KeNo's Housing and Economic Portal: Sunday December 25 Housing and Economic stories

Saturday, December 24, 2011

Sunday December 25 Housing and Economic stories

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TOP STORIES:

The Swiss Government Is Getting Ready For The Collapse Of The Euro - (www.businessinsider.com) The Swiss government is preparing for a collapse of the euro, according to Swiss Finance Minister Eveline Widmer-Schlumpf. She told parliament that a work group was studying the imposition of capital controls and negative interest rates to protect Switzerland from the capital flight that a euro collapse would engender (Handelsblatt). A tidal wave of euros would drive up the Swiss franc, devastate Switzerland’s export economy, and devalue its vast wealth invested in other countries. Already in August, the Swiss National Bank instituted a currency peg and swore to defend it by acquiring “unlimited” amounts of euros, a risky strategy if the euro were to collapse (for the debacle leading up to the peg, read... Swiss Franc Wreaks Havoc In Switzerland).

Hedge funds braced for worst year since 2008 - (www.ft.com) Hedge funds are set to rack up their second-worst year in two decades after taking a beating from the eurozone crisis and an unexpected slowing in global economic growth. The average hedge fund manager has lost 4.37 per cent in the year to the end of November, according to data just released by Hedge Fund Research – losing money in six of the past seven months. Only in 2008, following the collapse of Lehman Brothers, did the industry fare worse. More. High volatility and correlation have wrongfooted even the most skilled of traders. Managers such as US’s Paulson & Co and Highbridge of the US or the UK’s Lansdowne and Odey have failed to recover double-digit percentage losses for some of their funds suffered in August and September. “The market has travelled the distance between 1,100 and 1,200 seven times, and that volatility doesn’t always lend itself to completely rational decision-making,” said Barry Bausano, Deutsche Bank’s head of equities for the Americas.

Gas-Fracking Chemicals Detected in Wyoming Aquifer, EPA Says - (www.bloomberg.com) The U.S. Environmental Protection Agency said for the first time it found chemicals used in extracting natural gas through hydraulic fracturing in a drinking-water aquifer in west-central Wyoming. Samples taken from two deep water-monitoring wells near a gas fieldin Pavillion, Wyoming, showed synthetic chemicals such as glycols and alcohols “consistent with gas production and hydraulic-fracturing fluids,” the agency said today in an e- mailed statement. The U.S. gets about one-third of its gas from fracturing, or fracking, in which millions of gallons of chemically treated water and sand are forced underground to break rock and let trapped vapor flow. The findings give ammunition to environmental groups, such as the Natural Resources Defense Council, that have said the drilling risks tainting drinking water and needs stronger regulation.

Moody's cuts three French banks - (www.reuters.com) Ratings agency Moody's downgraded the debt of BNP Paribas, Societe Generale, and Credit Agricole on Friday, citing deteriorating liquidity and funding conditions. Moody's cut its ratings on the long-term debt of BNP and Credit Agricole by one notch to Aa3, concluding reviews that began in June and were continued in September. Societe Generale's long-term debt was cut by one notch to A1. The downgrades were driven by the increasing difficulties the banks were having in raising funding and the worsening economic outlook, Moody's said. The French banks' ratings are still roughly level compared with their European peers, reflecting their strong retail operations and stable earnings.

European CEOs Move Cash to Germany - (www.bloomberg.com) Grupo Gowex (GOW), a Spanish provider of Wi-Fi wireless services, is moving funds to Germany because it expects Spain to exit the euro. German machinery maker GEA Group AG is setting maximum amounts held at any one bank. “I don’t trust Spain will remain in the euro zone,” said Jenaro Garcia, founder and chief executive officer of Madrid- based Grupo Gowex, which provides Wi-Fi access in 15 countries. “We moved our cash and deposits to Germany because Spain will come back to the peseta.” European companies spent billions preparing for the euro when it was introduced in 2000 by 11 countries. Contingency planning for an unraveling of the currency involves cutting investment, moving money to Germany, transferring headquarters to northern Europe from southern, and even going out of business, according to interviews with more than 20 executives.