Long-feared mortgage meltdown is here

Third-quarter bank earnings will feel an unwelcome jolt as mortgage volume has fallen off a cliff. Banks large and small have been preparing investors for difficult revenue comparisons by preannouncing the bad news. JPMorgan Chase CFO Marianne Lake at a conference on Sept. 9 said the bank expected its mortgage origination business to post a net operating loss for the second half of 2013.

Cardinal Financial of McLean, Va., late on Thursday announced that its third-quarter mortgage loan originations had declined by roughly 40 percent from the second quarter, and that "the marketing gain percentage for mortgages sold has decreased during the third quarter due to increasing competitive pressure related to the changing market conditions."

Cardinal also said "Expense reduction and revenue enhancement measures have been and will continue to be implemented to offset the decrease in mortgage production and the decline in the marketing gain percentage," but that the bulk of the benefit of the cost declines wouldn't be realized until the fourth quarter. The bank was downgraded by several sell-side analysts on Thursday and Friday, and its shares dropped 5 percent Friday to close at $16.76  Read more >>

Is silver back in the bull market?

It is silver's time to shine after the precious metal climbed for seven straight sessions to notch gains not seen in nearly five years, and analysts say its winning streak is far from over.

Silver prices rallied to almost $23 a troy ounce on Thursday, after logging collective gains of 17 percent in over the past seven sessions, as a surge in gold prices and a more positive outlook for global industrial production boosted sentiment.

"It's something that you can't really ignore at the moment...There is plenty of talk about silver being in a bull market now, after the recent gains, it does look like it is in really good stead," said Stan Shamu, market strategist at trading firm IG.

Silver prices, which are closely correlated to gold, have followed steep falls in the yellow metal this year. Silver plunged 40 percent from the highs of at the start of the year to lows of $18.19 in June 28, while gold dropped 29 percent over the same period.

Demand for the precious metals, which are viewed as safe havens, waned as investors grew more confident over a more stable global economy. However, prices have recovered in recent weeks as Fed dialogue suggested tapering plans could be delayed and a flare up of violence in Egypt renewed appetite for the safe haven assets. Read more >>

Detroit retirees face pension cuts

The battle over the future of Detroit is set to begin this week in federal court, where government leaders will square off against retirees in a colossal debate over what the city owes to a prior generation of residents as it tries to rebuild for the next.

Soon after Detroit emergency manager Kevyn D. Orr and Michigan Gov. Rick Snyder (R) approved a bankruptcy filing Thursday, groups representing the 20,000 retirees reliant on city pensions successfully petitioned a county court to effectively freeze the bankruptcy process.

Now, city and state officials, who say the court ruling will not affect their plans, are asking a federal judge to hold hearings early this week to validate the bankruptcy and move forward with a strategy for Detroit to discharge much of its estimated $19 billion debt.

Orr has promised that retired city workers, police officers and firefighters will not see pensions or health benefits reduced for at least six months. But on Sunday, he said those retirement benefits will have to be cut down the road. Read more >>

Stockholm rioting continues for fifth night

Police in Stockholm are to seek reinforcements after youths set cars ablaze and threw stones at police for a fifth night running, officials said.

About 30 cars were set on fire in poorer districts in north-western and south-western parts of the Swedish capital on Thursday night, with rioters causing widespread damage to property, including schools. However, a police spokesman said the overnight violence was less intense than in previous nights.

Despite Sweden's reputation for equality, the rioting has exposed a faultline between a well-off majority and a minority, often young people with immigrant backgrounds, who cannot find work, lack education and feel marginalised.

The violence appears to have been prompted by the death of a 69-year-old man shot by police this month in Husby, now the centre of the rioting. Read more >>

Job Insecurity High as Layoffs Show Huge Surge

The number of planned layoffs at U.S. firms fell in March but downsizing by retail companies still helped the first quarter rack up the largest amount of cuts in over a year, a report showed on Thursday. Employers announced 49,255 planned job cuts last month, down 11 percent from 55,356 in February, according to the report from consultants Challenger, Gray & Christmas.

But March's layoffs were still up 30 percent from the same time a year ago, the fourth time in the last six months that monthly job cuts have been higher than the year before. For the quarter, there were 145,041 workers let go, up 5.6 percent from the fourth quarter of last year. It was the worst quarter for layoffs since the third quarter of 2011.

Retailers cut the most employees in March, announcing 16,445 layoffs, up from 2,279 in February. In the first three months of the year, retail firms have cut 25,400 jobs, second only to the financial sector's 33,819 for 2013 so far. Read more >>

One-third of seafood mislabeled, study finds

If you order tuna at a D.C. restaurant, chances are half the time you’ll be getting another, less expensive fish in its place. But those odds are better than if you had wanted snapper. Testers nationwide found that 87 percent of the time, restaurants and grocery stores were selling something else under that label.

As much as one-third of seafood sold in restaurants and groceries is fraudulently labeled, according to a report the advocacy group Oceana released Thursday. The group sampled 674 retail outlets in the District and 20 states between 2010 and 2012, often finding cheaper, farmed fish being sold in place of wild-caught ones.

Ninety-five percent of the sushi restaurants, 52 percent of other restaurants and 27 percent of grocery stores surveyed sold mis­labeled seafood. While academics, consumer groups and media outlets in the United States and elsewhere have scrutinized fish labeling before and found major errors, Oceana’s effort is one of the largest seafood investigations to date. Read more >>

U.S. a step closer to wide domestic use of drones

A future in which unmanned drones are as common in U.S. skies as helicopters and airliners has moved a step closer to reality with a government request for proposals to create six drone test sites around the country.

The Federal Aviation Administration made the request Thursday, kicking off what is anticipated to be an intense competition among states hoping to win one of the sites.

The FAA also posted online a draft plan for protecting people's privacy from the eyes in the sky. The plan would require each test site to follow federal and state laws and make a privacy policy publicly available.

Privacy advocates worry that a proliferation of drones will lead to a "surveillance society" in which the movements of Americans are routinely monitored, tracked, recorded and scrutinized by authorities.

The military has come to rely heavily on drones overseas. Now there is tremendous demand to use drones in the U.S. for all kinds of tasks that are too dirty, dull or dangerous for manned aircraft. Read more >>

Oklahomans Prepare for New Law That Will Make Guns a Common Sight

Bryan Hull will soon strap his Smith & Wesson .357 Magnum revolver to his hip and meet his armed friends at Beverly’s Pancake House here. They have no interest in the cash register. They just want a late-night breakfast.

A new law takes effect on Thursday in Oklahoma — anyone licensed to carry a concealed firearm can choose to carry a weapon out in the open, in a belt or shoulder holster, loaded or unloaded. Five minutes after midnight Thursday, Mr. Hull and his friends — supporters of the Oklahoma Open Carry Association, a gun rights group — will mark the occasion by wearing their unconcealed handguns while dining at Beverly’s, a 24-hour restaurant.

“It’s just a peaceful assembly,” said Mr. Hull, 44, the association’s co-director. “We’re all licensed by the state to carry. We’ve all been trained and vetted. Why wouldn’t somebody want to have that kind of a group do business with them in their establishment?” Read more >>

World’s richest woman to jealous poor: "Drink less, work more"

The world’s richest woman, Australian mining tycoon Gina Rinehart, urged those “jealous” of the wealthy to “spend less time drinking” in a piece the government described as “insulting” on Thursday. Rinehart, whose family iron ore prospecting fortune of Aus$29.2 billion (US$30.1 billion) also makes her Australia’s wealthiest person, hit out at those who she said were envious of the rich.

“There is no monopoly on becoming a millionaire,” she wrote in an industry magazine column. “If you’re jealous of those with more money, don’t just sit there and complain. Do something to make more money yourself — spend less time drinking or smoking and socialising, and more time working.

“Become one of those people who work hard, invest and build, and at the same time create employment and opportunities for others.” Rinehart blamed what she described as “socialist”, anti-business policies for the plight of Australia’s poor, urging the government to lower the minimum wage, as well as taxes, unless it wanted to end up like Greece. Read more >>

LatAm countries back Ecuador in Assange case

Latin American countries voiced support Thursday for Ecuador's latest decision to grant political asylum to WikiLeaks founder Julian Assange, a move that triggered a diplomatic row between Quito and London.

The members of the Bolivarian Alliance for the Americas (ALBA) -- Venezuela, Cuba, Nicaragua, Bolivia, Ecuador and three Caribbean island nations -- said in a statement that they "strongly object" to the British threat of raiding Ecuador's embassy in London to seize Assange, who has taken refuge there since June 19.

The statement said Britain would violate the Vienna Convention on Diplomatic Relations and face "grave consequences if the threats are carried out." The ALBA also expressed its "steadfast solidarity" with Ecuador, which granted political asylum to Assange on Thursday.

Jorge Tarud, president of the Chamber of Deputies Foreign Relations Committee in the Chilean Congress, on Thursday asked the Chilean government to give full support to Ecuador on the issue. Uruguayan Foreign Minister Luis Almagro also urged Britain to "respect the Vienna Convention on Diplomatic Relations, and to guarantee the privileges, inviolability and immunity of Ecuador's embassy." Read more >>

GE job posting closes after 10,000 applications received for $13/hour jobs

 bizjournals.com
General Electric Co.’s posting for jobs at Louisville’s Appliance Park closed Thursday evening after the company collected 10,000 applications through its Web site.

Hiring is expected to start in September, according to Kim Freeman, a spokeswoman for GE Appliances. It’s not clear how many applicants will get calls back.

Business First reports that the starting rate for the manufacturing positions will be $13.56 per hour. Workers hired on the second shift will receive a $1-per-hour night-shift bonus.

Freeman said company officials hope to get enough qualified applicants to take the company through all the hiring it will do through 2013.

Austerity Protests Erupt in 80 Cities Across Spain

Anger over austerity measures spilled into the streets across Spain on Thursday after parliament passed an $80 billion austerity package. Tens of thousands of protesters across 80 cities demonstrated against the imminent cuts, which include pay cuts for civil workers, an increase in sales tax, benefits cuts and a raise in retirement age.

The austerity measures were announced last week by prime minister Mariano Rajoy. Since the announcement, protests have broken out on an almost daily basis. Thursday's demonstrations, however, were the largest--swelling after Rajoy officially passed the measures through parliament with the aid of his center-right Popular Party.

Meanwhile, Germany's parliament approved a Spanish 'rescue package' worth up to $122 billion for Spain's banks. During the protests, a blockade of civil servants closed off several main roads in Madrid, while protesters chanted, "Hands up, this is a robbery!" Read more >>

Drought hits 56 percent of continental US; 'significant toll' on crops

The prolonged heat across the Midwest has not only set temperature records, it is also expanding and intensifying drought conditions -- and relief isn't on the horizon for most areas, the National Weather Service reported Thursday.

Drought conditions are present in 56 percent of the continental U.S., according to the weekly Drought Monitor. That's the most in the 12 years that the data have been compiled, topping the previous record of 55 percent set on Aug. 26, 2003. It's also up five percentage points from the previous week.

The drought hasn't been long enough to rank up there with the 1930s Dust Bowl or a bad stretch in the 1950s, David Miskus, a meteorologist at the weather service's Climate Prediction Center, told msnbc.com. "We don't have that here yet," he said. "This has really only started this year." But for a single year it's still pretty significant, not far behind an extremely dry 1988. Read more >>

Abandoned Homes Plague US Cities

Some local governments hardest hit by population losses are struggling with what has been left behind: large numbers of abandoned housing units. Census figures released Thursday underscore the problem: In places racked by foreclosure, job loss and a weak economy, housing units haven't fallen as fast as population.

A handful of cities such as Detroit have demolished thousands of housing units over the past few years. Many others — such as Baltimore, where city officials said as many as 10,000 empty buildings need to come down — have seen levels remain flat. Although an eighth of the nation's 800 largest counties have lost population since 2005, fewer than half those have seen declines in housing stock.

"The principal impediment is the cost," said Michael Braverman, deputy commissioner of code enforcement for Baltimore Housing, which tears down 200 to 300 buildings a year.  Read more >>

26% of U.S. Home Sales in First Quarter Were Foreclosures

Homes in some stage of foreclosure accounted for more than one in four home sales during the first three months of the year, according to a report released Thursday. Distressed properties that were either in default, scheduled for auction or bank-owned accounted for 26% of all residential sales during the first quarter, up from 22% in the previous quarter and 25% a year earlier, RealtyTrac said.

Altogether, 233,299 distressed properties were purchased during the quarter, an 8% increase from the previous quarter. Those homes sold for an average of $161,214, 27% below the average price of a home not in foreclosure.

"Foreclosure-related sales picked up in the first quarter, particularly pre-foreclosure sales where a distressed homeowner is selling to avoid foreclosure -- typically via a short sale," Brandon Moore, chief executive of RealtyTrac said in a statement. Read more >>

Thousands of British Police Join Anti-Austerity Protest

Thousands of off-duty police officers took to the streets in London on Thursday in a rare display of anger against government austerity, joining a protest by public sector workers including immigration officials, healthcare workers and prison officers.

Unions predicted some 400,000 public sector workers would walk out, a smaller protest than in November when Britain saw the biggest strike in years, but a significant show of discontent just after Prime Minister David Cameron's government took a drubbing at local elections.

The government said only about 150,000 had taken part and dismissed the action as "futile". Cabinet Office minister Frances Maude said, "public services were mainly unaffected". However, the sight of some 30,000 police officers marching through London will be embarrassing for Cameron's centre-right Conservatives, who pride themselves on being the party of law and order. More...

Poverty pervades the suburbs

Image via WikipediaGuess where most people in poverty live? Hint: It's not in the inner cities or rural America. It's in the idyllic suburbs.

A record 15.4 million suburban residents lived below the poverty line last year, up 11.5% from the year before, according to a Brookings Institution analysis of Census data released Thursday. That's one-third of the nation's poor.

And their ranks are swelling fast, as jobs disappear and incomes decline amid the continued weak economy.

Since 2000, the number of suburban poor has skyrocketed by 53%, battered by the two recessions that wiped out many manufacturing jobs early on, and low-wage construction and retail positions more recently.

America's cities, meanwhile, had 12.7 million people in poverty last year, up about 5% from the year before and 23% since 2000. The remaining 18 million poor folks in the U.S. are roughly split between smaller metro areas and rural communities.

"We think of poverty as a really urban or ultra-rural phenomenon, but it's not," said Elizabeth Kneebone, senior research associate at Brookings. "It's increasingly a suburban issue." More...