The Federal Housing Finance Agency reported that U.S. home prices rose 1.7% in January over December, the first monthly increase in a year. It added that prices were down 6.3% from the same month last year, and down 9.6% from the peak in April, 2006.

But don’t break out the champagne to celebrate the end of the housing slump just yet. The FHFA data, while they cover the entire country, stem mostly from Fannie Mae and Freddie Mac, and thus miss sales that aren’t backed by the two mortgage giants. The Standard & Poor’s/Case-Shiller index shows much larger price declines, and even the FHFA warns that its January data are preliminary and could be revised.

Source: MarketWatch.com

A Trade Deal for Korea and Europe?

South Korea and the EU announced that they are near completion on a free-trade accord but that major sticking points, including auto tariffs, remained and will be handed over to trade ministers to resolve. A deal could be reached on the sidelines of the G-20 meeting next week. It would be a strong statement against protectionism at a time when many nations are erecting trade barriers to cope with the economic downturn.

Source: Bloomberg

Reaction to the Toxic Assets Plan

After U.S. President Barack Obama outlined plans on Mar. 23 to lift toxic assets off bank balance sheets, attention now focuses on whether private-sector investors will be enticed to take part. Stock markets certainly think so, with the Dow rising 6.8 percent, or 497.48 points, to 7775.86 by the closing bell on Mar. 23. While that reaction relieved some of the immediate financial pressures, it was hardly a unanimous vote of confidence. Some critics called the Mar. 23 plan a series of opaque subsidies that, at best, would prop up the banks and their shareholders without doing much to revive lending. The critical question is: will the U.S. Treasury’s plan work? For many, Obama’s latest attempt to jumpstart the domestic economy assumes the basic problem is one of liquidity. Yet if the problem is really one of solvency — that current prices for these assets are, in fact, accurate — the gains posted on Mar. 23 won’t last for long.

Source: Financial Times, BusinessWeek

Geithner Mulls Limiting Company Risks

U.S. Treasury Secretary Timothy Geithner has suggested that limits may be put in place to stop big firms from taking financial risks. Talking at a Mar. 23 conference, Geithner said the government needs to implement “better designed constraints on leverage for the institutions critical to the stability of the financial system.” It’s important to “make the system less vulnerable to mistakes,” he added.

Source: Wall Street Journal

U.S. Government Could Seize Companies

The Obama administration is considering outlining unprecedented powers for the U.S. Treasury Secretary to initiate the seizure of non-bank financial companies whose collapse would damage the broader economy. For now, the government only has the authority to seize banks, but the proposed new powers would represent a significant shift from the existing model of financial regulation.

Source: Washington Post

AIG Bonuses Given Back

A number of recipients of American International Group’s bonuses have agreed to give them back in full, according to New York Attorney General Andrew Cuomo, who’s probing the $165 million in executive pay given out by the beleaguered U.S. company. Cuomo said he hopes to recoup $80 million of bonus payments — roughly half of the bonuses paid by the giant insurer.

Source: Reuters

Goldman to Bid for Barclays’ iShares

U.S. financial giant Goldman Sachs is organizing a bid for iShares, the fast-growing asset management business that British bank Barclays has put up for auction. Bids for the business, which are due by Apr. 3, could value the Barclays subsidiary as high as $6.5 billion. Goldman is also reported to be in talks with the government about repaying its $10 billion in TARP money by mid-April.

Source: Financial Times, Bloomberg

China Calls for New Reserve Currency

The head of China’s central bank, Zhou Xiaochuan, on Mar. 23 called for the creation of a new international currency reserve to replace the U.S. dollar. Xiaochuan said a new currency reserve system controlled by the International Monetary Fund could prove more stable and economically viable.

Source: New York Times

Tata’s Nano Coming to the U.S.

Tata Motors is working on plans to launch the Nano — the world’s cheapest car — in the U.S., a change of strategy made possible by the country’s ongoing recession. Ratan Tata, head of the Tata group, said his company was starting to design a version of the Nano for possible export to the U.S. as early as 2011 or 2012.

Source: Financial Times

Palm Taps Developers for New Phone

Against the odds, Palm courted a formidable community of developers whose apps may prove vital to the fortunes of its make-or-break Pre smartphone. And despite Apple’s iPhone remaining the “it” device for many mobile programmers, Palm’s attempt to grab runner-up status could be more than enough to help the company carve out a niche in the fast-growing smartphone business

Source: BusinessWeek

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