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STORIES:
Overdue
Student Loans Reach Record as U.S. Graduates Seek Jobs - (www.bloomberg.com) Overdue student
loans reached an all-time high as students struggle to find
work after college, according to a government report renewing alarms about the
rising burden of higher-education debt. Eleven percent of student loans were
seriously delinquent -- at least 90 days past due -- in the third quarter of
2012, compared with 6 percent in the first quarter of 2003, according to the
report by the U.S. Education Department. Almost 30 percent of
20- to 24-year-olds aren’t employed or in school, the study found. The research
is being released amid concern in Congress and President Barack
Obama’s administration about rising college costs and $1 trillion in
outstanding student loans, the largest category of consumer
debt besides mortgages. Borrowers say the burden is affecting
their choice of jobs and their ability to buy homes and get married. “Today’s
economy puts young graduates in a difficult position,” Jack Buckley,
commissioner of the National Center for Education Statistics, which published
the report, said in a statement. “A college diploma no longer guarantees a
direct pathway to the middle class, making it harder to justify the expense of
a degree.”
Bernanke out by August: QE ends, rates up, crash - (www.marketwatch.com) Here’s why you better be
preparing today for a crash dead ahead. As Pimco’s Bill Gross warned in his
recent newsletter: “You’re going to lose money investing ... because the
central banks say so.” That’s right, this is a Fed-driven rally. Soon the Fed
will be forced to stop printing cheap money.No spending spree; Obama’s new Fed
Chair has to raise rates. Here’s the alternative “Dr. Doom’s August scenario:”
Aging bull market. Fifth year. Markets at risk. Down soon. August. Will Obama
reappoint Bernanke again? No way. But who? New blood? Shake things up with Wall
Street mastermind Mayor Michael Bloomberg? After more than two decades of Greenspan/Bernanke’s
misguided, destructive monetary policies, America could use a guy like him at
this crucial turning point. But expect a safe bet. Obama favors a woman. The
high rollers are already betting on Janet Yellen, vice chairman of the Fed,
long-time monetary insider. Former San Francisco Federal Reserve Bank CEO. Also
chairman of Clinton’s Council of Economic Advisers. But watch out, even a sure
bet can misjudge hidden dangers lurking ahead of a Titanic like the $15
trillion U.S. economy. As the Wall Street Journal’s Matt Wirz wrote in March:
Moody’s
Defied as Local Bond Risk Falls to 2010 Low: Muni Credit - (www.bloomberg.com) Investor confidence in U.S.
municipal debt is the highest in three years even as Moody’s Investors Service
warns that local-government credit quality is set to weaken for the 18th
straight quarter. It cost the annual equivalent of as little as $133,000 this
month to protect $10 million of local bonds for 10 years through credit-default
swaps, according to Markit Group Ltd. data compiled by Bloomberg. That’s the
cheapest since April 2010. The municipal market isn’t alone in benefiting from
bets on economic growth. The cost of contracts linked to U.S. corporate
debt is close to the lowest since 2007, and for Western European sovereign
obligations it’s the cheapest since
2010.
BOJ
Bond Buying to Be Overwhelmed by Investor Sales, Bass Says - (www.bloomberg.com) J. Kyle Bass, whose Hayman
Advisors LP made $500 million amid the U.S. subprime crisis, said the Bank of
Japan will have to “dramatically” increase bond-buying efforts that have been
“overwhelmed” by investors selling. Benchmark 10-year Japanese government bond yields rose to 1 percent today
for the first time since April 2012, more than triple the all-time low reached
last month, a day after the BOJ announced unprecedented bond buying. Japanese
shares plunged the most in two years today, trimming gains since November when
Shinzo Abe called for expanded fiscal and monetary stimulus before elections
that made him prime minister. “Abe and
the BOJ face what I call the ‘rational investor paradox,’” Dallas-based Bass,
who has predicted a financial collapse in Japan since 2010, wrote in an
e-mailed response to questions. “If JGB investors begin to believe that
Abenomics will be successful, they will ‘rationally’ sell JGBs to buy foreign
bonds or equities.”
Home
Supply Limited by Americans Lacking Equity to Sell - (www.bloomberg.com) About 22 million Americans
may lack enough home equity to move, keeping property listings tight and
limiting sales as the housing market recovers, Zillow Inc. (Z) said. Forty-four
percent of homeowners with mortgages owed more than their properties are worth
or had less than 20 percent equity in the first quarter, the Seattle-based real
estate data company said in a report today. Those people probably are locked in
to their residences, because listing a house and purchasing a new one generally
requires equity of at least 20 percent to meet costs such as a down payment and
broker fees, Zillow said. The people who cannot sell are contributing to a
dearth of home inventory on the market, which is restraining deals in the key
U.S. spring selling season. There were 2.16 million homes available last month, the fewest for
any April since 2001, the National Association of Realtors reported yesterday.
While the low supply is helping to fuel price gains and lift home equity,
values have to climb further to ease the shortage, Zillow said.
ECB
has done a lot to fight crisis, can't solve it: Weidmann - (www.reuters.com)
Japanese Stocks Plunge Most Since March 2011 on Yields - (www.bloomberg.com)
Japanese Stocks Plunge Most Since March 2011 on Yields - (www.bloomberg.com)
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