Friday May 29 Housing and Economic stories

TOP STORIES:

Brazil's Massive Corruption Scandal Is Rocking Its Once-Superstar Economy - (www.bloomberg.com) Some Brazilians worry that the biggest corruption scandal in their nation's history will end in what is known in their country as a pizza party, meaning the accused will find a way to get away with it. While their fate remains to be seen, both the economy and society have been rattled. Here are some overlooked ways in which Operation Carwash — the probe into bribery and corruption that began with state-run oil company Petrobras only to extend its tentacles much farther — is affecting what was once a developing-world darling.

CONGRESS TELLS COURT THAT CONGRESS CAN’T BE INVESTIGATED FOR INSIDER TRADING - (www.firstlook.org) In a little-noticed brief filed last summer, lawyers for the House of Representatives claimed that an SEC investigation of congressional insider trading should be blocked on principle, because lawmakers and their staff are constitutionally protected from such inquiries given the nature of their work. The legal team led by Kerry W. Kircher, who was appointed House General Counsel by Speaker John Boehner in 2011, claimed that the insider trading probe violated the separation of powers between the legislative and executive branch. In 2012, members of Congress patted themselves on the back for passing the STOCK Act, a bill meant to curb insider trading for lawmakers and their staff. “We all know that Washington is broken and today members of both parties took a big step forward to fix it,” said Rep. Bill Johnson, R-Ohio, upon passage of the law.

Greece wants Europe's bailout fund to pay maturing bonds - (www.reuters.com)  Greece has proposed to its international lenders that Europe's bailout fund pay back maturing Greek government bonds held by the European Central Bank as a way to overcome a funding crunch, Finance Minister Yanis Varoufakis said on Monday. Athens could then pay the European Stability Mechanism (ESM), at a later date, Varoufakis told the annual assembly of the Greek Industrial Federation. "We are proposing, in the last period, what many specialists are proposing internationally: for the ESM to intermediate, to pay the ECB and then the Greek state can repay the ESM over the long term after an agreement with our lenders," he said. Greece needs to strike a deal with its creditors by the end of the month to stay afloat, the government said on Monday.

China’s record capital outflows spark financial stability fears - (www.ft.com) Capital is flowing out of China at a record pace, sparking fears over financial stability and complicating efforts by the central bank to support a slowing economy with lower interest rates. China ran a balance of payments deficit of $80bn in the first three months of the year, the largest quarterly net outflow on record, according to official data. The outflows are all the more striking because China’s trade surplus remained strong over the period. As falling commodity prices slashed the country’s import bill, it recorded a $79bn current-account surplus — the largest in nearly five years. But this was overwhelmed by outflows on the capital and financial accounts worth a record $159bn. The lure of China's surging stock market also failed to counter the outflow trend. 

Here Are the Winners and Losers of Puerto Rico's Debt Crisis - (www.bloomberg.com)  Puerto Rico and its agencies have amassed $72 billion of debt as the junk-rated island's economy has shrunk every year but one since 2006. Investors bought the securities, which are tax-exempt in all U.S. states, for their relatively higher yields. There are fewer residents to help repay the obligations: The island's population has declined 7 percent in the past decade as residents moved to the U.S. mainland. That combination of rising debt, sluggish economy, and falling population has pushed yields on Puerto Rico debt above those of Greece. The securities have been trading at distressed levels for nearly two years as investors doubted the commonwealth's ability to repay its debt on time and in full. Puerto Rico warned in its latest quarterly filing that it may place a moratorium on debt payments in fiscal year 2016 if the government can't cut spending or raise enough revenue.

OTHER STORIES:

Here Are the Winners and Losers of Puerto Rico's Debt Crisis - (www.bloomberg.com)
Euro, bond yields tumble as ECB hints at faster buying pre-summer - (www.reuters.com)
Greek Leaders Say Deal Is Within Reach Amid Creditor Doubts - (www.bloomberg.com)
Coeure Says ECB Will Moderately Frontload QE in May, June - (www.bloomberg.com)

Greek Finances to Stagger On Longer Than You Think - (www.bloomberg.com)
Merkel Seeks to Head Off Party Revolt Against Greek Deal - (www.bloomberg.com)
Hedge Fund Diners Get ECB’s Market-Moving News Hours Early - (www.bloomberg.com)
Japan Finance Ministry draft reveals deep rift on fiscal reform - (www.reuters.com)