Wednesday, October 3, 2012

Thursday October 4 Housing and Economic stories



TOP STORIES:

German City Needing Aid Shows Debt-Crisis Tentacles: Euro Credit - (www.bloomberg.com) Offenbach, a city of about 120,000 people neighboring Germany’s financial capital Frankfurt, is so mired in debt it had to ask the state of Hesse for a 211 million-euro ($277 million) bailout in June. In so doing, it became one of the largest of 102 municipalities to tap 3.2 billion euros of aid Hesse is making available as the first of Germany’s 16 federal states to introduce a formal rescue fund for struggling towns and cities. Offenbach, in Frankfurt’s shadow as the financial center rose to prominence during the past two decades, has lost its place as an industrial hub as household goods maker Rowenta Werke GmbH and printing-press maker Manroland AG cut production at their factories. As Germany, the biggest national contributor to euro-area bailouts, pressures indebted European countries to cut down on spending, its own cities are buckling in the absence of a mature municipal bond market and as public-finance lending shrinks in the wake of Europe’s sovereign debt crisis.

Deposit Flight From Europe Banks Eroding Common Currency - (www.bloomberg.com) An accelerating flight of deposits from banks in four European countries is jeopardizing the renewal of economic growth and undermining a main tenet of the common currency: an integrated financial system. A total of 326 billion euros ($425 billion) was pulled from banks in Spain, Portugal, Ireland and Greece in the 12 months ended July 31, according to data compiled by Bloomberg. The plight of Irish and Greek lenders, which were bleeding cash in 2010, spread to Spain and Portugal last year. The flight of deposits from the four countries coincides with an increase of about 300 billion euros at lenders in seven nations considered the core of the euro zone, including Germany and France, almost matching the outflow. That’s leading to a fragmentation of credit and a two-tiered banking system blocking economic recovery and blunting European Central Bank policy in the third year of a sovereign-debt crisis.

Spain PM in risky waiting game on bailout request - (finance.yahoo.com) Spain is breathing a little easier ever since the European Central Bank said it would buy unlimited amounts of government bonds to help countries like it that are being strangled by their debts. After the ECB pledged two weeks ago to rescue countries that seek the bank's help, Spanish borrowing costs have fallen sharply — a sign that investors are more confident the government can pay its bills. Yet Spain, which has the fourth-largest economy among the 17 countries that use the euro, isn't out of the danger zone. How its leaders interpret and respond to the recent calm in financial markets matters.

Stalled Rally Puts Pressure on Spain - (online.wsj.com) The European rally has ended, and now the waiting begins. Mario Draghi, the president of the European Central Bank, triggered a burst of optimism this month with the bank's plan to support weak countries like Spain. Spanish bonds strengthened sharply, and the Spanish stock market rebounded to levels not seen since the first quarter—when another ECB plan delivered a welcome boost. But like the last one, this newest fervor is showing signs of frost. Stock markets around Europe slid Tuesday, many for the second day. The Spanish bourse closed down 1.1%, at 8058.30. The Italian benchmark index slipped 2.4%..

One big order, thousands of small ones, seen behind oil tumble - (www.reuters.com) A single large sell order in the benchmark European Brent oil market, followed by an abrupt U-turn among high-frequency traders, may have caused one of the most abrupt price routs ever, brokers and analysts said on Tuesday. As the dust settled on Monday's four-minute, nearly $4 plunge, other possible causes such as an erroneous "fat finger" trade, a computer program run amok or a broad, rumor-driven sell-off were set aside in favor of a combination of one big trade - potentially as much as 12 million barrels worth some $1.4 billion - and tens of thousands of computerized orders.





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