TOP STORIES:
Car
Repos Soar 70% As Auto Subprime Bubble Pops; "It's Contained"
Promises Fed - (www.zerohedge.com) As NBC summarizes: "The repo man is
getting very busy as a growing number of car and truck owners are struggling to
make their monthly auto loan payments. Experian, which analyses millions of
auto loans, said Wednesday that the percentage of those loans that were
delinquent or ended up in default with the vehicle being repossessed surged in
the second quarter of this year." Hyperbole? Hardly. In fact, the
auto loan subprime bubble may be the latest to burst (after student loans) as
the rate of car repossessions jumped 70.2 percent in the second quarter, with
much of that increase coming from finance companies not run by automakers,
banks or credit unions. The good news: the percentage of auto loans that
end in default is just 0.62% of all auto loans. However, as everyone but the
Fed knows, what matters is the flow, not the stock, and the direction and
acceleration in defaults simply means that the maximum saturation point has
been reached and going forward lenders will experience ever greater losses, which
in turn will limit their willingness to offer subprime loans to US consumers
desperate to find a house (because clearly one doesn't need to home when one
can sleep in their Chevy Tahoe).
Credit
Suisse played role in Espirito Santo collapse: WSJ.com - (www.reuters.com) Credit Suisse helped put together billions of
dollars in securities that were issued by offshore investment vehicles of Banco
Espirito Santo SA and then sold to the Portuguese bank's retail customers, the Wall Street
Journal reported on Sunday. In the article in its online edition, the newspaper
cited corporate filings and people familiar with the situation, saying
customers didn't know the investment vehicles were loaded with debt issued by
various Espirito Santo companies and served as a mechanism to finance the
Portuguese conglomerate. When contacted by Reuters, Credit Suisse in
Switzerland said it had no comment on the story. WSJ.com said representatives
of Credit Suisse and Espirito Santo declined to comment on the article as well.
Troubled Banco Espirito Santo is Portugal's second largest bank. The Portuguese
government said it will extend a loan of 3.9 billion euros ($5.2 billion) to
the bank resolution fund in charge of rescuing Banco Espirito Santo.
Russia
Shuts Moscow McDonalds Due To "Sanitary Breaches" - (www.zerohedge.com) Sanctions blowback? Russian food safety watchdog
Rospotrebnadzor has ordered the closure of four McDonalds restaurants in
Moscow, according to Reuters, due to "numerous sanitary breaches." *MOSCOW
TEMPORARILY CLOSES SEVERAL MCDONALD'S RESTAURANTS. This was not entirely a
surprise since Russia had previously raised concerns over McDonalds
cheese and was angered when the fast-food restaurant ceased
operations in Crimea. This also comes on the heels of McDonalds problems in China and Japan over food supply
issues. It appears the "tangible losses" Putin
promised, are beginning.
Argentina
to Sidestep U.S. Ruling by Paying Bonds Locally - (www.bloomberg.com) Argentina’s bonds sank to a two-month low
after the government said it plans to pay foreign-currency notes locally to
sidestep a U.S. court ruling that blocked payments and caused its second
default in 13 years. The government will submit a bill to Congress that lets
overseas debt holders swap into new dollar-denominated bonds governed by
domestic law, President Cristina Fernandez de Kirchner said in
a nationwide address yesterday. Payments will be made into accounts at the
central bank instead of through Bank of New
York Mellon Corp., the current trustee.
How
the IRS is botching Obamacare tax collection - (www.cnbc.com) The Internal Revenue Service is struggling to
collect a new tax that's critical to financing the health-care law—and auditors
say the IRS' flawed collecting process is allowing it to raise only
three-quarters or so of the revenue that was originally expected. A new report from the
Treasury Inspector General for Tax Administration (TIGTA) flags the enforcement
of the medical device excise tax, one of a handful of new taxes imposed under
the Affordable Care Act. The Affordable Care Act's excise tax—equal to 2.3
percent of the sales price of medical devices—took effect in January and is
estimated to bring in about $20 billion through 2019, the Joint Committee on
Taxation has said.
Staples Plans to Shut 140 North America Stores
This Year - (www.bloomberg.com)
Risks Create Tumult for Tech, Health-Care Firms - (online.wsj.com)
Risks Create Tumult for Tech, Health-Care Firms - (online.wsj.com)
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