Friday August 2 Housing and Economic stories

TOP STORIES:

Hungary Calls on IMF to Close its Budapest Office - (www.spiegel.de)  Orbán's former economy minister and current central bank governor, Gyorgy Matolcsy, wrote a letter to IMF Managing Director Christine Lagarde on Monday calling on the fund to close its representative office in Budapest as it was "not necessary to maintain" it any longer. Hungary owes its economic survival to the IMF. When the country was caught up in the global financial crisis in 2008, the fund and the EU came to the rescue with a €20 billion ($26 billion) loan. At the time, Orbán's predecessor was in office. Ever since Orbán became prime minister in 2010, Hungary has had trouble with international institutions. His government pushed through anew constitution and many laws that curtailed democracy, the powers of the constitutional court, the justice system and press freedoms. The EU responded by launching several proceedings against Hungary for breaching EU treaties. In early July, the European Parliament passed a resolution calling on Hungary to repeal the "anti-democratic changes." Orbán angrily dismissed the demands as "Soviet-style" meddling.

Greece Hit by General Strike to Protest Austerity - (www.nytimes.com) Thousands of Greeks walked off the job Tuesday in a 24-hour general strike called by unions opposing a new round of austerity measures that the government has vowed to enact at the urging of the country’s foreign creditors. The sorest point is a much-delayed overhaul of the Civil Service involving thousands of layoffs and wage cuts, which is set for a vote in Parliament on Wednesday night. The package must be passed if Athens is to secure the first installment of $9 billion in rescue loans approved last week by euro zone finance ministers. Despite strong objections by the political opposition, and by some deputies in the ruling coalition, the package is expected to squeak through the 300-seat Parliament where the government has a slim majority of five. Implementation of the contentious reforms will remain a tough challenge however in a volatile political climate.

Portuguese politics may spoil European austerity recipe - (www.reuters.com) Europe hoped Portugal would stick to the austerity prescribed in its financial rescue, graduating next year and following Ireland in a successful recovery from economic slump. Instead, a political crisis has knocked the program off track and Portugal is starting to look more like Greece which only scraped through the latest review of its bailout. Two senior Portuguese ministers have resigned, creating political turmoil and spending cuts and tax hikes have contributed to the worst economic slump since the 1970s and record high unemployment of 18 percent. "The hope was that Portugal, by being the second country to exit a program after Ireland, would show that the cure works, that countries can recover," said Guntram Wolff, director of Bruegel, an influential think tank in Brussels.

Analysis: Citigroup has an emerging markets headache - (www.reuters.com) Emerging markets have fueled two-thirds of Citigroup revenue growth for the last two years. The bank operates in about 100 countries globally, far more than most of its U.S. competitors, which means it can be hit by economic factors that shareholders know little about. "If anything goes bump in the world, Citigroup may well have some exposure," said Fred Cannon, an analyst at Keefe, Bruyette & Woods. The slowdown in U.S. and European economies has made developing countries as a whole look riskier. So far this year, emerging market stocks, as measured by MSCI's index .MSCIEF, have declined about 12 percent, while the U.S. benchmark Standard & Poor's 500 index .SPX has gained about 15 percent.

Thousands of borrowers to get mortgage payments reduced - (money.cnn.com) Starting this week, hundreds of thousands of struggling borrowers could be in for a pleasant surprise: a quick and easy way to get their mortgage payments back on track -- and save considerable money. Through a new effort called the Streamlined Modification Initiative, borrowers withmortgages backed by Fannie Mae and Freddie Mac who are at least 90 days behind on payments will start receiving offers from lenders to lower their mortgage payments. The Federal Housing Finance Agency (FHFA), which oversees Fannie and Freddie, won't say how many delinquent homeowners will receive the modifications, but the Mortgage Bankers Association reported in May that about 1.1 million borrowers are behind on their loans by three payments or more. Not all of those mortgage holders have Fannie or Freddie loans, however.

OTHER STORIES:

Euro zone imports fall steeply in May, prices rise in June - (www.reuters.com)

ADB Trims Developing Asia’s Growth Forecasts on China Slowdown - (www.bloomberg.com)

Europe Car Sales Fall to Two-Decade Low on Unemployment - (www.bloomberg.com)

Mursi Supporters’ Battle With Police Leaves Seven Dead - (www.bloomberg.com)

China Treasuries Holdings Hit Record as Private Investors Sell - (www.bloomberg.com)

Analysis: Low rates pledge buys time but builds risk for fragile banks - (www.reuters.com)

India makes risky bet with rupee defense - (www.reuters.com)
China Slowdown Brings Ordos Bust as Li Grapples With Credit - (www.bloomberg.com)

Dollar Bulls Waver as Fed’s Signals Whipsaw Traders: Currencies - (www.bloomberg.com)