Wednesday July 8 Housing and Economic stories

TOP STORIES:

U.S. firms fear financing drought as deadline looms for trade bank - (www.reuters.com) A battle in Congress that could shut down the U.S. Export-Import (Ex-Im) Bank next week is already causing headaches for small exporters as they try to stop customers from defecting to foreign competitors and as export financing starts to freeze up. If the 80-year-old export credit-provider loses its operating authority, its proponents argue that thousands of U.S. exporters will suffer and that Washington will lose international economic influence. Its conservative Republican critics say private enterprise will fill the funding gap, calling the bank a source of "crony capitalism" and "corporate welfare" for big companies such as Boeing and General Electric. But smaller firms may be the biggest initial victims if the bank has to stop operating. Newport Beach, California-based Firm Green Inc, for example, fears it may lose its second major Philippines green energy project in a year to the uncertainty over Ex-Im's future.

Britain would not survive a vote for Brexit - (www.ft.com) Promising a referendum on Britain's place in Europe was always a rash gamble -- a tactical swerve blind to the strategic consequences. The stakes have risen. The rest of Europe does not want to see the Brits depart, but the EU would muddle on. For the UK, the choice has become existential. If Britain leaves Europe, Scotland will leave Britain. The union of the United Kingdom would not long survive Brexit. ... if Britain decided to leave Europe -- the more so if, as seems quite likely, the overall No vote combined English rejection with a Scottish preference to stay in the EU. Even Scotland's staunchest unionists admit that their cause would be lost in such circumstances.

Greek problems mask the rising risks in Italy and France - (www.ft.com) Italy and France face mounting problems of high debt, slow growth, unemployment, poor public finances, lack of competitiveness and an inability to undertake necessary adjustments. Reductions in energy prices combined with low borrowing costs and a weaker euro, engineered by the European Central Bank, cannot hide deep-seated and unresolved problems forever. Italian total real economy debt (government, household and business) is about 259 per cent of gross domestic product, up 55 per cent since 2007. France's equivalent debt is about 280 per cent of GDP, up 66 per cent since 2007. This ignores unfunded pension and healthcare obligations as well as contingent commitments to eurozone bailouts. ... France and Italy may not be able to avoid a financial crisis. Real GDP would need to increase at more than twice projected rates to stabilise and then reduce government debt-to-GDP ratios.

Forget Grexit, "Madame Frexit" Says France Is Next: French Presidential Frontrunner Wants Out Of "Failed" Euro - (www.zerohedge.com) There has been some confusion why Germany and the Eurozone are so strict in negotiating with France and unwilling to concede even to the smallest of what they deem as outlandish Greek demands. The reason is not so much whether Spain or even Italy, both countries with soaring unemployment, a lost generation and a sweeping movement against "austerity", follow with comparable demands should Europe concede to Tsipras, but France, where the frontrunner for the next president, the National Front's Marine Le Pen, has just warned that not only is a Grexit inevitable, but that France would follow shortly.

Icahn warns market is ‘extremely overheated’ - (www.marketwatch.com) Activist investor Carl Icahn took to Twitter and CNBC Wednesday to issue a stark warning to investors: “I think the public is walking into a trap again as they did in 2007,” Icahn told CNBC. Specifically, the 79-year-old investor warned of a bubble in high-yield debt. The prominent investor joins a chorus of voices pointing at frothiness in the so-called junk-bond market, including DoubleLine Capital founder Jeff Gundlach. In two tweets published on Wednesday, Icahn cautioned against listening to so-called permabulls, saying the 2008 crisis might have been avoided if more investors had warned about the risk of a bubble in 2007, as he is attempting to do now.

OTHER STORIES:

European Stocks Retreat as Creditors Reject Greece’s Proposals - (www.bloomberg.com)
Greece Handed New Terms as Tsipras Approaches Decision Time - (www.bloomberg.com)
Divisions Remain as Eurozone Finance Ministers Meet Over Greece Deal - (online.wsj.com)
How Draghi Shifted ECB Crisis Tactic Amid Greek Brinkmanship - (www.bloomberg.com)

Japan’s Nikkei Hits Highest Level in More Than 18 Years - (online.wsj.com)
French prime minister: US must act fast to repair damage from NSA spying revelations - (www.washingtonpost.com)
China to widen draft security law to cover space, sea, polar interests - (www.reuters.com)