KeNo's Housing and Economic Portal: Wednesday June 10 Housing and Economic stories

TOP STORIES:

EUROZONE IN CRISIS: €800 million bank run sparks fears of Greek exit from single currency - (www.express.co.uk) DEBT-STRICKEN Greece could be forced out of the Eurozone unless it reaches a last-ditch deal with its creditors, it was warned today. A staggering €800 million (£570 million) has been pulled out of Greek banks in less than 48 hours, sparking fears of a major bank run. Jack Lew, the US Treasury secretary, warned a deal must be reached now and the minor details sorted out later, otherwise "an accident" could unfold forcing Greece from the Eurozone. Mr Lew's comments came as negotiators continue to struggle to agree on means that would unlock bailout money desperately needed by Greece. The country, which has been stuck in a deep debt crisis for the past five years, is due to pay back €300 million (£21 million) to the International Monetary Fund next Friday. However, the IMF has said that deadline could be pushed back until later in June. Mr Lew said the world economy faces dire consequences if Greece and its creditors miss the extended deadline.

Bad Debts Prompt China’s Banks to Balk at Loan-Backed Bond Call - (www.bloomberg.com) Just as Premier Li Keqiang steps up efforts to revive China’s loan-backed bond market to spur the economy, banks are balking. Chinese lenders have cut offerings of asset-backed securities 45 percent to 43.4 billion yuan ($7 billion) this year, after a 15-fold jump in 2014, Bloomberg-compiled data show. They have reduced loans for four straight months, even as policy makers expanded the securitization quota by 500 billion yuan to free up space on their balance sheets for fresh lending. The wariness contrasts with mounting support for asset-backed bonds among regulators, who reversed course in 2012 to allow sales they’d banned in 2009 after the products helped spark the global financial crisis. A jump in bad loans last quarter to the worst since 2008 amid the weakest economy in more than two decades has made banks hesitant to package their higher quality assets into debt securities.

China Stock Rout Grips Market With Deja Vu of 2007 Catastrophe - (www.bloomberg.com) The rout wiped out about $350 billion of market value in a week on the Shanghai and Shenzhen exchanges. It so traumatized traders that eight years later they still refer to the decline by the date it began: the 5/30 catastrophe. The milestone for the modern Chinese stock market, which began in 1990, started on midnight, May 30, 2007, with Hu Jintao’s government unexpectedly announcing it would triple a tax on stock trading. The plunge sparked by the pronouncement had followed a breathless rally, making it eerily similar to last week’s events. On Thursday, stocks erased almost $550 billion in value after surging 143 percent on the Shanghai Composite Index over the past year. Traders could be forgiven for a wave of deja vu mixed with a dollop of dread: In 2007, stocks recovered from their May losses only to drop more than 70 percent over the next 12 months from an October peak. The Shanghai Composite gained 4.7 percent at the close Monday, its biggest gain in four months.

How The US Indirectly Armed ISIS With Over 2,300 Humvees – (www.zerohedge.com) Curious how and why the US is "boosting" US GDP by selling over $4 billion worth of weapons to Israel, Iran and Saudi Arabia, ostensibly to provide these countries with protection against ISIS (the same ISIS, incidentally, which a leaked document last week admitted had been effectively created by the US)? Simple: by first "losing" a billion dollars worth of Humvees so that, drumroll, ISIS can be the best-armed "terrorist" force in the middle east, a force whose mere presence will demand billions in subsequent military orders from the US military-industrial complex by all those who are threatened by ISIS. AFP reports that Iraqi security forces lost 2,300 Humvee armored vehicles when ISIS overran the northern city of Mosul, Prime Minister Haider al-Abadi said on Sunday. "In the collapse of Mosul, we lost a lot of weapons," Abadi said in an interview with Iraqiya state TV. "We lost 2,300 Humvees in Mosul alone." While the exact price of the vehicles varies depending on how they are armored and equipped, it is clearly a hugely expensive loss that has boosted ISIS's capabilities. Last year, the State Department approved a possible sale to Iraq of 1,000 Humvees with increased armor, machineguns, grenade launchers, other gear and support that was estimated to cost $579 million.

Obamacare unravel could be lose-lose: Experts - (www.cnbc.com) Conservatives will find themselves in a tough spot if a Supreme Court challenge to President Barack Obama's signature health care law results in the loss of subsidies for millions of Americans, two doctors told CNBC on Monday. Any day now, the Supreme Court is expected to decide whether language in the Affordable Health Care Act prevents the government from issuing subsidies to people who purchased health care on federal exchanges. The challenge being mounted in King v. Burwell threatens the subsidies issued in 34 states that did not establish state-run exchanges and are instead served by HealthCare.gov. GOP lawmakers have put forward a number of measures that would extend benefits that subsidize the cost of coverage for Americans who purchased plans on federally administered health care exchanges. Such an extension would create a solution through the 2016 presidential election, but a ruling against subsidies could create disruptions in important spots on the electoral map.

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