KeNo's Housing and Economic Portal: Thursday June 19 Housing and Economic stories

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France says mooted BNP Paribas' $10 billion U.S. fine 'unreasonable' - (www.bloomberg.com) France stepped up its protests to the United States on Tuesday over a possible $10 billion-plus sanctions busting fine for its biggest bank BNP Paribas, saying such a move could hurt transatlantic free-trade talks. Foreign Minister Laurent Fabius's warning came two days before President Francois Hollande hosts Barack Obama for talks fraught with other sources of possible tension - from General Electric's overtures to emblematic French engineering group Alstom to differences over Syria and sanctions on Russia. Until now, Hollande's senior ministers have shied away from commenting on BNP's negotiations with U.S. authorities, who are investigating whether the lender evaded U.S. sanctions relating primarily to Sudan, Iran and Syria between 2002 and 2009. But Fabius, whose portfolio includes trade issues, noted the case came just as Washington and the European Union are negotiating a free trade pact sought after by Obama, and that it would send the wrong signal if BNP's business was damaged.

Turkey's Erdogan calls CNN reporter 'agent' for his coverage of protests - (www.reuters.com) Turkish Prime Minister Tayyip Erdogan on Tuesday called CNN correspondent Ivan Watson a "flunky" and an "agent" for his coverage of anti-government protests days after police harassed him live on air. Istanbul police interrupted a live CNN International broadcast on Saturday and briefly held Watson, the news broadcaster's long-time Istanbul correspondent. He was reporting on the first anniversary of Turkey's biggest anti-government protests in decades. Erdogan has repeatedly accused the foreign media and governments of having a hand in the protests, which have erupted sporadically but with far fewer numbers since last June. He also blames an international conspiracy for a graft scandal that implicated his inner circle in December. Saturday's demonstrations were muted, with a heavy police presence at Taksim Square, where last year's protests began, to prevent any unrest. They fired tear gas and water cannon to disperse 1,000 or so protesters.

[Bloomberg] Lehman Lesson Lost as Bank Lobby Gains Clout, Reinfeldt Says - (www.bloomberg.com) Sweden’s Prime MinisterFredrik Reinfeldt said the world risks forgetting the lessons of the financial crisis as the bank lobby gains dominance. Regulators “have listened too much to banks and others who argue that if you try to do something like this we won’t be able to conduct a banking business,” the 48-year-old said in an interview last week at his Rosenbad office in Stockholm. Since the Basel Committee on Banking Supervision unveiled rules in 2010 to rein in an industry whose excesses plunged the global economy into crisis, banks have attacked the standards as posing a threat to economic growth. Reinfeldt says there’s a risk politicians might stray from the original policy goals articulated during the darkest hours of the crisis, as memory of the financial shock triggered by the 2008 failure of Lehman Brothers Holding Inc. fades.

Bond Yields Lowest Since Napoleon Are No Comfort to Europe Amid Deflation Fight - (www.bloomberg.com) Europe’s lowest government bond yields since the Napoleonic Wars are signaling investors want more action from Mario Draghi. Instead of a vote of confidence, the most pronounced rally in 200 years suggests the European Central Bank president needs to stave off the risks of stagnation and deflation. Austria, Belgium,France (GFRN10) andGermany can borrow at lowerrates (GDBR10) than the U.S. as inflation less than half the ECB’s target stokes concern the euro zone will take many years to recover from its longest-ever recession. While bond, currency and derivative markets show an abatement in the contagion that began in Greece in 2009 before engulfing Spain and Italy, a closer look reveals high debt and deficits that have yet to be addressed, unemployment near record levels and a banking system still to be fixed.

Brazil Debt Suffering Social-Spend Promises With Election - (www.bloomberg.com) As President Dilma Rousseff’s lead narrows in polls before October’s election, she and her top opponent are courting voters with spending promises that would undermine the fiscal discipline investors say is needed to restore confidence in the economy. Rousseff boosted this month cash transfers to the poor, said in April she will increase income tax exemptions for 2015, and pledged to continue raising the minimum wage. Senator Aecio Neves, the runner-up in polls, last month distanced himself from earlier talk of unpopular austerity measures and urged Congress to extend minimum wage increases by at least the rate of inflation through 2019. Analysts from credit rating firms to the World Bank agree Latin America’s largest economy needs to cut spending to help bring inflation under control, boost investments and thereby quicken growth. With a total tax burden already at 36 percent of gross domestic product, a widening budget deficit, and more than 80 percent of central government outlays earmarked by law, Brazil has little room for fiscal maneuvers, said Jankiel Santos, chief economist at Banco Espirito Santo de Investimento. “They’re promising paradise, not blood, sweat and tears,” Santos said in a phone interview from Sao Paulo. “A budget tightening is inevitable, so these pledges may become a political liability.”

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