KeNo's Housing and Economic Portal: Wednesday January 18 2017 Housing and Economic stories

Tuesday, January 17, 2017

Wednesday January 18 2017 Housing and Economic stories

From One Scam to Another: How Banks in Spain Intend to “Compensate” 1.4 Million Fleeced Homeowners - (www.wolfstreet.com) Spain’s biggest banks, it seems, will never learn — not even when the highest court of the land, the European Court of Justice (ECJ), rules against their dodgy practices. The ECJ ruled just before Christmas that Spain’s major banks would have to refund all the billions of euros they had surreptitiously overcharged borrowers as a result of the so-called “mortgage floor-clauses” that were unleashed across the whole home mortgage sector in 2009 [A Nightmare Before Christmas for Spanish Banks]. These floor clauses set a minimum interest rate, typically of between 3% and 4.5%, for variable-rate mortgages, which are a very common mortgage in Spain, even if the Euribor dropped far below that figure. In other words, the mortgages were only really variable in one direction: upwards! While this is not illegal, most banks failed to properly inform their customers that the mortgage contract included such a clause.

U.S. Shale's Great Reawakening - (www.bloomberg.com) Given that we now know that U.S. output was rising at a rate of 50,000 barrels a day each month in the last quarter of 2016, the warming price environment created by the OPEC deal and the benign impact of reduced regulation have set the stage for signs of life in shale to gather pace. And if prices go further above $55, that could provide further impetus to its return. It was always going to be a matter of when and not if OPEC would have to start grappling with the return of shale, and it looks like that time had already come even before it started supporting oil prices again. The big question is to what degree will the group and its members comply with what they said they'll do, and how much extra boost that will give to the U.S. shale oil industry.

Portugal Bonds Falter as ECB Running Out of Eligible Debt to Buy - (www.bloomberg.com) The European Central Bank is running out of Portuguese bonds to buy. The central bank’s holdings of Portugal’s debt are already pushing the limit set by its own guidelines, leaving it likely to buy less this year to avoid breaking those rules. That prospect has led to a selloff in Portuguese government bonds, with 10-year yields having risen almost 40 basis points since the ECB’s December meeting to hit an 11-month high last week. The ECB will have to scale back Portuguese purchases by around a half, according to Commerzbank AG, while ABN AMRO Group NV sees it stopping or suspending them by June. To make up the shortfall, the ECB may continue to buy more bonds from other countries with a greater pool of eligible securities, such as Germany and France.

While Davos Elites Address Populism, Just "Eight Men Own Same Wealth As Half The World" - (www.zerohedge.com) “From Brexit to the success of Donald Trump’s presidential campaign, a worrying rise in racism and the widespread disillusionment with mainstream politics, there are increasing signs that more and more people in rich countries are no longer willing to tolerate the status quo,” Oxfam said in its new report. “It is obscene for so much wealth to be held in the hands of so few when 1 in 10 people survive on less than $2 a day,” said Winnie Byanyima, executive director of Oxfam International, who is attending the exclusive meeting in Davos. “Inequality is trapping hundreds of millions in poverty; it is fracturing our societies and undermining democracy.” The same Oxfam report last year showed that it was 62 people holding as much wealth as the bottom half of the population. This year’s report was revised using the Forbes’ billionaires list published in March 2016 which shows that Microsoft founder Gates is the richest individual with a net worth of $75 billion.

American Apparel moves to Canada — where will its hoodies be made now? – (www.salon.com) Gildan's purchase agreement covers American Apparel's assets, including most of its manufacturing and distribution equipment. Gildan bought American Apparel's existing inventory in a separate deal. But the company has declined the option to assume the leases of two Los Angeles manufacturing facilities that employ nearly 1,300 factory workers. Gildan also declined the lease on American Apparel's headquarters, which employs nearly 2,200 people. The downtown offices will continue to manage the company's retail operations and website, but in December American Apparel warned all its Los Angeles-area employees that they may lose their jobs.

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