Wednesday, August 28, 2013

Thursday August 29 Housing and Economic stories


Spanish skyscraper run by "Bad Bank" missing elevators in monster goof - (www.nydailynews.com) What goes up must walk down. In what will surely go down in history as one the greatest architectural blunders, the town of Benidorm in Alicante, Spain, had almost completed its 47-story skyscraper when it realized it excluded plans for elevator shafts.... The bizarre nature of the practices put in place in the construction of InTempo doesn't stop at bad banks and missing elevator shafts. The initial backer of the project, Caixa Galicia, stopped paying workers for four months around the time it realized -- after about 23 floors had been completed -- that a service elevator hadn't been installed for the 41 workers who had been hauling materials up 23 flights of stairs.

China Banks’ Bad Loans Rise for Seventh Quarter as Economy Slows - (www.bloomberg.com) Chinese banks’ bad loans rose for a seventh straight quarter, extending the longest streak in at least nine years as the world’s second-largest economy continued slowing. Non-performing loans climbed by 13 billion yuan ($2.1 billion) in the second quarter from the end of March, reaching 539.5 billion yuan, the China Banking Regulatory Commission said in a statement on its website today. Soured debt increased across all lender categories, including state-owned and regional banks. China’s economy slowed for a second straight quarter during the period, as growth in factory output and fixed-asset investment weakened. A June crackdown on off-balance-sheet lending and other credit outside the banking system caused a cash squeeze, driving money-market rates to a record.

The Hindenburg Omen is Back! Will it Stick This Time? - (www.ispyetf.com) The Hindenburg Omen had its glory days (2007), but more recently it’s become famous for notorious misfires. Despite many hyped up Omen sightings in recent years, the Dow Jones (DJI: ^DJI) and S&P 500 (SNP: ^GSPC) are trading near all-time highs while the VIX (Chicago Options: ^VIX) is hovering near historic lows. But (and this could turn out to be a big but), I stumbled upon a statistical nuance that may restore the bruised indicator’s image. Hindenburg Omen is Back: The latest rally leg has brought a whole cluster of Omens in its wake. Omen clusters (not just scattered signals) appear to be the key to the signal’s reliability (or lack thereof). An Omen here or there may get the media’s attention, but it doesn’t consistently phase stocks. However – this observation may restore the Omen’s credibility - a cluster of a dozen or so Omens in a 50-day period, tends to be bearish for stocks.  We are seeing such an Omen cluster right now. The chart below plots the S&P 500 (NYSEArca: SPY) against the most recent ‘Dozen-Omen-Cluster’ sightings. They occurred in January/February 2000, March/April 2006 and July/August 2013.

India Restricts Foreign-Exchange Outflows - (www.bloomberg.com) India increased efforts to stem the rupee’s plunge and stop capital outflows that are pushing the economy towards its biggest crisis in more than two decades. The Reserve Bank of India, whose Governor Duvvuri Subbarao steps down next month, cut the amount local companies can invest overseas without seeking approval to 100 percent of their net worth, from 400 percent, according to a statement late yesterday. Residents can remit $75,000 a year versus the previous $200,000 limit. Rupee forwards rose for the first time in three days. Policy makers’ moves since July to tighten cash supply, restrict currency derivatives and curb gold imports have failed to arrest the rupee’s slump to record lows as they struggle to attract capital to fund a record current account deficit. The rupee has weakened 28 percent in the past two years, the biggest tumble since the government pledged gold reserves in exchange for loans from the International Monetary Fund in 1991.

Your mortgage documents are fake - (www.salon.com) Prepare to be outraged. Newly obtained filings from this Florida woman's lawsuit uncover horrifying scheme. If you know about foreclosure fraud, the mass fabrication of mortgage documents in state courts by banks attempting to foreclose on homeowners, you may have one nagging question: Why did banks have to resort to this illegal scheme? Was it just cheaper to mock up the documents than to provide the real ones? Did banks figure they simply had enough power over regulators, politicians and the courts to get away with it? (They were probably right about that one.) A newly unsealed lawsuit, which banks settled in 2012 for $95 million, actually offers a different reason, providing a key answer to one of the persistent riddles of the financial crisis and its aftermath. The lawsuit states that banks resorted to fake documents because they could not legally establish true ownership of the loans when trying to foreclose. This reality, which banks did not contest but instead settled out of court, means that tens of millions of mortgages in America still lack a legitimate chain of ownership, with implications far into the future. And if Congress, supported by the Obama administration, goes back to the same housing finance system, with the same corrupt private entities who broke the nation’s private property system back in business packaging mortgages, then shame on all of us.





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