KeNo's Housing and Economic Portal: Monday September 21 Housing and Economic stories

Sunday, September 20, 2015

Monday September 21 Housing and Economic stories

China Just Killed the World's Biggest Stock-Index Futures Market - (www.bloomberg.com) Add the world’s biggest stock-index futures market to the list of casualties from China’s interventionist campaign to stop a $5 trillion equity rout. Volumes in the country’s CSI 300 Index and CSI 500 Index futures sank to record lows on Wednesday after falling 99 percent from their June highs. Ranked by the World Federation of Exchanges as the most active market for index futures as recently as July, liquidity in China has dried up as authorities raised margin requirements, tightened position limits and started a police probe into bearish wagers. While trading in Chinese equities has also slumped amid curbs on short sales and an investigation into computer-driven orders, the tumble in futures volumes may cause even greater damage because of their central role in the investment strategies of domestic hedge funds and other institutional money managers. A failure to revive the market would undercut the government’s own efforts to attract professional investors to local stock exchanges, where individuals still account for more than 80 percent of trades.

An Obscure Hedge Fund Is Buying Tens of Billions of Dollars of U.S. Treasurys - (online.wsj.com) A little-known New York hedge fund run by a former Yale University math whiz has been buying tens of billions of dollars of U.S. Treasury debt at recent auctions, drawing attention from the Treasury Department and Wall Street. Element Capital Management LLC, led by trader Jeffrey Talpins, has been the largest purchaser in dozens of government-bond auctions over the past 10 months, people familiar with the matter said. The buying is part of an apparent effort by the fund to use borrowed money to exploit small inefficiencies in the world’s most liquid securities market, a strategy that is delivering sizable profits, said people close to the matter. Mr. Talpins is an intense and reserved trader formerly at Citigroup Inc. and Goldman Sachs Group Inc. He is known for a tenacious style that can grate on rivals and once tested the patience of former Federal Reserve Chairman Ben Bernanke.

Greek banks' bad loans at around 45 percent: local paper - (www.reuters.com) Greek banks' bad loans, which peaked after capital controls were imposed in late June, have dipped to around 45 percent of their loan books and are likely to fall further, daily newspaper Kathimerini said on Tuesday, citing bankers' estimates. The figure for bad loans - defined as credit more than 90 days in arrears or likely to fall into that category - was 40.8 percent at the end of the first quarter, according to latest official figures. The picture worsened in July, when in addition to capital controls banks were closed for a week, and when only about 15 percent of borrowers who had been repaying their loans normally in the past made monthly payments, the paper said. But 80 percent resumed timely repayments in August and bankers are expecting further improvement this month, it said.

Luxury Homes Unsold After a Year Showing South London Glut - (www.bloomberg.com) Investors betting on making a quick profit on luxury apartments in south London’sNine Elms district, Europe’s largest project for prime new homes, are facing long waits for buyers. Almost 30 percent of new properties in the district have languished on the market for more than a year, according to real estate data provider Lonres, who didn’t include sales by developers. That compares with 12 percent in London’s best districts. High prices and an increase in sales tax are deterring international investors who bought half of all new homes in central London in 2013. Currency turmoil in emerging markets is also weighing on sales. Malaysian investors, who purchased almost a third of the 866 homes in the first phase of the district’s $12 billion Battersea Power Station project, saw costs surge as much as 30 percent as the pound strengthened against the ringgit.

China reins in FX transactions to temper capital outflows-sources - (www.reuters.com) China has instructed banks to bolster management of foreign exchange transactions and identify "abnormal" cross-border fund transfers to ease pressure on capital outflows, two sources told Reuters on Wednesday. The State Administration of Foreign Exchange (SAFE) has released a document, asking banks to pay attention to suspicious FX transactions involving large amounts and frequent payments after Aug. 11, when Beijing unexpectedly devalued the yuan by nearly 2 percent. Banks are required to log transactions where more than five individuals have bought and transferred a total of over $200,000 or the equivalent to one account or institution outside of China within the past 90 days, said a source whose bank has received the document.

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