KeNo's Housing and Economic Portal: Friday July 17 Housing and Economic stories

TOP STORIES:

Anguished Chinese Investors See Savings 'Falling Into Abyss' - (www.nbcnews.com) The precipitous plunge in Chinese stocks, and Beijing's struggle to halt the fall, has sent waves of panic through the country's 90 million-plus retail investors, who say their life-savings are "falling into an abyss." At a Citic Securities brokerage in Beijing on Wednesday, the trading hall was packed was packed with retail investors, many of them pensioners, lamenting the loss of the money in the stock market. One investor was watching the big screen between his fingers as if at a horror flick. The mood was fearful, panicked and sometimes hostile, as investors huddled around computer screens, waiting to see whether the latest moves by Chinese authorities to prop up the stock market would do any good. "The government has been manipulating the stock market all this time," one investor who didn't want to be named told CNBC. "The authorities made us believe that we can make money from a bull market but actually we are falling into an abyss losing most of our life savings."

Microsoft Fires 7,800: Second Biggest Mass Layoff In Its History - (www.zerohedge.com) It has been almost exactly one year since Micorsoft announced it would fire a record 18,000 people (surpassing the previous all-time high layoff round of 5,800 in 2009) form a company that one upon a time seen as infallible as AAPL. So perhaps in order to release more funds with which to buy back its struggling stock, moments ago Microsoft did what it had to do to make corporate executives richer, and reported it would lay off another 7,700 workers. From the press release: Microsoft Corp. today announced plans to restructure the company’s phone hardware business to better focus and align resources. Microsoft also announced the reduction of up to 7,800 positions, primarily in the phone business. As a result, the company will record an impairment charge of approximately $7.6 billion related to assets associated with the acquisition of the Nokia Devices and Services (NDS) business in addition to a restructuring charge of approximately $750 million to $850 million. Today’s announcement follows recent moves by Microsoft to better align with company priorities, including recent changes to Microsoft’s engineering teams and leadership, plans to transfer the company’s imagery acquisition operations to Uber, and shifts in Microsoft’s display advertising business that enable the company to further invest in search as its core advertising technology and services.

China's Markets Tumble Again As Losses Top $3 Trillion - (www.nbcnews.com) Unprecedented steps aimed at propping up Chinese investor confidence failed to stop the country's main stock markets from tumbling yet again on Wednesday. Within the first hour of trading some 1,400 companies — representing more than 40 percent of China's stock market cap — had suspended trading. Some were frozen before the opening bell after petitioning the government while others quickly met the 10-percent daily limit on losses. Since the crisis began over three weeks ago, China's Shanghai and Shenzhen Composites have lost more than 30 percent and 40 percent of their value respectively, adding up to $3 trillion in equity lost. "There is a mood of panic in the market and a large increase in irrational dumping of shares, causing a strain of liquidity in the stock market," China's Securities Regulatory Commission said in a statement. The pain of these devastating losses is not primarily being felt by professional money managers. Instead, retail traders — regular citizens and pensioners investing their savings and accounting for nearly 85 percent of traders — are bearing the brunt.

China Makes Selling For Big Investors Illegal - (www.zerohedge.com) With another bloody session in the books for China’s bursting equity bubble, it’s now abundantly clear that Beijing and the PBoC have lost control not only of the market but of the narrative as well, despite dozens of attempts to steer both in the “right direction.” Having corralled selling by the National Social Security fund earlier this week and after discouraging local reporters from mentioning selling in the press, China has now made it illegal for big investors to dump shares over the next six months. Here are the details via Bloomberg: China’s securities regulator banned major shareholders, corporate executives and directors from selling any of their stakes for six months,the latest effort to stop a $3.5 trillion rout in the nation’s equity market. Controlling shareholders and investors holding more than a 5 percent stake in a company will be prevented from cutting their holdings over that time period, the China Securities Regulatory Commission said in a statement.

This Is Why So Many Chinese Companies Are Suspended - (www.bloomberg.com) The unwinding of margin loans is adding fuel to the fire. Individual investors in China, as we all know by now, have used generous margin financing terms to enter the stock market and then build up their portfolios. Less-known is that Chinese companies have been doing the same thing byusing their own corporate stock to secure loans from banks. This means that they stand to lose a lot when those share prices start trending dramatically lower. Says Nick Lawson at Deutsche Bank: "Stocks are being suspended by the companies themselves because many have bank loans backed by shares which the banks themselves may want to liquidate, joining the queues of margin sellers." Nomura analysts added that: "Some bank loans have been extended with shares of listed companies put up as collateral."

OTHER STORIES:

China stocks tumble as regulator warns of 'panic' - (www.reuters.com)