazil’s economy: go-go to so-so – FT.com

“Domestically, the country’s consumption boom has run out of steam. Low investment during the boom years has revealed itself as a series of growth-crimping supply bottlenecks. Externally, softening commodity prices have opened up a potentially worrying current account deficit. Equivalent to 4 per cent of gross domestic product, it is covered by foreign investment flows. But for how long? Private equity groups are just the latest investors to pull in their horns.”

Brazil: Loss of faith – FT.com

“below-par growth during the past three years for Brazil: 2.7 per cent in 2011 and 0.9 per cent in 2012. It is expected to be below 2 per cent for 2013. Ms Rousseff is on track to have the lowest average economic growth during a four-year term of any president since Fernando Collor in 1990-1992, says Oxford Economics.”

Worst drought in decades hits Brazil coffee belt as buyers brace for price rise | World news | Guardian Weekly

How Citigroup stumbled in the Mexican housing market | Reuters

Foreign companies in Turkey face squeeze | Reuters

” Foreign companies in Turkey are beginning to feel the effects of a sagging currency, rising inflation and a growing political power struggle, adding to fears the country may not be the source of future growth that some companies had hoped.”

Turkey’s Recep Tayyip Erdogan slams ‘treacherous’ recording – FT.com

“While the recording on YouTube suggested the taped conversations took place just as the corruption raids began, and concerned how to reduce the visibility of large amounts of funds to “zero”, Mr Erdogan denounced what he said were “edited” and “dubbed” recordings. “Even fabrication has a limit,” he said.”

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Europe

Retail sales rise at fastest pace in two years – Telegraph

Year of the PIIGS? Greece leads 2014 stock market league table – Telegraph

“Portugal, Italy, Ireland, Greece and Spain have been the best performers in Europe so far in 2014 “

French to break deficit promise to EU – Telegraph

“EU says France’s deficit will climb to 4pc of output this year and remain at 3.9pc in 2015. However, the EU’s outlook suggests economic growth in France is set to pick up, reaching 1pc this year and 1.7pc by 2015.”

Scotland: No pound, no banks is not an idle threat – Telegraph

“There is possibility independence will drive out Scotland’s financial services industry”

Italy and France to lag Germany in euro zone recovery | Reuters

“Germany is set to accelerate away from France and Italy in 2014 as the fragmented euro zone economy gradually recovers from its worst crisis, the European Commission said on Tuesday.”

Five risks to Portugal’s bailout success – FT.com

SPD distanziert sich von Merkels Europapolitik

The SPD is distancing itself from Angela Merkel’s European policy. They believe “the reform compacts cannot achieve a viable majority within the eurozone.” They also said “we also don’t believe they are a central theme for the future of the EU.”

Deflation: Deutsche glauben laut GfK nicht an fallende Preise – SPIEGEL ONLINE

A full 92% of Germans expect food prices to rise. And in general, Germans expect prices to continue to rise, not fall, despite all the hullabaloo about deflation risks in Europe.

George Soros: Starinvestor will mehr Geld in Europas Banken pumpen – SPIEGEL ONLINE

Soros is saying he is now prepared to put money to work in the European banking sector. If he puts his money where his mouth is, I would expect him to invest more in the periphery than overbanked Germany or anywhere else in the core. That’s a good sign for periphery bank shares.

 

Japan

Japan shifts agenda as Abe’s arrows miss – FT.com

“Wages have been falling in real terms since the late 1990s. Masaaki Kanno, JPMorgan’s chief economist in Japan, predicts that real wage income will drop 1.4 per cent in 2014, the largest annual drop outside recessions since 1980, when records first were kept.”

 

Technology

In Transit From Google to Lenovo, Motorola Announces Plans for New Wearables | Re/code

Everything you wanted to know about the security-focused Blackphone | Ars Technica

Blackphone aims to protect your privacy in a world where your data is for sale

“The idea is pretty simple: You start out with a nicely designed and well-specced Android-based phone, and then package it with some tried-and-tested apps and services that will work out of the box. The first layer is a customized skin called “PrivatOS” which gives the phone a different look and feel, but also works as a platform (soon to be open-source) that encrypts locally stored information. Next, you add in services like Silent Circle and Disconnect.me to enable anonymous phone calls, texts and browsing too. Finally, Blackphone comes with utilities that give the user better control over what third-party software does on their phone.”

Comcast’s deal with Netflix makes network neutrality obsolete

Huawei’s TalkBand B1 is a fitness tracker that fits in your ear | The Verge

Inside The Netflix/Comcast Deal and What The Media Is Getting Very Wrong – Dan Rayburn – StreamingMediaBlog.com

T-Mobile US Reports Fourth Quarter and Full Year 2013 Results and Third Consecutive Quarter of Over One Million Net Customer Additions

Proof of concept captures all SSL traffic via Apple’s goto fail exploit | ZDNet

“A New Zealand security consultant has used a man-in-the-middle proxy to mop up all SSL traffic related to the App store, updates, iCloud data, and traffic from apps that use certificate pining, such as Twitter.”

 

Bitcoin

SecondMarket Attempts to Launch a Bitcoin Exchange as Mt. Gox Crumbles | Re/code

Gox Goes Belly-up After Losing A Billion Dollars Without Noticing; Blames Fault In Corporate Bookkeeping Protocols

Mt Gox – AVC

“There is a lot of venture capital being invested in the Bitcoin sector right now. Much of that investment is going into the infrastructure, processes, and technology to provide the kind of safeguards that are mentioned in that paragraph. We are witnessing the maturation of a sector and part of that will inevitably be failures, crashes, and other messes. Almost every technology that I’ve watched come into a mass adoption has gone through these sorts of growing pains. One big difference is that in addition to technology, we are also talking about people’s money when we talk about Bitcoin. To me, that doesn’t change the discussion and the implications, but it sure does amplify the emotions around it.”

BitGo Safe Aims to Secure Bitcoin Wallets With Multi-Signature Transactions

“Howells lost £4m in bitcoins after he threw out his hard drive, while payment processor and online wallet service BIPS saw over $1m stolen in a wallet hack. They both suffered from the same problem: a single point of failure. BitGo’s founder Mike Belshe says that relying on a single device to store your bitcoins is a bad idea. Web wallets are outside the user’s control, while their own devices are prone to attack, hardware failure, or simple user error. “You wouldn’t want to use pure web, but you wouldn’t want to use pure client-side either – at least not for most mortals,” he said. “Client-side software is a bear.””

Securing your wallet – Bitcoin

“Bitcoin includes a multi-signature feature that allows a transaction to require the signature of more than one private key to be spent. It is currently only usable for technical users but a greater availability for this feature can be expected in the future. Multi-signature can, for example, allow an organization to give access to its treasury to its members while only allowing a withdrawal if 3 of 5 members sign the transaction. It can also allow future online wallets to share a multi-signature address with their users, so that a thief would need to compromise both your computer and the online wallet servers in order to steal your funds.”

Bitcoin wallets and other cryptocurrencies compromised by more advanced ‘Pony’ botnet

Playboy Plus, a Playboy Brand Website, is Now Accepting Bitcoin

 

Markets

Gold Holds Near 4-Month High as US Data Weighed Against Demand – Bloomberg

BBC News – Gold market breaches ‘covered up’

“Dubai’s biggest gold refiner committed serious breaches of the rules designed to stop gold mined in conflict zones from entering the global supply chain, a whistleblower has revealed. Amjad Rihan led an Ernst & Young team that audited Kaloti and found it was failing to carry out the proper checks.”

El-Erian’s PIMCO Resignation Memo – Business Insider

This is no recovery, this is a bubble – and it will burst | Ha-Joon Chang | Comment is free | The Guardian

“Stock market bubbles of historic proportions are developing in the US and UK markets. With policymakers unwilling to introduce tough regulation, we’re heading for trouble”

Tesla Tops $30 Billion on Morgan Stanley Boosts Outlook – Bloomberg

 

Elsewhere

How to Stop Giving a F*ck What People Think

@GSElevator exposed! Five of the funniest tweets in finance | Breakout – Yahoo Finance

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