Thursday April 28 2016 Housing and Economic stories

TOP STORIES:

The Canary In Canada's Real Estate Mine Just Died: Toronto's Urbancorp Files For Bankruptcy - (www.zerohedge.com) Less than two weeks ago we documented that Toronto based Urbancorp, one of Canada's largest residential developers, was having significant issues. Its attorney's had taken the highly unusual step of terminating their contract, it hadn't released 2015 financials due to the audit committee having "open issues and questions", and most intriguing, a board member quit just two weeks after being appointed specifically to provide expertise in accounting. For those unfamiliar with the company, Urbancorp was launched in 1993 by Alan Saskin, a former Cadillac Fairview executive, and has built dozens of condos and other housing developments in the Greater Toronto Area. This is how it describes itself on its website: Urbancorp is proud to have created some of the most visionary home and condominium communities in the GTA.

1MDB Says It's in Default After Missing Interest Payment - (www.bloomberg.com) The Malaysian government’s reputation took another hit on Tuesday after state-owned 1Malaysia Development Bhd. defaulted on a $1.75 billion bond. The ringgit fell and 1MDB’s dollar debt slumped. The development fund withheld a $50 million coupon payment amid a wider dispute with Abu Dhabi’s International Petroleum Investment Co., the co-guarantor of the bonds. The missed payment triggered cross defaults on 7.4 billion ringgit ($1.9 billion) of 1MDB debt, including borrowings that are guaranteed by the Malaysian government, the fund said in a statement on Tuesday. The default is the latest episode in financial scandals that have rocked 1MDB, whose advisory board is headed by Malaysian Prime Minister Najib Razak. 

Used car prices are falling for the first time since 2008 - (www.cnbc.com) Used car prices look set to suffer their first meaningful decline since 2008. And the likely culprit is the strong number of new vehicle sales. According to "NADA Used Car Guide," used car prices will fall 5 to 6 percent this year. And while some may be tempted to draw from that negative conclusions about the U.S. economy, NADA executive analyst Jonathan Banks explains that the drop is reflective of rising supply, rather than falling demand. "2016 marks the first year where we have a material increase in used supply," Banks said Friday on CNBC's "Trading Nation." He explains that recently, record-high used car prices have been spurred by a lack of used car supply, which in turn was caused by low new vehicle sales as a result of the recession. That trend is now reversing.

Iconic Hedge Fund Brevan Howard Slammed With $1.4 Billion In Redemption Requests - (www.zerohedge.com) It has already been a very bad several years for hedge funds with 2016 starting off especially brutally, when moments ago we learned that it is about to get even worse for one of the most iconic names in the macro hedge fund space, Brevan Howard, which according to Bloomberg has been served with $1.4 billion in cash redemption requests. As Bloomberg writes, investors in Brevan Howard Asset Management have asked to pull about $1.4 billion from the firm’s main hedge fund after successive annual declines followed by losses during the first quarter, according to two people with knowledge of the matter.

China’s bond market is on edge - (www.ft.com) Stand easy — or easier, at least. Ten basis points might not be the biggest one-day change for borrowing costs in China’s vast $7tn bond markets, but it was enough on Monday to push the country’s closely watched onshore repo rate back from an eight-month high. That offers a little breathing space for investors to ponder what next for the rising tensions in onshore bond markets. One point to look at is their own leverage as well as their fears for companies. Bond yields in China have jumped. This month, China’s five-year government bond yields have risen 25 basis points to 2.75 per cent — their worst monthly performance in a year. Defaults by two state-owned groups have raised fears that others could follow suit. All this has added roughly half a percentage point this month alone for high-quality borrowers onshore. Spooked by this, companies have so far suspended plans for an estimated $10bn in expected bond issuance. Amid all the furore about the pain of rising rates, one so-far overlooked factor is that investors, as well as companies, appear precariously balanced.

OTHER STORIES:

Asian Stocks Drop Before BOJ, Fed as Commodities Shares Retreat - (www.bloomberg.com)
Brazil Impeachment Countdown Begins as Senate Elects Committee - (www.bloomberg.com)
China could slam door on Apple, says top global risk expert - (www.cnbc.com)

China clamps down on commodities frenzy - (www.ft.com)
China’s bond market is on edge - (www.ft.com)

Exclusive: Seychelles says helping worldwide probe into Malaysia's 1MDB fund - (www.reuters.com)
China's Xi warns of foreign infiltration through religion - (www.reuters.com)
Dutch journalist who criticized Erdogan detained in Turkey: official - (www.reuters.com)