One Big Small Bank Reason to Worry About U.S.
Commercial Real Estate - (www.bloomberg.com) Banks
burned by soured home loans in the aftermath of the housing bust and
subsequent financial crisis found a quick replacement: mortgages secured by commercial properties
ranging from malls to offices. In the
years since 2008, U.S. lenders have opened the commercial real estate
(CRE) credit spigots, lending money underpinned by properties
including hotels, multifamily rental units, and industrial compounds.
Banks' total share of the CRE market has subsequently jumped to
a record 52 percent of loan originations compared to just 35 percent as
recently as two years ago, according to Morgan Stanley data. Now the concern is
that banks won't be able to fund the $400 billion worth of CRE loans that
need to be refinanced in 2017 alone as financial regulators step up their scrutiny of the sector. That worry has grown more
acute as sales of commercial mortgage-backed securities (CMBS)
have fallen to levels not seen in more than a decade.
French Fin Min urges support for Italy's banks - (www.marketwatch.com) French
Finance Minister Michel Sapin said Monday European authorities should show
solidarity with Italy's efforts to restore confidence in its banking sector. The
head of the Italy's Central Bank Ignazio Visco said last week the Italian
banking sector may need intervention from the state as investors have dumped
bank shares on concerns over bad loans. But the EU in recent years has beefed
up its rules to stop governments from bailing out lenders, with the aim of
breaking a vicious loop between a country's finances and its banks. However, in
some cases EU rules allow governments to bail out banks without first
inflicting losses on shareholders, bondholders and uninsured depositors. "This
is a concern for the Italian government, which is taking the necessary measures
to create confidence in the entire Italian banking system. I think it is our
duty to show solidarity," Mr. Sapin said.
Great
American Oil Bust Rages on; Defaults, Bankruptcies Soar - (www.wolfstreet.com) How
much worse is 2016 than 2015? During the entire year 2015, 42 E&P companies
filed for bankruptcy, with a total debt of $17.2 billion. So, over the first
six months in 2016, the debt in E&P bankruptcies exceeds the total for the
entire year 2015 by 155%! Both 2015 and 2016 combined – a measure of the Great
American Oil Bust to-date – generated 85 E&P bankruptcy filings involving
$61.2 billion in debt, of which $44 billion is unsecured. And the rest of 2016?
Haynes and Boone put it this way in its E&P report:
“Despite the modest recovery in energy prices, all indications suggest many
more producer bankruptcy filings will occur during 2016.” The bankruptcies of
oilfield services companies are tracked separately. Through May, the last
report available, there were 23 filings with $6.4 billion in debt. This brings
the total from January 2015 through May 2016 to 72 bankruptcies among oilfield
services companies, involving $11.7 billion in debt.
Abe to give order for new stimulus package – (asia.nikkei.com) Japanese
Prime Minister Shinzo Abe on Tuesday will order his cabinet to compile a new
set of economy-spurring measures, government sources said on Monday. On the
heels of the ruling coalition's upper house election victory on Sunday, the
sources said Abe's government will put together more than 10 trillion yen
($99.33 billion) worth of measures, including loans. To fund a supplementary
budget, they said the cabinet will consider the first additional issuance of
new government bonds in four years. The freshly empowered prime minister is
looking to rekindle Abenomics -- his policy for reviving the nation's
economy. The package is also expected to include labor market reforms
aimed at improving Japan's growth potential.
Tesla
Quietly Kills Car Buyback Program As Probes Reporter Reveals Undisclosed SEC
Investigation - (www.zerohedge.com) Confirming
that used Tesla car values are sinking faster than even the company had
expected in its worst case scenario, today Tesla quietly announced it had
discontinued its resale value guarantee program that assured buyers that cars
would retain value over time. With this program ending, demand for new
vehicles is set to slump even more as concerns about resale prices emerge.
Meanwhile, courtesy of our friends at Probes Reporter, we learn of another potentially far more
troubling problem facing Tesla: namely another SEC investigation.
BlackRock strategist warns of low returns, years of uncertainty
and volatility - (www.cnbc.com)
Goldman Sachs says dual rally in stocks and bonds make both expensive - (www.cnbc.com)
Italian bank problems not an "acute crisis" - Dijsselbloem - (www.reuters.com)
Black Hole of Negative Rates Is Dragging Down Yields Everywhere - (www.wsj.com)
Goldman Sachs says dual rally in stocks and bonds make both expensive - (www.cnbc.com)
Italian bank problems not an "acute crisis" - Dijsselbloem - (www.reuters.com)
Black Hole of Negative Rates Is Dragging Down Yields Everywhere - (www.wsj.com)
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