Business news in brief

QUOTE OF THE DAY

“There’s little doubt as to where the government’s sights are. I don’t think it takes Sherlock Holmes to figure it out.”

John Sylvia,

co-chairman of the securities litigation practice at the Mintz Levin law firm in Boston, on investigations of insider trading at affiliates of SAC Capital Advisors Article, 1DMortgage rates again hit record lows

WASHINGTON - Average U.S. rates on fixed mortgages fell to fresh record lows this week, a trend that is boosting home sales and aiding the housing recovery.

Mortgage buyer Freddie Mac, the Federal Home Loan Mortgage Corp., said Wednesday that the average rate on the 30-year loan dipped to 3.31 percent, the lowest on records dating back to 1971. That’s down from 3.34 percent last week, the previous record low.

The average on the 15-year fixed mortgage also dropped to 2.63 percent. That’s down from 2.65 percent last week and also a new record.

The average rate on the 30-year loan has been below 4 percent all year. It has fallen further since the Federal Reserve started buying mortgage bonds in September to encourage more borrowing and spending.

Freddie Mac surveys lenders across the country Monday through Wednesday of each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for 30-year loans was 0.7 point, unchanged from last week. The fee for 15-year loans also remained at 0.7 point.

The average rate on a one-year adjustable-rate mortgage ticked up to 2.56 percent from 2.55 percent. The fee for one-year adjustable-rate loans rose two-tenths to 0.5 point.

The average rate on a five-year adjustable-rate mortgage 2.74 percent, the same as the previous week. The fee was unchanged at 0.6 point.

  • The Associated PressBank unit led to loss, funds say

JPMorgan Chase & Co. turned its chief investment office into a proprietary-trading unit that caused more than $6.2 billion in losses, pension funds said in a revised complaint in their suit against the bank.

JPMorgan represented that the unit’s primary role was managing risk when in fact it was engaging in trades to generate profit for the New York-based bank, the funds said in an amended complaint filed Tuesday in Manhattan federal court.

The lead plaintiffs in the complaint filed on behalf of bank shareholders include the Arkansas Teacher Retirement System, the Ohio Public Employees Retirement System, and the state of Oregon.

JPMorgan Chief Executive Officer Jamie Dimon “secretly transformed” the unit from a risk management unit into a proprietary trading desk whose principal purpose was to engage in speculative, high-risk bets designed to generate profits, the plaintiffs said.

U.S. District Judge George Daniels ruled in August that lawsuits against JPMorgan should be consolidated into a class action. The pension funds allege that they incurred losses in their holdings because of trades by the chief investment office and Bruno Iksil, known as “the London Whale.”

Joe Evangelisti, a spokesman for JPMorgan, wasn’t immediately available to comment on the filing.

The case is In Re JPMorgan Chase & Co. Securities Litigation, 12-cv-3852, U.S. District Court, Southern District of New York (Manhattan).

  • Bloomberg News

FCC faces challenges after Sandy

ALBANY, N.Y. - The Federal Communications Commission on Wednesday announced a series of hearings nationwide to try to find ways to avoid widespread loss of communications among first-responders, emergency managers and the general public in disasters such as Hurricane Sandy.

The hearings will begin early next year and will include ways to keep cell-phone towers operating after storm damage and power losses. One in four consumers in areas hit hard by Sandy lost service because of the storm.

The hearings also will examine how to keep Wi-Fi service operating and discuss backup power sources for cell-phone communications. A major focus will involve speeding the recovery of service.

Genachowski said the 911 emergency communications system mostly remained in operation during Sandy, but the hearings will explore when new technologies might make the system more effective in a disaster.

  • The Associated PressJapan in trade deficit fever

TOKYO - Japan logged its fourth straight monthly trade deficit in October as the European debt crisis and strained business ties with China over a territorial dispute reduced exports.

The Ministry of Finance said Wednesday that imports exceeded exports by $6.7 billion, the biggest deficit for October since at least 1979, when the ministry began keeping comparable records.

Exports for the month fell 6.5 percent from a year earlier to $62.9 billion, while imports slipped 1.6 percent to $69.1 billion.

For years, Japan ran huge trade surpluses, which frequently caused trade friction with the U.S. But since last year, Japan has been regularly registering trade deficits as it shifts more production overseas and faces greater competition from Asian rivals such as South Korea, Taiwan and China. The strong yen as also made it expensive for Japan’s major automobile and electronics makers to produce at home.

This year, Japan has registered trade deficits every month except February and June.

  • The Associated PressU.K. still in borrowing mode

LONDON - The British government continued to borrow more than planned in October as corporation tax collections fell sharply in the wake of a nine-month recession, official figures showed Wednesday.

The Office for National Statistics said borrowing in October was $13.7 billion, up from $9.6 billion a year earlier.

Corporation tax revenue was down 10 percent, a sign that businesses continue to struggle - Britain only emerged from its latest recession in the third quarter of the year, with growth up a quarterly rate of 1 percent, largely on the back of a boost from the Olympic Games.

For the first six months of the fiscal year through October, the agency said the government’s borrowing stood at $116.9 billion, nearly $8 billion more than a year earlier.

  • The Associated Press

Business, Pages 36 on 11/22/2012

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