Thursday, September 25, 2014

Friday September 26 Housing and Economic stories


Albania Central Bank Governor Arrested Over Theft Of $7 Million From Bank Vaults
- (www.zerohedge.com) As it turns out, since there is a central bank involved, there is once again more than meets the eye, and the story has since mutated into something far more grotesque than even we could imagine, with news coming out late last week and over the weekend that not only was the theft by "two employees" a misdirection, but that the guilty party was none other than the Albanian version of Janet Yellen, the governor of the central bank himself Ardian Fullani. From Reuters: Albania's central bank governor Ardian Fullani was arrested on Friday evening in his office on charges of abuse of office over the theft of 713 million lek (6.63 million US dollar) from the bank's vaults, the prosecutor's office told Reuters. Fullani had refused to step down despite protests by citizens who started a petition to demand his dismissal. He had won a confidence vote in the supervisory board by a landslide. Fullani is the 17th bank employee to be arrested in the case.

Draghi Plea for ABS Support Rebuffed by France, Germany - (www.bloomberg.com)  Mario Draghi asked European governments to help him help them. The answer so far is “no.” France and Germany, the euro area’s two largest economies, will say they’re not interested in providing state guarantees for the European Central Bank president’s asset-purchase program announced last week, according to a draft document obtained by Bloomberg News. Draghi asked governments to guarantee some elements of asset-backed securities, bundled loans that the ECB plans to purchase to unlock funding in the region’s stalling economy. After rolling out interest-rate cuts and long-term loans to banks, the ECB is now turning up the pressure on political leaders to put their own money on the table. “Some actors have called for a public intervention, to facilitate the development of the securitization market, notably to improve the economics of securitization,” the French and German governments wrote in a paper that may be presented at a meeting of the region’s finance ministers in Milan this week. “An intervention in the form of a public guarantee would be problematic.” The German and French finance ministries declined to comment on the subject of guarantees today.

The American family makes $200 more a year than it did in 1989 - (www.marketwatch.comAs of a year ago, typical U.S. households still hadn’t recovered all of the wealth they lost in the Great Recession of 2008-09, according to the latest Survey of Consumer Finances released by the Federal Reserve on Thursday. Median net worth fell 2% (inflation-adjusted) between 2010 and 2013 to $81,200 per family, down about 40% from the $135,400 they had in 2007, just before home prices and stock prices plunged, the Fed reported. (The median means that half of families had more wealth, and half had less. Net worth is the value of all assets minus the value of all liabilities or debts.). The Survey of Consumer Finances is considered one of the most comprehensive studies on income, wealth and debt. Unfortunately, it’s only produced every third year, and it’s published about 18 months after the survey. A lot can change in that 18 months, including a 14% increase in home prices and a 30% gain in the stock market.

"Why This Stock Market Will Never Go Down" - (www.zerohedge.com) Presenting: "Why this stock market will never go down" which contains such stunning pearls of financial insight as the following: Everyone believes the U.S. stock market has reached a permanently high plateau. Everyone, that is, but the bears. Last week’s Investors Intelligence survey showed bearish sentiment at its lowest since 1987 (13.3%). In fact, short-sellers have nearly disappeared along with the few remaining bears. In addition, the VIX is at historic lows (near 12), which reflects investor complacency. Put another way, almost no one believes this market will go down. Wait, "permanently high plateau"? When was the last time we heard that line. Oh wait, nevermind. That said, the author does point out the clear inherent falacy in his premise, namely that there no longer is any retail participation in a market which everyone realizes is too rigged, too manipulated and too broken to hope to even break even: Ironically, retail investors are not as gung-ho about the market as in the past. Viewership of financial television programs is at 20-year lows, especially in the coveted 25-to-54 age group. It’s a sign that even as the market climbs higher, interest in the stock market is falling along with volatility.

Consumer Credit in U.S. Surges on More Loans for Automobiles - (www.bloomberg.com) Consumer borrowing in the U.S. rose more than forecast in July as non-revolving loans including those for cars climbed by the most in three years. The $26 billion increase in credit and exceeded the highest forecast in a Bloomberg survey and followed an $18.8 billion advance in June that was more than previously estimated, a report from the Federal Reserve in Washington showed today. Non-revolving loans, which include borrowing for autos and college tuition, climbed $20.6 billion, the biggest gain since July 2011. Credit-card lending rose for a fifth straight month. A stronger job market and rising home values are giving households the confidence to take on debt to buy big-ticket items such as motor vehicles. Banks are also becoming more willing to lend, which could encourage more consumers to boost their spending, which makes up the biggest part of the economy.





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