Money world

A New York City jury has ended a short day of deliberations without a verdict at the biggest insider trading case involving hedge funds.

The judge let jurors leave early on Friday. It was their fifth day of weighing the fate of hedge fund manager Raj Rajaratnam (rahj rah-juh-RUHT’-nuhm).

The Manhattan trial centers on secretly recorded phone calls of Rajaratnam and other Wall Street insiders talking about earnings and mergers. Prosecutors say the wiretaps prove the Galleon Group chief made tens of millions of dollars by trading on inside tips.

Lawyers for the Sri Lanka-born Rajaratnam argue he relied on public information and complex analysis for his decisions.

The jury is to resume deliberations on Monday.

Source

Japan’s housing starts may post the first decline in 10 months as the nation’s strongest earthquake on March 11 sapped demand, halting the strongest recovery in the real estate market in almost 15 years.

Construction companies broke ground on 1.1 percent fewer homes in March from a year earlier, according to the median estimate of 23 economists in a Bloomberg News survey. The Ministry of Land, Infrastructure, Transport and Tourism is scheduled to release the data at 2 p.m. Tokyo time today.

“With the uncertainties and anxiety about the future, it will take time for people to actively buy new homes,” said Taro Saito, senior economist in Tokyo at NLI Research Institute Ltd. “The housing market will remain harsh throughout this year.”

Demand for new homes showed signs of recovery before the magnitude-9 temblor last month, with starts gaining for nine straight months, the longest streak since 1996. Prime Minister Naoto Kan last week proposed a 4 trillion yen ($49 billion) additional budget that’s likely to be the first of several packages to rebuild areas devastated by the temblor and tsunami.

“The recent earthquake could cool house buying sentiment for around three to six months, leading to a temporary decline in demand,” Masahiro Mochizuki, an analyst at Credit Suisse Securities (Japan) Ltd., said in a report. “However, from fiscal year 2012, we expect housing starts to receive a boost from demand that failed to emerge in 2011 from reconstruction.”

Housing starts probably dropped to the equivalent of an annual 814,000 units in March, the lowest since October, according to the median estimate of 18 economists surveyed.

Great Hanshin Earthquake

Last month’s quake and tsunami destroyed and damaged about 300,000 homes, forcing 130,155 people to stay in shelters throughout 17 prefectures and the capital, according to the National Police Agency.

The housing market boom in 1996 came about a year after the Great Hanshin Earthquake, when a magnitude-7.3 temblor hit Kobe and parts of western Japan on Jan. 17, 1995, according to the land ministry and Japan Meteorological Agency. Housing starts rose for 10 months through December 1996.

Shares of Daiwa House Industry Co., Japan’s largest home builder, fell 5.9 percent on the Tokyo Stock Exchange since the quake, while shares of Sekisui House Ltd., Japan’s second largest, dropped 6.6 percent.

Apartment Sales

The number of condominiums offered for sale in Tokyo and surrounding areas may drop 25 percent in April as developers withhold sales of some projects, the Real Estate Economic Research Institute said.

Annual condominium supply in Tokyo region, which rose for the first time in five years in 2010, probably won’t reach a forecast of 50,000 units this year because of a possible slowdown of Japan’s economy, said Akio Fukuda, a manager at Real Estate Economic Institute in Tokyo.

Last month’s quake and tsunami also damaged Tokyo Electric Power Co.’s Fukushima Dai-Ichi nuclear plant, 220 kilometers (137 miles) north of Tokyo, causing radiation leaks.

“Apartment sales will be sluggish and it’s hard to tell when a recovery will take place at the moment,” said Mikio Namiki, an analyst at Mizuho Securities Co. in Tokyo. “With relatively big aftershocks and radiation leaks continuing, no one would be interested in buying a home now.”

Source

Confidence among U.S. consumers increased more than forecast in April, signaling the improving labor market is helping Americans weather rising fuel costs.

The Conference Board’s confidence index rose to 65.4 from a revised 63.8 reading in March, figures from the New York-based private research group showed today. The median forecast of economists surveyed by Bloomberg News called projected an advance to 64.5.

Six straight months of job growth along with joblessness at a two-year low in March are helping sustain consumer purchases, which account for about 70 percent of the economy. At the same time, bigger gains in sentiment may be difficult as households spend more for food and gasoline, which is at the highest level in almost three years.

“Confidence is picking up on the back of an improving labor market and rising stock prices, which are offsetting higher gasoline costs,” said Sal Guatieri, a senior economist at BMO Capital Markets Inc. in Toronto. “Consumers will have both the confidence and the income to keep spending.”

Stocks held earlier gains after the report on optimism over improving corporate earnings. The Standard & Poor’s 500 Index rose 0.4 percent to 1,340.8 at 10:17 a.m. in New York. Treasury securities rose, sending the yield on the benchmark 10-year note down to 3.34 percent from 3.37 percent late yesterday.

Home Prices

Another report today showed residential real estate prices dropped in February by the most in more than a year, a sign the housing market is struggling to stabilize.

The S&P/Case-Shiller index of property values in 20 cities fell 3.3 percent from February 2010, the biggest year-over-year decrease since November 2009.

Estimates for consumer confidence ranged from 57 to 68 in the Bloomberg survey of 69 economists. The measure averaged 97 during the expansion that ended in December 2007.

The group’s measure of present conditions increased to 39.6, the highest since November 2008, from 37.5 a month earlier. The gauge of expectations for the next six months rose to 82.6 from 81.3.

The share of consumers who said jobs are currently plentiful rose to 5.2 percent from 4.6 percent. Those who said jobs are hard to get decreased to 41.8 percent, the fewest since January 2009, from 44.4 percent.

Jobs Outlook

The outlook was less rosy. The percent of respondents expecting more jobs to become available in the next six months decreased to 17.5 from 19.6 the previous month. The share expecting incomes to rise over the next six months improved to 16.7 percent from 15.2 percent.

The report contained one positive bit of news for the housing market, which has lagged behind other parts of the economy since the recession ended in June 2009. The share of Americans planning to buy a house over the next six months increased to 5.5 percent, matching the record high reached in January 1978. Data go back to 1964.

Intentions to purchase automobiles and appliances also improved.

Fuel costs may be preventing bigger gains in confidence. The average price of regular fuel climbed to $3.87 a gallon yesterday, the highest level since August 2008, according to AAA, the nation’s biggest motoring organization.

Confidence ‘Fragile’

“The economic climate is still less than ideal, from a slow and uneven recovery to significantly rising commodity costs and fragile consumer confidence,” Jim Skinner, chief executive officer of McDonald’s Corp. (MCD), said on a conference call with analysts on April 21.

Oak Brook, Illinois-based McDonald’s, the world’s biggest restaurant chain, reported an 11 percent jump in first-quarter profit, fueled by U.S. demand for coffee and burgers, and predicted further increases in food costs this year.

Today’s report was foreshadowed by other figures. The Bloomberg Consumer Comfort Index climbed in the week ended April 17 to the best level since the end of February, posting the fourth consecutive gain. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment rose more than forecast in April, after a March reading that was the lowest since November 2009.

The economy created 216,000 jobs last month, the most since May, and the jobless rate fell to a two-year low of 8.8 percent. Data from the Labor Department due on May 6 may show payrolls climbed again this month, according to the median forecast in a Bloomberg survey.

Source

Deep divisions within Yemen’s opposition appeared to doom an Arab proposal for the president to step down within a month, raising the prospect of more bloodshed and instability in a nation already beset by deep poverty and conflict.

President Ali Abdullah Saleh, who has ruled for 32 years, agreed Saturday to the Gulf Cooperation Council’s formula for him to transfer power to his vice president within 30 days of a deal being signed in exchange for immunity from prosecution for him and his sons.

A coalition of seven opposition parties generally accepted the deal. But thousands stood their ground Sunday in a permanent protest camp in part of the capital, Sanaa, and their leaders said they suspect Saleh is just maneuvering to buy time and cling to power. The protesters say the established opposition political parties taking part in the talks with Arab mediators do not represent them and cannot turn off the rage on the streets.

“President Saleh has in the past agreed to initiatives and he went back on his word,” said Khaled al-Ansi, one of the youth leaders organizing the street protests. “We have no reason to believe that he would not do this again.”

So far, Saleh has outrun more than two months of protests pressing for him to immediately step down, thanks in large part to the unwavering loyalty of the country’s best military units, which are controlled by one of his sons and other close relatives.

That seems to have insulated him even as outrage over the severity of his crackdown on protesters has stripped him of many close allies in his party, his tribe and the military.

International pressure is also bearing down on him to leave, including from the United States, which had backed his rule with millions in financial assistance and military aid for fighting the active al-Qaida branch that has taken root in the country.

A bloc of Gulf nations, including powerful Saudi Arabia, has been trying to broker an end to the crisis, fearing the potential blowback of more instability in the fragile country on the southern edge of Arabia.

But the protesters in the streets, who are from an array of different backgrounds and are not represented in the talks, reject the proposal outright and want nothing short of Saleh’s immediate resignation and his trial on charges of corruption and for the killings of unarmed protesters.

The proposal’s steps call for the established opposition parties to join Saleh in a unity government. The president would then submit his resignation to a parliament dominated by his own party, which would have to approve or reject it. What happens if they reject it is unclear. If approved, he would transfer his power to his vice president.

Mohammed al-Sabri, spokesman for the opposition political parties, said the coalition does not want to discuss a unity government until after Saleh is out of power.

“How could we form a government that gets sworn in by a president who has lost his legitimacy?” he said.

The protesters, meanwhile, are calling for more demonstrations in the next few days to intensify the pressure.

In response, the government signaled it would not agree to any adjustments in the Gulf proposal, with a statement on the official SABA news agency saying the initiative must be implemented in its entirety.

That raised the prospect that Saleh was counting on the opposition to reject the deal and only agreed to it to make them look like the spoilers.

Thousands of protesters, meanwhile, held onto their camp in the capital’s Change Square, where they are ringed by military units that defected to join and protect them. Army officers in desert camouflage uniforms mixed with the crowds, pumping their arms into the air and flashing victory signs.

Their anger has been fed by the heavy crackdown. More than 130 people have been killed by security forces and Saleh supporters since the unrest began in early February. At least 40 were killed in a single attack on March 18 by rooftop snipers overlooking Change Square.

Saleh offered earlier in the crisis to step down by the end of the year and guarantee that his son Ahmed would not succeed him. When that failed to ease the unrest, he rolled back and insisted he would stay until the end of his term in 2013. Seeking to ease the international pressure on him, he warned the country would slide into chaos and al-Qaida would seize control if he left early.

The U.S. is concerned about the possibility of a security vacuum as well as political and economic paralysis if Saleh leaves office without a clear deal in place, said a former U.S. ambassador to Yemen, Barbara Bodine.

But she did not think any new government would partner with al-Qaida.

“I do not think we need to be concerned that a Taliban-like government is going to come in, one that is going to support and facilitate al-Qaida in the Arabian Peninsula,” she said in an interview on Saturday night.

Her assessment of the Gulf mediation effort was that it would not bring a quick end to the crisis.

“We are not at the end. We may be at the beginning of the end, but we are not at the end of this process,” she said.

Saleh, a shrewd politician and former military officer, has held power for decades by using his security forces to put down opponents and deftly negotiating with powerful tribes that hold sway in Yemen’s remote hinterlands.

He has fended off numerous serious challenges. The country’s al-Qaida offshoot has attacked his forces, an armed rebellion has battered the north of the country and a secessionist movement has reappeared in the once-independent south.

At the same time, the country is rapidly running out of water and oil and is the poorest in the Arab world.

The United States has watched the uprising with particular concern because Saleh has been an ally in fighting al-Qaida in the Arabian Peninsula, which has been behind two nearly successful attempts to attack U.S. targets in recent years and has an estimated 300 fighters.

Washington is now backing a transition of power to end the crisis. The White House on Saturday urged all parties in Yemen “to move swiftly to implement” a deal transferring power.

Source

A pair of foreclosed properties on the southern edge of the Union Station shopping and hotel complex are headed for auction later this month.

The Power House Office Building and Theatre, at 401 South 18th Street; and the Grand Central Office Building, at 415 South 18th Street, will go on the block Tuesday.

Both buildings are at the foot of the 18th Street bridge.

Bidding is scheduled to last two days.

Auction.com, the auctioneer, said bids for each property will begin at $400,000.

The Power House building, originally valued at $7.5 million, also includes a one-story movie theater.

Built in 1904 to supply power for the adjacent rail depot, the 112,281-square-foot structure currently has an occupancy rate of 77 percent.

Its tenants include radio studios, an architectural firm and a marketing agency.

The Grand Central building, at 65,852 square feet, was originally valued at $8.7 million. It houses a government office, trade association and legal counsel.

Real estate records show the owner of the buildings, St. Louis Station Partners, defaulted on loans of $5.78 million on Grand Central and $4.65 million on the Power House in 2008.

The office spaces now operate under a holding company controlled by the lender, JP Morgan Chase.

Interested parties can register to bid on the properties at auction.com.

Source

U.K. retail sales unexpectedly rose in March as the biggest jump in spending on food in 10 months outweighed a decline at other shops.

Sales climbed 0.2 percent from February, when they dropped 0.9 percent, the Office for National Statistics said today in London. The median forecast of 20 economists in a Bloomberg News survey was for a 0.5 percent decline. From a year earlier, sales increased by 1.3 percent.

The report suggests a surge in commodity prices and inflation that’s double the central bank’s 2 percent target has yet to dent shoppers’ spending at a time when they face a government budget squeeze. The Bank of England kept its benchmark interest rate at a record low of 0.5 percent this month and minutes of the meeting show officials saw risks that an increase to tame price gains could hurt confidence.

“The figures show pretty slow unexciting growth, but growth nonetheless,” said Philip Rush, an economist at Nomura International Plc in London. “It’s relatively encouraging for the Bank of England, and they’ll take some comfort from signs the consumer is returning to more stable though muted growth.”

The pound rose 0.5 percent against the dollar after the report and traded at $1.6562 as of 11:26 a.m. in London. The yield on the benchmark two-year government bond was up 1 basis point today at 1.157 percent.

Food Stores

Sales at food stores rose 0.7 percent on the month and were down 1 percent on the year. A 12.3 percent increase from February at small stores, which employ less than 100 people, offset a 3.1 percent drop in non-specialized food stores such as supermarkets.

Excluding fuel, sales rose 0.2 percent in March from the previous month and were 0.9 percent up on the year, the statistics office said.

Three members of the Monetary Policy Committee voted at the April 7 meeting to raise the key interest rate best payday advance. Inflation was at 4 percent in March and the bank sees a “significant risk” that it may climb above 5 percent.

The majority of the MPC saw a risk that an increase in borrowing costs could undermine the economic recovery. A Nationwide Building Society index of consumer confidence climbed to 44 in March from to a record low of 39 the previous month.

Confidence Concern

“An increase in bank rate in current circumstances could adversely affect consumer confidence, leading to an exaggerated impact on spending,” the minutes said. It is too soon to say “whether the weakness in the contemporary indicators of household spending heralded a more protracted weakness in consumption growth.”

Economists at Barclays Capital including Simon Hayes, its chief U.K. economist, cut their forecast today for growth in British gross domestic product in the first quarter to reflect “both subdued retail sales data” and “more general anecdotal evidence of weak consumer demand.”

Barclays now forecasts growth of 0.5 percent from the final three months of 2010, down from an earlier prediction of 0.7 percent. The statistics office publishes the data on April 27.

The bank’s next decision is May 5, when policy makers will have new quarterly inflation forecasts and a preliminary estimate of first-quarter growth. Ten of 16 economists in a Bloomberg News survey say the bank will raise the key rate a quarter point from the record low of 0.5 percent in the second quarter. The remainder forecast no change.

Source

Raising a

Investors are paying the smallest discounts for Treasuries other than the newest, most-traded bonds since the start of the financial crisis, a sign of growing demand even as the Federal Reserve’s $600 billion buying program approaches its conclusion.

Yields on older notes with 10 years left to maturity have fallen to within 11.4 basis points, or 0.114 percentage point, of those on the newest securities of the same maturity, down from the peak of 66.1 in January 2009, according to data from Barclays Plc. The gap for so-called off-the-run notes narrowed to as little as 6.6 basis points in February, the least since May 2007.

While investors typically pay the most for benchmark Treasuries, the shrinking gap suggests that U.S. borrowing costs are unlikely to soar when the central bank’s second round of so- called quantitative easing ends in June. The Barclays data show that the spread in yields is less now than in the five years before the credit crisis began in 2007.

“There will not be major disruptions in the functioning of the Treasury market,” said Eric Pellicciaro, the New York-based head of global rates investments at BlackRock Inc., which manages about $3.56 trillion in assets. Participation in the Treasury market will “remain high, if not higher,” he said.

No Concern

Goldman Sachs Group Inc. economists said last week they don’t expect an increase in yields after the Fed exits the market, while Credit Suisse AG fixed-income strategists said Treasury rates may fall as traders reverse bets on a decline.

“We are not concerned about the end of QE2,” the Credit Suisse strategists led by Carl Lantz in New York wrote in the report. “Our base case is that rates will tend to rally around the end of the program.”

Treasuries gained last week, with the yield on the benchmark 10-year note falling 17 basis points, or 0.17 percentage point, to 3.41 percent, according to Bloomberg Bond Trader prices. The decline was the biggest since yields fell by the same amount in the five days ended Feb. 25. The price of the 3.625 percent security due February 2021 rose 1 13/32, or $14.06 per $1,000 face amount, to 101 25/32.

The rate was little changed today at 3.42 percent as of 6:02 a.m. in London.

The yield on the 9.875 percent note sold in November 1985 and due in November 2015 is 16 basis points less than the benchmark 1.37 percent security issued in November 2010 and maturing in five years.

Bond Bears

The Fed said Nov. 3 it would buy $600 billion of Treasuries in an effort to spur the sluggish labor market and prevent deflation to boost the economy. Since then, Labor Department data show the U.S. has created 723,000 jobs, inflation expectations as measured by debt yields have increased and markets from stocks to junks bonds have surged.

Bond bears say the only thing supporting the Treasury market is investors seeking safety amid turmoil and uprisings in the Middle East in North Africa, the nuclear disaster in Japan following a record earthquake and tsunami, and Europe’s sovereign-debt crisis.

Pacific Investment Management Co.’s Bill Gross, manager of the world’s biggest bond fund, has a net short position in Treasuries, or a bet pieces will fall, according to the firm’s website. The founder of Newport Beach, California-based Pimco has eliminated Treasuries from his $236 billion Total Return Fund, saying they offer little value because of the growing U no fax payday advances.S. debt burden and the risk of accelerating inflation.

Rate ‘Pressure’

“There’s going to be roughly $75 billion a month of issuance that’s going to have to be absorbed by the market,” said David Glocke, a fund manager who oversees $65 billion of Treasuries at Vanguard Group Inc. in Valley Forge, Pennsylvania. “That should go ahead and cause some pressure on interest rates to go up.”

Ten-year yields are down from 3.8 percent a year ago and remain below the average of 5.22 percent over the last two decades even with the U.S. projected to post a deficit in excess of $1 trillion for a third-consecutive year. Yields will remain below 4 percent through year-end, according to the median forecast of 73 economists in a Bloomberg News survey.

A narrowing in the difference in yields between on- and off-the-run Treasuries comes as the Fed shifts its buying to newer issues, which account for about 90 percent of trading in U.S. government securities. More than 36 percent of the government bonds the central bank bought in March were issued within the previous 90 days, up from 15 percent in November, according to Bank of America Merrill Lynch.

Rising Volume

In another sign of demand, the volume of Treasury trading now exceeds levels before the collapse of Lehman Brothers Holdings Inc. in September 2008, according to Fed data.

Primary dealers have traded an average of $606 billion in securities each week this year, compared with $584 billion in the first eight months of 2008, central bank data shows. The amount dipped to about $410 billion per week in 2009 and $524 billion last year even as debt outstanding surged 54 percent $8.86 trillion.

Treasuries are also getting a boost from optimism that President Barack Obama and Congress are beginning to address record debt levels, according to Brian Edmonds, head of interest rates at primary dealer Cantor Fitzgerald LP in New York.

Obama, a Democrat, unveiled a plan on April 13 to cut $4 trillion in cumulative deficits within 12 years through a combination of spending cuts and tax increases. The U.S. House passed a Republican budget on April 15 that would cut spending by more than $6 trillion over a decade.

Auction Demand

“We’re starting to have a meaningful dialogue that discusses these formerly untouchable things,” Edmonds said.

Demand at Treasury auctions has risen to record levels this year, with investors submitting $3 in orders for every $1 of debt offered, data compiled by Bloomberg show. At each of last week’s auctions of three-, 10- and 30-year bonds, the so-called bid-to-cover ratio exceeded the average of the previous 10 sales.

The bond market has likely already priced in the end of QE2, according to Goldman Sachs, a primary dealer. Traders typically adjust prices when the Fed announces its buying plans rather than when it acquires the debt, Sven Jari Stehn, an economist at the firm in New York, wrote in the report last week.

“Many market participants are worried that the end of the Treasury purchases will have strongly adverse effects on bond yields and other asset prices,” Stehn wrote. “This is unlikely.”

Source

Employees of Liberty Mutual Group took heart in October when Missouri Gov. Jay Nixon announced their company would rake in $1.6 million in state tax credits

Japan’s government on Friday ordered the operator of a tsunami-damaged nuclear plant leaking radiation to pay about $12,000 to each household forced to evacuate from the area.

Tens of thousands of residents unable to return to their homes near the nuclear plant are bereft of their livelihoods and possessions, unsure of when, if ever, they will be able to return home. Some have traveled hundreds of kilometers (miles) to Tokyo Electric Power Co.’s headquarters in Tokyo to press their demands for compensation.

Hiroaki Wada, a Trade Ministry spokesman, said Friday that TEPCO will pay compensation as soon as possible, with families forced to evacuate getting 1 million yen (about $12,000) and individuals getting 750,000 yen (about $9,000).

“There are around 150 evacuation centers alone. It will take some time until everyone gets money. But we want the company to quickly do this to support people’s lives,” Trade Minister Banri Kaieda said at a news conference.

The arrangement is a provisional one, with more compensation expected, Wada said. Roughly 48,000 households living within about 19 miles (30 kilometers) of the crippled Fukushima Dai-ichi nuclear plant would be eligible for the payments.

TEPCO’s president, Masataka Shimizu, was expected to formally announce the plan later Friday. The company is still struggling to stabilize the nuclear plant, which saw its cooling systems fail after a magnitude 9.0 earthquake on March 11 triggered a massive tsunami that wrecked emergency backup systems as well as much of the plant’s regular equipment.

Radiation leaks from the crisis have contaminated crops and left fishermen in the region unable to sell their catches, a huge blow to an area heavily dependent on fishing and farming.

The governor of Fukushima, Yuhei Sato, has vigorously criticized both TEPCO and the government for their handling of the disaster, demanding faster action payday lenders.

“This is just a beginning. The accident has not ended. We will continue to ask the government and TEPCO to fully compensate evacuees.”

Nearly 140,000 people are still living in shelters after losing their homes or being advised to evacuate because of concerns about radiation.

Seeking to console evacuees, Japan’s emperor visited the country’s disaster zone for the first time Thursday.

In Asahi, where 13 people were killed and some 3,000 homes damaged, Emperor Akihito, 77, and Empress Michiko got their first look at the devastation, somberly gazing at a plot of land where a home once stood and also commiserating with evacuees at two shelters.

The royal couple kneeled on mats to speak quietly with the survivors, who bowed in gratitude and wiped away tears. One evacuee with Down syndrome, who has trouble speaking, wrote “I will keep striving” in a small notebook that he showed to the emperor and empress. Asahi is about 55 miles (85 kilometers) east of Tokyo.

Even as the month-old emergency dragged on, radiation levels dropped enough for police sealed in white protective suits, goggles and blue gloves to begin searching for bodies amid the muddy debris inside a six-mile (10-kilometer) radius around the Fukushima Dai-ichi plant that had been off-limits.

Authorities believe up to 1,000 bodies are lodged in the debris. A police spokesman, who gave only the surname Sato, said searchers were working Friday to recover three of the 10 bodies they located on Thursday that were trapped in cars or debris.

Overall, the bodies of only about 13,500 of the more than 26,000 people believed killed in the March 11 disaster have been recovered, with most thought to have been washed out to sea.

Source