Thursday, October 22, 2015

Friday October 23 Housing and Economic stories

TOP STORIES:

Despite signs of Russia’s Syria buildup, U.S. seemed to be caught flat-footed - (www.washingtonpost.com) Among the first clues that Russia was mobilizing for a military offensive in Syria were requests Moscow began making in ­mid-August for permission to cross other countries’ territory with more and larger aircraft. “We were getting the word the Russians were asking for inordinate overflights,” a senior Obama administration official said, referring to reports from U.S. allies receiving the requests. Russia was seeking clearance for not only cargo planes but also “fighter aircraft and bombers” that Syrian pilots had never been trained to fly, the official said. “It was clear that something pretty big was up.” But despite that early suspicion — which only intensified as Russia then deployed fighter jets and teams of military advisers — the United States seemed to be caught flat-footed by the barrage of airstrikes that Moscow launched last week.

Deutsche Bank's Riskiest Bonds Sink to Record Low on Coupon Risk - (www.bloomberg.com) Deutsche Bank AG’s additional Tier 1 notes, the riskiest form of bank debt, fell to record lows as a potential dividend cut stoked concerns about coupon payments and capital levels. Prices dropped as much as three percentage points after the lender reported a preliminary 6.2 billion-euro ($7 billion) loss for the third quarter and said it may skip adividend for the first time since at least 1957. Capital shortages could also eventually lead to the bank missing coupon payments on additional Tier 1 notes, said Bill Blain, a strategist at Mint Partners. “There has always been a concern at the back of investors’ minds that a bank may use AT1s as emergency capital,” he said. “Bearing in mind Deutsche’s history, it’s a possibility for them more than for others.”

The world economic order is collapsing and this time there seems no way out - (www.theguardian.com)  Europe has seen nothing like this for 70 years – the visible expression of a world where order is collapsing. The millions of refugees fleeing from ceaseless Middle Eastern war and barbarism are voting with their feet, despairing of their futures. The catalyst for their despair – the shredding of state structures and grip of Islamic fundamentalism on young Muslim minds – shows no sign of disappearing. Yet there is a parallel collapse in the economic order that is less conspicuous: the hundreds of billions of dollars fleeing emerging economies, from Brazil to China, don’t come with images of women and children on capsizing boats. Nor do banks that have lent trillions that will never be repaid post gruesome videos. However, this collapse threatens our liberal universe as much as certain responses to the refugees. Capital flight and bank fragility are profound dysfunctions in the way the global economy is now organised that will surface as real-world economic dislocation. The IMF is profoundly concerned, warning at last week’s annual meeting in Peru of $3tn (£1.95tn) of excess credit globally and weakening global economic growth. 

Merkel Under Fire: German Conservatives Deeply Split over Refugees - (www.speigel.de) But last Wednesday, the 85 municipal politicians from Bavaria who gathered there were in no mood for fun. They were there for a meeting with Bavarian Governor Horst Seehofer and to report to him about how their communities are handling the many refugees who are currently flowing into Bavaria across the state's border with Austria. In truth, of course, Seehofer knows the situation well since he speaks with municipal politicians from his party, the Christian Social Union, every day. But this is a political show -- working title: "The Bavarian Governor Takes On the Chancellor" -- and he needed a stage. Unsurprisingly, the complaints began immediately. One participant complained that capacity had been reached while others vented their anger with Austria for simply waving the refugees through to Germany. Ultimately, though, the spotlight was shone squarely on Angela Merkel and her refusal thus far to place an upper limit on the number of migrants Germany could accept.

Fed officials seem ready to deploy negative rates in next crisis - (www.marketwatch.com) Federal Reserve officials now seem open to deploying negative interest rates to combat the next serious recession even though they rejected that option during the darkest days of the financial crisis in 2009 and 2010. “Some of the experiences [in Europe] suggest maybe can we use negative interest rates and the costs aren’t as great as you anticipate,” said William Dudley, the president of the New York Fed, in an interview on CNBC on Friday. The Fed under former chairman Ben Bernanke considered using negative rates during the financial crisis, but rejected the idea. “We decided — even during the period where the economy was doing the poorest and we were pretty far from our objectives — not to move to negative interest rates because of some concern that the costs might outweigh the benefits,” said Dudley.


Hundreds of thousands protest in Berlin against EU-U.S. trade deal - (www.reuters.com)
Chinese all-cash buyers of U.S. homes have tripled since 2005
- (www.marketwatch.com)
Turkish Violence Rocks Capital City as Bombing Kills 86
- (www.bloomberg.com)
China to Intensify Crackdown on Illegal Money Transfers to Fight Corruption 
- (www.reuters.com)

China warns US it will not allow violations of its waters
- (www.reuters.com)
Why Beijing Isn't Backing Down on South China Sea
- (www.newsweek.com)
Kim Jong Un: North Korea ready for ‘any kind of war’ against U.S.
- (www.washingtonpost.com)

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