Monday April 11 2016 Housing and Economic stories

TOP STORIES:

Global Bond Yield Plunge to Record 1.3% in Flashing Warning Sign - (www.bloomberg.com) Global bond yields fell to a record, a warning sign for the worldwide economy. The yield on the Bank of America Corp. Global Broad Market Index plunged to 1.3 percent, the lowest in almost 20 years of data. Bonds in the gauge have returned 3.6 percent in 2016, while the MSCI All Country World Index of shares has slumped 1.5 percent, including reinvested dividends. Treasuries declined, with 10-year yields climbing for the first time in three days, before minutes of the Federal Reserve’s March meeting are published. A third of the world’s developed-market sovereign debt now has negative yields, based on Bloomberg bond indexes, after Europe and Japan cut interest rates below zero to counter deflation. Investors rushed to higher-yielding debt, fueling the global rally.

More Than 40% of Student Borrowers Aren't Making Payments - (online.wsj.com)  More than 40% of Americans who borrowed from the government’s main student-loan program aren’t making payments or are behind on more than $200 billion owed, raising worries that millions of them may never repay. The new figures represent the fallout of a decadelong borrowing boom as record numbers of students enrolled in trade schools, universities and graduate schools. While most have since left school and joined the workforce, 43% of the roughly 22 million Americans with federal student loans weren’t making payments as of Jan. 1, according to a quarterly snapshot of the Education Department’s $1.2 trillion student-loan portfolio.

Deutsche Bank Is Crashing Again As European Banks Slide To Crisis Lows - (www.zerohedge.com)  As of this moment, various European banks but most prominently Deutsche Bank as well as Credit Suisse and RBS, have been crashing back to lows hit in early February and then all the way back to the March 2009 "the world is ending" lows. The problem is that now that global central banks are more focused on appeasing China and keeping the USD weaker (by way of a dovish, non-data dependent Fed), the pain for Europe (and Japan), and their currencies, and their banking sector, will likely only get worse. This is precisely the case proposed by Francesco Filia of Fasanara Capital, who explains below his "Short European Bank Thesis."

 

M&A Boom Ends, US Deal Failures in 2016 Worst Ever - (www.wolfstreet.com)  There have been 12 announced mergers and acquisitions with a deal size of $100 billion or more in the world ever. Five of these blockbuster deals have been withdrawn — two of them in 2016 alone! Pfizer’s $160-billion acquisition of Allergan, the second largest merger ever when announced in November 2015, entered the M&A annals on Wednesday, when the company announced that it would abandon the deal — the largest deal failure ever. The fifth largest deal ever to be withdrawn also happened this year: Honeywell’s $103-billion acquisition of United Technologies, which was sunk in early March, after UTC spurned Honeywell’s offer, citing among other things increasingly nervous antitrust regulators.

Why Are Americans Not Included in the Panama Papers? - (www.nbcnews.com) There are numerous other firms, large and small, American and foreign, that help wealthy clients set up offshore shell corporations -- which isn't of itself illegal, as long as the clients aren't trying to hide criminal proceeds or dodge tax collectors, experts said. Mossack Fonseca co-founder Ramon Fonseca has said that his firm broke no laws, and that it wasn't responsible for how the corporations were used. "This firm is one of thousands in the world and there are hundreds or thousands just like it in the U.S.," said Ana Owens, a tax and budget advocate at U.S. Public Interest Research Group (PIRG), a federation of state-level consumer advocacy organizations. "If a company in the U.S. can do the exact thing for you as this company in Panama, then you might as well do it right here in the U.S. And its perfectly legal, which is the issue."

OTHER STORIES:

Swiss police raid UEFA as Panama Papers scandal spreads - (www.reuters.com)
Panama Papers law firm masks its U.S. presence  - (www.usatoday.com)
Fed signals caution on rate hikes, worried by global growth: minutes - (www.reuters.com)

Fed's Global Concern Signals Barriers to Next Rate Increase - (www.bloomberg.com)
U.S. needs long-term growth plan, not more stimulus: Fed's Bullard - (www.reuters.com)
Southeast Asia's Debt Problem Hasn't Gone Away - (www.bloomberg.com)
South China Sea: Is Beijing making a new 'strategic strait'? - (www.cnbc.com)