International Monetary Fund Managing Director Christine Lagarde joined world financial and trade organization chiefs in warning policy makers gathering in Davos, Switzerland next week against fiscal cuts that jeopardize growth.
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The Federal Reserve on Tuesday drew fire from conservatives for its recent policy proposals on the downtrodden housing sector that the critics argued represented an overreach by the central bank.
Two Republican senators lashed out at the Fed’s “white paper” on housing, which suggested other officials should consider giving failed mortgage finance giants Fannie Mae (FNMA.OB: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FMCC.OB: Quote, Profile, Research, Stock Buzz) a bigger role in turning the market around.
The protests mark a rekindling of anti-central bank sentiment that reached fever pitch when the Fed launched its second round of bond buying in late 2010. At that time, conservatives accused the central bank of sowing the seeds for future inflation, though recent trends show price pressures ebbing.
The Fed’s detractors are now reacting to what they see as central bankers chiming in on fiscal policy matters that are not the appropriate realm for monetary authorities.
“I believe that it is important to the interests of the Federal Reserve, including the independence of monetary policy, that the Fed refrain from providing any hint of activism regarding what are clearly fiscal policy choices,” said Orrin Hatch, the top Republican on the Senate Finance Committee.
“I am sure that the Fed would not appreciate a white paper from Congress outlining how to think about and execute monetary policy,” he said.
Sen. Bob Corker, a member of the Banking Committee, directed his criticism at William Dudley, the influential president of the New York Federal Reserve Bank, for his suggestion that principal write-downs be considered for distressed borrowers.
Such criticisms have some resonance among a minority of inflation hawks at the Fed one hour payday loan. Philadelphia Federal Reserve Bank President Charles Plosser and Richmond Fed chief Jeffrey Lacker have both expressed distaste over an earlier effort by the Fed to drive down mortgage costs by buying mortgage-related debt.
At the other end of the spectrum, Dudley and Eric Rosengren of the Boston Fed have said the central bank should consider further purchases of mortgage-backed securities.
An editorial in the Wall Street Journal on Tuesday was even more scathing, accusing the central bank of “rank electioneering” for issuing the housing proposal.
Fed officials have argued that, given their broad mandate to achieve solid economic growth, it would be irresponsible for them to ignore housing, which continues to be a major drag on the economic recovery.
Recent indicators have been mixed, pointing to some strength in construction but also a continued decline in home prices that bodes ill for a sustained housing rebound.
When Ben Bernanke first took over as chairman at the central bank in 2006, he vowed to steer clear of the type of fiscal debates that got his predecessor, Alan Greenspan, into trouble.
Greenspan had widely been criticized for giving intellectual cover to tax cuts during President George Bush’s administration.
In a letter to leading lawmakers that accompanied the “white paper” last Wednesday, Bernanke said the Fed had received questions and requests for input and that the policy proposals were being made in the “interest of a continuing dialogue.”
Home prices fell for a fourth straight month in November as distressed sales continued to weigh on prices, data analysis firm CoreLogic said on Monday.
CoreLogic’s (CLGX.N: Quote, Profile, Research, Stock Buzz) home price index fell 1.4 percent in November from the previous month. Compared with November of last year, prices were down 4.3 percent, steeper than the 3.7 percent year-over-year decline seen in October.
Excluding distressed sales, prices were off just 0.6 percent in November on a yearly basis. Homeowners in danger of foreclosure, or in “distress,” often sell their homes at a significantly reduced price Payday Loan for Bad Credit.
“Distressed sales continue to put downward pressure on prices and is a factor that must be addressed in 2012 for a housing recovery to become a reality,” Mark Fleming, chief economist at CoreLogic, said in a statement.
Of the top 100 statistical areas measured by population, 77 showed year-over-year declines, down from 80 in October.
The Walt Disney Co. said Wednesday that it reached a long-term agreement with the nation’s largest TV signal provider, Comcast Corp., that extends their partnership into the next decade.
The deal covers major pay channels ESPN, Disney Channel and ABC Family and the retransmission of free ABC broadcast network programs through seven ABC TV stations. It allows Comcast subscribers to gain greater access to shows on demand over the Internet on multiple devices.
Terms were not disclosed.
The deal comes as TV distributors and content owners continue to spar over fees to carry programming.
In the New York area, a dispute between Time Warner Cable and The Madison Square Garden Co. has left some cable subscribers without access to Knicks basketball or Rangers hockey games since early in the new year.
Disney and Comcast agreed on the package covering 70 channels or services even though only a few agreements covering ABC Family, Disney Channel and Disney XD had expired at the end of 2011. The companies agreed that a long-term comprehensive deal was in both their interests.
Comcast and Disney called the scope and range of the deal “unprecedented cheap business cards.”
“It reinforces the value of the multichannel subscription and takes full advantage of new technologies, which serve all of our viewers,” said ESPN executive chairman George Bodenheimer in a statement.
The deal incorporates Comcast’s Xfinity TV online suite of programs and gives its 22.4 million video subscribers online access to services such as ESPN3, which offers live feeds of games that are sometimes not on the television network. Comcast subscribers will also be able to watch ABC shows such as “Castle” and “Grey’s Anatomy” on demand, but they won’t have the option of fast-forwarding through commercials.
Comcast also agreed to carry the pay TV channel Disney Junior, a rebranded network focused on children up to age 7 that will replace the SOAPnet channel in February.
Disney shares rose 49 cents to $38.80 in afternoon trading. Comcast shares rose 10 cents to $24.59.
A federal judge on Friday dismissed a Utah company’s $1 billion federal antitrust lawsuit against Microsoft Corp. after a jury failed to reach a unanimous verdict.
Novell claims Microsoft duped it into developing the once-popular WordPerfect writing program for Windows 95 only to pull the plug so Microsoft could gain market share with its own product. Novell says it was later forced to sell WordPerfect for a $1.2 billion loss.
The trial has been ongoing in Salt Lake City for two months. Jurors got the case Wednesday morning, but by Friday told the judge they were “hopelessly deadlocked.”
They had expressed confusion to the judge about the complicated case throughout deliberations, even bringing one question to the court that could not be answered. The judge told jurors to simply disregard the question.
Earlier Friday, the judge denied a request from one juror to be removed from the case.
Microsoft lawyers have argued that Novell’s loss of market share was its own doing because the company didn’t develop a compatible WordPerfect program until long after the rollout of Windows 95. WordPerfect once had nearly 50 percent of the market for word processing, but its share quickly plummeted to less than 10 percent as Microsoft’s own Office programs took hold.
Microsoft co-founder Bill Gates testified last month that he had no idea his decision to drop a tool for outside developers would sidetrack Novell. Gates said he was acting to protect Windows 95 and future versions from crashing.
Novell could have worked around the problem but failed to react quickly, he said.
Novell has argued that Gates ordered Microsoft engineers to reject WordPerfect as a Windows 95 word processing application because he feared it was too good.
Novell’s lawsuit is the last major private antitrust case to follow the settlement of a federal antitrust enforcement action against Microsoft more than eight years ago. The trial began in October in federal court in Salt Lake City.
Novell is now a wholly owned subsidiary of The Attachmate Group, the result of a merger that was completed earlier this year.
After nearly nine years, 4,500 American dead, 32,000 wounded and more than $800 billion, U.S. officials formally shut down the war in Iraq _ a conflict that U.S. Defense Secretary Leon Panetta said was worth the price in blood and money, as it set Iraq on a path to democracy.
Panetta stepped off his military plane in Baghdad Thursday as the leader of America’s war in Iraq, but will leave as one of many top U.S. and global officials who hope to work with the struggling nation as it tries to find its new place in the Middle East and the broader world.
More than 100,000 Iraqis have been killed since the U.S. invasion in 2003, according to the Iraq Body Count website. Bombings and gun battles are still common. And experts are concerned about the Iraqi security force’s ability to defend the nation against foreign threats.
Still, Panetta said earlier this week, the war “has not been in vain.”
Panetta and several other U.S. diplomatic, military and defense leaders participated Thursday in a symbolic ceremony during which the flag of U.S. Forces-Iraq was officially retired, or “cased,” according to Army tradition. The U.S. Forces-Iraq flag was furled _ or wrapped _ around a flagpole and covered in camouflage. It will be brought back to the United States.
“You will leave with great pride _ lasting pride,” Panetta told the troops. “Secure in knowing that your sacrifice has helped the Iraqi people to begin a new chapter in history.”
During a stop in Afghanistan this week, Panetta described the mission as “making that country sovereign and independent and able to govern and secure itself.”
That, he said, is “a tribute to everybody _ everybody who fought in that war, everybody who spilled blood in that war, everybody who was dedicated to making sure we could achieve that mission.”
Iraqi citizens offered a more pessimistic assessment. “The Americans are leaving behind them a destroyed country,” said Mariam Khazim of Sadr City. “The Americans did not leave modern schools or big factories behind them. Instead, they left thousands of widows and orphans.”
A member of the political coalition loyal to anti-American cleric Muqtada al-Sadr saw another message in the U.S. withdrawal. “The American ceremony represents the failure of the U.S. occupation of Iraq due to the great resistance of the Iraqi people,” said Sadrist lawmaker Amir al-Kinani.
Panetta echoed President Barack Obama’s promise that the U.S. plans to keep a robust diplomatic presence in Iraq, foster a deep and lasting relationship with the nation and maintain a strong military force in the region.
As of Thursday, there were two U.S. bases and about 4,000 U.S. troops in Iraq _ a dramatic drop from the roughly 500 military installations and as many as 170,000 troops during the surge ordered by President George W. Bush in 2007, when violence and raging sectarianism gripped the country. All U.S. troops are slated to be out of Iraq by the end of the year, but officials are likely to meet that goal a bit before then.
The total U.S. departure is a bit earlier than initially planned, and military leaders worry that it is a bit premature for the still maturing Iraqi security forces, who face continuing struggles to develop the logistics, air operations, surveillance and intelligence sharing capabilities they will need in what has long been a difficult neighborhood payday loans in 1 hour.
U.S. officials were unable to reach an agreement with the Iraqis on legal issues and troop immunity that would have allowed a small training and counterterrorism force to remain. U.S. defense officials said they expect there will be no movement on that issue until sometime next year.
Still, despite Obama’s earlier contention that all American troops would be home for Christmas, at least 4,000 forces will remain in Kuwait for some months. The troops will be able to help finalize the move out of Iraq, but could also be used as a quick reaction force if needed.
Obama met in Washington with Iraqi Prime Minister Nouri al-Maliki earlier this week, vowing to remain committed to Iraq as the two countries struggle to define their new relationship. Ending the war was an early goal of the Obama administration, and Thursday’s ceremony will allow the president to fulfill a crucial campaign promise during a politically opportune time. The 2012 presidential race is roiling and Republicans are in a ferocious battle to determine who will face off against Obama in the election.
Panetta acknowledged the difficulties for Iraq in the coming years, as the country tries to find its footing.
“They’re going face challenges in the future,” Panetta said Wednesday during a visit with troops in Afghanistan. “They’ll face challenges from terrorism, they’ll face challenges from those that would want to divide their country. They’ll face challenges from just the test of democracy, a new democracy and trying to make it work. But the fact is, we have given them the opportunity to be able to succeed.”
The ceremony at Baghdad International Airport also featured remarks from Army Gen. Martin Dempsey, the chairman of the Joint Chiefs of Staff, and Gen. Lloyd Austin, the top U.S. commander in Iraq.
Austin is leading the massive logistical challenge of shuttering hundreds of bases and combat outposts, and methodically moving more than 50,000 U.S. troops and their equipment out of Iraq over the last year _ while still conducting training, security assistance and counterterrorism battles.
The war “tested our military’s strength and our ability to adapt and evolve,” he said, noting the development of the new counterinsurgency doctrine.
Over the coming days, the final few thousand U.S. troops will leave Iraq in orderly caravans and tightly scheduled flights _ a marked contrast to the shock and awe that rocked the country on March 20, 2003, as the U.S. invasion began.
Saddam Hussein has been ousted, the reports of weapons of mass destruction largely laid to rest. And the future of a nascent democracy awaits.
Builders have found a way to make money in a decrepit home market: Apartments.
Permit requests to build apartments jumped to a three-year high last month. In 12 months, they’ve surged 63 percent.
Blame the housing bust, which left many people without the means, the credit or the stomach to buy. More people need apartments. The demand has driven up monthly rents. And apartment-home builders are rushing to cash in.
That said, the overall home market remains depressed. Builders are still struggling. They broke ground on a seasonally adjusted annual rate of 628,000 homes last month, the government said Thursday. That’s barely half the pace that economists equate with a healthy market.
High unemployment, stagnant pay and waves of foreclosures have slowed sales of single-family homes, which make up about 70 percent of the home building market. Apartment construction may be surging, but it’s a small portion of the industry.
More apartment building won’t add enough jobs to reduce unemployment or hasten an end to the housing crisis. Still, it’s contributed to the overall economy’s growth for two straight quarters. And many economists expect apartment construction to grow for at least the next 12 months, as long as the economy avoids another recession.
“You’re not going to see apartments as an economic driver,” said James Marple, senior economist at TD Economics. “But it’s renters who are clearly going to drive the demand for housing.”
It’s also worth keeping the increase in perspective: The growth in apartment construction is coming off extremely low levels. Last year, for example, only 146,000 apartments were built. That was the fewest since 1993. This year’s pace isn’t much more.
By comparison, in 2005, just before the housing market went bust, 258,000 apartments were built. Some signs suggest that builders could match that level over the next few years.
One such sign: Permits for apartment buildings, a gauge of future construction, have jumped more than 60 percent over the past year. That compares with just 6.6 percent growth in permits for single-family construction over the same period.
“The demand is there,” said Mark Obrinsky, chief economist at National Multi Housing Council. “Rents have recovered, much of them to where they were before the recession.”
Bob Champion, who runs a real estate company in Los Angeles, says he has four apartment projects in development. That matches the number he had in 2005.
It’s quite a shift from 2006, when Champion’s company stopped building apartments because the cost of land had skyrocketed.
Champion has raised rents about 4 percent this year. His occupancy rate is 95 percent. As recently as last year, his rents were flat, and he was dangling incentives, like a free month’s rent, to woo tenants.
“People who can’t afford to buy a home, rent,” Champion said. “That’s why the apartment market has stayed healthy.”
Champion won’t likely be building as many apartments next year, though. Land prices have doubled in the past two years, he said. Competition for apartment land has intensified.
For many builders, financing for a project remains a big obstacle. So is time. Apartment projects take an average of 18 months to build.
Still, fewer home buyers mean more people must rent. Nearly 4 million new renting households were created between 2005 and 2010, according to Harvard’s Joint Center for Housing Studies. Under normal economic conditions, that’s more than 10 times the number of new renters who would be expected in a five-year span.
Homeownership has fallen more over the past decade than in any other 10-year stretch since the Great Depression. Roughly 65 percent of Americans own homes. That’s down from a peak of nearly 70 percent in the middle of the decade.
As more people have become tenants, landlords have felt emboldened to raise rents.
The average rent in the United States has risen 2.4 percent over the past 12 months to $1,004 a month, according to the real estate data firm Reis Inc. Over the previous year, rents rose just 1 percent. Between 2008 and 2009, they actually fell 2.7 percent.
AvalonBay Communities Inc., based in Arlington, Va., has raised rents by an average 6 percent in the past year. The company earned 11 percent more in rental revenue in the July-September quarter than in the previous quarter.
With nearly 54,000 units, AvalonBay is one of the largest apartment developers in the country. Nearly 96 percent of its apartments had been occupied by the end of September, according to its earnings reports.
The average rent at AvalonBay’s cheapest complex under construction, in Seattle’s Ballard neighborhood: $1,715. The builder completed 1,280 more apartments between July and September and started work on 933 others.
At Equity Residential, whose chairman is real estate magnate Sam Zell, rental income jumped 12.7 percent in the July-September quarter over the same period a year before.
Equity Residential is the nation’s largest apartment owner. Nearly 25 percent of its apartments are in Phoenix, Orlando and South Florida, which were hammered by the housing bust and where its average rents are the lowest.
Yet Equity’s properties there are faring well. The average rent for one of the company’s 9,300 apartments in Phoenix rose from $837 last year to $925 this year.
Zell, whose net worth is roughly $5 billion, has publicly extolled the prospects for his apartment business over his office and retail operations.
Employees are more focused on pay and less on whether their occupation is rewarding, according to a recent survey by compensation specialists Mercer. In previous studies, Mercer found most Canadian respondents said job fulfillment was the key issue.
Yet 47 per cent of survey participants say they are not satisfied with base pay and 42 per cent do not feel they are paid fairly, given their performance and contribution to the organization. At the same time, fewer employees than five years ago understand how their pay is determined, which may contribute to their overall sense of dissatisfaction.
Mercer partner Iain Morrison thinks base pay is a primary concern because of anxiety about job security and being able to pay for the most basic things. “Since 2008 employees have seen layoffs, pay freezes and reduced availability of training and development,” he says.
The large number of Canadian employees considering leaving their job within six months (36 percent) or who are not looking for work but open to new offers (22 per cent) further underscores high levels of employee disengagement. In fact, employees “sitting on the fence” are more negative about their employment situation than people who are actively seeking new employment.
“You can’t just throw money at these people. You have to find ways to motivate them,” Morrison continues. “If they cannot be re-engaged, it may make sense to try and manage some of them out, because they are the least productive employees and they are not saying anything good about the business.”
After base pay, survey results reveal that Canadian respondents view a good retirement savings or pension plan as the second most important element of the employee value proposition. And somewhat unexpectedly, having a company-provided retirement plan rivals or is more important to younger respondents than having a flexible work schedule.
“Retirement savings have not been on the radar for 25-40 year olds before. But the media has created awareness and employees in their 20s hear their parents close to retirement worrying about pension savings,” says Mercer principal Madeline Avedon.
Overall benefits programs were rated as good or very good by the majority of survey respondents and more than half said they are satisfied with their health benefits. However, 43 per cent want more choice and control to reduce the value of some benefits in order to increase the value of others to meet their needs. About the same number also said they would be willing to contribute towards the cost of new or improved benefits that are important to them.
Also read: Your 2012 raise may be less than inflation and How to improve your odds of getting a raise .
President Barack Obama has arrived in France to join world leaders at a summit of the Group of 20 industrialized and developing countries, a meeting overshadowed by Europe’s debt crisis and surprise plans by Greece to put a bailout deal to a popular vote.
French President Nicolas Sarkozy (sar-koh-ZEE’) is hosting the two-day meeting in Cannes (kan), France, the city known worldwide for its annual film festival.
Obama was meeting separately Thursday with Sarkozy and German Chancellor Angela Merkel. Sarkozy and Merkel helped strike a $130 billion bailout deal for Greece. But the Greek prime minister’s surprising announcement of a December referendum is raising doubts about the deal.
The White House says the U.S. can help guide Europe through its financial crisis but that it’s ultimately Europe’s problem to solve.
The head of the European Commission says more unification is critical to the EU’s survival.
Jose Manuel Barroso, president of the European Union’s executive arm, says without “more unification,” there will be “more fragmentation.” He is giving his state of the union address in Strasbourg, France, on Wednesday.
“I think this is going to be a baptism of fire for a whole generation,” Barroso says.
However, he asserts that the EU can summon the leadership and the political will to come up with overall solutions to its crises, which involve the common currency and the borderless travel area.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
BRUSSELS (AP) _ The head of the European Commission says more unification is critical to the EU’s survival cheap business cards.
Jose Manuel Barroso, president of the European Union’s executive arm, says without “more unification,” there will be “more fragmentation.” He is giving his state of the union address in Strasbourg, France, on Wednesday.
“I think this is going to be a baptism of fire for a whole generation,” Barroso says.
However, he asserts that the EU can summon the leadership and the political will to come up with overall solutions to its crises, which involve the common currency and the borderless travel area.