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Ohio’s attorney general sued Standard & Poor’s, Moody’s and Fitch Ratings on Friday, asserting that they provided misleading credit ratings that led to hundreds of millions of losses for state funds.

The official, Richard Cordray, filed the lawsuit in United States District Court for the Southern District of Ohio on behalf of five Ohio funds that assert they lost more than $457 million because of “false and misleading ratings” of mortgage-backed securities by the ratings agencies.

Officials at Moody’s and Standard & Poor’s, which is owned by McGraw-Hill, could not be immediately reached for comment Internet Payday loans. A spokesman for Fitch Ratings, which is owned by Fimalac S.A., had no immediate comment.

The lawsuit was filed on behalf of five major funds — the Ohio Public Employees Retirement System, the State Teachers Retirement System of Ohio, the Ohio Police & Fire Pension Fund, the School Employees Retirement System of Ohio and the Ohio Public Employees Deferred Compensation Program.

Ohio Sues Credit Rating Agencies

Hot News: Gap profit climbs 25 percent in 3Q

BERLIN

THE luxury goods industry, struggling through a recession that has threatened some well-known names with extinction, is trying to use technology to its advantage.

Many in the fashion business remain wary of the Internet, partly because of continuing legal battles over online sales of counterfeit goods and concerns about diluting carefully honed brand images. Many companies also have failed to execute online storefronts successfully. But executives say that attitudes are softening as brands realize that the Web provides one of the last untapped sources of potential growth.

Federico Marchetti, the founder of Yoox, a company in Milan that runs retailing sites for luxury brands like Valentino, Emilio Pucci and Jil Sander, said many labels were skeptical not long ago.

“Now,” he said, “it is the opposite.”

The move to capitalize on the Web has become a financial imperative. Analysts at Bain & Company estimate that the sales of luxury goods will fall to 154 billion euros this year ($229 billion), from 170 billion euros in 2008. It is unlikely that online revenue — still only a tiny fraction of the total — will make up the difference soon.

One of the most successful ventures on the Web has been Net-à-Porter, a site based in London that sells high-end fashion and accessories, delivering them to homes or offices in black boxes. Though sales in the United States slowed during the depth of the recession, they have since recovered and have continued to rise at double-digit rates in other markets, the company said. It expects sales this year to top £100 million ($168 million), up from £82 million last year.

“It just made a lot of sense to allow women to shop when they wanted to shop, how they wanted to shop — at work, at home, in bedroom,” said Natalie Massenet, the company’s founder.

•

At a time when trundling along high-end strips like Bond Street in London or Avenue Montaigne in Paris with an armful of shopping bags seems out of touch with reality, Net-à-Porter may have benefited from the greater discretion that its service offers. Last year, to cloak purchases even more, the company added a brown-bag delivery option. This year, in another bit of good timing that Ms. Massenet attributed to luck rather than foresight, the company added a new site selling fashions from previous seasons at reduced prices.

Customer overlap between the sites is only 6 percent, Ms payday loan lenders. Massenet said, with fashionistas frequenting the original Net-à-Porter and bargain hunters turning to the new site, outnet.com.

That ought to comfort luxury executives worried that selling online might undermine the high-end appeal of their wares — and the high prices that come with such exclusivity.

Some individual brands that previously refrained from selling online have recently embraced the Internet. Hugo Boss, the German clothier, started introducing Internet shops in Europe last year. Now it is accelerating its online efforts, planning to open similar stores in the United States early next year and in Asia the year after, said Claus-Dietrich Lahrs, the chief executive.

Mr. Lahrs said Hugo Boss expected to sell more than 50 million euros of goods online within two years, up from a little more than 10 million euros this year.

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While some labels are now trying to make up for lost time, others remain cautious about the pitfalls of the Internet.

Led by the largest company in the business, LVMH Moët Hennessy Louis Vuitton, luxury brand owners have fought a series of legal battles across several continents with Internet companies like Google and eBay, contending that they aided in the online sale of counterfeit goods. Courts have issued mixed rulings, sometimes siding with the brand owners and fining the technology companies, and in other cases agreeing that sufficient steps were being taken to root out fakes.

Some executives also remain reluctant to invest heavily in digital initiatives because of costly failures in the past. Uché Okonkwo, a Paris-based consultant, said that brand owners are “many steps behind the clients, when they should be several steps ahead of them.”

One brand that has won plaudits from analysts for its efforts is Burberry. This month, it created a social networking site that allows owners of Burberry’s trench coats to exchange stories about them.

Christopher Bailey, Burberry’s chief creative officer, said high-end brands should go further in trying to give Web stores the rich texture of physical stores.

“Whether they are walking into our store on Bond Street or tapping in from India or China, it’s about making sure the consumer is getting the same experience,” he said.

Advertising: Once Wary of the Web, Luxury Brands Embrace It

WASHINGTON – New home construction likely inched higher in October as builders seized on the promise of more orders due largely to a federal tax credit for first-time homebuyers.

Construction of new homes and apartments is expected to grow 1.7 percent to a seasonally adjusted annual rate of 600,000, according to economists surveyed by Thomson Reuters. Building permits, seen as a good indicator of future activity, are expected to creep up 1.2 percent to an annual rate of 580,000 units.

The Commerce Department is scheduled to release the report Wednesday at 8:30 a.m. EST.

Builders slammed the brakes on construction after the housing bubble burst, and housing starts plunged to the lowest point in a half-century in April.

Construction then began a recovery, rising to the highest level in nine months in August, led by apartment building construction. Housing construction rose a modest 0.5 percent to an annual rate of 590,000 new homes and apartments in September. Applications for new building permits, however, fell 1.2 percent to an annual rate of 573,000 units.

But builders have been ramping up as new home orders have improved due to the tax credit, which covers 10 percent of a home price up to $8,000 low interest payday loans.

The incentive had been set to expire Nov. 30, but Congress extended it earlier this month.

Buyers who have owned their current homes for at least five years are eligible for tax credits of up to $6,500, while first-time homebuyers — or anyone who hasn’t owned a home in the last three years — would still get up to $8,000. To qualify, buyers have to sign a purchase agreement by April 30, 2010, and close by June 30.

Meanwhile, the National Association of Home Builders said Tuesday its housing market index remained unchanged in November, reflecting a cautious outlook from residential developers as they waited to learn whether Congress would extend a homebuyer tax credit.

The trade association said its index stood at 17 for the second straight month. Index readings below 50 indicate negative sentiment about the market.

Ahead of the Bell: Housing Starts

CHICAGO (MarketWatch) — House shopping usually slows down in the winter, as people put their home searches on hold to trim the tree, buy presents to put under it and avoid the chilly weather.

This winter, however, might be different, thanks to the extended — and expanded — first-time home-buyer tax credit.

Gold is precious to the IRS, too

The tax code treats gold, silver and precious-metals ETFs as collectibles, not capital gains. Sell them at a profit, and you could be taxed at hefty rates.

“We’re going to see far more interest in the fourth quarter than we generally do because of the tax credit,” said Heather Fernandez, vice president of Trulia.com, a real estate search engine. Traffic surged on the site on Nov. 5, the day Congress approved the credit extension, she said.

The new law extends the tax credit for first-time home buyers and opens it up to some existing homeowners as well: The credit is now 10% of the home price, up to $8,000 for first-time buyers and up to $6,500 for repeat buyers. Read more about the home-buyer tax credit on the Internal Revenue Service’s Web site.

All buyers must have a binding contract on a house in place on or before April 30. The sale must close on or before June 30.

To be considered a first-time home buyer, an individual must not have owned a home in the past three years. And to be eligible, existing homeowners need to have lived in the same principal residence for five consecutive years during the eight-year period that ends when the new home is purchased. The credit is only for principal residences.

Income limits have risen as well. According to the IRS, the home-buyer tax credit now phases out for individuals with modified adjusted gross incomes between $125,000 and $145,000, and between $225,000 and $245,000 for people filing joint returns.

Will credit spur more buyers?

The inclusion of move-up buyers might inspire homeowners to take action and list their house if they’ve been putting it off, said Carolyn Warren, a Seattle, Wash.-based mortgage broker and banker and author of the book “Homebuyers Beware.”

“If somebody loves their home, it’s not going to entice them to sell. If they’ve had it on the back of their minds and really would like to move up, it might push them into doing it sooner than later,” Warren said.

The credit isn’t expected to have as large of an effect on move-up buyers as it has on first-time buyers, according to the Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions. The maximum tax credit is about 4% of the average purchase price for first-time buyers, but about 2% of the average purchase price for move-up buyers.

“We estimate that the first-time home-buyer tax credit will result in a 10% increase in home sales from March through November of 2009,” said Thomas Popik, research director for Campbell Surveys, in a news release. “We’d expect the effect of the proposed tax credit for current homeowners to be about half as large — from December until the tax credit expiration in the spring of next year, it might be 5% of 3 million transactions, or about 150,000 incremental home sales. Incremental sales to first-time home buyers could be an additional 300,000, for a total of 450,000 incremental sales due to the tax credit extension.”

Tips for buyers

Interested in buying a home and claiming the home-buyer tax credit? Below are five tips:

1 Business Card Holders. Don’t procrastinate

Get searching now. Getting an early start will give you a better chance of finding the right house before the credit deadline.

“Go out and start as soon as possible. There will be people waiting until the end,” said Pat Lashinsky, chief executive of ZipRealty, a residential real-estate brokerage firm.

When first-time buyers thought the credit would expire Nov. 30, people scrambled to find properties in September and October, he said. In some cases, “there wasn’t inventory that fit people’s needs,” he said. In Phoenix, Chicago and parts of California, for example, some properties even had multiple bidders, Lashinsky said.

Before you start house hunting, get preapproved for a mortgage, said Eddie Fadel, a Miami-based mortgage banker and author of the book “Don’t Rent, Buy!” And do a realistic assessment of what you can afford.

Buyers who have to sell an existing home should price it aggressively from the beginning to drum up interest and get a buyer as soon as possible, Fernandez said.

2. Don’t count on another extension

The credit won’t be available forever, Fadel said. If you want to take advantage, be sure to make that spring deadline.

“This is a medication for the housing crisis. Once the patient — which is the housing market — cures, there will be no medication needed,” he said.

3. Mind the interest rates

Mortgage interest rates are low right now, but will likely rise next year, Warren said. Higher rates will affect your monthly mortgage payments, thus the affordability of the house you are buying.

“It’s pretty universally accepted that rates will be higher next year. What is unknown is how fast and by how much,” Warren said.

Average rates on the 30-year fixed-rate mortgage have been hovering around 5%, but when the government stops buying large amounts of mortgage-backed securities, rates could rise, she said. The Federal Reserve plans to end its purchase program in March.

4. Communicate with your lender

Throughout the process, make sure you’re communicating with your lender regularly; if there’s a piece of documentation you’re asked for, get it turned in as soon as possible, said Doug Heddings, a New York-based real estate agent with Charles Rutenberg Realty. Good communication is important in making sure the loan closes on time.

And think twice before pursuing a short sale if you want to make the credit deadline. That’s where someone sells a home for less than what he or she owes on a mortgage, with permission of the lender. The process can be lengthy and unpredictable because the homeowner’s lender has to approve any deal, and can be complicated when there is a second mortgage associated with the property, Warren said.

5. Don’t take shortcuts

Don’t forgo any of the steps you would normally take just to make the tax-credit deadline. Make sure the house is a good fit for your needs and get a home inspection, Lashinsky said. Skipping steps could cost you in the long run.

“Don’t let the tax credit get you to make a decision to buy a house that you wouldn’t otherwise want to buy,” he said. “Don’t shortcut the process to get the tax credit.”

Five tips on tapping the new home-buyer tax credit

WASHINGTON (Reuters) – Federal Reserve Chairman Ben Bernanke said on Monday that the U.S. central bank was monitoring the declining value of the dollar closely, saying the Fed was committed to both jobs growth and price stability.

However, he said there were other factors helping to restrain inflation in the United States, and he repeated that the Fed is likely to keep interest rates exceptionally low for "an extended period."

In a rare commentary on the value of the dollar, Bernanke drew a link between its current weakness and inflation risks.

"We are attentive to implications of changes in the value of the dollar and will continue to formulate policy to guard against risks to our dual mandate to foster both maximum employment and price stability," he said in remarks prepared for delivery to the Economic Club of New York cash loans.

Fed officials usually defer to the Treasury secretary on issues relating to the dollar's value, but Bernanke noted that the currency's recent decline had been a factor helping to push commodity prices higher.

Bernanke said, however, that a high level of slack in the economy and stable longer-run inflation expectations should keep price pressures under wraps.

"On net, notwithstanding significant crosscurrents, inflation seems likely to remain subdued for some time," he said.

(Reporting by Mark Felsenthal; Editing by Andrea Ricci)

Bernanke says watching dollar drop closely

TOKYO (Reuters) – Japan's trade minister apologized on Monday for disclosing market sensitive third-quarter GDP figures to oil industry executives ahead of its official release, in an embarrassing slip for a government that took power two months ago.

The much-stronger-than-expected third-quarter growth figures caused Japanese bond prices to dip after the official release by the Cabinet Office at 8:50 a.m. (6:50 p.m. EST), although they later recovered as analysts warned the outlook was less rosy.

Masayuki Naoshima, the minister of economy, trade and industry, said that he told industry officials about GDP data because of concerns about the economy and he did not know the data was due later.

"I'm sorry. I honestly didn't know it was due to be released at 8:50 a.m. so I thought it would be OK to talk about it," Naoshima told reporters.

"I apologize for causing trouble and I'll be careful from now on payday loans with no fax."

Japan's economy grew 1.2 percent in the third quarter, its fastest pace in more than two years as stimulus lifted consumer spending and capital spending bottomed out.

It was the first GDP data released after Prime Minister Yukio Hatoyama's new government took power in mid-September in the wake of an election that ousted the long-dominant Liberal Democratic Party.

The government under the LDP had become more careful with handling the GDP data after a newspaper reported the figures ahead of the release a decade ago, forcing policymakers to confirm the figures.

(Additional reporting by Sumio Ito and Yoko Nishikawa; Writing by Yoko Kubota; Editing by Rodney Joyce)

Japan’s trade minister apologizes for leaking GDP

BEIJING (Reuters) – Ultra-low interest rates in the United States are fuelling speculation in overseas asset markets and threatening the global economic recovery, a senior Chinese official said on Sunday.

In unusually blunt criticism of U.S. monetary policy on the day that President Barack Obama arrives in China for a visit, Chinese banking regulator Liu Mingkang said the Federal Reserve's pledge to hold down borrowing costs and the weak dollar had emerged as a "new systemic risk."

"This situation has already encouraged a huge dollar carry trade and had a massive impact on global asset prices," he said in a speech at a financial forum in Beijing.

"It is boosting speculative investment in stock and property markets and will pose new, insurmountable risks to the global recovery and, particularly, to the recovery in emerging markets," Liu, chairman of the China Banking Regulatory Commission, said.

Earlier this month the Fed restated its commitment to keep borrowing costs near zero for "an extended period." With rates so low and funds readily available, "carry trade" investors have borrowed huge sums of money in dollars to buy higher-yielding assets overseas payday loans.

Liu made no specific mention of Chinese markets in his address, but Beijing has its own additional reasons to be worried about low U.S. rates.

The yuan is heavily anchored to the dollar, making it very difficult for China to raise interest rates before the United States without attracting more speculative cash than is already streaming toward its stock and property markets.

And a slumping dollar weighs on the value of China's $2.27 trillion of foreign exchange reserves, of which about two-thirds are estimated to be invested in dollar-denominated assets.

Liu also said the global economic recovery gave little grounds for optimism, as it was driven largely by governments' stimulus spending rather than real corporate activity.

(Reporting by Langi Chiang and Simon Rabinovitch; Editing by Alan Wheatley and Ron Popeski)

China rounds on U.S. rates as global economic risk

An Iranian-owned New York building seized by U.S. federal U.S. prosecutors, 12 Nov 2009Federal prosecutors continued legal action on Friday to seize properties, including several mosques, owned by a non-profit Muslim organization with alleged ties to the Iranian government. Federal Marshals delivered notices initiating possible seizure proceedings against the Islamic Education Center in Potomac, Maryland just outside Washington.Authorities are moving against properties linked to the New York based Alavi Foundation.Prosecutors accuse the foundation of funneling millions of dollars to Iran’s state-owned Bank Melli through a front company called the Assa Corporation.The U.S. Treasury accuses the bank of supporting Iran’s nuclear program and has banned U.S. citizens from doing business with the financial institution.A Muslin rights group, the Council on American-Islamic Relations, criticized the move to seize the mosques. The group’s communications director is Ibrahim Hooper.”What we are really concerned about is the U.S. government seizing houses of worship,” said Ibrahim Hooper. “Whether it is a mosque, a synagogue, a church, I think it sends a very chilling message in terms of freedom of religion to people of all faiths and it is something that all Americans should be concerned about.”A spokeswoman for the U.S. Attorney’s Office in New York made it clear there are no allegations of wrongdoing and no action taken against tenants or occupants of the properties Internet Payday loans.In addition to the mosque in Maryland, court documents say the Alavi Foundation also owns mosques in Queens, New York, Carmichael, California and the Islamic Education Center of Greater Houston in Texas.Faheem Kazimi is chairman of the board of the Houston organization.”I want to make it very clear to people that the Islamic Education Center of Houston is a non-profit organization,” said Faheem Kazimi. “It is an independent organization not affiliated with any of these other organizations.”A New York skyscraper involved in the case is known as the Piaget building. A report by the Associated Press says the structure is worth more than $500 million.An attorney for Alavi says the foundation has been cooperating with the U.S. government and is disappointed with the lawsuit.He says the foundation will dispute the government’s claims in court.On Thursday U.S. President Barack Obama renewed long-standing sanctions against Iran for another year, saying relations with Tehran have not yet returned to normal.The United States and Iran have had no diplomatic ties since the hostage crisis that followed the 1979 Islamic Revolution and the storming of the U.S. embassy in Tehran.   

US Moves to Seize Mosques, Properties of Group Linked to Iran

(Reuters) – Some former bankers are planning to bid for failing banks in the Federal Insurance Deposit Corp auction process, and getting financial backing from Wall Street firms like Goldman Sachs Group Inc (GS.N) and Deutsche Bank AG (DBKGn.DE), the Wall Street Journal reported citing sources.

JPMorgan Chase & Co's (JPM.N) former Chief Executive William Harrison, former Wachovia Corp CEO Robert Steele and Herb Boydstun, former CEO of Hibernia Corp were among the banking veterans considering such plans, the paper said citing people familiar with the situation.

Last month, former executives at Citizens Financial Group Inc, a unit of Royal Bank of Scotland Group PLC (RBS payday loans.L), raised $1.15 billion in a private placement and formed NBH Holdings Corp in an effort to buy battered banks, the Journal said.

Other bankers who are looking for investors to enter the auction include Charles Rinehart, former chairman and CEO of H F Ahmanson & Co and Daniel Healy, former finance chief of North Fork Bancorp, the Journal said citing sources.

(Reporting by Supantha Mukherjee in Bangalore; Editing by Valerie Lee)

Former bankers look to buy failing banks: report

HONG KONG (Reuters) – Chinese property developer Longfor Properties Co raised $912 million, pricing its Hong Kong initial public offering at the top end of an indicated range on Thursday, according to two sources close to the deal.

Billionaire investor George Soros bought HK$200 million (US$25.8 million) worth of shares, while $293 billion sovereign fund China Investmnent Corp (CIC) also invested through the international tranche, another source said.

The company sold 1 billion shares, or 20 percent of its enlarged share capital, at HK$7.07 each, compared with an indicative range of HK$6.06 to HK$7.10, according to the sources.

The pricing near the top end of the range indicates that there is still demand for Chinese property IPOs despite a glut of offerings in the last few months.

Longfor's offering price range represented a multiple of about 12 to 14 times forecast 2010 earnings. By comparison, peer R&F (2777.HK) trades at 11 times 2010 forecast earnings ,while Greentown China (3900.HK) trades at 9.9 times forecast 2010 earnings.

The deal has attracted about US$10 billion worth of orders, or about 12 times the number of shares earmarked for institutional investors, in which more than half are long-term funds and hedge funds, another source close to the deal said bad credit cash loans.

The company also generated orders for 56 times the shares initially on offer for Hong Kong retail investors. It will trigger the clawback option to increase the retail portion of the global offering to 40 percent from an initial 10 percent.

The company has signed up five cornerstone investors, including Government of Singapore Investment Corp (GIC.UL), Temasek Holdings (TEM.UL), Hong Kong Land, China's Ping An Insurance (2318.HK) and Bank of China Group Investment Ltd, for a combined $197.5 million worth of shares.

Longfor's trading debut is scheduled for November 19, under the symbol "960" (0960.HK).

Citigroup (C.N), Morgan Stanley (MS.N) and UBS (UBSN.VX) are handling the deal.

(Editing by Chris Lewis)

Soros, CIC help Longfor raise $912 million in IPO