KeNo's Housing and Economic Portal: Wednesday November 23 Housing and Economic stories

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TOP STORIES:

UPDATE: Bonuses For MF Global US And UK Employees Processed Days Before Bankruptcy - (www.businessinsider.com) Employees of MF Global's British offices may have received their quarterly bonuses last Monday, just hours before MF Global filed for chapter 11 bankruptcy in New York, The Telegraph is reporting. It's an interesting development - because last Monday, Robert Preston at the BBC reported very early in the morning that London employees had been sent home. Maybe they were sent home with their bonuses? It is unclear whether US employees had also received bonuses, though this seems rather unlikely from MF Global's chaotic last hours that Monday morning. MF Global's bankruptcy was announced at around 10:30 a.m. EST last Monday - that was 2:30 p.m. London time. (England is usually five hours ahead of the US - but their daylight savings time occurs one week before the US, so London was only four hours ahead last Monday)

Italy bond yields soar; euro zone troubles deepen - (www.reuters.com) Italian government bond yields soared to near 15-year highs, putting the euro zone's third largest economy front and center of the region's debt crisis, despite scrambling efforts by policymakers to stem the growing contagion. Italy, the world's eighth largest economy, overtook Greece as the prime threat to the stability of the 17-country single currency zone, as finance ministers met to try to find ways of building a firewall around the two-year-old crisis. Italian 10-year bond yields rose to their highest since 1997 -- approaching levels regarded as unsustainable -- with political turmoil in Rome threatening to drag a fourth European economy after Greece, Ireland and Portugal into the debt mire. Jean-Claude Juncker, the chairman of Eurogroup finance ministers, said the European Central Bank would take part in monitoring Italy's promised economic reforms along with the European Commission and the International Monetary Fund, effectively putting the country under full surveillance.

Gloomy Outlook for China Exporters as Factory Closure Wave Looms - (www.reuters.com) Up to a third of Hong Kong's 50,000 or so factories in China could downsize or shut by the end of the year as exporters get hit by cost rises and darkening global demand for Chinese goods, a major Hong Kong industrial body said on Tuesday. The Federation of Hong Kong Industries, which represents around 3,000 industrialists running factories in China, said it expected orders in the second half of this year and the first half of 2012 to fall between 5-30 percent. The European debt crisis and a fragile U.S. economy have depressed this year's Christmas orders, Stanley Lau, deputy chairman of Hong Kong's leading industrial promotion body, told a news briefing. He said a consolidation was on the cards, with around a third of Hong Kong's 50,000 or so factories in China likely to scale down operations or close by year-end.

Olympus Used Gyrus Fees to Hide Losses - (www.bloomberg.com) Olympus Corp. (7733)’s admission that three of its top executives colluded to hide losses from investors fails to address the roles played by other officials, according to the company’s biggest overseas shareholder. The Japanese camera maker’s shares slumped 29 percent yesterday after it reversed weeks of denials that there was any wrongdoing in past acquisitions. The company fired Executive Vice President Hisashi Mori over his role in covering up the losses with former Chairman Tsuyoshi Kikukawa, who resigned last week, and said auditor Hideo Yamada would step down. Olympus’ biggest overseas shareholder is now demanding investor relations head Akihiro Nambu go too because of his role as a director of Gyrus Group Plc, the U.K. takeover target used to funnel more than $600 million in inflated advisory fees to a Cayman Islands fund. And after Nambu, the rest of the board must follow, said Josh Shores, a London-based principal for Southeastern Asset Management Inc.

European crisis hits US bank lending - (www.ft.com) The crisis in Europe has begun to spill over into US bank lending, according to the latest survey of loan officers by the US Federal Reserve.

Credit conditions have steadily eased since the end of the recession but that process almost ground to a halt in the last three months, with only five domestic banks out of 50 saying that they relaxed their standards for lending to large companies. Two banks had tightened conditions. There was also a sharper retrenchment by US branches of foreign banks: 23 per cent of such operations tightened their lending terms, raising their interest rate spreads and cutting back on the amount and period for which they are willing to lend. Of the foreign banks that tightened their lending conditions in the US, all nine pointed to a weaker economic outlook, while a majority said they had a lower tolerance for risk, that their own liquidity position was weaker, and that it was harder to sell loans on the secondary market.

OTHER STORIES:

Germany’s Weidmann Says ECB Can’t Bail Out Governments by Printing Money - (www.bloomberg.com)

European Banks Cutting Sovereign Bond Holdings Threatens to Worsen Crisis - (www.bloomberg.com)

EU Eyes December Start for Rescue Fund - (www.bloomberg.com)

ECB funding to Italian banks rises further in Oct - (www.bloomberg.com)

Drought-Damaged U.S. Corn Crop Pressuring Global Food Supply: Commodities - (www.bloomberg.com)

Italy’s debt costs soar as pressure builds on Berlusconi - (www.washingtonpost.com)

HSBC chief warns of Asia credit crunch - (www.ft.com)

Bond investors fear cliff risk as Italy teeters - (www.ft.com)

Berlusconi Lacks Majority in Budget Vote, Fueling Calls to Quit - (www.bloomberg.com)

Italian Vote Will Test Berlusconi’s Majority - (www.bloomberg.com)

Italian Parliament Vote Will Test Berlusconi’s Majority as Allies Defect - (www.bloomberg.com)