KeNo's Housing and Economic Portal: Monday April 6 Housing and Economic stories

Sunday, April 5, 2015

Monday April 6 Housing and Economic stories

TOP STORIES:

Bond Traders Fear Oct. 15-Style Volatility Could Repeat - (www.bloomberg.com) A group of U.S. Treasury market professionals sponsored by the Federal Reserve Bank of New York expressed concern that the large gyrations seen in that market on Oct. 15 could be repeated in the future, according to minutes of their meeting released Monday. “Members generally suggested that, given the structural changes in the market, including growth of automated trading and impact of regulations, there is an increased potential for further episodes of volatility and impaired liquidity in Treasury markets,” minutes of the Treasury Market Practices Group’s Feb. 26 meeting showed. On Oct. 15, U.S. Treasury trading volume soared to record levels as yields on the 10-year note tumbled 0.34 percentage point to a low of 1.86 percent that day. Most of that drop occurred in a 10-minute span from 9:30 a.m. in New York, before yields ended the day at 2.14 percent.

No End in Sight for Bond Rally as ECB Spigot Spills Across Globe - (www.bloomberg.com) Eventually, analysts who keep forecasting an end to the bond market’s bull run will be correct. For now, they’re still wrong. Just when it seemed bond yields that averaged 1.6 percent at year-end couldn’t get any lower, Mario Draghi and the European Central Bank flooded the market with cheap cash. That pushed yields in Bank of America Merrill Lynch’s Global Broad Market Index to 1.39 percent on Monday, within 0.06 percentage point of the record low reached in January. Even as the Federal Reserve prepares to raise interest rates from near zero, the ECB’s trillion-euro bond-buying plan is pushing investors to accept negative yields on more than $1.9 trillion of sovereign debt worldwide. Fixed-income assets from government debt to corporate bonds are poised for gains of 1.8 percent in the first three months of 2015, a seventh straight quarterly gain that has defied analysts at firms from Pacific Investment Management Co. to JPMorgan Chase & Co.

Millions of Americans have little to no money saved - (www.cnbc.com) Millions of Americans have no savings set aside for a rainy day, leaving them in serious jeopardy if financial calamity strikes, according to two new studies released this week. Roughly a third of American adults don't have any emergency savings, meaning that over 72 million people have no cushion to fall back on if they lose a job or have to deal with another crisis, according to a survey released today by NeighborWorks America, a national non-profit that supports communities. "This is troubling,'' Paul Weech, president and CEO of NeighborWorks America, said in an e-mail. "We're concerned because our survey shows that many people are still digging themselves out of the hole that they found themselves in during the Great Recession.'' With the Bureau of Labor Statistics reporting in February that the average length of unemployment was 31.7 weeks, savings could be a lifeline to surviving day to day. "It takes the average unemployed person a long time to find new employment, often longer than their emergency savings would last," Weech says.

Investors flee market at crisis-level pace - (www.cnbc.com) Recent market volatility has sent stock market investors rushing for the exits and into cash. Outflows from equity-based funds in 2015 have reached their highest level since 2009, thanks to a seesaw market that has come under pressure from weak economic data, a stronger dollar and the the prospect of monetary tightening. Funds that invest in stocks have seen $44 billion in outflows, or redemptions, year to date, according to Bank of America Merrill Lynch. Equity funds have seen outflows in five of the last six weeks, including $6.1 billion in just the last week. U.S. equities have been particularly hard-hit, with the group surrendering $10.8 billion last week, BofAML reported.

San Francisco real estate has gotten so crazy that this startup founder was offered stock options for his house - (www.businessinsider.com) From million-dollar teardowns to homes selling for 70% above their asking price, there have been plenty of crazy stories about the San Francisco real estate market. This one might take the cake. Joe Fernandez, cofounder of social influence startup Klout, was looking to sell his Noe Valley home before making the move to Los Angeles with his wife. The home, a three-bedroom Victorian house whose gutting and renovation had been featured in the New York Times, was listed for $1.895 million at the beginning of March. Fernandez said hundreds of people showed up for the open house in the days that followed.

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