Friday February 21 Housing and Economic stories

TOP STORIES:

Detroit: Pension funds should get more than banks - (www.cnbc.com) Detroit wants to pay a higher rate for what it owes to the city's pension funds than to bankers and bondholders, according to the Detroit Free Press. It also wants to treat complex interest-rate debt it owes to two large Wall Street banks as unsecured debt, the newspaper reports. The proposals are part of the city's plan of adjustment in its historic bankruptcy case. Detroit needs to reduce some $18 billion in debt and long-term liabilities. The paper quoted a person familiar with the draft as saying the city proposed to pay pension funds around 25 cents on the dollar, compared with about 22 cents for other unsecured creditors, including bondholders whose repayments are not tied to specific revenue streams.

Billions of dollars were withdrawn from emerging markets this week - (www.telegraph.co.uk)  Billions of dollars were withdrawn from emerging market equity funds this week, the steepest seven-day sell-off since August 2011. This week was the largest equity fund outflow from emerging markets since August 2011 with billion of dollar withdrawn, according to a BofA Merrill Lynch Global Research report. Together, emerging market debt and equity funds have outflows of $9.1bn, which almost matches the crises such as the Taper tantrum, debt ceiling crisis, and Lehman Brothers collapse. Some $6.4bn equities made up the outflow from emerging markets, while $2.7bn of debt made up the largest debt fund outflow since June 2013.

Schiff: We're Heading For A Crisis Worse Than 2007 - (www.moneymorning.com) Washington is engaged in a massive "campaign" to make Americans believe the economy is in recovery.  But in reality the United States is at the brink of a devastating economic crash that will cause catastrophic market losses and impoverish millions. That's according to Peter Schiff, the best-selling author and CEO of Euro Pacific Capital, who delivered his frightening warning to investors in a recent interview on CCTV. "The problem with politicians is they don't want to level with the voters and tell them how bad the economy really is and what the cure for the disease is," Schiff said. The "disease" Schiff refers to is a toxic combination of our massive $16.4 trillion debt and the Fed's continued devaluing of the dollar through its controversial 7-year long "easing" program. The Fed is currently purchasing $75 billion a month in Treasury and mortgage bonds, a form of stimulus. President Obama and like-minded politicians claim this stimulus has pushed the economy forward, boosting GDP and keeping inflation low. But Schiff says "it's another lie."  In fact, according to Schiff, the government has done nothing more than create a "phony" economy that is "completely dependent on the ability to borrow more money that we can't pay back."

Target Card Breaches Open New Front in Old Battle With Bankers - (www.bloomberg.com) Bankers and retailers are resuming their fight over responsibility for losses from cybertheft as Congress weighs responses to a security breach at Target Corp. (TGT) that exposed data from tens of millions of accounts. The two sides, antagonists in other disputes over card payments, have already drawn up lines of attack for a series of hearings in Congress that begin next week. Bankers want retailers to cover more of the cost of breaches. Retailers say bankers need to adopt more-secure card technology. Lawmakers must decide whether to act to require tighter security or swifter disclosures. “This pits powerful banks against powerful merchants,” Jaret Seiberg, a policy analyst at Guggenheim Securities LLC’s Washington Research Group, said in an interview. “Everyone will have a headache, there will be so much noise, but in the end I doubt Congress is going to intervene.”

Emerging Markets See Foreign Capital’s Dark Side - (www.nytimes.com) It is no fun to be a central banker in an emerging-market country when investors suddenly grow doubtful. If you don’t do what the foreign investors say you should do, your currency and your markets will be punished. And if you do what you are told, well, they could be punished anyway. Turkey’s central bank set out this week to show that it was changing its ways. After months of watching the country’s currency lose value, and of refusing to raise interest rates despite receiving lots of advice from overseas to do so, it called a news conference for midnight Tuesday, hinting that it would raise rates. It not only raised them, it sent them soaring. One rate — the central bank has a lot of them — rose to 10 percent from 4.5 percent. That was enough to quiet the talk that the bank was subservient to Prime Minister Recep Tayyip Erdogan, who had loudly opposed any rate increase.

OTHER STORIES:

Why so many ex-NFL players struggle with money - (www.cnbc.com)

Big Oil sings the blues as US gushes oil, gas - (www.cnbc.com)

Emerging-Market Tremors Shake the World Economy - (www.bloomberg.com)
Thai army to deploy more troops amid warning of poll violence - (www.bloomberg.com)

Finally Someone Has The Guts To Tell The Truth About Detroit’s Dirt Cheap Homes - (www.mfi-miami.com)

Bitcoin ‘Ponzi’ Concern Sparks Warning From Estonia Bank - (www.bloomberg.com)

Abe Doomsday Risk Prompts Moody’s Warning on JGBs: Japan Credit - (www.bloomberg.com)

Rajan Warns of Policy Breakdown as Emerging Markets Fall - (www.bloomberg.com)

Consumer sentiment dips in January - (www.reuters.com)