Thursday September 29 20916 Housing and Economic stories

TOP STORIES:

Canadian Housing Bubble, Debt Stir Financial Crisis Fears - (www.wolfstreet.com) Everyone is fretting about the Canadian house price bubble and the mountain of debt it generates – from the IMF on down to the regular Canadian. Now even the Bank for International Settlement (BIS) and the Organization for Economic Co-operation and Development (OECD) warn about the risks. Every city has its own housing market, and some aren’t so hot. But in Vancouver and Toronto, all heck has broken loose in recent years. In Vancouver, for example, even as sales volume plunged 45% in August from a year ago – under the impact of the new 15% transfer tax aimed at Chinese non-resident investors – the “benchmark” price of a detached house soared by 35.8%, of an apartment by 26.9%, and of an attached house by 31.1%. Ludicrous price increases!

Deutsche Bank Woes Sparks Concern Among German Lawmakers - (www.bloomberg.com) Deutsche Bank AG’s finances, weakened by low profitability and mounting legal costs, are raising concern among German politicians after the U.S. sought $14 billion to settle claims related to the sale of mortgage-backed securities. At a closed session of Social Democratic finance lawmakers this week, Deutsche Bank’s woes came up alongside a debate over Basel financial rules, according to two people familiar with the matter. Participants discussed the U.S. fine and the financial reservesat Deutsche Bank’s disposal if it had to cover the full amount, according to the people, who asked not to be identified because the meeting on Tuesday was private. While the participants -- members of the junior party in Chancellor Angela Merkel’s government -- didn’t reach any conclusions on the likely outcome, the discussion signals that the risks have the attention of Germany’s political establishment. The German Finance Ministry last week called on the U.S. to ensure a “fair outcome” for Deutsche Bank, citing cases against other banks where the government settled for reduced fines. A spokesman for Deutsche Bank declined to comment.

Exclusive: Regulators Expect Monte Dei Paschi to Ask Italy for Help-Sources - (www.reuters.com) European regulators expect Italian bank Monte dei Paschi di Siena will have to turn to the government for support, three euro zone officials with knowledge of the matter said, although Rome would strongly resist such a move if bondholders suffered losses. Less than two months after the Tuscan lender announced an emergency plan to raise 5 billion euros of fresh capital, having come last in a health check of 51 European banks, there is growing concern among European regulators that the cash bid will fall short. While the bank is determined to see through the capital raising, if it were to disappoint, it would be left with a capital hole. Now euro zone authorities are considering whether state support would have to be tapped after what bankers have described as slack interest in the bank's share offer.

US-EU Trade Talks "De Facto Dead" - (www.zerohedge.com) President Obama was hoping to get two trade agreements in the waning days of his administration. However, this week the German Economy Minister stated the US-EU TTIP  talks were “de facto dead”. The US-Asia TPP talks have been dead as a doornob for some time. Both deals were allegedly about free trade. In fact, neither was. Nonetheless, that both deals died after years of negotiation is systematic of a bigger problem: rising protectionism everywhere, led by the US and EU.

The Average Federal Employee Is Compensated $123,160 – (www.dailycaller.com) The average federal employee compensation is $123,160 per year, according to a new study by the Cato Institute. The study shows two major trends: the first being that there is a staggering differential in federal pay and benefits packages and private sector pay and benefits packages; the second being that the differential between these two groups is now growing even larger. It uses Bureau of Economic Analysis data to reach its conclusions. Currently, the federal government employs around 2.4 million Americans. Since the 1990s, federal employees have outstripped private sector growth rates in compensation and benefits packages, the study reports.

OTHER STORIES:

Cash is king as correlations cloud asset allocation - (www.reuters.com)
Yahoo hit in worst hack ever, 500 million accounts swiped - (www.cnet.com)

US stock funds suffer biggest redemptions since Brexit vote - (www.ft.com)
China’s economic fate rests on its housing market - (www.ft.com)
SEC’s pursuit of Leon Cooperman rattles hedge fund industry - (www.ft.com)