Business

WASHINGTON — The sales of new single-family US homes quickened for the second straight month in October, rising to the highest level since the housing bubble, according to data released on Monday.

The increase could point to a recovery in sales after what had been a sluggish year amid tightening supply and rising prices.

But the monthly gain was boosted by the storm-damaged southern US, which continued to see robust sales.

Sales of new homes rose 6.2 per cent compared to September to an annual rate of 685,000 units, seasonally adjusted, the fastest pace since October 2007, the Commerce Department said in its monthly report.

The result overshot the expectations of analysts, who had been expecting a 2.5 per cent decline.

The estimates are subject to a high degree of uncertainty, however. Sales in September, which originally were reported as a 10-year record, were revised down.

Analysts have said the tight housing market is weighing on sales and pricing houses beyond the reach of many would-be homeowners.

Yet, sales in the South, which suffered back-to-back hurricanes at the end of the summer, rose to 383,000 units — the highest level since October 2007 — even though it was an increase of just 1.3 per cent from the prior month.

Sales soared in the northeast, jumping 30.2 per cent, also a 10-year record, while sales in the Midwest surged 17.9 per cent.

The brisk sales pace drew down the supply of available new homes to 4.9 months, a 5.8 per cent decline, but in raw numbers the pool of houses for sale changed little at 282,000, the highest since May 2009.

Despite the strong demand, the median sales price fell 3.7 per cent to $312,800 but the average sales price hit its highest level on record, rising five per cent to $400,200.

PARIS — Bitcoin, which this week soared to a new record high of more than $8,000, is the monetary equivalent of Uber, since it bypasses central bank regulation and could be attractive for financially fragile countries, economists say.

Nevertheless, it is precisely the lack of oversight that opens up the users of cryptocurrencies such as bitcoin to risks and dangers, analysts warn.

“Bitcoin? It’s about ‘Uber-ising’ currency, about not having a central bank that decides the price,” said Ludovic Subran, chief economist at credit insurer Euler Hermes, referring to Uber, the ride-hailing app that has set the cat among the pigeons in the taxi sector in recent years.

“Yes, it’s exactly that: it bypasses a central regulatory authority. That’s the genius of this invention,” agreed Yves Choueifaty, founder of the Paris-based asset management firm Tobam, which this week launched the first European fund investing in bitcoin. 

Bitcoin is not regulated, but is traded on specialist platforms. It has no legal exchange rate and no central bank backing it. Launched in 2009 as a bit of encrypted software written by someone using the Japanese-sounding name Satoshi Nakamoto, bitcoin is controlled and regulated by its community of users. 

Investors are already referring to it as “digital gold”, as the bitcoin soared to a new record high of more than $8,000 this week, a staggering rise in value from just under $1,000 at the beginning of the year. 

“We have no need for central banks,” said Yves Choueifaty, suggesting that institutional investors may be behind the recent sharp gains, even if insisted that there was “no bitcoin bubble”.

The growing interest in bitcoin is catching mainstream attention: the CME Group of Chicago, one of the world’s biggest exchanges, has decided to launch a bitcoin futures marketplace. 

Prestigious US universities are offering courses in blockchain technology, on which cryptocurrencies are based.

‘Dollarisation 2’ 

Virtual currencies could also prove attractive to economic players in countries such as Zimbabwe or Venezuela, whose fiat currencies have been ravaged hyper-inflation. Caracas, for example, has had to issued a new 100,000-bolivar bill, when just a year ago, the biggest-denomination banknote was 100 bolivars. 

“Think of countries with weak institutions and unstable national currencies. Instead of adopting the currency of another country — such as the US dollar — some of these economies might see a growing use of virtual currencies. Call it dollarisation 2,” said the head of the International Monetary Fund, Christine Lagarde, recently.

Economists also suggest the bitcoin could be of interest to developing countries where individuals often find it easier to access the internet than traditional bank accounts.

Nevertheless, central banks and the big financial institutions are concerned that virtual currencies can be used for illicit purposes and are highly speculative by nature. 

“It’s the exact definition of a bubble,” the head of Swiss banking giant Credit Suisse, Tidjane Thiam, warned recently in comments that immediately sparked an uproar on social media among bitcoin’s supporters. 

The head of the French central bank or Banque de France, Francois Villeroy de Galhau, warned in the summer: “People are using the bitcoin today are clearly doing it at their own risk and at their own peril.” 

‘No intrinsic value’ 

Nobel laureate, Jean Tirole, also insisted that the current bitcoin boom was a “bubble”. 

“It’s something that has no intrinsic value,” he told AFP on the sidelines of a conference in Paris this week. 

“It could collapse from one day to the next. I would be completely against French banks, for example, investing in bitcoin.” 

Euler Hermes economist Subran called on the financial authorities to make potential investors more aware of the risks. 

“There’s a lot of money to be made. And a lot of money to be lost,” he said. 

“We’re seeing more and more people wanting to venture there, but they’re not fully aware of the risk.” 

Bitcoin has regularly suffered abrupt falls, for example, in cases of friction between the members of the community who oversee it and the members who produce it, when the regulatory authorities issue any warnings, or if there are data hacks.

But more often than not, bitcoin quickly makes up any losses and some investors are predicting it will soon top the $10,000 level. Back in 2011, it had struggled to pass $1. 

CHICAGO/NEW YORK — US stores offered deep discounts, entertainment and free gifts to lure bargain hunters on Black Friday, the traditional start of the holiday retail season, but some shoppers said they were just browsing the merchandise, reserving their cash for Internet purchases.

Still, a sharp rise in online sales brightened the overall outlook for those traditional retailers that have expanded beyond brick-and-mortar outlets, sending their shares higher in day-after-Thanksgiving trading. Stores also had carefully managed inventory, seeking to ward off any post-holiday liquidation that would weigh on profits.

There was little evidence of the delirious shopper frenzy customary of Black Fridays from past years, even as some stores appeared to be getting creative with gimmicks besides heavy discounts to draw in customers.

No actual data for Friday’s brick-and-mortar business was immediately available. 

Despite anecdotal signs of muted in-store sales — fewer cars in mall parking lots, shoppers leaving stores without purchases in hand — consumers are still expected to spend more overall this holiday season than last, analysts and industry executives said.

Black Friday online sales totalled at least $3.54 billion by 8pm EST (01:00 Saturday GMT), up 15.6 per cent from a year ago, according to Adobe Analytics, which measures transactions at the largest 100 US web retailers. On Thanksgiving Day, US shoppers spent more than $2.87 billion online. 

Adobe projected internet sales would still reach a record $5 billion by the end of the night, with online retailers forecast to rake in an additional $6.6 billion on Cyber Monday. 

Indeed, some chains struggled to keep up, with brief online outages experienced by Lowe’s, H&M and the Gap, among others, according to website performance monitors. 

Macy’s Inc. customers in several states, including Texas, Arizona and Illinois, took to social media to complain about the retailer’s credit card processing system. The company acknowledged that processing was taking longer than usual in its stores and said it was working on the problem.

The hiccups dragged Macy’s shares 0.6 per cent lower in extended trading. They had ended the regular session up 2.1 per cent, boosted by comments from Chief Executive Jeff Gennette, who told CNBC that Macy’s was better off this year than last, had robust online demand and was in a good place for holiday promotions.

Macy’s and J.C. Penney Co. Inc. did a better job of ordering and controlling inventory this time, according to Burt Flickinger, managing director of Strategic Resources Group, a consultancy with seven researchers out in the field.

“The turnout this morning has been relatively slow, but it is still the best we have seen in three years,” Flickinger said, citing improving consumer confidence, a strong job market and healthy housing prices.

Fair weather across much of the nation also was factor, said National Retail Federation President Matthew Shay.

Some shoppers were enticed by the promise of spectacle, while others felt the pull of nostalgia. 

“It’s like a hangout, it’s an experience,” said Jonathan Lin, 17. “All my friends are back from college and we got together.”

“There’s something nostalgic about being at the stores this early,” Jennifer Stasiak said at Chicago’s popular Oakbrook Centre.

Not everyone found the Black Friday magic irresistible.

“I avoid the store, too many crowds,” said Elana Silverstein, 32, a school counselor enjoying a warm, sunny day at a Los Angeles park. Instead, Silverstein said, she bought several personal items on sale on Thursday night through the online marketplace Groupon.

Major retailers generally traded higher on Wall Street. J.C. Penney climbed 0.6 per cent and Wal-Mart Stores Inc edged upward. Amazon.com Inc. closed up 2.6 per cent at a record high.

Target Corp. did not fare as well, with analysts noting that it closed its stores for several hours overnight while many rivals kept their doors open. Its shares fell 2.8 per cent. 

Not what it used to be 

The period between the US Thanksgiving holiday and Christmas can make or a break a retailer, accounting for as much as 40 per cent of annual revenue and leading many businesses to go the extra mile to stoke shoppers’ interest. 

Godiva gave out free chocolates, while Sephora offered face masks and perfumes. Dancers entertained Bergdorf Goodman shoppers, according to The New York Post. 

Many chains, including Wal-Mart, Target, Macy’s and J.C. Penney, opened stores on Thursday evening and most were offering extended deals online. Some started offering in-store deals earlier this week.

Macy’s said some 16,000 shoppers were lined up outside its flagship Herald Square store in Manhattan when doors opened at 5pm on Thursday for its Black Friday eve sale. 

The deepest discounts included more than $200 off some Best Buy TVs; all bras across Victoria’s Secret Pink stores priced at $25; half-priced video games at Target; and $50 off PlayStation 4 Pro gaming consoles at Wal-Mart.

Here and there were signs of the pandemonium for which Black Friday was long known. 

A confrontation between two men in the parking lot of Willowbrook Mall in Houston left one shot and the other stabbed, though the origins of the clash and whether it was shopping-related was not immediately known, police said.

A false report of gunfire prompted shoppers to flee the Westland Mall in Hialeah, Florida. Stores reopened less than an hour later, a mall security supervisor told Reuters by phone.

Near Birmingham, Alabama, police broke up a fight on Thursday night between two women who may have been arguing over a sale item at the Riverchase Galleria, mall officials said. 

The growing online shopping trend, led by Amazon, has forced the toy chain Toys R Us and apparel retailers True Religion, the Limited, Rue 21 and Payless Shoe Source to file for bankruptcy this year. 

Still, traditional retailers earn the bulk of their revenue from in-store buys. Shoppers in brick-and-mortar stores can also be easier to tempt with impulse or add-on purchases than online browsers. Garden State Plaza in Paramus, New Jersey, was crowded but not chaotic. Shoppers came for deals with nothing specific in mind. Many enjoyed the experience of trying on clothes rather than shopping online. 

A Macy’s employee there said it was less busy on Friday because the store had been open, and packed, on Thursday.

“They’re all online,” said Sarah Jones, 42, an employee at Roosevelt Field Mall on Long Island. “I’ve worked in retail my whole life, trust me.” 

MILAN — Workers at Amazon’s main distribution hub in Italy are planning their first ever strike for Friday, trade unions said, while they are also striking at six warehouses in Germany, threatening to disrupt one of the year’s busiest shopping days.

Like the rest of Europe, Italians in recent years have embraced the US tradition of Black Friday, a day of heavy discounting by retailers on the day after Thanksgiving.

Unions said in a statement more than 500 Amazon workers at the Piacenza site in northern Italy had agreed to strike following a failure to negotiate bonuses with the company. 

Workers have also decided not to do any overtime until December 31, covering the peak season for the online retailer which hires temporary workers during this period.

Amazon employs around 1,600 people on a permanent basis at the Piacenza site, the first it built in the country after launching its Italian website in 2010.

The Verdi trade union in Germany said Amazon employees would also strike on Friday at six distribution centres in the country as part of a long-running dispute over pay and conditions.

“The world’s biggest online retailer wants to achieve record sales on this day, but employees have to produce record performance not only on this day so that everything runs how Amazon wants it,” said Verdi board member Stefanie Nutzenberger.

Amazon in Italy said in a statement it remained focused on trying to guarantee scheduled deliveries for its customers on Black Friday and in the following days.

The company said salaries paid to its workers were among the highest in the logistic sector, and that it also provided some benefits such as private medical insurance or money to pay for training programmes.

E-commerce is growing fast in Italy where online sales account only for 10 per cent of overall retail sales, according to consultancy EY, half the European average.

The US government on Tuesday urged businesses to act on an Intel Corp. alert about security flaws in widely used computer chips, as industry researchers scrambled to understand the impact of the newly disclosed vulnerability.

Homeland Security gave the guidance a day after Intel said it had identified security vulnerabilities in remote-management software known as “Management Engine” that shipped with eight types of processors used in business computers sold by Dell Technologies Inc., Lenovo Group Ltd., HP Inc. , Hewlett Packard Enterprise Co. and other manufacturers. 

Security experts said that it was not clear how difficult it would be to exploit the vulnerabilities to launch attacks, though they found the disclosure troubling because the affected chips were widely used. 

“These vulnerabilities affect essentially every business computer and server with an Intel processor released in the last two years,” said Jay Little, a security engineer with cyber consulting firm Trail of Bits.

For a remote attack to succeed, a vulnerable machine would need to be configured to allow remote access, and a hacker would need to know the administrator’s user name and password, Little said. Attackers could break in without those credentials if they have physical access to the computer, he said.

Intel said that it knew of no cases where hackers had exploited the vulnerability in a cyber attack.

Homeland Security advised computer users to review the warning from Intel, which includes a software tool that checks whether a computer has a vulnerable chip. It also urged them to contact computer makers to obtain software updates and advice on strategies for mitigating the threat. 

Intel spokeswoman Agnes Kwan said the company had provided software patches to fix the issue to all major computer manufacturers, though it was up to them to distribute patches to computers users. Dell’s support website offered patches for servers, but not laptop or desktop computers, as of midday Tuesday. Lenovo offered fixes for some servers, laptops and tablets and said more updates would be available on Friday. An HP representative said the company would soon post fixes on its support site.

Security experts noted that it could take time to fix vulnerable systems because installing patches on computer chips is a difficult process. 

“Patching software is hard. Patching hardware is even harder,” said Ben Johnson, co-founder of cyber startup Obsidian Security.

BRUSSELS — The European Union has agreed a plan obliging online retailers operating in the bloc to make electrical goods, concert tickets or car rental available to all EU consumers regardless of where they live.

Putting an end to “geoblocking”, whereby consumers in one EU country can not buy a good or service sold online in another, has been a priority for the EU as it tries to create a digital single market with 24 legislative proposals.

The agreement late on Monday between the European Parliament, the EU’s 28 member states and the Commission will allow EU consumers to buy products and services online from any EU country. The agreement applies to e-commerce sites including Amazon and eBay.

Companies will no longer be able to re-direct consumers to a country-specific website without their consent. However, consumers will still have to organise how to pick up a product if the company does not offer cross-border delivery.

Commission Vice President Andrus Ansip, responsible for the digital single market, said the proposal would put an end to unjustified discrimination for online shoppers.

“With the new rules, Europeans will be able to choose which website they want to buy from, without being blocked or re-routed. This will be a reality by Christmas next year,” Ansip said in a statement.

The proposal does not extend to copyright-protected content, which includes music streaming services such as Spotify and Apple’s iTunes, electronic books, television series and movies.

The Parliament had hoped to include these services, but music industries successfully argued this could lead to price increases in countries where such services are cheaper.

The European Consumer Organisation  argued that, by not including copyright-protected materials, consumer choice would be limited for people living or studying abroad.

“It is especially frustrating for consumers who belong to a linguistic minority and would like to watch series or films in their own language,” Monique Goyens, the director general of BEUC, said in a statement.

The European Parliament and member states are expected to approve the new legislation early next year. It is seen entering force by the end of 2018.

AMMAN — Trade delegates from the Republic of Korea held meetings on Monday with their Jordanian counterparts in a bid to build new trade partnerships between the two countries, according to a statement of the Korea Business Centre in Amman.

The visiting delegates, representing manufacturers and exporters of several products, came from the Korean city of Daegu.

The meetings were attended by the Ambassador of the Republic of Korea to Jordan Lee Bom-yon and Jordanian businessmen who have interest in the Korean industries, according to the statement. 

TOKYO — Embattled Japanese conglomerate Toshiba said on Sunday it plans to raise $5.3 billion by issuing new shares, a move aimed at avoiding delisting from the Tokyo bourse.

A board meeting on Sunday decided on the move, it said.

Toshiba will issue 2.28 billion new shares to raise a total of 600 billion yen ($5.3 billion), with financing expected to close on December 5.

The new shares will be allotted to 60 overseas investment funds. Each will be priced at 262.8 yen, a 10 per cent discount from Friday’s closing price.

The number of new shares is roughly half the number of currently listed shares.

“This of course poses a concern of dilution of the value of shares but... we believe this measure will enable us to clear obligations and focus on core business, which will ultimately contribute to the value of shares,” a Toshiba spokeswoman said.

Toshiba is on the ropes after the disastrous acquisition of US nuclear energy firm Westinghouse, which racked up billions of dollars in losses before being placed under bankruptcy protection.

Those losses came to light as the group was still reeling from revelations that top executives had pressured underlings to cover up weak results for years after the 2008 global financial meltdown.

In order to survive and avoid delisting, the cash-strapped group has decided on the multibillion-dollar sale of its prized chip business to a consortium led by Bain Capital. 

The chip unit brought in around a quarter of Toshiba’s total annual revenue and is the crown jewel in a vast range of businesses ranging from home appliances to nuclear reactors.

But the sale has been delayed due to legal disputes with a production partner, US chipmaker Western Digital.

The Tokyo-based conglomerate logged a net loss of $436 million for the April-September fiscal first half.

Toshiba said proceeds from the new share issuance would be used for full payment of parent company guarantees related to Westinghouse.

After Toshiba settles its obligations to Westinghouse creditors, it will be able to demand reimbursement from Westinghouse itself.

Toshiba intends to sell the claims against Westinghouse to a third party, thus focusing more on its own rehabilitation.

Tesla Inc. may have to ask creditors and shareholders for more capital to fund development of an electric semi truck, a new roadster and accelerated production of a high-volume electric sedan, analysts said on Friday.

Tesla CEO Elon Musk  unveiled one flashy strategy for generating cash during the launch event on Thursday for the Semi truck, surprising the audience with a prototype of a new generation of the Tesla Roadster. Musk promised the Roadster will be the fastest production car available. The first 1,000 cars will cost $250,000 each, paid in full upfront, with later models starting at $200,000.

Those deposits would put $250 million into Tesla’s cash drawer today for a car that is likely to go into production in 2020.

Musk did not offer details about how Tesla would generate additional funds to deliver the semi truck and the roadster, and overcome production problems that have hobbled production of the company’s high-volume sedan, the Model 3.

Tesla spent $1.1 billion on its auto business in the third quarter, and expects expenses of $1 billion in the current one. It had about $3.5 billion in cash and cash equivalents as of September 30.

At the current cash-burn rate, it would likely be down to about $1 billion in cash by the end of the first quarter.

“In essence, all last night’s event did was add to Elon Musk’s shopping list of things he needs to spend money on at a time when the company is having difficulty making its base vehicle [Model 3],” said Cowen analyst Jeffrey Osborne.

Despite such concerns, Tesla shares were up about 1.4 per cent at mid-day. While the shares are up more than 40 per cent this year, they have fallen 20 per cent from record highs in mid-September.

Shares in heavy truck diesel engine maker Cummins Inc. fell 4.7 per cent, and shares in Class-8 truck makers Paccar Inc. and Navistar International Corp. also fell.

Tesla this month pushed back its target for volume production on the Model 3 sedan — widely seen as crucial to the company’s long-term future — by about three months to fix production bottlenecks. 

Osborne said Tesla’s cumulative capex announcements now exceed $15 billion to $20 billion over the next few years.

Some analysts fear the trucks will be an expensive distraction for the company, which has never posted an annual profit and is in self-described “manufacturing hell” related to the $35,000 Model 3 sedan.

Jefferies analyst Philippe Houchois estimated that Tesla would need to raise $2.5 billion to $3 billion to keep production running smoothly.

“Longer term, we continue to think the capital intensity of the business model will keep returns below best-in-class auto [makers],” Houchois said in a research note.

Tesla’s last debt sale in August was well-received in a hot bond market, allowing the company to increase the offering to $1.8 billion from $1.5 billion. But the bond has underperformed in the secondary market, suggesting it could be more challenging for Tesla to tap the high-yield debt market again so soon.

“They are losing $1.5 billion a quarter and the bond is unsecured so it is not of interest to me,” said Jim Brilliant, chief investment officer at Century Management.