KeNo's Housing and Economic Portal: Monday March 2 Housing and Economic stories

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REPORT: The ECB wants Greece to impose capital controls - (www.businessinsider.com) According to Frankfurter Allgemeine Zeitung (FAZ), one of Germany's biggest papers, the European Central Bank (ECB) is pushing for Greece to introduce capital controls. If it's true (and the ECB says it is not) it would be a massive deal. Capital controls would mean investors and ordinary bank deposit holders in Greece would have the amount they can remove immediately drastically reduced. Such controls were introduced in Cyprus in March 2013, during its financial crisis. Here's a rough English translation of the relevant section of the article from FAZ: Greek banks are weakened by large outflows. Since December Greeks, cleared up more than 20 billion from their accounts. In central bank circles it was discussed why the Greek government had not yet introduced capital controls. "The Governing Council and the Governing banking supervisors would be better if there were capital controls to prevent bleeding of the banks," it was said in ECB circles. The Council of the Central Bank also discussed the question of whether and how long the Greek banks in general are still solvent. ELA-emergency loans may only be granted to temporarily illiquid but solvent banks in principle.

Lenders Step Up Financing to Subprime Borrowers - (online.wsj.com) Loans to consumers with low credit scores have reached the highest level since the start of the financial crisis, driven by a boom in car lending and a new crop of companies extending credit. Almost four of every 10 loans for autos, credit cards and personal borrowing in the U.S. went to subprime customers during the first 11 months of 2014, according to data compiled for The Wall Street Journal by credit-reporting firm Equifax. That amounted to more than 50 million consumer loans and cards totaling more than $189 billion, the highest levels since 2007, when subprime loans represented 41% of consumer lending outside of home mortgages. Equifax defines subprime borrowers as those with a credit score below 640 on a scale that tops out at 850. Lenders’ interest in customers who were the hardest hit by the financial crisis reflects both the relative health of the U.S. economy and firms’ desires to take more risks at a time when ultralow interest rates are depressing profits.

Caterpillar Suffers Worst Month Since Lehman, 26 Consecutive Months Of Declining Retail Sales - (www.zerohedge.com) Once upon a time, Caterpillar was the world's industrial bellwether and a Dow Jones Industrial staple. Lately, in addition to suddenly developing a very close relationship with Federal authorities who "are investigating the movement of cash among Caterpillar Inc. ’s U.S. and overseas subsidiaries", CAT has become a completely ignored and forgotten poster name of the "old-economy" (the one in which cash flow still mattered). However, there are those who still believe that the second coming "eyeballs" as the only valuation term category is destined to end in tears, and as such care about how companies like CAT do. Sadly, we have some more bad news: Caterpillar just reported that in January, it suffered its worst retail sales month since Lehman, with global sales plunging 14% from last January.

Why Germany rejected Greece's 'Trojan horse' offer - (www.businessinsider.com) The battle of the leaked documents in Europe continues. The Germans' reasons for refusing to accept Greece's offer Thursday has now been leaked. The German letter says the Greek letter from this morning, offering a compromise, "represents a Trojan horse" which looks to end the current bailout program and acquire bridge financing (which is what the Greeks have been asking for all along). The letter below is all about semantics. If you look at point two, the Germans are demanding very specific language. They want the Greeks to agree to call the deal an extension of the current program, which the Greeks have continued to maintain that they won't do.

U.S. Panel Calls for Taxing Sugary Foods to Curb Obesity – (www.bloomberg.com) US Government getting involved in another aspect of our lives, and goal (as usual) is to generate revenue.

Americans should pay taxes on sugary sodas and snacks as a way to cut down on sweets, though they no longer need to worry about cholesterol, according to scientists helping to revamp dietary guidelines as U.S. obesity levels surge. The recommendations Thursday from the Dietary Guidelines Advisory Committee also call for Americans to reduce meat consumption and to take sustainability into account when dining. The panel released its report as the Obama administration seeks ways to fight obesity, which now affects more than one-third of American adults and 17 percent of children, according to the Centers for Disease Control and Prevention. “What we’re calling for in the report in terms of innovation and bold new action in health care, in public health, at the community level, is what it’s going to take to try and make a dent on the epidemic of obesity,” committee chairwoman Barbara Millen of Millennium Prevention in Westwood, Massachusetts, said in a telephone interview.

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