KeNo's Housing and Economic Portal: Thursday June 23 Housing and Economic stories

Wednesday, June 22, 2011

Thursday June 23 Housing and Economic stories

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TOP STORIES:

Hillary Clinton Considers Seeking The World Bank Presidency - (www.businessinsider.com) Hillary Clinton may be seeking the World Bank presidency, Reuters just announced. Philippe Reines, a State Department spokesperson, says the rumor is "not even remotely true." The Washington Post says that Reines told a Reuters journalist directly: "I have a better source than you do." The current president, Robert Zoellick, got the job after his predecessor, Paul Wolfowitz, was forced out in the wake of a scandal involving a relationship with his subordinate. Zoellick's current term ends in 2012.

Greece, Portugal, Ireland Risk Surges to Record, Credit-Default Swaps Show - (www.bloomberg.com) The cost of insuring against default on government debt sold byGreece, Portugal and Ireland surged to records, according to traders of credit-default swaps. Contracts on Greece soared 30 basis points to 1,522, Portugal increased 16 to 722 and Ireland rose 10 to 690 as of 2:30 p.m. in London, according to CMA. The Markit iTraxx SovX Western Europe Index of swaps on 15 governments rose 4 basis points to 203, the highest since Jan. 12. Swaps on Spain increased 6.5 basis points to 261.5, Italy climbed 6 basis points to 165 and Belgium was 4 basis points higher at 144, according to CMA. An increase signals a deterioration in investor perceptions of credit quality. The cost of insuring corporate debt also rose. The Markit iTraxx Crossover Index of swaps on 40 companies with mostly high-yield credit ratings increased 2 basis points to 395, the highest since March 17, while the Markit iTraxx Europe Index of 125 investment-grade companies rose 1 basis point to a five- month high of 107.25, according to JPMorgan Chase & Co.

Greece Tourism Gains Threatened by Strikes - (www.bloomberg.com) Prime Minister George Papandreou’s attempts to draw tourists to Greece may be undermined by union calls for strikes against new government austerity measures. Unions representing more than 3 million workers are planning walkouts this month as Papandreou shapes 78 billion euros ($114 billion) of budget cuts and state asset sales to meet European Union bailout requirements. About 5,000 protesters, including power, postal and bank workers, marched through central Athens today carrying banners, one of which had a map of Greece with a red “Not For Sale” sign on it. Members of the PAME labor union took over the Finance Ministry offices in Athens on June 3 and 50,000 people protested two days later. A general strike is set for June 15. “If we weren’t committed to a conference, we might not have come,” said Norm Hartwell, a 70-year old dermatologist from Christchurch, New Zealand, as he dragged his suitcase through central Athens during a five-hour subway walkout this week. “We were thinking there may be disruptions.”

Brown’s Tax Program Heads for Showdown as California Budget Deadline Looms - (www.bloomberg.com) Committees in California’s Democrat- controlled Legislature passed spending plans including $8.1 billion of higher taxes opposed by Republicans, setting up a budget showdown as a constitutional deadline approaches. Budget panels in the Senate and Assembly approved Governor Jerry Brown’s proposal along party lines. The votes late yesterday sent the plans to the floor of each chamber for a decision. Brown, a Democrat, wants lawmakers to temporarily extend expiring taxes and fees pending a statewide vote. California, the world’s eighth-largest economy, may run out of cash if there’s no budget by July 1, forcing it to issue IOUs as it did in 2009. Under the constitution, tax increases require approval by two-thirds of lawmakers. Democrats are four votes short of that. Republicans have vowed to block passage.

Greece Is Said to Require $65 Billion More in Emergency Loans From EU, IMF - (www.bloomberg.com) European governments and the International Monetary Fund would lend as much as an extra 45 billion euros ($65 billion) to Greece under an expanded plan to avoid the euro area’s first sovereign default, two people with direct knowledge of the talks said. European estimates put Greece’s 2012-14 financing gap at as much as 170 billion euros, the people said. It would be filled by the loans, plus around 57 billion euros in unspent aid from last year’s bailout, roughly 30 billion euros in asset-sale proceeds and about 30 billion euros in rollovers by creditors. Structuring the rollovers remains the most sensitive part of the package, with European Central Bank President Jean-Claude Trichet warning on a teleconference of euro-area officials yesterday that German calls for a debt exchange might lead rating companies to declare Greece in default, the people said.