KeNo's Housing and Economic Portal: Tuesday July 7 Housing and Economic stories

TOP STORIES:

Company that got millions from US taxpayers now profits Chinese Owners - (www.foxnews.com) The good news is electric car battery maker A123 Systems is finally on track to turn a profit. The bad news is taxpayers don't figure to see any of the $133 million the federal government spent and the estimated $141 million in tax credits and subsidies secured from Michigan to help the company take off in 2009, only to see A123 Systems crash, declare bankruptcy in 2012 and then get purchased by a privately held Chinese conglomerate. "In the case of A123, they created some jobs and a year or two later those jobs were gone, so taxpayers weren't getting that money back," said Jarret Skorup, a policy analyst at Michigan's Mackinac Center, a free-market think tank. Earlier this month, CEO Jason Forcier announced that A123 Systems' parent company, the China-based Wanxiang Group, will spend $200 million to double the capacity of three lithium-ion battery plants, including two in suburban Detroit.

China Margin Trades Buckle Leaving $364 Billion at Risk - (www.bloomberg.com) The biggest tumble in Chinese shares since 2008 is proving especially painful for margin traders as their favorite stocks sink faster than the benchmark index, raising the risk of forced liquidations. The 30 equities in Shanghai with the highest levels of margin debt relative to tradable shares have dropped 17 percent on average since the market peaked on June 12, versus a 13 percent decline for the Shanghai Composite Index. Margin positions on the city’s bourse fell for the first time in a month on Friday, a sign that leveraged investors are unwinding bets after they grew more than five-fold in the past year. With at least $364 billion of borrowed money riding on stocks in Shanghai and Shenzhen, losses on those positions threaten to magnify market declines as traders sell shares to meet margin calls. China’s benchmark index tumbled at the fastest pace among global equity gauges last week, after a world-beating 152 percent gain in the previous 12 months. “It’s a self-fulfilling prophecy,” Roshan Padamadan, the founder and manager of Luminance Global Fund, said in an interview on Bloomberg Television from Singapore. “As people try to book profits, they’ll find out that there’s nobody on the other side of the trade.”

Greek offer to creditors stirs angry backlash at home - (www.reuters.com) Greek lawmakers reacted angrily on Tuesday to concessions Athens offered in debt talks and parliament's deputy speaker warned the proposals might be rejected, puncturing optimism that a deal to pull Greece back from the abyss might be sealed quickly. Euro zone leaders welcomed new budget proposals from Athens on Monday as a basis for further negotiations to unlock billions of euros in frozen aid and avert a default next week that could lead to a Greek exit from the single currency area. Stock markets also cheered, with European shares extending the previous session's sharp rally and climbing to a three-week high on hopes of a deal. But the euro fell on fears the plan would struggle to win approval in the Greek parliament.

Eurotunnel shuts down after French protesters block tracks, start fires - (www.businessinsider.com) Eurotunnel said that train services had been suspended in both directions Tuesday after protesting French sailors got onto the tracks of the line that links France and Britain and torched tyres. "We have been notified that protesters have gained access to rail tracks which means that for safety reasons Eurotunnel have to temporarily suspend their service," the firm said in a statement. A spokeswoman told AFP that protesters had "got onto the tracks and were burning tyres". Some of the migrants living in camps near the port, who use Calais as a jumping off point to reach Britain, took advantage of the halted traffic by trying to climb aboard vehicles.

U.S. to pre-position tanks, artillery in Baltics, eastern Europe - (www.reuters.com) The United States will pre-position tanks, artillery and other military equipment in eastern and central Europe, U.S. Defense Secretary Ash Carter announced on Tuesday, moving to reassure NATO allies unnerved by Russian involvement in Ukraine. Carter, during a trip to Tallinn, said the Baltic states - Estonia, Lithuania, Latvia -- as well as Bulgaria, Romania and Poland had agreed to host elements of this heavy equipment. Some of the equipment would also be located in Germany. The U.S. decision to stage heavy equipment closer to Russia's borders aims to speed deployment of rotating U.S. forces as NATO steps up exercises in Europe following Russia's annexation of Ukraine's Crimea region last year. Neighboring NATO countries, especially the former Soviet Baltic states with their Russian minorities, fear Russia could foment trouble on their territories. Moscow denies any such intention.

OTHER STORIES: