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Latest Danish Bank Failure Shows Risks Hidden in Profits -
(www.bloomberg.com) Denmark’s latest regional bank failure shows
that even lenders that had reported growing profits can conceal risks big
enough to shut them down. Toender Bank
A/S (TNDR), based in southwest Denmark close to the German border,
was forced to declare bankruptcy after markets closed on Nov. 2, following an
inspection by the Financial Supervisory Authority that revealed bad loans big
enough to wipe out the lender’s equity. Sydbank A/S (SYDB),
Denmark’s third-largest listed lender, will take over Toender Bank’s 18,000
customers and a balance sheet of 2.3 billion kroner ($396 million). The
acquisition won’t include hybrid or supplementary capital. Denmark’s burst
housing bubble has claimed more than a dozen regional lenders since 2008 as
continued declines in property values and a struggling farming industry trigger
deeper impairments. About 3.2 percent of the nation’s roughly 105 banks are
under “intensified supervision due to potential solvency problems,” FSA
Director Ulrik Noedgaard said last month. Until last week, Toender Bank had
appeared profitable.
Analysis: Canada braces as housing slowdown takes hold - (www.reuters.com) Long convinced the country's housing boom would never end in a crash,
Canadians have watched this autumn as a sharp slowdown in real estate spreads
across the country, leaving would-be home buyers hopeful and sellers scared. "The
power is in the hands of the buyer - that's what I'm feeling," said Andria
Petrillo, 32, as she and her husband toured a quiet open house in the heart of
Toronto, where crowds and chaos once reigned over weekend home showings. But
like most people shopping for a new home, Petrillo has to sell her old one
first. And that's where she worries. "With the economy, I'd like to sell
now. I worry about selling because it's a condo, and that market is cooling
even faster than houses," said the newly married sportscaster. "We
can't sell it for a ridiculous amount of money anymore."
FHA Said to Set Stage for Treasury Draw as Losses Mount - (www.bloomberg.com) The Federal
Housing Administration, faced with continuing losses from the housing bubble,
will issue a financial analysis next week setting the stage for what could be
its first draw from the U.S. Treasury in its 78-year history, according to
three people briefed on the report. The government-backed mortgage insurer,
which warned in last year’s report that its insurance fund was being drained,
has raised premiums and tightened credit standards in an effort to avoid asking
for a taxpayer subsidy. Still, the improved quality of recent FHA-backed loans
-- now comprising 15 percent of U.S. mortgages for home purchases - - may not
offset continuing defaults from loans made from 2005 to 2008, said the people,
who spoke on condition of anonymity because the report isn’t yet final.
Greece makes austerity push, workers gear for strike - (www.reuters.com) Greece's government presented a new austerity package to parliament on
Monday as a week of strikes and protests kicked off over proposals that
lawmakers must approve if the country is to secure more aid and stave off
bankruptcy. Parliament is expected to vote on Prime Minister Antonis Samaras's
13.5 billion euros ($17 billion) package of cost cuts and tax hikes on
Wednesday along with measures making it easier for firms to hire and fire
workers. Despite public exasperation at four years of belt-tightening that has
helped wipe out a fifth of the economy and leave a quarter of Greeks jobless,
the package and a tough budget slated for a vote on Sunday are expected to
scrape through parliament.
NJ
housing market was already struggling before hurricane - (www.telegram.com) Cody Buck rebuilt his home in Sayreville, N.J., after Hurricane Irene
knocked it down last year. On Wednesday, Buck showed New Jersey Gov. Chris
Christie how Hurricane Sandy destroyed the house again. “I think,
governor, we need to level the whole neighborhood, give everybody a check and
get out of here,” Buck said, according to a pool report by journalists covering
Christie’s tour of the hurricane-racked state. Sandy’s brutal arrival last
Monday was the latest blow to homeowners in New Jersey, where foreclosures
continued to rise and real estate prices to fall after most of the U.S. housing
market began to recover last year.
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