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New Zealand house prices climbed for a fifth month in February, fueled by increased demand for property in the nation’s largest cities as the economy emerges from a recession.

Prices rose 5.5 percent from a year earlier, following a 4.4 percent annual gain in January, according to a Quotable Value New Zealand Ltd. index. Prices in the 17 largest cities rose 7.3 percent, the Wellington-based government valuation agency said in an e-mailed report.

Further gains in house prices may be curbed by the prospect of higher interest rates and changes to taxation of investment property that will be announced in the May 20 budget. Prices in rural areas fell in February and the pace of increases in provincial cities and some urban areas is slowing, said Glenda Whitehead, valuation manager at Quotable Value.

“Values in the last few months have flattened in many areas,” she said. “The market remains patchy and buyers cautious.”

Reserve Bank Governor Alan Bollard said on Jan. 28 he expected to raise the official cash rate from a record-low 2.5 percent around the middle of the year.

Property sales and listings of houses for sale improved in February as the market approaches its busiest time of the year in late summer, Whitehead said.

“We expect values to stabilize over the coming months, reflecting the ongoing uncertainty around employment, pending interest-rate rises and continued tight lending criteria,” she said. “We may see more certainty in the market after the budget announcement.”

Unemployment

Damping consumer confidence, New Zealand’s jobless rate rose to a 10-year high of 7.3 percent in the fourth quarter. Banks are taking a careful approach to lending and are requesting fresh valuations where the borrower has a low deposit, Whitehead said.

The number of home-loan approvals in the three months ended Feb. 26 slumped 20 percent from a year earlier, according to central bank figures published March 3.

A separate report prepared by the Real Estate Institute last month said that house prices fell for a second month in January. The institute releases February figures on March 12.

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Industrial Alliance Insurance and Financial Services Inc. of Canada has launched a company in Scottsdale in what officials say “is the next phase of the company’s long-term growth strategy in the U.S.”

IA American Life Insurance Co. will be headquartered with the Quebec City company’s Industrial Alliance Pacific Life Insurance Co. U.S. division. The two will offer a range of life and annuity products.

Among IA’s first efforts was a tentative agreement to take on policies of Golden State Mutual Life Insurance Co., seized in September by California regulators. It’s also offering a new product called SecureLife Plus universal life insurance, which offers coverage to individuals up to age 120 and features such as increased maximums on term riders, a new waiver of surrender charge and an accelerated death benefit.

“We’ve laid a solid U.S. foundation and now we’re focusing on growth in underserved, middle-income markets,” said Michael Stickney, president of IA American.

“The debut of IA American marks the beginning of a new phase in our expansion in North America,” said Yvon Charest, president and CEO of Industrial Alliance guaranteed online payday loans. “Over the last few years, we’ve focused on creating a solid local management team in the U.S. Our next objective is to create a strong and vibrant organization capable of serving the insurance and financial needs of middle-income American families.”

State officials took over Golden State Mutual, the largest minority-owned life insurance company in California, after the insurer’s surplus dropped below the state’s required minimum. Golden State Mutual had posted six consecutive years of net operating losses and was operating in a hazardous financial condition, according to an announcement from Insurance Commissioner Steve Poizner. IA was the only bidder that met state requirements after a national search.

Founded in 1892, Industrial Alliance is a life and health insurance company with operations across North America. It has more than 3,400 employees and manages and over $58 billion in assets. Officials could not be reached over the weekend for further details on the Scottsdale operation.

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Government-owned mortgage financing firm Freddie Mac reported a larger loss in the fourth quarter, but the company did not need to draw down any additional tax dollars in the period.

The company, which along with rival Fannie Mae (FNM, Fortune 500) was put into a conservatorship under government control in September 2008, lost $6.5 billion in the quarter, up from a loss of $5.4 billion in the third quarter.

Including $1.3 billion in preferred dividend payments to the federal government, the loss came to $7.8 billion in the fourth quarter of 2009. But that’s still much better than the $23.9 billion it lost in the year-earlier period.

The company lost $21.6 billion for the year, an improvement from 2008 losses of $50.1 billion.

Freddie charged off $2.4 billion in bad loans during the quarter, nearly triple the $863 million from a year earlier. That brought full-year charge-offs to $7.6 billion in 2009.

And the worst is clearly not behind it, as Freddie raised its reserves for loan losses to $33.9 billion at the end of the quarter, up from $30.6 billion three months earlier.

About 3.9% of its $1.9 trillion in loans are now delinquent, well below the national average for late payments. But Freddie’s delinquency rate has been rising steadily for the past two years.

Freddie (FRE, Fortune 500) said it ended the quarter with a positive net worth of $4.4 billion, which means that for the third straight quarter it did not need another injection of government cash make quick cash. Net worth compares a company’s assets to the value of its liabilities.

A year ago Freddie needed $30.8 billion in federal cash as mounting foreclosures on the mortgages Freddie owns or guarantees hurt the company’s finances. Since the start of the conservatorship, Freddie has received $50.7 billion in taxpayer dollars, while Fannie has received $60.9 billion.

That injection of tax money to keep the companies afloat gave the Treasury Department an 80% stake in both companies. Fannie and Freddie both pay dividends to Treasury. Freddie has paid $4.2 billion so far.

But despite those dividends, future injections of taxpayer dollars are likely. At the end of the fourth quarter, Treasury lifted a $100 billion limit on the amount of money it could pour into each of the firms.

Fannie and Freddie are the primary source of mortgage funding in the nation. They bundle home loans that conform to certain standards into securities, attach a guarantee that they will be paid, and sell them to investors. The process gets money back to the banks and other lenders that originate the loans.

Freddie, which has about $1.9 trillion in its loan portfolio, purchased or guaranteed approximately one out of every four U.S. home loans originated during 2009. 

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Otterbein Homes has acquired Pioneer Home Health Care, a Medicare-certified home health agency with operations in the Wilmington area.

Pioneer Home Health Care was established in 2005 by licensed physical therapists Tim McCormick and Kimberly Neikirk. Neikirk has been named executive director for the new venture for Otterbein, and McCormick will assume the position of therapy supervisor.

All of the other current employees will remain with the company, according to a press release.

Otterbein’s five full-service retirement communities in western and northern Ohio are located in Lebanon, St. Marys, Cridersville, Pemberville and on the Marblehead Peninsula on Lake Erie. Avalon by Otterbein neighborhoods, which offer skilled nursing and rehabilitation, are located in Perrysburg and Monclova in northern Ohio and Springboro and Middletown in southern Ohio Same day payday loans.

Avalon in Hamilton Township is under construction.

Jill Hreben, CEO of Otterbein Homes, said: “Extending the Otterbein brand to include home health services was critical to our continuing strategic goals, and we recognized an outstanding alignment with the level of care and the values displayed by Kimberly and Tim and the other partners at Pioneer.”

Otterbein Homes serves nearly 1,700 people and is related to the East Ohio and West Ohio Conferences of the United Methodist Church.

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If you want to buy a house, the state of Missouri wants to give you $1,250.

And if you make the place more energy-efficient, it will give you $500 more.

State officials are poised to pass a measure next week that would give a sizable break on property taxes to most people who buy a house in 2010. It is Jefferson City’s latest bid to boost the state’s weak housing market, and the newest item on a growing menu of sweeteners to make buying a house more appealing, sweeteners that some warn could eventually cause a hangover.

The measure was pitched last month by Gov. Jay Nixon and state Treasurer Clint Zweifel as a way to spur housing sales and spur the state’s economy.

"This is so vital to our state’s economic growth," Nixon said. "We want to do everything feasible to encourage people to buy homes."

So next Friday, they will ask the Missouri Housing Development Commission — which Zweifel chairs and to which Nixon appoints most of the members — to set aside $15 million of its reserve funds for one-time property tax reimbursements for Missourians who buy a home in 2010. To qualify, St. Louis-area households must earn $95,060 or less; if they do, they can get up to $1,250 in property taxes reimbursed by the state.

Home buyers who add energy-saving appliances, new windows or other "green" improvements, can qualify for another $500. With a $15 million cap for the program, the state expects to write between 9,000 and 11,000 such checks — roughly one for every 10 homes sold in Missouri this year.

It comes on top of the $8,000 federal tax credit for first-time home buyers, which many economists say has helped prop up home sales this year. Last month, Congress voted to extend that program through April and expand it to include $6,500 for some repeat buyers. States from California to Delaware have thrown in their own incentives, too, and in January the Missouri housing commission launched a program to give an advance on the $8,000 credit, a program more than 1,200 people have used so far. Illinois launched something similar in July.

Now, Missouri plans to up the ante. If the housing commission approves, the agency will put much of its reserve funds — separate from the state’s cash-strapped general budget — toward the waivers.

"This hopefully is another tool in the toolbox," Zweifel said. "It’s important to put our dollars to work."

Still, given Missouri’s record-high foreclosure rates and a job market that is giving pause to many would-be buyers, some housing advocates wonder if the $15 million might be better spent in other ways no faxing payday loan.

"In terms of the level of need, it strikes me as a little strange," said Chris Krehmeyer, president of Beyond Housing, a St. Louis-based group that provides mortgage counseling and builds affordable housing. "We’re not seeing folks who are buying homes saying ‘I wish someone would pay my taxes next year.’ People are saying, ‘I need help to stay in the home I own.’"

Typically, the state’s housing commission finances affordable housing projects and will issue nearly $100 million in tax credits for those projects in early 2010. But, Zweifel said, the broader housing industry is a big pillar of Missouri’s economy, and supporting it, too, means creating jobs. This provides a fast way to do it.

"The goal was partially to spur home purchases, but also to find a way to quickly put $15 million to work for Missourians," he said. "We wanted to create a program that helps spur economic development and job creation, not something that’s permanent in nature."

The temporary nature of this and the $8,000 federal tax credit has some housing economists warning of trouble when the programs end. Such props must be taken down eventually, and critics point to a plunge in auto sales after the end of the government’s "Cash for Clunkers" program as a warning for what might happen to the housing market.

Then there’s the question of just how much impact it will have. Most people aren’t going to make a decision on whether to move based on $1,250, said Carlos Garriga, an economist who studies housing at the Federal Reserve Bank of St. Louis.

"It’s just kind of a bonus," he said. "Even at the margins, how many people will move because of this? It’s not that big."

Still, said Mark Stallmann, chief executive of the St. Charles County Association of Realtors, it’s the sort of thing that makes it easier to buy a house. And with the real estate market as weak as it is right now, every little bit — even a $1,250 check from the state — helps.

"Anything that reduces the cost of homeownership, that’s an incentive to help families get in a home, that’s a good thing."

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A return to lavish bonuses for Wall Street’s top earners could be just the tonic that the Swiss watch industry needs this Christmas after months of austerity depressed sales.

The country’s watch sector, which makes up around 7 percent of exports, has been grappling with a sharp drop in demand over the past year after the worst economic crisis in decades killed consumers’ desire and ability to splurge on pricey treats.

But watchmakers are eyeing a modest rise in sales over the key festive period — the fourth quarter accounts for some 30 percent of sales — as a recovery in Wall Street earnings could lift bankers’ bonuses by up to 50 percent.

“The consumer mood between the continents varies, but on average it is better than last year,” said Philippe Merk, chief executive of privately owned Audemars Piguet, whose watches cost around $20,000 to $30,000.

“Luxury consumers, who are bankers, are better off now as this is the sector that has recovered the fastest. These are the indicators that tell us that this year’s Christmas sales will be better,” he said.

Bonuses are expected to be substantially higher this year despite pressure from politicians and regulators to restrain payouts.

Goldman Sachs, for example, has set aside nearly $17 billion for bonuses so far this year and looks well on track to break the $20 billion mark, which could mean higher payouts per employee than in the previous record year, 2007.

This comes after a revival in profits for most investment banks, and contrasts with a bleak year for the financial sector that has seen governments bailing out major banks and nearly 400,000 job cuts.

Richemont’s most important Cartier brand, Swatch Group’s Tissot marque, luxury watchmaker Parmigiani Fleurier and the head of LVMH’s watch and jewelry unit have all said they expect stronger demand this Christmas.

And Tiffany & Co posted better-than-expected quarterly results on Wednesday that showed its upscale shoppers around the world were spending again.

One Swiss banker said he was treating himself to one of Maurice Lacroix’s latest watches this year, adding that some people bought watches and jewelry as a solid investment, especially after this year’s volatile equity markets.

But he cautioned that there would still be many in the financial sector who would have to forego such purchases.

“It will not be as easy as it was in the past. There is a real difference between the winners and the losers. Employees at those banks that are now state-controlled can forget about bonuses this year,” the banker said.

ASIA A BIG FACTOR

Swiss watch exports have tumbled 26 percent so far this year, ending several years of strong growth, but some analysts predict the watch industry will grow 3-4 percent thanks to an easier comparison base next year and thriving demand from Asia. 

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The U.S. Federal Reserve is best equipped to supervise the largest, most complex firms, a top U.S. Treasury official said on Friday.

“No regulator had a perfect record leading up to the crisis,” Deputy Secretary Neal Wolin said in prepared remarks to the American Bar Association’s banking law committee. “But in our view, the Federal Reserve is the agency best equipped for the task of supervising the largest, most complex firms.”

The comments came three days after Senator Christopher Dodd, chairman of the Senate Banking Committee, proposed consolidating bank supervisory powers in a single agency, stripping the Fed of its role as a direct bank supervisor.

Wolin did not mention Dodd by name in his comments, but said the Fed’s supervisory role gave it a deep understanding of and timely access to information about the banking sector, payment systems and capital markets no credit check payday loan.

“Stripped of its supervisory role, the Fed would not have timely and complete information in a crisis,” he said.

The Fed, the U.S. central bank, has drawn sharp criticism from some lawmakers for its handling of the financial crisis, particularly its controversial decisions to extend emergency loans to firms such as AIG, which it did not directly supervise.

(Reporting by Emily Kaiser; Editing by Neil Stempleman)

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Europe’s biggest bank HSBC Holdings Plc said its underlying third-quarter profits were significantly ahead of a year ago and losses on U.S. consumer loans had shown their first fall in three years.

The news sent HSBC stock up over 4 percent to their highest in just over a year. At 0910 GMT (4:10 a.m. EST), the shares were up 3.4 percent at 715.7p.

In a trading statement on Tuesday which lacked detailed figures on its quarterly results, HSBC said its investment banking arm had maintained its record performance in the quarter, following bumper performances by rivals including Britain’s Barclays.

It said margins for the Global Banking and Markets arm were not as good in the quarter as they were in the exceptional first half, which benefitted from pent-up demand after the crisis hit at the end of 2008, but said margins were very good compared with previous years, including 2006 and 2007.

In the United States, which has been the focus of market concern, HSBC said loan impairment allowances for its consumer finance business declined, representing the first quarterly fall since the start of 2006 and their lowest level for over a year.

But the bank cautioned it was still too soon to call a turn in U.S. consumer impairments, which hit around $3 billion in the third quarter, though there were positive signs.

“Consensus forecasts (for unemployment, house prices) are moving down from some of the more pessimistic figures bad credit payday advance… if these things all play out, those would be reflective of turning points. But I don’t think anyone is confident to call those yet,” Finance Director Douglas Flint told reporters.

Overall loan impairment charges and other credit risk provisions declined in the quarter and were at their lowest quarterly level since the second quarter of 2008.

“I believe the biggest jolt has now passed through the global economy,” said HSBC Chief Executive Michael Geoghegan. “The world will likely see a two-speed recovery,” he said, adding that emerging markets are likely to drive the recovery.

The bank said on a reported basis, including losses on the fair value of its own debt, third-quarter profits were lower than a year ago. The bank said it had seen a further tightening of credit spreads in October, resulting in an additional reduction in the gain from fair-value movements in its own debt.

HSBC also said its U.S. business would announce the sale of its U.S. vehicle loan servicing operations and $1 billion in vehicle loans to Santander’s U.S. operations.

(Editing by David Holmes)

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A U.S.-led group that includes former Ford Motor Co director Michael Dingman is in talks to acquire the automaker’s money-losing Volvo brand, a source familiar with the matter said on Monday.

The group, called the Crown consortium, has been in talks with Ford over Volvo for some time, said the source, who asked not to be named because the discussions are private.

The discussions raise a potential rival bid for Volvo to that of China’s Geely Automotive, which confirmed in September an interest in the Swedish brand.

Ford, the only large U.S. automaker not to restructure under a government-supported bankruptcy this year, in December said it was considering selling Volvo. The automaker has been divesting brands to focus on Ford, Mercury and Lincoln and conserving cash to support a turnaround.

A Ford spokesman said the automaker was in discussions with parties interested in acquiring Volvo. He declined to identify the parties or to comment on the potential timing of any sale.

“We will provide an update as soon as we have something to say,” Ford spokesman Mark Truby said.

The Financial Times first reported the Crown consortium’s interest in the Volvo brand and said the group was fronted by Dingman and former Ford and Chrysler executive Shamel Rushwin.

Dingman served on Ford’s board from 1981 to 2002, when he reached its mandatory retirement age.

The FT said the consortium had fully secured financing from U.S. private equity groups and was seeking additional backing from Swedish investors to signal its intent to keep Volvo in the country, citing people close to the sale.

The FT reported another informed person as saying the U.S. consortium had offered significantly less than Hong Kong-listed Geely, but that both plans involved similar plans for more than $3 billion of additional investment in Volvo.

The FT quoted a person close to the sale as saying Geely had offered just less than $2 billion for Volvo. Other media reports have put the price tag at about $2.5 billion.

The timing of the sale remains unclear. Ford has been restructuring Volvo to cut costs and to separate its operations to run on a stand-alone basis. It started discussions on the sale of Volvo in the first quarter of this year.

The unit was designated as held for sale during the first quarter, meaning that Ford expected to sell it within a year, but the process has moved at a deliberate pace.

Volvo is the last brand left at Ford from the automaker’s former premier auto group. Ford previously sold off Aston Martin, Jaguar and Land Rover, but has continuing relationships with each brand and likely would retain ties to Volvo also.

The process of separating Jaguar and Land Rover from Ford for the sale to Tata Motors required working out continuing relationships that may be even more extensive between Ford and any new owner of Volvo.

As a result, Ford’s interests run beyond transaction price to the long-term financial stability of Volvo. 

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Pipeline giant Enbridge Inc. is pushing further into the renewable-energy market, announcing today a plan to purchase the largest solar power farm in Canada from U.S. solar manufacturer First Solar Inc.

Enbridge, the country’s biggest distributor of natural gas, said it will spend $100 million this year on its solar strategy, and expects its newly acquired Sarnia Solar Project to be fully operational by the end of this year.

"The Sarnia Solar Project is right in the sweet spot of Enbridge’s renewable energy strategy," said Enbridge president and chief executive officer Patrick Daniel. "It has risk and return characteristics which are fully consistent with Enbridge’s low-risk business model, and similar to our crude oil pipeline business."

The projects were originally owned by California solar manufacturer OptiSolar Inc., which had obtained 20-year contracts with the Ontario Power Authority to sell its solar electricity into the provincial grid for 42 cents per kilowatt-hour.

Those contracts were obtained under an older renewable-energy standard offer program (RESOP), which has since been replaced with a new feed-in tariff (FIT) program launched last month.

But OptiSolar ran into trouble during the economic downturn, so in April sold the rights to its Ontario solar projects to Tempe, Ariz.-based First Solar empire payday loans. Since then, First Solar has built more than 65 per cent of the 20-megawatt project, which on sunny days can put out enough power to meet the needs of 3,200 homes.

On average, the Sarnia Solar Project will produce 30 million kilowatt-hours annually, equating to revenues of $12.6 million a year for Enbridge. The company already owns four wind-energy projects in Canada totaling 260 megawatts, including a 190-megawatt wind farm in Bruce County.

"Subject to certain conditions, Enbridge may participate with First Solar in future solar energy projects at the Sarnia site," the company said.

First Solar will continue to supply its thin-film solar modules to the Sarnia Solar Project. The RESOP program, unlike the new FIT program, does not have local content rules that make it difficult to use foreign-made solar equipment.

Enbridge won’t be alone in owning a massive solar farm in Ontario. Toronto-based SkyPower Corp. and joint-venture partner SunEdison LLC from Maryland have completed a 9-megawatt project near the town of Stone Mills. It is the first phase of a 19-megawatt solar farm called First Light.

Several other multi-megawatts solar farms in Ontario are under construction or in early development.

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