Wednesday December 23 Housing and Economic stories

TOP STORIES:

Rand Plunges as Zuma Fires Finance Minister in Shock Move - (www.bloomberg.com) South African President Jacob Zuma fired Finance Minister Nhlanhla Nene in a shock move and replaced him with a little-known lawmaker, triggering the rand’s biggest decline in more than four years. Nene was removed from his position after 19 months and ahead of his “deployment to another strategic position,” Zuma said in an e-mailed statement on Wednesday, without providing more detail. He was replaced by David Van Rooyen, who serves as a parliamentary member on committees for finance and economic transformation. The rand dropped as much as 5.4 percent against the dollar, its biggest decline since September 2011, hitting a new record low of 15.3857. The currency was down 2.4 percent at 14.9369 per dollar at 10:40 p.m. in Johannesburg.

South African Bonds Crash, Rand Hits Record Low After FinMin Fired - (www.zerohedge.com)  Without giving any reasons, South African President Jacob Zuma hasfired his finance minister (after just 19 months in office). This has shocked investors, already anxious about the nation's surging debt and sluggish economy and South African bonds and FX have collapsed andhas given rating agencies “perfect justification” for further downgrades and the loss of investment grade status. 10Y yields spiked 140bps to 10.18% - the highest since July 2008 - and CDS have soared. The Rand has crashed to new record lows above 15 to the USD. The shock move came less than a week after credit-rating companies pushed the nation closer to junk status, citing concerns over a sluggish economy and rising debt. Nene’s departure, and uncertainty relating to his successor, raises questions about whether the National Treasury can stick to its spending targets.

Emerging Markets Face Record Bond Tab as Fed Prepares Liftoff - (www.bloomberg.com) Developing nations are facing their biggest debt bills yet from international bond markets that funded them in boom times. It’s happening just as the cost to refinance overseas creeps higher, with money manager Pioneer Investments seeing no relief in sight. Companies and governments in developing nations must repay an unprecedented $262 billion of notes in all currencies outside domestic markets in 2016, more than half the $444 billion they sold this year, data compiled by Bloomberg show. The bond tab will rise further in 2017 to $352 billion. The borrowers missed payment on $5.6 billion of the debt this year, the most since 2002. "We expect emerging-market spreads to drift wider in 2016" and volatility to increase, said Yerlan Syzdykov, the head of emerging markets, bond and high yield, at London-based Pioneer, which had $244.1 billion under management as of Dec. 31, 2014. "This is due to higher financial leverage and the deterioration in credit quality, such as negative rating actions, weaker local currencies and higher default rates."

Massive insider selling spurs market concerns - (www.cnbc.com) Corporate insiders have been selling their shares at near-record levels, and according to some, this could be a sign for outside investors to start selling as well. Investment research firm TrimTabs reported on Wednesday that insider selling reached $7.6 billion for the month of November, the fourth-highest monthly level on record. For some this may be an alarming indicator, as corporate insiders tend to have more knowledge than public shareholders on the inner workings of the company, and what may drive stock prices up or down. "Historically when insiders are selling heavily it's not the greatest sign," TrimTabs' chief executive, David Santschi, told CNBC in a phone interview Wednesday. "I'm surprised given the valuations in the market that they're not selling more than they are."

Brazil’s troubles deepen with ratings blow - (www.ft.com)  Brazil’s woes deepened on Wednesday as Moody’s Investors Service downgraded all ratings for embattled oil group Petrobras, and the country faced the threat of losing its investment grade credit rating from the agency. Moody’s downgraded all ratings for Petrobras to Ba3 from Ba2, and placed them on review for possible further downgrade. “These rating actions reflect Petrobras’ elevated refinancing risks in the face of deteriorating industry conditions that make it more difficult to raise cash through asset sales,” the agency said. Meanwhile, after Congress opened impeachment proceedings against President Dilma Rousseff last week, Moody’s said it was placing Brazil’s Baa3 rating on review for downgrade, driven by a rapidly deteriorating economy and “worsening governability”. The move raises fears of an investor exodus from Latin America’s biggest economy.

OTHER STORIES:

Asian Stocks Decline as Jump in Yen Weighs on Japanese Exporters - (www.bloomberg.com)
Dividends Could Be the Next Victim of the Commodity Crunch - (www.bloomberg.com)

Wall Street Is Pricing Pipeline MLPs Like Half Will Cut Payouts - (www.bloomberg.com)
No One Knows How Messy the Fed Increase Could Get - (www.bloomberg.com)
Wall Street Lending Standards Remind Regulators of Crisis Run-Up - (www.bloomberg.com)

Oil is 1 of 3 'unhinged' markets: El-Erian - (www.cnbc.com)

Why a Fed rate hike could hurt your retirement - (www.cnbc.com)