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Republicans Arm US Mortgages in Pre-Mid-Term Boost

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Republican candidates in the crucial battleground in the US midterm elections are using rising mortgage rates to attack Democrats over inflation, as they hope a renewed focus on the economy will help them seize control of Congress in November.

High gasoline prices continued to serve as a major weapon for Republicans in the course of the election campaign despite the general decline in recent months. But the Fed is sharp interest rate increases This year has given them additional ammunition by causing mortgage rates to rise rapidly to levels not seen since the 2008 housing-led financial crisis.

According to the latest data, the average interest rate on a 30-year fixed-rate mortgage in the US rose to about 6.7 percent, doubling from about 3 percent in January.

This has destabilized the housing market in many areas and raised concerns about affordability – two factors that are increasingly cited by Republican politicians, who blame the Joe Biden administration and Democrats in Congress far more than the Federal Reserve.

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“It’s reckless government policy that has spent trillions of dollars we didn’t have and then paid people to not go to work: that’s fueling inflation.” Mark Robertson, a Republican who is challenging Dina Titus, a Democrat from Nevada, said: They didn’t, the Fed would not have had to respond.”

“I have wealthy gated neighborhoods, and then I have very modest homes on the east side of Las Vegas. And the effect is mostly on those humble, middle-class areas. Those are the people who suffer the most… It really hurts them,” Robertson added. .

Other ambitious Republican members of Congress hope to secure a seat on Capitol Hill and deliver a majority to the Republican Party in November. election They were piling up as the monetary tightening began to take effect.

In a tweet last week, Madison Jesioto Gilbert, who is trying to win the Ohio House race, attacked the “Democratic Party’s takeover of Washington” for causing “historic inflation” and causing mortgage rates to double.

In a tweet this week, Tom Barrett, who is trying to unseat Elisa Slotkin, a Michigan Democrat, published a chart criticizing what he called the “Slotkin/Biden effect”: an increase in monthly mortgage payments needed to afford an average US home from $1,698 to $2,547.

In another race for Congress in Nevada, Sam Peters, the Republican who is challenging incumbent Democratic candidate Stephen Horsford, said the discrepancy in the state of the housing market in his area is dramatic compared to last year.

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“Houses were flying. You can’t even put it on the market. They are gone in one day. . . Fast forward to now, there’s a larger pool of inventory, but people are being priced because of interest rates,” he said.

Relief was not in sight, Peters added: “There is a lot of work to be done to control our inflationary environment.”

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The interest in housing and mortgages comes as Republicans try to refocus their midterm campaigns on the economy in the last leg of their races. In doing so, they hope to win over swing voters and keep their base active, after Democrats regained some ground in the wake of the Supreme Court’s June ruling on miscarriage.

There is general dissatisfaction among Americans about the state of the economy. For a lot of millennials, even a lot of Generation X, and certainly Generation Z, this is the first time they’re living in a world where interest rates are going up and they’re living in a world of things that’s getting more expensive,” said Ben Colton of Bacon Policy Research. Gas, food prices have gone up, mortgage rates have gone up, housing costs have gone up. This affects everyone.”

With the central bank likely to keep raising interest rates in an attempt to tame inflation – most officials expect the Fed funds rate to peak at 4.6 per cent in 2023 – economists are warning that mortgage rates are unlikely to fall any time soon. This means that first-time homebuyers will continue to exit the market even as real estate prices have fallen from their highest levels.

Federal Reserve Chairman Jay Powell went so far last month to warn that the once booming housing market is likely to “go through a correction”. The comments came during the press conference following the central bank’s decision to implement a third consecutive increase in interest rates by 0.75 percentage points and raise the federal funds rate to a new target range from 3 percent to 3.25 percent.

“There was an underlying reason [affordability] Trouble getting into this and now we have this rise in mortgage rates, pushing millions of people out of the home buying market. “We’ve also seen very high rental growth,” said Nancy Vanden Houten, chief US economist at Oxford Economics.

“It’s part of this larger problem of increasing the cost of everything, especially basic things that take up larger shares of the budgets of low- and middle-income families,” she added.

Robert Dietz, chief economist at the National Association of Home Builders, said the economic pain and political fallout of the housing disruption could extend beyond the midterm.

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“We are not at the end of the Fed tightening, despite what the markets are betting, and there will be higher interest rates,” he said.

“Given where housing is in terms of this business cycle, the importance of rent in terms of family budget challenges, and the importance of the rate of home ownership, I think we will most likely see a rise in housing among these top-tier politicians issues in the 2024 presidential election.

Democrats are trying to fend off GOP attacks on housing and mortgages by pointing to the fact that Republicans have not announced any coherent plan of their own to cut inflation, while they have passed legislation to lower the cost of vital goods like prescription drugs. . The Biden administration has also announced steps to boost the supply of affordable housing, which should help mitigate shelter-related expenses.

Changes in the housing market may be more politically notable in fast-growing battle states like Arizona, Georgia and Nevada, which are particularly prone to boom-bust cycles. a CNN Poll The one released this week found that Republicans had a slight advantage over Democrats in three state races: for secretary of state, governor, and a pivotal seat in the Senate.

Home prices have also risen in metro areas in many states with competitive Senate races. Average selling prices have risen 34-39 percent in Phoenix, Las Vegas and Atlanta over the past two years, according to data from real estate brokerage Redfin. However, this has recently begun to subside with rising mortgage rates and increasing home stock, after a prolonged decline after a slump in the housing supply.

For Steve Bird, the veteran Las Vegas-area realtor supporting Robertson in his congressional bid, the speed and scale of the turmoil and change in the housing market this year have been both surprising and disturbing.

“It’s just anemia now and sellers have to be very competitive and willing to take discounts,” he said. “It’s always hard, you know, to get out of the market we’ve been in.”

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Economic

Exclusive: Canada’s largest pension plan, CPPI, is ending the pursuit of cryptocurrency investing

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© Reuters. FILE PHOTO: A representation of bitcoin is seen in front of a stock chart in this illustration taken on May 19, 2021. REUTERS/Dado Ruvik/File Photo

Written by Divya Rajagopal

TORONTO (Reuters) – Canada’s largest pension fund, CBB Investments, has ended its efforts to study investment opportunities in the volatile cryptocurrency market, two people familiar with the matter told Reuters.

The reasons behind CPPI’s abandonment of cryptocurrency research were not immediately clear. CPPI declined to comment but said it has not made direct investments in cryptocurrency. He pointed to previous comments on cryptocurrency by its CEO, John Graham, in which he sounded cautionary.

The people added that CPPI’s Alpha Generation Lab, which studies emerging investment trends, put together a three-member team in early 2021 to research cryptocurrency and blockchain-related businesses, with a view to potential exposure.

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But sources said CPPI gave up the chase this year and redeployed the team to other regions.

CPPI’s move also comes as two of Canada’s largest pension funds have divested their investments following the collapse of cryptocurrency exchange FTX and cryptocurrency lender Celsius, which collapsed this year.

Earlier this year, CPPI CEO Graham said the pension plan, which manages C$529 billion ($388 billion) for nearly 20 million Canadians, did not want to invest in digital currencies simply for fear of missing out.

“You really want to think about the intrinsic value of some of these assets and build your portfolio accordingly,” Graham said in a June speech. “So I’d say crypto is something that we keep looking at and trying to understand, but we haven’t really invested in.”

It was not clear when CPPI dropped its plan. One source said the team was actively evaluating investment opportunities in late July this year, but the second source said the team finished its work earlier than that.

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Details of CPPI’s quest to invest in cryptocurrency and its decision to end it were not previously reported.

The sources declined to be identified because the information was not made public.

Canadian pension funds’ exposure to the cryptocurrency sector has come under scrutiny in the aftermath of the FTX debacle. While Canadian pension funds are not prohibited from buying cryptocurrencies, they are known for risk-averse investment strategies to generate steady returns for retirees.

While CPPI has avoided investments in cryptocurrencies, some of its peers have been caught up in the chaos of the sector this year. The Ontario Teachers’ Pension Fund (OTPP), which oversees approximately C$242 billion in assets, has written off its C$95 million investment in FTX. OTPP said it was “disappointed” with its investment in FTX.

Earlier this year, Canada’s second largest pension fund, Caisse de dépôt et placement du Québec (CDPQ), said it had canceled its C$150 million investment in bankrupt crypto lending firm Celsius. CDPQ has initiated legal action against Celsius in Bankruptcy Court.

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The Ontario Municipal Employees Retirement System (OMERS), which manages C$121 billion, made three allocations to crypto-related companies through the business of OMERS Ventures between 2012 and 2018, but exited all investments in 2020.

Another Canadian pension fund, OP Trust, told Reuters it has investments in the offshore digital asset fund space. She said the investment in core encryption technology.

($1 = 1.3650 Canadian dollars)

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Argentina urges the European Union to renegotiate a South American trade agreement

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Argentina’s President Alberto Fernandez has called on the European Union to renegotiate a landmark trade deal with South America, saying the agreement is unbalanced and a threat to the auto industries of Brazil and Argentina.

Fernandez told Financial Times’s Global Boardroom Conference.

Asked how long this process might take, he said, “As long as the parties want to. It’s like tango. The tango is danced by a couple, you need both of them to want to tango, otherwise it’s very difficult.”

The trade deal between the EU and the Mercosur bloc – Argentina, Brazil, Paraguay and Uruguay – was agreed in principle in 2019 after nearly two decades of haggling. But its conclusion has been shelved amid European objections to Brazil’s poor record of preserving the Amazon rainforest under far-right President Jair Bolsonaro.

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The election in October of Luiz Inacio Lula da Silva, who has pledged to preserve the Amazon, to succeed Bolsonaro, raising hopes that a long-awaited deal between the EU and Mercosur might gain final approval. Spain’s trade minister, Xiana Mendez, told the Financial Times last month that she believed he would support the agreement. “It’s very balanced,” she said. We do not support reopening negotiations.

But Fernandez told the Financial Times conference that the environment “isn’t why we don’t get the agreement, it’s an excuse”.

The real reason is that for Brazil and Argentina [as] Car producers, the only car producers in South America, this agreement is problematic because it makes things difficult for us if European competition reaches South America,” he said.

At the same time, he added, South American countries faced a “burden of hurdles” in selling their agricultural exports to Europe, with countries such as France, Ireland and Poland opposing ending agricultural subsidies and allowing competition from Argentina.

“Neither I nor Lula are against the agreement with the European Union,” Fernandez said. You have to keep in mind what this agreement is, because this agreement has problems. . . related to market imbalances.

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While the debate over the long-stalled trade agreement with Europe continues, Argentina is striking deals with China, its second largest trading partner after Brazil. Beijing last month agreed to expand a swap facility with Argentina’s central bank to $25 billion, which helps boost the South American country’s meager foreign reserves.

China has also built a space monitoring station in the Patagonian province of Neuquen, which the Center for Strategic and International Studies in Washington says is Works with little Argentinian supervision It can be used to gather military intelligence.

Fernandez rejected the argument Argentina Need to choose between the United States and China, saying that he does not wish to recreate the Cold War era. “Argentina has to do what works best for Argentina,” he said. “The US is very concerned about what China might do in Latin America but China could do . . . just like the US could do in Latin America, they could come and invest.”

Argentina is building a naval base at Ushuaia in southern Patagonia to support ships patrolling the South Atlantic and Antarctica, but Fernandez called “fictional” news reports that China was involved. He said, “There is no such thing.” “In Argentina you cannot have Chinese, American or French military bases . . . because we are a sovereign country.”

The South American country faces dire economic challenges, with inflation approaching 100 percent annually, access to international financial markets largely cut off after a default in 2020, and exchange controls that have pushed dollars on the black market to nearly double the level. the official.

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Fernandez said the Argentine economy was “strange” because, despite high inflation and “unpayable” levels of debt, the country also had record levels of foreign investment and exports in the first half of the year, unemployment was low and consumption was increasing.

“If you cling to the image of an inflated Argentina . . . of an indebted Argentina, you will say Argentina is a mess,” Fernandez said. “But there is also all this data that points to sustainable growth and huge potential.”

He said the solution to the longstanding economic problems of this South American country is to add value to its goods. “Argentina must stop being an exporter of raw materials and become an industrialized country.”

Argentina holds presidential and congressional elections next October, and opinion polls show Fernandez’s Peronist party trailing the conservative opposition. The president has said in the past that he would like to run again but that his approval ratings are low, and he told the Financial Times conference that he was “totally immersed” in governance.

His powerful vice president, Cristina Fernandez de Kirchner, said on Tuesday she would not run again Convicted of corruptiona ruling against which she plans to appeal.

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“I’m not thinking of re-election, believe me,” said President Fernandez. I think how to solve all these problems[of the country]. . . I want to finish my tenure having seeded Argentina with opportunities for the person who will succeed me.”

Additional reporting by Andy Pounds in Brussels

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Renault says executive vice president Delpos has resigned, according to Reuters

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© Reuters. FILE PHOTO: A Renault logo is pictured in a shop in Vertou, near Nantes, France, January 17, 2022. REUTERS/Stephane Mahe/File Photo

PARIS (Reuters) – President of the French automaker Renault The company said on Wednesday that its new mobility unit Mobilize (EPA:) and group executive vice president Clotilde Delbos have both resigned.

Renault said Delpos would leave at the end of December, without giving a reason for her departure. The company said in a statement that Phaedra Ribeiro will be named CEO of Mobiliz while Patrick Claude, Group Chief Financial Services Officer, will take on the role of Delbus on a temporary basis at Renault Financial subsidiary RCI Banque.

Delbos joined Renault in 2012 as group controller and was a seasoned executive who helped transition between former boss Carlos Ghosn, who was arrested in Tokyo in 2018 on financial misconduct charges, and current CEO Luca de Meo, who took over in the summer of 2018. Past. 2020.

Delbos, who also served as Renault’s chief financial officer between 2016 and early 2022, pitched herself in to take over as CEO before the board decided to call the outsider de Meo.

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Renault is in the middle of a major and complex overhaul that will see it spin off its businesses into five companies, deepen ties with China’s Geely and spin off the electric car unit with a stock market listing next year.

Shares of the automaker briefly fell after Delbos’ departure was first reported by a Le Monde reporter on Twitter but then recovered to close a touch higher.

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