KeNo's Housing and Economic Portal: Monday August 24 Housing and Economic stories

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Yuan Slide Slams Emerging Nations as Stocks Approach Bear Market - (www.bloomberg.com) Emerging-market stocks fell toward the lowest level since 2011 and currencies retreated on concern China will curtail imports from some countries after the biggest slide in the yuan in two decades. The selloff took the MSCI Emerging Markets Index’s decline from a peak last September to 20 percent, the threshold for a bear market on a closing basis. Shares in Indonesia slumped to a 17-month low. Russia’s ruble weakened 2 percent against the dollar while currencies from Brazil to Chile fell at least 1.1 percent. Turkish assets rallied after parties agreed to continue coalition talks. China’s central bank cut its reference rate by 1.9 percent, triggering the yuan’s steepest one-day loss since the nation unified official and market exchange rates in 1994. Credit and currency markets in Brazil, Peru and Chile are exposed due to their reliance on China for exports, Commerzbank AG said. Russia and South Africa count China as their biggest trading partner.

China's shadow banking sector collapsed in July - (www.ft.com) Lending in China's shadow banking sector appears to have collapsed in July, after China's equity market fell by a third and more than half of listed companies suspended their shares to avoid the turmoil. New data show that "aggregate financing," the broadest measure of Chinese new credit available, was just Rmb718.8bn ($116bn) last month — 61 per cent lower than a month earlier, according to the National Bureau of Statistics. It's also 29 per cent below forecasts. Details suggest banks flooded the market with liquidity, but that shadow banks cut off the tap. "New yuan loans", which track loans in the normal backing sector, were Rmb1.48tn, almost double forecasts at Rmb750bn, according to Bloomberg. It's rare for new renminbi loans to be higher than the aggregate figure, as it means shadow activity actually contracted in the month. The last time this happened at all was in early 2009. Moreover, new renminbi loans outpaced lending in the shadow banking sector by the biggest amount since records began in 2002.

Seattle to tax guns and bullets – (money.cnn.com) Seattle is ready to tax guns and bullets. The City Council unanimously passed a special tax on Monday, and Mayor Ed Murray signaled his support for the measure. The new law will impose a $25 tax on guns and a 5-cent tax on bullets sold within the city limits. Lawmakers called it a "gun violence tax" because proceeds would be used for prevention and research programs to reduce gun violence in Seattle. The law is based on a similar $25 gun tax that passed in Cook County, Illinois, in 2013. The Seattle budget office estimates the law will raise $300,000 to $500,000 a year. Seattle estimates that direct medical costs from gunshot wounds totaled $17 million last year, with taxpayers picking up $12 million of the costs. The Urban Institute estimated that gun violence costs U.S. taxpayers $500 million a year.

Meet the New King of Subprime Lending - (online.wsj.com) Wesley Edens still rues his decision not to bet against subprime mortgages before the financial crisis. That left Fortress Investment Group LLC, the private-equity and hedge-fund firm where he is co-founder and co-chairman, exposed to big losses that sank its stock price below $1. On Wall Street, the best way to get over a losing trade is to bounce back with a winner. Mr. Edens is enjoying a surprising whopper: subprime loans. A resurgence in loans to Americans with scuffed or limited credit is giving Fortress one of the largest financial windfalls in the history of the private-equity industry. The New York company’s majority stake in subprime lender Springleaf Holdings Inc. has ballooned in value to $3.5 billion—putting the firm’s gain at more than 27 times Fortress’s original investment of $124 million in 2010. Buying the stake was Mr. Edens’s idea.

KKR’s Samson Said Planning for Bankruptcy as Soon as Aug. 15 - (www.bloomberg.com) Samson Resources Corp. is close to entering an agreement with its lenders that will put the energy company into bankruptcy court as soon as Aug. 15, according to two people with knowledge of the matter. The company is talking with loan holders led by Silver Point Capital LP and Cerberus Capital Management LP to iron out details on a proposal that would give the company a loan of about $300 million to fund operations during Chapter 11 proceedings, said one of the people, who asked not to be identified because the negotiations are private. Lenders would gain control of the gas producer from investors led by KKR & Co., that person said. If a restructuring plan isn’t complete by Aug. 15, when a $110 million interest payment comes due on its bonds, the company will skip the payment and continue talks during a 30-day grace period, the person said. Samson will join a number of energy producers to file for bankruptcy as the industry struggles with plunging crude and natural gas prices. Sabine Oil & Gas Corp., Quicksilver Resources Inc. and Endeavour International Corp. are among companies that filed for Chapter 11 in the past 10 months, according to data compiled by Bloomberg.

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