KeNo's Housing and Economic Portal: Tuesday June 28 Housing and Economic stories

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TOP STORIES:

Wave of Unrest Rocks China - (online.wsj.com) A wave of violent unrest in urban areas of China over the past three weeks is testing the Communist Party's efforts to maintain control over an increasingly complex and fractious society, forcing it to repeatedly deploy its massive security forces to contain public anger over economic and political grievances. The simultaneous challenge to social order in several cities from the industrial north to the export-oriented south represents a new threat for China's leaders in the politically sensitive run-up to a once-a-decade leadership change next year, even though for now the violence doesn't appear to be coordinated. In the latest disturbance, armed police were struggling to restore order in a manufacturing town in southern China Monday after deploying tear gas and armored vehicles against hundreds of migrant workers who overturned police cars, smashed windows and torched government buildings there the night before. The protests, which began Friday night in Zengcheng, in the southern province of Guangdong, followed serious rioting in another city in central China last week, plus bomb attacks on government facilities in two other cities in the past three weeks, and ethnic unrest in the northern region of Inner Mongolia last month. Antigovernment protests have become increasingly common in China in recent years, according to the government's own figures, but they have been mainly confined to rural areas, often where farmers have been thrown off their land by property developers and local officials.

BofA ‘Significantly Hindered’ Foreclosure Review of Its Loans, U.S. Says - (www.bloomberg.com) Bank of America Corp. (BAC), the largest U.S. lender, “significantly hindered” a federal review of its foreclosures on loans insured by the Federal Housing Administration, the U.S. said. The bank was slow in providing data and offered incomplete information, according to the U.S. Department of Housing and Urban Development inspector general’s office, which conducted the review. “Our review was significantly hindered by Bank of America’s reluctance to allow us to interview employees or provide data and information in a timely manner,” William Nixon, an assistant regional inspector general for the agency, said in a sworn declaration. The filing, dated June 1 and obtained yesterday by Bloomberg News, was submitted as an exhibit in a lawsuit by the state of Arizona against the Charlotte, North Carolina-based bank. Arizona, which is seeking to interview former Bank of America employees, accused the bank of misleading homeowners who were seeking mortgage modifications.

Fees Punish Savers Seeking Hedge-Fund Cachet in Commodities Futures Funds - (www.bloomberg.com) Altegris Managed Futures Strategy Fund, a mutual fund that allows less affluent clients to invest with some of the best-known hedge-fund commodities traders, has attracted $707 million since its start less than a year ago. Investors in the fund lost 6 percent this year, and plummeting gold, silver and oil prices weren’t the only reason. The losses also reflect fees of as much as 2 percent of assets paid to the underlying traders in addition to the fund’s 2 percent management fee and 5.75 percent in upfront charges. If the fund had made a profit, as much as 35 percent of that would also have gone to the underlying managers. Investors in U.S. mutual funds, by contrast, paid 0.8 percent in average fees last year, according to data from Morningstar. “The fees are far higher than for less specialized strategies,” said Nadia Papagiannis, an analyst with Chicago- based Morningstar Inc. (MORN) “They’re promising the performance of hedge-fund managers, but what we’ve seen with funds of funds is that the performance is mediocre.”

Regulators moves to delay swaps crackdown, bolster banks - (www.reuters.com) U.S. regulators threw a temporary bridge across the increasingly awkward gap between the idea of regulating the $600-trillion swaps market and the reality of actually doing it. In a move that will give the European Union time to catch up with the United States, the U.S. Commodity Futures Trading Commission conceded on Tuesday what market observers have long known -- new swaps rules must be postponed. The CFTC proposed delaying for months the effective dates of new rules overseeing the over-the-counter derivatives market, including credit default swaps like those that helped amplify the 2007-2009 banking crisis. The U.S. agency's move came as French President Nicolas Sarkozy called on Tuesday for tighter controls over speculators he blames for rising food and energy prices.

Systemic U.S. Firms May Be Forced to Restructure, FDIC’s Krimminger Says - (www.bloomberg.com) Systemically important financial institutions in the U.S. may have to simplify their business if they can’t provide viable plans for unwinding themselves in a crisis, a senior Federal Deposit Insurance Corp. official said. “Ultimately, a SIFI could be required to restructure its operations if it cannot demonstrate it is resolvable in an orderly manner under theBankruptcy Code,” Michael Krimminger, the FDIC’s chief counsel, will tell a House Financial Services subcommittee tomorrow at a hearing in Washington. The Dodd-Frank Act requires firms deemed systemically important to file plans with the FDIC and the Federal Reserve, laying out how they could be resolved if they should collapse. Lawmakers gave the FDIC authority to resolve complex firms aiming to prevent a repeat of the market tumult that followed the September 2008 bankruptcy of Lehman Brothers Holdings Inc. Krimminger, in prepared testimony for a Financial Institutions subcommittee hearing on whether Dodd-Frank has ended the idea that some firms are “too big to fail,” said the FDIC anticipates systemic firms will “pursue the resolution planning process in a way to meet statutory requirements.”

Uh-Oh: It Sounds Like They Don't Have A Deal On Greece - (www.businessinsider.com) A deal for another bailout of Greece has not yet been reached, according to Luxembourg's finance minister, Luc Frieden (via Bloomberg). Frieden, commenting at the European finance ministers meeting today, said the deal may not be done until July. He also suggested that the private sector will be involved in this bailout, a fact now well known. The euro is falling on the news, but it has also been sliding in the wake of Bernanke's speech, so recent movements may be a bit misleading.

OTHER STORIES:

Euro Finance Chiefs Race to Avert Default; Greek Bonds Drop - (www.bloomberg.com)

Soros: Time working against euro zone solution - (www.reuters.com)

'Conduit' muni bond defaults draw scrutiny - (www.latimes.com)

Euro zone to mull private sector role in Greek bailout - (www.reuters.com)

Greek Aid May Be Delayed to July: Frieden - (www.bloomberg.com)

China Inflation Heading for 6% Shows Danger for Wen Extending Rate Pause - (www.bloomberg.com)

China Raises Bank Reserve Requirements - (www.bloomberg.com)

China food costs push inflation to 5.5 pct in May - (finance.yahoo.com)

India Wholesale Prices Rise Faster-Than-Estimated 9.06% From Year Earlier - (www.bloomberg.com)

Kan to Resign After Passage of Key Bills - (www.bloomberg.com)

Mario Draghi Holds E.C.B. Line Against Restructuring for Greece - (www.nytimes.com)