Wednesday, February 25, 2015

Thursday February 26 Housing and Economic stories


Student loan debt piles up to $1.16 trillion: NY Fed - (www.cnbc.com)  Even with an improved job market, those student loans are getting harder to keep up with. While households are generally doing a better job making payments on their mortgages and credit cards, the delinquency rates on student loans worsened in the last three months of 2014, according a new report from the New York Federal Reserve. "Although we've seen an overall improvement in delinquency rates since the Great Recession, the increasing trend in student loan balances and delinquencies is concerning," said New York Fed researcher Donghoon Lee in a statement. "Student loan delinquencies and repayment problems appear to be reducing borrowers' ability to form their own households." Overall, household debt levels rose one percent—to $11.8 trillion—in the fourth quarter of 2014, after a steady decline in loan balances following the Great Recession reversed course in the fourth quarter of 2013. Outstanding balances were up for mortgages ($39 billion), student loans ($31 billion), car loan ($21 billion) and credit card debt ($20 billion).

[Bloomberg] Libya’s Chaos Puts Neighbors on Alert as Italy Weighs Action - (www.bloomberg.com) The beheading of 21 Egyptian Christians by Islamic State’s affiliate in Libya is giving impetus to calls for broader military action against Islamist militants in the oil-rich country. Egyptian President Abdel-Fattah El-Sisi, whose air force bombed Islamic State targets in Libya on Monday, said his country will ask the United Nations Security Council to authorize intervention in the North African nation. Italy, Libya’s former colonial ruler, said it would consider sending a force under a UN mandate. The Egyptian military also deployed soldiers at home to “secure vital institutions and installations,” it said in a statement. Tunisia, Libya’s western neighbor, said helicopters and fighter jets were conducting reconnaissance missions to monitor the border. More than three years after NATO-led airstrikes helped Libyan rebels end Muammar al-Qaddafi’s four decades of autocratic rule, the crisis in the holder of Africa’s largest oil reserves is posing a threat to its neighbors as well as European interests. Italian oil company Eni SpA is Libya’s biggest foreign oil producer.

The North Sea oil industry needs tax cuts for Scotland's sake - (www.businessinsider.com)  North Sea oil companies are running out of time. That's according to Scotland's first minister Nicola Sturgeon, other politicians, oil industry groups, and companies. Already, BP and a range of other energy giants cut jobs and investment in the sector as oil prices still remain starkly lower than the triple digit highs of June 2014. So, despite the Scottish National Party's (SNP) line that any talk about dwindling North Sea reserves was "scaremongering," Sturgeon begged Britain for tax breaks. "I believe that North Sea oil is a fantastic asset for Scotland and will continue to be so for decades to come," said Sturgeon in a press statement.

Turkey Central Bank Head Faces 2 Years In Jail For Not Lowering Interest Rates - (www.zerohedge.com) Having questioned the need for an independent central bank a week ago, saying that if they can’t cope with their duties, they will be held accountable, Turkey's President Recep Tayyip Erdogan has filed a lawsuit against the head of Turkey’s central bank, Erdem Basci. As Trend reports, the prosecutor accuses Basci of serious material damage inflicted to Turkey’s citizens as a result of an erroneous interest rate policy of the central bank. As Trend reports, A prosecutor of a court in Ankara, Serif Aydin, filed a lawsuit against the head of Turkey’s central bank, Erdem Basci. Turkish news channel Haber7 reported that the prosecutor accuses Basci of serious material damage inflicted to Turkey’s citizens as a result of an erroneous interest rate policy of the central bank. The prosecutor said that, in case of a trial, the Turkish central bank’s head can be imprisoned for up to two years. On Feb. 10, Turkey’s President Recep Tayyip Erdogan criticized Basci’s work, saying that if the central bank’s head can’t cope with his duties, he will be held accountable.

Greek Banks Need More Emergency Funds as Deposits Drop - (www.bloomberg.com) Greek lenders are urging central bank Governor Yannis Stournaras to seek additional emergency cash as deposit outflows accelerate, according to three people familiar with the situation. Deposit withdrawals picked up after talks between Greece and its euro-area creditors on extending its bailout ended in acrimony in Brussels Monday night, said the people, who asked not to be identified because the information is private. Stournaras meets European Central Bank Governing Council colleagues in Frankfurt tomorrow as Greek banks exhaust their current allocation of emergency funds, the three people said. The lenders, unable to tap investors for funds, are bleeding deposits amid uncertainty over their country’s future in the euro area and concern capital controls might be used to stem outflows. Banks are being kept afloat through the Emergency Liquidity Assistance lifeline extended by the Bank of Greece, subject to approval by the ECB. The ELA pool, which currently stands at 65 billion euros ($74 billion), is extended to solvent lenders as a temporary measure to cover liquidity shortages.



Tuesday, February 24, 2015

Wednesday February 25 Housing and Economic stories


Hans-Werner Sinn: "Impose Capital Controls In Greece Now To Avoid Another Cyprus" - (www.zerohedge.com) There is a saying: "strike while the rehypothecated iron is hot", and nobody is better at it than Germany, which hours after the latest disappointing Eurogroup summit failed - again - to reach a solution on the third iteration of the Grexit dilemma, has decided to pour even more gas on the fire in the form of infamous Euroskeptic, the president of the Ifo Institute for Economic Research, Hans-Werner Sinn who in an FT op-ed beckons someone, supposedly Europe's federalist, if non-existant, powers which in the mind of the German have control over Greek sovereignty, to immediately 'impose capital controls in Greece or repeat the mistake of Cyprus." And while the key letter excerpts can be found below, the most notable section is the following: The ECB is underwriting a temporary reprieve for Greek banks that would otherwise be bankrupt, and doing so at the risk of eurozone taxpayers. It is ultimately the citizens of other eurozone countries who, without having been consulted, are providing credit at their own risk to enable wealthy Greeks to whisk their money to safety. The Greek central bank should not be allowed to live beyond its means. Assistance for the country’s commercial banks should be capped at €42bn.The Greek government should then set up capital controls to stop money from leaving the country and keep its banks solvent. The Cypriot example should not be repeated.

Greece defies creditors, seeking credit but no bailout - (www.reuters.com) Talks between Greece and euro zone finance ministers over the country's debt crisis broke down on Monday when Athens rejected a proposal to request a six-month extension of its international bailout package as "unacceptable". The unexpectedly rapid collapse raised doubts about Greece's future in the single currency area after a new leftist-led government vowed to scrap the 240 billion euro ($272.4 billion) bailout, reverse austerity policies and end cooperation with EU/IMF inspectors. Dutch Finance Minister Jeroen Dijsselbloem, who chaired the meeting, said Athens had until Friday to request an extension, otherwise the bailout would expire at the end of the month. The Greek state and its banks would then face a looming cash crunch.

How a Liquidity Squeeze Could Push Greece Out of the Euro - (www.bloomberg.com) The standoff between Greece and its creditors on how to proceed on its bailout program risks triggering a simultaneous cash and credit crunch, which could drive the country out of the euro area. Here’s how a worst-case scenario could unfold: The Greek government, companies and lenders have all effectively lost access to international markets, due to the uncertainty over the country’s future. The current sources of liquidity are bailout funds from the euro-area nations, the currency bloc’s crisis fund, the International Monetary Fund and the European Central Bank’s Emergency Liquidity Assistance. Failure to strike a compromise means that these payments would cease. This means that the state would be unable to service its debt obligations, which stand at 22 billion euros ($25 billion) this year, excluding treasury bills, according to the 2015 budget. Greek aid talks in Brussels ended abruptly Monday.

West Coast ports dispute drags on; labor secretary to intervene - (www.reuters.com) A partial shutdown of 29 U.S. West Coast ports stretched into a third day on Monday ahead of the U.S. labor secretary's scheduled arrival in San Francisco to try to broker a settlement ending months of disruptions on the cargo-clogged docks. President Barack Obama, under pressure to weigh in on a labor dispute that has rippled through the U.S. commercial supply chain and beyond, said on Saturday he would dispatch Labor Secretary Tom Perez to meet with the two sides in the conflict. But there was no word on timing of the trip until Monday, when a spokeswoman for the labor secretary said Perez was due to arrive in San Francisco on Tuesday to join in talks between the shipping companies and the union representing 20,000 dockworkers. Neither the International Longshore and Warehouse Union nor the shipping companies' bargaining agent, the Pacific Maritime Association, have spoken about the negotiations since agreeing on Friday to honor a news blackout requested by a federal mediator. And no face-to-face talks between the parties are believed to have occurred since then.

Judge: Police takeover of Henderson homes not covered by Third Amendment - (www.reviewjournal.com)  According to the Mitchells’ lawsuit, a Henderson police officer asked Anthony Mitchell to allow police to use his house to gain a “tactical advantage” over the neighbor, but Anthony Mitchell rejected the request. The lawsuit claims police later knocked down Anthony Mitchell’s door with a metal ram and entered his house without either a warrant or his permission. A Henderson police officer then arrested Anthony Mitchell, according to the lawsuit, and multiple officers searched his home. Meanwhile, the lawsuit alleges, police entered his parents’ home across the street without either a warrant or permission and searched it. Michael Mitchell also was arrested, according to the lawsuit, which claims both he and his son spent at least nine hours at the Henderson Detention Center on charges of obstructing an officer before they were released on bond




Monday, February 23, 2015

Tuesday February 24 Housing and Economic stories


Negative rates to shake up financial system - (www.cnbc.com) Falls in European interest rates into negative territory could profoundly affect the workings of the financial system and there is little chance of benchmark borrowing costs rising in the year ahead, top investment managers and strategists have warned. Yields, which move inversely with prices, have this year dropped below zero on a rapidly expanding range of European governments' bonds - and even some corporate bonds. The declines, which are driven by the European Central Bank's "quantitative easing", mean historically low borrowing costs. But senior finance experts interviewed by the Financial Times saw worrying side effects. "This could be the makings of a completely new environment for global bond markets," said Andrew Milligan, head of global strategy at Standard Life Investments, at the FT's debt capital markets conference in London. "If it actually becomes permanent . . . There could be some very significant capital flows."

China's COSCO Dis-Assembles 8 Ships Amid Glut As Baltic Dry Hits Another Record Low - (www.zerohedge.com) You know things are bad in the ship-building business when... amid considerably larger than expected losses, China's COSCO announced that it has dis-assembled 8 vessels in January alone (including 3 bulk carriers) and will be decommissioning and disposing of them as it awaits a "more conducive" environment. It appears that is not coming anytime soon, as The Baltic Dry Index just hit 522 - a new all-time low (down a stunning 53 of the last 55 days). As COSCO explains in its HKSE Statement: The board of directors (the “Board”) of the Company wishes to inform the shareholders of the Company (the “Shareholders”) and potential investors that the Group had disassembled eight vessels (collectively, the “Vessels”), including five container vessels (Hutuo He, Xinhui He, Zhaoqing He, Yangjiang He and Yongding He) and three bulk carriers (Peng Jie, Peng Nian and Peng Cai) from 1 January 2015 to 31 January 2015

Puerto Rico debt worries muni bond market - (www.ft.com) Fresh doubts over Puerto Rico’s ability to meet its debt payments are worrying the $4tn market where US states and municipalities raise capital, casting a shadow on the outlook for muni bonds, the popular tax-exempt securities. Standard & Poor’s last week downgraded the rating on Puerto Rico’s general obligation debt by three notches, citing the island’s declining revenue and a recent district court ruling. A federal judge this month overturned a plan by the island, a US commonwealth, that would have allowed Puerto Rico to put some government agencies into debt restructuring, a move that angered some large debt holders. The judge’s decision and the rating downgrade have hit demand for Puerto Rico’s debt, which hovers around $70bn, and added to pressures on the broader muni market. Yields on Puerto Rico’s 30-year GO debt have risen 36 basis points since the start of the month, to stand at 8.06 per cent on Friday, according to Thomson Reuters MMD. Yields on broad triple A-rated muni bonds with similar maturities also jumped for the same period, climbing 37bp to 2.87 per cent on Friday.

Kaisa Bonds Slip Further Into Distress, Shares Halted - (www.bloomberg.com) Kaisa Group Holdings Ltd.’s dollar bonds slipped further into distressed territory as the trouble developer halted trade in its shares, pending the release of inside information. The company’s $800 million of 8.875 percent notes due 2018 fell 0.8 cents to 60.6 cents on the dollar as of 12:02 p.m. in Hong Kong, yielding 29 percent, according to prices compiled by Bloomberg. Its 10.25 percent 2020 debentures dropped 0.9 cents to 60.9 cents, to yield 24.4 percent. Sunac China Holdings Ltd., another developer based in the northern Chinese city of Tianjin, bought a 49.3 percent stake in Kaisa on Jan. 30 and on Feb. 6, proposed buying the rest of the shares it doesn’t already own at HK$1.80 apiece. Shares in Kaisa rallied 4.3 percent on Friday to close at HK$1.71.

Greece's Postwar Alliances Show Europe Has More at Stake Than Money - (www.bloomberg.com)  As Prime Minister Alexis Tsipras focuses on the economic arguments for a new bailout deal for Greece, the country’s strategic importance to the European Union may do as much to persuade Germany to grant him concessions. With war in Syria to the east, the failure of the Libyan state to the south and a nascent cease-fire in Ukraine to the north adding to the perennial tensions between Israel and its neighbors, the value of Greece as a NATO member and its ports on the eastern Mediterranean is rising. “One would be justified to ask whether Europe, the U.S. and NATO could afford the creation of a security vacuum and a black hole in a critical region,” Thanos Dokos, director of the Hellenic Foundation for European and Foreign Policy, an Athens-based research institute, said by e-mail. That may not be “an acceptable loss for an EU with any ambitions to play a meaningful global and regional role,” he said.




Sunday, February 22, 2015

Monday February 23 Housing and Economic stories


Greek finance minister says euro will collapse if Greece exits - (www.reuters.com) If Greece is forced out of the euro zone, other countries will inevitably follow and the currency bloc will collapse, Greek Finance Minister Yanis Varoufakis said on Sunday, in comments which drew a rebuke from Italy. Greece's new leftist government is trying to re-negotiate its debt repayments and has begun to roll back austerity policies agreed with its international creditors. In an interview with Italian state television network RAI, Varoufakis said Greece's debt problems must be solved as part of a rejection of austerity policies for the euro zone as a whole. He called for a massive "new deal" investment programme funded by the European Investment Bank. "The euro is fragile, it’s like building a castle of cards, if you take out the Greek card the others will collapse." Varoufakis said according to an Italian transcript of the interview released by RAI ahead of broadcast. The euro zone faces a risk of fragmentation and "de-construction" unless it faces up to the fact that Greece, and not only Greece, is unable to pay back its debt under the current terms, Varoufakis said.

US Rig Count Plunges By Most Since 1993, Production Hits Record Highs - (www.zerohedge.com) Despite the dramatic plunge in rig counts, this week saw yet another surge in production to record highs and with storage levels getting close to full, it would seem  - despite the bounce/squeeze in prices to $53 as the data hit - that supply remains well ahead of any demand. Total rig count dropped 98 to 1,358 - for the largest weekly drop of the 10 week run as cutting is accelerating rapidly - now down 30%.  This is the biggest weekly rig count drop since 1993. West Virginia remains the relative hardest hit with rig count depletions but Permian Basin collapse 49 rigs to 369 this week. US Oil Rig Count Down 84 to 1,056. Canada Rig Count +1. Total Rig count... biggest percentage weekly drop since 1993

The ECB just made an worrying move in approving more emergency liquidity for Greek banks - (www.businessinsider.com) The European Central Bank (ECB) just increased the amount of emergency funding available to Greek banks by €5 billion — despite indications that the savers were pulling less of their money out in February. On Thursday, Reuters reported that the ECB was extending the Emergency Liquidity Assistance that can be given to Greek banks from its current (self-imposed) maximum of €60 billion to €65 billion. However, its reasons for doing so remain unclear. Earlier reports had suggested that fears of deposit flight, where Greek savers withdrew their money from banks and deprived them of a key source of funding, after the left-wing Syriza party took power and the ECB altered its rules to prevent Greek government debt (and government-guaranteed debt) from being used to access its emergency loan programme were failing to materialise. A survey of Greek banks found that although savers remained nervous about the new government's plans deposit outflows had slowed in February, according to Reuters.

Greek Crisis Set To Ignite Panic In Markets Around The World - (www.kingworldnews.com) Despite many global markets near all-time highs, today one of the legends in the gold world warned King World News that the Greek crisis will ignite panic in markets across the globe. Keith Barron:  “The Greek crisis is being underplayed by leaders like Cameron and Merkel.  Merkel even said, ‘If they want to go, they can go.’  But a Greek exit will cause absolute pandemonium in the banking system and Merkel knows that…. Fallout Will Be Much More Dangerous: When little Cyprus had their crisis it reverberated all around the world.  This is a similar situation but the fallout will be much more dangerous.  I’ve been predicting for at least six months on KWN that Greece would leave the euro. Of course if Greece leaves the euro, then the next to go will be the Italians, Spanish and the Portuguese. One of the problems is that there have been large withdrawals from Greek banks since the beginning of December.  The Greeks are afraid of what happened in Cyprus after the bail-in.  Everyone in Cyprus with more than 150 thousand euros in the bank actually had their money confiscated.

Taxpayers paying $39 billion a year for … nothing – (www.wnd.com) Americans are paying $39 billion a year – that’s $10 from every man, woman and child in the nation per month all year long – for essentially nothing. That’s the conclusion of a new report by the Taxpayers Protection Alliance called “Filling the Solar Sinkhole: Billions of Bucks Have Delivered Too Little Bang.” Its principle conclusion is that the Obama administration’s agenda of pushing more and more money to “green projects” isn’t helping the country and has cost $39 billion a year for each of the last five years. That’s $3,600 out of the grocery budget or housing budget for a family of six over that time span. “American taxpayers spent an average of $39 billion a year over the past five years financing grants, subsidizing tax credits, guaranteeing loans, bailing out failed solar energy boondoggles and otherwise underwriting every idea under the sun to make solar energy cheaper and more popular,” the report states. “But none of it has worked. Solar energy remains prohibitively expensive – often three times more than electricity produced from natural gas and other sources. As a result, less than 1 percent of the electricity consumers by Americans comes from solar energy sources.”




Thursday, February 19, 2015

Friday February 20 Housing and Economic stories


Distressed family swamped by an underwater home | The ... - (www.washingtonpost.com) The land had once been the site of Fairview, one of the Maryland’s largest slave plantations. Now it was Fairwood, an 1,800-home subdivision that would soon become the richest neighborhood in the richest African American county in the United States. A decade ago, Comfort and Kofi were at the apex of an astonishing journey they had made from Ghana in 1997, when they had won a visa lottery to come to America. They did not know it at the time, but they were also at the midpoint in their odyssey from American Dream to American Nightmare. Today, they struggle under nearly $1 million in debt that they will never be able to repay on the 3,292-square-foot, six-bedroom, red-brick Colonial they bought for $617,055 in 2005. The Boatengs have not made a mortgage payment in 2,322 days — more than six years — according to their most recent mortgage statement. Their plight illustrates how some of the people swallowed up by the easy credit era of the previous decade have yet to reemerge years later.

The "Catastrophic Shutdown Of America's Supply Chain" Begins: Stunning Photos Of West Coast Port Congestion - (www.zerohedge.com) One week ago, when previewing what may be the first lockout of the West Coast Ports since 2002, we cited the Retail Industry Leaders Association who, realizing that failure to reach an agreement between the dockworker union and their bosses, the Pacific Maritime Association representing port management would lead to devastating consequences for the US retail industry, had several very damning soundbites….
"The slowdown is already making life difficult, but a shutdown could derail the economy completely." Just so readers have a sense of what is at stake, this is what the average dockworker makes: $147,000 a year in salary, plus $35,000 a year in employer-paid health care and an annual pension of $80,000 (according to an association press release). It is the overtime compensation to the total shown here, which grosses to over a quarter of a million dollars, that dockworkers are negotiating to raise or else the key US supply-chains gets it. Incidentally, the demands of the dockworker union and their leverage is precisely the reason for the dramatic discrepancy we showed in the following chart:

ECB approves more emergency liquidity for Greek banks - newspaper - (www.reuters.com) The European Central Bank has extended the total amount of Emergency Liquidity Assistance that can be given to Greek banks by 5 billion euros ($5.7 billion), German newspaper Handelsblatt reported on Thursday. One euro zone source told Reuters that a single-digit billion euro extension for ELA had been granted. That comes on top of the 60 billion euros previously approved. Sources have also told Reuters that the ECB Governing Council discussed the issue of ELA in a telephone conference on Thursday.

I.M.F. Announces $17.5 Billion Package for Ukraine - (www.nytimes.com) The International Monetary Fund agreed on Thursday to throw a new $17.5 billion lifeline to Ukraine, hoping to stabilize the country as it teeters on the edge of default. The new plan replaces a $17 billion emergency bailout that was extended last year after mass street protests in Ukraine ousted the country’s president, Viktor F. Yanukovych; Russia annexed Crimea; and a violent separatist uprising began in the east of the country. That uprising has now stretched into a nearly yearlong battle that has severely crippled Ukraine’s economy. In addition to the heavy costs of the continuing military operation and the displacement of more than one million people from the east, Ukraine has had to grapple with a collapse in the value of its currency, the hryvnia, and spiking inflation. Trade with Russia, long Ukraine’s largest partner, has plummeted, paralyzing many industries. Foreign investment has dried up amid the turmoil. Announcing the program in Brussels on Thursday, the fund’s managing director, Christine Lagarde, acknowledged that there were serious risks in providing any credit to Ukraine but said that the aid was needed urgently.

Global Oil Layoffs Exceed 100,000 - (www.bloomberg.com)   The promise of plentiful jobs and salaries as high as a quarter-million dollars a year lured Colombia native Clara Correa Zappa and her British husband to Perth, Australia, at the height of the continent’s oil and gas frenzy. Engineers were in high demand in 2012, when oil prices exceeded $100 a barrel, making the move across the world a no-brainer. Within two years, though, oil plunged to less than half the 2012 price and Zappa lost her job as a safety analyst. Now she’s worried her husband, who also works in the commodities industry, could also lose his job. Such anxieties are rising at a time when the number of energy jobs cut globally have climbed well above 100,000 as once-bustling oil hubs in Scotland, Australia and Brazil, among other countries, empty out, according to Swift Worldwide Resources, a staffing firm with offices across the world. “It’s shocking,” Zappa, 29, said in a telephone interview. There is “so much pressure for him to keep his job and even work extra.”