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STORIES:
Homeownership Rate in U.S. Falls to Lowest Since 1997 - (www.bloomberg.com) The U.S. homeownership rate fell to the lowest level in 15
years in the first quarter as borrowers lost homes to foreclosure and tighter
inventory and credit kept buyers off the market. The rate dropped to 65.4
percent from 66 percent in the fourth quarter and fell a full percentage point
from a year earlier, the Census Bureau said in a report today. That is the
lowest level since the first quarter of 1997, and down from a record 69.2
percent in June 2004. Mounting foreclosures are displacing borrowers, while a
lack of inventory has kept home sales from accelerating amid record affordability, the National Association of
Realtors reported April 19. Stricter mortgage standards are also limiting
purchases as rental demand surges, said Paul
Diggle, property economist with Capital Economics Ltd. in London.
Illinois
Faces 25% Cost Increase to Borrow $1.8 Billion - (www.bloomberg.com) Illinois plans to sell $1.8 billion of
general-obligation debt tomorrow as its relative borrowing costs may increase
by almost a quarter.
The
tax-exempt deal for the state, rated lowest by Moody’s Investors Service,
includes a 10-year segment that underwriter Jefferies & Co. plans to offer
to investors at 1.85 percentage points above benchmark AAA securities,
according to a person familiar with the sale. Illinois’s last
general-obligation sale was on March 13 for $575 million, with 10-year
securities priced to yield 1.51 percentage points above benchmark tax-exempts,
according to data compiled by Bloomberg. That’s 0.34 percentage points below
tomorrow’s tentative pricing plan, or a difference of 22.5 percent.
Spain in talks over ‘bad bank’ scheme - (www.ft.com) Standard & Poor's, the US credit rating
agency, downgraded 11 of Spain's largest banks on Monday as the government held
talks to segregate problematic property loans into one or more asset management
companies to relieve the burden on struggling lenders, according to officials
and bankers. The "bad bank" scheme is the latest attempt by the
centre-right government of Mariano Rajoy, prime minister, to avoid an
international rescue programme of the sort required by Greece, Ireland and
Portugal. Mr Rajoy's Popular party government has deepened fiscal austerity,
reformed Spain's labour market and ordered banks to set aside an extra €54bn of
bad loan provisions and capital buffers this year.
Italian, Spanish banks load up more on government debt: ECB
- (www.reuters.com) Banks in Italy and Spain stuffed their coffers
with government bonds last month, European Central Bank data showed on Monday,
in the latest sign they have been using ultra-cheap three-year ECB funds to
stock up on sovereign debt. Italian banks now hold more government debt than
lenders in any other country in the euro zone,
and Monday's data may add to concerns that banks there and in Spain are
becoming ever more wedded to the fate of their own heavily indebted
governments. The data, the first for the period following the ECB's huge
injection of three-year cash on February 29, showed Italian banks increased
their holdings of securities issued by euro zone governments by a record 23.7
billion euros, taking their total holdings to 323.9 billion euros.
Meredith
Whitney: State Finances Are Still Doomed, And These Three States Are In The
Most Trouble - (www.businessinsider.com)
But there are three stats in
particular she doesn't like: California (which is the worst) followed closely
by Illinois and New Jersey. In Illinois, in particular, she cited something new
about parents being forced to pay for school busses because finances have gotten so bad. Some
other points she made:
·
Europe
is stil in a lot of trouble. And beyond Spain, you have to watch France.
·
The
panic in Europe will keep US rates low, and that makes the Fed's job easier
since rates will stay low.
·
She's
'absolutely' still worried about state finances. In fact there's more evidence
supporting the thesis that the states are in trouble.
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