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Some Americans caught in the weak job market are lining up for federal student aid, not for education that boosts their employment prospects but for the chance to take out low-cost loans, sometimes with little intention of getting a degree. Take Ray Selent, a 30-year-old former retail clerk in Fort Lauderdale, Fla. He was unemployed in 2012 when he enrolled as a part-time student at Broward County's community college. "The only way I feel I can survive financially is by going back to school and putting myself in more student debt," says Mr. Selent, who has since added $8,000 in student debt from living expenses. Returning to school also gave Mr. Selent a reprieve on the $400 a month he owed from previous student debt because the federal government doesn't require payments while borrowers are in school. Andrew Kaufman for The Wall Street Journal Ray Selent of Fort Lauderdale, Fla., who is taking courses for a degree in theater, says student loans allow him to cover any needs that arise.
U.S. consumer spending rose more than expected in January as outlays on services recorded their largest increase since late 2001, likely driven by demand for heating. The Commerce Department said on Monday consumer spending increased 0.4 percent after advancing by a revised 0.1 percent in December. Economists polled by Reuters had forecast consumer spending, which accounts for more than two-thirds of U.S. economic activity, edging up 0.1 percent in January. A price index for consumer spending rose 0.1 percent after increasing 0.2 percent in December.
Financial data firm Markit said the final read of its U.S. Manufacturing Purchasing Managers Index rose to 57.1 in February, above both the preliminary read of 56.7 and expectations for a read of 56.6. "This to a large extent reflects a temporary rebound after supply chains and production had been disrupted by severe weather," Chris Williamson, Chief Economist at Markit said in a statement.
China's services sector regained some momentum in February but its manufacturing sector struggled, separate surveys showed on Monday, with the divergence adding to the difficulty in assessing the strength of the economy at the start of 2014. Weak investment and declining manufacturing PMI readings have been countered by surprisingly buoyant exports and bank lending. The official non-manufacturing Purchasing Managers' Index (PMI) rose to a three-month high of 55.0 in February, while the final Markit/HSBC manufacturing Purchasing Managers' Index fell to 48.5, its third straight decline. You see exports strong, so external demand is fine," said Wei Yao, China economist at Societe Generale in Hong Kong.
Bruce Berkowitz, a prominent mutual-fund investor, sent letters to the boards of Fannie Mae and Freddie Mac late Friday scolding directors for not protecting the rights of shareholders, upping the ante in his bid to let investors share in the spoils of the newly profitable mortgage-finance giants. In an interview Sunday, Mr. Berkowitz said he hopes to "wake up the boards" so they realize "that they have a fiduciary responsibility" to shareholders such as his Fairholme Funds Inc., which last month disclosed that its position in the companies had grown to a combined amount of nearly $1.3 billion. Fairholme and other shareholders are suing the U.S. government to challenge changes that the Treasury Department made to the 2008 bailout of Fannie and Freddie. The changes, effective last year, required the companies to send all profits to the government, replacing an earlier 10% dividend payment and preventing the firms from retaining any earnings.
China's factory activity shrank again in February as output and new orders fell, a private survey found on Monday, reinforcing concerns of a slowdown in the world's second largest economy. "Signs are becoming clear the risks to GDP growth are tilting to the downside," said Hongbin Qu, chief economist for China at HSBC, in a statement accompanying the PMI results. Output was likely affected by manufacturers closing for China's biggest annual holiday, the Lunar New Year festival, which began on January 31 and covered early February, although the PMI results are seasonally adjusted. That sub-index is one of the few indicators to measure the health of China's labor market, a priority area for Beijing, which wants to keep unemployment low in order to maintain social stability.
The U.S. Securities and Exchange Commission is investigating Citigroup for accounting fraud after it disclosed bogus loans in its Mexican Banamex unit, a source familiar with the investigation said. The securities regulator is also examining whether Citigroup violated the Foreign Corrupt Practices Act, the source said. An employee at Banamex has been questioned by Mexican police after being suspected by the bank of involvement in the loan scheme, another source familiar with the police investigation said. Citigroup said on Friday it had found $400 million in bad Banamex loans and was reducing its full year profit by $235 million to $13.67 billion, after the bank had first reported its 2013 earnings more than one month ago.
Escalating political tensions in Ukraine pressured Asian stocks on Monday, forcing anxious investors to cut their exposure to riskier assets in favor of traditional safe haven bets such as the Japanese yen and Swiss franc. Ukraine mobilized for war on Sunday and Washington threatened to isolate Russia economically, after President Vladimir Putin declared he had the right to invade his neighbor, in the biggest confrontation between Russia and the West since the Cold War. Australian shares were off 0.2 percent (.AXJO), and MSCI's broadest index of Asia-Pacific shares outside Japan was also down by a similar margin. U.S. stock futures fell 0.7 percent.