Sunday, April 26, 2015

Monday April 27 Housing and Economic stories

Contagion Arrives: European Peripheral Bond Risk Soars - ( Just yesterday, German FinMin Schaeuble bent the truth, proclaiming that there was no sign of contagion from Grexit concerns. Today, it appears, he will be eating his words, as Italian, Spanish, and Portuguese bond spreads have exploded higher (up 15-30bps this week) amid the collapse of Greek sovereign and bank bonds. It's not just Greek Sovereigns that are plunging, Greek Bank Bonds have collapsed... It's not just Schaeuble that doesn't see any problems. Stan Druckenmiller, the Chairman and CEO of Duquesne Family Office, said that with regard Greece leaving the euro: "Draghi has QE at his disposal.  My guess is there won’t be contagion, but even if there is, he can contain it, and soon as market participants see that, you won’t get contagion." However, it's no longer about bonds or Draghi, it's about redenomination risk once again and who gets what idea next (because if there is one thing that is not allowed in the EU, it's thinking for yourself).

CBS4 Investigation: TSA Screeners At DIA Manipulated System To Grope Men's Genitals – (  A CBS4 investigation has learned that two Transportation Security Administration screeners at Denver International Airport have been fired after they were discovered manipulating passenger screening systems to allow a male TSA employee to fondle the genital areas of attractive male passengers. It happened roughly a dozen times, according to information gathered by CBS4. According to law enforcement reports obtained during the CBS4 investigation, a male TSA screener told a female colleague in 2014 that he “gropes” male passengers who come through the screening area at DIA. “He related that when a male he finds attractive comes to be screened by the scanning machine he will alert another TSA screener to indicate to the scanning computer that the party being screened is a female. When the screener does this, the scanning machine will indicate an anomaly in the genital area and this allows (the male TSA screener) to conduct a pat-down search of that area.” Although the TSA learned of the accusation on Nov. 18, 2014 via an anonymous tip from one of the agency’s own employees, reports show that it would be nearly three months before anything was done.

Schaeuble Warns Greece to Ditch False Hopes, Do Reforms - ( German Finance Minister Wolfgang Schaeuble ruled out further concessions to Greece, saying it’s up to the Greek government to commit to the reforms needed to release aid rather than give false hopes to its people. Schaeuble, speaking in a Bloomberg Television interview in New York on Wednesday, said that another debt restructuring wasn’t up for discussion now, and that Greek demands for war reparations from Germany were “completely unrealistic.” “It’s entirely down to Greece,” said Schaeuble, 72. While some kind of restructuring might be on the agenda in 10 years, “today the issue for Greece is reforming its economy in such a way that it becomes competitive at some point.” Greece’s plight is deepening with no end in sight to the standoff with creditors over releasing the final installment of bailout aid, which has been stalled since the January election of Prime Minister Alexis Tsipras’s anti-austerity government. Greek bonds plunged Thursday after Standard & Poor’s cut the country’s rating to CCC+ from B-, citing the country’s deteriorating outlook.

Greece in 'slow-death scenario' amid defaults fears - ( A U.K. bookmaker has stopped taking bets on Greece leaving the euro zone, saying it is increasingly likely that the country could "begin the process of departing" very shortly. William Hill closed their book on whether Greece will leave the euro zone during 2015, and on which country would be first to leave the euro zone, the bookmaker said Wednesday evening. "Greece had been heavily backed down to 1/5 to be the first to quit the euro zone, and we'd also been shortening the odds for Greece to leave during 2015. They'd come down from 5/1 to 3/1.' William Hill spokesman Graham Sharpe said in a press release. He added that "it is now looking increasingly likely that they could begin the process of departing very shortly." It comes as one analyst told CNBC Thursday that the country faced a "slow-death scenario"—including a default and messy exit from the euro zone—as the country's economic crisis took another turn for the worse following a credit rating downgrade.

Ratings Shopping Run Amok in U.S. Property Debt Fuels Buyer Ire - ( Some of the biggest buyers of bonds financing U.S. commercial properties are asking regulators to help stop a Wall Street practice of shopping for the highest credit ratings that they say has gotten excessive. MetLife Inc., Genworth Financial Inc. and Deutsche Bank AG’s investment arm are among at least nine firms that have discussed their concerns with regulators, according to four people with direct knowledge of the situation. Their main gripe is that underwriters are increasingly dropping credit raters such as Moody’s Investors Service and Fitch Ratings that demand the securities be structured to offer more protection from defaults. Barclays Plc analysts say banks are instead favoring upstarts that are more willing to give higher grades. That’s upsetting big bond buyers, many of whom can’t purchase the debt unless it’s graded by one of the three major bond raters -- Moody’s, Fitch and Standard & Poor’s. That means they’re getting squeezed out of deals, losing out to investors who face no such restrictions as a global hunt for high-yielding assets creates a seller’s market.

Thursday, April 23, 2015

Friday April 24 Housing and Economic stories

Bond-Liquidity Desperation Sends Record Cash Into ETFs Worldwide - (  The unprecedented demand for bond exchange-traded funds in the U.S. is spreading across the pond as European investors seek an easy way to buy into one of the longest bull runs in credit-market history. The ETFs, which trade like stocks and can be purchased online, have attracted $35.7 billion this year worldwide, on track to exceed the record $84.9 billion placed last year, according to data compiled by BlackRock Inc. About $14 billion of that was in Europe, the data show. Thirteen years after being created in the U.S., the funds are gaining traction globally as a salve for traders’ complaint that new regulations are making it harder to buy and sell bonds. While it’s simple to purchase an ETF, concern is growing that investors are underestimating how difficult it may be to get out when sentiment sours. The International Monetary Fund said in a report last week that the dynamic may pose a risk to financial stability.

The Madness Of Negative Bond Yields - (  Confidence in the system likely hangs by a much thinner thread than is currently widely perceived. Since “risk asset” prices are soaring in much of Europe, the underlying currents of suspicion are well masked, but that certainly doesn’t mean they don’t exist. While we believe that central bank and regulatory interventions in the market are a major reason why so many bond yields have dropped into negative territory, the role played by distrust in the banking system is probably quite large as well – a suspicion that seems to be confirmed by the strength of the euro-denominated gold price.

OREGON GOLD MINING STAND OFF WITH BLM….  - ( BLM issued a cease and desist order without a court order and without 'Coordination Authorization'....with local authorities. Federal officials acting lawlessly. Possible federal land grab to seize gold rich property on behalf of Chinese government. Sheriff Dave Daniel is NOT considered to be a Consitutional Sheriff. A land dispute is creating tension between miners in Josephine County and the Bureau of Land Management. The owners of the mines say they are afraid their rights to due process will not be respected and have now called in reinforcements. The Oath Keepers of Josephine County are gathering at a piece of property near Merlin. They’re in the process of setting up a staging area, in order to step in if they are needed by the Sugar Pine miners. “Because we are constitutional group,” said Mary Emerick with Oath Keepers. “We defend the Constitution… And we are here just to make sure that they receive their Fifth Amendment rights which is due process.” The owners called them in to help protect the property that they have mined for more than 100 years. The miners say documents they have grandfathered-in their surface rights to the property. But the BLM says the documents are outdated, and at some point, the property has changed hands which cancels out the grandfather process. Now, the BLM says the miners have to tone down their mining operation to stay in line with the regulations.

Insight: U.S. public companies seek bankruptcy at fastest first-quarter rate since 2010 - ( The number of bankruptcies among publicly traded U.S. companies has climbed to the highest first-quarter level for five years, according to a Reuters analysis of data from research firm Plunging prices of crude oil and other commodities is one of the major reasons for the increased filings, and bankruptcy experts said a more aggressive stance by lenders may also be hurting some companies. While U.S. stocks have climbed to near record levels and the jobless rate has fallen to a six-year low, 26 publicly traded U.S. corporations filed for bankruptcy in the first three months of 2015. The number doubled from 11 in the first quarter of last year and was the highest since 27 in the first quarter of 2010, which was in the immediate aftermath of the financial crisis. In addition, many of the bankruptcies were large. Six companies had reported at least a billion dollars in assets when they filed in the first quarter of this year, the most in the first quarter of any year since 2009.

Why Is WalMart Mysteriously Shuttering Stores Nationwide For "Plumbing Issues"? - (  WalMart has abruptly closed multiple stores across the country affecting an estimated 2,000 employees over the past several days citing "ongoing plumbing issues" which it will apparently take the company 6 months or more to fix. Interestingly, the stores are geographically distinct, and have nothing in common other than "clogs and leaks," and no plumbing permits have been obtained for any work. 

Wednesday, April 22, 2015

Thursday April 23 Housing and Economic stories

Rolling Stone author apologizes — but not specifically to the fraternity that her story accused - (  But, as John Hinderaker (Powerline) points out, Erdely didn’t expressly apologize to the most obvious victim of any discredited accusation: the accused. Her story accused Phi Kappa Psi fraternity members of gang rape, and obviously reflected not just on the unnamed individuals, but on the fraternity itself. It damaged the reputation of the fraternity, at least for a time, and would have damaged it still more had the flaws in the story not come out so publicly. Yet the closest she gets to apologizing to those her story accused is by apologizing “to the U.V.A. community.” Not quite right, it seems to me.

When work isn't enough to keep you off welfare and food stamps – ( This picture casts the culprit in a different light: Taxpayers are spending a lot of money subsidizing not people who won't work, but industries that don't pay their workers a living wage. Through these four programs alone, federal and state governments spend about $150 billion a year aiding working families, according to the analysis (the authors define people who are working here as those who worked at least 10 hours a week, at least half the year).

"We Have Come To The End Of The Road" - Greece Prepares For Default, FT Reports - ( Update: as always is the case in Europe, nothing is confirmed until it is officially denied by officials, so here you go: GREEK GOVT OFFICIAL DENIES FT REPORT GREECE PLANNING DEFAULT. There was no explanation from the government official where Greece would get the €2.5 billion it needs to fund upcoming IMF interest and principal payments. * * * It should hardly come as a surprise that after the latest round of Greek pre-negotiation negotiations with the Troika, in which the Greek representative was said to behave like a taxi driverwho "just asked where the money was and insisted his country would soon be bankrupt" and in which the Eurozone members "were disappointed and shocked at Athens' lack of movement in its plans, and in particular its reluctance to talk about cutting civil servants' pensions" that the next Greek step is to fall back - yet again - to square zero: threats of an imminent default. Which is precisely what, according to the FT, has happened "Greece is preparing to take the dramatic step of declaring a debt default unless it can reach a deal with its international creditors by the end of April, according to people briefed on the radical leftist government’s thinking."

Fed official warns ‘flash crash’ could be repeated - ( A senior Federal Reserve official has warned that last autumn's "flash crash" in US Treasurys could happen again due to the changing nature of the US government debt market, and urged banks, investors and exchanges to adopt a revised set of guidelines in response to the turmoil. The US Treasury market is the biggest and most liquid in the world, and forms the bedrock for the global financial system. Its steadiness and the solid creditworthiness of the US government is a large reason why it constitutes a mainstay of global central banking reserves and the default haven asset in times of crisis. However, last October, Treasurys see-sawed dramatically, seemingly on little news. The yield on the benchmark 10-year US government bond, which moves inversely to price, slid as much as 33 basis points to 1.86 per cent before rising to settle at 2.13 per cent. Mathematically this move was so sharp it would only be expected to occur once every 1.6bn years.

Shale oil boom goes bust as expected production dips for first time in years - (  The U.S. shale oil boom that powered the country’s highest crude oil production levels in decades appears to be slowing down due, in part, to a glut of supplies. Oil output from the most productive U.S. shale fields is expected to drop off next month by 57 million barrels of crude daily from April to May, the U.S. Energy Information Administration said Monday. That would represent the first monthly decline in more than four years, according to Reuters. The EIA forecasted that the seven shale formations — Bakken, Eagle Ford, Haynesville, Marcellus, Niobrara, Permian and Utica — will produce a total of 5.56 million barrels of crude oil daily next month, down from 5.62 million barrels per day in April. While the most productive formation, Permian, will see slightly higher output — by 11,000 barrels per day, to 1.99 million — output at the next-highest producer, Eagle Ford, will drop 33,000 barrels daily while Bakken’s output will decline by 23,000 barrels next month.

Tuesday, April 21, 2015

Wednesday April 22 Housing and Economic stories

Flash Move Haunts Bond Traders Heeding Dimon’s Warning of Crisis - ( Six months after an unexplained flash rally in Treasuries sent markets reeling, bond investors are bracing for it to happen again. Prudential Investment Management is trading more futures because they’re both liquid and anonymous. State Street Corp. is making smaller bets. And Pioneer Investments is looking for returns in higher-quality securities that are easier to sell. On Oct. 15, benchmark Treasury yields swung the most relative to overall yields since at least 2000, scarring debt investors who say they’re still trying to figure out why it happened. JPMorgan Chase & Co. chief Jamie Dimon called the move a “warning shot” last week, blaming it on central-bank hoarding of bonds along with regulations that have led dealers to retreat from making markets. Others say the rise of electronic trading is at fault.

Greece casts shadow as ECB money printing buoys euro zone - ( European Central Bank policymakers gathering on Wednesday will examine possible further emergency funding for Greece's banks as they take stock of a wider economic picture showing early signs of improvement. With falling prices in the euro zone beginning to stabilize, ECB President Mario Draghi will be able to claim an early success for the quantitative easing scheme -- money printing to buy chiefly government bonds -- launched by the bank in March. The ECB's borrowing rates are all but certain to be held at record lows, but continued wrangling between Greece and the euro zone over reforms and aid is casting a cloud of uncertainty over the 19-country currency bloc. Athens has until the middle of this week to improve a package of reforms required for the release of euro zone loans that it needs to stay afloat. Were Greece ultimately to tumble out of the euro, it would deal a blow to the credibility of the currency union. Athens was first bailed out almost five years ago by the euro zone with another aid deal in 2012 but its future remains uncertain.

Russia opens way to missile deliveries to Iran, starts oil-for-goods swap - (www.reuters.comRussia paved the way on Monday for missile system deliveries to Iran and started an oil-for-goods swap, signaling that Moscow may have a head-start in the race to benefit from an eventual lifting of sanctions on Tehran. The moves come after world powers, including Russia, reached an interim deal with Iran this month on curbing its nuclear program. The Kremlin said President Vladimir Putin signed a decree ending a self-imposed ban on delivering the S-300 anti-missile rocket system to Iran, removing a major irritant between the two after Moscow canceled a corresponding contract in 2010 under pressure from the West. A senior government official said separately that Russia has started supplying grain, equipment and construction materials to Iran in exchange for crude oil under a barter deal. Sources told Reuters more than a year ago that a deal worth up to $20 billion was being discussed and would involve Russia buying up to 500,000 barrels of Iranian oil a day. Officials from the two countries have issued contradictory statements since then on whether a deal has been signed, but Deputy Foreign Minister Sergei Ryabkov said on Monday one was already being implemented.

Court mulls forcing reveal of details of secret wireless kill switch - (  US courts are once again asking the government why it won't release details of its wireless service kill switch. The Electronic Privacy Information Center (EPIC) has been trying to wrangle documents concerning the kill switch - officially known asStandard Operating Procedure 303 - from the tight grip of the Department of Homeland Security (DHS) since filing a Freedom of Information Act (FOIA) in July 2012. DHS created SOP 303 in the mid-2000s, and the protocol was approved in March 2006. As EPIC describes it, SOP 303 is an "Emergency Wireless Protocol" that codifies a "unified voluntary process for the orderly shut-down and restoration of wireless services during critical emergencies such as the threat of radio-activated improvised explosive devices." The details have never been revealed to the public, but a federal appeals court has now asked the US government why it should be allowed to keep secret its plan to silence phone service during "critical emergencies".

Mighty Rio Grande Now a Trickle Under Siege - ( On maps, the mighty Rio Grande meanders 1,900 miles, from southern Colorado’s San Juan Mountains to the Gulf of Mexico. But on the ground, farms and cities drink all but a trickle before it reaches the canal that irrigates Bobby Skov’s farm outside El Paso, hundreds of miles from the gulf. Now, shriveled by the historic drought that has consumed California and most of the Southwest, that trickle has become a moist breath. “It’s been progressively worse” since the early 2000s, Mr. Skov said during a pickup-truck tour of his spread last week, but he said his farm would muddle through — if the trend did not continue. “The jury’s out on that,” he said. Drought’s grip on California grabs all the headlines. But from Texas to Arizona to Colorado, the entire West is under siege by changing weather patterns that have shrunk snowpacks, raised temperatures, spurred evaporation and reduced reservoirs to record lows.

Monday, April 20, 2015

Tuesday April 21 Housing and Economic stories

Wells Fargo Forecloses On Elderly Couple Who Sold Their Home 21 Years Ago - ( In another example of how disorganized American banking has become, Wells Fargo shocked elderly couple Sheridon and Susan Turner when a process server knocked on their door informing them that Wells Fargo was suing them for foreclosure on a home they sold 21 years ago. The Turners sold the house in suburban Orlando to Alton Ricks in July 1994 and transferred their assumable mortgage to him as part of the sale. 72 year-old Sheridon Turner told the Orlando Sentinel, “Needless to say, we were shocked. That lawsuit could ruin my credit. If we had the mortgage, why wouldn’t the bank send me a notice when someone stopped making the payments last August?” Wells Fargo told the Orlando Sentinel that it sued the Turners for foreclosure because Sheridon turner was the “borrower of record.” But, a spokesperson added,“the lender will not hold him financially liable for the debt or reflect the foreclosure on his credit reports.”

U.S. States Aren't Prepared for the Next Fiscal Shock - ( U.S. states, still grappling with the lingering effects of the longest recession since the 1930s, are even more vulnerable to another fiscal shock. The governments have a little more than half the reserves they’d stashed away before the 18-month recession that ended in June 2009, according to a report last month by Pew Charitable Trusts. New Jersey, Pennsylvania, Illinois and Arkansas have saved the least. Skimpier rainy-day funds have implications for the national economy, which is in its sixth year of expansion. States would have to cut spending or raise revenue by a combined $21 billion in the event of a recession, exacerbating economic weakness, Moody’s Analytics found in a stress test of state finances. Reserves take on added importance for governments balancing obligatory pension and health-care costs with swings in tax collections, said Daniel White, a senior economist at the arm of Moody’s Corp. “What the Great Recession has shown is that things have fundamentally changed in terms of the way that state fiscal conditions are determined,” White said from West Chester, Pennsylvania. “They need to be much more prepared for very volatile fiscal conditions than they had been in the past.”

We Traveled Across China and Returned Terrified for the Economy - ( China’s steel and metals markets, a barometer of the world’s second-biggest economy, are “a lot worse than you think,” according to a Bloomberg Intelligence analyst who just completed a tour of the country. What he saw: idle cranes, empty construction sites and half-finished, abandoned buildings in several cities. Conversations with executives reinforced the “gloomy” outlook. “China’s metals demand is plummeting,” wrote Kenneth Hoffman, the metals analyst who spent a week traveling across the country, meeting with executives, traders, industry groups and analysts. “Demand is rapidly deteriorating as the government slows its infrastructure building and transforms into a consumer economy.” The China Steel Profitability Index compiled by Bloomberg Intelligence barely rose in March, a time after the annual Lunar New Year when demand would usually surge, and so far this month has resumed its decline. Steel use this year is down 3.4 percent, after slumping as much as 4 percent in 2014, according to BI. It had steadily risen for more than a decade.

[McArdle] Uncle Sam Is Uneducated About Loan Risks- ( Under the Barack Obama administration, the government has pretty much taken over the student loan business. Loans that might once have been made by banks (often with a federal guarantee) are now issued directly by the government. Proponents of this policy have hailed it as cutting out the middleman, arguing that the system even turns a profit. But all along, critics have quietly asked a question: What about risk? And now, as student loan volumes and delinquencies rise, those critics have gotten a little louder. Under current conditions, the Congressional Budget Office estimates that the student loan program will remain profitable for the government, at least for the next 10 years. But that raises a couple of questions: What if those conditions change? And what happens outside the forecast window? The first question centers around a rather esoteric debate among budget wonks: Should the government estimate the cost of its guaranteed loan programs by simply adding up the expected costs (the interest that Uncle Sam will have to pay to borrow the money it lends, the money it will lose from defaults, and the overhead cost of loan origination and collections) and subtracting that from the expected revenues (the interest and principal the government will collect)?

Swiss Government Becomes First Ever To Issue 10Y Debt At A Negative Yield - ( It had to happen sooner or later... in the new normal of yield-reaching, collateral-shortage-ing, money-printing economalypse, the Swiss government has become the first ever to issue a 10Y sovereign bond at a negative yield. As WSJ notes, while several European countries have sold government debt at negative yields up to five years of maturity - which means investors effectively pay for the privilege of buying it - no other country has previously stretched this out as long as 10 years. Mission Accomplished Central Bankers? As The Wall Street Journal reports, The Alpine country sold a total of 377.9 million Swiss francs (about $391 million) of bonds maturing in 2025 and 2049. On the 10-year slice, the yield was -0.055%, compared with 0.011% on its most recent similar bond two months ago.In the post-issuance secondary market, Swiss bonds maturing up to 11 years in the future already trade with yields under 0%. But such low yields at the initial point of sale “illustrate well the world we live in,” said Jan von Gerich, chief strategist at Nordea, referring to collapsing yields on debt amid widespread stimulus from central bank