Tuesday July 12 2016 Housing and Economic stories

TOP STORIES:

Domino #4: Henderson Suspends $5 Billion UK Property Fund Over "Exceptional Liquidity Pressures" - (www.zerohedge.com)  Does '4' make a trend? First Standard Life, then Aviva, followed by M&G and now this morning, due to "exceptional liquidity pressures" Henderson has suspended trading in its $5bn UK property fund and all of its feeders. Is it time to panic yet? And now Domino #4: *HENDERSON SUSPENDS UK PROPERTY PAIF & PAIF FEEDER FUND. Henderson temporarily suspends all trading in the Henderson U.K. Property PAIF and the Henderson UK Property PAIF feeder funds to safeguard the interests of all investors, according to statement. Decision due to “exceptional liquidity pressures” after Brexit and recent suspension of other direct property funds

M&G becomes 3rd U.K. firm to freeze property fund - (www.marketwatch.com) M&G Investments on Tuesday afternoon became the third U.K. investment manager to freeze a property fund following the British vote to leave the European Union. The company said it is temporarily suspending trading in the shares of its M&G Property Portfolio and its feeder fund. "Investor redemptions in the fund have risen markedly because of the high levels of uncertainty in the UK commercial property market since the outcome of the European Union referendum," the company said in a statement. "Redemptions have now reached a point where M&G believes it can best protect the interests of the funds' shareholders by seeking a temporary suspension in trading," it added. 

Markets worry as Italian banks face the perfect storm - (www.cnbc.com) Italy's bank bailout fund might not be enough to beat back the Brexit. More key Italian financial services firms are under pressure and face the potential need to raise capital, leaving Italian government officials and its banking system trying to steer clear of a crisis.  As Italian bank bonds and share prices are seeing their value slammed in the face of rising uncertainty, banks with substantial bad loans are facing greater pressure, with rates around the world slipping into negative territory. It's an anxiety some in Italy and throughout the European Union may have been hoping would be eased by the Brexit vote last month — but then the U.K. referendum delivered the opposite outcome from the one they had sought. "Market volatility following the U.K.'s EU referendum result hit the Italian bank sector particularly hard because it is one of Europe's weakest," Fitch Ratings analysts said in a July 4 report. "Asset quality pressure is a main driver for the negative outlooks on several large and medium-sized Italian banks."

The Big Unravel: US Commercial Bankruptcies Skyrocket - (www.wolfstreet.com)  This year through June, there have been 91 corporate defaults globally, the highest first-half total since 2009, according to Standard and Poor’s. Of them, 60 occurred in the US. Some of them are going to end up in bankruptcy. Others are restructuring their debts outside of bankruptcy court by holding the bankruptcy gun to creditors’ heads. In the process, stockholders will often get wiped out. These are credit fiascos at larger corporations – those that pay Standard and Poor’s to rate their credit so that they can sell bonds in the credit markets. But in the vast universe of 19 million American businesses, there are only about 3,025 companies, or 0.02% of the total, with annual revenues over $1 billion; they’re big enough to pay Standard & Poor’s for a credit rating. About 183,000 businesses, or less than 1% of the total, are medium-size with sales between $10 million and $1 billion. Only a fraction of them have an S&P credit rating, and only those figure into S&P’s measure of defaults. The rest, the vast majority, are flying under S&P’s radar. About 99% of all businesses in the US are small, with less than $10 million a year in revenues. None of them are S&P rated and none of them figure into S&P’s default measurements.

Italy Bans Short-Selling In Monte Paschi For Three Months, Forgets To Ban Buying Of CDS - (www.zerohedge.com)   Consob bans for three months net short positions on Banca MPS shares - The prohibition shall apply from tomorrow 7 July 2016 until 5 October 2016 - It affects derivatives and market makers as well. The prohibition on net short positions strengthens and extends the ban to short selling adopted yesterday, as the new prohibition bans both short selling on BMPS shares and short positions taken though single stock derivatives on BMPS shares.

OTHER STORIES:

UK pound falls under $1.28 on renewed Brexit concerns; Asia stock markets tumble - (www.bloomberg.com)
Asian Stocks Fall as Yen Weighs on Japan Shares With BOE Warning - (www.bloomberg.com)
Japan 20-Year Yield Falls to Zero as Treasuries Rally to Record - (www.bloomberg.com)
Oil down 5 percent; biggest drop since Feb on Brexit, supply builds - (www.reuters.com)
Brexit Aftershocks Shake U.K. Real Estate, Pound - (www.wsj.com)

Bank Profits Dealt Another Blow, as Yields Hit Record Lows - (www.wsj.com)
Mexico Peso Leading Losses Shows Limits of Interest-Rate Boost - (www.bloomberg.com)
Fed's Williams says Brexit effect as expected, no big deal - (www.bloomberg.com)
Financial Strain Grows From ‘Brexit’ Vote - (www.nytimes.com)