Wednesday, November 18, 2015

Thursday November 19 Housing and Economic stories


Chicago stuck in pension funding squeeze - (www.cnbc.com)  Despite tax hike, Chicago still faces huge pension fund gap. Chicago's recent tax hike will help fill a multibillion-dollar hole in its public pension funds, but it won't be enough to close the gap, according to a report Tuesday by bond rater Moody's. "Despite significantly increasing its contributions to its pension plans, Chicago's unfunded pension liabilities could grow, at a minimum, for another 10 years," the report said. Last month, the Chicago City Council approved a $7.8 billion budget that includes a highly unpopular tax hike proposed by Mayor Rahm Emanuel to make up for years of underfunding city workers' pensions. The package included a $543 million property tax hike, phased in over four years, increases in other fees, and spending cuts aimed at filling a $20 billion hole in the city's pension obligation.

Greece told to do more on reforms before it gets next bailout payment - (www.theguardian.com) European leaders have told Greece that it must do more to prove it is pushing through the reforms its creditors have demanded before it can receive a €2bn (£1.4bn) aid payment. The debt-stricken country has been at odds with its lenders over the protection it can offer families at risk of being made homeless because of mortgage defaults. Greece clinched an €86bn bailout in the summer, in return for promising measures to reduce its deficit such as higher VAT rates and pension cuts. Its lenders have also demanded new laws to help banks repossess homes from people who cannot meet their loan repayments. The new sticking point turned the buildup to a key Brussels meeting of eurozone finance ministers on Monday night into a series of tit-for-tat briefings reminiscent of the height of the bailout crisis earlier this year.

EU Warns of Refugee 'Catastrophe' as Winter Closes In - (www.ap.org) The European Union warned on Monday of a looming humanitarian "catastrophe" with tens of thousands of people traveling through the Balkans to northern Europe as winter closes in. More than 770,000 people have arrived in the EU by sea so far this year, overwhelming border authorities and reception facilities. Many have made the arduous land journey on foot through the Balkans in search of sanctuary or work in countries like Germany or Sweden. The EU's 28 member nations have pledged to provide experts and funds to help manage the emergency, and to share refugees among them. But the resources have been painfully slow in coming.

Hedge Funds + Leverage Are Hot Formula for Canada Pension Funds - (www.bloomberg.com)  The words “bold” and “pension fund” don’t always go together easily. Then again, neither do bold and Canada. But Canadian public pension funds are once again employing bold strategies in a world where interest rates have remained persistently low at the very moment that aging baby boomers are increasingly drawing down their retirement funds. With traditionally safe pension investments such as bonds no longer yielding enough to cover obligations, a number of Canadian plans are ramping up leverage strategies -- approaches intended to squeeze more profit from their investments by doubling down with debt. They are mortgaging some of their swankiest skyscrapers and forming in-house hedge funds that invest in complex derivatives like forwards, swaps and options, accepting more risk in an effort to keep their promises to retirees. 

China Builder Wuzhou's Bonds Fall to Record Low Amid Share Halt - (www.bloomberg.com) Wuzhou International Holdings Ltd. bonds slid to a record low as the builder of malls in China halted trading of its stock following an unprecedented plunge in the shares Monday. The developer’s 13.75 percent notes due in 2018 dropped 3.6 cents on the dollar to 94.2 cents as of 10:32 a.m. in Hong Kong, the lowest since issuance in 2013, according to data compiled by Bloomberg. The company halted trading pending an announcement in relation to certain share transfers by controlling holders, it said in a filing Tuesday. Its stock plunged 32 percent in Hong Kong on Monday, the steepest decline on record. Wuzhou’s shareholders include Boom Win Holdings Ltd., which has a 69.7 percent stake in the developer, the data show. Wuzhou Chairman Shu Cecheng owns 60 percent of Boom Win and Chief Executive Officer Shu Cewan holds 40 percent, according to a company interim report filed to the Hong Kong stock exchange in September.



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