Monday November 12 Housing and Economic stories

TOP STORIES:

Greek debt to badly miss target - euro zone official - (www.reuters.com) Greek debt will be above the target of 120 percent of GDP in 2020, a preliminary report by the IMF showed on Thursday, and Athens will need more reforms before emergency credit from international lenders can start flowing again. Excerpts from the International Monetary Fund (IMF) report were presented to the Eurogroup Working Group (EWG) - junior finance ministers and treasury officials who prepare meetings of euro zone finance ministers. "It is clear that Greece is off track and there is no chance they will cut the debt to 120 percent of GDP in 2020 as envisaged. It will be rather 136 percent, and this would be under a positive scenario of a primary budget surplus, a return to economic growth, and privatisation," a euro zoneofficial, who insisted on anonymity, said.

Latest Obama Headfake: Threat to Replace Favorite Housing Scapegoat, FHFA’s Ed DeMarco - (www.nakedcapitalism.com) The October surprises are now coming fast and furious as Obama’s lead is slipping in most polls and on Intrade. So empty gestures to boost turnout in his heretofore spurned Democratic party base are the order of the day. I’m a day behind on this item, but nevertheless thought it was so cynical as to merit special notice. A new effort to rally the troops, per Shahien Nasirpour at the Financial Times, is that the Administration has started messaging to pet activist groups that it will replace Ed DeMacro, the Administration’s favorite scapegoat for its negligence on the housing beat. Team Obama has backed the banks every step of the way, from its failure to use chain of title abuses and obvious tax code (REMIC) violations to pressure banks to do mortgage mods, to its unwillingness to prosecute senior bankers (Charles Ferguson, this blog, and others have set forth legal theories and evidence; the issue clearly is lack of political will), its refusal to undertake anything other than cursory “see no evil” investigations, and its bank friendly measures, from borrower-damaging, “foam the runway” HAMP to a fraud-institutionalizing mortgage “settlement”. But DeMarco, by refusing to endorse principal mods for Fannie and Freddie borrowers (which is a peculiarly short-sighted posture) serves an a convenient distraction for the Administration’s repeated refusal to take any serious pro-borrower measures. From the Financial Times:

9 More Banks Subpoenaed Over Libor - (online.wsj.com) Nine more banks have received subpoenas in connection with a probe into alleged widespread interest-rate manipulation by banks, a person familiar with the investigation said. The probe, a joint effort by the offices of New York Attorney General Eric Schneiderman and Connecticut Attorney General George Jepsen, could lead to civil enforcement action related to breaches of antitrust and fraud laws. The subpoenas, which were issued in August and September but haven't been previously reported, bring the total number of subpoenas in the case to 16. The banks involved in the probe include most members of the panel that helps set the dollar London interbank offered rate.

Spain’s Unemployment Reaches Record as Bailout Looms - (www.bloomberg.com) Spanish unemployment climbed to a fresh record in the third quarter as a deepening recession left one in four workers jobless, adding pressure on Prime Minister Mariano Rajoy to seek a second European bailout. Unemployment, the second highest in the European Union after Greece, rose to 25.02 percent from 24.6 percent in the previous quarter, the National Statistics Institute said in Madrid today. That is the highest since at least 1976, the year after dictator Francisco Franco’s death led Spain to democracy. The euro-area average is 11.4 percent. Nearly three months after the European Central Bank offered bond buys to lower its borrowing costs, Spain is still playing for time. Rajoy is ignoring pressure to seek more European aid even as the country’s recession worsens and banks report decreasing third-quarter earnings following an increase in provisions for souring real-estate assets. Spain’s Ibex 35 stock index has dropped 10 percent this year, the only decline among major European equity markets.

S&P downgrades French banks - (money.cnn.com)  Credit agency Standard & Poor's has cut its ratings on BNP Paribas and two other major French banks, citing the rising economic risks that they face. The downgrade, which came after the market closed in Paris Thursday, also cut the ratings for Banque Solfea and Cofidis. "We see them as more exposed to this more difficult European environment," said the statement from S&P. "In our view, the economic risks under which French banks operate are increasing, leaving [them] moderately more exposed to the potential of a more protracted recession in the eurozone."

OTHER STORIES:

Why you should take GDP Headline with a grain of salt. - (www.washingtonpost.com)

Spanish unemployment hits new peak  - (money.cnn.com)

Korea’s Growth Slows as Global Cooling Caps Export Demand - (www.bloomberg.com)

Wen Jiabao Family Linked to Billions in Assets, NYT Reports - (www.bloomberg.com)

Italy Business Optimism Unexpectedly Falls on Recession - (www.bloomberg.com)

Billions in Hidden Riches for Family of Chinese Leader - (www.nytimes.com)

‘Fiscal cliff’ already hampering U.S. economy, report says - (www.washingtonpost.com)

Apple Forecast Shortfall Shows Cost of Year-End Product Rush - (www.bloomberg.com)

Citi Chairman Is Said to Have Planned Chief’s Exit Over Months - (www.nytimes.com)