Wednesday April 13 2016 Housing and Economic stories

TOP STORIES:

Italy government calls meeting Monday to finalise bank fund plan: sources - (www.reuters.com) Italy's largest banks will meet the Treasury and central bank on Monday to thrash out a plan to set up a state-backed fund to buy bad loans and plug capital shortfalls at its ailing banks, five sources familiar with the matter said on Sunday. Italy's government is anxious to assuage concerns about its banking system, which fared badly in financial stress tests carried out by the European Central Bank and is groaning under the weight of 360 billion euros ($410 billion) in bad loans. The fund's precise mandate still needs to be decided, the sources said. Possibilities include buying non-performing loans and helping recapitalise weak banks. An announcement could be finalised as early as Monday.

US faces ‘disastrous’ $3.4tn pension funding hole - (www.ft.com) The US public pension system has developed a $3.4tn funding hole that will pile pressure on cities and states to cut spending or raise taxes to avoid Detroit-style bankruptcies. According to academic research shared exclusively with FTfm, the collective funding shortfall of US public pension funds is three times larger than official figures showed, and is getting bigger. Devin Nunes, a US Republican congressman, said: “It has been clear for years that many cities and states are critically underfunding their pension programmes and hiding the fiscal holes with accounting tricks.” Mr Nunes, who put forward a bill to the House of Representatives last month to overhaul how public pension plans report their figures, added: “When these pension funds go insolvent, they will create problems so disastrous that the fund officials assume the federal government will have to bail them out.”

Austria's FMA imposes big haircut, long wait on Heta creditors - (www.reuters.com) Austria's financial markets regulator FMA on Sunday cut the nominal value of "bad bank" Heta Asset Resolution's [HAABI.UL] senior bonds by more than half, highlighting the long struggle creditors face for repayment if a settlement is not reached. The FMA, which is overseeing the wind-down of Heta, on Sunday announced measures including the bail-in, or haircut, of 54 percent, the extension of bonds' maturities to 2023 and the cancellation of coupon payments as of March of last year. The announcement is the latest chapter in a standoff between the province of Carinthia and Heta's creditors, many of which insist on repayment in full because their bonds were guaranteed by Carinthia, which could push the province into insolvency.

German criticism of ECB gets louder as politicians say savers are losing out - (www.reuters.com)  A chorus of conservative German politicians have criticised the European Central Bank for its interest rate policy, which they say is hitting the retirement provisions of ordinary Germans, could lead to asset bubbles and even boost the right-wing. German Finance Minister Wolfgang Schaeuble partly blamed the ECB's policy for the success of the right-wing Alternative for Germany (AfD) in recent regional elections, which saw it take up to a quarter of votes in a setback to Schaeuble's conservatives, according to the Wall Street Journal. The newspaper quoted Schaeuble as saying he had told ECB President Mario Draghi: "Be very proud: You can attribute 50 percent of the results of a party that seems to be new and successful in Germany to the design of this [monetary] policy." A finance ministry spokesman declined to confirm the comments.

BlackRock Joins $46 Billion Japan Pullout - (www.bloomberg.com) For global equity investors and Shinzo Abe, it’s splitsville. Starting in the first days of 2016, foreign traders have been pulling out of Tokyo’s stock market for 13 straight weeks, the longest stretch since 1998. Overseas investors dumped $46 billion of shares as economic reports deteriorated, stimulus from the Bank of Japan backfired and the yen’s surge pressured exporters. The benchmark Topix index is down 17 percent in 2016, the world’s steepest declines behind Italy. Losing the faith of foreigners would be a blow to the Japanese prime minister -- they’re the most active traders in a market Abe has held up as a litmus on his growth strategies. “Japan is back," and “Buy my Abenomics!” he proclaimed during a visit to the New York Stock Exchange in September 2013, when shares were marching to an eight-year high. Now about half of those gains are gone and BlackRock Inc., the world’s largest money manager, is among firms ending bullish calls on Japan equities.

OTHER STORIES:

Asian Stocks Decline as Japanese Shares Slump Amid Economic Data - (www.bloomberg.com)
Panama Furor Rumbles Into Second Week as Global Pressure Mounts - (www.bloomberg.com)
U.S. banks' dismal first quarter may spell trouble for 2016 - (www.reuters.com)
Emerging Markets That Fueled Agriculture Boom Now Driving a Bust - (www.bloomberg.com)

Comcast's Cavanagh Is Highest-Paid U.S. CFO With $41 Million - (www.bloomberg.com)
Exclusive: Bank of Italy conducting supervisory inspection at Bank of China offices - (www.reuters.com)
Tsipras demonises IMF to rally troops for bailout sacrifices - (www.reuters.com)
IMF supports move to negative rates by some central banks - (www.reuters.com)