Tuesday July 21 Housing and Economic stories

TOP STORIES:

Chinese Capital Flight Overwhelming NZ Property Market – (www.nzherald.co.nz)  Mainland Chinese money snapped up at least 80 per cent of residential sales in parts of Auckland in March but were nearer 90 per cent in May, a whistle blower from the industry says. The Herald reported at the weekend Labour data that showed people of Chinese descent accounted for 39.5 per cent of the almost 4000 Auckland transactions between February and April. Yet Census 2013 data showed ethnic Chinese who are New Zealand residents or citizens account for only 9 per cent of Auckland's population. The property insider - who wanted to protect their identity because they feared for their job - said the situation was much more serious than the Labour data suggested. The numbers should be more than doubled due to the weight of capital coming out of Mainland China, the whistle blower said.  One big Auckland real estate agency, where many salespeople are of Chinese ethnicity, was selling almost every single property throughout many suburban areas to people living in China, the insider said.

[Bradsher] Signs of a Growing Hush in China’s Economy - (www.nytimes.com) As China’s stock market tumbled over the last month, some wealthy apartment owners began trying to sell. Shopping malls became quieter. And customers at automobile dealerships across the country asked to defer delivery and payment for previously ordered cars. While share prices have rebounded modestly in recent days, many business owners in China remain nervous, as they start to notice a perceptible economic chill. “Of course car sales have not returned to normal levels — people are still very wary,” Cui Dongshu, the secretary general of the China Passenger Car Association, which represents manufacturers, said on Friday. “They feel this spike in the stock market today is probably not sustainable.” Even with the rebound, $3.1 trillion in market value, much of it financed with borrowed money, has been erased since mid-June. Many experts worry about the damage to the Chinese economy, particularly if stocks continue to fall. Consumer confidence could suffer, weighing on the country’s growth and on economies elsewhere that depend on exports to China.

Goldman Sachs could be sued for helping Greece hide debts when it joined euro - (www.independent.co.uk)  Goldman Sachs faces the prospect of potential legal action from Greece over the complex financial deals in 2001 that many blame for its subsequent debt crisis. A leading adviser to debt-riven countries has offered to help Athens recover some of the vast profits made by the investment bank.

The Independent has learnt that a former Goldman banker, who has advised indebted governments on recovering losses made from complex transactions with banks, has written to the Greek government to advise that it has a chance of clawing back some of the hundreds of millions of dollars it paid Goldman to secure its position in the single currency. The development came as Greece edged towards a last-minute deal with its creditors which will keep it from crashing out of the single currency. The deal is based on fresh economic reform proposals submitted by Athens which bear a striking similarity to the creditors’ offer rejected by the Greek people in a referendum last Sunday – sparking claims that Prime Minister Alexis Tsipras has effectively executed a huge U-turn in order to avoid a catastrophic “Grexit”.

French comeback exposes rift in eurozone core  - (www.ft.com) Paris made a surprise comeback on the European stage this week. As the crisis over Greece approaches a decisive moment, President François Hollande has presented himself as a potential bridge builder between Athens and its creditors. His officials also reportedly helped draft the reform proposal that Alexis Tsipras, Greek prime minister, sent to the lenders late on Thursday night. Such moves were eye-catching. Until now Paris has largely, if reluctantly, quietly followed Berlin’s eurozone policy of providing aid but at the same time pushing hard for reforms to the governance of the euro area that follow German economic thinking. Now, by opposing Berlin’s position on how to deal with Greece, Paris has exposed a deep rift in the euro area about the very nature of monetary union itself. Disagreement between the two main continental European powers — the fabled Franco-German motor — is nothing new. Over the past six decades, European integration has frequently been achieved through a process in which profound differences between France and Germany were resolved in hard-fought compromises that mostly worked because they were seen as a fair deal and accepted by other EU member states.

​Iranian bank joins SWIFT, breaking blockade - (www.rt.com)  Iran's Day Bank has announced joining the SWIFT transaction system, which facilitates worldwide bank transfers. The private system cut off Iranian financial institutions in 2012 amid a US-led campaign to cripple the country's economy. The Society for Worldwide Interbank Financial Telecommunication (SWIFT) blocked 30 Iranian banks from its services after the EU joined American sanctions against the Iranian banking sector. Now the financial blockade appears to be crumbling, as Day Bank governor Ahmad Shafizadeh announced joining the system after a lengthy campaign, the Iran News Daily reported. Representatives of Belgium-based SWIFT reportedly visited Tehran in April to meet officials from Iranian private banks over a possible resumption of its services in the country.

OTHER STORIES:

Germany mulling five-year 'temporary Grexit' plan - (news.yahoo.com)
Euro zone ministers demand more from Greece for loan talks - (www.reuters.com)
European Hardliners Call Greece Trust Deficit Key Hurdle to Deal - (www.bloomberg.com)
German finance minister accuses Greek leaders of 'destroying trust' - (www.telegraph.co.uk)
Greek Debt Crisis Pits Greeks Against Germans - (www.nytimes.com)
Eurozone finance ministers split over Greece - (www.ft.com)

Greek Bailout Dissected as German Skepticism Clouds Talks - (www.bloomberg.com)
Euro zone not certain to agree Greek bailout: sources - (www.reuters.com)
Europe weighs Greece’s ability to enact austerity - (www.washingtonpost.com)