KeNo's Housing and Economic Portal: Thursday June 18 Housing and Economic stories

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White House Admits Economies Of European Allies Crippled By Russian Sanctions - (www.zerohedge.com) A few months later, Europe was on the verge of a deflationary bust and triple dip recession, and only the launch of €E has allowed the continent to kick the can for a few months before the crippling economic reality comes back with a vengeance. Incidentally, some skeptics (such as this website) wondered in late 2014 whether the Russian sanctions weren't precisely what Mario Draghi ordered: without the collapse in the German economy in the second half of 2014, the ECB surely would not have been allowed to proceed with its current courtesy of debt monetization. But more importantly, overnight it was none other than the White House itself which finally admitted that the entire brilliant idea of collapsing the Russian economy by way of sanctions across the western world, ended up hurting European nations (i.e., US partners) who had no choice but to "sacrifice their own economies." This is what Josh Earnest, White House press secretary, said yesterday.

"The commitment required by our European partners to implement and maintain these sanctions is significant. They have economies that are more integrated with Russia than the United States has, and so we recognize that many of the countries that we’re counting on to continue to enforce these sanctions are countries who do so at some sacrifice to their own economy."

Bunds Rout Extends on Recovery Signs as Investors Wait on Greece - (www.bloomberg.com) Germany’s government bonds extended a selloff that pushed 10-year yields up last week by the most since 1998 amid an economic recovery that’s gathering pace. Bond bears were given further encouragement after European Central Bank Governing Council member Ewald Nowotny described higher yields as a “success story.” The euro area’s benchmark sovereign securities fell for a second day as separate reports showed industrial output in Europe’s largest economy rose in April more than analysts predicted and exports jumped the most this year. Greek bonds declined, while Italian 10-year yields earlier climbed to the highest level since November. “Bunds looks set to remain on a slippery slope with upbeat macro data compounding the impact of self-feeding volatility,” said Michael Leister, a senior rates strategist at Commerzbank AG in Frankfurt. “Peripherals look unlikely to benefit materially from struggling bunds as risk-taking capacity remains subdued and Greece unresolved.” The yield on German 10-year bunds rose five basis points, or 0.05 percentage point, to 0.89 percent as of 4:35 p.m. London time. The 0.5 percent security due in February 2025 fell 0.435, or 4.35 euros per 1,000-euro ($1,122) face amount, to 96.375. The yield jumped 36 basis points last week, the biggest increase since October 1998.

Greece: Leaders lash out as tempers fray - (www.cnbc.com) As talks between Greece and its creditors drag on and pressure mounts on both sides to find a deal, relations between Athens and its European partners are getting worse, not better. Tensions over reforms-for-aid negotiations came to a head Sunday when European Commission President Jean-Claude Juncker accused the Greek Prime Minister Alexis Tsipras of distorting what the creditors had proposed to make some headway in securing a deal for the country. This was a very different picture from last week. Relations between Juncker and Tsipras appeared to have soured very quickly after what seemed to be an amicable meeting last Wednesday.

Iceland to Lift Capital Controls Imposed After Financial Crisis – (www.nytimes.com) Iceland’s government laid out a plan on Monday to unwind the capital controls introduced nearly seven years ago after the country’s three main banks imploded during the global financial crisis. The island nation was hit particularly hard during the crisis. In 2008, the country’s three main banks failed in a matter of days, sending the economy and the Icelandic krona into a downward spiral. The combined assets of the banks were in excess of $185 billion, or 14 times the size of Iceland’s economic output. The market capitalization of the stock market fell by 90 percent. The capital controls, imposed that year, were put in place to prohibit money from leaving the country and worsening the already severe crisis. They were meant to last six months; they have lasted almost seven years.

Public says don't kill Obamacare subsidies - (www.cnbc.com) The Supreme Court kept quiet Monday on the future of Obamacare—but other people spoke up loudly. Two new polls show strong public support for the high court maintaining financial aid that helps people in 34 states buy health coverage through the federal Obamacare marketplace. The Supreme Court is considering a case that would limit those often-generous subsidies to customers of exchanges in the 16 states and the District of Columbia that elected to run their own online insurance marketplaces. About 6.4 million people in the HealthCare.gov states receive an average federal tax credit of $272 per month to offset the cost of their monthly insurance premiums.

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