Thursday December 8 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Greeks Balk at Paying Steep New Property Tax - (www.nytimes.com) Ioannis Chatzis is 86 and lives in a tiny, single room, surviving on a pension that is just enough to pay for food and care for his bedridden wife. But in its latest push to raise cash, the Greek government sent him a new $372 real estate tax bill, incorporated into his October electric statement. Mr. Chatzis says he is being asked to choose between lights and paying for his wife’s medicines, since he cannot afford both on his $720-a-month pension. “This is how we are treated,” he said recently, his face a mixture of fury and despair. “I have nothing left to give. I will not be paying it.” Mr. Chatzis is far from alone in that vow, and it is not certain that the Greek government will do anything about the tax rebels.

Italy is closer to collapse than anyone realized - (www.businessinsider.com) Some stories in the European press (La Stampa - Zero Hedge link) suggest that Italy is working on a very big loan package from the IMF. I have no doubt that there are ongoing discussions. There have to be. Either someone puts a finger in the dike or Italy goes tapioca. That thought is difficult for me to fathom. How could we be so close to the brink? At this point there is zero possibility that Italy can refinance any portion of its $300b of 2012 maturing debt. If there is anyone at the table who still thinks that Italy can pull off a miracle, they are wrong. I’m certain that the finance guys at the ECB and Italian CB understand this.

Secret Fed Loans Gave Banks Undisclosed $13B - (www.bloomberg.com) The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing. The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue. Saved by the bailout, bankers lobbied against government regulations, a job made easier by the Fed, which never disclosed the details of the rescue to lawmakers even as Congress doled out more money and debated new rules aimed at preventing the next collapse.

Italy’s Banks Back Patriotism to Spur Demand for Sovereign Debt - (www.bloomberg.com) As Italian bond yields hover close to euro-area highs, the country’s biggest banks are backing a plea for local investors to purchase the securities and help restore confidence in the nation’s sovereign market. The Italian Banking Association is promoting “BTP-Day” today, with lenders waiving fees for clients who buy government bonds and bills known as BTPs and BOTs at branches. The initiative, originally proposed by a Tuscan businessman, will be repeated on Dec. 12. Borrowing costs surged as the euro region’s debt crisis pushed the yields of six-month Italian Treasury bills to a 14- year high. The rate on benchmark 10-year bonds has breached 7 percent, a level that locked Greece, Portugal and Ireland out of the capital markets and forced them to seek aid. The yield fell 4 basis points to 7.23 percent today, while the spread with German bunds narrowed 7 basis points to 492 basis points.

Dealers See Fed Buying $545B Mortgage Bonds- (www.bloomberg.com) The biggest bond dealers in the U.S. say the Federal Reserve is poised to start a new round of stimulus, injecting more money into the economy by purchasing mortgage securities instead of Treasuries. Fed Chairman Ben S. Bernanke and his fellow policy makers, who bought $2.3 trillion of Treasury and mortgage-related bonds between 2008 and June, will start another program next quarter, 16 of the 21 primary dealers of U.S. government securities that trade with the central bank said in a Bloomberg News survey last week. The Fed may buy about $545 billion in home-loan debt, based on the median of the firms that provided estimates. While mortgage rates are already at about record lows, housing continues to constrain the economy, with the National Association of Realtors saying in Washington last week that the median price of U.S. existing homes dropped 4.7 percent in October from a year ago. Borrowers with a 30-year conventional mortgage would save $40 billion to $50 billion annually in aggregate if they could all refinance into a new loan with a 3.75 percent rate, according to JPMorgan Chase & Co.

OTHER STORIES:

IMF Says No Discussions Have Been Held With Italy About Financing Program - (www.bloomberg.com)

Moody’s Says All Euro-Region Ratings Threatened by Debt and Banking Crisis - (www.bloomberg.com)

Italy Sells $759 Million of Inflation-Linked Bonds at 7.3 Percent - (www.bloomberg.com)

Central Banks Ease Most Since 2009 - (www.bloomberg.com)

Investors shun Europe’s big banks - (www.ft.com)

Time Runs Short for Europe to Resolve Debt Crisis - (www.nytimes.com)

Merkel Favors Fast-Track EU Treaty Change - (www.bloomberg.com)

Bank of Japan Capital Ratio Sinks to Lowest Level Since 1979 - (www.bloomberg.com)

Real-Estate Risks Overshadow China’s Economic Prospects, OECD Report Shows - (www.bloomberg.com)

Fewer New Homes Sales in U.S. Than Forecast - (www.bloomberg.com)

Global economic recovery petering out: OECD - (www.bloomberg.com)

Banks Step Up Warnings on Euro Breakup as Moody’s Sees Ratings Threatened - (www.bloomberg.com)