Tuesday, July 15, 2014

Wednesday July 16 Housing and Economic stories


Investors Who Bought Foreclosed Homes in Bulk Look to Sell - (www.nytimes.com) A year ago, buying foreclosed homes to rent out was the sure-thing trade for investment firms backed by money from private equity companies, hedge funds and pension systems. But with the supply of cheap foreclosed homes dwindling, some early investors are looking to cash out a bit by flipping homes to competitors. The Waypoint Real Estate Group, one of the first companies to raise money from private investors to buy foreclosed homes, is quietly shopping as many as 2,000 houses in California that it acquired in the last few years in several private investment funds, said three people who had been briefed on the matter but were not authorized to discuss it. The homes, which are largely rented, are being shown to other companies backed by investor money that have also scooped up distressed houses in states including Arizona, California, Florida, Georgia, Illinois and Nevada.

Hillary's money problem: How she made it  - (www.cnbc.com) The basic argument is that the way Clinton has talked about her money—she worked hard to get it, pays ordinary tax rates unlike some really rich people and was dead broke 14 years ago—is not going to work and could cause her problems both with a potential primary challenge from the left and in a general election where she gets painted as hypocritical and out of touch. The problem is obvious. Clinton right now comes across as disingenuous and in denial about her place in the nation's wealthiest 1 percent. It's true that America has had many wealthy presidents from Kennedy to FDR to George Washington. But it's also true that Americans seem much more comfortable with inherited wealth or wealth created by entrepreneurs who employ people. The way Hillary and Bill Clinton have made their money appears to create more unease. "How have they made all this money? Speaking fees? Book advances? These are not the ways that Americans are comfortable with Americans making a lot of money," Louis Hyman, a historian of capitalism at Cornell University, told me. "There is no way her wealth can reflect on her doing better for other people.

Europe Gives Bulgaria A Bank System Lifeline As Battle Over "South Stream" Pipeline Heats Up - (www.zerohedge.com) Earlier today Reuters reported that the European Commission said on Monday it had approved a Bulgarian request to extend a credit line of 3.3 billion levs ($2.30 billion) in support of banks that have come under speculative attack. “The Commission concluded that the state aid implied by the provision of the credit line is proportionate and commensurate with the need to ensure sufficient liquidity in the banking system in the particular circumstances,” the EU executive said in a statement. The statement said Bulgaria’s banking system was “well capitalised and has high levels of liquidity compared to its peers in other member states. For precautionary reasons, Bulgaria has taken this measure to further increase the liquidity and safeguard its financial system”. The move follows runs by jittery depositors on two major Bulgarian commercial banks in the space of a week. And while this latest backstop of the Bulgarian bank system should provide a respite from bank insolvency fears (if only for the time being), one wonders about Europe's true intentions.

Mutual funds sue Puerto Rico on bankruptcy worries - (www.cnbc.com) U.S. mutual funds holding about $1.7 billion in Puerto Rico debt have sued the cash-strapped commonwealth, accusing it of passing a law modeled after the U.S. bankruptcy code that could undermine the rights of American investors. Last week's rushed passage of the law has spooked the $3.7 trillion U.S. municipal bond market, sending down prices of revenue bonds issued by Puerto Rico's electric authority. U.S. municipal bonds funds are the largest holders of the island's debt because it is tax-exempt in every state. Puerto Rico is one of the largest issuers of debt in the U.S. municipal bond market. Under its constitution, Puerto Rico does not have the power to enact a bankruptcy law for the adjustment of its debts. The complaint contends Puerto Rico passed an act modeled after title 11 of the U.S. Bankruptcy code, which is used by U.S. corporations to reorganize.

Argentina Must Pay $539 Million Today - Default Imminent - (www.zerohedge.com) Today is the day that Paul Singer and his Elliot Capital Management team have been waiting for. Thanks to SCOTUS' decision, as Bloomberg reports, Argentina is poised to miss a bond payment today, putting the country on the brink of its second default in 13 years, after a U.S. court blocked the cash from being distributed until the government settles with creditors from the previous debt debacle. The decade-long battle between Argentina and holdout creditors from the country’s $95 billion default in 2001 is coming to a head as the judge’s decision “closes Argentina’s options to finally force it to negotiate," and "should now stop using these delay tactics and get serious." Argentina sees it a different way, the ruling "is merely a sophisticated way of of trying to bring us down to our knees before global usurpers,” according to the economy minister Axel Kicillof.




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