South Korean inflation may accelerate above the government
U.S. home prices fell 2.4 percent in the fourth quarter from a year earlier, as sales were boosted by investors seeking lower-cost distressed properties.
Prices dropped 0.1 percent from the prior three months on a seasonally adjusted basis, the Federal Housing Finance Agency said today in a report from Washington. In December, prices retreated 0.8 percent from a year earlier, while increasing 0.7 percent from the previous month.
Foreclosures (FORLTOTL) are boosting the supply of properties on the market and dragging down values for all houses. Banks may seize more than 1 million U.S. homes this year after legal scrutiny of their foreclosure practices slowed actions against delinquent property owners in 2011, RealtyTrac Inc. said last month.
Distressed properties, comprising foreclosures and short sales in which the lender agrees to a transaction for less than the mortgage balance, accounted for 35 percent of all existing- home purchases in January, the National Association of Realtors said yesterday payday loan lenders.
The FHFA
It should be a no-brainer: a popular bill with bipartisan support that bans insider trading by members of Congress.
The legislation is known as the Stop Trading on Congressional Knowledge Act, or the Stock Act. It gained momentum last year after an explosive 60 Minutes report that accused several prominent representatives of insider trading using government information. President Obama urged the bill’s passage in his State of the Union address last month.
Now, however, the bill is stuck in part due to a disagreement over a provision that requires so-called "political intelligence" professionals to register with the government and disclose their activities in the same way that lobbyists do.
The disagreement puts the spotlight on an industry that has previously escaped the notice of most Americans. But despite its relatively low profile, political intelligence is big business.
Political intelligence professionals get paid big bucks to gather information about government policy and pending legislation, often through lawmakers or other public officials. Their clients include hedge funds, mutual funds, pension funds and wealthy individuals who use the information to guide investment decisions.
Under one version of the Stock Act, political intelligence practitioners would have to reveal who their clients are, how much they get paid for their research, and what issues they’re hired to gather intelligence on.
"If you seek information from Congress in order to make money, the American people have a right to know your name and who you’re selling that information to," Senator Chuck Grassley of Iowa said in congressional debate earlier this month.
The idea is that shining a light on the industry will help ensure that such firms are confined to objective research and analysis and are not simply providing insider trading tips based on government knowledge.
Amazingly, there are no clear prohibitions on these kinds of insider tips at the moment.
The Senate passed a version of the Stock Act by a margin of 96-3 that included the registration requirement. The House version sailed through last week with similar support — a 417-2 vote — though it scrapped the registration requirement and called only for a government study of the political intelligence industry.
Even without the political intelligence provision, the Stock Act would prohibit Congressmen and other federal employees from exploiting non-public government information or using it to tip off others, and would require them to report investment transactions within 30 days.
Rep. Louise Slaughter told a congressional committee in December that the political intelligence industry brings in $100 million a year in the U.S., and Mayhew estimated that there are roughly 300 firms worldwide providing political intelligence and policy research.
"Political intelligence firms have increasingly become an issue — they have proliferated — and I think part of the issue here is that until the Stock Act, most Americans didn’t even know about the political intelligence industry," said Melanie Sloan, executive director of the progressive watchdog group Citizens for Responsibility and Ethics in Washington.
The political intelligence field bears some similarities to so-called "expert networking" firms in the corporate world, which connect hedge funds and mutual funds with consultants who provide insight about particular companies.
While such firms offer legitimate market research, some have also been accused of passing non-public, inside information to clients as part of the government’s ongoing crackdown on insider trading at hedge funds.
"There is an increasing problem with Wall Street recognizing that they can get inside information not just from corporate insiders, but from the government," Sloan said.
Some in Congress worried that the political intelligence registration requirement was drafted too broadly and required further study. Laena Fallon, a spokeswoman for House Majority Leader Eric Cantor, said in an email that it could affect a range of people from "local rotaries to national media conglomerates."
But Grassley, who added the registration requirement to the Senate bill, called it "astonishing and extremely disappointing that the House would fulfill Wall Street’s wishes by killing this provision." Grassley’s amendment passed the Senate by a vote of 60-39, and included an exception for journalists "disseminating news and information to the public."
"If Congress delays action, the political intelligence industry will stay in the shadows, just the way Wall Street likes it," the senator said in a statement.
Why three senators said no to an insider trading ban in Congress
Looking ahead: A spokeswoman for the Senate’s Governmental Affairs Committee said staffers were unsure of when the two congressional chambers would resolve their disagreement and when the Stock Act might be finalized.
Should the registration requirement go into force, hedge funds and other political intelligence customers who don’t want their identities disclosed may pull back from such services, Mayhew said.
Yet even if it passes without the registration requirement, the Stock Act will still likely have an impact on political intelligence firms, as it will become illegal for them to pass on non-public information gleaned from government officials.
Just as they did during the expert networking crackdown, Wall Street firms will have to beef up their internal regulations to make sure they don’t receive non-public information in the guise of legitimate research, Mayhew said.
"The information will continue to be extremely important, but ultimately, they’re going to be a lot more careful about how they use it," he said.
Wells Fargo Advisors is moving jobs from Minneapolis to St. Louis, though the brokerage arm of Wells Fargo won’t say how many positions would shift to the region.
Wells Fargo Advisors announced to employees in Minneapolis this week that it is closing an office within its Business Services Group there and transitioning those jobs to St. Louis. Employees in Minneapolis can apply for the St. Louis positions.
Raschelle Burton, a Wells Fargo Advisors spokeswoman, confirmed the jobs are moving from Minneapolis but declined to specify how many.
“This is part of a broad and ongoing effort to maximize efficiency,” Burton said.
Wells Fargo Advisors, a subsidiary of San Francisco-based Wells Fargo & Co., is based in downtown St. Louis. The company employs more than 5,000 locally and provides financial services including brokerage, estate planning, and asset management.
In August, Wells Fargo Advisors CEO Danny Ludeman said 200 jobs would be added to the St. Louis headquarters campus within 18 months to improve efficiency following a series of acquisitions. Wachovia acquired St. Louis-based A.G. Edwards in 2007, followed by Wells Fargo’s acquisition of Wachovia in 2008.
Ludeman identified Minneapolis in August as a possible site for jobs that could move to St. Louis, in addition to trader jobs and IT and technical jobs from San Francisco, Seattle and New York.
Picture it: Save for a few disposable point-and-shoots, Kodak is exiting the camera business.
Eastman Kodak Co. said Thursday that it will stop making digital cameras, pocket video cameras and digital picture frames in a move that marks the end of an era for the beleaguered 132-year-old company.
Founded by George Eastman in 1880, Kodak was known all over the world for iconic cameras such as the Instamatic. For the last few decades, however, the company has struggled. It was battered by Japanese competition in the 1980s and failed to keep pace with the shift from film to digital technology.
The company sought bankruptcy protection last month in a case that covers $6.7 billion in debt. It has a year to devise a restructuring plan. Citigroup Inc. was approved to lend the company $650 million to continue operating.
Exiting the digital camera business is especially poignant for Kodak. In 1975, using an electronic sensor invented six years earlier at Bell Labs, a Kodak engineer named Steven Sasson created the world’s first digital camera. It was an 8-pound, toaster-size device that captured low-resolution black-and-white images.
Reached at home Thursday, Sasson told The Associated Press that seeing Kodak exit the business is “a bit sad” but part of a transition facing all companies that use evolving technology.
“The average person probably owns more digital cameras than they realize,” he said. “It’s just the reality that digital imaging is a part of our lives and you can capture images in a lot of different ways. There’s a lot of choices people have, cellphones being one of them.”
Through the 1990s, Kodak spent some $4 billion developing the photo technology inside most of today’s cellphones and digital devices. But fearing that it might cannibalize its celluloid film business, Kodak waited until 2001 to bring its own digital cameras to the market. By then, it faced strong competitors like Sony Corp. and Canon.
These days, digital camera sales are suffering as consumers increasingly take photos on smartphones. Certain smartphone makers such as LG, Nokia, Motorola and Samsung have agreed to pay Kodak to license its digital camera technology, while companies like Apple are fighting its patent claims.
Before Thursday’s announcement, Kodak had already been trying to shrink its product line and sell in fewer retail venues, but as sales declines worsened, the company saw no way to make the business profitable.
“We made the logical conclusion that there was no clear path to profitability, and we have to focus on generating profits at this point,” said Kodak spokesman Chris Veronda.
Kodak sees home photo printers, high-speed commercial inkjet presses, workflow software and packaging as the core of its future business. Since 2005, the company has poured hundreds of millions into new lines of inkjet printers. Once the digital camera business is phased out, Kodak said its consumer business will focus on printing.
The fracking-led oil and natural gas boom that’s received widespread attention in the mainstream press has moved to a new medium: reality TV.
"Bayou Billionaires," a new reality show on Country Music Television, follows the lives of the Dowdens, a Louisiana family that’s struck it rich off natural gas.
"I bought me a new pickup" says Gerald Dowden in the trailer posted on CMT’s website. "And I bought a dually," says his wife Kitten, referring to a pickup with four tires on the rear axle. "I got the special edition Polaris," says Gerald, clearly excited about his all-terrain vehicle. "She put the pool in."
"We got a new hot tub," says Kitten. "Jet skis," says Gerald.
"I have 50 hounds" and one horse, he adds. "But my wife has nine. We’re spending it, that’s what it’s for."
Ohio set to see oil boom thanks to fracking
Billionaires may be stretching it, but the Dowdens sure have come into some serious cash.
Thanks to new drilling technology, a small Texas firm called Exco () was able to put four new natural gas wells on the Dowden’s 80 acres of land outside Shreveport, La. in the last three years.
Each month, the wells generate a royalty check for the Dowdens that can be as high as $40,000. The wells are expected to produce for 16 to 20 years. And their royalty checks could grow considerably.
Exco, has plans to add up to 16 wells on the Dowden’s land over the next few years, Gerald says in an interview with CNNMoney.
Their royalties are also pegged to the price of natural gas, which is currently at a decade-long low. But if natural gas returns to the the highs it hit in 2008 and the other wells are drilled, the Dowdens could potentially see a check for nearly a million dollars a month.
"We’re going to make a lot of money," says Gerald.
Not that the family was poor before. The Dowdens previously had four smaller natural gas wells on their land, which used to generate royalty checks of between $3,000 and $5,000 a month. Plus, they own a small construction business that employs around 20 people.
Striking it rich hasn’t seemed to change their work pattern that much — Kitten is still the bookkeeper at the construction company, and Gerald says he’s yet to officially retire.
But in addition to their new toys the couple has carved out time for three cruises over the past year, one to the Persian Gulf.
Opponents of hydraulic fracturing, or fracking for short, fear the process of injecting pressurized water and chemicals into the ground to ease the extraction process is contaminating the water business cards design. Others with gas wells on their property have regretted the decision, saying the compressors are loud and the wells produce nauseating fumes.
But the Dowdens say they aren’t worried. And they say noise or fumes aren’t a problem either.
"They’re a community-oriented company," said Gerald. "They’re really safe."
The reality show, which was filmed over an eight-week period last year, profiles the adventures of not just Gerald and Kitten but their extended family.
Gerald says neither their new wealth nor having a television crew on their land has strained relations with their neighbors, who are out of eyesight anyway.
"They’re excited, they all want to be in it," says Kitten.
Despite claims by the show’s producer and the Dowden family that the program doesn’t aim to celebrate or exploit redneck stereotypes, clips on CMT’s website leave some room for doubt.
"I love my new teeth," says the couple’s daughter Chantal in the episode trailer, which is also filled with lots of ATV riding and yee-haws partially set to a steel guitar soundtrack.
Obama’s energy plan: The winners, and winners
"She really needed ‘em," responds Chantel’s boyfriend in the trailer, which gives his name as Carl, Albert or Jimmy, "depending on what part of the country," he’s in, and where Gerald affectionately calls him the "burnout biker."
Still, show producer Brian Flanagan says the aim was to simply profile a tight- knit family that’s come into some money.
"I wasn’t trying to make a redneck show, I was trying to make a sweet show," says Flanagan, who got the idea from an employee who has family in the area and saw first hand how normal people were getting rich off the energy boom.
Flanagan, whose company is behind other reality shows including the Discovery channel’s "Moonshires" and TLC’s "Long Island Medium," says the Dowdens fit the part perfectly.
"They love their property, they love each other, and they are having a blast together thanks to their newfound fortune," he says.
He notes the show is devoid of some of the more unsavory aspects on reality television.
"I don’t need anyone flipping a table over on this show," he says. "It’s a show for the whole family, not a train wreck."
Bayou Billionaires’ third episode airs Saturday at 9 PM on Viacom’s (, Fortune 500) CMT.
A coalition of labor and trade activists joined Democratic lawmakers from industrial states Tuesday to push the Obama administration to take action against the growing imports of auto parts from China.
The push to limit Chinese auto imports comes a week after President Obama announced in his State of the Union address that he was creating a trade enforcement unit to bring cases against countries, mentioning China by name.
It also comes two weeks ahead of a Washington visit by Chinese Vice President Xi Jinping, seen as likely to become president of China when Hu Jintao’s term ends next winter.
Criticism of China’s currency valuation and other trade practices are likely to be a point of contention between the two major trading partners at the Obama-Xi meeting, especially as the U.S. election season heats up.
Those who participated in the Capitol Hill news conference had praise for the Obama administration’s rescue of General Motors (, Fortune 500) and Chrysler Group in 2009, as well as its past trade cases against China. (GM back on top in global sales race)
But they argued that unless there were new cases brought against Chinese parts imports that even more jobs were at risk, since 75% of those employed in the auto industry work for parts suppliers rather than the automakers themselves.
"We’re very proud of the turnaround in the Big Three, but we can’t sit back and celebrate their comeback as long as China unabashedly steals jobs from small businesses who make up the majority of the American automobile industry," said Sen. Debbie Stabenow, a Democrat from Michigan.
The Democratic lawmakers who spoke Tuesday came from Michigan, Ohio and Pennsylvania, all expected to be key battleground states in this November’s general election.
Experts who spoke Tuesday argued that when China targets an industry, it can quickly come to dominate sales.
"If these policies are not stopped, by the end of this decade, China could seize 50% of more of our auto parts market, costing additional hundreds of thousands of U.S. jobs" said Terrence Stewart, an attorney who has won trade cases against China in the past. "The last 15 years of watching other industries will tell you that’s not (just) a possibility but a high likelihood if there is not something done."
The critics say China’s improper support comes in the form of direct subsidies, as well as restrictions on U.S. operations in its market. China has become the largest market for auto sales in the world, and U.S. suppliers’ limited access gives Chinese parts manufacturers an unfair advantage, the critics argued.
Among those joining the presentation Tuesday were the Alliance for American Manufacturing, a trade group supported by small manufacturers and the United Steelworkers union, as well as the Economic Policy Institute, a liberal think tank, and the United Auto Workers.
But missing from the presentation were officials from GM, Ford Motor (, Fortune 500), Chrysler or their suppliers, many of whom have their own plants in China and don’t want to risk alienating Chinese officials by calling for tough trade actions.
"At this point, all the major auto parts producers are invested in China," said Robert Scott, international economist with the Economic Policy Institute. "Not only do they want these subsidies, they’re afraid to complain that they will lose share in China."
China has recently imposed its own tariffs on U.S. vehicle exports to China that would significantly raise the price of any vehicles exported there. It alleges that the U.S. industry is itself benefiting from unfair subsidies.
But even though GM now sells more cars in China than it does in the United States, the Chinese duties will have little impact on its sales there, since less than 0.5% of its Chinese sales are cars built in the United States.
Asked about the move at the Detroit auto show earlier this month, GM CEO Dan Akerson refused to criticize the Chinese action against U.S. exports, saying "All countries, including the United States, have tariffs."
U.S. stock futures are falling as uncertainty about a tentative deal to resolve Greece’s debt crisis weighs on investor sentiment ahead of a summit of European leaders.
Dow Jones industrial futures are down 65 points to 12,549. The broader S&P 500 futures are down 7 points to 1,305. The Nasdaq composite is 14 points lower at 2,443.
The leaders gathering in Brussels hope to focus on how to stimulate economic growth when huge government spending cuts threaten to push many countries back into recession short term personal loan.
The latest data showed Spain’s economy shrank in the last three months of 2011.
European markets also declined. In Asia, most indexes fell as investors reacted to Friday’s release of data showing the U.S. economy grew more slowly than expected in the fourth quarter.
Chevron Corp. said Friday that net income slipped 3.2 percent in the fourth quarter as its refineries struggled to pass on the higher cost of crude oil.
The San Ramon, Calif. oil giant on Friday reported net income of $5.12 billion, or $2.58 per share, in the final three months of 2011. That compares with $5.3 billion, or $2.64 per share, in the same part of 2010. Revenue increased 11.9 percent to $60 billion.
The net income fell short of Wall Street forecasts of $2.86 per share, according to FactSet. Shares dropped $2.04, or 1.9 percent, to $104.55 in premarket trading.
Chevron, the second-largest U.S. oil company behind Exxon Mobil Corp., said that oil and natural gas production declined in the quarter. Profits from its exploration and production business increased anyway, as the company sold oil at higher prices. International natural gas prices also rose in the quarter.
The refining business struggled, however, as falling prices for retail gasoline and other fuels made it harder to pass along higher oil costs to customers. Chevron’s U.S. refining operations lost $204 million from October to December, compared with a profit a year-earlier, while international refining profits fell by 46.4 percent.
For the full year, Chevron earned $26.9 billion, or $13.44 per share, compared with $19 billion, or $9.48 per share in 2010. Annual revenue increased 23.3 percent to $253.7 billion.
Exxon will release its fourth-quarter financial results on Tuesday.
Earlier in the week, ConocoPhillips reported a 66 percent increase in quarterly earnings, though much of that came from the sale of a pipeline and other assets. Occidental Petroleum Corp. reported a 35 percent jump in quarterly profits as it increased production and sold crude oil for higher prices.
Police say unknown bombers detonated locally made dynamite near an important bridge in Nigeria’s oil-rich southern delta overnight, though no one was injured.
The blast happened Friday night in Yenagoa, the capital of Bayelsa state, the home of President Goodluck Jonathan. Bayelsa state police spokesman Eguavoen Emokpae said the bomb targeted a bridge, but caused little damage.
The blast occurred as Bayelsa state is under increasing political pressure over an upcoming gubernatorial race in the state no teletrack payday loan. The winner of the race will control a state budget that’s larger than some nations surrounding oil-rich Nigeria. Violence remains common in elections in Nigeria, a nation of more than 160 million people and a top crude oil supplier to the U.S.
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