Finance Blog number 1

Home prices rose for the second straight month in most major U.S. cities and are stabilizing after years of declines. But analysts say the trend in prices hardly signals a rebound for the troubled housing market.

A flurry of spring buyers is helping boost sales. At the same time, millions of foreclosures are in limbo, awaiting the results of a government investigation into improper practices by mortgage lenders. Once that probe is complete, banks will resume seizing homes and prices will likely fall again.

The Standard & Poor’s/Case-Shiller home-price index released Tuesday showed that prices rose in May in 16 of the 20 cities tracked.

Boston, Minneapolis and Washington posted the biggest monthly increases. Prices in Detroit, Las Vegas and Tampa, Fla. Prices _ three cities hit hardest by the housing crisis _ fell to their lowest points since the recession began.

Price declines have been getting smaller through the year. Seasonally adjusted prices have fallen a modest 1.2 percent over the past six months, according to the index. That’s roughly a third of the decline from the previous six months.

But analysts say the weakening job market and the uncertainty over foreclosures could lead to deeper price declines in the second half of the year. They estimate prices will fall another 5 to 10 percent by year’s end.

“The aggregate economy is at a turning point and there is much uncertainty now,” said Robert Shiller, a Yale professor and co-founder of the home-price index.

David M. Blitzer, chairman of S&P’s index committee, said the month-over-month increases in May were attributed to a “seasonal period of stronger demand for houses.” Such increases are expected, he said.

After adjusting for seasonal factors, such as spring buying, prices fell in 11 markets.

“Sustained increases in home prices over several months and better annual results need to be seen before we can confirm a real estate market recovery,” he said.

Over the last 12 months, prices have fallen in 19 of the 20 cities tracked.

Housing remains the weakest part of the economy. High unemployment, larger down payment requirements and tighter credit are preventing many buyers from entering the market. Many who can afford to buy are waiting because they are worried prices have yet to hit bottom.

Foreclosures and short sales _ when a lender agrees to sell for less than what is owed on a mortgage _ made up about 30 percent of all home sales last month, up from about 10 percent in past years. And 1.7 million potential foreclosures are being held up, according to real estate firm CoreLogic, either by backlogged courts or lenders awaiting state and federal probes into troubled foreclosure practices.

At least 10 percent of homeowners are 90 days or more past due on their mortgage payments in nine major U.S. cities, according to CoreLogic. The national average is 7.4 percent.

Most of those areas are well known trouble spots, including Atlanta, Las Vegas, Phoenix, Tampa, Fla., and Riverside, Calif. But others haven’t been as battered, including Chicago, Orlando, Fla., Long Island, N.Y., and Sacramento, Calif. That suggests the weakness in the housing industry is nationwide, economists say.

“We’re just really bouncing along the bottom right now,” said Chris Christopher, senior economist at IHS Global Insight. “Even with the positive news, there’s nothing very meaningful in these reports to show we’re coming back up. It’s just little blips here and there.”

There’s also less demand because the U.S. is seeing a decline in household formation. Fewer people are getting married. More young people are moving back in with their parents. Fewer immigrants are coming to the United States, partly because of the economy and also because of tougher enforcement of immigration laws. And the divorce rate has dropped, which is good for families but means there are fewer buyers.

Before the recession, between 2002 and 2007, roughly 1.3 million households were formed every year, according to U.S. Census data. That figure peaked in 2007 at more than 1.6 million. But since then it has fallen to just 357,000 last year, the lowest level in more than 60 years.

One bright spot in the S&P/Case-Shiller data: Even when adjusted for seasonal factors, month-over-month prices rose in some markets that had been pummeled by slumping sales. Those cities are Chicago, Denver, Miami, Minneapolis and Seattle.

The index measures prices compared with those in January 2000. It then provides a three-month average. The May data is the latest available.

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Swansea-based Holland Construction Services is building Medical Building Three, the first free-standing medical facility on the Memorial Hospital campus at Belleville.

The 3-story steel structure with brick veneer and curtain wall entry will encompass 85,000 square feet, offering an orthopedic and neurosciences center.

It will also accommodate Memorial Hospital’s outpatient physical, occupational, hand and speech therapy services and open MRI paydayloans.

The project is scheduled for completion in November.

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Mexican central banker Agustin Carstens says the next leader of the International Monetary Fund should not be European because those nations are borrowing heavily from the lending organization.

Carstens is pressing his long-shot candidacy to head the IMF. European officials have closed ranks behind French Finance Minister Christine Lagarde, who has emerged as the front-runner.

Carstens says Lagarde’s candidacy would create “conflicts of interest” because Greece, Ireland and Portugal are borrowing heavily from the Fund.

A European has traditionally headed the IMF. Carstens is unlikely to pose a serious challenge to Lagarde, who consolidated her lead over the weekend. But his speech and a meeting with Treasury Secretary Timothy Geithner should help Carstens build name recognition and position him for another top job in the future.

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North County is seeing some positive developments.

That was the basic message delivered over ham and eggs to several hundred people at Friday’s 34th Annual Breakfast sponsored by North County Incorporated. NCI is a regional development group that is an advocate for the North County community.

“Over the past year, we have been considerably busy working on regional issues that will affect the North County area long term,” NCI President and CEO Rebecca Zoll said. “We want to show people that North County is a great place to live and work.”

NCI has partnered with Metro and the St. Louis County Economic Council on various issues. The group worked to pass the St. Louis County’s sales tax increase for more revenue for Metro and to reopen different bus routes, The organization also is pleased that the Missouri Department of Transportation has started a transportation study to find ways to improve the Interstate 270 Corridor from McDonnell Boulevard. Results will be made public in January 2012.

Other positive highlights include the future opening of the National Records and Archives Center in Spanish Lake. NCI also launched www.explorenorthstlouiscounty.com, a website that features North County’s parks and recreational opportunities, museums, historical sites, entertainment, art and festivals.

During the breakfast at the St. Louis Airport Marriott, the NCI honored various community leaders and business for their achievements.

The North County Suburban Journals was a sponsor of the breakfast.

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Pakistani media have reported a name they say is that of the CIA’s station chief in Islamabad.

The weekend television and newspaper reports follow last Monday’s U.S. raid that killed al-Qaida leader Osama bin Laden in Abbottabad, Pakistan, and badly soured relations between the two countries.

A spokesman for Pakistani intelligence declined to comment Monday.

It’s the second time in six months that an alleged name of the CIA station chief in Islamabad has been reported in the Pakistani media. The Associated Press has learned that the name being reported is incorrect.

In December, the CIA pulled its then-station chief out of the country after a name alleged to be his surfaced in Pakistan’s media. Pakistani officials have denied unmasking the previous station chief.

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European inflation accelerated to the fastest pace in two and a half years and confidence in the economic outlook declined as surging energy prices threatened to undermine growth.

Inflation in the 17-nation euro region quickened to 2.8 percent in April from 2.7 percent, the European Union’s statistics office in Luxembourg said today in an initial estimate. Economists had expected inflation to remain unchanged, according to the median of 34 forecasts in a Bloomberg News survey. An index of executive and consumer sentiment slipped to 106.2 from 107.3 in March, the sharpest drop since May 2010, and unemployment held at 9.9 percent, separate reports showed.

Crude-oil prices have soared 38 percent in the past six months, pushing inflation above the European Central Bank’s 2 percent limit and prompting policy makers to raise interest rates this month for the first time in almost three years. At the same time, higher raw-material costs are weighing on consumption and company profits, just as governments across the region cut spending to narrow budget deficits.

“The inflation numbers support the view that the ECB will deliver another interest rate hike before long,” said Aline Schuiling, senior economist at ABN Amro Bank NV in Amsterdam. “Growth was exceptionally strong in the first quarter, but will slow from here. The labor market is still very sluggish and paired with inflation that’s not good for purchasing power.”

German Output

The euro was little changed after the data were released, trading at $1.4867 at 11:31 a.m. in Brussels, up 0.2%.

European services and manufacturing growth unexpectedly accelerated in April, driven by higher output in Germany and France, the region’s largest economies. Still, European investor confidence declined as faster inflation and higher interest rates may hurt the recovery. Euro-region growth will slow to 1.6 percent this year from 1.8 percent in 2010, the European Commission forecast last month.

A gauge of sentiment among euro-region manufacturers slipped to 5.8 in April from 6.7 in the previous month, the European Commission said today. Services confidence dropped to 10.4 from 10.8 and an index of consumer confidence eased to minus 11.6 from minus 10.6. Sentiment among builders rose to minus 24.2 from minus 25.4.

Debt Crisis

Capacity utilization rose to 81.3 percent in the second quarter from 80.3 percent in the previous three months, the commission said.

As governments from Ireland to Spain cut spending to contain a sovereign debt crisis, eroding consumer and investment spending, European companies have relied on faster-growing markets to bolster sales. Volkswagen AG (VOW), Europe’s biggest automaker, this week reported record operating profit in the first quarter on stronger demand from China.

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Vietnam’s inflation accelerated to the fastest pace since 2008, putting pressure on the government to tighten policy further after almost doubling a key interest rate in less than six months.

Consumer prices climbed 17.51 percent in April from a year earlier, according to figures released by the General Statistics Office in Hanoi today. The rate is the highest since December 2008 and compares with the 13.89 percent pace last month. Prices rose 3.32 percent in April from March.

Policy makers have boosted the repurchase rate to 13 percent from 7 percent in November and cut the target for 2011 credit growth to tame inflation and regain investor confidence in the government’s ability to prevent the economy from overheating. Still, food and commodities make up a large share of household spending and increases in gasoline and power costs will fuel inflation, Standard & Poor’s said this month.

“Inflation shows little signs of responding to monetary and fiscal austerity just yet,” said Bill Stoops, chief investment officer at Ho Chi Minh City-based fund manager Dragon Capital. “Government policies to slow inflation operate with a lag effect.”

The inflation rate may peak at almost 20 percent before easing to about 13 percent by year-end, according to U.K.-listed Vietnam Property Fund Ltd. (VPF), which is managed by Dragon Capital.

The repurchase rate at which the central bank performs open market operations is Vietnam’s key policy rate, according to Santitarn Sathirathai, a Singapore-based economist at Credit Suisse Group AG (CSGN), which expects an increase to 14 percent by the end of the year.

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South Korea’s inflation will probably accelerate more than previously forecast while economic growth stays in line with expectations, the Bank of Korea said.

Consumer prices may increase 3.9 percent in 2011, faster than the previous estimate of 3.5 percent, the central bank forecast in a statement in Seoul today. Gross domestic product is projected to expand 4.5 percent this year and 4.8 percent in 2012 after a 6.2 percent gain in 2010, it said. The bank predicted in December growth of 4.7 percent for next year.

Accelerating inflation spurred by economic growth and higher oil and food prices may prompt the central bank to raise interest rates three more times this year, according to Barclays Plc. Bank of Korea Governor Kim Choong Soo said yesterday he will take monetary policy action “neither too slowly nor too fast,” after keeping the benchmark rate unchanged.

The increased inflation forecast “is a hawkish signal that reinforces our call for more rate hikes this year,” said Dariusz Kowalczyk, a Hong Kong-based economist at Credit Agricole CIB. He said he predicts at least two more interest-rate increases this year, and a strengthening in the won to 1,050 to the dollar by the end of the year.

The won rose 0.1 percent to 1,092.85 per dollar as of 9:18 a.m. in Seoul, according to the data compiled by Bloomberg, while the Kospi stock index gained 0.1 percent.

Oil prices

The central bank also estimated the economy grew 1.5 percent during the first quarter and expanded 4.1 percent from a year earlier. Economic growth was bolstered by exports. Overseas shipments jumped 30.3 percent to record-high $48.6 billion in March, according to a government report on April 1.

Consumer inflation in Asia’s fourth-largest economy will accelerate to 4.5 percent this year, the International Monetary Fund projected this week. It forecast that economic growth will slow to 4.2 percent next year from 4.5 percent this year.

The threat of further oil-price increases has become a “key downside risk” for global growth, according to the IMF. Oil will rise 36 percent in 2011 to $107.16 a barrel, based on the average prices of U.K. Brent, Dubai and West Texas Intermediate crudes, the IMF said. The January forecast was for oil at $89.50 a barrel this year.

Inflation Ceiling

The Bank of Korea itself projects oil prices to be at $105 per barrel this year, compared with its previous estimate of $87. Crude oil for May delivery fell $3.67 to $106.25 a barrel on the New York Mercantile Exchange yesterday, the lowest settlement since March 30.

Higher oil and food prices have pushed consumer inflation beyond the central bank’s 4 percent ceiling every month since the start of the year, prompting the bank to raise rates by a quarter of a percentage point each in January and March. Consumer price climbed 4.7 percent from a year earlier in March, the biggest increase since October 2008.

Governor Kim said high inflation will likely persist in coming months and that core prices excluding oil and food may gain faster than consumer prices by the end of this year.

“We’re determined to normalize interest rates,” Kim said yesterday after keeping the target rate at 3 percent. “We will move ahead neither too slowly nor too fast, and in a forward- looking manner, as we’re recovering from a crisis.” The central bank began increasing the benchmark seven-day repurchase rate from a record-low 2 percent last July.

Jobless Rate

The Korean central bank may increase its target rate by 25 basis points in May, July and September, Wai Ho Leong, a Singapore-based regional economist at Barclays Plc, said yesterday in a report.

The bank today also forecast that the jobless rate will decline to 3.4 percent next year from 3.6 percent this year. The nation’s current-account surplus is expected to shrink to $11 billion in 2011 from $28.2 billion last year because of surge in oil price.

South Korea’s unemployment rate stayed at a one-year high in March as an economic recovery encouraged people to seek jobs.

The jobless rate was at 4 percent, unchanged from February, Statistics Korea said in Gwacheon today, citing seasonally adjusted figures.

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The French prime minister says France would support military action against Moammar Gadhafi’s Libya within a matter of hours if the U.N. Security Council approves it.

Francois Fillon says “time is of the essence” and “the threat of Col. Gadhafi shows how urgent it is that the international community mobilizes itself.”

Fillon’s comments on France-2 Television Thursday came just hours before a scheduled Security Council vote on a resolution that would impose a no-fly zone over Libya.

The resolution would also authorize “all necessary measures” to protect civilians from attacks by Gadhafi’s forces.

France and Britain have been among the biggest proponents of a no-fly zone over Libya and French Foreign Minister Alain Juppe was arriving in New York for the debate.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

UNITED NATIONS (AP) _ The U.N. Security Council scheduled a vote Thursday on a resolution that would impose a no-fly zone over Libya and authorize “all necessary measures” to protect civilians from attacks by Moammar Gadhafi’s forces.

France’s U.N. Ambassador Gerard Araud said he expected more than one of the council’s 15 members to abstain when the vote took place at 6 p.m. EDT (2300 GMT), but council diplomats said they did not expect the resolution to be vetoed.

The resolution needs nine “yes” votes and no veto by a permanent member to be adopted.

Russia and China, which have veto power, have expressed doubts about the United Nations and other outside powers using force against Gadhafi, and diplomats said other council nations reacted cautiously, including Germany, India, Brazil and South Africa.

Even if all six countries abstained, the resolution would still have the minimum nine “yes” votes.

The United States joined the resolution’s initial supporters _ Britain, France and Lebanon _ not only in pushing for a speedy vote but in pressing for action beyond setting up a no-fly zone in order to protect civilians from air, land and sea attacks by Gadhafi’s fighters.

The text that will be put to a vote would “establish a ban on all flights in the airspace of the Libyan Arab Jamahiriya in order to help protect civilians,” diplomats said. It also would authorize U.N. member states to take “all necessary measures” to protect civilians under threat of attack, while excluding an occupation force, the diplomats said.

French Foreign Minister Alain Juppe flew to New York Thursday to press the case for speedy Security Council approval.

A French diplomatic official in Paris said military action could follow “in a very short period of time.”

The official, speaking on condition of anonymity because he was not authorized to speak about the issue publicly, said France foresees a “coalition of the willing” that would include support from Arab states but would not involve a ground operation.

French officials have said Arab countries’ support could come, for example, by providing use of their air bases, the official said.

U.S. Secretary of State Hillary Rodham Clinton told reporters in Tunisia on Thursday that a U.N. no-fly zone over Libya would require action to protect the planes and pilots, “including bombing targets like the Libyan defense systems.”

Council members agreed to call a vote after a close-door meeting to discuss reactions to the draft sent to capitals overnight. It was hammered out during more than eight hours of sometimes heated negotiations on Wednesday.

With Gadhafi’s forces intensifying attacks and heading toward opposition-held Benghazi, Libya’s second-largest city, supporters of the resolution have been pressing for speedy council action.

U.S. Ambassador Susan Rice said late Wednesday the Obama administration is “fully focused on the urgency and the gravity” of the situation in Libya.

“We are interested in a broad range of actions that will effectively protect civilians and increase the pressure on the Gadhafi regime to halt the killing and to allow the Libyan people to express themselves in their aspirations for the future freely and peacefully,” Rice told reporters. “Those include discussion of a no-fly zone, but the U.S. view is that … a no-fly zone has inherent limitations in terms of protection of civilians at immediate risk.”

According to a council diplomat who spoke on condition of anonymity because the talks were private, Rice said the U.S. will not act without Security Council authorization, does not want to put U.S. ground troops into Libya, and insists on broad international participation, especially by Arab states.

President Barack Obama and his top national security aides had been cautious with calls for a no-fly zone, which the Pentagon described as a step tantamount to war. The U.S. fears involvement in Libya could further strain its already stretched military and entangle the country in an expensive and messy conflict in another Muslim country.

The council diplomat said Rice told the ambassadors the Obama administration believes there is a significant risk of major atrocities by Gadhafi’s forces in Benghazi and wants the council to do everything possible to prevent that and protect civilians.

Michael Mann, a spokesman for EU foreign policy chief Catherine Ashton, said Thursday that even as Gadhafi’s forces advanced, there would be no talks with his regime. He called the situation on the ground “extremely worrying.”

Asked what the EU would do if Gadhafi’s forces retook Benghazi, Mann said, “We have always said all along that we are planning for all options.”

He also said the EU was looking to the U.N. Security Council before making further decisions.

Russia’s U.N. Ambassador Vitaly Churkin, whose government had expressed misgivings about a no-fly zone, proposed that the council vote first on a resolution calling for a cease-fire in Libya.

Rice told reporters a majority of council members did not support a separate cease-fire resolution but said that a call for a cease-fire could be incorporated in the no-fly resolution.

France and Britain failed to win support for a no-fly zone during a two-day meeting of Group of Eight foreign ministers in Paris earlier Tuesday and the G-8’s final communique did not mention a flight ban, leaving any action to the Security Council.

The Security Council on Feb. 26 imposed an arms embargo on Libya and ordered all countries to freeze assets and ban travel for Gadhafi and some close associates. It also referred the regime’s deadly crackdown on protesters to the International Criminal Court, for an investigation of possible crimes against humanity.

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AT&T Inc.’s CEO Randall Stephenson on Tuesday expressed frustration with the way applications are sold to smart phone users, saying customers should be able to buy an application once and have it work across many devices.

As an alternative to today’s most popular application stores, controlled by Silicon Valley heavyweights Apple Inc. and Google Inc., Stephenson touted an emerging system that lets carriers like AT&T sell apps directly to users.

AT&T Inc. was, until last week, the sole U.S. carrier for the iPhone, which sells apps that run only on Apple devices.

“You purchase an app for one operating system, and if you want it on another device or platform, you have to buy it again,” Stephenson said in a keynote speech at the world’s largest mobile-phone trade show in Barcelona, Spain. “That’s not how our customers expect to experience this environment bad credit payday loans.”

Stephenson highlighted a new standard for Web software, HTML 5, which will allow applications to run on different devices, and the Wholesale Applications Community, which is an “app store” set up by carriers as a counterweight to app stores run by The Wholesale Applications Community announced its commercial launch Monday. From the point of view of software developers, it acts as one app store. The apps are then sold by a variety of phone companies around the world, in stores that carry their own brands.

There are as yet few phones that support WAC applications, but LG Electronics Inc., Samsung Electronics Co., Sony Ericsson, Huawei Technologies Co. and ZTE Corp. have committed to making them.

The four biggest U.S. wireless carriers