Bloomberg:
- Housing Starts in U.S. Decrease More Than Forecast. Housing starts fell in June to the lowest level since October as a slump in sales following the expiration of a government tax incentive caused U.S. builders to cut back. Work began on 549,000 houses at an annual rate last month, fewer than the median estimate of economists surveyed by Bloomberg News and down 5 percent from May, Commerce Department figures showed today in Washington. Building permits, a gauge of future construction, rose 2.1 percent last month to a 586,000 pace, propelled by a 20 percent jump in multifamily applications that are often volatile. Permits for single-family housing, the biggest part of the market, dropped 3.4 percent to a 421,000 pace, the lowest since April 2009.
- Warren May Lack Votes for Consumer Agency, Dodd Says. Elizabeth Warren, the Harvard University professor touted to head a new consumer protection bureau, may not have sufficient support to win confirmation to the post, Senator Christopher Dodd said in a radio interview. Warren, chairman of a panel overseeing the Troubled Asset Relief Program, is credited with conceiving the agency included in the financial-regulation bill awaiting President Barack Obama’s signature. Warren, 61, has clashed with financial-industry executives and Obama administration officials including Treasury Secretary Timothy F. Geithner in her role leading the TARP Congressional Oversight Panel. Her criticism of the Treasury Department’s handling of the $700 billion bank bailout program has led to speculation -- dismissed by Treasury officials -- that Geithner is working to oppose Warren’s appointment to the consumer post. Warren has been lauded by consumer advocates and labor leaders including AFL-CIO President Richard Trumka, who endorsed her today.
- California Residents Protest City Manager's $800,000 Salary. Hundreds of residents of one of the poorest municipalities in Los Angeles County shouted in protest last night as tensions rose over a report that the city’s manager earns an annual salary of almost $800,000. An overflow crowd packed a City Council meeting in Bell, a mostly Hispanic city of 38,000 about 10 miles (16 kilometers) southeast of Los Angeles, to call for the resignation of Mayor Oscar Hernandez and other city officials. Residents left standing outside the chamber banged on the doors and shouted “fuera,” or “get out” in Spanish. It was the first council meeting since the Los Angeles Times reported July 15 that Chief Administrative Officer Robert Rizzo earns $787,637 -- with annual 12 percent raises -- and that Bell pays its police chief $457,000, more than Los Angeles Police Chief Charlie Beck makes in a city of 3.8 million people. Bell council members earn almost $100,000 for part-time work. City Attorney Edward Lee said the council members couldn’t discuss salaries in public without advance notice.
- Payrolls Fall in 27 U.S. States, Led by California. Payrolls decreased in 27 U.S. states in June, led by California and New York, signaling the slowdown in hiring is broad-based. Employers in California cut staff by 27,600 workers last month and those in New York reduced employment by 22,500, the Labor Department said today in Washington. Tennessee, Arizona and New Mexico rounded out the five states with the biggest job losses. For the second month, Nevada had the highest jobless rate in the country, rising to a record 14.2 percent from 14 percent in May. Data collection began in 1976. Unemployment in Michigan, the second-highest, dropped to 13.2 percent from 13.6 percent. Texas, with a gain of 14,000, and Kentucky, with a 6,200 increase, paced states showing an improvement in employment. Today’s report showed 16 states had unemployment of 10 percent or higher, the same as in May.
- Ortel Sees 'Considerable Downside' for Goldman's(GS) Stock: Video. Charles Ortel, managing director at Newport Value Partners, and Thomas Brown, chief executive officer of Second Curve Capital LLC, discuss Goldman Sachs Group Inc.'s second-quarter profit reported today. Goldman said profit dropped 82 percent, missing analysts' estimates on a slide in trading revenue five days after settling U.S. regulators' fraud allegations.
- Copper Jumps as Building Permit Gain Revives Demand Outlook. Copper prices jumped the most in three weeks after a gain in U.S. building permits boosted demand prospects for the metal used in electrical wiring and plumbing. Permits, a gauge of future construction, rose 2.1 percent last month to a 586,000 annual pace, the government said today. The gain was the first since March and was more than economists expected. Copper futures for September delivery rose 6.3 cents, or 2.11 percent, to $3.001 a pound at 12:01 p.m. on the Comex in New York.
- China Sees Export Threat From Brazil, India Monetary Tightening. Monetary tightening in India and Brazil may add to Europe’s sovereign-debt crisis in curbing demand for China’s exports, a Chinese official said. The outlook for trade is “complicated and difficult,” Yao Jian, a spokesman for the Ministry of Commerce, said at a press briefing in Beijing today. A government research body forecasts second-half export gains will slow to less than half the pace of the first six months. Demand may be restrained by Europe’s woes, the gradual end of post-crisis restocking by businesses, and tightening in emerging economies such as India and Brazil, Yao said. In Brazil, the central bank has lifted the benchmark lending rate, known as Selic, to 10.25 percent from a record low of 8.75 percent in April. Traders are betting on another half percentage point increase this week. India’s next monetary policy decision is on July 27.
- Hoyer Says House Will Debate China Currency Manipulation Bill. The U.S. House will debate legislation to authorize trade sanctions against China for currency manipulation as part of a package of measures to promote U.S. manufacturing, House Majority Leader Steny Hoyer said. The measure, sponsored by Representative Tim Ryan, an Ohio Democrat, would authorize imposition of countervailing duties on China’s exports to the U.S. if authorities determined that the renminbi is undervalued by at least 5 percent on average for 18 months. The measure, which would amend the 1930 Tariff Act that forbids subsidies of products imported into the U.S., would apply to all other foreign currencies.
Wall Street Journal:
- A Staunch and Self-Confident Ally by David Cameron. We have a clear common agenda: succeeding in Afghanistan, securing economic growth and fighting protectionism. No other international alliance seems to come under the intense scrutiny reserved for the one between Britain and the United States. There is a seemingly endless British preoccupation with the health of the special relationship. Its temperature is continually taken to see if it's in good shape, its pulse checked to see if it will survive. I have never understood this anxiety.
- More Than 40% Leave Obama Mortgage-Aid Program in June. The number of borrowers dropping out of a government program to help struggling homeowners rework their mortgage grew in June at almost twice the pace of those getting a permanent modification, the Treasury Department said on Tuesday.
- Pay Czar to Banks: Take Back 2008 Bonuses. Pay czar Ken Feinberg is getting ready to stick it to Wall Street again, preparing to demand, or “claw back”, bonus money that some banks paid out during the bailout year of 2008, FOX Business Network has learned. Whether the banks will do so is another story. If approved by the Treasury Department, Feinberg's decision could be announced as early as Friday, people close to the situation tell FOX Business. In an interview, Feinberg refused to say how much money he’s going to ask for or which banks will be targeted. “I’m aiming for Friday to make an announcement,” he said in an interview. “The banks will be notified shortly.”
- Hedge Fund Inflows Going To Largest Managers. Hedge funds saw net inflows of $9.5 billion in the second quarter, with the lion's share of that new money—$8.8 billion of it—going to firms with more than $5 billion in assets under management, according to data provider Hedge Fund Research. Those large firms now manage approximately 60% of total industry capital. But while the money poured in from investors, hedge funds themselves—hit with volatile markets—had a rough ride. The HFRI Fund Weighted Composite Index posted a decline of 2.5%, offsetting first quarter gains. Total hedge fund industry capital ended the most recent quarter at $1.65 trillion, down from $1.67 trillion the prior quarter.
- SEC Expected to Cap 12(b)-1s. Agency would limit fees to 0.25%; anything above would be treated as a sales charge. The SEC is planning to propose a new framework that would cap at 0.25% of assets the amount that funds can charge on a continuing basis to cover marketing and administration costs, according to sources who asked not to be identified. Any fees above the 0.25% limit would be treated as a load that is paid over time. It's unclear what the conversion period would be.
- Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Tuesday shows that 27% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty-four percent (44%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -17 (see trends).
- 4 House Dems Revolt. Four junior House Democrats frustrated with leadership’s approach to deficit spending are going rogue. Reps. Gary Peters, John Adler (D-N.J.), Jim Himes (D-Conn.) and Peter Welch (D-Vt.) are getting more vocal on their concerns about government spending. They’re forming a working group to propose major cuts to spending in areas like defense, energy, housing and agriculture that they say would save about $70 billion over ten years. “We have been growing increasingly frustrated with the lack of action and talking about specifics and putting those on the table,” Peters said in an interview with POLITICO.
- Spanish Finance Minister Elena Salgado said all the Spanish banks that underwent European Union stress tests passed.
Danish public sector growth must freeze for three years and then the prerequisite for it to start growing again should be growth in the private sector, Danish Foreign Minister Lene Espersen said in an interview. "We need to bring the public sector down to what we can afford, which is 26.5% of GDP," Espersen said.
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