Investing in a slowing China
Signs of slowing growth in China needn’t scare off investors, said Ben Levisohn in The Wall Street Journal. The Chinese economy will likely expand 7.5 percent this year—less than in recent years—but experts say the slower pace could be a sign of stability. The country is trying to make the transition from an economy dominated by exports to one fueled by the Chinese consumer, says Anna Stupnytska, a Goldman Sachs economist, a change that’s “absolutely necessary to make the economy sustainable.” How can investors profit from that shift? Start with U.S.-based multinationals that do business in China, “including McDonald’s, Nike, and Yum Brands.” Some companies with high exposure in China have become relative bargains as their prices have dropped because of concerns about the slowdown.
A little tuition relief
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With U.S. student debt topping the $1 trillion mark, an increasing number of colleges are lowering or freezing tuition to make themselves more attractive to applicants, said Blake Ellis in CNNMoney.com. Seton Hall University in New Jersey, Lincoln College in Illinois, and Pennsylvania’s Cabrini College have all cut tuition by at least 10 percent for the fall semester. Burlington College in Vermont is among the at least 16 schools that have promised not to hike fees this year—“the highest number of tuition freezes on record.” Students’ concerns about rising college costs are one reason these institutions are acting, but competition among schools for applicants is also a key factor, says Mark Kantrowitz of financial aid website FinAid.org.
A Wall Street rush on foreclosures
Major Wall Street firms are jumping to buy foreclosed homes from Fannie Mae and Freddie Mac in order to get a piece of the “red-hot” rental market, said Matthew Goldstein and Jennifer Ablan in Reuters.com. The Federal Housing Finance Agency, which regulates the government-backed mortgage giants, is taking bids in April for a trial sale of 2,500 Fannie-owned homes in Atlanta, Chicago, Los Angeles, and Phoenix. If the sale goes well, more distressed properties could follow. Big private equity firms and institutional investors hope there are “fat profits to be made” on renting out the properties, but critics warn of a backlash if some of the buyers are “subsidiaries of the big banks” that took bailouts from the government.
