Global News February 21, 2018

  1. BBC
  2. Global News February 21, 2018

“Einhorn Says Greenlight Posts Worst Underperformance Since 2000.”

Hedge fund manager David Einhorn said a shift in favor toward value stocks may soon be coming even after his firm posted its worst underperformance in almost two decades.
“While we’ve never underperformed like this, our prior worst underperformance compared to the S&P came in March of 2000, which was a similar environment,» Einhorn said Wednesday in a conference call discussing results for Greenlight Capital Re Ltd., the Cayman Islands-based reinsurer where he is chairman.
“While the environment has remained difficult with growth stocks accelerating their outperformance against value stocks this year including February, we think a reversion may finally be coming soon,» he added.
Poor investment returns and underwriting results have put pressure on the reinsurer’s shares, which have tumbled 15 percent this year. In January, the reinsurer’s investment portfolio dropped 5.5 percent as a rise in stocks it was betting against outpaced gains in the long portfolio.
The performance is the latest setback in a difficult few years for Greenlight. After losing more than 20 percent in 2015, the firm has struggled as it has stuck to its value-investing strategy. His wagers include shorts against a “bubble basket” of technology stocks.


“U.S. existing home sales fall for second straight month.”

U.S. home sales unexpectedly fell for a second straight month in January, weighed down by a persistent shortage of houses that is pushing up prices and keeping first-time buyers out of the market.
The National Association of Realtors said on Wednesday that existing home sales dropped 3.2 percent to a seasonally adjusted annual rate of 5.38 million units last month. December’s sales pace was revised down to 5.56 million units from the previously reported 5.57 million units.
Economists polled by Reuters had forecast existing home sales rising 0.8 percent to a rate of 5.60 million units in January. Sales fell in all four regions last month. Existing home sales, which account for about 90 percent of U.S. home sales, declined 4.8 percent on a year-on-year basis in January.
That was the biggest year-on-year drop since August 2014. The weakness in home sales largely reflects supply constraints rather than a lack of demand.
The NAR also published revisions going back to 2015, which were minor and had no impact on the previous fairly upbeat assessment of the housing market.
A robust labor market is boosting demand for housing, but home sales growth is being frustrated by an acute shortage of properties available on the market, especially at the lower end. The resulting increase in house prices is sidelining some potential first-time buyers.
While the number of previously owned homes on the market rose 4.1 percent to 1.52 million units in January, housing inventory was down 9.5 percent from a year ago. That was the lowest January inventory on record. Supply has declined for 32 straight months on a year-on-year basis. At January’s sales pace, it would take 3.4 months to exhaust the current inventory, up from 3.2 months in December. A six-to-seven-month supply is viewed as a healthy balance between supply and demand.


BBC News
“Syria war: Eastern Ghouta bombing ‘catastrophic’.”

A doctor working in the Syrian rebel enclave of the Eastern Ghouta says the situation is «catastrophic» – and he believes the international community has abandoned the people living there. «We don’t have anything – no food, no medicine, no shelter,» Dr Bassam said.
Activists say 45 people were killed in fresh government air strikes on Wednesday, bringing the total death toll there since Sunday to nearly 300. The Red Cross is demanding urgent humanitarian access to the region. The Syrian military says it is trying to liberate the area from terrorists – but it has also been accused of targeting civilians.
The Eastern Ghouta is dominated by the Islamist faction Jaysh al-Islam. But Hayat Tahrir al-Sham, a jihadist alliance led by al-Qaeda’s former affiliate in Syria, also has a presence there. Pro-government forces, backed by Russia, intensified their efforts to retake the last major rebel stronghold on Sunday night. «They targeted everything: shops, markets, hospitals, schools, mosques, everything,» Dr Bassam told the BBC on Wednesday.
The head of safety and security for the Union of Medical Care and Relief Organizations (UOSSM), which operates medical facilities in the Eastern Ghouta, told the BBC that 45 people had been killed and another 250 injured on Wednesday alone. Dr Ahmad Dbis said that since Sunday, ten members of medical staff and volunteers had been killed and 14 medical facilities were taken out of service, with five totally destroyed.
The UK-based Syrian Observatory for Human Rights put the total death toll since Sunday at 296. The catastrophe in eastern Ghouta is unfolding as the war in Syria enters a new and even more dangerous phase. The international community is impotent to act, not least because key members of that community are deeply implicated in what is going on, not least Russia.
Other regional players like Turkey and Iran are acting to secure their own long-term strategic interests. So too is Washington though its goals seem uncertain now that IS is defeated and the Assad regime remains in power.
There is no consensus in the international community, no great leadership in evidence, and no shared sense of what Syria’s future should be. Just as the international community has failed to halt the use of chemical weapons, so too it has been unable to secure humanitarian access to those at greatest risk.


“Final version of Trans-Pacific trade deal released, rules pushed by U.S. on ice.”

The final version of a landmark deal aimed at cutting trade barriers in some of the Asia-Pacific’s fastest-growing economies was released on Wednesday, signaling the pact was a step closer to reality even without its star member the United States.
More than 20 provisions have been suspended or changed in the final text ahead of the deal’s official signing in March, including rules around intellectual property originally included at the behest of Washington.
The original 12-member deal was thrown into limbo early last year when U.S. President Donald Trump withdrew from the agreement to prioritize protecting U.S. jobs. The 11 remaining nations, led by Japan, finalized a revised trade pact in January, called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). It is expected to be signed in Chile on March 8.
The deal will reduce tariffs in economies that together amount to more than 13 percent of the global GDP – a total of $10 trillion. With the U.S., it would have represented 40 percent.
“The big changes with TPP 11 are the suspension of a whole lot of the provisions of the agreement. They have suspended many of the controversial ones, particularly around pharmaceuticals,” said Kimberlee Weatherall, professor of law at the University of Sydney.
Many of these changes had been inserted into the original TPP 12 at the demand of U.S. negotiators, such as rules ramping up intellectual property protection of pharmaceuticals, which some governments and activists worried would raise the costs of medicine.
The success of the deal has been touted by officials in Japan and other member countries as an antidote to counter growing U.S. protectionism, and with the hope that Washington would eventually sign back up.