Thursday August 11 2016 Housing and Economic stories

TOP STORIES:

Since 2014 The US Has Added Half A Million Waiters & Bartenders And No Manufacturing Workers: Here's Why - (www.zerohedge.com)  As part of our monthly tradition showing the gaping disparity in the quality of the US labor market, we present the breakdown between the lowest paid jobs available, those for workers in "food services and drinking places", also known as waiters and bartenders, and compare them to the number of workers in the traditionally best paid sector, manufacturing. Here is the bottom line: as the chart below shows, there have been half a million waiter and bartender jobs added since 2014, and no manufacturing jobs.

Whiff of Panic among Australia’s Biggest Banks? - (www.wolfstreet.com) “Australia’s WTF Moment”: Australian bank regulators that had for years practically encouraged the big four Australian banks to do whatever it takes to further inflate the housing bubble suddenly fretted publicly in April about the banks’ exposure not only to housing but also to China. And now something strange has happened that set off all kinds of warning sirens. On August 2, the Reserve Bank of Australia (RBA) lowered its target “cash rate” by 25 basis points to 1.50%. And what did the banks do? Something so strange it smelled of panic. Everything is nearly hunky-dory around the globe and in Australia, the RBA said to rationalize the rate cut, but it mentioned some squiggles in Australia’s housing market. And since about two-thirds of the assets of the big four banks are loans to the property sector, particularly mortgages, the RBA is getting nervous. 

Greenspan Put Gone Wild as Critics See Markets Hamstringing Fed – (www.bloomberg.com)  It’s the Greenspan put gone wild. Or so the Federal Reserve’s critics would have it. No longer is the Fed just waiting for financial markets to be hit by a bout of turbulence and then lowering interest rates in response -- as former Chairman Alan Greenspan did. Instead, the critics contend, it’s become so sensitive to the risk of sharp market moves in the future that it’s pulling its policy punches now by repeatedly holding off on raising rates. “They used to respond, I think excessively, to what financial markets did,” said Willem Buiter, chief economist at Citigroup Inc. and a former policy maker at the Bank of England. “Now they don’t act in response to the fear that they have of how the market might respond to their actions.” New York Fed President William Dudley suggested earlier this week that the central bank is paying close attention to how its possible policy moves might play out in the currency and other financial markets. The risk in such a strategy is that the Federal Open Market Committee loses credibility and finds itself increasingly hamstrung in carrying out policy, said investment analyst Jim Bianco.

Berkshire Said to Draw Fed Scrutiny Over Wells Fargo Investment - (www.bloomberg.com) Warren Buffett’s Berkshire Hathaway Inc. is well known as a tapestry of modern capitalism for its ownership of dozens of companies and investments in dozens more. Now that interconnected web is prompting U.S. regulators to examine whether Berkshire’s stake in one of its biggest holdings, Wells Fargo & Co., violates rules for how much credit banks can extend to corporate insiders, according to two people familiar with the review. Wells Fargo provides financing to many in Berkshire’s sea of subsidiaries. The relationships have triggered questions from agencies including the Federal Reserve into whether legal limits are being exceeded for how much a bank can lend to entities controlled by someone who owns a big chunk of its stock.

Bonds Jump Globally as Bank of England Eases Policy Post-Brexit - (www.bloomberg.com) Bonds jumped globally after the Bank of England cut interest rates in response to the U.K.’s decision to leave the European Union, reinforcing the trend for monetary easing worldwide. Treasuries climbed with European securities after the BOE reduced its key rate for the first time in more than seven years and announced asset purchases and loans to ramp up defenses against a Brexit-induced slump. The moves sent the yield on U.K. gilts to a record low. Six weeks after Britain’s vote to leave the EU sent shock waves across financial markets, policy makers led by BOE Governor Mark Carney slashed growth forecasts by the most ever. Sovereign bond yields from the U.S. to Europe to Japan fell to record lows last month amid concern that Brexit would curb global economic growth and keep the Federal Reserve from raising interest rates. Investors awaited Friday’s release of the U.S. monthly labor statistics to gauge the health of the world’s biggest economy.

OTHER STORIES:

The Fight for Yield Has Crept Into Emerging Market Equities - (www.bloomberg.com)
US financials feel the burn from rock bottom interest rates - (www.ft.com)

Carney Takes ‘Exceptional’ Action With Rate Cut After Brexit - (www.bloomberg.com)
Pound Slides on BOE Stimulus; European Stocks Jump With Bonds - (www.bloomberg.com)

Bank of England cuts rates, ready for 'whatever action necessary' after Brexit vote - (www.reuters.com)
BOE Targets Company Bonds as Brexit Spurs Stimulus Revival - (www.bloomberg.com)
Rate cut and stimulus measures mark BoE's 'whatever it takes' moment -BBA - (www.reuters.com)