Wednesday, April 23, 2014

Thursday April 24 Housing and Economic stories

TOP STORIES:

Nomi Prins | The Real Vice-President of the United States Is Wall Street - (www.truth-out.org) In "All the Presidents' Bankers: The Hidden Alliances That Drive American Power," Wall Street journalist (and former Goldman Sachs executive) Nomi Prins writes a painstakingly researched history of the financial industry's collusion with the White House to create a self-serving United States financial policy. Get the book directly from Truthout by clicking here. Prins' book uses short passages to weave together in understandable terms a longterm relationship between economic and political power that has remained unchallenged. Yes, there were occasional periods when Wall Street did not receive everything that it wanted from the White House (such as in the New Deal). However, adding up the ledger of government policy toward Wall Street results in a decisive victory for the financial titans.

China tells banks to manage bad loans, stress tests planned: paper - (www.reuters.com) The China Banking Regulatory Commission (CBRC) has said it will conduct regional and national stress tests after banks saw a spike in bad loans last year, the Shanghai Securities News reported on Friday, reflecting growing concerns over credit risk. "All (CBRC) offices, supervisory departments, must organize stress tests of banking institutions in a timely manner so as to analyze the impact of unfavorable situations in individual banks and the banking system and urge banking financial institutions to make emergency plans," the regulator was quoted as saying in guidelines sent to banks in March. Chinese banks' non-performing loan (NPL) ratio rose to 1.0 percent at the end of December, its highest level in two years, the CBRC reported in February. It was unclear, however, to what extent the latest guidelines are a departure from previous practice.

China Cash Shortage Brings IOUs to Fore - (online.wsj.com) Xie Daoliang's business survives by trading almost exclusively in a virtual currency, but not by choice. Mr. Xie makes bulldozer treads and other parts for heavy machinery. These days, when he makes a sale he seldom gets paid in cash. Instead, he gets a piece of paper with a value printed on it and a promise from a bank that it will pay at an arranged point in the future. In China's economic slowdown, businesses are having troubles paying suppliers, and banks are getting shy about lending, so cash is scarce. The notes—a form of IOUs known as acceptance drafts – are increasingly being used instead, and Mr. Xie says they really get around. Sitting in his cavernous factory office with chalky white walls a 40-minute flight south of Beijing, Mr. Xie pulls an acceptance draft from his briefcase. With a face value of 30,000 yuan ($4,800), the draft was issued in mid-January to a machine dealership two provinces away. Since then, Mr. Xie says, it had been used to pay a machine maker in another province, and then an aluminum company in yet a third. It then went to a power generator in Shanghai, which used it to pay Mr. Xie's company—Jining Chine Heavy Construction Machinery Ltd. Mr. Xie says he might use it to pay his steel supplier. The bill matures in mid-July.

Foreclosure Mill Attorney Goes Nuts After Judge Rules Against Him - (www.mfi-miami.com) A hotheaded big shot corporate lawyer named David Dunn,  a Manhattan partner in the international corporate law firm Hogan Lovells, became so enraged when a Brooklyn judge ruled against his client, Bank of New York-Melon in a foreclosure case that he attacked the opposing attorney Bruce Richardson as he was leaving the court room. Richardson was representing a homeowner as he was leaving the court room. Dunn allegedly knocked Richardson to the ground and then hit Richardson with his briefcase so hard the injured lawyer needed back surgery. Richardson is now suing Dunn in Brooklyn Supreme Court. The Ivy League-educated Dunn allegedly knocked Richardson down and then climbed over Richardson while hitting him in the chest and face with his brief case as he rushed to exit the courtroom in March 2013. Dunn, who appeared to be annoyed that he had to attend the  hearing allegedly stormed out of the court room and assaulted Richardson after a foreclosure referee ruled against his client, Bank of New York-Melon.

Welcome to Feudalfornia: the golden sarcophagus and the investor. Acceleration to price out masses - (www.doctorhousingbubble.com)  California housing affordability may seem like an oxymoron.  Many younger buyers are priced out in many markets across the state.  The latest data from the California Association of Realtors (CAR) finds that still only 1 out of 3 families can actually afford to buy a home in the state in which they live.  We also have a record number of young potential buyers (more likely potential renters) living at home with their parents.  Starting in 2008 a large portion of housing sales started going to investors.  These investors may have different timelines on when they will release property out into the market.  In fact, this might be another big reason as to why so little inventory is out in the market.  Some investors are looking to securitize cash flows and may be limited in terms of selling.  Instead a regular buyer potentially looking to capitalize on equity and move up in more traditional times, you have different motivating factors.  Since 2008 over 30 percent of all California home sales went to this group.  




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