Mortgage applications fall again, Pimco is under investigation for fraudulent valuation of funds, and Starbucks is buying Starbucks Japan. Here are the top news stories for September 24, 2014.
Starbucks Will Complete Purchase of Starbucks Japan
Starbucks Corporation, which owns almost 30 percent of Starbucks Coffee Japan, will purchase the remaining 60.5 percent share of the company in a two-step deal that is valued at $913.5 million. Starbucks Japan has been operated in a joint effort by Sazaby League and Starbucks since 1995. There are currently more than 1,000 Starbucks locations in Japan, the second largest market for the company. Starbucks expects to have the controlling interest in Starbucks Japan before its fiscal first quarter ends on Dec. 28.
Mortgage Applications Slide Again
Although there was a surge in refinancing of mortgages in the middle of the month, the volume of applications fell again in the week ending September 19 as interest rates rose to their highest level in several months. The Mortgage Bankers Association says the total mortgage applications dropped 4.1 percent on a seasonally adjusted basis. "Following last week's FOMC (Federal Open Market Committee) meeting, interest rates continued to inch up, as the end of QE (quantitative easing) was confirmed, and investors anticipate the first increase in short-term rates by the middle of next year," said Michael Fratantoni, chief economist at the MBA. Applications to refinance a loan fell 7 percent week-to-week and were down 31 percent from one year ago, the MBA said. Applications to purchase a home were down 0.3 percent for the week and is down 16 percent from the same time in 2013.
Pimco Under SEC Investigation
The Wall Street Journal reports that the Securities and Exchange Commission is investing whether Pacific Investment Management Co. (Pimco) is artificially boosting its returns on one of its largest funds. The newspaper says the investigation is into the way Pimco values its bond holdings on exchange traded funds it bought at discounted prices. Placing a higher value on those bonds could create the appearance of quick price gains, which the SEC says may be misleading in regard to the fund’s actual performance. The Wall Street Journal said Pimco is cooperating with regulators. "We believe our pricing procedures are entirely appropriate and in keeping with industry best practices," a Pimco spokesperson said.
Walmart Prepares to Offer Checking Accounts
Walmart is teaming up with prepaid payment card company Green Dot to create checking accounts for almost anyone over 18 years old who passes an identification check. Senior vice president Daniel Eckert said Tuesday the new Walmart checking accounts would be available nationwide by the end of October. They will offer low-cost checking in a battle to attract customers away from their traditional bank checking accounts which carry high fees. The Walmart accounts would have no fees for overdrafts or bounced checks and no minimum account balance.
Blackberry is Set to Launch its New Smartphone
Passport is the name of the new smartphone offered by Blackberry, which is trying to regain position in the mobile technology market. The launch of Passport Wednesday come as the company has completed a three-year restructuring process to get back into the black. Passport gets its launch in Toronto, London and Dubai Wednesday. Passport has a large square screen and a touch-sensitive keyboard. Blackberry is also going to launch its new Blackberry Classic in the next couple of months. The Ontario-based company announces its second-quarter numbers Friday.
Popeyes to Offer Beer Can Chicken
In a direct nod to the craft beer craze running through the country, Popeyes is set to offer an alcohol-free new flavor of chicken called Beer Can Chicken. On Oct. 25, the national fast food chain will offer its new southern-style fried chicken for a limited time. There is no beer in the recipe. The beer flavor will be derived from a mixture of seasonings including garlic, butter, rosemary, onion, cayenne pepper, lemon zest and an undisclosed flavoring. The three strips of chicken, fries and a biscuit will cost $3.99. “No one in fast food has ever done anything like this,’’ said Popeyes CMO Hector Munoz. “It’s not about the beer. It’s about the flavor.”