Wednesday, August 22, 2012

Thursday August 23 Housing and Economic stories



TOP STORIES:

ECB’s Rescue Worsens Spain, Italy Maturity Crunch: Euro Credit - (www.bloomberg.com)  European Central Bank President Mario Draghi’s bid to bring down Spanish and Italian yields may spur the nations to sell more short-dated notes, swelling the debt pile that needs refinancing in the coming years. Yields on Italian and Spanish two-year notes plunged after Draghi said on Aug. 2 the ECB may buy debt on the “short-end of the yield curve” as part of a broader crisis-fighting plan. The gap between Spain’s two-year and 10-year yields rose on Aug. 6 to the widest in at least two decades, while the spreadbetween similar Italian securities also approached a record. The average maturity of Spanish debt is the shortest since 2004 as Spain, like Italy, hasn’t issued 15- or 30-year bonds all year. As Prime Ministers Mario Monti and Mariano Rajoy fight to avoid bailouts that may threaten the euro’s survival, the ECB’s plan risks adding to pressure on the two nations’ treasuries.

Recession Generation Opts to Rent Not Buy Houses to Cars - (www.bloomberg.com) The day Michael Anselmo signed a lease on his first apartment in New York City, he lost his job at Buck Consultants LLC. He spent about 10 months struggling to pay rent with unemployment benefits. Two years later he’s still hesitant to buy a home or even a road bike.  “Every decision that I have made since I lost my job has been colored by that insecurity I feel about the future,” said Anselmo, 28, who now rents an apartment in Austin, Texas, and works as a consultant for UnitedHealth Group Inc. “Buying a house is just further out on the timeline for me than it used to be.” Anselmo and many of his peers are wary about making large purchases after entering adulthood in the deepest recession and weakest recovery since World War II. Confronting ajobless rate above 8 percent since 2009 and student-loan debt hitting about $1 trillion, 20-to-34-year-olds are renting apartments, cars and even clothing to save money and stay flexible.

‘Les Riches’ in France Vow to Leave if 75% Tax Rate Is Passed - (www.nytimes.com) The call to Vincent Grandil’s Paris law firm began like many others that have rolled in recently. On the line was the well-paid chief executive of one of France’s most profitable companies, and he was feeling nervous. President François Hollande is vowing to impose a 75 percent tax on the portion of anyone’s income above a million euros ($1.24 million) a year. “Should I be preparing to leave the country?” the executive asked Mr. Grandil. The lawyer’s counsel: Wait and see. For now, at least. “We’re getting a lot of calls from high earners who are asking whether they should get out of France,” said Mr. Grandil, a partner at Altexis, which specializes in tax matters for corporations and the wealthy. “Even young, dynamic people pulling in 200,000 euros are wondering whether to remain in a country where making money is not considered a good thing.”

Loan-Shark Lending Surge Feared in Japan - (www.bloomberg.com) Toyoki Yoshida recalls the winter day in 2002 when he tried to hang himself with a leather belt after yakuza thugs hounded him for weeks to pay back 500,000 yen ($6,300) in loans. The belt ripped as his neck strained the noose, saving his life. The loans, with interest rates as high as 5,000 percent annually, were among those Yoshida owed to 96 loan sharks --some with connections to organized crime. Working in the billing department of a Tokyo electronics company, he’d been borrowing from consumer-finance companies to entertain clients and colleagues and fell into a spiral of debt which cost him his job. It ended when lawyers helped Yoshida terminate his contracts through a bankruptcy filing and partial payments.

Greece’s Rating Outlook Lowered By S&P As Economy Weakens - (www.bloomberg.com) Greece’s credit rating may be cut again by Standard & Poor’s on concern the debt-burdened nation will need more support from European Union lenders. The outlook on Greece’s CCC rating, already eight levels below investment grade, was revised to negative from stable, S&P said in a statement yesterday. The change reflects the risk of a downgrade if Greece is unable to obtain its next disbursement of bailout loans from the EU and International Monetary Fund rescue package, the rating company said. Representatives from the so-called troika of the European Commission, European Central Bank and IMF return to Athen searly next month to review Greece’s economic program, which will determine whether the nation will receive further funds from rescue packages, amounting to 240 billion euros ($297 billion), needed to remain in the 17-nation euro area.






No comments: