Friday February 26 2016 Housing and Economic stories

TOP STORIES:

Fortress Hedge Fund Seeing 'More Cracks' in Credit Markets  - (www.bloomberg.com) The Fortress Investment Group LLC fund that has predicted an Asia credit meltdown to rival 1997 says it is seeing more warning signs. “Returning to the creaking ship analogy that we have used previously, more cracks are appearing in the hull of the good ship ‘Credit,’” David Dredge, Singapore-based chief investment officer for the Fortress Convex Asia Fund, wrote in a December letter to investors. “Two such problems in our view are the unrelenting fall in oil and commodity prices and the depreciation of onshore and offshore renminbi.” Fortress Convex, which lost 3.1 percent last year, said that plunging oil and commodity prices and the depreciation of the yuan are warning signs that a credit crisis is looming, a view that the firm first expressed in a letter to investors in September. Anxiety over China’s ability to manage a slowing economy and slumping oil prices have clouded the outlook for global growth and put pressure on the yuan.

Larry Summers: Time to scrap $100 bill - (www.cnbc.com) The war on cash continues.  Veteran U.S. economist Larry Summers says that "it's time to go after big money," in his latest column for The Washington Post. But rather than going after the top 1 percent, the former chief economist of the World Bank is backing calls for removing the 500 euro and $100 bills from circulation. Summers argues that the fact that "in certain circles the 500 euro note is known as the 'Bin Laden,'" is exactly the reason why it should no longer be printed; pointing to the illicit activities associated with the bill to give it such a nickname.

The War On Paper Currency Begins: ECB Votes To "Scrap" 500 Euro Bill - (www.zerohedge.com)  Update: in case there was any doubt about the ECB's true intentions, we just got the official "denial": DRAGHI: ANY ECB ACTION ON EU500 NOTE IS NOT ABOUT REDUCING CASH. Translation: the ECB action is only about reducing physical cash, some 30% of it to be specific. The first shot in the global war on cash was just fired, by none other than the ECB, which moments ago Handelsblatt reported... ... and Bloomberg confirmed - ECB COUNCIL VOTES TO SCRAP EU500 NOTE: HANDELSBLATT - has voted to scrap the second highest denominated European bank note in circulation:

Hedge Funds in Asia Had Nowhere to Hide in January ‘Bloodbath’ - (www.bloomberg.com) As global stocks, currencies, commodities and risky bonds were roiled in a renewed frenzy of selling in January, hedge funds including those from Quam Asset Management Ltd. and Greenwoods Asset Management Ltd. fell more than 10 percent last month, while one from Springs Capital fell more than 20 percent. As a group, Asia-focused hedge funds declined 3.1 percent, their worst start to a year since 2008, according to Singapore-based Eurekahedge Pte. About 81 percent of hedge funds actively reporting to the Asia Long-Short Equities category had negative returns last month, the data show. "January was a bloodbath to the whole world,” Chris Choy, chief investment officer for the Quam China Focus Segregated Portfolio, said in an e-mail. Unless one had a “crystal ball,” it was very difficult to avoid losses, said Choy, whose $126 million Quam China Focus fund fell 16.7 percent in January.

Fed's Kashkari Floats Breaking Up Big Banks to Avert Meltdown - (www.bloomberg.com) The former U.S. Treasury official who led the 2008 bailout program for the nation’s biggest banks says in his new role at the Federal Reserve that Congress and regulators should consider breaking them up to protect the financial system from another crisis. Federal Reserve Bank of Minneapolis President Neel Kashkari, speaking Tuesday in Washington, said his regional Fed bank will study ways to toughen U.S. banking laws to prevent another financial crisis. Regulators should consider options including breaking up the nation’s largest financial institutions, loading them up with “so much capital that they virtually can’t fail” and taxing leverage to make the system safer, he said. Tougher oversight will require new legislation, he added.

OTHER STORIES:

Yuan Heads for Biggest Two-Day Drop in a Month as PBOC Cuts Fix - (www.bloomberg.com)
Asian Stocks Poised to Retreat as Yen Holds Gains; Oil Below $30 - (www.bloomberg.com)
ECB Bond Program Dubbed `Financial Dictatorship' in German Court - (www.bloomberg.com)
35% of drillers at high risk of bankruptcy: Report - (www.cnbc.com)
This has been the worst quarter for company earnings reports since 2009 - (www.marketwatch.com)

China sends missiles to contested South China Sea island: Fox News - (www.reuters.com)
Defiant Iran ignores UN ban, hits up Putin for high-tech tanks, fighter jets - (www.foxnews.com)
U.S. planned major cyber attack on Iran if diplomacy failed: NYT - (www.reuters.com)
A Direct Turkey-Russia Clash Is a Growing Risk on Syria Border - (www.bloomberg.com)