KeNo's Housing and Economic Portal: Wednesday May 13 Housing and Economic stories

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U.S. Firms Shoulder Rising Debt - (online.wsj.com) Companies and consumers are on a borrowing spree and, for now, are in a strong position to pay the money back. U.S. corporate-debt issuance is running at its fastest clip ever in 2015 after three consecutive record years. Borrowing by investors against their stockbrokerage accounts has risen to fresh records. And household borrowing has picked up after plunging during the “Great Recession.” But while many leverage indicators are rising, bullish stock and bond investors stress that many measures of broad economic health and income are rising as well. The increased borrowing is a sign that companies and individuals are feeling more confident about taking risks as a strengthening economy makes the debt more manageable, according to experts who say that the level of indebtedness isn’t yet a cause of concern the way that it was before the financial crisis.

IMF takes hard line on aid as Greek surplus turns to deficit - (www.ft.com) Greece is so far off course on its $172bn bailout programme that it faces losing vital International Monetary Fund support unless European lenders write off significant amounts of its sovereign debt, the fund has warned Athens’ eurozone creditors. The warning, delivered to eurozone finance ministers by Poul Thomsen, head of the IMF’s European department, raises the prospect that it may hold back its portion of a €7.2bn tranche of bailout aid that Greece is desperately attempting to secure to avoid bankruptcy. Half of the €7.2bn, which is the subject of intense negotiations between Athens and its creditors in Brussels-based talks that resumed on Monday, is due to come from the IMF. Without the funds, Greece is expected to run out of cash this month. Eurozone creditors, who hold the vast bulk of Greek debt, are adamantly opposed to debt relief. But IMF support is crucial both for its funds and to sustain political backing for the Greece bailout, particularly in Germany.

Fed loan officer survey cites expected credit trouble in energy sector - (www.reuters.com) Bank lending officers said they expect more bad loans among companies in the energy sector, and have begun taking steps to protect against the downturn among oil and gas companies, according to a Fed survey released on Monday. The quarterly survey covered senior loan officers at 76 U.S. banks and 23 branches of foreign banks. Overall, the loan officers reported a slight easing of lending conditions in key categories like commercial real estate, construction and land development, and home mortgages. The loan officials also reported stronger demand in the real estate sector overall, both for commercial loans and for home mortgages. They reported little change in lending conditions for business loans, with some banks saying they had tightened standards because of issues like economic uncertainty, but a similar number saying they had eased conditions because of increased competition among banks for business lending.

Poland to buy U.S. Patriot missiles, French helicopters - (www.reuters.com) Poland said on Tuesday it would buy Raytheon Co's (RTN.N) Patriot missiles from the United States and provisionally selected French Airbus Group (AIR.PA) helicopters as it speeds up the modernization of its military amid tensions with Russia. The choice of suppliers, in deals potentially worth $8 billion, strikes a trans-Atlantic balance as Eastern Europe's largest economy re-arms itself on NATO's frontline while edging towards a bigger role in Europe's defence industry. "For the armed forces' technical modernization and the Polish armed forces' resilience to be effective, the so-called anti-missile shield ... had to become the priority of priorities," said Polish President Bronislaw Komorowski. Poland will enter exclusive talks with the U.S. government on the Patriot missile defence system. It plans to buy eight missile batteries by 2025, including two within three years of signing. A consortium of France's Thales (TCFP.PA) and European group MBDA was also competing for the $5 billion missile defence contract - the largest in Poland's military history.

Greek Pensioners Crash Pension Fund Board Meeting, Form Lines At Banks - (www.zerohedge.com) On Thursday we noted that no matter how tempting it may be to tune out the almost hourly warnings from various sources claiming Greece is finally set to run out of cash, one can’t just assume the government will yet again find another couch cushion to reach into in order to scrape up a few more euros to pay government employees and creditors and thereby forestall the inevitable for another few weeks. Eventually, there simply will be no more money and the first signs that Greece has entered the final, terminal phase in the long and painful road to complete insolvency showed up last month in the form of a sweeping decree which required municipalities to transfer excess cash to the central bank. That mandate was greeted with incredulity and with the country’s local governments less than willing to turn over their funds, Athens finally ran out of money (if only for 8 or so hours) on Tuesday when pensioners showed up at ATMs only to discover that their money simply was not there. Amusingly, the government blamed the delay on a “technical glitch”, and while we suppose it’s not exactly a lie to call running out of money a “technical glitch”, it was abundantly clear that the country’s socialist saviors were making a feeble attempt to avert a pensioner mutiny. Today, we get more details about the situation and sure enough, the retirees are restless.

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