All posts by Mike Price

Supply problems hit production at BMW: Focus

FRANKFURT Problems at one of its suppliers has forced German carmaker BMW (BMWG.DE) to halt production in Leipzig and could hit its plants in China and South Africa, German magazine Focus reported in its online edition.

The magazine said problems at one of BMW’s Italian suppliers of parts for its steering technology was the reason for the disruption.

Citing a BMW spokesman, Focus reported that the carmaker has halted output at its plant in Leipzig, Germany since Friday and may have to reduce production in China and South Africa.

Production in Munich was also reduced for two days last week, the magazine reported.

Focus said the disruptions would cost BMW double-digit millions of euros a day, without saying where it got its information from.

BMW could not immediately be reached for comment outside regular business hours.

(Reporting by Harro ten Wolde; Editing by Susan Fenton)

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GM says ISS advises against Greenlight share plan, board nominees

General Motors Co(GM.N) said on Saturday that proxy advisory firm Institutional Shareholder Services has recommended that shareholders vote against a slate of directors proposed by hedge fund Greenlight Capital and reject the hedge fund’s plan to divide GM shares into two classes.

The advice from ISS is a setback for Greenlight and its manager David Einhorn. They have said GM shares are undervalued and would be more attractive if the company divided its common stock into shares that pay a dividend and shares that would reflect the automaker’s growth potential.

Greenlight also has proposed a slate of three candidates for GM’s board of directors.

On Friday, advisory firm Glass Lewis also advised against Greenlight’s nominees for the automaker’s board and its share split plan.

(Reporting By Joe White; Editing by W Simon)

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Beijing bling: Hyundai plots China branding reboot after missile row

SEOUL/BEIJING Bruised by anti-Korean sentiment in its biggest market and losing ground to local automakers, Hyundai Motor (005380.KS) will open its first Chinese brand store, and may locally assemble its premium Genesis cars and accelerate the launch of a sport-utility vehicle (SUV), people familiar with the plans said.

The measures are aimed at rebooting the South Korean firm’s branding in China, where many see Hyundai as a lower-end maker of city taxis.

Hyundai and its affiliate Kia Motors (000270.KS) were not long ago ranked third among foreign car brands in China, but recent sales have been hit by a consumer backlash over South Korea’s deployment of a U.S. anti-missile defense system which Beijing opposes.

Analysts say the diplomatic row masks broader problems for Hyundai/Kia in China: poor brand recognition and a model line-up struggling against local brands’ cheaper SUVs.

“Hyundai has an in-between brand that doesn’t have a clear identity in China, and there’s the backdrop of poor China-Korea relations,” said James Chao, Shanghai-based Asia-Pacific chief of consulting firm IHS Markit Automotive.

“Newly introduced SUVs should help, but they are late to the game.”

Even before the missile systems row, Hyundai/Kia’s China market share tumbled to 8.1 percent last year, the lowest in eight years. This year, it has slid further to 5 percent.

To help its identity crisis, Hyundai will in September open a brand experience center in Beijing’s 798 Art District, a trendy hub of refurbished factory buildings. Hyundai has three similar centers in Seoul and one in Moscow.

“We’re not going to show a real car. This space is only for focusing on brand building,” Xu Jing, the Hyundai executive in charge of the project, told Reuters.

The center was planned before the recent political tensions, but its completion is now a key plank in Hyundai’s efforts to regain a lost position in China as local automakers and European brands gain ground. Volvo-owner Geely (0175.HK) and Great Wall Motor (601633.SS) are also looking to move upmarket.

The branding store ventures into territory traditionally held by premium names such as Daimler’s (DAIGn.DE) “Mercedes me” stores and BMW’s (BMWG.DE) brand centers, already in China.


Hyundai is also considering using complete knock-down (CKD) kits shipped from South Korea to assemble Genesis cars in China – more than halving import tariffs to 10 percent – two people familiar with the matter said.

Building Genesis cars from kits in China would also prevent technology leaking to its local joint venture partner, BAIC (1958.HK), one of the people added.

The kits are a first step, said one Hyundai insider. “We are agonizing over how to source local parts and secure enough sales to build the Genesis cars.”

Hyundai launched its Genesis luxury sedan in 2008, and two years ago spun it off with the larger Equus sedan into a standalone premium brand. Brand chief Manfred Fitzgerald said last year Genesis would launch in China within 2-3 years.

Hyundai has not decided which Genesis model it will build in China first, but plans to have six models including a sports sedan and two SUVs under the premium marque by 2020.

“While the Genesis brand is reviewing a variety of strategies for the China market, no specific decisions have been made yet,” Hyundai said in a statement.

Hyundai sold 74 Genesis sedans in China last year, down from 1,016 in 2015. It sold a single Equus, down from 10 the previous year, according to export data seen by Reuters.


Hyundai may also bring forward by a month, to November, the launch of a small SUV, codenamed NU, to be built at its fourth factory in China, one of the people told Reuters.

And Kia is considering launching the Stinger, its first sports sedan, in China, people with direct knowledge of the matter said, though there are no plans to build the model there.

Hyundai said it also plans to apply new, cutting-edge technologies such as connectivity and advanced driver assistance systems (ADAS) to many products from the second half of this year, and soon introduce six new-energy vehicles.

Since starting to make cars in China in 2002, Hyundai has aggressively chased sales and market share by selling both older and new versions of models including the Elantra and Sonata sedans and Tucson SUV.

Among foreign car brands, Hyundai’s China sales lag only those of General Motors (GM.N) and Volkswagen (VOWG_p.DE), but it’s generally seen as more lower-end than American, German and Japanese rivals. Beijing Hyundai has supplied around a fifth of the capital’s taxis.

The volume sales model “did wonders for sales growth, but dented the Hyundai image in the minds of Chinese buyers,” said Michael Dunne, president of consultancy Dunne Automotive.

“(Having a) weaker brand … than Japanese automakers, I think it might take more time to restore the brand and sales,” said Han Sang-yun, director at SP, noting Japanese car makers took a year to bounce back in China after a 2012 consumer backlash over a territorial dispute between Beijing and Tokyo.

(Reporting by Hyunjoo Jin and Jake Spring, with additional reporting by Norihiko Shirouzu; Editing by Clara Ferreira-Marques and Ian Geoghegan)

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Slim seeks to sell minority stake in tower company Telesites: sources

Billionaire Carlos Slim is looking to sell a minority stake in Telesites SAB de CV (SITESB1.MX), the Mexican wireless tower company that he controls, people familiar with the matter said on Friday.

The move comes 18 months after sweeping regulatory reforms forced Slim to spin off Telesites from telecommunications company America Movil SAB de CV (AMXL.MX). Telesites shares have risen only slightly since then, as the company struggles to diversify beyond America Movil as its main client.

Slim and family members own about 61 percent of the shares, according to Telesites’ annual report.

Slim is speaking to private equity firms, sovereign wealth funds and infrastructure funds about selling the stake without giving up control of Telesites, the people said this week.

The sources requested anonymity because the talks are confidential and cautioned that a deal was not certain.

Telesites declined to comment. A representative for Slim, whose net worth is pegged by Forbes at $65 billion, also declined to comment.

Since its spin-off in December 2015, Telesites has been unable to attract many tenants to the towers besides America Movil and its mobile unit, Telcel. It competes with American Tower Corporation (AMT.N) in Mexico.

“We see little progress in third-party usage of Telesites’ towers,” Itau BBA analyst Gregorio Tomassi said in a May 3 research note. It noted that ATT, another wireless player in Mexico, has not increased its demand for Telesites towers.

Private equity firms have traditionally invested in tower companies for their steady cash flows. Buyout firm KKR Co LP (KKR.N) bought a 40 percent stake in Spain’s Telefonica SA’s (TEF.MC) tower subsidiary Telxius earlier this year for 1.275 billion euros.

Telesites has a market capitalization of 38.52 billion Mexican pesos ($2 billion). The shares closed at 11.440 pesos on Friday on the Mexican stock exchange.

(Reporting by Liana B. Baker in San Francisco; Additional reporting by Anthony Esposito in Mexico City; Editing by Richard Chang)

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In Aramco IPO pitch, Canada plays up its natural resources expertise

((This May 26th story corrects paragraph 12 to show Falih was speaking at news conference not to Reuters and adds comment on listing))

By Alastair Sharp

TORONTO The Toronto Stock Exchange’s efforts to win a slice of the massive Saudi Aramco public listing plays up the country’s deep experience in natural resources as part of a broader offer to help the kingdom with its shift away from oil dependence.

In pitch documents obtained by Reuters, the TSX talks up “a customized regulatory environment for resource issuers”, its leading position in oil and gas equity capital raising, and strong trading interest from outside the country.

The Canadian pitch is also broader than just for a slice of the Aramco IPO. On several trips to the kingdom, the most recent in late March, TMX executives have been joined by senior executives from some of the country’s biggest banks, brokerages and other financial players as Canada Inc seeks a role in delivering the kingdom’s broader Vision 2030 plan.

One source directly involved in the Canadian pitch told Reuters they are focused on convincing the Saudis that Canada excels in 10 of the 12 areas they have targeted for development under that plan, including in mining and infrastructure. The source declined to be named due to the sensitivity of the matter.

“We feel that we have put TMX and Canada’s best foot forward and we continue to promote our strengths in pursuit of business opportunities in the region and around the world,” TMX said in a statement.

But its best chance of winning a part of the biggest IPO ever, expected to raise about $100 billion as early as next year, may lie in its geography and geopolitics, securities lawyers say.

While the exchange, owned by the TMX Group Ltd, is widely considered an underdog in a race that has also excited larger exchanges in London, New York, Tokyo, Hong Kong and Singapore its case could be bolstered by a recent change in U.S. law that allows those affected by the September 11, 2001 attacks to sue the Saudi government, they said.

“We are inoffensive from a political perspective,” said Sarah Gingrich, a Calgary-based partner at Fasken Martineau, who has previously worked in Dubai with Saudi clients for international law firm Freshfields.

That law, the Justice Against Sponsors of Terrorism Act, came into effect in September, after the U.S. Congress overrode a veto by former President Barack Obama.

A group of insurers has since renewed a $6-billion lawsuit against the kingdom, seeking to hold it responsible for business and property damage as a result of the attacks, in which Saudi has long denied involvement.

In a March 17 interview with the Wall Street Journal, the Saudi energy minister, Khalid al-Falih, said the so-called “terror law” is one consideration in the country’s decision on whether to list in the United States.

Falih, who is Aramco’s chairman, declined to comment on the specifics of the IPO process at a recent news conference in Riyadh, citing legal restrictions. However, he said the Saudi government still intended to list Aramco in 2018 and that the preparations were on track.

It was not clear if the issue was discussed during U.S. President Donald Trump’s recent visit.

A spokeswoman for the NYSE, which sources have said planned to visit Saudi soon after Trump’s visit, declined to comment on their efforts to win Aramco’s business.

Nasdaq, which is a technology partner to Saudi Arabia’s exchange, is also pitching for the listing, while the London Stock Exchange is working on a completely new type of listing structure to woo Aramco, Reuters has reported.


Canada-listed oil and gas companies raised 22 percent of global energy financing over the past five years, the TMX pitch documents show, second behind the NYSE’s 44 percent.

The documents put Canada in third place behind Chinese and Hong Kong exchanges, and the United States for total capital raised in 2016, noting that TSX-listed companies raised 28 percent more than fourth-placed LSE.

They say more than 40 percent of TSX trading originates outside the country and that bid-ask spreads, a key measure of liquidity, are among the lowest in the world.

Still, while Canada boasts significant expertise in oil and gas financing and strong interest from both institutional and retail investors, it is dwarfed by the much larger U.S. market.

The oil and gas companies listed on its main TSX exchange and the junior TSXV have a total market capitalization of C$325 billion ($239 billion), TMX says.

By comparison, the New York Stock Exchange says its oil and gas companies – which include super majors ExxonMobil Corp, Chevron and secondary listings for Royal Dutch Shell and Total – are worth $3.3 trillion.

Neither the source in the TMX delegation nor the external lawyers said listing and regulatory requirements would prove much of an obstacle to a Canadian listing, especially if it were to be a third or fourth option.

But Canada would only find a way in to the action “if their (Aramco’s) bankers think they will get sufficient enough market interest here that it will help promote the stock price and give them some liquidity and trading,” said Darrell Peterson, a partner with Bennett Jones in Calgary.

(Reporting by Alastair Sharp; Additional reporting by John McCrank in NEW YORK, Reem Shamseddine in RIYADH; Editing by Denny Thomas/Nick Zieminski/David Clarke)

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Switch it up this year: Buy in May, till November stay

NEW YORK “Sell in May and go away” is perhaps the oldest saw on Wall Street, but it appears there’s no shortage of U.S. mutual funds doing exactly that this year.

After all, the SP 500 .SPX has delivered a total return, including reinvested dividends, of 10.8 percent over the last six months, essentially capturing all of the average rolling 12-month total return on the index since 1990, so why not cash in?

Indeed, political drama and high valuations are clearly driving some investors to take profits. American fund investors have yanked more than $17 billion from U.S. stocks so far this month, data from fund tracker Lipper shows, with some $10.1 billion in withdrawals in the latest week alone, the second biggest outflow for the year.

Some hearty investors, however, stand ready to bet against that flow – and history – and are advocating a buy-in-May approach this year.

“If anything you might want to buy in May and sell in November,” said Chris Zaccarelli, Chief Investment Officer at Cornerstone Financial Partners, in Huntersville, North Carolina, who bases his bullishness on the healthy outlook for the global economy rather than expectations for a policy boost from the Trump administration.

While stocks appear to have priced in hope for a Trump stimulus this year, Zaccarelli says his expectations for progress on Trump’s agenda in 2017 has recently tumbled to 40/60 from 80/20 because he doesn’t see Trump gaining enough support from a severely divided Republican party, which suggests to him that selling will be more opportune a few months down the road.

“If we go the entire year and Washington does nothing, no tax reform, no repatriation, I think there will be a little disappointment,” he said. “Ironically enough, the disappointment will be in November or December because people will realize they went the whole year and got nothing done.”


The sell-in-May tactic has been kicked around Wall Street for decades and is premised on the historic outperformance of the November-May period over the other six months of the year. It works.

In the last 20 years, a $100 investment in the SP from November through April would have become $343 while a $100 investment in May through October in the same years would have slipped to $98.5, according to Bespoke Investment Group, in Harrison, New York.

From 1928 to 2017 the $100 would have become $4,270 from November through April but would only be worth $257 from investing from May through October, according to Bespoke.

In the summer months “things slow down so you tend to see the chances for a pickup in volatility. That’s usually accompanied by weakness in the market,” according to Paul Hickey, Co-founder of Bespoke Investment Group, LLC who is not selling now as he still has “a positive view toward equities.”

Other factors that can drive a summer lull include a corporate tendency to hold stock-boosting investor meetings early or late in the year, a reduction of over-optimistic analyst estimates around mid-year, and a boost just ahead of the end-of-year holiday shopping season, says Linda Bakhshian, portfolio manager at Federated Investors in Pittsburgh.

John Augustine, Chief Investment Officer at Huntington National Bank in Columbus, Ohio said he is “taking the opposite tack to “sell in May” and moving into U.S. small and mid cap stocks which have underperformed large caps so far this year.

The small cap Russell 2000 index has risen just 1.8 percent year-to-date compared with 7.8 percent for the SP 500, 6.6 percent for the Dow Jones Industrial Average .DJI and 15.3 percent for Nasdaq Composite .IXIC.

“To sell we’d need a Fed that’s more hawkish than expected mixed with economic data that’s weaker than expected. That combination could give us a domestic stock sell off this summer. But markets have discounted that this week based after Fed minutes, thinking the Fed would stay dovish this Summer,” said Augustine.

(Reporting by Sinead Carew; editing by Dan Burns and Andrew Hay)

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ICE Arrests Nearly 200 Illegal Immigrants in Los Angeles Raids

Immigration authorities have arrested nearly 200 criminal aliens in a five-day operation across the Los Angeles area, including dozens with prior convictions for sex crimes and domestic violence.

Fugitive operations officers for U.S. Immigration and Customs Enforcement (ICE) nabbed a total of 188 people in a sweep targeting at-large criminal aliens, immigration fugitives and individuals who had illegally re-entered the U.S. after being deported.

Of the those arrested, 169 — about 90 percent — had prior criminal convictions for a variety of crimes, the agency said Thursday. The most common prior offenses were drug violations, comprising 43 of those arrested, followed by DUI and domestic violence, with 30 and 27 arrests, respectively.

“Operations like this are emblematic of the vital work ICE Enforcement and Removal Operations officers do every day seeking to locate, arrest, and ultimately deport at-large convicted criminals and other immigration fugitives who pose a threat to public safety,” David Marin, field office director for ICE’s enforcement and removal division in Los Angeles, said in a statement.

“By taking these individuals off the streets and removing them from the country, we’re making our communities safer for everyone,” he added.

Illegal immigrants from Mexico made up the vast majority of those arrested in the operation, which took place across six counties in the L.A. metro area. ICE agents arrested 146 Mexican nationals — 78 percent of all individuals detained — followed by 13 from El Salvador and 12 from Guatemala. About half of all the arrests occurred in L.A. County.

ICE arrested 19 individuals who had no prior criminal convictions, according to agency figures. Officials say that deportation officers conduct “targeted enforcement operations” that prioritize aliens with criminal backgrounds, but that anyone present in the country without authorization may also be arrested during the sweeps.

“During targeted enforcement operations, ICE officers frequently encounter additional suspects who may be in the United States in violation of federal immigration laws,” the agency said. “Those persons will be evaluated on a case by case basis and, when appropriate, arrested by ICE.”

The 188 arrests made this week are in line with the scope of similar operations that ICE occasionally carries out in the area, reports the Los Angeles Times. More than 150 people were arrested during a week-long sweep in February, and before that ICE arrested 112 people in a multi-day operation in July.


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Sending Your Child to College Next Year? First Open Your Eyes

By Tom Gilson

Published on May 27, 2017

Thinking of sending your child to college next fall? Take note. You need to see some of what’s taken place on campus in just the past week. Most of these schools had already closed down their main class schedules for the summer.

  • The Alliance Defending Freedom filed suit against Kellogg Community College. The suit sought to halt policies that had already resulted in students being arrested for passing out copies of the Constitution on campus. One of the students was jailed.
  • A Duke University professor holding an endowed chair resigned rather than being forced to attend a weekend of “Diversity Training Phase I.” He had predicted — quite believably — it would be an “illiberal” event.
  • Cornell University continued to deny tenure to a professor because of rape charges. This went on even though a court of law had found there was no evidence for the charges, had “blasted” the school for its actions, and had ordered a review of the decision.
  • Lawrence University proved it can’t take a joke, denying recognition to a club that had screened a film, Can We Take a Joke?, on the topic of free speech in comedy.
  • Students at Davidson College “responded in anguish and outrage” after being filmed answering whether they would support the leveling of GPAs by giving the bottom 10 percent of students the GPAs held by the top 10 percent. In truth, though, they denounced the survey only after it was revealed as a project showing the wrongness of income redistribution.
  • Liberals mocked a proposed free speech center at the University of Wisconsin, Madison, as a “GOP safe place.” One group called it an attempt at “bullying” through “Republican propaganda.”
  • Students at DePaul University voted themselves a $2 increase in fees to fund scholarships for illegal immigrants. DePaul’s president, a Catholic priest, approved the fee hike.
  • Students and faculty at Orange Coast College “stormed the … administration building,” demanding the school “end its ‘neutrality’ … by removing the College Republicans.”
  • A professor at the University of Hawaii called on “cisgender” and “white” colleagues to resign so that “women of color and trans people” could have their jobs. “Not to alarm you, but I probably want you to quit your job, or at least take a demotion,” she wrote.
  • A college in New York was revealed as offering a course in “The Abolition of Whiteness.”

This is just one small sampling at the end of the school year. The same kind of thing goes on even more all year long, all across the country.

More and more public colleges are displaying hostility to Christian faith, morality and conservative principles. Does this mean you shouldn’t send your child to college? Not necessarily. It does mean that you shouldn’t do it with your eyes closed.

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Wall St. in holiday mode ahead of long weekend

U.S. stocks were little changed in early afternoon trading on Friday, taking a breather after six straight days of gains and ahead of a three-day holiday weekend.

Another strong day for consumer stocks was offset by weakness in healthcare and real estate stocks, leaving the market in danger of snapping its six-day winning streak, which is its longest since February.

The streak – one that included record high closes for the SP 500 and the Nasdaq on Thursday – has put all three major indexes on track to post their strongest weekly gains since the end of April.

“We’ve reached new highs and we expect days of strong gains. Investors may be taking a breather as we head into the holiday weekend,” said Emily Roland, head of investment research at John Hancock Investments in Boston.

At 12:32 p.m. ET the Dow Jones Industrial Average .DJI was down 9.32 points, or 0.04 percent, at 21,073.63, the SP 500 .SPX was down 0.22 points, or 0.00 percent, at 2,414.85.

The Nasdaq Composite .IXIC was up 1.83 points, or 0.03 percent, at 6,207.09.

Six of the 11 major SP sectors were higher, led for the second session in a row by consumer stocks.

The consumer staples index .SPLRCS rose 0.18 percent and the consumer discretionary index .SPLRCD was up 0.16 percent.

Shares of Costco Wholesale (COST.O) rose 1.8 percent to $177.99 and was among the biggest drivers of the SP and Nasdaq, after the warehouse club operator reported a strong profit.

Ulta Beauty (ULTA.O) jumped 3.3 percent, the second most on the SP, after the company raised its full-year forecast.

Deckers Outdoor Corp (DECK.N) rose as much as 21 percent to a nine-month high after reporting a surprise quarterly profit.

Among the laggards, GameStop (GME.N) fell 6.7 percent to $22.02 as the videogame retailer left its full-year earnings forecast unchanged despite beating profit estimates.

Earlier in the day, a report showed that the U.S. economy grew at a 1.2 percent pace in the first quarter, slightly more than the 0.7 percent growth estimated earlier. The higher reading was in line with economists’ expectations.

Declining issues outnumbered advancers on the NYSE by 1,402 to 1,393. On the Nasdaq, 1,574 issues fell and 1,163 advanced.

The SP 500 index showed 51 new 52-week highs and eight new lows, while the Nasdaq recorded 78 new highs and 44 new lows.

(Reporting by Tanya Agrawal in Bengaluru; Additional reporting by Gayathree Ganesan; Editing by Savio D’Souza and Anil D’Silva)

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China’s reforms not enough to arrest mounting debt: Moody’s

BEIJING China’s structural reforms will slow the pace of its debt build-up but will not be enough to arrest it, and another credit rating cut for the country is possible down the road unless it gets its ballooning credit in check, officials at Moody’s said.

The comments came two days after Moody’s downgraded China’s sovereign ratings by one notch to A1, saying it expects the financial strength of the world’s second-largest economy to erode in coming years as growth slows and debt continues to mount.

In announcing the downgrade, Moody’s Investors Service also changed its outlook on China from “negative” to “stable”, suggesting no further ratings changes for some time.

China has strongly criticized the downgrade, asserting it was based on “inappropriate methodology”, exaggerating difficulties facing the economy and underestimating the government’s reform efforts.

In response, senior Moody’s official Marie Diron said on Friday that the ratings agency has been encouraged by the “vast reform agenda” undertaken by the Chinese authorities to contain risks from the rapid rise in debt.

However, while Moody’s believes the reforms may slow the pace at which debt is rising, they will not be enough to arrest the trend and levels will not drop dramatically, Diron said.

Diron said China’s economic recovery since late last year was mainly thanks to policy stimulus, and expects Beijing will continue to rely on pump-priming to meet its official economic growth targets, adding to the debt overhang.


Moody’s also is waiting to see how some of the announced measures, such as reining in local government finances, are actually implemented, Diron, associate managing director of Moody’s Sovereign Risk Group, told reporters in a webcast.

China may no longer get an A1 rating if there are signs that debt is growing at a pace that exceeds Moody’s expectations, Li Xiujun, vice president of credit strategy and standards at the ratings agency, said in the same webcast

“If in the future China’s structural reforms can prevent its leverage from rising more effectively without increasing risks in the banking and shadow banking sector, then it will have a positive impact on China’s rating,” Li said.

But Li added: “If there are signs that China’s debt will keep rising and the rate of growth is beyond our expectations, leading to serious capital misallocation, then it will continue to weigh on economic growth in the medium term and impact the sovereign rating negatively.”

“China may no longer suit the requirement of A1 rating.”

Li did not give a specific target for debt levels nor a timeframe for further assessments.

Moody’s expects China’s growth to slow to around 5 percent in coming years, from 6.7 percent last year, compounding the difficulty of reducing debt. But Diron said the economy will remain robust, and the likelihood of a hard landing is slim.

After Moody’s downgrade, its rating for China is on the same level as that on Fitch Ratings, with Standard Poor’s still one notch above, with a negative outlook.

On Friday, Fitch said it is maintaining its A+ rating. Andrew Fennel, its direct of sovereign ratings, noted China’s “strong macroeconomic track record”, but said that its growth “has been accompanied by a build-up of imbalances and vulnerabilities that poses risks to its basic economic and financial stability”.


Government-led stimulus has been a major driver of China’s economic growth over recent years, but has also been accompanied by runaway credit growth that has created a mountain of debt – now at nearly 300 percent of gross domestic product (GDP).

Some analysts are more worried about the speed at which the debt has accumulated than its absolute level, noting much of the debt and the banking system is controlled by the central government.

UBS estimates that government debt, including explicit and quasi-government debt, rose to 68 percent of GDP in 2016 from 62 percent in 2015, while corporate debt climbed to 164 percent of GDP in 2016 from 153 percent the previous year.

A growing number of economists believe that a massive bank bailout may be inevitable in China as bad loans mount. Last September, the Bank for International Settlements (BIS) warned that excessive credit growth in China signaled an increasing risk of a banking crisis within three years.


The Moody’s downgrade was seen as largely symbolic because China has relatively little foreign debt and local markets are influenced more by domestic factors, with many companies enjoying stronger credit ratings from home-grown agencies than they would in the West.

Still, the rating demotion highlighted investor worries over whether China has the will and ability to contain rising risks stemming from years of credit-fueled stimulus, without triggering financial shocks or dampening economic growth.

China has vowed to lower debt levels by rolling out measures such as debt-to-equity swaps, reforming state-owned enterprises (SOEs) and reducing excess industrial capacity.

In recent months, regulators have issued a flurry of measures to clamp down on the shadow banking sector while the central bank has gingerly raised short-term interest rates.

But moves so far have been cautious, especially heading into a key political leadership reshuffle later this year.

The autumn’s Communist Party Congress is President Xi Jinping’s most important event of the year, where a new generation of up and coming leaders will be ushered into the Standing Committee, China’s elite ruling inner core.

But party congresses are always tricky affairs, as different power bases compete for influence, so the government will be keen to ensure there are no distractions like financial or economic problems or diplomatic confrontations.

(Additional reporting by Ben Blanchard and Elias Glenn; Editing by Kim Coghill and Richard Borsuk)

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U.S. economy slowed less than expected in first quarter; outlook cloudier

WASHINGTON The U.S. economy slowed less than initially thought in the first quarter, but softening business investment and moderate consumer spending are clouding expectations of a sharp acceleration in the second quarter.

Gross domestic product increased at a 1.2 percent annual rate instead of the 0.7 percent pace reported last month, the Commerce Department said on Friday in its second GDP estimate for the first three months of the year.

That was the worst performance in a year and followed a 2.1 percent growth rate in the fourth quarter.

“Economic indicators so far aren’t entirely convincing on a second-quarter bounce in activity and show a U.S. economy struggling to surprise on the upside,” said Scott Anderson, chief economist at Bank of the West in San Francisco.

The first-quarter weakness is a blow to President Donald Trump’s ambitious goal to sharply boost economic growth.

During the 2016 presidential campaign Trump had vowed to lift annual GDP growth to 4 percent, though administration officials now see 3 percent as more realistic.

Trump has proposed a range of measures to spur faster growth, including corporate and individual tax cuts. But analysts are skeptical that fiscal stimulus, if it materializes, will fire up the economy given weak productivity and labor shortages in some areas.

“If the economy is going to grow at 3 percent for as long as the eye can see, businesses better spend lots of money on capital goods. That is not happening,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.

The economy’s sluggishness, however, is probably not a true reflection of its health, as first-quarter GDP tends to underperform because of difficulties with the calculation of data that the government is working to resolve.

The government raised its initial estimate of consumer spending growth for the first quarter, but said inventory investment was far smaller than previously reported. The trade deficit also was a bit smaller than estimated last month.

Economists had expected that GDP growth would be revised up to a 0.9 percent rate. Despite the tepid growth, the Federal Reserve is expected to raise interest rates next month.

The dollar was trading slightly higher against a basket of currencies on Friday, while U.S. stocks were flat after six straight days of gains. Prices for longer-dated U.S. government bonds rose.


Though the economy appears to have regained some speed early in the second quarter, hopes of a sharp rebound have been tempered by weak business spending, a modest increase in retail sales last month, a widening of the goods trade deficit and decreases in inventory investment.

In a second report on Friday, the Commerce Department said non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, were unchanged in April for a second straight month.

Shipments of these so-called core capital goods dipped 0.1 percent after rising 0.2 percent in March. Core capital goods shipments are used to calculate equipment spending in the government’s gross domestic product measurement.

Second-quarter GDP growth estimates range between a rate of 2.0 percent and 3.7 percent rate.

“It looks instead that many companies may be delaying their equipment purchases for now to see if they get a better tax deal later on down the road,” said Chris Rupkey, chief economist at MUFG Union Bank in New York.

The GDP report also showed an acceleration in business spending equipment was not as fast as previously estimated. Spending on equipment rose at a 7.2 percent rate in the first quarter rather than the 9.1 percent reported last month.

Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose at a 0.6 percent rate instead of the previously reported 0.3 percent pace. That was still the slowest pace since the fourth quarter of 2009 and followed the fourth quarter’s robust 3.5 percent growth rate.

With consumer sentiment hovering at lofty levels, consumer spending could pick up. But there are worries that surging household debt could cut into spending as monthly repayments squeeze paychecks.

Businesses accumulated inventories at a rate of $4.3 billion in the last quarter, rather than the $10.3 billion reported last month. Inventory investment increased at a $49.6 billion rate in the October-December period.

Inventories subtracted 1.07 percentage point from GDP growth instead of the previously estimated 0.93 percentage point.

The government also reported that corporate profits after tax with inventory valuation and capital consumption adjustments fell at an annual rate of 2.5 percent in the first quarter, hurt by legal settlements, after rising at a 2.3 percent pace in the previous three months.

Penalties imposed by the government on the U.S. subsidiaries of Credit Suisse and Deutsche Bank related to the sale of mortgage-backed securities reduced financial corporate profits by $5.6 billion in the first quarter.

In addition, a fine levied on the U.S. subsidiary of Volkswagen (VOWG_p.DE) related to violations of U.S. environmental regulations cut $4.3 billion from non-financial corporate profits.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

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Oil plunges 4 percent on disappointment with OPEC cuts

NEW YORK Oil prices fell nearly 5 percent on Thursday as OPEC’s decision to extend production curbs fell short of expectations of deeper or longer cuts.

As expected, the Organization of the Petroleum Exporting Countries, along with other non-OPEC members, agreed to extend a cut in oil supplies of 1.8 million barrels per day (bpd) until the end of the first quarter of 2018 to reduce a glut of supply.

However, in the days prior to the meeting, talk of a possible extension for 12 months, or deeper cuts than the current agreement, helped buoy prices on optimism of a faster drawdown in supply.

In Vienna on Thursday, Saudi Arabia’s energy minister, Khalid al-Falih, said ministers did not see a need to reduce oil output further.

“Maybe they’re disappointed that there wasn’t anything additional,” said Adam Rozencwajg, managing partner at Goehring Rozencwajg Associates in New York.

Brent crude oil LCOc1 was down $2.38 a barrel at $51.58 a barrel by 12:15 p.m. (1615 GMT).

U.S. West Texas intermediate crude futures CLc1 fell $2.43 a barrel to $48.93, a 4.8 percent drop, breaking through $50 for the first time all week as volumes rose sharply.

The global glut of supply has proved difficult to draw down even after OPEC agreed to cut production in the first half of the year.

That was in part because of large volumes of floating storage, weaker-than-expected demand in places like India, and increased U.S. production.

U.S. oil production C-OUT-T-EIA has already risen by more than 10 percent since mid-2016 to more than 9.3 million bpd, and OPEC’s contribution to the cuts – 1.2 million bpd – could be completely eaten up by rising U.S. production by year-end, according to RBN Energy.

Rising U.S. production may continue to offset OPEC’s cuts, even though refining runs have touched record levels in the United States in recent weeks. [EIA/S]

“Everyone is watching (the price of oil) with trepidation, not jubilance,” said David Arrington, president of shale oil producer Arrington Oil Gas in Midland, Texas.

How shale producers respond in coming months will have as much of an effect on pricing as OPEC’s cuts, he said.

“If U.S. shale producers exceeded our projected increases, it’ll drive the price down again,” Arrington said.

(Additional reporting by Gary McWilliams in Houston, Christopher Johnson in London, Henning Gloystein in Singapore; Editing by Marguerita Choy, Edmund Blair)

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OPEC, non-OPEC extend oil output cut by nine months to fight glut

VIENNA OPEC and non-members led by Russia decided on Thursday to extend cuts in oil output by nine months to March 2018 as they battle a global glut of crude after seeing prices halve and revenues drop sharply in the past three years.

OPEC’s cuts have helped to push oil back above $50 a barrel this year, giving a fiscal boost to producers, many of which rely heavily on energy revenues and have had to burn through foreign-currency reserves to plug holes in their budgets.

Oil’s earlier price decline, which started in 2014, forced Russia and Saudi Arabia to tighten their belts and led to unrest in some producing countries including Venezuela and Nigeria.

The price rise this year has spurred growth in the U.S. shale industry, which is not participating in the output deal, thus slowing the market’s rebalancing with global crude stocks still near record highs.

The nine-month extension was largely expected by the market. By 1530 GMT (11:30 a.m. ET), Brent crude was down nearly 3 percent at around $52.30 per barrel on disappointment OPEC would not deepen the cuts or extend them by as long as 12 months. [O/R]

In December, the Organization of the Petroleum Exporting Countries agreed its first production curbs in a decade and the first joint cuts with non-OPEC producer nations, led by Russia, in 15 years.

The two sides decided to remove about 1.8 million barrels per day (bpd) from the market in the first half of 2017 – equal to 2 percent of global production, taking October 2016 as the baseline month for reductions.

On Thursday, OPEC agreed to keep its own cuts of around 1.2 million bpd in place for nine months, Kuwaiti Oil Minister Essam al-Marzouq said.

OPEC and non-OPEC delegates said joint cuts with non-OPEC were agreed at around 1.8 million bpd, which would see non-OPEC producers again contributing a reduction of under 600,000 bpd.

Despite the output cut, OPEC kept exports fairly stable in the first half of 2017 as its members sold oil from stocks.

OPEC first suggested extending cuts by six months, but later proposed to prolong them by nine months. Russia offered an unusually long duration of 12 months.

“There have been suggestions (of deeper cuts), many member countries have indicated flexibility but … that won’t be necessary,” Saudi Energy Minister Khalid al-Falih said before the meeting.


OPEC produces a third of the world’s oil. Its production reduction of 1.2 million bpd was made based on October 2016 output of around 31 million bpd, excluding Nigeria and Libya.

Falih said OPEC members Nigeria and Libya would still be excluded from cuts as their output remained curbed by unrest.

He also said Saudi oil exports were set to decline steeply from June, thus helping to speed up market rebalancing.

OPEC sources have said the Thursday meeting will highlight a need for long-term cooperation with non-OPEC producers.

The group could also send a message to the market that it will seek to curtail its oil exports.

“Russia has an upcoming election and Saudis have the Aramco share listing next year so they will indeed do whatever it takes to support oil prices,” said Gary Ross, head of global oil at PIRA Energy, a unit of SP Global Platts.

OPEC has a self-imposed goal of bringing stocks down from a record high of 3 billion barrels to their five-year average of 2.7 billion.

“We have seen a substantial drawdown in inventories that will be accelerated,” Falih said. “Then, the fourth quarter will get us to where we want.”

OPEC also faces the dilemma of not pushing oil prices too high because doing so would further spur shale production in the United States, the world’s top oil consumer, which now rivals Saudi Arabia and Russia as the world’s biggest producer.

“Less OPEC oil on the market enhances the opportunity for American energy to fill needs around the world, and will help us achieve energy dominance,” Ryan Sitton from the Texas Railroad Commission, which regulates the large Texan oil industry, told Reuters.

(Additional reporting by Ahmad Ghaddar, Vladimir Soldatkin and Shadia Nasralla; Writing by Dmitry Zhdannikov; Editing by Dale Hudson, Pravin Char and Sonya Hepinstall)

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Retailers rebound to boost S&P, Nasdaq to record highs

U.S. stocks rose on Thursday, with the SP 500 and Nasdaq Composite scaling new highs, buoyed by strong earnings reports from the embattled retailer sector.

Sentiment also got a boost after the minutes of the Federal Reserve’s latest meeting showed policymakers expected the economy to pick up momentum and an interest rate hike would come sooner rather than later.

While gains were broad based, the consumer discretionary index’s .SPLRCD 1.03 percent surge was easily the highest among the 11 major SP sectors.

Best Buy BBY.O surged as much as 19.4 percent to a record high of $60.24, making it the top gainer on the SP, as its comparable sales unexpectedly rose last quarter.

Tommy Hilfiger-owner PVH (PVH.N) was second-biggest SP gainer with a 7 percent jump to a near 6-month high on strong results. Sears (SHLD.O) was up about 14 percent after posting its first quarterly profit in nearly two years.

Analysts also said the SP 500 being able to break through and stay above the 2,400 level for the third straight session has also provided technical support.

“Breaking through 2,400 on the SP 500 is a bit of a technical help, so you’re getting the benefit of people coming into the market since that level was such a staunch resistance for so long,” said Robert Pavlik, chief market strategist at Boston Private Wealth in New York.

At 12:42 p.m. ET the Dow Jones Industrial Average .DJI was up 73.14 points, or 0.35 percent, at 21,085.56.

The SP 500 .SPX was up 11.66 points, or 0.484946 percent, at 2,416.05, easing off from a high of 2,417.58.

The Nasdaq Composite .IXIC was up 44.60 points, or 0.72 percent, at 6,207.62. The index hit an all-time high of 6,209.05.

Amazon (AMZN.O), up 1.8 percent, gave the biggest boost to the SP and Nasdaq. The stock hit a record of $999, on the brink of breaking through $1,000 for the first time ever.

Only two SP indexes in the red, led by the energy .SPNY sector. The index sank 1.29 percent along with crude oil prices after the OPEC agreed to extend output cuts, but not by as much as investors had hoped for. [O/R]

Minutes of the Fed’s latest meeting, released on Wednesday afternoon, showed that while policymakers backed a rate hike, they also agreed to hold off until it was clear a recent slowdown in the economy was temporary.

Fed officials also proposed a plan to wind down its $4.5 trillion of debt securities, including a limit on how much would be allowed to fall off the balance sheet each month.

“The Fed reducing the size of their balance sheet over a gradual period rather than doing that all at one time or in larger chunks is a positive,” said Pavlik.

Advancing issues outnumbered decliners on the NYSE by 1,504 to 1,331. On the Nasdaq, 1,482 issues rose and 1,260 fell.

The SP 500 index showed 84 new 52-week highs and nine new lows, while the Nasdaq recorded 118 new highs and 44 new lows.

(Reporting by Tanya Agrawal in Bengaluru; Editing by Savio D’Souza)

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Promoting Islam in Our Schools

Memorizing the Islamic conversion prayer. Reciting the Five Pillars of Islam. Affirming that Christians are not as strong in their faith as Muslims. Several school districts across the nation are requiring their students to study Islam. And parents aren’t happy about it.

A 1963 Supreme Court decision allows for historical instruction about religions. But it seems that Islam is the only religion that is okay to promote. Some parents believe the Islamic teaching has gone too far. And now there’s a lawsuit.

The Court Opens the Door

The Supreme Court in Abington v. Schempp ruled that organized religious events violated the First Amendment. Schools could not require Bible reading or praying in class. But they could offer courses on the Bible or religion as a secular subject. The Court said that “education is not complete without a study of comparative religion or the history of religion and its relationship to the advancement of civilization.”

Those who know Abington know it as the case that kicked Bible reading out of public education. But it left the door open for a historical study of the Christianity — or any other religion. Now the study of Islam is making its way into the school systems nationwide.

Islamic teaching in public schools has alarmed several parents. They believe it has crossed the line from a historical study to indoctrination. They believe that school districts are promoting Islam over other religions.

The Problem with Teaching Islam

A La Plata, California, High School parent brought a lawsuit against the school. John Kevin Wood and his wife said that his daughter’s school required her to complete assignments that endorsed Islam.

The school required her to affirm that “Most Muslims’ faith is stronger than the average Christian.” The school required all students to recite the Islamic conversion prayer. The prayer, called the Shahada, states that “There is no god but Allah and Mohammed is his prophet.” The school also required students to profess the Five Pillars of Islam.

Wood said his daughter’s school forced her to write statements that offended and denied her Christian beliefs. When she refused to complete the assignments, she received failing grades. Her teacher sent her to the school library away from her classmates. As a result, she felt ostracized because of her Christian beliefs.

Wood contacted the school and asked for alternative assignments. The school’s principal refused. Wood informed the principal that he would contact an attorney and the media. The school then reportedly responded by obtaining a restraining order against Wood. He could no longer pick up his daughter on school property or attend parent-teacher meetings.

La Plata High School did not teach Christianity the same way as Islam, according to Wood. Christianity was taught for one day—disparagingly. Islam was taught for two weeks—sympathetically. The lesson did not require students to learn any of Christianity’s tenets, faith statements or creeds. Nor were the students required to learn any of Judaism’s.

It Happens in Other Schools Too

It happens in other schools, too. Parents across the country have complained that their child’s school required them to:

  • Dress up as a Muslim, learn prayers and scriptures from the Quran;
  • Memorize the Five Pillars of Islam and listen to a Muslim prayer;
  • Memorize and recite the Shahada, or the conversion prayer; and
  • Write the Shahada in Arabic as part of a calligraphy lesson.

Parents of students at several schools complain that teachers do not teach non-Muslim religions. And that is the crux of the issue for many parents.

The Ten Commandments would never be a lesson requirement, said one New Jersey mom. “If Islam is taught, teach Christianity, too. [My son] couldn’t even put a Bible verse in his presentation that was student-initiated. So they’re not only teaching Islam, but they’re not allowing students to be free in expressing their [Christian] religious beliefs.”

Many school districts indoctrinate students in Islam, said Thomas More Law Center President Richard Thompson. “This is happening in public schools across the country. And [parents] must take action to stop it.”

The First Amendment’s Establishment Clause

The Establishment Clause prohibits the government from establishing a religion. The Supreme Court decided in Lemon v. Kurtzman (1971) that a three-part test would govern what constitutes “establishment of a religion.”  Under the “Lemon test,” government can make laws or policy about religion if the reason for the law is secular, it neither promotes nor inhibits religion, and it doesn’t excessively entangle church and state.

Teaching about Islam in schools may not seem at first glance to be a problem. But the law is clear that the government may not adhere to, promote or inhibit a particular religion. This includes public school districts. Teaching Islam as a secular subject along with other religions equally is lawful. When the teaching of Islam promotes the religion above others, that is against the law. This is found in the Establishment Clause of our First Amendment.

The First Amendment Center at Vanderbilt University stated these lessons can go too far. In particular, some “hands-on” activities border on unconstitutional endorsement of religion. They added, “Would any of these schools dream of acting out the Catholic Mass or inviting a Protestant minister to give a sermon in the gym?”

Even if school districts have good intentions, they can still cross the line, the Center noted. “However well-intentioned, including religions and cultures by violating the Constitution doesn’t help anyone. … All of us have an important stake in making sure that First Amendment principles are applied fairly and justly to each and every individual and group in the United States.”

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Ben & Jerry’s Proves Same-Sex ‘Marriage’ Is Not Marriage

 It certainly wasn’t their intent, but Ben and Jerry’s, the famous, specialty ice cream company, has given us further evidence that same-sex “marriage” is not marriage. How so?

The company, which has long been known for its left-wing activism, went one step further this week. As a headline in the Daily Mail announced, “Ben Jerry’s BAN customers from ordering two scoops of the same ice cream until Australia legalises gay marriage.”

That’s right. If you want two scoops of New York Super Fudge Chocolate on your ice cream cone, you can’t have it. You’ll have to settle for just one scoop or mix in another flavor.

This is Ben and Jerry’s way of sending a message: “We believe love comes in all flavours.”

As they explained on their website: “Imagine heading down to your local Scoop Shop to order your favourite two scoops of Cookie Dough in a waffle cone,” the company wrote on its website.

But you find out you are not allowed … you’d be furious!

This doesn’t even begin to compare to how furious you would be if you were told you were not allowed to marry the person you love.

So we are banning two scoops of the same flavour and encouraging our fans to contact their MPs to tell them that the time has come make same sex marriage legal! Love comes in all flavours!

Regulating Scoops is a Slippery Slope

You might say, “Well, this sounds somewhat stupid, but how does it prove that same-sex marriage is not marriage?”

I’ll explain in a moment. But first, Ben and Jerry’s should realize they’re heading down a slippery slope.

After all, will they ban three-scoop cones of any flavor until Australia legalizes throuples? And will they ban one scoop of one flavor plus two scoops of another flavor until Australia legalizes polygamy? Hey, love is love, right? And if I have the right to marry the one I love, how about the ones I love? Why not?

The absurdities go on and on.

As my assistant Dylan asked after reading the Daily Mail article,

And perhaps there’s a current loophole (and bigotry) to their current position. What if some chocolate ice cream identifies as vanilla? (I mean, who are they to be so primitive as to label all chocolate ice cream chocolate just because that’s what society has done through the ages.) Can you then go ahead and get a scoop of chocolate and a scoop of trans-flavored (chocolate to vanilla) ice cream?

In all seriousness, I understand that Ben and Jerry’s is not comparing human beings to scoops of ice cream. The company is making a point and showing solidarity. They believe they are standing up for justice and equality. I get all that.

Still, the nature of their protest is self-refuting, demonstrating the point that same-sex “marriage” is not marriage at all.

Let me explain.

Mars + Mars

Let’s say that chocolate represents men and vanilla represents women. You take one scoop of chocolate and one scoop of vanilla and what do you get? Something new. Something distinct. A unique blend of the two flavors. Two entities that are different and yet similar now become one.

That is a picture of marriage, which is the unique blend of male and female, the unique union of two different and yet similar entities. Borrowing imagery from John Gray, marriage is the union of Mars + Venus.

Going back to ice cream, what happens if you get two scoops of chocolate or two scoops of vanilla? What do you end up with? More of the same. The same multiplied. No change in color or flavor. Nothing new created out of the union. You simply have Mars + Mars or Venus + Venus, which does not equal Mars + Venus.

Do you see the point?

A same-sex couple cannot demonstrate the fullness of marriage, because they are missing the essential components of marriage.

I’m sure gay couples will say that their union brings together very different parts and make them into one new, harmonious whole. But marriage is more than that (otherwise every friendship would be a marriage of sorts).

Marriage has always served the purpose of bringing together the uniquely different-but-same entities of male and female. Through the two of them becoming one, a new entity is created: a paired couple. And by design, that paired couple, biologically made for one another, can produce brand new life.

No same-sex couple in the world, however loving or committed they may be, can produce new life in this way. Nor can any same-sex couple demonstrate the fullness of marriage because it is missing the essential components of marriage: Not just two people, but one male and one female.

Quite unintentionally, Ben and Jerry’s has just reminded us of this reality. And while I do appreciate their zeal for cultural causes, maybe they should turn their attention to other pressing issues, like the health risks of obesity.

On second thought, they might not want to tackle that one at all.

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Existing-Home Sales Slip 2.3 Percent in April; Days on Market Falls to Under a Month

WASHINGTON (May 24, 2017) — Stubbornly low supply levels held down existing-home sales in April and also pushed the median number of days a home was on the market to a new low of 29 days, according to the National Association of Realtors®.

Total existing-home sales1,, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, dipped 2.3 percent to a seasonally adjusted annual rate of 5.57 million in April from a downwardly revised 5.70 million in March. Despite last month’s decline, sales are still 1.6 percent above a year ago and at the fourth highest pace over the past year.

Lawrence Yun, NAR chief economist, says every major region except for the Midwest saw a retreat in existing sales in April. “Last month’s dip in closings was somewhat expected given that there was such a strong sales increase in March at 4.2 percent, and new and existing inventory is not keeping up with the fast pace homes are coming off the market,” he said. “Demand is easily outstripping supply in most of the country and it’s stymieing many prospective buyers from finding a home to purchase.” 

The median existing-home price2 for all housing types in April was $244,800, up 6.0 percent from April 2016 ($230,900). April’s price increase marks the 62nd straight month of year-over-year gains.

Total housing inventory3 at the end of April climbed 7.2 percent to 1.93 million existing homes available for sale, but is still 9.0 percent lower than a year ago (2.12 million) and has fallen year-over-year for 23 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.6 months a year ago.  

“Realtors® continue to voice the frustration their clients are experiencing because of the insufficient number of homes for sale,” added Yun. “Homes in the lower- and mid-market price range are hard to find in most markets, and when one is listed for sale, interest is immediate and multiple offers are nudging the eventual sales prices higher.”

Properties typically stayed on the market for 29 days in April, which is down from 34 days in March and 39 days a year ago, and surpasses last May (32 days) as the shortest timeframe since NAR began tracking in May 2011. Short sales were on the market the longest at a median of 88 days in April, while foreclosures sold in 46 days and non-distressed homes took 28 days. Fifty-two percent of homes sold in April were on the market for less than a month (a new high).

Inventory data from® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in April were San Jose-Sunnyvale-Santa Clara, Calif., 23 days; San Francisco-Oakland-Hayward, Calif., 25 days; Denver-Aurora-Lakewood, Colo., 27 days; and Seattle-Tacoma-Bellevue, Wash., 28 days.  

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage declined for the first time in six months, dipping to 4.05 percent in April from 4.20 percent in March. The average commitment rate for all of 2016 was 3.65 percent.

“Mortgage rates have been stuck in a holding pattern in recent months, which is a relief for spring homebuyers,” said Yun. “With price growth showing little sign of slowing, prospective first-time buyers will be the most sensitive to any sudden uptick in rates in the months ahead.”  

Matching the highest percentage since last September, first-time buyers were 34 percent of sales in April, which is up from 32 percent both in March and a year ago. NAR’s 2016 Profile of Home Buyers and Sellers – released in late 20164 – revealed that the annual share of first-time buyers was 35 percent.

President William E. Brown, a Realtor® from Alamo, California, says it’s not only prospective homebuyers who are facing housing issues; many middle-income homeowners who benefit from the mortgage interest deduction could be slapped with a tax increase if some of the tax reform proposals currently being discussed go through. A recently released study commissioned by NAR titled, “Impact of Tax Reform Options on Owner-Occupied Housing,” estimated taxes would rise on average by $815 each year for homeowners with adjusted gross incomes between $50,000 and $200,000. Furthermore, home values could shrink by an average of more than 10 percent, with areas with higher property taxes or state income taxes experiencing an even steeper decline.

“Realtors® support tax reform, but any plan that effectively nullifies the current tax benefits of owning a home is a non-starter for the roughly 75 million homeowners and countless prospective first-time buyers that see owning a home as part of their American Dream,” said Brown. Thousands of Realtors® took this message to Capitol Hill last week during NAR’s annual legislative meetings in Washington, D.C.

All-cash sales were 21 percent of transactions in April, down from 23 percent in March and 24 percent a year ago. Individual investors, who account for many cash sales, purchased 15 percent of homes in April, unchanged from March but up from 13 percent a year ago. Fifty-seven percent of investors paid in cash in April.

Distressed sales5 – foreclosures and short sales – were 5 percent of sales in April, down from 6 percent in March and 7 percent a year ago. Three percent of April sales were foreclosures and 2 percent were short sales. Foreclosures sold for an average discount of 18 percent below market value in April (16 percent in March), while short sales were discounted 12 percent (14 percent in March).

Members of the media are invited to attend the upcoming Sustainable Homeownership Conference on June 9 at University of California’s Memorial Stadium in Berkeley. In celebration of National Homeownership Month, the conference brings together experts to examine housing trends and real estate’s positive impacts. NAR’s Brown and Yun and Berkeley Hass Real Estate Group Chair Ken Rosen are among the prominent experts scheduled to speak. To register contact Adam DeSanctis, 202-383-1178 or  

Single-family and Condo/Co-op Sales

Single-family home sales decreased 2.4 percent to a seasonally adjusted annual rate of 4.95 million in April from 5.07 million in March, but are still 1.6 percent above the 4.87 million pace a year ago. The median existing single-family home price was $246,100 in April, up 6.1 percent from April 2016.

Existing condominium and co-op sales declined 1.6 percent to a seasonally adjusted annual rate of 620,000 units in April, but are still 1.6 percent higher than a year ago. The median existing condo price was $234,600 in April, which is 5.6 percent above a year ago.

Regional Breakdown

April existing-home sales in the Northeast dipped 2.7 percent to an annual rate of 730,000, and are now 2.7 percent below a year ago. The median price in the Northeast was $267,700, which is 1.6 percent above April 2016.

In the Midwest, existing-home sales increased 3.8 percent to an annual rate of 1.36 million in April, but are 0.7 percent below a year ago. The median price in the Midwest was $194,500, up 7.8 percent from a year ago.

Existing-home sales in the South in fell 5.0 percent to an annual rate of 2.30 million, but are still 3.6 percent above April 2016. The median price in the South was $217,700, up 7.9 percent from a year ago.

Existing-home sales in the West declined 3.3 percent to an annual rate of 1.18 million in April, but are still 3.5 percent above a year ago. The median price in the West was $358,600, up 6.8 percent from April 2016.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

NOTE:  For local information, please contact the local association of Realtors® for data from local multiple listing services. Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.

1Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR rebenchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.

Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90 percent of total home sales, are based on a much larger data sample – about 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

2The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.

The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.

3Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90 percent of transactions and condos were measured only on a quarterly basis).

4Survey results represent owner-occupants and differ from separately reported monthly findings from NAR’s Realtors® Confidence Index, which include all types of buyers. Investors are under-represented in the annual study because survey questionnaires are mailed to the addresses of the property purchased and generally are not returned by absentee owners. Results include both new and existing homes.

5Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s Realtors® Confidence Index, posted at

NOTE: NAR’s Pending Home Sales Index for April is scheduled for release on May 31, and Existing-Home Sales for May will be released June 21; release times are 10:00 a.m. ET.

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Moody’s downgrades China, warns of fading financial strength as debt mounts

SHANGHAI/BEIJING Moody’s Investors Service downgraded China’s credit ratings on Wednesday for the first time in nearly 30 years, saying it expects the financial strength of the economy will erode in coming years as growth slows and debt continues to rise.

The one-notch downgrade in long-term local and foreign currency issuer ratings, to A1 from Aa3, comes as the Chinese government grapples with the challenges of rising financial risks stemming from years of credit-fueled stimulus.

“The downgrade reflects Moody’s expectation that China’s financial strength will erode somewhat over the coming years, with economy-wide debt continuing to rise as potential growth slows,” the ratings agency said in a statement, changing its outlook for China to stable from negative.

China’s Finance Ministry said the downgrade, Moody’s first for the country since 1989, overestimated the risks to the economy and was based on “inappropriate methodology”.

“Moody’s views that China’s non-financial debt will rise rapidly and the government would continue to maintain growth via stimulus measures are exaggerating difficulties facing the Chinese economy, and underestimating the Chinese government’s ability to deepen supply-side structural reform and appropriately expand aggregate demand,” the ministry said in a statement.

China’s leaders have identified the containment of financial risks and asset bubbles as a top priority this year. All the same, authorities are moving cautiously to avoid knocking economic growth, gingerly raising short-term interest rates while tightening regulatory supervision.

At the same time, Beijing’s need to deliver on official growth targets is likely to make the economy increasingly reliant on stimulus, Moody’s said.

“While ongoing progress on reforms is likely to transform the economy and financial system over time, it is not likely to prevent a further material rise in economy-wide debt, and the consequent increase in contingent liabilities for the government,” it said.

While the downgrade is likely to modestly increase the cost of borrowing for the Chinese government and its state-owned enterprises (SOEs), it remains comfortably within the investment grade rating range.

World stocks inched lower after the move, though Shanghai’s main index .SSEC recouped early losses to end marginally higher. [MKTS/GLOB]

“After being very much at the front and center of global risk sentiment at the beginning of last year, the Chinese slowdown story has been almost forgotten, with politics throughout Europe and the U.S. taking the limelight,” said David Cheetham, chief market analyst at brokerage XTB.

The yuan currency CNH=D3 briefly dipped against the U.S. dollar in offshore trading, as did the Australian dollar AUD=, often seen as a proxy for China risk.

“It’s going to be quite negative in terms of sentiment, particularly at a time when China is looking to de-risk the banking system (and) when there’s going to be some potential restructuring of SOEs,” said Vishnu Varathan, Asia head of economics and strategy at Mizuho Bank’s Treasury division.


In March 2016, Moody’s cut its outlook on China’s ratings to negative from stable, citing rising debt and uncertainty about authorities’ ability to carry out reforms.

Rival ratings agency Standard Poor’s downgraded its outlook to negative in the same month. SP’s AA- rating is one notch above both Moody’s and Fitch Ratings, leading to speculation among analysts that SP could also downgrade soon.

“We understand the risk and the reason for downgrade, but due to China being a unique system – (with a) closed capital account and strong government control over all important sectors – it can tolerate a higher debt level,” said Edmund Goh, a Kuala Lumpur-based investment manager at Aberdeen Asset Management.

The slowing economy has become an increasingly sensitive topic in China, with authorities directing mainland Chinese economists and journalists toward more positive messaging.

Authorities have stepped up efforts over the last several months to curb debt and housing risks, and a raft of recent data has signaled a cooling in the economy, which grew a solid 6.9 percent in the first quarter.

China’s potential economic growth was likely to slow toward 5 percent in coming years, but the cooldown is likely to be gradual due to further doses of fiscal stimulus, Moody’s said.


The Finance Ministry said continued mid- to high-level economic growth “will provide fundamental support to fend off local government debt risks. China’s government debt risks will not change dramatically in 2018-2020 from 2016.”

The state planner, the National Development and Reform Commission (NDRC), said debt risks are generally controllable as measures to lower corporate leverage have achieved initial results, and systemic risks from debt are relatively low.

Government-led stimulus has been a major driver of China’s growth over recent years, but has also been accompanied by runaway credit growth that has created a mountain of debt – now standing at nearly 300 percent of gross domestic product (GDP).

Julian Evans-Pritchard, China economist at Capital Economics in Singapore, said steps to resolve the debt overhang, such as debt-for-equity swaps at state companies, were insufficient to deal with problem.

“It’s reached the point where the bad debt problem is just so large the government will have to step in to resolve it at some point, and that obviously means at some point a sizeable increase in government debt,” he said.

Moody’s said it expects the government’s direct debt burden to rise gradually toward 40 percent of GDP by 2018 “and closer to 45 percent by the end of the decade”.

A growing number of economists believe that a massive bank bailout may be inevitable in China as bad loans mount. Last September, the Bank for International Settlements (BIS) warned that excessive credit growth in China signaled an increasing risk of a banking crisis within three years.

Moody’s lowered Agricultural Bank of China’s (601288.SS) long-term deposit and senior unsecured debt ratings to A2 from A1, on par with Bank of Communications’ (601328.SS), which the agency put on review for possible downgrade.

Ratings for state-owned Bank of China (601988.SS), China Construction Bank (601939.SS) and Industrial and Commercial Bank of China (601398.SS) were affirmed at A1, with Moody’s citing their very high level of government support.

For a graphic on China’s debt problem, click here

(Additional reporting by Ryan Woo and Sue-lin Wong in BEIJING, Nichola Saminather in SINGAPORE, John Ruwitch and Andrew Galbraith in SHANGHAI and Umesh Desai in HONG KONG; Writing by Lincoln Feast; Editing by Shri Navaratnam, Kim Coghill and Ian Geoghegan)

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Home sales fall as tight supply boosts prices

WASHINGTON U.S. home resales fell more than expected in April, weighed down by a chronic shortage of houses on the market that is keeping house prices elevated and sidelining prospective buyers.

The National Association of Realtors said on Wednesday existing home sales declined 2.3 percent to a seasonally adjusted annual rate of 5.57 million units last month.

Despite the decline, April’s sales pace was the fourth highest over the past 12 months. March’s sales pace was revised down to 5.70 million units, which was still the highest level since February 2007, from the previously reported 5.71 million units.

“Lack of supply moving through the seasonal ramp-up in sales in the spring selling season slowed sales rather than demand,” said Ted Wieseman, an economist at Morgan Stanley in New York.

Economists had forecast sales falling 1.1 percent to a 5.65 million-unit rate. Sales were up 1.6 percent from April 2016, also underscoring the housing market’s underlying strength.

While the number of homes on the market rose 7.2 percent to 1.93 million units from March, supply was down 9.0 percent from a year ago. Housing inventory has dropped for 23 straight months on a year-on-year basis.

As a result, the median house price increased 6.0 percent from a year ago to $244,800 in April, the highest level since June 2016. That was the 62nd straight month of year-on-year price gains.

With recent data showing a drop in homebuilding and a plunge in new home sales in April, weak home resales suggest residential investment will probably make a small contribution to gross domestic product in the second quarter.

Residential investment added half a percentage point to the economy’s 0.7 percent annualized growth pace in the first quarter.

U.S. financial markets were little moved by the report as investors awaited minutes of the Federal Reserve’s May policy meeting later on Wednesday.

Houses typically stayed on the market for 29 days last month, the shortest period since the NAR started tracking the series in May 2011. That was down from 34 days in March and 39 days a year ago.

Demand for housing is being driven by a tight labor market, marked by a 4.4 percent unemployment rate, which is boosting employment opportunities for young Americans.

The housing market also remains supported by historically low mortgage rates, with the 30-year fixed mortgage rate hovering just above 4.0 percent. But rising building material costs as well as shortages of lots and labor have left builders struggling to fill the inventory gap.

The NAR estimates housing starts and completions should be in a range of 1.5 million to 1.6 million units to eliminate the persistent shortage. Housing starts are running at about a rate of 1.2 million units and completions around a pace of 1 million units.

A separate report from the Mortgage Bankers Association onWednesday showed applications for loans to purchase homes fell 1.0 percent last week.

Last month, sales fell in the Northeast, West and South regions, but rose in the Midwest.

At April’s sales pace, it would take 4.2 months to clear the stock of houses on the market, up from 3.8 months inMarch. A six-month supply is viewed as a healthy balance between supply and demand.

First-time buyers accounted for 34 percent of transactions last month, still well below the 40 percent share that economists and realtors say is needed for a robust housing market, but up from 32 percent a year ago.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

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Wall St. creeps higher; Fed minutes eyed

U.S. stocks were modestly higher late on Wednesday morning, aiming for a fifth straight day of gains, as investors awaited Federal Reserve minutes of its May meeting that could cement the chances of an interest rate hike next month.

U.S. interest rates futures were steady. Fed funds futures implied traders priced in about an 83 percent chance of a rate hike in June, little changed from Tuesday’s close.

Investors are also awaiting more details regarding the Fed trimming its $4.5 trillion balance sheet, when the central bank releases the minutes at 2 p.m. ET.

“The real take from the Fed is that a June rate hike still seems to pretty much baked in the cake but I’m going to be looking at guidance as how they expect to start spending down their excess assets,” said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Mass.

While recent economic data has been mixed, with signs of a dip in consumer sentiment and spending, the job market continues to strengthen. That could give the Fed impetus to continue with its path of monetary tightening.

Data on Wednesday showed home resales fell more than expected in April as a tight supply boosted prices and sidelined prospective buyers. A tightening labor market and historically low mortgage rates have helped the housing market recovery.

McMillan said the recent mixed economic data did not concern him as a lot of it was due to from first-quarter seasonality issues and that he expected an improvement in the current quarter.

At 10:56 a.m. ET the Dow Jones Industrial Average .DJI was up 31.67 points, or 0.15 percent, at 20,969.58, the SP 500 .SPX was up 2.15 points, or 0.08 percent, at 2,400.57 and the Nasdaq Composite .IXIC was up 9.63 points, or 0.16 percent, at 6,148.34.

Seven of the 11 major SP 500 sectors were higher, led by the materials index’s .SPLRCM 0.67 percent rise.

Financials .SPSY, the index which will benefit the most from higher interest rates, was off 0.21 percent after four days of gains.

The consumer staples index .SPLRCD fell 0.12 percent, weighed down by weak report from Lowe’s, the No. 2 U.S. home improvement chain.

Lowe’s (LOW.N) dropped 4.3 percent to $78.82 after it reported a lower-than-expected profit and comparable sales. Bigger rival Home Depot (HD.N) was off 0.2 percent.

Jewelry retailer Tiffany (TIF.N) sank 6.8 percent after posting a surprise drop in comparable sales. Signet Jewelers (SIG.N), which reports on Thursday, was down 6 percent. The two were the biggest losers on the SP.

At the other end was Intuit (INTU.O), which jumped 7.2 percent after the tax-preparation software maker posted a profit topped estimates and also raised its revenue forecast.

Advancing issues outnumbered decliners on the NYSE by 1,684 to 1,011. On the Nasdaq, 1,506 issues rose and 1,107 fell.

The SP 500 index showed 33 new 52-week highs and 10 new lows, while the Nasdaq recorded 64 new highs and 32 new lows.

(Reporting by Tanya Agrawal in Bengaluru; Editing by Savio D’Souza)

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Trump budget to increase growth by boosting investment, labor force: Mnuchin

WASHINGTON The Trump administration believes its budget plan will boost economic growth by fostering capital investment and creating jobs for workers who gave up their job hunts during tough times, Treasury Secretary Steven Mnuchin said on Tuesday.

“One component of this is making sure we can create jobs for people who want jobs and will come back into the workforce,” Mnuchin said at an event on fiscal policy. “The other component is productivity and capital investment.”

(Reporting by Jason Lange; Editing by James Dalgleish)

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Wall St. trims gains as weak data weighs ahead of Trump budget

U.S. stocks trimmed their gains on Tuesday morning, weighed down by weak economic data, while investors await more details from President Donald Trump’s first full budget plan aimed at slashing government spending.

Trump is set to propose a raft of politically sensitive cuts, including to healthcare and food assistance programs for the poor, with the aim of chopping government spending by $3.6 trillion and balancing the budget over the next decade.

“Investors are interested simply because it does give an indication where Trump is going to try to influence the agenda and there is some concern over whether he has reduced negotiating power because of his own political difficulties at the moment,” said Lisa Kopp, head of traditional investments at U.S. Bank Wealth Management in Minneapolis.

Congress holds the federal purse strings and often ignores presidential budgets, which are proposals and may not take effect in their current form.

Economic data showed new single-family home sales in April tumbled from near a 9-1/2-year high, while manufacturing activity for May fell to its lowest level since September.

While the job market continues to strengthen, other pieces of data have shown a dip in consumer sentiment and spending, which makes up about two-thirds of U.S. economic activity.

“We’re likely to be in a sideways period in the market for the next few weeks as there are quite a bit of pieces of news the market is digesting including geopolitical developments in Washington and globally,” said Kopp.

At 10:56 a.m. ET the Dow Jones Industrial Average .DJI was up 39.21 points, or 0.19 percent, at 20,934.04, the SP 500 .SPX was up 3.5 points, or 0.14 percent, at 2,397.52 and the Nasdaq Composite .IXIC was down 1.80 points, or 0.03 percent, at 6,131.82.

The market also seemed to have shrugged off news of a suicide attack in Britain. U.S. futures had slipped slightly on Monday evening, before recovering, on news of the attack that killed 22 people and wounded many more at a pop concert in the English city of Manchester.

Eight of the 11 major SP 500 sectors were higher, with the defensive sectors such as utilities .SPLRCU and consumer staples .SPLRCS leading the gainers.

Consumer discretionary .SPLRCD was the biggest laggard with a 0.32 percent drop, as auto part retailers weighed.

Autozone (AZO.N) fell 8.5 percent to $603.71 after the auto part retailer’s quarterly results came in below expectations. Advance Auto Parts (AAP.N), O’Reilly Automotive (ORLY.O) and Genuine Parts (GPC.N) were down between 2.6 percent and 3.9 percent.

Shares of Take-Two (TTWO.O) reversed course from premarket to rise as much as 11 percent to a record high of $76.70 as the videogame maker’s full-year forecast was not as bad as feared.

Advancing issues outnumbered decliners on the NYSE by 1,607 to 1,124. On the Nasdaq, 1,412 issues fell and 1,213 advanced.

The SP 500 index showed 40 new 52-week highs and seven new lows, while the Nasdaq recorded 60 new highs and 39 new lows.

(Reporting by Tanya Agrawal; Additional reporting by Gayathree Ganesan; Editing by Savio D’Souza)

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U.S. government to sue Fiat Chrysler over excess emissions: sources

WASHINGTON The U.S. government plans to file a civil lawsuit on Tuesday accusing Fiat Chrysler Automobiles NV (FCHA.MI) of using software to bypass emission controls in diesel vehicles, two sources briefed on the matter said.

The U.S. Justice Department lawsuit, expected to be filed in Detroit, will say the Italian-American automaker placed undeclared “defeat devices,” or auxiliary emissions controls, in 2014-2016 Fiat Chrysler diesel vehicles, the sources said.

Fiat Chrysler did not immediately comment. Its shares fell 3 percent in the minutes after Reuters’ report of the suit.

In January, the U.S. Environmental Protection Agency and California accused Fiat Chrysler of illegally using undisclosed software to allow excess diesel emissions in 104,000 U.S. 2014-2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks.

Fiat Chrysler said on Friday it plans to update software that it expects will resolve the concerns of U.S. regulators about excess emissions in those vehicles.

The January notice was the result of regulators’ investigation of rival Volkswagen AG’s (VOWG_p.DE) excess emissions.

Fiat Chrysler has applied for certification to sell 2017 diesel models from U.S. and California regulators and said it was in talks to win approval for a software update to address regulators’ concerns about emissions in vehicles on the road.

The software update would begin rolling out once the EPA and California Air Resources Board approved it, Fiat Chrysler said Friday. The company said it does not anticipate any impact on performance or fuel efficiency.

Reuters reported on May 17 that the Justice Department was preparing to file a civil lawsuit against the automaker.

A federal judge in California set a Wednesday hearing on a series of lawsuits filed by owners of vehicles and some dealers against Fiat Chrysler.

(Reporting by David Shepardson; Editing by Jeffrey Benkoe and Nick Zieminski)

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House IT Aides Fear Suspects in Hill Breach are Blackmailing Members With Their Own Data

Congressional technology aides are baffled that data-theft allegations against four former House IT workers — who were banned from the congressional network — have largely been ignored, and they fear the integrity of sensitive high-level information.

Imran Awan and three relatives were colleagues until police banned them from computer networks at the House of Representatives after suspicion the brothers accessed congressional computers without permission.

Five Capitol Hill technology aides told The Daily Caller News Foundation’s Investigative Group that members of Congress have displayed an inexplicable and intense loyalty towards the suspects who police say victimized them. The baffled aides wonder if the suspects are blackmailing representatives based on the contents of their emails and files, to which they had full access.

“I don’t know what they have, but they have something on someone. It’s been months at this point” with no arrests, said Pat Sowers, who has managed IT for several House offices for 12 years. “Something is rotten in Denmark.”

A manager at a tech-services company that works with Democratic House offices said he approached congressional offices, offering their services at one-fourth the price of Awan and his Pakistani brothers, but the members declined. At the time, he couldn’t understand why his offers were rejected but now he suspects the Awans exerted some type of leverage over members.

“There’s no question about it: If I was accused of a tenth of what these guys are accused of, they’d take me out in handcuffs that same day, and I’d never work again,” he said.

The Awans’ ban sent 20 members searching for new IT workers, but another contractor claims he’s had difficulty convincing offices to let him fill the void, even when he seemed like a shoo-in. He says he has the sense some members wrongly believed that he blew the whistle on the Awans’ theft and they were angry at him for it.

Politico reported the Awan crew is “accused of stealing equipment from members’ offices without their knowledge and committing serious, potentially illegal, violations on the House IT network.”

A House IT employee who requested anonymity said tech workers who have taken over some of those offices found that computers in some — but not all — offices were “thin clients” that sent all data to an offsite server in violation of House policies. Additionally, staffers’ iPhones were all linked to a single non-government iTunes account.

Awan began working for Democratic Rep. Debbie Wasserman Schultz of Florida in 2005, and his wife, his brother’s wife, and two of his brothers all appeared on the payrolls of various House Democrats soon after, payroll records show. They have collected $4 million since 2010.

For years, it was widely known that Awan, and eventually his 20-year-old brother Jamal, did the bulk of the work for various offices, while no-show employees were listed on members’ staffs in order to collect additional $165,000 salaries, workers said. This circumvented a rule that prevents any one staffer from making more than members of Congress.

Members were fiercely protective of the business, despite objectively shoddy work and requests for computer help routinely ignored for weeks, all said. An IT specialist who took over an Awan office said they did not keep an inventory of what hardware was there, and the office was paying for phone lines it hadn’t used in years.

“The number of offices they had would definitely be suspicious. The loyalty [members] had [coupled with] customer service that wasn’t there,” Sowers said.

One Democratic IT staffer said Awan “would come in and only help the member — he’d tell me this — because staff come and go. There was one staffer whose computer was broken and said, ‘I’m not going to pay my invoices until you fix my computer,’ and Imran went to the member, and they fired [the staffer who complained] that day. Imran has that power.”

Sowers said, “I love the Hill but to see this clear lack of concern over what appears to be a major breach bothers me. Everyone has said for years they were breaking the rules, but it’s just been a matter of time.”

An employee of a third private company with House IT office contracts, who like most of the others requested anonymity, said the Awans had more offices than anyone, yet “there’s networkers meetings once a week and I never saw them ever come to them. We have an email group; I never saw them contribute or reply.”

The investigation goes far beyond the theft of millions of dollars. The employees could read all emails dozens of members of Congress sent and received, as well as access any files members and their staff stored. Court records show the brothers ran a side business that owed $100,000 to an Iranian fugitive who has been tied to Hezbollah, and their stepmother says they often send money to Pakistan.

“When you’re an admin for an office, yes, you have access to everything, you’re the one providing access for others,” the IT specialist said.

Wasserman Schultz, the victim of a disastrous hack while she was chairman of the Democratic National Committee, renamed Awan an “advisor” to circumvent the Capitol Police’s computer network ban on the brothers. Ohio Democratic Rep. Marcia Fudge’s office told Politico a month after the ban that she had not fired Imran either.

After Wasserman Schultz and Fudge, as well as New York Democratic Reps. Gregory Meeks and Yvette Clarke and the House Democratic Caucus office, retained the Awans, the incumbents or their staffs encouraged newly-elected members to place the family on their payrolls.

“You’d think in the caucus they’d know these guys were working for all of them and they couldn’t possibly support all of them. Someone must have been turning a blind eye,” the IT specialist said.

“You have the power to shut down the office, remove all their data and lock everyone out. It’s got to be a trusted adviser. How could you not see this? Maybe it’s not specifically blackmail, maybe it’s, you knew this was going on and let me do this” for years, the specialist continued.

Another Democratic IT contractor said members “are saying don’t say anything, this will all blow over if we all don’t say anything.” The Awans “had [members] in their pocket,” and “there are a lot of members who could go down over this.”


Read more from this ongoing investigation.

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Pence, Notre Dame, and Respecting Speakers You Disagree With

Why not put into practice the civility and tolerance that will be expected in society?

Ixtlaly Estrada makes remarks after Notre Dame students walked out of the commencement ceremony in opposition opposed to the Trump administration’s policies, as Vice President Mike Pence was introduced at Notre Dame Stadium on Sunday, May 21, 2017, in South Bend, Ind.

By Alex Chediak

Published on May 23, 2017

Vice President Mike Pence gave the Commencement address at Notre Dame this past Sunday in his home state of Indiana. He praised Notre Dame as a “vanguard of freedom of expression and the free exchange of ideas.” But the Vice-President criticized the political correctness that has become common elsewhere.

Ironically, a group of graduates took the opportunity to walk out during the Vice-President’s speech. This was a planned demonstration on the part of 50-100 students, less than 5 percent of the 2,100 graduates gathered.

Some demonstrators had the rainbow colors associated with gay rights advocacy draped around their necks. One said she hoped the protest would “send a message” to the Notre Dame administration that someone “more inclusive” would have been preferred. Aside from his current role, when Mr. Pence was governor of Indiana, he signed the Religious Freedom Restoration Act. Critics claimed this Act would have violated the civil rights of the gay community. The Act was soon amended.

Honor the University, Respect the Invited Speaker

The Notre Dame students are entitled to disagree with Pence. To their credit, they walked out silently and respectfully. But boycotting the Vice President’s address makes little sense. As University President John I. Jenkins said in his introduction to Pence, “political leaders are necessary for society, and we must strive with them to serve the common good.” That was also true in 2009 when President Jenkins and his staff invited the new President Barack Obama to give the commencement address.

No matter the speaker, the respectful thing to do is to honor the university and the speaker by remaining in your seat.

If Pence has supported policies that are unpopular with some Notre Dame constituents, that was certainly true of President Obama as well. I don’t recall if Notre Dame students walked out on President Obama in 2009. But if they did, they were wrong to do so.

Sitting respectfully while an invited guest addresses you — even a guest you dislike or disagree with — is something expected of adults. It’s something I’ve done many times, both as a student at liberal bastion U.C. Berkeley and in more recent years.

All of the Notre Dame faculty were presumably required to attend commencement in 2009 and 2017. No doubt some of them did not vote for either the Obama-Biden or Trump-Pence tickets. On commencement day, it doesn’t matter. The distinguished speaker chosen by the university (their employer) is addressing the audience. The respectful thing to do is to honor the university and the speaker by remaining in your seat.

I understand that students tend to view themselves as paying customers. And the customer is always right. But after graduation, they are students no longer. Why not take that last day to put into practice the civility and tolerance that will be expected of them in society?  


Dr. Alex Chediak (Ph.D., U.C. Berkeley) is a professor at California Baptist University and the author of Thriving at College (Tyndale House, 2011), a roadmap for how students can best navigate the challenges of their college years. His latest book is Beating the College Debt Trap. Learn more about him at or follow him on Twitter (@chediak).

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  • You are expecting university graduates to be adults, from some of my personal experience this is not always the case.

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China slaps import duties on sugar; experts question impact

BEIJING China said on Monday it will impose hefty penalties on sugar imports after lobbying by domestic mills, but experts said the ruling may not go far enough to stem the flow of lower-priced sweetener into the world’s top importer.

The ruling, which will affect about a third of China’s annual sugar imports, introduces an extra tariff for the next three years on shipments that the government said had “seriously damaged” the domestic industry.

The move could dent imports from top growers such as Brazil and Thailand as it will close the big gap between Chinese and international prices. Chinese sugar prices are around double those on the London market.

But traders said the higher tariffs will also likely spur increased smuggling across China’s porous southern border, while some imports from major producers may be shipped through third-party nations excluded from the tariffs.

Sugar is one of the few sectors in which China struggles to compete given the higher costs of its smallholder farmers, who produce about 10.5 million tonnes of cane and beet sugar a year.

The country imports another 3 million tonnes of the sweetener a year, while Beijing has been trying to crack down on illegal shipments of as much as 2 million tonnes a year, sources have said.

“While smuggling has temporarily slowed, there is a risk that the incentives for smuggling are still strong and in fact could increase if domestic prices rise,” said Tom McNeill, director of Green Pool Commodities in Brisbane.

The latest ruling exempted about 190 smaller countries and regions from the new duty, including smaller producers such as the Philippines and Pakistan as well as Myanmar on its southern border.

“Of course it will support the domestic industry for a short time,” said a China-based trader. “(But) the global raw sugar market just needs to drop a little below 15 cents” to make it profitable to import into China.

Global raw sugar prices SBcv1 were at 17 cents per lb on Friday.

Global raw sugar prices



China currently allows 1.94 million tonnes of imports at a tariff of 15 percent as part of its commitment to the World Trade Organization.

Imports beyond this attract a 50 percent levy. Monday’s ruling will add an extra 45 percent duty to these imports in the current fiscal year, China’s Commerce Ministry said in a statement, taking the total to 95 percent. This will fall to 90 percent next year and 85 percent a year later.

The measures may also increase pressure on Beijing to sell more of its state reserves to prevent supplies tightening and prices spiking.

Sugar futures CSRcv1 initially fell more than 1 percent on the news as traders interpreted the move, which was in line with a draft proposal issued in April, as too lenient to staunch shipments. They were trading down 0.6 percent at 0650 GMT.

Thailand, the world’s third largest producer, played down the impact of the duty.

Its millers have a much lower shipping cost to China than rivals, Brazil and Australia, said Viboon Panitwong, chairman of the Thai Sugar Millers Corp Ltd, who did not expect the duty to significantly affect sugar exports.

Thailand exports about 300,000 to 400,000 tonnes of sugar to China a year, but sells much more to Cambodia and Myanmar, which then re-export sweetener to other countries.



(Reporting by Dominique Patton and Hallie Gu; Additional reporting by Patpicha Tanakasempipat in BANGKOK; Writing by Josephine Mason; Editing by Richard Pullin)

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Ford names James Hackett CEO as challenges mount

WASHINGTON/DEARBORN, Mich. Ford Motor Co (F.N) on Monday named James Hackett, who heads its unit developing self-driving cars, as chief executive officer, responding to investors’ growing unease about the U.S. automaker’s stock price and prospects.

Hackett, 62, a former CEO of furniture manufacturer Steelcase Inc, will take the helm in a broader shake-up aimed at speeding up decision-making and improving operations. He replaces Mark Fields, 56, who spent less than three years as CEO.

Ford shares were up 1.7 percent at $11.06 in morning trading. At Friday’s close, they had fallen 37 percent since Fields took over three years ago, at the peak of the U.S. auto industry’s recovery.

Now U.S. sales are slipping. The company’s profits are trailing those of larger rival General Motors (GM.N), whose shares fell 13 percent over the same period, and Ford’s market capitalization has fallen behind electric car maker Tesla Inc’s (TSLA.O).

Executive Chairman Bill Ford Jr. and the board have been unhappy with the company’s performance and sought reassurance that investments in self-driving cars, electric vehicles and ride services would pay off. The Ford family controls the automaker through a special class of voting rights stock.

Ford Jr. told reporters at a news conference that the automaker needs to make decisions faster.

“We have to modernize the business” and move “decisively to address underperforming areas,” he said.

The automaker has had a long-time “obsession with hierarchy,” he said, calling the new CEO “a cultural change agent.” Former Ford CEO Alan Mulally “really captured the hearts and minds of our employees … and I think that’s something you will see with Jim.”

Hackett, a former football player at the University of Michigan and interim athletic director, was named chairman of the Ford Smart Mobility LLC subsidiary in 2016 to focus on emerging businesses that include ridesharing and autonomous vehicles.

Ford said in February it was investing $1 billion in artificial intelligence company Argo AI to develop a virtual driver system for the automaker’s autonomous vehicle coming in 2021.


The upheaval at Ford underlines pressure on all three Detroit automakers to prove they can avoid losses as the U.S. market begins to slow from last year’s record sales.

Fiat Chrysler Automobiles NV (FCHA.MI) (FCAU.N) is fighting diesel emissions-cheating allegations from U.S. and California regulators following CEO Sergio Marchionne’s failed bid to find a merger partner.

GM CEO Mary Barra is fending off attacks from hedge fund Greenlight Capital, which wants to install three new directors and split the company’s stock.

In March, GM sold its money-losing Opel division to France’s PSA Group (PEUP.PA), effectively exiting Europe in a move Barra promised would free cash for share buybacks.

The shake-up at Ford may bring new scrutiny of its own plans in the region. Jim Farley, Ford of Europe chief since January 2015, will oversee all of the company’s regions, global marketing and sales, as well as its Lincoln Motor Co.

Joe Hinrichs, head of the Americas since December 2012, will manage global product development, manufacturing and labor affairs, purchasing, and environmental and safety engineering; Marcy Klevorn, vice president of information technology and chief technical officer since January, will oversee Ford Smart Mobility.

The company is also replacing its head of communications.

Ford posted a record $1.2 billion profit in Europe last year but warned the impact of Britain’s vote to leave the European Union would put a dent in 2017 earnings.

Fields, who earned $22.1 million in 2016 and had a 28-year-career at Ford, also faced a clamor for share repurchases, which boost the value of stock, at the company’s annual meeting earlier this month.

Ford said last week it would cut 1,400 staff positions in North America and Asia, a small fraction of the 20,000 job reductions some news outlets had reported were imminent.


Ford, who had been CEO before replacing himself in 2006 with Mulally, is the great-grandson of company founder Henry Ford.

The company has churned out strong profits on his watch, reporting a record $10.4 billion in pretax earnings in 2016.

However, investors were concerned by a weak first quarter and lower profit forecast for 2017, as well as higher costs for investments in “emerging opportunities.”

Tesla was valued at $51 billion on Friday, more than Ford’s $43 billion. The contrast shows investors’ faltering confidence that old-line automakers can make the transition to a future where software substitutes for pistons and transportation is sold by the mile or the minute.

At the same time, GM is turning up the pressure in the North American truck and sport utility business, the source of 90 percent of Ford’s earnings.

GM is gearing up an “onslaught” of trucks for that region, President Dan Ammann told Reuters last week, including a new generation of the Chevrolet Silverado large pickup that competes with Ford’s primary profit machine, the F-series line.

Ford also tangled with President Donald Trump, who spent more than a year criticizing the automaker on the campaign trail for expanding operations in Mexico.

But Trump praised Ford in January for scrapping a planned Mexican car factory and announcing plans to add 700 jobs in Michigan. Fields, who has made several trips to the White House this year, said Ford would have made the decision regardless of who was president.

(Additional reporting by Laurence Frost in Paris, Edward Taylor in Frankfurt, Costas Pitas in London, Ismail Shakil in Bengaluru, Andreas Cremer in Berlin; Writing by Nick Zieminski; Editing by Lisa Von Ahn)

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Wall St. gains as defense, tech stocks rise

Wall Street was higher in late morning trading on Monday, boosted by technology shares and as defense stocks rose after a multi-billion dollar arms deal between the United States and Saudi Arabia.

President Donald Trump visited Saudi Arabia over the weekend and sealed $110 billion in deals in which Riyadh will buy U.S. arms to help it counter Iran, with options running as high as $350 billion over 10 years.

Shares of defense firms such as General Dynamics (GD.N), Raytheon (RTN.N), Boeing (BA.N) and Lockheed Martin (LMT.N) were up between 1 percent and 2.2 percent.

“The bar for success has been set extremely low for President Trump and it seems that he’s been able to meet that over the weekend,” said Kim Forrest, senior equity research analyst, Fort Pitt Capital Group in Pittsburgh.

Trump’s visit is his first foreign trip since taking office and one the White House hopes will shift the focus away from domestic controversies such as his firing of a former FBI head last week and reports of his administration’s links to Russia.

“The commentary on what happened in Saudi Arabia, most of it, was good. Because we were down last week because of political news the inverse is true too: that nothing bad happened over the weekend in political news.”

At 10:47 a.m. ET the Dow Jones Industrial Average .DJI was up 79.39 points, or 0.38 percent, at 20,884.23, the SP 500 .SPX was up 7.16 points, or 0.30 percent, at 2,388.89 and the Nasdaq Composite .IXIC was up 31.16 points, or 0.51 percent, at 6,114.86.

Gains were broad based, with nine of the 11 SP sectors trading higher, led by the tech sector’s .SPLRCT 0.55 and industrials index’s .SPLRCI 0.50 percent rise.

Boeing was the biggest boost on the Dow. Amazon’s (AMZN.O) near 1 percent rise was the biggest positive influence on the SP and the Nasdaq.

Forrest said that while strong earnings and mostly positive economic data will help provide support, the market will continue to be susceptible in the near term to political developments and what it means for Trump’s agenda for tax cuts and higher infrastructure spending.

Also bolstering the market was a 1 percent gain in oil prices due to confidence that top exporters will this week agree to extend supply curbs, or even be deepen cuts. [O/R]

Ford (F.N) was up 1.7 percent at $11.05 after the automaker named James Hackett, who heads its unit developing self-driving cars, as chief executive, responding to investors’ growing unease about its stock price and prospects.

Berkshire Hathaway (BRKa.N) (BRKb.N) was up about 0.8 percent after Barron’s said on Saturday the conglomerate’s stock could see double digit gains over the next year and a half even if Chairman Warren Buffett decided to retire.

Advancing issues outnumbered decliners on the NYSE by 1,798 to 938. On the Nasdaq, 1,621 issues rose and 999 fell.

The SP 500 index showed 31 new 52-week highs and one new low, while the Nasdaq recorded 74 new highs and 24 new lows.

(Reporting by Tanya Agrawal; Editing by Savio D’Souza)

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Texas lawmakers clear way for Uber, Lyft return to major cities

AUSTIN, Texas Texas governor Greg Abbott will sign in the next few days a bill that would shield ride-hailing firms Uber and Lyft from bruising battles over fingerprint background checks that led them to leave some of the state’s most important markets.

Lawmakers last week approved the legislation known as House Bill 100 that sets up statewide regulations for the companies. It clears the way for Lyft Inc to reenter Houston, where Uber Technologies Inc currently dominates, and for both to reenter Austin, Corpus Christi and Galveston.

More than 40 states have set up statewide regulatory systems for ride-hailing companies such as Uber and Lyft that can be used to override local regulations in most places, according to the National Conference of State Legislatures.

“There is definitely a national, coordinated push from the industry to enact regulations for this type of transportation at the state rather than city level,” said Lara Cottingham, deputy assistant director of administration and regulatory affairs for Houston, which opposed the state bill because it could supersede city regulations. 

The Texas legislature on May 17 approved HB 100, a bill that eliminates local ordinances such as a fingerprint measure in Austin, which passed despite company objections and prompted the two firms to leave the Texas capital last year.

Also on May 17, lawmakers in Alaska, Louisiana and New York advanced legislation that also would take ride service regulations out of local hands.

Lawmakers in cities including Los Angeles, Chicago and San Francisco have argued that fingerprinting is needed for Uber and Lyft drivers. The companies say they already do comprehensive background checks, which make such measures unnecessary.

In Houston, the fourth most-populous U.S. city, Lyft left in 2014 over local ordinances including the fingerprint checks. Uber struck its own deal with local authorities to operate in Houston.

The Texas bill may also kill Houston regulations that ensure handicapped customers have access to services and customers can lodge complaints, officials said.

Mostly Republican backers of the bill said it benefits consumers by offering more choice and competition, which will drive down prices.

“A statewide framework for ridesharing will help bring greater economic opportunity and expanded access to safe, reliable transportation options to more Texans,” Sarfraz Maredia, general manager for Uber Texas, said in a statement.


In a 2016 election, Uber and Lyft spent more than $10 million in an unsuccessful effort to roll back city regulation. That exceeded the amount spent by all candidates running for mayor and city council in their most recent election.

Taking that defeat as a cautionary tale, as the companies geared up to support the state bill they enlisted 34 lobbyists, according to Texas Ethic Commission data. For comparison, Texas-based American Airlines hired eight to lobby Texas for its business interests.

California based Uber and Lyft are expected to spend up to $2.3 million on lobbyists in Texas in 2017, non-profit tracking agency Texans for Public Justice reported after an examination of lobbyists’ contracts as of March 2017. The companies did not respond to requests to comment on lobbyist spending.

The other trouble Uber and Lyft ran into in Austin came from startups. When the big companies left Austin, smaller ride service companies quickly employed about 10,000 drivers that they had abandoned.

Uber and Lyft said they will be back as soon as the governor, a Republican, signs the measure. Austin Mayor Steve Adler said state lawmakers should respect local voters.

“I’m disappointed that the legislature chose to nullify the bedrock principles of self-governance and limited government,” he said.

The chief executive of non-profit Ride Austin, a new provider which averages about 60,000 rides a week, is worried Uber and Lyft will use their deep pockets to tilt the market in their favor.

“We do expect the giants to use their $12 billion in cash to try and crush our non-profit – but we believe the support of the Austin community and the Austin drivers will help us continue,’ Andy Tryba said in an email.

(Reporting by Jon Herskovitz; ASdditional reporting by Heather Somerville in San Francisco, editing by Peter Henderson, Dave Gregorio and Chizu Nomiyama)

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Boeing Co signs defense, commercial deals with Saudi Arabia

DUBAI Boeing Co (BA.N) said on Sunday it had signed several defense and commercial deals with Saudi Arabia including for the sale of military and passenger aircraft during a visit by U.S. President Donald Trump to the kingdom.

The announcement is the latest in tens of billions of dollars in deals signed between U.S. and Saudi firms since Trump arrived in Riyadh on Saturday.

Boeing said Saudi Arabia has agreed to buy Chinook helicopters, associated support services and guided weapons systems, and intends to purchase P-8 surveillance aircraft.

The total value of the deals or how many aircraft Saudi Arabia intends to buy was not given in the statement announcing the agreements.

A Boeing spokesman declined to comment beyond the statement.

The U.S State Department announced in December plans to sell Saudi Arabia CH-47F Chinook cargo helicopters and related equipment, training and support worth $3.51 billion.

Saudi Arabia is seeking closer defense and commercial ties with the United States under Trump, as it seeks to develop its economy beyond oil and leads a coalition that is fighting a war in Yemen.

“These announcements reaffirm our commitment to the economic growth, prosperity and national security of both Saudi Arabia and the United States, helping to create or sustain thousands of jobs in our two countries,” said Boeing Chief Executive Dennis Muilenburg.

Boeing also said it would negotiate the sale of up to 16 wide body airplanes to Saudi Gulf Airlines which is based in the country’s east in Dammam.

Boeing did not say which aircraft it was negotiating to sell to the privately-owned commercial airline. Saudi Gulf, which started operations last year, could not immediately be reached for comment.

Boeing will also establish a joint venture with Saudi Arabia to provide “sustainment services for a wide range of military platforms,” the statement said, whilst a separate joint venture would “provide support for both military and commercial helicopters.”

(Reporting by Alexander Cornwell Editing by Jeremy Gaunt)

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U.S., Saudi firms sign tens of billions of dollars of deals as Trump visits

RIYADH U.S. and Saudi Arabian companies signed business deals worth tens of billions of dollars on Saturday during a visit by U.S. President Donald Trump, as Riyadh seeks help to develop its economy beyond oil.

National oil firm Saudi Aramco said it signed $50 billion of agreements with U.S. firms. Energy minister Khalid al-Falih said deals involving all companies totaled over $200 billion, many of them designed to produce things in Saudi Arabia that had previously been imported.

Business leaders on both sides were keen to demonstrate their talks had been a success, so there was an element of showmanship in the huge numbers. Some deals had been announced previously; others were memorandums of understanding that would require further negotiations to materialize.

Nevertheless, the deals illustrated Saudi Arabia’s hunger for foreign capital and technology as it tries to reduce its dependence on oil exports. Low oil prices in the past couple of years have slowed the economy to a crawl and saddled the government with a big budget deficit.

“We want foreign companies to look at Saudi Arabia as a platform for exports to other markets,” Falih told a conference attended by dozens of U.S. executives.

In March, Saudi Arabia’s King Salman toured Asia and his delegation signed similar agreements worth tens of billions of dollars there, including deals worth as much as $65 billion in China.

FUNDSEven as it sought U.S. investment on Saturday, Riyadh made two announcements on plans to deploy its own financial reserves for projects that would cement economic ties with the United States.

The Public Investment Fund, Riyadh’s main sovereign wealth fund, and U.S. private equity firm Blackstone said they were studying a proposal to create a $40 billion vehicle to invest in infrastructure projects, mainly in the United States.

The vehicle would obtain $20 billion from the PIF and with additional debt financing, might invest in over $100 billion of infrastructure projects – a political boon to Trump, who has said he wants to rebuild crumbling U.S. infrastructure.

Meanwhile the world’s largest private equity fund, backed by the PIF, Japan’s Softbank Group and other investors including U.S. firms Apple Inc and Qualcomm, said on Saturday it had raised over $93 billion to invest in technology sectors such as artificial intelligence and robotics.

Much of the Softbank Vision Fund’s money is likely to be invested in the United States, helping Riyadh obtain access to technology that it could use to diversify its economy.

Top Saudi economic policy makers, including the finance minister and head of the kingdom’s main sovereign wealth fund, described investment opportunities in Saudi Arabia to the conference on Saturday.

Saudi officials said they aimed to prepare new, streamlined rules covering direct investment by foreign firms within 12 months.

Among the deals signed on Saturday, GE said it reached $15 billion of agreements involving almost $7 billion of goods and services from GE itself. They ranged from the power and healthcare sectors to the oil and gas industry and mining.

Jacobs Engineering will form a joint venture with Aramco to manage business projects in the kingdom, and McDermott International will transfer some of its ship fabrication facilities from Dubai to a new shipbuilding complex which Aramco will build within Saudi Arabia.

Riyadh, one of the world’s biggest military spenders, is keen to develop a domestic arms industry rather than import weapons, so several deals were in military industries.

Lockheed Martin said it would support the final assembly and completion of an estimated 150 S-70 Black Hawk utility helicopters in Saudi Arabia.

(Additional reporting by Marwa Rashad and Celine Aswad; Writing by Andrew Torchia; Editing by Andrew Roche and Chizu Nomiyama)

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Fixing the Broken Senate

When I served on the staff of Senator Dan Coats in the 1990s, I found that the U.S. Senate can be almost like a family. Friendships often cross party lines. Harry Reid and Rand Paul were buddies. Orin Hatch and Ted Kennedy were close friends.

Yet, while friendships are valuable, they can’t bridge the deep political divide in today’s Senate. That’s where the rules the Senate has made for itself come in. Under those rules, 60 votes are needed to bring any legislation to the full chamber for a vote. This is called the “legislative filibuster.”

What Ever Happened to Bipartisanship?

As the New York Times explains, “In recent years, as partisanship has escalated, the Senate has required a 60-vote majority for almost any controversial legislation to overcome a filibuster. Gone, for the most part, are bipartisan quorums that used to pass large and complex laws with simple majorities.”

This is about more than party loyalty, or men and women on opposite “teams” who refuse to work together because one wants to “outscore” the other. It is about differing views of the Constitution, the role of government, and the kind of country America is and should be. It is about a clash of values and beliefs and the political decisions that flow from them. That’s why, from abortion to taxes, the Senate looks like a logjam.

In modern politics, the intention of the legislative filibuster — forcing members to work things out — has been lost.

Is it time to get rid of the legislative filibuster? Is it time to allow the passage of key bills with a simple majority of “50 percent plus one”?

Such a change would follow Harry Reid’s end to the filibuster rule on lower federal court appointments in 2013 and Mitch McConnell’s end of the Supreme Court nominee filibuster rule earlier this year.

The Senate Used to be a Place for Calm Debate

Ending the legislative filibuster would, as former Senator Byron Dorgan, D-N.D., said recently, “change the character of the politics of America. The filibuster is a set of brake pads of the speed of the passion of the moment. The Senate is the place where cooler heads prevail and you need a larger group of people to find common ground.”

He is correct about what the Senate should be. “Common ground” is a nice idea. But that ground seems to be shrinking by the day.

The Senate was intended by the Founders to be a place for calm debate. The 60-vote rule has required people with competing convictions to find the compromises needed to keep our government up and running.

Now, though, the intention of the legislative filibuster — forcing members to work things out — has been lost. Instead, the 60-vote rule has become a political club used by one party against the other. It means that much of the time, the minority rules.

Is It Time for the Filibuster to Retire?

The danger in ending the legislative filibuster is great. To again quote the New York Times, “both parties … understand the profound and lasting effect that a party with power unchecked by the minority could have when it comes to lawmaking.”

In recent years, the minority is “checking” way too much. It is true that if the legislative filibuster was ended, public policy could resemble a game of ping-pong. A majority enacts a bill in one session; following the next election, a new party in power undoes it. This would create economic chaos, political instability and an increasingly angry citizenry.

The Senate, a chamber whose whole purpose has been to slow down popular passion, would become like the House of Representatives — only with longer terms for its members. As Senator John McCain has asked, if this happens, “Why have a bicameral system?”

I offer no knot-cutting political solution to resolve this dilemma. But it must be resolved. Time is not on the side of America’s future.

He makes a troubling point. But as historian Kevin Gutzman of Western Connecticut University argues, “Abolishing the (legislative) filibuster would clear up confusion about responsibility for Congress’s policy decisions. The duty to govern would fall upon the majority, as it should.”

Conservative pundit Erick Erickson counters,

the filibuster is often the last tool available for conservatives to stop the worst excesses of their own party. The filibuster is how (conservatives) can force their own party to rein in spending and liberal legislation. If you gut the legislative filibuster, you are stopping conservatives from being able to fight for limited government.

That’s just one danger. But our country has multiple pressing needs. Ending the legislative filibuster isn’t just about ending inefficiency but, far more importantly, solving looming problems.

Here’s one example: Most Americans like Social Security. Want it to continue? It must be modernized, soon, or else it will collapse under a growing burden of debt that it can’t sustain.

We cannot wait forever for America’s needs to be met. The road down which the can has long been kicked ends somewhere, and probably sooner than later.

I offer no knot-cutting political solution to resolve this dilemma. But it must be resolved. Time is not on the side of America’s future.

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Trump Delivers Message to Muslim Nations on Extremists: ‘Drive Them Out!’

The President declares the battle is not between the West and Islam, but “between good and evil.”

President Donald Trump delivers a speech to the Arab Islamic American Summit, at the King Abdulaziz Conference Center, Sunday, May 21, 2017, in Riyadh, Saudi Arabia.


Published on May 21, 2017

RIYADH, Saudi Arabia (AP) — President Donald Trump called on Middle Eastern leaders to combat a “crisis of Islamic extremism” emanating from the region, casting the fight against terrorism as a “battle between good and evil,” not a clash between the West and Islam.

Trump’s address Sunday was the centerpiece of his two-day visit to Saudi Arabia, his first stop overseas as president. During a meeting of more than 50 Arab and Muslim leaders, he sought to chart a new course for America’s role in the region, one aimed squarely on rooting out terrorism, with less focus on promoting human rights and democratic reforms.

“We are not here to lecture — we are not here to tell other people how to live, what to do, who to be, or how to worship,” Trump said, speaking in an ornate, multi-chandeliered room. “Instead, we are here to offer partnership — based on shared interests and values — to pursue a better future for us all.”

Even as the president pledged to work alongside Middle Eastern nations, he put the onus for combatting terrorism on the region. Bellowing into the microphone, he implored Muslim leaders to aggressively fight extremists: “Drive them out of your places of worship. Drive them out of your communities.”

The president has been enthusiastically embraced in Riyadh, where the ruling royal family has welcomed his tougher stance on Iran, its regional foe. Sitting alongside Trump, Saudi King Salman declared, “The Iranian regime has been the spearhead of global terrorism.”

Trump’s trip to Saudi Arabia also served as something of a reset with the region following his presidential campaign, which was frequently punctured by bouts of anti-Islamic rhetoric. He once mused that he thought “Islam hates us.”

And only a week after taking office, he signed an executive order to ban immigrants from seven countries — Iraq, Iran, Syria, Sudan, Libya, Somalia, and Yemen — from entering the United States, a decision that sparked widespread protests at the nation’s airports and demonstrations outside the White House.

That ban was blocked by the courts. A second order, which dropped Iraq from the list, is tied up in federal court and the federal government is appealing.

But on Sunday, Trump was full of praise for Muslim world’s history and culture. He declared Islam “one of the world’s great faiths.”

White House officials said they considered Trump’s address to be a counterweight to President Barack Obama’s debut speech to the Muslim world in 2009 in Cairo.

Obama called for understanding and acknowledged some of America’s missteps in the region. That speech was denounced by many Republicans and criticized by a number of the United States’ Middle East allies as being a misguided apology.


Associated Press writers Vivian Salama, Ken Thomas and Jill Colvin in Washington contributed to this report.


Follow Lemire on Twitter at and Pace at


Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Internal News Service Special Report

NAR Reaffirms Support of Project Upstream

The NAR Board of Directors voted to continue its support of Upstream, the technology developed to give brokers and agents a better way to manage their listing data and direct its distribution to MLSs, vendors, and third-party listing aggregators. 

Spearheaded by the broker-run UpstreamRE LLC, the technology has been successfully demonstrated by RMLS, a REALTOR® owned MLS operating in the Portland, Ore., area. Several other demonstrations are planned for this summer with brokers and MLSs around the country. 

In comments to the Board, Upstream Chairman Dan Elsea likened Upstream to technologies that exist in other industries, including ATPCO, the source of airline fare-related data. Elsea heads one of the nation’s largest independent brokerages, Real Estate One, but said Upstream will benefit large and small brokerages alike. 

The vote authorizes NAR to fund $1.5 million for administrative costs through 2018, as well as up to $7.5 million to support deployment of the technology by REALTORS® Property Resource, the NAR subsidiary that developed the technology. Earlier in the week, UpstreamRE announced a new “broker of choice” model, which will enable listing data to be input directly into Upstream or flow to Upstream from the MLS. 

The Board’s decision came at its May 20 meeting, which capped off the REALTORS® Legislative Meetings Trade Expo in Washington. Nearly 10,000 REALTORS® and others attended the meetings and made visits to their members of Congress to advocate on behalf of homeowners, commercial property investors, and strong communities.

The board also approved measures dealing with federal policy, MLS policy, and credentialing of officer candidates. Here are highlights.

CFPB Structure Change Sought

The Board supported a proposal to restructure the Consumer Financial Protection Bureau (CFPB) by replacing the current single-director arrangement with a five-member board whose members would be appointed by the president and confirmed by the Senate. Under the proposal, no more than three CFPB board members would come from one political party. The existing independent agency structure and funding sources would remain unchanged.

ADA Lawsuits Should Be Last Resort

The Board called for legislation requiring that parties who claim violations of the Americans with Disabilities Act (ADA) notify the person or organization responsible for the alleged violation and give them an opportunity to remedy it before filing a lawsuit.

FHA Fund Calculations

The Board supported the exclusion of reverse mortgages when HUD calculates the minimum capital reserve required for the Mutual Mortgage Insurance Fund (MMIF). While the FHA’s insurance program for single-family mortgages is growing and financially stable, the FHA’s Home Equity Conversion Mortgage (HECM) program has been unstable. Keeping the programs separate would help provide a more realistic picture of the FHA’s financial health. 

Opposition to Rent Control

In response to the growing number of rent control programs that have been implemented by states and localities in recent years, the Board adopted an updated rent control policy statement to replace the one that has been in place since 1997. The new statement reiterates NAR’s position that government programs that limit rent increases or impose other rent-related restrictions on landlords unfairly restrict private property rights. Under the policy, NAR encourages local and state associations to oppose legislative measures that allow for rent control or rent stabilization programs. 

Legal Assistance

The board allocated $500,000 to support two state REALTOR® associations and two other organizations in the following legal cases:

  • A copyright-infringement suit filed by the California Association of REALTORS® against a website that has posted copyrighted CAR forms and refused to remove them.
  • A suit that an organization in Oregon intends to file against the National Marine Fisheries Service in response to the service’s decision that FEMA’s implementation of the National Flood Insurance Program violates the Endangered Species Act.
  • A suit filed against the city of Portland, Ore., seeking to invalidate an ordinance that requires landlords to provide relocation assistance to tenants in certain cases. NAR funds will be used to reimburse the Oregon Association of REALTORS® for expenses related to its support for the case.
  • A suit filed by a Guam organization claiming that the federal government’s decision to sharply reduce the percentage of requests for H2B temporary worker visas it approves is arbitrary and harmful to Guam’s economy.

MLS Policy Changes

The Board updated the NAR Lockbox Security Requirements to reflect technology changes, particularly the increasing use of mobile devices. In addition, the Board approved the use of voice-activated services to deliver IDX listing information. Finally, the Board changed the model IDX rules to require that listing brokers be identified in all IDX displays; previously, listing broker attribution was optional. 

Government-Sponsored Enterprises

As the federal government considers reform of the secondary mortgage market, the Board reaffirmed NAR’s position that any successor to Fannie Mae or Freddie Mac maintain an explicit government guarantee to ensure that mortgage funds remain available to credit-worthy homebuyers, even during economic downturns. In an addition to NAR’s Housing Finance Reform Principles, the board took the position that loans syndicated through government-guaranteed mortgage-backed securities should be assumable. The board also heard the following reports. 

The REALTORS® Information Network

Bob Goldberg, president and CEO of the REALTORS® Information Network and a senior vice president for NAR, said more than 100,000 members had registered for a .realtor top-level domain.®

Luke Glass, executive vice president of Move Inc., told the Board that consumer awareness of® is at 88 percent and said that the site now ranks third across the internet (behind just YouTube and Facebook) in terms of how much time users spend per session. Glass also described a variety of innovations, including virtual reality tours, a service that will allow people to get neighborhood information using the camera on their mobile device, and a new resource section that enables members to easily share content with consumers. 

Realtors Property Resource®

About 98 percent of multiple-listing services now provide data to Realtors Property Resource® (RPR®), according to RPR® CEO Dale Ross. About 700,000 real estate professionals now use RPR® on an annual basis, and 158,000 “power users” tap the service regularly. 

Distinguished Service Awards

Jack Woodcock, GRI, CCIM, CRS, SRES, of Las Vegas, and Robert (Bob) Kulick, GRI, CCIM, of Monte Sereno, Calif., were announced as NAR Distinguished Service Award recipients. Woodcock and Kulick will receive their awards during the at the next Board meeting, Nov. 6 in Chicago. 


RPAC has raised more than $17.5 million so far in 2017, more than half of its 2017 goal of $31.3 million. The number of major investors is up 19 percent.


NAR dues will remain at $120 for 2018, with $40 of this amount allocated for REALTOR® Party programs. The association membership stands at 1.23 million, and NAR forecasts 1.24 million members in 2018.

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Blackstone, Saudi’s PIF plan $40 billion infrastructure investment fund

RIYADH U.S. private equity firm Blackstone (BX.N) and Saudi Arabia’s main sovereign wealth fund said on Saturday they planned to create a $40 billion vehicle to invest in infrastructure projects, mainly in the United States.

Blackstone and the Public Investment Fund signed a non-binding memorandum of understanding for the project, which will depend on further negotiations.

The U.S. firm said it expected the vehicle to have $40 billion of equity commitments, with a $20 billion anchor investment from the PIF and the rest of the money obtained from other investors. Through this equity and debt financing, Blackstone expects to invest in over $100 billion of infrastructure projects, it said.

(Reporting by Andrew Torchia; Editing by Alison Williams)

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Softbank-Saudi tech fund becomes world’s biggest with $93 billion of capital

RIYADH The world’s largest private equity fund, backed by Japan’s Softbank Group and Saudi Arabia’s main sovereign wealth fund, said on Saturday it had raised over $93 billion to invest in technology sectors such as artificial intelligence and robotics.

“The next stage of the Information Revolution is under way, and building the businesses that will make this possible will require unprecedented large-scale, long-term investment,” the Softbank Vision Fund said in a statement.

In addition to Softbank (9984.T) and Saudi Arabia’s Public Investment Fund, the new fund’s investors include Abu Dhabi’s Mubadala Investment, which has committed $15 billion, and Apple Inc (AAPL.O).

(Reporting by Andrew Torchia; Editing by Dale Hudson)

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GE announces $15 billion of business deals with Saudi Arabia

RIYADH U.S. technology and engineering conglomerate GE said on Saturday it had signed $15 billion of business deals with Saudi Arabia as part of the kingdom’s drive to diversify its economy beyond oil.

It came as dozens of senior U.S. business executives met Saudi counterparts at a conference coinciding with the visit of President Donald Trump to Riyadh.

The agreements, which involve almost $7 billion of goods and services from GE itself, range from the power and healthcare sectors to the oil and gas industry and mining, GE said. Some of the deals are memorandums of understanding which would require further agreements to materialize.

Among the projects, GE will help make Saudi power generation more efficient and provide digital technology to the operations of oil firm Saudi Aramco, aiming to create $4 billion of annual productivity improvements at Aramco. It will cooperate in medical research and training.

(Reporting by Andrew Torchia Editing by Jeremy Gaunt.)

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Realtors® Have a Positive Outlook for Commercial Markets in 2017

WASHINGTON (May 19, 2017) – While challenges face commercial real estate markets, Realtors® specializing in the sector should have confidence that growth will continue. That’s according to speakers at a commercial economic issues and trends forum at the REALTORS® Legislative Meetings Trade Expo.

NAR Chief Economist Lawrence Yun led a panel discussion about the economic forces shaping commercial real estate markets; the panelists agreed that the market has improved and that continued growth in the economy will further drive activity, but difficulties remain regarding availability of financing for smaller commercial properties.

George Ratiu, NAR director of quantitative and commercial research, said that increased trade and the rise of e-commerce has boosted rents in the industrial and warehouse sector. “During a time of transformation in consumer shopping habit, vacancy rates will still continue to see a gradual decline in warehousing and strong rent growth will continue,” he said.

Unemployment has declined to 4.4 percent and consumer confidence is at its highest point in 15 years. As the economy improves, the commercial real estate market has continued to improve as well, said Yun. “A rising interest rate environment is likely to halt commercial price growth or even cause a minor decline; that outlook is supported by the expanding economy and the over 2 million jobs gained in the past year,” he said.

Looking at the global market, Ratiu explained that global commercial investors have hit the pause button on investments, which in the first quarter of 2017 decreased nearly 20 percent year-over-year; however, certain U.S. markets are seeing good global cash flow with $76 billion flowing to the U.S. “Overall global investments are down, while the San Francisco, Dallas, Charlotte, Houston and Baltimore markets have experienced large sales volume gains,” he said.

With the blip in overall global investments in the first quarter, international buyers are likely to play a greater role in the U.S. market this year. “Over the past five years, a near majority of Realtors® experienced an increase in the number of international clients. We expect international buying activity to grow in 2017, which will have an overall positive impact on the commercial market’s gradual recovery,” said Yun.

One major hurdle that continues to affect the market is the lack of available financing to small commercial real estate investors, due in large part to regulatory uncertainty.

“Realtors® are seeing evidence of markets being impacted by regulators’ increased scrutiny of banks’ balance sheet allocations to commercial real estate loans,” said Ratiu. “Considering that 64 percent of Realtor® clients get their financing from banks, this is likely to impact deal flow as lending conditions tightened in 37 percent of Realtors®’ markets, a four percent increase from last year.”

John Worth, senior vice president of research and investor outreach at the National Association of Real Estate Investment Trusts, discussed the performance of commercial real estate investment and its status among other investment sectors. “Real estate investment is currently the best performing asset class. Strong returns and the level of new commercial supply we are seeing today is making up for a lot of missing sectors, following the economic downturn. The first quarter of this year saw a slight decrease, but 2017 is experiencing an overall healthy trend,” he said.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.2 million members involved in all aspects of the residential and commercial real estate industries.


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Foreign Buyers and Immigration Expected to Drive Future Demand for U.S. Housing

WASHINGTON (May 19, 2017) – U.S. real estate markets are increasingly becoming international, and changing demographics brought forth by immigration and growing interest from foreigners are positioned to bolster home sales activity and prices. That’s according to speakers at an international real estate forum organized by the REALTOR® University Richard J. Rosenthal Center for Real Estate Studies session here at the 2017 REALTORS® Legislative Meetings Trade Expo.

NAR’s Danielle Hale, managing director of housing research, was joined by Alex Nowrasteh, immigration policy analyst at the Center for Global Liberty and Prosperity at the Cato Institute, to share insight on the current and future impact of foreign buyers and immigration on the U.S. housing market.  

According to Nowrasteh, the rising U.S. population is being bolstered by a growing number of immigrant households, and their presence will continue to transform the housing market. Referring to data from the 2015 American Community Survey, Nowrasteh said of the roughly 321.4 million residents in the U.S., 278.1 million are born here (natives) and the remaining 43.3 million – made up of 20.7 million naturalized citizens and 22.6 million non-citizens – are foreign-born.  

“Immigration affects rents and home prices far more than it affects the labor market,” said Nowrasteh. “An expected 1 percent increase in a city’s population produces a 1 percent uptick in rents, while an unexpected increase results in a 3.75 percent rise.”

Nowrasteh, pointing to studies conducted on immigration and housing, explained that the effects of immigration on real estate are localized, with most of the impact felt where immigrants tend to reside: low-to-middle income counties. Each immigrant adds 11.6 cents to housing value within that county. In 2012, 40 million immigrants added roughly $3.7 trillion to U.S. housing wealth.

Referencing the Legal Arizona Workers Act that went into effect on January 1, 2008, Nowrasteh said the decline in population resulting from the law likely exasperated the drop in home prices the state experienced during the downturn. Fewer households purchasing or renting property subsequently lead to higher vacancies and lower prices. “Immigration is the best way to increase population, housing supply and prices,” he said.

Presenting some of the key findings from NAR’s 2016 Profile of International Activity in U.S. Residential Real Estate released last July, Hale said foreigners increasingly view the U.S. as a great place to buy and invest in real estate. She noted the upward trend in sales activity from resident and non-resident foreign buyers1 in the past seven years, with total foreign buyer transactions increasing from $65.9 billion in 2010 to $102.6 billion in the latest survey.

 “A majority of foreign buyers in recent years are coming from China, which surpassed Canada as the top country by dollar volume of sales in 2013 and total sales 2015,” said Hale. “Foreign buyers on average purchase more expensive homes than U.S. residents and are more likely to pay in cash.”

Perhaps foreshadowing where a bulk of future home purchases from immigrants will come from, Hale said that in NAR’s latest survey roughly over half of all foreign buyers purchased property in Florida (22 percent), California (15 percent), Texas (10 percent), Arizona or New York (each at 4 percent). Latin Americans, Europeans and Canadians – who tend to buy for vacation purposes in warm climates – mostly sought properties in Florida and Arizona. Asian buyers were most attracted to California and New York, while Texas mostly saw sales activity from Latin American, Caribbean and Asian buyers.

NAR’s 2017 Profile of International Activity in U.S. Residential Real Estate survey is scheduled for release this summer. Looking at the past year, Hale said monthly data from the Realtors® Confidence Index revealed a rise in responses from Realtors® indicating they worked with an international buyer.

“Chinese buyers are once again expected to top all countries in both total dollar volume and overall sales,” said Hale.  

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

1The term international or foreign client refers to two types of clients: non-resident foreigners (Type A) and resident foreigners (Type B).

Non-resident foreigners: Non-U.S. citizens with permanent residences outside the United States. These clients typically purchase property as an investment, for vacations, or other visits of less than six months to the United States.

Resident foreigners: Non-U.S. citizens who are recent immigrants (in the country less than two years at the time of the transaction) or temporary visa holders residing for more than six months in the United States for professional, educational, or other reasons.

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St. Louis Fed’s Bullard says expected rate hikes ‘too aggressive’

ST. LOUIS The Fed’s expected plans for rate increases may be too fast for an economy that has shown recent signs of weakness, St. Louis Federal Reserve President James Bullard said on Friday, sketching out the case for a continued go-slow approach.

Since the Fed raised rates in March inflation data have dipped and so have long-term bond yields, the opposite of what would happen if investors and the public felt the economy was going to continue on a strong enough course to justify further rate hikes.

In its most recent set of projections central bank officials said they foresaw raising rates two more times over the course of this year, a pace Bullard said may be “overly aggressive relative to actual incoming data on U.S. macroeconomic performance.”

“On balance, the U.S. macroeconomic data have been relatively weak since the March…meeting,” Bullard said at a breakfast presentation to the Association for Corporate Growth. “U.S. inflation and inflation expectations have surprised to the downside in recent months. Labor market improvement has slowed.”

The Fed is expected to raise rates at its June policy-setting meeting, and will release fresh economic projections at that time.

Bullard, who regards the economy as mired in a low-inflation, low-growth rut, has said he feels the central bank needs to raise rates only one more time, then could pause until it is clear the economy has shifted to a higher gear.

His prepared comments did not mention whether the controversy developing around the Trump administration could influence the central bank if it begins weighing on business and consumer confidence, or drags down global markets as it did earlier in the week.

(Reporting by Howard Schneider; Editing by Chizu Nomiyama)

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U.S. regulators to announce VW diesel fix approval for 84,000 vehicles

WASHINGTON The U.S. Environmental Protection Agency and California Air Resources Board on Friday are expected to announce approval of a fix for about 84,000 older Volkswagen diesel vehicles that can emit excess emissions, two sources briefed on the matter said.

Volkswagen agreed last year to offer to buy back up to 475,000 U.S. diesel vehicles or offer fixes if regulators approved. Friday’s announcement is expected to cover a fix for 84,390 2012-2014 Passat diesel vehicles with automatic transmissions. In January, regulators approved a fix for 67,000 2015 model diesels, leaving around 325,000 vehicles still awaiting approval for a fix.

(Reporting by David Shepardson; Editing by Phil Berlowitz)

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Strong earnings lift investor spirits after Trump slump

U.S. stocks advanced on Friday, driven by Apple, as a sense of calm prevailed over Wall Street in a week that was dominated by political uncertainty surrounding Donald Trump’s presidency.

Still, the indexes are on track for their worst weekly declines since mid-April after Trump unexpectedly fired FBI Director James Comey. Reports later alleged Trump had asked Comey to end an investigation into former national security adviser Michael Flynn’s ties with Russia.

Investors fear that the political uproar in Washington could hinder Trump from pursuing his promise of fiscal stimulus, a key driver for Wall Street’s record-setting run.

“The market is looking to stabilize as no new political news hit this morning headlines, suggesting that investors are willing to play out the political turmoil without pushing the panic switch,” Peter Cardillo, chief market economist at First Standard Financial wrote in a note.

Apple (AAPL.O) was up 0.6 percent and was the top stock on all three major Wall Street indexes. Shares of the most valuable U.S.-listed company have been recovering after their biggest one-day drop in more than a year on Wednesday.

At 9:39 a.m. ET (1339 GMT), the Dow Jones Industrial Average .DJI was up 53.44 points, or 0.26 percent, at 20,716.46, the SP 500 .SPX was up 9.23 points, or 0.39 percent, at 2,374.95 and the Nasdaq Composite .IXIC was up 32.44 points, or 0.54 percent, at 6,087.57.

Nine of the 11 major SP 500 sectors were higher. Technology .SPLRCT was in the lead with a 0.58 percent increase, followed by a 0.51 percent rise in financials .SPSY.

Shares of Deere Co (DE.N) rose 6.5 percent to $120.07 after the farm and construction equipment maker reported a 62 percent jump in quarterly profit. Caterpillar (CAT.N) was up 1.7 percent.

Campbell Soup (CPB.N) slid 2 percent to $55.94 after the packaged foods company warned that its full-year sales could decline.

Dow member Wal-Mart (WMT.N) was up 1.3 percent at $78.55 after BMO upgraded the big-box retailer’s stock to “market perform” from “underperform”.

Autodesk (ADSK.O) soared 14.7 percent to $109.95 after the software maker reported better-than-expected quarterly revenue.

Advancing issues outnumbered decliners on the NYSE by 1,757 to 781. On the Nasdaq, 1,508 issues rose and 758 fell.

The SP 500 index showed eight new 52-week highs and five new lows, while the Nasdaq recorded 31 new highs and 20 new lows.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D’Silva)

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Two Presidents and Two Popes…

On June 7, 1982, Ronald Reagan and Pope John Paul II met for the first time at the Vatican. The two were of one mind and one mission.

It had been a little over year since both had been shot and nearly bled to death. Now, they talked alone for about an hour in the Vatican Library. The attempted assassinations were raised right away. Pio Laghi, the pope’s representative to the United States, later said that Reagan told the pontiff: “Look how the evil forces were put in our way and how Providence intervened.”

Bill Clark, Reagan’s closest aide, said that both men referred to the “miraculous” fact they had survived. And now, “because of their mutual interests,” said Clark, they came together to “form some sort of collaboration.”

What kind of collaboration? One that would truly change history.

The Protestant and Catholic, said Clark, shared a “unity” in spiritual views and in their “vision on the Soviet empire.” That day in Rome, said Clark, they discussed their joint sense that they had been given “a spiritual mission — a special role in the divine plan of life,” and agreed that “atheistic communism lived a lie that, when fully understood, must ultimately fail.”

The two leaders, temporal and spiritual, also had mutual ideas on what should be done to end the Cold War. Reagan told the pope that “hope remains,” most notably in the battleground that was Poland. “We, working together,” he told the Polish pontiff, “can keep it alive.”

They sure did. Cardinal Laghi would say of this Reagan-John Paul II meeting: “Nobody believed the collapse of communism would happen this fast or on this timetable. But in their first meeting, Holy Father and president committed themselves and the institutions of the Church and America to such a goal. And from that day, the focus was to bring it about.”

And aside from the singular purpose, the two men held much more in common. Both bravely fought what John Paul II dubbed the “Culture of Death,” affirming what Reagan called “the transcendent right to life of all human beings, the right without which no other rights have any meaning,” and what John Paul II almost identically called “the first of the fundamental rights, the right to life.” Reagan said that “every per­son is a ressacra, a sacred reality;” John Paul II said that every person is “a unique and unrepeatable gift of God.” They both insisted upon the interdependence of faith and freedom, the principle of subsidiarity, and the need to speak out unequivocally against evil.

All of which brings me to Donald Trump and Pope Francis.

Such crucial and even touching presidential-papal commonalities — which, for Reagan and John Paul II, enabled them to change the world — is lacking in the case of Donald Trump and Pope Francis. The presidential-papal meeting at the Vatican on May 24, 2017 will be utterly unlike the presidential-papal meeting at the Vatican on June 7, 1982.

Think about it. Regardless of their respective strengths and weaknesses, it’s hard to find much shared outlook between the man in the White House today and the man in the Vatican today. Do they possess a mutual understanding of what currently serves as the great international threat or global menace, or how to defeat it? What would President Trump and Pope Francis list as the dominant threats today? Radical Islam? Trump might, but not in the way — or certainly not with the preferred response — that Francis would.

Do their top priorities intersect anywhere? Immigration? Certainly not. “Climate change?” No way. Economic “inequality?” Nope.

Now, that said, this meeting could surprise people, and disappoint those looking for fireworks. Sure, the optics will be intriguing; mere photos of these two men together will seize interest. But as for pundits hoping for a fight, I think they’ll be disappointed.

After all, personality-wise, maybe the two men aren’t terribly dissimilar. Both of these strong personalities are colorful, outspoken, and infamous for off-the-cuff comments. Neither is afraid to speak his mind, or stick his foot in his mouth. Pope Francis on an airplane with an open mic and group of reporters can be as freewheeling as Donald Trump with his Twitter account unmonitored by Kellyanne Conway, leaving lots of clean-up for his spokespeople to handle. The two men both operate with a folksy candor sometimes endearing and sometimes maddening. They might get along better than people expect.

I don’t expect a verbal sparring match over “building walls.” Francis is too winsome to provoke a contentious disagreement. He’s a pope of mercy who preaches forgiveness and decries malevolence. I expect him to treat Trump well. And when Trump is treated well, he usually responds in kind.

Surely, Francis should be pleased and heartened that Trump — for his first presidential trip abroad — chose to go to the Vatican. That’s a significant gesture.

As for Trump, the brash New York swagger might be tempered by the sheer majesty of the St. Peter’s environs. As one pundit told me, “trips to the Vatican” change people. They do. So do meetings with the pope. They tend to affect people.

But again, unlike Ronald Reagan and Pope John Paul II, I don’t perceive a grand historical-spiritual vision among Donald Trump and Pope Francis. I have no lofty historic hopes for this relationship. However, if a lesson can be learned from Reagan-John Paul II, it’s this: When a president and a pope come together with some significant goal in mind, really important things can happen. Good things can result. That’s something for this president and his staff to think about very prudently.


Paul Kengor is professor of political science at Grove City College in Grove City, Pennsylvania. His latest book is A Pope and a President: John Paul II, Ronald Reagan, and the Extraordinary Untold Story of the 20th Century.

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Defending Trump Against Excessive Charges is Not Selling Out

One thing should be clear, at least to Republicans: The left has had the long knives out for President Donald Trump since before he was inaugurated. It intended to destroy him regardless of his conduct in office.

Liberals and even some conservatives contend that Trump’s defenders on the right are tainted, partisan, idolatrous cheerleaders who have sold their souls and principles to defend him against troublesome charges. Some argue that even if former Presidents Barack Obama and Bill Clinton engaged in similar activities, two wrongs don’t make a right.

Trump supporters, they say, have always insisted they are strict adherents of the rule of law but are showing their true colors in defending Trump. But are they? Why is defending Trump against these excessive charges a betrayal of the rule of law? Just because he’s handled some things disappointingly doesn’t mean he’s committed a crime or an impeachable offense. The rule of law requires that we be discriminating about these matters and not jump on the bandwagon to condemn Trump just because we don’t approve of some of his actions or statements.

Without question, the rule of law and all other principles must be given the highest priority, and the Trump presidency doesn’t change that. But there’s something more involved here than mere Democratic hypocrisy.

It is reprehensible that liberals are perpetuating slander to delegitimize Trump and undermine the will of the American people.

We are talking about Democratic and liberal media wrongdoing. Obama, when injecting himself into the investigation concerning Hillary Clinton’s emails and saying that no criminal activity had occurred, actually engaged in the very conduct of which Trump is being sloppily accused. The left had no objection. But at this point, it sure doesn’t appear that Trump’s comments to then-FBI Director James Comey about then-national security adviser Michael Flynn rose to the level of interfering with a proceeding, much less obstruction of justice.

Liberals are also engaged in wrongdoing by conducting this ceaseless witch hunt against Trump for alleged collusion with Russia to interfere with the presidential election when they know there is no evidence of any collusion. It is reprehensible that they are perpetuating this slander to delegitimize Trump and undermine the will of the American people.

So no, two wrongs don’t make a right, but there aren’t two equal “wrongs” here, and attempts to attribute moral equivalence to these separate sets of conduct are deceitful and scurrilous.

Of course, Trump supporters should not compromise their principles to defend him against legitimate charges, but we shouldn’t throw him to the leftist wolves when the Democrats make false, excessive and otherwise unwarranted charges against him. There are a number of things I will criticize Trump for, but I am not going to accede to the Democrats’ outrageously over-the-top characterization of these actions as criminal or impeachable just to appear fairer or nonpartisan.

If I defend Trump, it is because I believe he deserves defending, and if I criticize the left, it is because I believe it deserves criticism.

I’m also not about to quit pointing out the monumentally worse behavior of the leftist media and Democratic Party just to avoid the undiscriminating claim that I am a Trump cheerleader.

We have to analyze whether Trump is culpable of those things of which he has been accused, but in no event should such accusations intimidate or deter us from condemning the left for making false charges and trying to wrongfully undermine Trump’s presidency.

Put another way, I am not defending Trump because he is being attacked by the left. I am not attacking the left because I am trying to change the subject from legitimate allegations against Trump. If I defend Trump, it is because I believe he deserves defending, and if I criticize the left, it is because I believe it deserves criticism. I am not compromising my principles to attack the left for trying to smear Trump and destroy this country. I am acting in accordance with my principles.

Sure, Trump shoots from the hip on Twitter and in some interviews, but he did this long before the election. The question isn’t whether he says things we wish he wouldn’t or commits gaffes. The issue that is before us — and will remain before us for as long as he’s in office because the Democrats will see to it, irrespective of Trump’s actions — is whether Trump engaged in serious misconduct on any of these things. So far, it appears he has not — from the firing of Comey to alleged collusion with Russia to the Comey memo to the alleged sharing of classified information with Russia. So why are some conservatives suggesting Trump just resign? It is neither prudent nor fair to rush to judgment. Let’s be guided by the evidence rather than innuendo or some anti-Trump hysteria.

As long as he rededicates himself to his campaign promises, his base will not abandon him, even with his occasional gaffes.

I admit I’m concerned about Trump’s apparent flip-flop on Jerusalem, his seeming ambivalence about certain health care issues, the recent budget fiasco, the wall and confusion around tax reform. I just wish Trump would return forthwith to the agenda on which he was elected and the commitments he made to seeing it through.

I believe that if he would redouble his efforts to clarify his legislative priorities and present strong, viable proposals on all these issues and exercise leadership to advance them, he would unite a majority around him sufficient to pass them. As long as he rededicates himself to his campaign promises, his base will not abandon him, even with his occasional gaffes.

In the meantime, let’s recognize that the left is at war with us and is relentless in pursuing it. We must fight back as hard as the left is attacking if we expect our ideas to prevail. And we can do that without compromising our principles, so let’s get to work.

David Limbaugh is a writer, author and attorney. His latest book is The True Jesus: Uncovering the Divinity of Christ in the Gospels. Follow him on Twitter @davidlimbaugh and his website at 



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Second Century Ventures adds Adwerx and immoviewer to 2017 REach® Accelerator Class

WASHINGTON (May 17, 2017) — Two more innovative technology companies have been selected to join REach®, a growth technology accelerator program from the National Association of Realtors®’ strategic investment arm, Second Century Ventures. Adwerx, a digital advertising provider, and immoviewer, a 3-D virtual tour technology company, will join the seven other companies announced last month as part of the fifth REach class.

REach provides early-to mid-stage companies with access to NAR’s industry expertise, influence and key relationships to help launch companies into the real estate, financial services, banking, home services and insurance industries.

“This year we had a record number of applications, which demonstrates REach’s value proposition to participating companies and the tremendous opportunity there is for them in the trillion dollar real estate industry,” said Dale Stinton, president of SCV and NAR CEO. “We are excited by the talent and diversity of innovation among the nine selected companies and are eager to kick off our 2017 cohort with the final addition of Adwerx and immoviewer.”

Adwerx provides cost-effective, highly-targeted and localized online advertising for real estate brokers, agents and listings. “By participating in the NAR REach program, Adwerx is in a great position to expand our footprint in real estate and strengthen our relationship with NAR. The opportunity to be part of the class of 2017 is perfect timing for us with the launch of our enterprise offering of marketing automation to brokers and franchises,” said Adwerx CEO Jed Carlson.

The newest trend in real estate listing marketing is 360 degree virtual tours, and immoviewer’s 3-D virtual tour software makes the process simple and affordable. “As the European market leader in 3-D virtual tour technology and the first international company to be selected to participate in the REach program, we are excited about the opportunity to accelerate and expand the use of this technology among real estate professionals in the U.S.” said immoviewer CEO Ralf von Grafenstein.

The seven other organizations making up the 2017 REach class are Centriq, an app that transfers home repair and maintenance knowledge from the seller to the buyer and keeps agents connected to their clients after the transaction; HouseCanary, a leading source for residential valuations and analytics; Notarize: a remote electronic notary service; Occly: a portable alarm solution that helps protect real estate professionals and properties; Pearl Certification, which certifies homes with features that contribute to its comfort, energy performance, indoor air quality and value; Relola, a site for agents to share insights about local listings, neighborhoods and service providers with clients; and Trusted Mail, a certification program that uses facial-biometrics to sign and encrypt email and attachments to protect against wire fraud and email spoofing.

NAR’s 2017 REach accelerator companies will be showcasing their innovative technology solutions this week during the REALTORS® Legislative Meetings in Washington, D.C., at the trade expo on Wednesday, May 17 and Thursday, May 18 from 10:00 a.m. to 6:00 p.m. at booth #1731.

Second Century Ventures is an early-stage technology fund, backed by the National Association of Realtors® that leverages the association’s 1.2 million members and an unparalleled network of executives within real estate and adjacent industries.  SCV systematically launches its portfolio companies into the world’s largest industries including real estate, financial services, banking, home services, and insurance. SCV seeks to define and deliver the future of the world’s largest industries by being a catalyst for new technologies, new opportunities, and new talent.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.


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