Thursday, October 6, 2016

Friday October 7 20916 Housing and Economic stories


Losses Jump for Subprime Auto Loans - (www.wsj.com) Subprime auto loan losses rose again in August as more borrowers fell behind on payments. The share of subprime auto loans backing bonds that were at least 60 days behind on payments climbed to 4.86% in August, up from 3.98% a year earlier, according to Fitch Ratings. Annualized net losses reached 8.89%, up from 7.02% a year prior. Overall, defaults in the auto-loan market are relatively low. But increased lending to subprime borrowers between 2013 and 2015 is contributing to a spike in subprime auto loan defaults and losses, according to Fitch. To keep car sales going, lenders have continued to loosen some terms on loans. Among them: increasing loan repayment periods in order to make monthly car payments more affordable. A report by Moody’s Investors Service earlier this month said the long repayment periods are the main culprit for growing losses.

European Banks Cutting 20,000 Jobs as ING Joins Commerzbank, ABN - (www.bloomberg.com) European banks are preparing a fresh round of bloodletting -- with some 20,000 jobs set to go -- as tougher rules and negative interest rates weigh on profits. ING Groep NV will slash 5,800 positions over five years as it focuses on Internet and mobile banking and automates systems, the Amsterdam-based lender said Monday. Last week, Germany’s Commerzbank AG disclosed plans to cut 9,600 jobs, while Spain’s Banco Popular Espanol SA said it will eliminate as many as 3,000 posts after tapping investors for funds.  “Banks are facing high regulatory costs and competition on margins and pricing due to the low-rate environment,” said Karim Bertoni, a fund manager at Bellevue Asset Management in Switzerland, which has about 6.9 billion Swiss francs ($7 billion) under management. “They are trying to reduce costs and people are one of the biggest parts of that.”

Restaurant Industry, Leading Indicator of US Economy Sours, Bankruptcies Pile up – (www.wolfstreet.com) On Friday, September 30, Restaurants Acquisitions, the operator of Black-eyed Pea and Dixie House restaurant chains, converted its Chapter 11 filing to Chapter 7 liquidation. The bankruptcy court order noted the company had shuttered its restaurants and management had resigned. The day before, Cosi Inc., a fast-casual chain with 1,100 employees filed for bankruptcy. It closed 29 of its 74 company-owned restaurants and laid off 450 people. The 31 independently owned franchise operations continue operating. Also last week, Logan’s Roadhouse, a casual steakhouse with over 200 locations, closed more than 10 restaurants, on top of the locations it had already closed in August when it filed for Chapter 11 bankruptcy. Eight restaurant companies representing 12 chains have filed for bankruptcy since December: Restaurants Acquisitions, Cosi, Logan’s Roadhouse, Fox & Hound, Champps, Bailey’s, Old Country Buffet, HomeTown Buffet, Ryan’s, Johnny Carino’s, Quaker Steak & Lube, and Zio’s Italian Kitchen.

Greek Police Fire Tear Gas, Use Pepper Spray On Protesting Pensioners - (www.zerohedge.com) Familiar scenes returned to Athens today, when Greek police fired teargas at a demonstration of pensioners protesting over cutbacks to their benefits, part of an austerity drive dictated by the Troika (or was it Quadriga). Between 1,500 and 2,0000 pensioners attempted to march to Prime Minister Alexis Tsipras's office, however they were blocked when riot police blocked their path, intercepting them with pepper spray and tear gas.

US accused of waging ‘economic war’ over Deutsche - (www.cnbc.com) German politicians have accused the U.S. of waging economic war against Germany as concern continues to rise among the country’s political and corporate elite over the future of Deutsche Bank, its biggest lender. Some of Germany’s top industrial chiefs have also rallied to the bank’s side following the market storm that last week threatened to engulf Deutsche, stressing its importance to the German economy and expressing confidence in the leadership of John Cryan, the bank’s chief executive. Deutsche has been under intense pressure since the U.S. Department of Justice requested it pay $14 billion to settle claims of mis-selling mortgage securities last month, sparking fears about the bank’s capital levels. Shares in the bank fell below €10 to their lowest level since 1983 before bouncing back on Friday after some media reports suggested Deutsche was close to a much smaller $5.4 billion deal with the U.S. authorities.



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