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Foreclosure scandal escalates Anger is mounting in the United States over what critics say were improper methods of foreclosure. The White House said today President Barack Obama will not sign legislation that would have made it harder for people to challenge foreclosures. The President is sending the bill back to the House for more discussion, his communications director said in Washington.
In Des Moines, Iowa's attorney general urged three major lenders to stop foreclosure proceedings while a probe is under way. Several banks have already stopped foreclosures in many states after reports of improper proceedings largely involving documentation. Other states have also urged action, and some politicians have called for a federal probe and a moratorium on foreclosures.
A key issue in the scandal, The Wall Street Journal reports, is what is known as "robo" signing, or documents being signed quickly by people or electronically without review.
Iowa's attorney general, Tom Miller, told reporters today that, by law, people signing affidavits in question must have personal knowledge of an eviction proceeding. But, he said, according to The Associated Press, that did not happen at times.
"We have admissions that was done in a sort of mass production, almost manufactured, basis," Mr. Miller said. "That they were being signed and not checked out."
Poverty on rise in U.S. suburbs The American suburb is no longer the getaway from the city core that it used to be. Amid the loss of millions of jobs in the recession, home foreclosures and eroding wealth, poverty rates are rising in the U.S. suburbs, the Brookings Institution said in a study today.
"The Great Recession exacerbated the trend toward rising and suburbanizing poverty apparent in the nation's largest metro areas since the start of the decade," writes Elizabeth Kneebone, senior research associate at the group's Metropolitan Policy Program.
"Given the persisitence of urban poverty and the growth of poor in the suburbs, policy makers and service providers alike will increasing need to craft regional solutions to address the shared challenges of metropolitan poverty."
Among the findings:
- The number of impoverished people in large metro areas climbed by 5.5 million from 1999 to 2009, more than two-thirds of that in suburbs.
- By 2009, some 1.6 million more people lived in the suburbs of the largest areas compared to the cities.
- The poverty rate rose in 57 of the 100 largest centres between 2007 and 2009, with big increases in the Sun Belt.
- Poverty increased by far wider margins in 2009 than in 2008.
- Several areas saw city poverty rates rise by more than 5 percentage points, while many suburban areas saw increases of 2 to 4 percentage points between 2007 and 2009.
Referring to the 100 biggest metro areas, Ms. Kneebone noted that suburban communities "bore the brunt" of rising povierty between 1999 and 2009.
"Suburbs saw their poor population balloon by 37.4 per cent in the 2000s, oustripping the national growth rate and more than doubling the rate of increase seen in cities (16.7 per cent)."
Potash CEO wants well over $170 a share The CEO of Potash Corp. of Saskatchewan says the value of his company "far exceeds $170 (U.S.) per share," suggesting that Australia's BHP Billiton Ltd. - or any other bidder - will have to pay substantially more than the current stock price to win his approval.
BHP's $130-per-share offer, which values the company at $38.6-billion, is "a non-starter," Bill Doyle said in an interview with The Globe and Mail, during which he predicted Potash Corp.'s stock would "blow the doors off" its record high of about $240 if the company were to stay independent.
U.S. dollar sinking The U.S. dollar continues to sink today amid speculation of further measures from the Federal Reserve and as the buzz in markets continues to focus on a global currency war.
"The combination of a weaker-than-expected U.S. growth trajectory, anticipation of the Federal Reserve entering a second round of unconventional stimulus measures, the lack of a credible fiscal plan and the upcoming midterm elections have all helped to weaken the [U.S. dollar]" Scotia Capital currency analyst Camilla Sutton said in a research note. "... Renewed monetary easing from the major central banks equates to a new flood of liquidity into the system. Fears over currency debasement, sparked by both direct currency intervention in Japan and the potential for ongoing intervention in both the U.S. and Japan, has helped to push gold prices to new highs and the [U.S. dollar]to year-to-date lows."
Several officials weighed in on the debate today. The chief of the International Monetary Fund, for example, ruled out a one-time currency accord, Globe and Mail Washington correspondent Kevin Carmichael reports.
Holding down the value of a currency is deemed a trade irritant, a way to help boost a country's exports. China has been under intense pressure to allow its yuan to rise, while Japan intervened in markets to keep a lid on the yen.
Russia, on the other hand, is talking up its ruble, which has been gaining against the U.S. dollar. Yesterday, Alexei Ulyukayev, the first deputy central bank chairman, reportedly told a conference in Moscow that "the ruble is more likely to strengthen than weaken" in the short term.
"Here's a central banker appearing to try and talk up his currency," Tim Ash, an analyst at Royal Bank of Scotland Group PLC, told The Wall Street Journal. "The central bank has been relatively slow to respond to recent market rumours suggestive of an imminent devaluation of the ruble."
And today, Russia established a council whose aim is to strenghten the ruble's role as a reserve currency, Bloomberg News reported.
In a research report late last month, Paul Biszko, senior emerging markets strategist at RBC Dominion Securities in Toronto, projected that a sustained "appreciation trend" for the ruble, one of the worst-performing commodity-linked currencies this year, will resume over the next three to six months as commodity prices hold.
"The Central Bank of Russia's (CBR) recent actions and signals regarding the currency and monetary policy suggest that officials remain committed to a freer floating ruble and an inflation targeting monetary policy regime, with a two-to-three timeframe likely," Mr. Biszko wrote in a report titled "Is the Russian Bear poised to re-awaken?"
"... Also underpinning our optimism on the [ruble]is the fact that neither the currency's valuation nor investor positioning in Russian financial assets appear stretched at this time."
- IMF rules out new currency accord
- Fed poised to pump more cash into system
- Pressure mounts on China to stop currency war
Trichet wades into currency debate
European Central Bank chief Jean-Claude Trichet is weighing into the controversy over exchange rates, warning that a currency should reflect its country's economy and that "excess volatility and disorderly moves" hurt economies and financial stability.
Mr. Trichet's comments came as the euro climbed against its U.S. counterpart, hitting $1.40 for the first time since early in the year.
Fears over a currency war have been mounting, largely because China is keeping a lid on its yuan and Japan has intervened in markets in an attempt to hold down the yen.
Mr. Trichet spoke after both his ECB and the Bank of England held interest rates steady today.
- ECB holds rates at record low
- Bank of England holds rates steady
- Economy Lab: Does Britain face a double-dip?
Building permits slip
Building permits in Canada fell 9.2 per cent in August from a month earlier, pulled down by a hefty drop of almost 23 per cent in the non-residential sector. Permits issued for residential construction rose, however, Statistics Canada said today.
The drop in the non-residential sector was primarily due to declines in Ontario, British Columbia and Quebec. The reverse was seen in residential permits, which rose 2 per cent on multi-family homes in the same three provinces.
While overall permits were down, they still stood 11.4 per cent above the level a year earlier, the federal statistics gathering agency said.
Retailers post solid gains
U.S. retailers appear to have had a successful back-to-school season, which is lifting hopes heading into the crucial holiday sales period.
Several chains today reported September sales that were better than expected, including Macy's Inc. and Abercrombie & Fitch AFN-N, though Gap Inc. and Target Corp. lagged.
From today's Report on Business
- Bell executive to take reins at CTV
- Defiant Maple Leaf charts own path
- Fourth-generation wireless: A tale of two providers
- Eric Reguly: Fading prospect of Chinese play for Potash
And, read our Streetwise blog and Your Business section.