Thursday October 6 20916 Housing and Economic stories

TOP STORIES:

Summers Floats Idea of Sustained Government Stock Purchases - (www.bloomberg.com) Former U.S. Treasury Secretary Lawrence Summers floated the idea of continuous purchases of stocks as a potential ingredient in a recipe for the developed world to strengthen economies struggling with subdued growth and inflation. Among the proposals that deserve “serious reflection” is the purchase of a “wider range of assets on a sustained and continuing basis," Summers said in a lecture at a Bank of Japan conference in Tokyo Friday. "I’m not prepared to make a policy recommendation at this point,” he told reporters later. Summers, who also served as a top economic adviser to President Barack Obama, reiterated his concerns about “secular stagnation,” where trend economic growth rates have been reduced and neutral interest rates are lower than historic norms.

Rents Plunge in San Francisco, New York. “Mixed” Nationally - (www.wolfstreet.com) “The trend in rental prices this month was mixed”: so started out the Zumper October Rent Report for the month of September. “Mixed” is not exactly a bullish term – not when it includes the two most expensive housing markets in the US, San Francisco and New York, where rents have fallen, in some cases sharply, on a year-over-year basis, as the supply of new apartments already on the market and coming on the market is enormous. In San Francisco, the median asking rent for a one-bedroom apartment fell 5.5% year-over-year to $3,420, according to Zumper, which analyzes rental data from over 1 million active rental listings. For a two-bedroom, it fell 4.4% year-over-year to $4,780. It was the third month in a row of year-over-year declines. The last time the market was negative year-over-year was in April 2010. Since then, rents have soared at astonishing rates. Hence the San Francisco term for it: “Housing Crisis.” It’s when even teachers can’t afford to live in the city – unless they’ve been in a rent-controlled apartment for years and don’t get evicted.

Secret Swiss Military Bunkers Being Filled With Gold By Billionaires Seeking "Alternatives To Bank Deposits" - (www.zerohedge.com) Which, as Bloomberg points out, has been a huge boon for Swiss operators of private vaults which are not subject to the same transparency and reporting requirements as banks.  In fact, these super-secret, privately operated storage facilities buried around the Swiss Alps can basically store anything from anybody because they're not even required to report suspicious activity to Switzerland's Money Laundering Reporting Office.  “There is growth in gold,” Wipfli says. “Since 2008 there has been a real interest inalternatives to bank deposits.” The company explicitly taps into that demand. Swiss Data Safe “is independent from the banking system and any other organization or interest group,” according to a PowerPoint presentation Wipfli shows clients. The company and its anonymous rival aren’t regulated by the Swiss financial-services regulator Finma.

Outflows from European equity funds approach $100bn – (www.ft.com) Redemptions from European equity funds have approached $100bn as investors race out of an asset class rattled by the uncertain health of the continent’s financial sector. Funds invested in European stocks suffered $1.9bn of withdrawals in the week to September 28, the 34th consecutive week of outflows, according to fund flows tracked by EPFR. The exodus since mid-February has reached $95bn, the data show. Anxiety about the European banking system, which has culminated in a rise in short interest in Deutsche Bank, has persisted from the year’s start and weighed on the region’s nascent recovery.

The Ghost of Lehman Brothers Haunts Deutsche Bank - (www.wsj.com) Deutsche Bank’s shares have plummeted in recent weeks after The Wall Street Journal reported that the U.S. Justice Department suggested the bank pay $14 billion to settle allegations around mortgage securities. The bank expects to agree to a lower figure. Some hedge-fund clients have grown concerned about their exposure to the German lender, prompting them to pull assets and forcing bank executives to step up reassurances about its stability, according to people close to clients and the bank. Hedge funds face the same dilemma all bank customers face. The gains from sticking with Deutsche are very small, while the potential losses if it were to run into trouble are very large.

OTHER STORIES:

Bundesbank President Rejects Calls for German Stimulus - (www.wsj.com)

U.S. Stocks Rise as Deutsche Bank Erases Slump; Crude Rallies - (www.bloomberg.com)
Stocks, Euro Trim Losses as Deutsche Bank Climbs; Oil Fluctuates - (www.bloomberg.com)

Euro Money Markets Show Most Stress Since 2012 on Deutsche Bank - (www.bloomberg.com)
Bank Stocks Decline in Asia as Deutsche Bank Concerns Increase - (www.bloomberg.com)
The return of Mao: a new threat to China’s politics - (www.ft.com)
Three Chinese fishermen killed in confrontation with South Korea coastguard - (www.reuters.com)