Monday July 21 Housing and Economic stories

TOP STORIES:

China Developers Offering Home Buybacks in Weakest Markets - (www.bloomberg.com) Property developers in two ofChina’s weakest housing markets are offering to buy back homes above the purchase price to boost sales as demand slows. In Hangzhou, where home prices fell the most in May among 70 Chinese cities watched by the government, Shanheng Real Estate Group is giving homebuyers an option to sell back their apartments in five years for 40 percent above the purchase price. In Wenzhou, DoThink Group is offering to repurchase homes at three of its projects for 120 percent of the purchase price after three years. The offers are the latest strategy by developers across China, including reducing prices, delaying project launches and offering incentives to potential buyers, as they seek to maintain sales targets. Prices of new homes fell in May from April in half the 70 cities tracked by the government, the largest proportion since May 2012, according to government data. A more persistent and sharper downturn in the property sector is the biggest risk for China’s economy in the next couple of years, according to UBS AG.

Puerto Rico’s Downgrade Shows Debt Law Can’t Contain Rot - (www.bloomberg.com) A law allowing some Puerto Rico government entities to restructure debt outside bankruptcy failed to contain a crisis as its credit rating was cut three levels, imperiling the U.S. commonwealth’s ability to finance itself. The island’s electric authority, which could shed some of its $8.6 billion in debt by making creditors accept losses, said yesterday after the market’s close it had paid off maturing bonds in full. That was only after Moody’s Investors Service sent Puerto Rico’s rating on $14.4 billion of general-obligation debt to B2 from Ba2, and reduced sales-tax debt to speculative grade. The cuts and the restructuring measure restrict Puerto Rico’s ability to borrow, said Peter Hayes, head of municipal debt at BlackRock Inc. “With these ratings and this legislation, that access to the market is gone,” said Hayes, whose New-York based firm oversees $108 billion of munis. Little is certain about what has grown to become a $73 billion obligation for the commonwealth and its agencies. Most of the debt is tax free, held in 66 percent of U.S. muni mutual funds as the yield created by risk made it a mainstay of U.S. municipal finance. The downgrade now leaves those investments in danger and the poverty-ravaged island with few options to borrow money.

Anti-immigration protesters block undocumented migrants in California - (www.reuters.com) Protesters shouting anti-immigration slogans blocked the arrival of three buses carrying undocumented Central American families to a U.S. Border Patrol station on Tuesday after they were flown to San Diego from Texas. The migrants, a group of around 140 adults and children, were sent to California to be assigned case numbers and undergo background checks before most were likely to be released under limited supervision to await deportation proceedings, U.S. immigration officials said. But plans to bring the immigrants to a Border Patrol outpost in Murrieta, 60 miles (100 km) north of San Diego, sparked an outcry from town mayor Alan Long, who said the migrants posed a public safety threat to his community.

Medical staff warned: Keep your mouths shut about illegal immigrants or face arrest - (www.foxnews.com) A government-contracted security force threatened to arrest doctors and nurses if they divulged any information about the contagion threat at a refugee camp housing illegal alien children at Lackland Air Force Base in San Antonio, Texas, sources say. In spite of the threat, several former camp workers broke their confidentiality agreements and shared exclusive details with me about the dangerous conditions at the camp. They said taxpayers deserve to know about the contagious diseases and the risks the children pose to Americans. I have agreed to not to disclose their identities because they fear retaliation and prosecution. “There were several of us who wanted to talk about the camps, but the agents made it clear we would be arrested,” a psychiatric counselor told me. “We were under orders not to say anything.”

Sarkozy Charged With Influence Peddling After Questioning  - (www.bloomberg.com) Former French President Nicolas Sarkozy was charged withinfluence peddling, threatening to upend his political ambitions. Television footage showed Sarkozy leaving the courthouse in Nanterre this morning after being questioned by a special team of anti-corruption magistrates. The charge follows 15 hours of questioning centered on whether some judges were keeping Sarkozy and his lawyer Thierry Herzog informed about the state of play in probes into the former president’s campaign financing. Herzog was detained this week as part of the same investigations. “I believe in the innocence of Nicolas Sarkozy,” Jerome Chartier, a lawmaker in Sarkozy’s UMP party, said on the i-tele TV channel. Chartier said he doesn’t want Sarkozy to lead the party into the next election.

OTHER STORIES:

Japan flexes its muscles, shifts its defense policy with Pentagon support - (www.washingtonpost.com)
U.S. spying row overshadows McCain's trip to India - (www.reuters.com)

Merkel warns Russia on sanctions ahead of Berlin talks on Ukraine - (www.reuters.com)

Sarkozy Charged With Influence Peddling After Questioning - (www.bloomberg.com)
More fighting in Ukraine as ministers prepare Berlin meeting - (www.reuters.com)

London House Prices Surge the Most Since 1987, Nationwide Says - (www.bloomberg.com)