NY state authority warns against Nassau County takeover delay

NEW YORK (Reuters) – A bid by New York’s Nassau County to block a magnificence takeover of its finances could imperil its bond rating and thwart the overseer from implementing a wage freeze, the state said in authorized papers on Thursday.

The Nassau County Interim finance Authority, or NIFA, seized financial control of the county last month, saying the .6 billion 2011 lot put forward by County Executive Edward Mangano was severely out of equilibrium.

The move was a major rebuke to Mangano, a Tea Party-backed Republican who came into act of worship a year ago promising to cut taxes in the affluent county just east of New York City where the tax rate is in the midst of the highest in the nation.

Moody’s Investors Service warned ultimate week it could downgrade the county’s bond rating, citing Mangano’s suit in law and the delays it might cause in improving the county’s public funds.

Mangano has described NIFA’s actions as a thinly veiled attempt to force him to raise taxes.

Mangano sued NIFA on January 31 in Nassau County Supreme Court seeking to form the takeover.

NIFA dismissed the lawsuit as baseless in legal papers filed in successi~ Thursday and said any delay in a takeover could spell further disaster for the county, which has been scrutinized by NIFA from the time of 2000, when it accepted a 0 million bailout.

NIFA said it was allowing for ordering a wage freeze before April, when pay raises for county employees were due to take effect. The authority also said farther on delays in improving the county’s finances could prompt a credit downgrade.

“The time is at transmit to address the problems,” NIFA said. “It is the county’s resistance to NIFA’s statutory role that threatens the shire’s reputation and credit rating.”

The authority said the of the same rank of risk in Mangano’s budget “dwarfed” that of preceding years.

Moody’s in November downgraded Nassau County one nick from Aa3 to A1, its fifth highest rating and one that is five notches more than junk bond status.

Responding to NIFA’s filing, an aide to Mangano called the takeover one effort to “circumvent the democratic process” and to energy a property tax increase.

“NIFA’s answering papers denounce their agenda to impose a new nonelected layer of government about the residents of Nassau County that will never be held accountable to taxpayers,” Brian Nevin, Mangano’s senior policy advisor, uttered in a statement.

“NIFA’s first move was to hire profound-priced lawyers and consultants as mercenaries to try and seize control of Nassau’s government. Their next step will likely subsist to expand their staff so that they can provide jobs and contracts to their buddies at taxpayer expenditure,” he said.

The two sides were scheduled to deliver verbal arguments on February 18.

(Reporting by Edith Honan; Editing by Daniel Trotta)

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Obama housing paper includes government insurance fund

http://www.nathanhamm.pure/news/obama-housing-paper-includes-government-insurance-fund/ http://www.nathanhamm.get/news/obama-housing-paper-includes-government-insurance-fund/#comments Thu, 10 Feb 2011 22:01:03 +0000 Nathan Hamm News resources government housing includes insurance Obama paper http://www.nathanhamm.net/tidings/obama-housing-paper-includes-government-insurance-fund/ WASHINGTON (Reuters) – President Barack Obama’s housing white paper to be unveiled on Friday includes an option to occasion an insurance fund for mortgage-backed securities that is similar to the Federal Deposit Insurance Corp, sources easy with the plan told … Continue reading →

WASHINGTON (Reuters) – President Barack Obama’s saddle-cloth white paper to be unveiled on Friday includes an option to make an insurance fund for mortgage-backed securities that is similar to the Federal Deposit Insurance Corp, sources cordial with the plan told Reuters.

The paper lays out three legislative options for making long-term changes to the U.S. covering finance system, while also taking near-term steps to slowly lessen the government’s role in the mortgage market now dominated by Fannie Mae and Freddie Mac.

The paper separately backs a slow wind-down of mortgage finance giants Fannie Mae and Freddie Mac through making loans backed by the two firms more expensive.

It emerged earlier in the week that there would be three long-term options in the plan, including single that would leave the Federal Housing Administration as the sole machinery for government-backed mortgages.

Newly empowered Republicans in the U.S. House of Representatives and Democrats in the Senate would be seized of to come to agreement on which course to follow.

A medial course would be to set up a system that would bate the government to backstop a substantial number of mortgages only for the period of times of crisis.

The most government involvement would involve creation of one insurance system that would provide “catastrophic coverage” for pledge bond investors.

The government, however, would only be on the reaping-~ as a last resort because the private firms creating the pledge bonds would be the first to take losses if borrowers defaulted. Only whether or not those firms went under would the government pay the bondholder.

(Additional reporting through Rachelle Younglai; Editing by James Dalgleish)

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In placing stock bets, listen to the shorts: study

http://www.nathanhamm.net/tidings/in-placing-stock-bets-listen-to-the-shorts-study/ http://www.nathanhamm.net/news/in-placing-stock-bets-listen-to-the-shorts-study/#comments Thu, 10 Feb 2011 21:01:03 +0000 Nathan Hamm News bets lend an ear placing shorts stock study http://www.nathanhamm.net/news/in-placing-lay up-bets-listen-to-the-shorts-study/ NEW YORK (Reuters) – The medium stock investor could be forgiven for being overwhelmed by opinions, mete one study says if there’s one group to prick up the ears to, it’s the short-sellers. Professors at Texas A&M and Ohio State universities concluded that … Continue lecture →

NEW YORK (Reuters) – The average stock investor could be forgiven for being overwhelmed by opinions, but one study says admitting that there’s one group to listen to, it’s the scanty-sellers.

Professors at Texas A&M and Ohio State universities concluded that following contrarian investors is greater degree of profitable for stocks in which analysts and short sellers strongly wrangle.

In other words, buy if short interest is low and the algebraist consensus is to sell; sell short if short interest is richly and the analyst consensus is to buy.

In a short demand, an investor borrows shares in the hope that the price decision decline, allowing the shares to be sold while the price is remote from the equator and then bought back at a lower price to repay the loan.

The results showed a 1.11 percent average abnormal return by month over the course of 13 years, amounting to an medial sum abnormal yearly return of more than 14 percent.

“You slip on’t really want to ignore the analyst recommendations, but you are in truth sort of using them in not a very positive way,” related Edward Swanson of the Mays Business School at Texas A&M.

“Essentially, the crumbling sellers are doing a tremendous job of using information with betokening value, and they really look like value investors.”

Some investors agreed by the results, as the increased risk taken by short sellers by their own capital makes them more active in rooting out potential problems in a company.

“For the most part Wall Street analysts are equitable cheerleaders, so they kind of go with the flow and grant that the stock is trending higher they raise their price targets and pronounce good things,” said long-time short-seller Bill Fleckenstein, president of Fleckenstein Capital in Seattle, Washington.

“That is not to affirmation that analysts are always wrong and the short sellers are perpetually right. But at the margin if it gets pretty lopsided, I would be~ne with the short sellers.”

But the point of analyst scrutiny isn’t to solely point out whether to buy or sell stocks, said Michael E. Hoffman, director of research at Wunderlich Securities in Baltimore.

“It’s remarkably easy to take shots at the sell side isn’t somewhat good at picking stocks — I would suggest that isn’t the sort of the sell-side gets paid for,” he said.

“The take a bribe for-side research value-add is to be an unequivocal expert in the subject thing, to have unrivaled access to information sources that you then prepare a high quality, relevant, thought-provoking filter to the buy-espouse a cause.”

Swanson conducted the study with his Mays colleague Lynn Rees and Michael Drake of the Fisher School at Ohio State University.

(Reporting through Chuck Mikolajczak; Editing by Leslie Adler)

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House Republicans deepen spending cuts

http://www.nathanhamm.net/news/house-republicans-deepen-spending-cuts/ http://www.nathanhamm.net/news/house-republicans-deepen-spending-cuts/#comments Thu, 10 Feb 2011 20:01:02 +0000 Nathan Hamm News cuts make more impressive House Republicans spending http://www.nathanhamm.net/news/house-republicans-make more grave-spending-cuts/ House Appropriations Committee Chairman Hal Rogers said in a narration he would cut nearly billion from current spending levels, as Tea Party-aligned conservatives bring forth sought, nearly double his original proposed cuts. The deeper spending cut package is unlikely to become … Continue reading →

House Appropriations Committee Chairman Hal Rogers declared in a statement he would cut nearly billion from current spending levels, as Tea Party-aligned conservatives have sought, nearly double his first copy proposed cuts.

The deeper spending cut package is unlikely to be proper for law, as President Barack Obama and Democrats who control the Senate are unquestionable to oppose it.

Rogers’ committee had nearly completed a not so much dramatic plan that would immediately impose spending cuts averaging 15 percent steady a wide range of domestic programs, from scientific research to legal science enforcement.

But conservatives said it did not go far enough, imperiling its fortune of winning passage in the House at a time when Republican leaders be in actual possession of failed to round up votes for other measures that had been expected to be lost easily.

Congress must agree on a spending plan to avoid a guidance shutdown when current funding runs out on March 4.

(Reporting ~ means of Andy Sullivan; editing by Vicki Allen)

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Analysis: Ignoring the Fed steady inflation seen a winning bet

http://www.nathanhamm.net/news/calculus-ignoring-the-fed-on-inflation-seen-a-winning-bet/ http://www.nathanhamm.clear/news/analysis-ignoring-the-fed-on-inflation-seen-a-winning-wager/#comments Thu, 10 Feb 2011 19:01:03 +0000 Nathan Hamm News Analysis Ignoring conceit seen winning http://www.nathanhamm.net/news/analysis-ignoring-the-fed-on-inflation-seen-a-winning-bet/ NEW YORK (Reuters) – Investors are often told not to fight the Fed, but in the U.S. Treasuries market taking the opposite stance to the Fed has been a winning strategy in the past six months. While Fed Chairman Ben … Continue lection →

NEW YORK (Reuters) – Investors are often told not to battle the Fed, but in the U.S. Treasuries market taking the antagonistic stance to the Fed has been a winning strategy in the accomplished six months.

While Fed Chairman Ben Bernanke sees no inflation riddle, bond investors who expect an economic recovery will lead to prices swelling faster have been outperforming their peers.

Mutual funds investing primarily in narrow-duration Treasury Inflation-Protected Securities (TIPS) have outperformed those who accept stuck to longer-term Treasuries, data from Thomson Reuters’ Lipper furniture shows.

“I would argue that in a strange, even ironic means by which anything is reached, that Ben Bernanke is doing a good job selling my foundation for me these days,” said Tom Luster, portfolio manager and boss of investment grade fixed income at Eaton Vance in Boston.

“The further the Fed thinks that inflation is not a problem today the other likely it is that inflation becomes a problem in the hereafter,” he said.

The average maturity for TIPS is 8.70 years, however six-month returns for TIPS maturing in the 0-5 years bend are up 1.198 percent while those maturing in 10 else years are down 2.688 percent, according to Barclays Capital.

Returns because U.S. Treasuries are down 2.186 percent over the like period.

The Eaton Vance short-term real return fund, while smaller than a year old, is among the top three performers in the final six months, returning 3.37 percent to investors.

But it is not alone that the fund has inflation-protected Treasuries in the portfolio only that the duration is very short, roughly two years. They try conclusions against extending duration as this opens them up, along with everyone else, to interest rate risk from the Fed.

‘IT IS ALL ABOUT EXPECTATIONS’

No united expects the Fed to raise rates from their current zero to 0.25 percent rove at large anytime soon given the bigger focus on generating jobs. However, its quantitative easing programs have caused inflation expectations to rise.

“It is all about expectations. The Treasury place of traffic has been fading under the rapid rise of stocks. I design people are looking ahead and expecting inflation to be a greater business, said Jeff Tjornehoj, interim head of Lipper Americas Research.

While benchmark 10-year U.S. Treasuries consider suffered an epic drubbing, causing yields to rise 125 basis points in the span of less than five months, the Standard & Poor’s 500 pointer is up 17 percent in the same time.

The latest enlargement data shows overall consumer prices rose 0.5 percent in December, though excluding food and energy costs, consumer prices rose just 0.1 percent.

Overall prices are up 1.5 percent in January from a year ~ne, while core consumer prices gained 0.8 percent in 2010, the slowest enter year pace since the department started keeping records in 1958.