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Banks on Verge of Collapse in Denmark Win Time in FSA Review - (www.bloomberg.com) Danish banks in breach of the nation’s solvency rules will get more time to raise capital and avert failure as the regulator eases its resolution practices. The Financial Supervisory Authority will give two banks currently in breach of individual solvency requirements the time they need to rebuild their capital buffers, said Anders Balling, head of banking at the regulator in Copenhagen. At the height of Denmark’s banking crisis two years ago, the FSA gave lenders as little as 48 hours to find investors before they were shut down. “We have moved away from an either-or model,” Balling said in a telephone interview. “We can see the benefits of a gradual approach. This is also part of the thinking in the new European capital requirement rules.”
JGBs
skid for third session, pushing 10-yr yield to 9-month high - (www.reuters.com) Japanese government bond
prices sold off for a third straight session on Tuesday and the benchmark yield
hit a nine-month high, though a late downturn in shares pulled yields off their
intraday highs. Decent demand at a 30-year auction did little to reassure some
investors, particularly banks, which continued to cut their
holdings of short- to medium-term notes. In recent sessions, the yen's weakness
against the dollar has helped push up Japanese share prices, pressuring JGB
prices which were already feeling the pinch from sagging U.S Treasuries. "The
auction was better than some people had feared, but we have a series of
auctions in the coming weeks," said Maki Shimizu, senior strategist at
Citigroup in Tokyo. "Today's selloff was not driven by the auction,"
she said, but rather by the medium-term and the long-term tenors.
Why Did
Mortgage Rates Spike Quickly To One-Month Highs? - (www.mortgagenewsdaily.com) Mortgage rates rocketed higher precipitously today, taking
them to their highest levels since April 2nd. The move was all the more
confounding as it happened on a day with no significant headlines or data
releases--at least not the caliber of information that normally motivates such
violent swings. When the dust settled, borrowing costs at the 3.5% 'best-execution' were up anywhere from 0.4
to 1.2% depending on the scenario (this is equivalent to $400-$1200 in closing
costs or lender credit for every $100k financed). It was also enough of a
move to bring 3.625% back into picture and as a viable best-execution
contender. The differences between those two rates are minimal in terms
of efficiency, and in most cases, the choice amounts to a trade-off between up-front
cost and monthly payment. While there was no overt causality for today's
big movement, it wasn't without it's reasons. That said, the reasons (or
'probable' reasons, as the case may be) have to do with some of the more esoteric
factors driving mortgage rates. We know that Mortgage-Backed-Securities
(MBS)--the financial instruments that groups of similar loans ultimately
become, have the most direct effect on mortgage rates. We've also
spoken about how the movements of MBS prices are often very similar to movement
of bond prices, particularly in US Treasuries.
Grind
of Euro Crisis Wears Down Support for Union, Poll Finds - (www.nytimes.com) Europeans have never been
wild about the European
Union. With the region sapped by the euro crisis, confidence in the
institution and the benefits it was supposed to provide is flagging faster and
further than ever before, according to an influential opinion survey released
Monday. The results of an
annual survey by the Pew
Research Center, a nonpartisan organization based in Washington,
show a deepening disillusionment with the union in major member countries. The
results of the survey suggest that more citizens than ever could end up
opposing the transfer of more power to European Union institutions that may be
vital for transforming the euro into a viable currency over the long term. “The
effort over the past half-century to create a more united Europe is now the
principal casualty of the euro crisis,” according to a report that Pew
published with the survey results. The title of the report summed it up: “The
New Sick Man of Europe: the European Union.”
62%
of delinquent loans are more than 90 days past due - (www.ochousingnews.com) Lenders made no progress on
their resolution of legacy loans over the last year. The delinquency rate of
all loans inched down from 6.8% in March of 2012 to 6.59% in March of 2013.
Given the improvement shown by recent vintages, that means the delinquency of
legacy loans is unchanged, and itt may have gotten worse. As lenders kick the
can with loan modifications, borrowers are redefaulting faster than lenders can
remodify their loans. The only net reduction in legacy loan delinquencies is
coming from the trickle of foreclosures. As a result, legacy loans now
account for 62% of long-term delinquencies. Lenders are committed to a policy
of can kicking until prices come back. They are foreclosing on a handful of
committed squatters in an attempt to spook the herd and prompt them to agree to
loan modifications. From their perspective, the plan is working. Remember,
negative equity is another lender euphemism. It disguises the fact that lenders
have a huge exposure to loans without collateral backing, and it makes
borrowers feel like they have hope of actual equity again while they rent from
the bank. (Notice the deception in the chart below that cuts off the bottom 10%
to make the improvement look better than it is).
San Francisco Leasing Slows Amid Office Boom: Real Estate - (www.bloomberg.com)
Divisions hamper Europe's plans to tackle failing banks - (www.reuters.com)
U.S. oil boom leaves OPEC
sidelined from demand growth - (www.reuters.com)
Lehman Reaches Beyond Grave to Grab Millions From Nonprofits - (www.bloomberg.com)
Lehman Reaches Beyond Grave to Grab Millions From Nonprofits - (www.bloomberg.com)
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