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Monday, January 13, 2014

Claman On Call: Suntory to buy Beam for $16B

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Suntory to buy Beam for $16B

Claman on Call: FBN's Liz Claman with an after-hours web-exclusive on the markets, Charter Communications bid for Time Warner Cable, Suntory's deal for Beam and Ford's new F-150.

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Rent tier society

Unless you’re a landlord, the economics of the US rental market aren’t pretty: renters’ real median income fell by 7.6% from 2007 to 2012, while the number of renters rose by roughly 11% from 2007 to 2011, Bloomberg reports.

Rents are greatly outpacing job growth in some big cities, according to Trulia economist Jed Kolko. In San Francisco, Portland, and San Diego rents have risen roughly 10% in the last year, as job growth has ranged from 1.5% to 2%. “We are in the midst of the worst rental affordability crisis that this country has known,” HUD secretary Shaun Donovan said in December. A recent Harvard study showed that some 11.8 million renters with extremely low incomes are chasing 6.9 million affordable housing units. “Half of all renters now spend 30% of their income on rent, and a quarter spend more than 50%. This is an unprecedented squeeze on the people who can least afford the shelter they need,” Felix writes.

Things are particularly troubling for renters in NYC, where average rents are just over $3,000. (Note: I’m biased because I live here). Between 2002 and 2011, the city lost 40% the total number of housing units that were affordable to low-income families, per one recent calculation. New York City’s long history of rental wars may be heating up again -- the city’s new mayor has called for a limited rent freeze. New York Governor Andrew Cuomo has called for an as-of-yet undefined tax break for renters who make less than $100,000 per year, which would apparently increase by family size.

The rent needn’t be too damn high, even in financial and cultural capitals like New York City, Reihan Salam wrote in August. One idea Salam suggests is “tax-increment local transfers” that would give local residents a cut of the income tax revenues attributable to new housing tracts. Josh Barro has a more classically conservative case for solving New York’s rental problem: more housing units, simplified zoning laws, and cuts to rent-control regulations, which he argues raise rents overall. Most research suggests rent controls aren’t actually great at protecting low income citizens, Peter Tatian writes.

Apartment renters like me are a part of a larger generational shift, according to a new paper by Kansas City Fed economist Jordan Rappaport. Classic suburban single-family home construction will level out as Baby Boomers retire, Rappaport writes, and more Americans move to multi-family buildings. This will boost demand not just for new apartments, but for “restaurants, city parks, and high-quality public transit” . -- Ryan McCarthy

On to today’s links:

Deals
Japan's Suntory buys Jim Beam for $13.6 billion - DealBook
Charter offers to buy Time Warner Cable for $61.3 billion - Bloomberg
Google acquires Nest for $3.2 billion in cash - Re/code

Must Read
"A classic economic death spiral": poverty and misery in Appalachia - National Review

Vicious Circles
Inequality is feeding on itself - Robert Frank

Regulations
Banks are fighting the Volcker Rule by challenging the meaning of "own" - Bloomberg
A government agency was set up to try to work outside bureaucratic boundaries. What happened next won't surprise you - Lydia DePillis

Crisis Retro
The safe asset crash and the financial crisis - John Carney

Profiles In Capital
Our congenial web overlords: The father-and-son Lerer Ventures empire - Jessica Pressler

EU Mess
"It takes an almost heroic act of denial to look at this chart and see a success story" - Paul Krugman
"Home is where the heartache is: in the domestic economy outside the gated community of high-tech multinationals" - Fintan O’Toole
Head of Greek bank rescue fund charged with money-laundering - FT

Equals
"Slouching toward gender equity": 4 charts showing how the recession made men worse off - Matt Yglesias

Oxpeckers
David Foster Wallace, Standard Written English, and journalism's declining linguistic authority - Tech Crunch
Charting how much the readers of different newspapers care about Twitter - Mashable

Lessons
Why Medicare overpays at the pump - Jordan Weissmann

FWIW
“S&P 500 valuation is lofty by almost any measure” - WSJ

Legal Arcana
$100 bills “were named defendants in a lawsuit called US v. $4,245,800 in Mutilated US Currency" - Bloomberg

The Fed
"The Fed is independent only in a very narrow sense" - Randall Wray

Alpha
CMBS for a homeless shelter - Tracy Alloway

Corrections of the Day
"The information was fed into trading algorithms, not into logarithms" - NYT

Check Your Bias
The IKEA effect, or people value not being alienated from their labor - Wikipedia

Says Science
Why French kids don't get ADHD - Psychology Today
The point of sleep is brain cleaning - NYT

Old Normal
Documenting Brooklyn apartments, circa 1978 - Messy Nessy

Innovation
The internet of things: making making your refrigerator obsolete and hackable - Ars Technica

Follow Counterparties on Twitter. And, of course, there are many more links at Counterparties.

 

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Business Today: Google to acquire Nest for $3.2 billion in cash

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01/13/2014
Reuters Election 2012 Daily round-up of the day's top news from the campaign trail, the White House and all the politics in between
Google to acquire Nest for $3.2 billion in cash
SAN FRANCISCO (Reuters) - Google Inc on Monday announced plans to acquire Nest Labs Inc, a maker of smart thermostats and smoke alarms, for $3.2 billion, one of the Internet search company's largest acquisitions.
Apple loses bid to block antitrust monitorship
NEW YORK (Reuters) - Apple Inc lost a bid on Monday to block an antitrust monitor appointed after a judge's finding that the company conspired to fix e-book prices.
Wall Street slides on caution ahead of earnings
NEW YORK (Reuters) - U.S. stocks tumbled on Monday on caution ahead of corporate results, as mounting negative pre-announcements left a lackluster profit growth outlook.
Madoff trustee wins court fight over Picower settlement
NEW YORK (Reuters) - Two former investors with Bernard Madoff cannot pursue claims against the estate of a Florida businessman who was one of the convicted swindler's biggest clients, a federal appeals court ruled on Monday.
U.S. posts record December budget surplus
WASHINGTON (Reuters) - The U.S. government last month posted the largest budget surplus for any December on record, boosted by payments from government-controlled housing finance giants Fannie Mae and Freddie Mac .
U.S. venture funds raise more in fourth quarter, but less for year
SAN FRANCISCO (Reuters) - U.S. venture funds raised $4.85 billion last quarter, up 53 percent from the same period a year ago, but full-year 2013 fundraising fell 15 percent compared to the year before.
Fed's Lockhart gives cautious backing to more QE cuts
ATLANTA (Reuters) - A top U.S. central banker on Monday cautiously endorsed further cuts to a stimulative bond-buying program, warning the labor market has not yet healed and that there are worrisome signs of disinflation in the economy.
Hyundai Motor sees U.S. market share rebound to 4.7 percent in 2014
DETROIT (Reuters) - Hyundai Motor expects its market share to bounce back to 4.7 percent this year from 4.6 percent in 2013, propelled by new models such as the revamped Sonata sedan and eased capacity constraints, the automaker's U.S. chief told Reuters on Monday.
Japan's Suntory to buy U.S. spirits maker Beam for $13.6 billion cash
LONDON/NEW YORK (Reuters) - Suntory Holdings Ltd on Monday said it would buy U.S. spirits company Beam Inc for $13.6 billion cash in a deal that would make the Japanese company the world's third-largest spirits maker.
Ford to double hybrid offerings by 2020: development chief
DETROIT (Reuters) - The top development executive at Ford Motor Co said on Monday that the U.S. automaker plans to double its hybrid offerings by 2020.
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