Thursday, December 22, 2011

Friday December 23 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Citi cuts 4,500 jobs, will take $400 million charge - (www.reuters.com) Citigroup Inc is cutting 4,500 jobs worldwide, Chief Executive Vikram Pandit said on Tuesday, becoming the latest large bank to trim staff. Pandit, speaking at the Goldman Sachs Financial Services Conference, said the bank would record a $400 million charge in the quarter for severance and other expenses related to the layoffs. The cuts are equal to about 2 percent of Citi's workforce of 267,000 employees at the end of third quarter 2011. Pandit said the cuts would be completed over "the next few quarters" and would come from a range of businesses. Citi joins other banks worldwide that have cut more than 120,000 jobs as regulations have imposed tighter industry rules and the economy remains weak. Earlier this year, Citi rival Bank of America Corp (BAC.N) announced plans to cut 30,000 jobs and slash $5 billion in annual expenses as part of a program known as 'New BAC,' a play on the company's ticker symbol.

Boeing Is About To Get Stung By The European Crisis - (www.businessinsider.com) The title (Banks Withdraw from Aircraft Financing) says it all. No one should be surprised that the EU banks have turned off the spigot. They are all trying to broadly deleverage. They are already full up on dodgy aircraft paper. What I want to add is that the EU banks have been major providers of liquidity to the global air carriers for decades. The reason that I got involved with this mess was that I knew many European banks. They were all in love with high yielding asset backed lending. Airlines and the EU banks were a perfect match. That these banks are now out of the picture is a very big deal indeed. A Boeing VP, Randy Tinseth, had this to say recently about those EU banks: (Bloomberg Link) “There’s been a lot of concern in the market about the availability of capital, especially the situation with European banks.” So what’s Boeing going to about the shortage of debt capital for the air carriers? Simple. They are going to take the paper right back on their books. From Commercial Chief Executive Officer, Jim Albaugh: “Our strategy will be that Boeing capital will be much more than a lessor of last resort.” Oh boy! Look out! Boeing is going to be financing its own sales. (Just like GE does.) I looked at the Boeing Capital home page. This is a list of financial products the nice guys at BA are offering:


Hotel Lenders Shun Foreclosures as $17.5 Billion in U.S. Loans Come Due - (www.bloomberg.com)
As $17.5 billion in securitized loans backed by U.S. hotels come due in the next two years, lenders are doing more to avoid foreclosure on lodging properties than on any other type of commercial real estate. Workout agreements have been reached on 53 percent of distressed hotel loans since the start of 2008, the highest among six commercial-property categories, according to data from Real Capital Analytics Inc. in New York. Special servicers, who negotiate with landlords on behalf of investors in commercial mortgage-backed securities, typically install a receiver or hire a broker to sell an office, apartment or industrial building with multiyear leases. Hotel rooms, on the other hand, rent by the night, and contracts with such operators as Marriott International Inc. may be terminated if a property is repossessed, making it harder to run or market.

Economists see France losing AAA in 3 months: Reuters poll - (www.reuters.com) France will lose its AAA credit rating early next year regardless of last-ditch efforts by President Nicolas Sarkozy to resolve the euro zone crisis at an EU summit this week, a Reuters poll of economists showed on Wednesday. The snap survey of 13 economists found that 11 of them think France will be downgraded by one of the major ratings agencies within the next three months. The only question, following this week's blanket euro zone credit warning by Standard & Poor's, is whether France will be cut by one notch to AA+ or by two to a straight AA.

Greeks abandoning Banks - (www.spiegel.de) Many Greeks are draining their savings accounts because they are out of work, face rising taxes or are afraid the country will be forced to leave the euro zone. By withdrawing money, they are forcing banks to scale back their lending -- and are inadvertently making the recession even worse. Georgios Provopoulos, the governor of the central bank of Greece, is a man of statistics, and they speak a clear language. "In September and October, savings and time deposits fell by a further 13 to 14 billion euros. In the first 10 days of November the decline continued on a large scale," he recently told the economic affairs committee of the Greek parliament. With disarming honesty, the central banker explained to the lawmakers why the Greek economy isn't managing to recover from a recession that has gone on for three years now: "Our banking system lacks the scope to finance growth." He means that the outflow of funds from Greek bank accounts has been accelerating rapidly.

OTHER STORIES:

Germany Won’t Agree to Combine Euro Rescue Funds, Government Official Says- (www.bloomberg.com)

ECB Officials Said to Plan Additional Measures to Stimulate Bank Lending - (www.bloomberg.com)

Germany Gets More Bids Than Maximum Target for Five-Year Notes at Auction - (www.bloomberg.com)

German Official: More Pessimistic Than Last Week On Success At Summit - (online.wsj.com)

Demand for ECB dollar liquidity surges - (www.ft.com)

Eurozone debt alarm puts safety in question - (www.ft.com)

New European Bank Chief Takes a Bold Approach - (www.nytimes.com)

France vows powerful summit deal - (www.reuters.com)

U.K. October Manufacturing Output Drops More Than Forecast on Euro Crisis - (www.bloomberg.com)

China growth to ease as export outlook darkens - (www.reuters.com)

Devil’s in detail of Sarkozy-Merkel deal - (www.ft.com)

U.S. Hit by 12 Weather Disasters Costing $1 Billion Each in ’11, Most Ever - (www.bloomberg.com)

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