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Economic data up, but weather stalling recovery

Written By Unknown on Sabtu, 01 Maret 2014 | 16.30

A slew of economic data released yesterday pointed to a recovery that is still struggling to take off, experts said.

"The numbers we had today show a continuation of a recovery, although it's subpar and it's anemic," said Christine Armstrong, senior vice president at Morgan Stanley.

The Commerce Department said the economy grew at 2.4 percent in the fourth quarter of 2013, revised down from its previous estimate of 3.2 percent. Also yesterday, the National Association of Realtors said its pending home sales index inched up 0.1 to 95 last month, while the University of Michigan's consumer sentiment index rose to 81.6 in February, up 0.4 from January.

"We continue to be in an environment of recovery and modest growth," said James Abate, chief investment officer at Centre Asset Management.

Many economists have blamed subpar economic data on poor weather across the country, and say the GPD will temporarily dip because of the cold and snow.

"Due to Mother Nature, quarter one is not going to be anything worth writing home about," said Jennifer Lee, senior economist at BMO Capital Markets, in a research note. "The rebound ... and all of that pent-up demand won't show up until the second quarter.

Earlier this week, Eric Rosengren, president of the Boston Federal Reserve, said data have been difficult to interpret because of the weather.

Herald wire services contributed to this report.


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Slots parlor to spin ahead

Penn National Gaming is moving quickly on plans to build a slots parlor at a Plainville racetrack now that it has been awarded a state license, despite the possibility of a ballot question this fall to repeal the casino law.

"We're not going to slow down our construction process with this threat out there and we're going to fight for the right outcome," Tim Wilmott, Penn National's chief executive, said. "We have a lot of experience in political battles with gaming in other parts of the United States and we feel confident we're going to get the right outcome."

The state Gaming Commission voted unanimously yesterday to award the state's sole slots parlor license to Penn National, and company officials said they would begin construction planning next week at Plainridge Racecourse with a goal of opening next spring. Company officials celebrated the awarding of the license with workers at the track yesterday.

But a group working to strike down the casino law, Repeal the Casino Deal, is petitioning the Supreme Judicial Court to get on the November ballot over the objection of Attorney General Martha Coakley, who argues the question would violate the implied contractual rights of license applicants. The SJC is expected to hear the case in May.

John Ribeiro, chairman of Repeal the Casino Deal, said he is confident the question will get on the ballot in November and that voters will turn against gambling.

"The casino industry's empty promises may have bamboozled the governor, Legislature, Gaming Commission and a handful of struggling cities, but convincing voters across the state that any of this amounts to 'destination resort casinos' is vastly different," Ribeiro said.

Wilmott said the company's most recent election battles involved ballot measures in Ohio. The fights there involved an intense campaign with fliers, direct mail, television, radio and newspaper ads, said Eric Schippers, Penn National's vice president for public affairs.

Penn's ad blitz worked in both 2008 and in 2009, said Rick Lertzman, who was on the losing end of the measure in 2008.

"We've had a lot of interaction with Penn in the past," said Lertzman, chairman of Quest Gaming, which operates rival gaming facilities in Ohio. "We've had a lot of conflict with Penn in the past."

No date has been set for groundbreaking at Plainridge, but Penn National is promising to create 1,000 construction jobs as well as 500 permanent jobs. The facility will have 1,250 slot machines, and will help preserve roughly 100 harness racing jobs at the track.


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Wilmington tops for buying home

Considering buying a home in Massachusetts but unsure where to look? How does Wilmington, Franklin or Reading strike you?

They're the top three of the 20 best places to own a home in the Bay State, according to consumer finance website NerdWallet, which based its recommendations on U.S. Census data for the 77 communities with more than 15,000 residents. The website chose that as the cutoff because not all of the data for smaller communities were available and even when it was, the smaller the population, the greater the possibility that the data could be skewed, said Jaime Ortiz, senior analyst for strategy.

For each municipality, NerdWallet looked at three main criteria: whether homes were available, how affordable it was to live there, and whether the area was growing — a signal of a robust economy, Ortiz said.

"A lot of these places — 13 of the top 20 — were clustered around Boston," she said. "That definitely tells me they benefit from their proximity to Boston, including its jobs, its universities, its arts and entertainment."

Wilmington also had a homeownership rate of 89.8 percent — the highest in the state — as well as monthly costs that took up only 27 percent of the median monthly household income.

Franklin had a homeownership rate of 79.3 percent and monthly costs that took up 29.2 percent of the median monthly household income, while Reading's 
homeownership rate was 82.2 percent and monthly costs were 30.9 percent.

NerdWallet's other top places were, in order, Burlington, Hudson, Wakefield, Randolph, Lexington, Methuen, Longmeadow, Winchester, Braintree, Saugus, Abington, Danvers, Dedham, Milton, Somerset, Wellesley and Milford.


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Asia stocks mostly higher on US housing data

Written By Unknown on Kamis, 27 Februari 2014 | 16.31

TOKYO — Shares were mostly higher Thursday in Asia following gains on Wall Street after the release of better-than-expected housing data.

Hong Kong's Hang Seng was up 0.9 percent at 22,638.65 and Seoul's Kospi gained 0.2 percent to 1,974.35. Markets in Southeast Asia were also higher and China's Shanghai Composite added 0.5 percent to 2,052.78.

Markets in Greater China are consolidating as they watch for new policy initiatives from China's annual legislative session in early March, said Linus Yip, a strategist for First Shanghai Securities in Hong Kong.

"Investors are still looking for some good news," Yip said. "The market needs structural reforms in mainland China."

Japan's Nikkei 225 stock index edged 0.2 percent lower to 14,947.28. Shares in Australia also fell, with Australian shares coming under pressure from weakness in commodities and a decline in capital spending in the last quarter.

Japanese investors are watching for Friday's release of economic data for January, looking for signs of how a sales tax hike due to take effect April 1 might affect the country's recovery.

Investors may get fresh impetus for buying on Thursday, when Janet Yellen, the new head of the Federal Reserve, testifies in front of the Senate's Banking Committee. Stocks jumped on Feb. 11 when Yellen reassured Congress over the central bank's market-friendly, low-interest rate policies.

On Wednesday, solid U.S. housing data showing new home sales in January up 9.6 percent to an annualized rate of 468,000 units helped push the Dow Jones industrial average up 18 points, or 0.1 percent, to 16,198.41. The Standard & Poor's 500 edged up a fraction to close at 1,845.16, three points below the record high close it set six weeks ago.

In currency dealings, the euro rose to $1.3687 from $1.3680. The dollar gained to 102.35 yen from 102.30 yen.

Oil prices edged lower, with benchmark U.S. crude for April delivery down 28 cents to $102.31 in electronic trading on the New York Mercantile Exchange. The contract gained 76 cents to settle Wednesday at $102.59.


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Medford dials into Smart911

Calling 911 with an emergency is getting smarter, thanks to Framingham-based Rave Mobile Safety's Smart911.

Launching in Medford today, Smart911 allows residents to fill out profiles in advance, giving first responders valuable information before they get on scene.

"When you call from a mobile phone, there's very little information provided," said Todd Miller, an executive at Rave Mobile Safety. With Smart911, "all of that critical safety profile information is shared."

Smart911, which is in more than 450 cities and towns nationwide, can tell first responders about medical conditions, or a caller's apartment number if they live in a large apartment complex. That supplemental information helps dispatchers to send an appropriate response as soon as they receive the call, Miller said.

"It's going to help develop a better quality of life as it relates to emergency services," said Medford Mayor Michael J. McGlynn. "You know if they have a boa constrictor or a pit bull, you know what their medications are."

Medford is the first Bay State city to sign on with Smart911, but the service is already live in towns including Milford and Framingham. More towns will be announced in the coming weeks, Miller said.


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US safety agency to probe GM recall response

DETROIT — The U.S. government's auto safety watchdog is investigating whether General Motors acted quickly enough to recall 1.6 million older-model small cars in a case linked to 13 deaths.

The National Highway Traffic Safety Administration said Wednesday night that it opened the probe "to determine whether GM properly followed the legal processes and requirements for reporting recalls."

The agency has the authority to fine GM as much as $35 million under legislation that went into effect late last year. The previous maximum fine automakers faced per incident was $17.35 million. Automakers must report evidence of safety defects within five days of discovering it.

On Tuesday, GM doubled the number of cars in the recall for faulty ignition switches. The problem has been linked to 31 front-end crashes that caused the 13 deaths. The company also issued a rare apology, saying its process to examine the problem was not robust enough when it surfaced about a decade ago.

A chronology of events filed Monday with NHTSA by GM show it knew of the problem as early as 2004.

Since undergoing a painful bankruptcy in 2009, GM has removed layers of bureaucracy, improved the quality of its vehicles and is quicker to issue recalls when problems occur. However, the admission that its procedures were lacking 10 years ago shows how the old culture can still haunt the automaker.

"The chronology shows that the process employed to examine this phenomenon was not as robust as it should have been," GM North America President Alan Batey said in a statement Tuesday. "Today's GM is committed to doing business differently and better."

On Feb. 13, GM announced the recall of more than 780,000 Chevrolet Cobalts and Pontiac G5s (model years 2005-2007). Then on Tuesday, it doubled up, adding 842,000 Saturn Ion compacts (2003-2007), and Chevrolet HHR SUVs, Pontiac Solstice and Saturn Sky sports cars (2006-2007). Most of the cars were sold in the U.S., Mexico and Canada.

GM says a heavy key ring or jarring from rough roads can cause the ignition switch to move out of the run position and shut off the engine and electrical power. That can knock out power-assisted brakes and steering and disable the front air bags. In the fatalities, the air bags did not inflate, but the engines did not shut off in all cases, GM said.

It was unclear whether the ignition switches caused the crashes, or whether people died because the air bags didn't inflate.

Margie Beskau, of Woodville, Wis., whose teenage daughter, Amy Rademaker, died in an October, 2006, crash involving a Chevy Cobalt, said she was relieved that GM agreed to the recall. The move finally gave her family answers about what happened in the crash that killed Rademaker, 15, and her friend, Natasha Weigel, 18.

"I feel like we're getting justice for Amy and Tasha because GM had to step forward and let people know what happened," she said. "That was huge."

According GM's chronology, the company knew of the problem as early as 2004, and was told of at least one fatal crash in March of 2007. GM issued service bulletins in 2005 and 2006 telling dealers how to fix the problem with a key insert, and advising them to warn customers about overloading their key chains. The company's records showed that only 474 vehicle owners got the key inserts.

GM thought the service bulletin was sufficient because the car's steering and brakes were operable even after the engines lost power, according to the chronology.

By the end of 2007, GM knew of 10 cases in which Cobalts were in front-end crashes where the air bags didn't inflate, the chronology said. GM's chronology also shows that NHTSA knew about the problem and a fatal accident in March of 2007. In its investigation, NHTSA likely will try to find out if GM withheld information or was slow to produce it.

In 2005, GM initially approved an engineer's plan to redesign the ignition switch, but the change was "later canceled," according to the chronology.

GM spokesman Alan Adler said that initially the rate of problems per 1,000 vehicles was too low to warrant a recall.

GM has hired an outside law firm to find out what went wrong in the ignition recall. But Adler wouldn't say whether the firm will look into other safety problems that occurred around the same time. "We are focused on this case," he said.

GM also said Wednesday that it will send letters to all 1.6 million owners globally starting March 10 telling them to use only the key in the ignition until repairs are made. Another letter will go out in April telling people they can take their cars in for repairs.

If General Motors Co. is fined, it will be the third automaker to face significant penalties for being slow to report safety problems. From 2010 through 2012, Toyota Motor Corp. paid a series of fines totaling more than $66 million for delays in reporting unintended acceleration problems. Ford Motor Co. last year paid $17.35 million for being too slow to report sticky gas pedals in some Escape SUVs.

____

AP Reporter Amy Forliti contributed to this report from Hammond, Wis.


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Broke church gets court’s blessing

Written By Unknown on Rabu, 26 Februari 2014 | 16.31

Dorchester's Greater Love Tabernacle Church won bankruptcy court approval yesterday for a fundraising campaign to help refinance its mortgage.

Donations raised will be protected from the church's creditors, including its Texas mortgage holder, VFC Partners 18 LLC. They'll be held in escrow and must be returned to donors if the church fails to refinance or restructure its approximately $700,000 loan.

Greater Love, which held a January interfaith service to raise community awareness about its troubles, already has raised nearly $61,000, according to its pro bono attorney, John Morrier. It has not set a fundraising goal, he said.

"My heart was overwhelmed when I saw the amount of support and people that came to our interfaith service," Pastor William E. Dickerson II said. "It's refreshing to know the work and labor of this church has not gone in vain."

Another fundraiser/service is set for March 30, and Dickerson said he's confident the financial issues will be resolved.

The 24-year-old church filed for bankruptcy protection in December with about $803,000 in debt after being threatened with foreclosure. It fell into financial trouble after signing a 2010 lease for a nearby site on which it hoped to build a community center. But the church was unable to raise needed funds for the project, and the monthly lease payments — which ran as high as $4,800 — caused it to fall behind on mortgage payments for the church, court documents state.

Phoenix Management Services is working pro bono to stabilize the church's financial management, Morrier said. The lease for the undeveloped land expired at the beginning of the year, and is "no longer an issue," he said.


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Bitcoin crash may hurt Hub biz prospects

The crash of one of the largest Bitcoin exchanges this week has sent Boston Bitcoin entrepreneurs scrambling to defend the digital currency's reputation and increase its stability.

Mt. Gox, a Tokyo-based Bitcoin exchange, halted trading this week and went offline, and a document reportedly leaked from the exchange said $365 million in bitcoins are missing. Bitcoin, an online currency that is not backed by a central authority, has gained momentum in recent months. Overstock.com and the Sacramento Kings both began accepting the digital currency recently.

The price of one Bitcoin on Mt. Gox fell from $330 on Sunday evening to $131.71 when transactions were halted. The average price of one Bitcoin across all exchanges has fallen by nearly $100 since the weekend to about $500.

"Despite the promise of digital currency, and Bitcoin in particular, we cannot ask consumers to foot the bill while the technology and the industry endures inevitable growing pains," said Jeremy Allaire, founder and CEO of Circle, a Boston startup building a payment system for Bitcoin.

Alex Peterson, CEO and co-founder of Vis Nova Ventures, said there will be fallout that will hamper Bitcoin's acceptance for consumers.

"It's a PR issue," he said. "Right now it's going to hurt what we're doing."

Vis Nova plans to install a Bitcoin ATM in Cambridge in the coming weeks.

Chris Yim, co-founder of Liberty Teller, a Bitcoin ATM company, said about 20 percent of customers asked about the Mt. Gox news at Liberty Teller's ATM in South Station.

"People are already interested in Bitcoin," Yim said. "We can help correct their perceptions of it."


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Airbus posts higher 2013 profit

TOULOUSE, France — European jetmaker Airbus Group said Wednesday record demand for its civilian jetliners from airlines around the world drove higher sales and profits last year.

The Boeing Co. rival, known until this year as EADS, said net profit rose 22 percent to 1.47 billion euros ($2 billion) in 2013, up from 1.2 billion euros the previous year.

The company, which competes with Boeing in the multi-billion-dollar market for large civilian aircraft, forecast jet deliveries to remain at about the same level this year as last year when it sold 626 aircraft.

"We're not planning new adventures in 2014, the focus is on execution, execution, execution," Chief Executive Tom Enders said at a press conference.

Enders said that while Airbus will "take a little break" this year in terms of production, after 11 straight years of growth, he predicted orders will remain higher than deliveries. Last year Airbus took in a record 1,619 new orders.

In a statement, Airbus also announced plans to ramp up production of its single-aisle jets to 46 a month by 2016, from 42 now.

The A320 single aisle family of jets competes with Boeing's 737, and has seen high demand in recent years alongside exceptional growth in the air travel market in developing countries in Asia and the Middle East.

Airbus' earnings came in below the 1.97 billion-euro consensus forecast of analysts surveyed by Factset. The 2013 accounts were dented by higher costs connected to Airbus' new A350 twin-aisle jet, which Airbus hopes to start delivering to customers by the end of this year.

Airbus has received over 820 orders so far for the wide body A350, with around 30 percent coming from Asian airlines. The region is a crucial market for plane makers because its economic growth is driving rapid expansion of jet fleets.

Airbus shares rose 1.5 percent in early trading Wednesday on the Paris stock exchange, as investors applauded the group's hitting financial targets including higher operating profit and better-than-expected free cash flow.

Airbus says the A350 program "remains challenging," after it took a 434 million-euro charge against the program in the fourth quarter last year. Development of the jet, an intended rival to Boeing's 787 Dreamliner, has cost around 10 billion euros over the last decade. Qatar Airways expects to take delivery of the first A350 in the fourth quarter of this year.

Airbus is in the midst of a corporate restructuring that will see it cut 5,800 jobs over two years. A failed merger with British defense firm BAE Systems scuttled Airbus' plans to grow its own defense business, which now accounts for about 30 percent of the group's total sales.

A slowdown in U.S. and European military spending has forced Airbus and Boeing to overall their defense businesses.


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