China’s Developers Face Shakeout as Easy Money Ends: Mortgages - (www.bloomberg.com) The collapse of a Chinese developer in a city south ofShanghai foreshadows a shakeout among the nation’s almost 90,000 real estate companies as the government reins in credit and the housing market slows. Zhejiang Xingrun Real Estate Co., a closely held developer based in Fenghua, is insolvent, with 3.5 billion yuan ($562 million) of debt. Its residential projects have been halted and authorities have detained its largest shareholder and his son, according to the city’s government. Developers have proliferated since China began allowing private home ownership in 1998, causing a surge in demand and a rally in residential prices. For years, homebuilders binged on easy credit from banks and shadow financing from non-banks at higher interest rates. Now many developers are struggling with debt as thousands of apartment buildings across the country sit empty and the government abstains from providing further stimulus for the economy.
Banks
Lending Like It’s 2007 Belied by $10 Trillion Hoard - (www.bloomberg.com) For
all the warnings from theFederal
Reserve over
excessive risk-taking as loan growth soars to levels last seen just before the
crisis, bankers still have 10 trillion
reasons to lend. That’s the dollar amount that banks hold in deposits in the
U.S., which exceeded the value of all loans by a record $2.5 trillion last
month. Banks are amassing more cash even as lending to U.S. companies this
quarter is poised to increase by the most since 2007, according to data
compiled by the Fed. The lending surge reflects confidence among the nation’s
banks to extend credit as the Fed scales back its monetary support of the U.S. economy, while the cash cushion may temper the
concerns of regulators who in recent months have warned that excesses may be
emerging in riskier parts of the loan markets. Seven years ago, when banks were
lending at a faster pace, the amount that was lent outstripped cash deposits.
Georgia
teen spends $31K mistakenly deposited into account, now bank wants it back – (www.nydailynews.com) Ten
days after the extravagant mistake was reportedly made, the banking victim
inquired about his missing money but the teen had already withdrawn $20,000
cash and spent $5,000 with his ATM card. He was confronted when returning to
the bank to make another withdrawal. Here's hoping he can still afford a good
lawyer. A Georgia teen whose bank mistakenly deposited $31,000 into his account
has been told to return the money or face legal action. Unfortunately for him,
he had 10 days to spend it and most of it appears to be gone. The extravagant
blunder reportedly began on March 7 when a Madison County man made the
five-figure deposit into his First Citizen Bank account, but a teller dropped
it into the wrong account bearing his same name of Steven Fields, according to
an incident report.
GM halts
most Chevy Cruze sales - (money.cnn.com) General
Motors has halted the sale of most of the Chevrolet Cruzes now on dealer lots.
The Cruze is GM's best-selling car model in the United States, and is also
widely distributed internationally. Spokesman Alan Adler confirmed that the
automaker has ordered a halt to sales of models with the 1.4-liter turbo
engine, the most popular version of the compact car. Adler did not know the
reason for the halt, and said there has not been a recall issued on cars
already sold. The news comes as GM contends with a damaging recall of 1.6
million small cars worldwide due to an ignition switch flaw that has been linked to at least 12 deaths. This stop order is minor in comparison to
that recall, but comes at a bad time, as Congress and federal prosecutors probe why GM did not recall the cars for a decade after it discovered the problem. GM CEO Mary Barra, who has apologized repeatedly for the delays
in the recall, is due to testify before Congresson Tuesday and Wednesday next week.
Failing
Stress Test Is Another Stumble for Citigroup - (www.nytimes.com) Something
didn’t quite seem right to Citigroup earlier this week. The banking behemoth
could show that it had enough capital to ride out an economic storm, but a
regulator was refusing to approve its plan to increase dividends and stock
buybacks, steps intended to please shareholders and build confidence in the
bank’s turnaround. Inside Citigroup, board members and senior executives
expressed bafflement and anger as they prepared for the rejection to be
announced by the Federal
Reserve Wednesday
afternoon, people briefed on the matter said. Was the Fed punishing Citigroup
for a costly fraud last month at its Mexican unit? Was the regulator trying to
look tough? Or was the Fed subtly pressing for a breakup of the bank — a goal
of some regulators, investors and analysts for years? A day after Citigroup’s
capital plan failed the Fed’s stress test for the second time in three years,
bank executives were still struggling to understand the decision and how best
to respond, these people said.
Potential
Crackdown on Russia Risks Also Punishing Western Oil Companies - (www.nytimes.com)
Global Growth at Risk as Ukraine Adds to Known Unknowns - (www.bloomberg.com)
Global Growth at Risk as Ukraine Adds to Known Unknowns - (www.bloomberg.com)
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