Thursday, July 23, 2015

Friday July 24 Housing and Economic stories


Hedge Funds Hit by China Markets Selloff - (online.wsj.com) Hedge funds investing in China have seen this year’s big gains eroded by the recent market selloff, highlighting the downside of investing in an environment where managing risks is difficult and government actions are unpredictable. Chinese shares in Shanghai and Hong Kong were hit by selling again Tuesday, following a three-day rebound. The benchmark Shanghai Composite Index fell 1.2% and is down 24% from its 7½-year high hit on June 12. Several hedge funds, operating in a market still dominated by mom-and-pop investors and with scant opportunity to make money when markets are falling, have suffered steep losses. “Up until the end of last month, most people thought it was a healthy correction,” said Richard Johnston, Asia head for alternative-investments consultancy Albourne Partners Ltd. “I think it went a lot further than many people thought.”

Richmond: Mayor's properties prompt calls to sit out vote on rent control - (www.contracostatimes.com) As Richmond hashes out whether to pass rent control or at least create a rent mediation board to consider unreasonable rent increases -- a battle that has stretched out for months -- a new wrinkle has surfaced: Should the mayor, a landlord with multiple properties, recuse himself from the impending decision? It depends on whom you ask. The advocacy group Alliance of Californians for Community Empowerment that has regularly organized tenants to show up at city council meetings with signs pushing for rent control, says yes. So does Tenants Together, a tenants' rights group based in San Francisco that has also spoken at Richmond meetings. Mayor Tom Butt has refused to acquiesce to the demands, saying his interest is indistinguishable from hundreds of other property owners in the city and therefore does not constitute a conflict of interest. Butt owns one single-family rental home, one duplex, six commercial units in Point Richmond and is a partner at Baltic Development Associates, a commercial real estate company. None of his properties would be subject to rent control, which exempts single-family homes and all commercial properties.

Investors in China not allowed to jump - (www.ft.com) Zhu Rongji, when mayor of Shanghai, apparently once complained about the retail investors who would sometimes protest outside city hall when the value of their portfolios collapsed. In a perhaps apocryphal quip, Mr Zhu — who went on to become Chinese premier — claimed it would have been easier to be mayor in the city’s pre-revolutionary 1920s and 30s heyday, when angry investors were more likely to jump out of windows. It has been 12 long years since Mr Zhu retired, denying journalists the pleasure of his acerbic wit. But his observation about those so-called ‘mom and pop’ investors still resonates as the ruling Chinese Communist party attempts to rescue the country’s stock markets from their worst crisis since the Shanghai exchange was reconstituted in 1990. At issue is the nature of China Inc’s relationship with the markets — and Mr Zhu’s complaint cuts to the heart of this. Because when one of the party’s favourite slogans, wei renmin fuwu (serve the people), morphs into wei gumin fuwu (serve the investors), it has important implications for listed companies and their shareholders.

Puerto Rico Faces Its Creditors in Early Debt Resolution Talks - (www.nytimes.com)  If a meeting on Monday between Puerto Rico and its creditors is any indication, restructuring the island’s $72 billion in debt could be a long process. At that meeting, the commonwealth’s finance team said it had not yet determined how it would seek to revamp the island’s obligations. The roughly 350 creditors, such as hedge funds and money managers, that had packed into a Park Avenue auditorium on Monday afternoon were told they would have to wait several more weeks until a working group made up of Puerto Rico political leaders came up with formal recommendations for ending the island’s fiscal crisis. “I ask for your patience while we develop a credible plan that meets all of our stakeholders’ objectives,” Melba Acosta Febo, the president of the Government Development Bank for Puerto Rico, told the creditors gathered at Citigroup’s executive headquarters.

Greece’s Banks Are Next in Line for a European Bailout - (www.nytimes.com) Eurozone leaders acknowledged on Monday what has become increasingly obvious to everyday Athenians: Greek banks need a bailout, too. Among its many proposed measures, the new accord between Greece and its European creditors calls for an overhaul of Greece’s rickety banking system, including money to replenish capital and, if needed, to close insolvent lenders. Despite the tentative deal, the European Central Bank, which has been keeping Greek banks propped up for months with emergency loans, declined on Monday to provide additional cash. The central bank’s governing council is waiting for the Greek Parliament to ratify the deal before taking on any more risk from Athens. Parliament must approve at least some of the measures by Wednesday for the deal to move forward.



Retail Sales in U.S. Unexpectedly Fall on Broad-Based Retreat - (www.bloomberg.com)
Exclusive: Greece needs debt relief far beyond EU plans - Secret IMF report - (www.reuters.com)
Greek lawmakers split over bailout as vote looms - (www.reuters.com)
Greece Faces ECB Cliffhanger Monday as EU Engineers Bridge Funds
- (www.bloomberg.com)
Greece crisis: Osborne seeks to block use of British-backed fund in bailout - (www.theguardian.com)
The Latest: Germany says Greece needs 1st loan by next week
- (finance.yahoo.com)
Some in German Government Preferred Temporary Grexit: Schaeuble - (www.reuters.com)

Greek Reforms Would Face Political, Legal Backlash in Germany - (online.wsj.com)
China’s Credit Expands in June as Stimulus Efforts Kick In
- (www.bloomberg.com)
China Said to Consider Extra 1 Trillion Yuan Debt-Swap Quota
- (www.bloomberg.com)
Hedge Funds Hit by China Markets Selloff
- (online.wsj.com)

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