From Bloomberg:
Zhou Says China Has Room for Monetary Easing; May Not Use It
China’s central bank Governor Zhou Xiaochuan said the world’s second-largest economy has scope compared with other nations to ease its monetary policies though won’t necessarily take advantage of it. (Read more)
ECB’s Vasiliauskas Says Summer is Limit for Greek Emergency Cash
The European Central Bank shouldn’t extend Emergency Liquidity Assistance for Greece beyond summer, Governing Council member Vitas Vasiliauskas said.
“The situation in Greece means that we should have a limit until summer for ELA,” Vasiliauskas said in an interview in Washington on Saturday. “Everyone understands what ELA means, it’s a temporary measure to give the banks liquidity. We will have to have discussions about the issue liquidity provision versus monetary financing. We will certainly have these discussions before summer.” (Read here)
California’s New Drought Rules Would Require Cuts of Up to 36%
California has proposed rules calling for mandatory reductions in water use by municipal agencies as a historic drought drags into a fourth year.
The state’s 411 urban water suppliers would have to cut use by as much as 36 percent, with those that conserved less facing tougher restrictions, the California State Water Resources Control Board said in the proposed rules released Saturday. The board will meet May 5 and 6 to finalize the rules, which would take effect by June 1. (More)
American Realty Investors Allege Fee-Driven Scheme by Schorsch
Behind the accounting errors that knocked $4 billion off American Realty Capital Properties Inc.’s market value was a hidden scheme that generated more than $900 million in managers’ fees and bonuses, investors said in a lawsuit against the company.
Ex-Chairman Nicholas Schorsch turned a small real estate investment trust into a massive engine of payments for himself and cronies, adding $20 billion of assets in two years and charging for services rendered by 47 entities he controlled, according to court documents filed this week. (Continue)
Draghi Says Urgent Need for Greece to Strike Bailout Deal
European Central Bank President Mario Draghi urged Greece to work quickly toward an agreement with its creditors to curb a deepening financial crisis and quash doubts over its membership of the euro.
Even as he warned investors against dumping the single currency, Draghi said Prime Minister Alexis Tsipras’s government must do “much more work” to show it can satisfy the terms of its 240 billion-euro ($259 billion) bailout program. (Read more)
China Moves to Stimulus Mode With Cut to Bank Reserve Ratio
China’s leaders swung into stimulus mode, cutting the amount of cash lenders must set aside as reserves by the most since the global financial crisis just days after a report showed the slowest economic growth in six years.
The reserve-requirement ratio will be lowered 1 percentage point effective April 20, the People’s Bank of China said on its website Sunday, the second reduction this year and the largest since November 2008. The level will decline to 18.5 percent, still high by global standards, based on previous statements. (Full article)
IMF Official Says Hard to Predict When BOJ to Meet Price Target
The International Monetary Fund said it’s become harder to estimate when the Bank of Japan will achieve its inflation target, suggesting the global fund is backtracking from its prediction of around 2017 or 2018.
“It’s just too uncertain for us to say x or y time,” Kalpana Kochhar, the IMF’s mission chief for Japan, said in an interview Friday in Washington. There are many uncertainties, including oil prices, wage growth and Japanese companies’ potential use of cash holdings, making it hard to make a prediction, she said. (More here)
Saudi Arabian Stocks Rally on Bourse Opening Boost; Dubai Drops
Saudi Arabian stocks rose the most in four months after the kingdom said foreigners will be able to access its stock market directly from mid-June and as Saudi Basic Industries Corp.’s profit beat estimates. Dubai shares fell.
The Tadawul All Share Index climbed 4 percent, the most since Dec. 18, to close at 9,619.97. The Capital Market Authority on Thursday said it will publish investment rules on May 4, which will be enacted on June 1, and foreigners can start trading on June 15. Saudi Basic, the world’s biggest global petrochemical manufacturer by sales known as Sabic, soared 9.8 percent. Riyadh-based Al Rajhi Bank climbed 3.8 percent. (More)
Comcast Deal Collapse Would Kill Other Mergers in Domino Effect
The potential collapse of Comcast Corp.’s merger with Time Warner Cable Inc. wouldn’t just be a setback for those two companies. It would also unwind other pending deals and have a wide-reaching impact on the cable industry. (Here)
Tannenbaum's Fifth Street Funds Yield 10% by Lending Alongside Private Equity
When Leonard Tannenbaum set up shop in the basement of an office building in Mount Kisco, New York, his plan for his one-man investing business was about as basic as you can get. “Early on, the idea was to make money,” Tannenbaum says. “How do I make money? How do I get an edge?”
It was 1998, and he was 27 years old, a Wharton MBA with two years as an analyst at Merrill Lynch and a couple of stints at fund firms, Bloomberg Markets reports in its May issue. He even sublet out half of the 800-square-foot (74-square-meter) space. Tannenbaum asked himself: “Is there a better mousetrap to develop?” (Read here)
Yahoo Wins New Flexibility in Search Deal With Microsoft
Microsoft Corp. and Yahoo! Inc. revamped their search agreement, giving the Web portal more freedom over how it makes money from advertising under Chief Executive Officer Marissa Mayer.
Yahoo no longer will have to use Microsoft to serve all the ads on desktop searches, under the agreement announced Thursday. While Yahoo already had that flexibility with mobile search, the new deal adds the leeway for a minority of desktop ads. (Continue)
How Your T-Shirt Can Make You Rich
It’s hard to say exactly when the British World War II slogan “Keep calm and carry on” began its ascent in the pop-culture lexicon, but over the past three years startup Teespring has turned variations on that theme into fashion statements: “Keep calm and ask a librarian,” “Keep calm and smoke on,” “I can’t keep calm I’m a wrestling mom,” and hundreds more. (Read here)
Al Gore Joins Tea Party in Battle Against Utilities
If you go far enough left or right on the American political spectrum, you end up in the same place: trashing utilities for trying to kill the solar-power revolution.
If you’re Al Gore, former Democratic vice-president and climate change activist, you blast Big Power for “using the atmosphere as their sewage infrastructure” to suck up carbon emissions and trying to shut down competition. The industry is waging a “war on solar,” he told investors Monday at the Bloomberg New Energy Finance conference in New York City. (More)
Musk’s Cousins Battle Utilities to Make Solar Rooftops Cheap
In September 2013, Hawaiian Electric Co. told thousands of customers they couldn’t connect their new solar panels to its distribution grid. In some neighborhoods, HECO said, its system couldn’t absorb any more unused energy from home solar arrays. The moratorium, which lasted 13 months, made Hawaii a central battleground in the effort by utilities to control the rapid growth of independent solar companies across the U.S. And it was a big deal to people such as Robert Gould, a retired Northwest Airlines pilot living near Honolulu. He’d just paid $53,000 to have solar panels installed. (Read more)
Mark Halperin: Which Republican Won New Hampshire?
Republican candidates and potential candidates — 17 in all — were in New Hampshire over the weekend to speak to voters at the “First in the Nation Republican Leadership Summit.” The event’s name refers to the state’s status as the home of the first presidential primary every four years. (More here)
U.K. Home-Price Growth Slows as Election Cools Market Demand
U.K. home-price inflation slowed to the least in more than a year last month as uncertainty surrounding next month’s election damped activity.
Prices rose an annual 5.6 percent, down from 6.8 percent in February and marking the smallest increase since November 2013, LSL Property Services and Acadata said in a report Friday. While sales increased almost 12 percent, this was half the increase expected during the spring property season, they said. (Continue)
Why Nuclear Power Is All but Dead in the U.S.
The Obama administration supported a bill yesterday, April 14, that would give Congress a chance to review a nuclear power agreement with Iran, if the two countries clinch a deal before their June 30 deadline.
In other words, if the diplomatic hurdles are surmounted, nuclear power may have a smoother ride in Iran than in the U.S. (Read more)
European Stocks Slide Most Since January Amid Greek Debt Concern
European stocks slid, posting the biggest retreat since they began rallying in January, as concern over Greek debt was exacerbated by declines in the U.S. and Asia.
The Stoxx Europe 600 Index lost 1.8 percent to 403.69 at the close of trading, completing the worst week of the year. The Greek ASE Index slid 3 percent, with the National Bank of Greece SA and Alpha Bank AE tumbling more than 7 percent, as the country struggles to win more aid to avoid a default. Germany’s DAX Index plunged 5.5 percent this week, the most since 2011. (Continue reading)
New Starter Homes Hit a Dead Stop (BloombergView)
Can you build a house for less than $200,000?
Well, you personally probably can't. But what about developers? Builder magazine says it's getting harder and harder to do. The market for new "starter homes" is drying up, mostly on the supply side. As credit markets recover, there are more and more people who could be buying their first homes … if only builders could build them. (More)
Obama Warns China Will Fill Void If Trade Authority Fails
President Barack Obama, trying to sway free-trade skeptics among his supporters, said that if the U.S. can’t come to terms on an accord being worked on with other Pacific nations, China will step in to fill the void. (Continue)
Three Charts Explain the Student Loan Mess (BloombergView)
Here are three charts about student loans that have me worried. First, the total amount of student loans in the U.S. has risen steadily, doubling just since the financial crisis: (Continue here)
Crowdfunding? How About Crowdinvesting? (BloombergView)
Surely one of the most glorious absurdities of American capitalism is that it's easier to raise money online to make some potato salad than, say, to start an actual business. Of course, it should be more difficult to get people to invest in an idea than in a side dish. But it shouldn’t be this hard. (Full article)
Global Economy Loses Its (Ball) Bearings (BloombergView)
Few components are as essential to the workings of industry as the humble ball bearing. So the bleak economic picture painted by today's earning report from the world's biggest bearings maker was worrisome enough. But combined with sales news indicating weak consumer demand for staples such as toiletries and food — goods that economists call inelastic, meaning people tend to keep buying margarine and soap no matter what their economy is doing — they suggest the global economy is far more fragile than most observers have acknowledged. (More)
Supply-Side Doom in Kansas (BloombergView)
Every year, right after the April 15 tax deadline, the U.S. Census releases its data on the prior year’s state tax collections. It is a fascinating document, filled with great data points for tax and policy wonks. It reveals a good deal about the state of local economies, economic trends and results of specific policies. In broad terms, the financial fortunes of the states are improving. (Continue)
Russia's Economy Steps Back from the Brink (BloombergView)
It's been fascinating to watch the Russian economy adjust to sharply lower oil prices. With a little help from the central bank, the country's recession might not be as bad as previously thought.
After an initial period in which the ruble plummeted and inflation surged — with food prices up 15.4 percent from a year earlier in December — the Russian central bank's response is turning things around. A sharp increase in short-term interest rates, currently at 14 percent, has stabilized the ruble and might even be getting consumer prices under control. (Read more)
