Cleveland, OH, United States (AHN Sports) – Two nights after scoring the final 12 points to secure a one-point win against Boston, Cleveland cut a 21-point deficit to two Tuesday at Quickens Loan Arena before dropping a 93-90 decision to the bewildered Celtics.

Anderson Varajao had a Herculean effort with 20 points and 20 rebounds – 10 offensive – and rookie Kyrie Irving added 21 points for the Cavaliers (8-12), who beat Boston 88-87 Sunday at TD Garden on Irving’s twisting layup with just under three seconds left.

This one also almost got away from the veteran Celtics (10-10), who got 20 points and six assists from Paul Pierce and held on for their fifth win in six games.

Kevin Garnett added 13 points, including a clutch jumper after Cleveland had pulled within two with just over a minute remaining, and Brandon Bass tallied 13 points and six rebounds off the bench.

Boston entered the fourth quarter with a 76-58 lead but a 13-2 run to start the period got the Cavs closer. A driving layup down the lane by Irving with 1:17 left got Cleveland to within 89-87, but Cleveland couldn’t score again until Irving’s 3-pointer at the buzzer.

Antawn Jamison added 12 points and Ramon Sessions had 10 assists off the bench for Cleveland, which played without injured shooting guards Daniel Gibson and Anthony Parker.

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New York, NY, United States (AHN) – Rates for U.S. 30 year mortgages dropped to the lowest level on record as the number of homeowners seeking to reduce their monthly payments soared.

The average rate for a 30-year fixed loan for the week ending Jan. 19 fell to 3.88 percent, an all time record low, and down from 3.89 percent in the prior week, according to mortgage giant Freddie Mac.

The average rate on 15-year mortgage edged up slightly, ending the current week at 3.17 percent, a hair higher than last week’s 3.16 percent.

Refinancing applications soared 26 percent in the period ending Jan. 13, the highest level since August 2011, the Mortgage Bankers Association reported. The Washington based group noted that the measure of  purchase applications rose 10 percent.

The news is very welcome for the ailing U.S. housing market which has been weighed down by an 8.5 percent unemployment rate, tight credit and foreclosures that drag down prices.

Other bright spots include the rising confidence among U.S. home builders, which increased in January to the highest level in more than four years, and signs that buyer traffic has picked up, according a report released Wednesday by the National Association of Home Builders.

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Ramallah, Palestinian Territory (IRIN) – Izz Tawil draws a black circle on the flip-chart in his office in Ramallah, capital of the West Bank in the occupied Palestinian territory (oPt).

“The Palestinian economy is a closed cash-circle,” the general manager of the Palestinian microfinance network Sharakeh explains.

He goes on to draw several small arrows on the line, meant to indicate different elements of an isolated system: At the bottom, there is the construction worker, who gets his salary from a company contracted by the Palestinian Authority (PA), while the PA itself is kept alive through foreign aid.

“And this aid is the only fuel that keeps the circle running,” Tawil says, with a serious mien.

Humanitarian aid to oPt increased dramatically from US$863 million in 2008 to $1.3 billion in 2009. After Sudan, oPt was the second largest recipient of aid in the world in 2010. Economists and businessmen warn that the PA’s dependency on aid and vulnerability to external shocks could lead the entire West Bank economy to collapse, provoking a humanitarian crisis. Among the most vulnerable are the owners of small businesses and all those who depend on foreign aid channeled through the PA.

Tawil is among a number of people in the West Bank with suggestions for a better way forward.

Coping with aid cuts

Shortly after the 2006 elections which brought militant group Hamas to power in oPt’s Gaza Strip, donors cut off more than $1 billion in aid to the PA as a means of boycotting Hamas. Since then, the West Bank economy has trembled over and over – despite a resumption of aid transfers to the PA in December 2007.

The year 2011 was an especially troublesome year for the PA’s budget, which was hit by delayed payments from Arab countries, temporary aid cuts of $200 million by the U.S. Congress, and a temporary freeze on Israel’s monthly transfer of $100 million in tax funds to the PA. Though both Israel and the US later resumed payments, Israeli officials made clear that they would freeze funds again should Fatah, the dominant political party in the West Bank, form a unity government with Hamas.

The threats raised fears of a crisis scenario similar to 2006, when the PA’s budget slid from $180 million to $55 million a month, amid running debts of $1.7 billion. The crisis left government employees, who have a relatively high spending power, without salaries. Banks imposed a more restrictive borrowing policy on businesses; and the unsafe environment made foreign investment appear risky and less attractive.

As withholding aid has become a way to punish the Palestinians for unwanted political maneuvering, the PA is now seeking more financial independence. 2013 is supposed to be the last year “in which the PA will need any external financing to help with recurrent expenditures,” Prime Minister Salam Fayyad announced in a 2011 interview with the Associated Press.

But it will not be easy, given such aid amounted to about $1.5 billion of the PA’s $3.7 billion budget in 2011. The remaining sources of income were about $105 million in monthly tax refunds from Israel, and much smaller domestic tax revenues.

The dangers of credit

At first glance, the Ramallah-centered West Bank economy seems solid. Many new neighborhoods are being built around the city and expensive cars are not uncommon. The West Bank economy grew by 7.6 percent (GDP) in 2010, according to the World Bank.

But much of what may have seemed like a boom in Ramallah is veneer.

The economy grew by only 4 percent in the first half of 2011, according to the Bank, and unemployment remained at about 16 percent. According to one employee at a Ramallah branch of the Arab Bank, everything is bought on credit – “even wedding dresses… $300 is enough for a loan of 10,000″.

With a total of $1.09 million in debts, the PA – including its public institutions and employees – is the biggest of all Palestinian debtors, representing 40 percent of what is owed to Palestinian banks, according to Shirin al-Ahmad, a division chief at the Palestinian Monetary Authority (PMA).

“A political shock like that of 2006,” al-Ahmad added, “would mean that these 40 percent become a risk factor for hundreds of thousands of Palestinians, because no money from the PA means no salaries, and no salaries means that people can’t pay back their loans, or need to take out new ones.”

Even more vulnerable than PA-employees are those with no regular income at all. Without steady work, they are not eligible for loans from any of the 18 banks that operate in the West Bank and the Gaza Strip. This is why 43,100 Palestinians need to borrow from one of Sharakeh’s 11 microfinance institutions, with a total credit portfolio of $74.6 million, of which $54.7 million can be attributed to clients in the West Bank.

Building an independent economy

“Most of our clients want to run a small business. They are the backbone of the West Bank economy,” said Tawil, the general manager of Sharakeh. “If the cash injections from foreign aid delay PA employees’ salaries, small businesses like groceries are the first that feel the results.”

Mazen Khayyat, owner of a clothing shop in the center of Ramallah, told IRIN his business was hard hit by the cuts in aid in 2006.

“My debts rose in 2006 from almost nothing to 27,000 New Israeli Shekel [NIS - $7,013]. At the end of 2011, my debts reached 39,500 NIS [$10,260]. In 2006 alone, my profit decreased by 17 percent compared to the year before. All this was because people generally look for cheaper products when the economy is weak. And because most of my clients are government employees or their families, the problem was especially severe in 2006. When their salary comes late, they buy only the most necessary.”

Tawil hopes that by lending to people with no steady income, micro-credit institutions can help build a more independent economy from the bottom up. He suggested the PA support these businesses by giving them tax exemptions. He also recommended university graduates be given more incentives to open a business.

“No one takes the risk involved in business in this unsafe environment,” he said, “because a regular income, financial safety and a loan have become core values for young people.”

His call for less aid is shared by leading Palestinian entrepreneurs, such as Bashar Masri, who is leading the construction of the new West Bank city of Rawabi for 40,000 future residents between Ramallah and Nablus.

Some foreign companies have refrained from investment in the West Bank because of the recurrent danger of violent conflict, the political unpredictability and the many restrictions on trade, mobility and access, imposed by Israel.

The World Bank has identified these restrictions as the main obstacle to private sector growth in oPt. So-called Investment Guarantee Funds had provided insurance for some investors against risks resulting from war and conflict in the past, but their reach is limited. Businessmen argue independence from aid would make the arena more attractive.

“Although cutting aid might hurt in the beginning, more businesses also bring more tax revenues for the PA,” Masri said, adding that “sometimes it has to get worse, before it can get better.”

Despite the many obstacles, some private equity funds recently started investing in the West Bank, Masri explained, adding that one of them, a British fund called Blakeney, invested around $100 million in local projects. “Foreign funds [are showing] more and more interest,” he said.

“Private sector could collapse”

Rawabi’s budget of $800 million is entirely financed by a fund from Qatar, providing independence from the PA and from foreign aid – something most private sector projects in the West Bank lack.

Take for instance the 750 local construction companies represented by the Palestinian Contractors Union (PCU).

“Many projects contracted by the PA got their money far too late and had to take out expensive loans,” PCU-chairman Adel Odah explained. “This way at least 30 companies went bankrupt in the last two years. Much profit is lost by paying interest rates to banks. If the PA goes bankrupt, the entire private sector could collapse,” he warned.

Replacing aid

The PA is well aware of the risks: “The PA is teetering at the edge of collapse at any point of time,” Prime Minister Fayyad said at the beginning of December, and began curbing its dependency on aid three years ago, according to Ghassan Khatib, a senior PA official.

Between 2008 and 2011, the PA brought down the deficit covered by donors from $1.8 billion to about 1 billion, he said, adding that this trend would continue, “hopefully until the PA needs no more aid”.

Fayyad said the PA’s operational costs should become independent of aid by 2013.

The question is how.

“On the one hand, we will replace aid by raising taxes and collecting them more effectively. On the other, we will reduce expenditures,” Khatib explained. Some saving measures, such as restricting PA employees’ use of their government sponsored cars outside working hours, have already been taken.

Khatib said the need for external support would decrease this year, but noted the PA had no control over Israel’s behavior.

“But their withholding of our tax money will not keep us from pursuing national unity with Hamas,” he added.

ah/ha/cb

– Provided by Integrated Regional Information Networks.

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London, England, United Kingdom (AHN Sports) – Arsenal manager Arsene Wenger is excited over Thierry Henry’s return on a two-month loan from the New York Red Bulls.

“I have done this for footballing reasons because I need a striker for two months and I don’t have one at the moment,” Wenger said, according to The Guardian. “Thierry’s value is on the pitch. I felt that at the World Cup [last year], when he came on for France against South Africa, he gave something to the team. He has something. He knows where to be. He knows how to give a problem to the opponent. You never lose that.”

Arsenal’s Marouane Chamakh and Gervinho are headed to the Africa Cup of Nations to compete, part of the reason for his interest in Henry.

“He has the quality and capacity to help us out. You do not find players on the planet of this quality who are available for two months. Was there a moment in training when I realised he could still do it? Yes, the first day. There are no risks.,” he said according to The Guardian.

“I met Thierry when he was 17 years old [at Monaco] and I had him here at 22 so I know every movement that he can make. He is a super-intelligent guy and he is a special talent.”

Wenger likes that Henry plays several positions, providing a spark in the lineup even if he has lost a step at 34-years-old.

Henry could play at Fulham on Monday and may start against Leeds United in an upcoming tilt at Emirates Stadium.

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New York, NY, United States (AHN) – How low can they go?

That is the question many people are asking after the average rate on 30-year fixed mortgages hit new lows again for the week ending Dec. 22.

The average rate on 30-year fixed mortgages fell to a record 3.91 percent. It marks the third time in 2011 that rates have hit new lows.

Mortgage giant Freddie Mac reports the rate on the 30-year home loan fell from 3.94 percent from a week ago.

The average on the 15-year fixed mortgage remained unchanged at 3.21 percent, also a record low.

The low rates offer an historic opportunity for those who can afford to buy a home or refinance, but so few Americans qualify for the record low rates.

Average mortgage rates have been below 5 percent for all but two weeks of 2011. Yet, this year is on track to be one of the worst ever for home sales.

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Jerusalem, Israel David Rosenberg (The Medi – Home prices – an anxious subject for both Israeli consumers and policy makers as they first raced higher and then suddenly started to sink – remain a threat to the economy, the Organization for Economic Cooperation and Development (OECD) warned on Monday.

Although the price rises have eased as the government has clamped down on mortgage lending, Israel is by no means out of the hole yet, the Paris-based organization said in a report. Israel faces a twin risk of prices spiraling upward to bubble levels, if current measures don’t bring about long-term stability, or conversely dropping sharply.

“There is still a risk that a soft landing may not be achieved and house prices (and loan repayments) in relation to rents and incomes may reach ‘bubble’ proportions, heightening the risk of a sharp and damaging correction,” the OECD said. “On the other hand, the early stages of weakness may presage an imminent sharper-than-desired decline in prices.”

The warning has special meaning for Israel, which unlike the U.S. and much of Europe, succeeded in avoiding the catastrophic collapse of its housing market and the financial crisis that followed. But ironically the country’s record of almost uninterrupted economic growth, combined with low borrowing rates, caused home prices to start climbing in Israel just as much of the developed world was seeing prices fall at double-digit rates.

The increase caused the Bank of Israel to undertake a series of measures to reduce demand for mortgages at the same time it was raising interest rates through much of 2010 and 2011.

“There’s a lot of concern that there will be crash. Prices are heading down – the only question is how fast and how far,” Pinchas Landau, an independent financial consultant, told The Media Line.

“For first time in 15 years, there’s more supply than demand. There isn’t massive building. You have a multi-year backlog, but it’s not American situation,” he said. “There could be widespread pain, but if prices come down 20 percent I don’t think that’s a crash. You have to look at how much they went up before.”

Home prices in the 12 months through September climbed 10.5 percent and the central bank has reversed course and lowered its base lending rate in the past two months, a move that could encourage more home loans. Nevertheless, there are signs that they may have reached a plateau.

The rise over the past 12 months is far less steep than the 20 percent recorded in 2010 and August-September prices dropped for the first time since 2008, according to Israel’s Central Bureau of Statistics (CBS).

Meanwhile, residential construction is increasing while sales of new homes are falling. The number of building starts in the 12 months through August reached 43,672 units, compared with annual rates of less than 35,000 up through 2009. But only 1,057 new homes were sold in October 2011, down by more than 50 percent from a year ago, the CBS reported at the end of November.

A survey of senior real estate executives in Israel conducted by the accounting firm Deloitte Brightman Almagor Zohar in November found that 46 percent expected home prices to decline as much as 10 percent in the coming 12 months and another 9 percent saw drops of 10-20 percent. Fifteen percent, however, foresee rises of up to 10 percent.

The OECD said that warning indicators, such as the ratio of home prices to rents had not reached “critical levels” and lauded the measures taken by Israel to restrain the rises. But it did recommend that the government, which controls the lion’s share of land in the country through its Israel Lands Authority, speed up the sale of leaseholds, reduce delays in planning approvals and work to develop a market in mortgage-backed securities “with a good deal of caution.”

It said tax exemptions for homeowners and property investors should be pared back and housing policy geared more toward encouraging more rental housing and helping low-income families.

In spite of growing signs of recession in Europe, which is Israel’s biggest trade partner, Israeli gross domestic product will likely post another year of growth in 2012, the OECD said. Real GDP growth will shift down to 2.9 percent in 2012 from 4.7 percent this year, but accelerate to 3.9 percent in 2013.

“This is substantially better than in many OECD countries, but Israel benefits from relatively rapid population growth,” OECD economist Peter Jarrett said Sunday while visiting Israel for the Globes Business Conference in Tel Aviv. “Europe is leading the world into another period of very slow growth, if not outright recession.”

The report addressed two other issues that have dominated economic policy in the past year amid a gathering storm of social protests over the high cost of living and growing income inequality. The protests began quietly against hikes in gasoline prices, morphed into a nationwide boycott of cottage cheese and erupted over the summer into tent cities and mass rallies that drew hundreds of thousands demanding a wide range of economic reforms.

The government responded by appointing a committee to examine socio-economic policy and has since adopted some of the recommendations of the so-called Trajtenberg panel.

The OECD said that Israel’s “deep socio-economic cleavages,” expressed in high rates of poverty and income inequality, is weighing down on the economy by lowering growth rates for productivity and per capita income. Although the problem is concentrated in Israel’s ultra-Orthodox and Arab populations – which account for 60 percent of poor households, double their proportion of the population – they are not the only Israelis trapped in poverty.

The report noted some progress in overhauling education, where Israeli students have performed poorly in international comparisons of achievement in science, math and reading. But the OECD faulted efforts to encourage people to join the workforce, pointing to the abandonment of the Wisconsin program, which had put the responsibility job placement in the hands of private sector firms.

The OECD was also supportive of efforts to increase business competition and restrict the size and power of holding companies. It backed plans to separate financial institutions, such as banks and insurers, from other businesses, while faulting the government for the slow progress toward creating competition in electricity generation.

The OECD said the scope for increasing competition in other industries is limited due to the small size of the Israeli economy.

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Santa Clara, CA, United States (AHN Sports) – The San Francisco 49ers might need a name change soon.

The 49ers and the City of Santa Clara announced Friday that they have secured funding for a new stadium project. Santa Clara is about 45 miles south of San Francisco.

The two sides announced that Goldman Sachs, Bank of America-Merrill Lynch and U.S. Bank have agreed to an $850 million loan with the city’s stadium authority and the 49ers.

The money will cover most of the estimated $1 billion project with funding from the National Football League, a hotel tax and city redevelopment funds expected to make up the difference.

The goal is to open the new stadium in 2015 and that goal is closer to becoming reality now that the loan for the project has been secured.

“It’s like first-and-goal from the 9-yard line,” said Ron Garratt, a consultant helping lead the project for the city. “We think we’re going to score from here.”

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Washington, DC, United States (AHN) – The Supreme Court plans to confront consumers’ anger toward the mortgage lending industry Monday with a hearing in a lawsuit against a real estate title company.

The plaintiff, Denise Edwards, is trying to sue First American Financial Corp. in a class action lawsuit that alleges violations of the Real Estate Settlement Procedures Act.

The 1974 federal law prohibits payment of kickbacks when consumers purchase a “federally-related mortgage loan.”

Under the law, a kickback refers to payments in exchange for referrals of mortgage settlement service business.

The Supreme Court is being asked to decide whether a consumer can sue for damages when the kickbacks did nothing to raise the price of her mortgage.

In other words, how can she be compensated for damages when she might not have suffered any damages, according to the defendants.

When she bought a home in Cleveland in 2006, Edwards was referred by her settlement agent at Tower City Title Agency to First American Title Insurance Company.

First American charged Edwards a standard fee under Ohio law of $455.43.

However, no one told her that First American owned 17.5 percent of Tower City Title Agency. They also did not tell her that Tower City shared some of the income from customers who purchase mortgage insurance from First American.

Edwards filed a class action lawsuit alleging that First American’s ownership interest in Tower City, plus the fact Tower City referred customers to First American, was the same as a kickback.

If the class action lawsuit succeeds, First American customers could receive compensation of three times more than they paid for mortgage insurance, up to a half-million dollar cap.

First American claimed the case should be dismissed because Edwards’ standard $455.43 bill was unaffected by the alleged kickback. She also could not prove the quality of service she received was bad.

Edwards says that regardless of the fee she was charged, First American still violated the Real Estate Settlement Procedures Act by paying a kickback, which should be enough of a reason to get sued.

So far, Edwards has won in lower courts.

The U.S. District Court for the Central District of California denied First American’s motion to dismiss. The Ninth Circuit Court of Appeals in San Francisco affirmed the dismissal.

An “injury” that can be compensated in a lawsuit “can exist solely by virtue of statutes creating legal rights,” even if consumers cannot prove they lost money, the Ninth Circuit’s ruling said.

First American appealed to the Supreme Court.

Edwards has lined up powerful friends to support her in the hearing Monday. They include the U.S. Justice Department, which filed an amicus – or friend of the court – brief that argues Congress can create legally protected rights by passing laws intended to protect certain persons.

In Edwards’ case, Congress was trying to protect home buyers by approving the Real Estate Settlement Procedures Act.

Both Edwards and the Justice Department say filing the lawsuit as a class action might motivate mortgage companies like First American to comply with the law.

The Supreme Court case coincides with ongoing efforts in Congress to clamp down on fraud and other shady dealings by the mortgage industry.

President Barack Obama has blamed the industry for being a primary culprit in the Great Recession that began in 2008.

Easy credit terms for consumers led to numerous bad loans, which then prompted widespread home foreclosures and personal bankruptcies.

In the latest move by Congress, 15 lawmakers are asking bank regulators in the Treasury Department to publicly release information about what steps are being taken to prevent illegal foreclosures by banks. The U.S. Comptroller is investigating the bank foreclosures.

“The only way this claims process will be fair is if the regulators shine a bright light on mortgage servicers, and make them demonstrate to the public how they’re being held accountable,” said Rep. Maxine Waters (D-CA), who is leading the effort for greater “transparency” in mortgage fraud cases.

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Rochester, MI, United States (AHN) – Wednesday’s CNBC Republican debate in Michigan wasn’t without a few gaffs and gaps.

The Republican candidates stressed their opposition to U.S. government bailouts for banks, Europe and the auto industry.

Former Massachusetts Gov. Mitt Romney rejected a suggestion that the U.S. should help prop up Italy’s ailing economy saying, “Europe is able to take care of their own problems.”

Ron Paul, U.S. Representative of Texas said it would be a “real tragedy” if the U.S. sought to bail out Europe. Paul also took aim at the ballooning student debt loan program, calling it a “total failure.”

Former Utah Gov. Jon Huntsman said Americans are “sick and tired of seeing taxpayer dollars going bailouts.”

Michele Bachmann said she would stop American borrowing from China.

Former U.S. Speaker Newt Gingrich of Georgia said when asked what he would create jobs, he focused on Federal Reserve Chairman Ben Bernanke. “Bernanke is a large part of the problem and ought to be fired as rapidly as possible.”

Former U.S. Sen. Rick Santorum of Pennsylvania defended his tax plan, which would eliminate corporate taxes on manufactures.

While the debate focused mostly on economic issues, the event was also marked by a stark embarrassment for Texas Gov. Rick Perry.

When asked to identity the three federal agencies he would eliminate to help cut government spending, specifics Perry has talked about on his campaign trail, he could only name two of the three.

“The third agency of government I would do away with? Education, Commerce. And let’s see. I can’t. The third one I can’t. Sorry. Oops,” Perry answered. He later acknowledged it was the Department of Energy.

Herman Cain who, facing numerous sexual allegations has called the attacks character assassination,” said, ‘The American people deserve better than someone being tried in the court of public opinion based on unfounded allegations.” His statement was followed by applause.

Romney, running at the top of mosts polls neck-to-neck with Cain, refused to comment about the matter, saying that Cain was the person to respond to the allegations.

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New York, NY, United States (AHN) – There is nothing average about the new average student loan debt.

The average debt of college seniors who graduated in 2010 with student loans increased 5 percent from a year earlier to $25,250. The amount is the highest level ever.

The figure does not include data from for-profit colleges where graduates typically carry levels of debt that are substantially larger.

The findings come from the annual report of the Project on Student Debt, a nonprofit research effort partially funded by the Bill and Melinda Gates Foundation. The data is based on information obtained from Peterson’s Undergraduate Financial Aid and Undergraduate Databases, a publisher of college guides.

The state with the highest debt level is New Hampshire, where grads carry an average of $31,048 in student loan debt.

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