Thursday January 28 2016 Housing and Economic stories

TOP STORIES:

Exclusive: Dallas Fed Quietly Suspends Energy Mark-To-Market On Default Contagion Fears - (www.zerohedge.com) We can now make it official, because moments ago we got confirmation from a second source who reports that according to an energy analyst who had recently met Houston funds to give his 1H16e update, one of his clients indicated that his firm was invited to a lunch attended by the Dallas Fed, which had previously instructed lenders to open up their entire loan books for Fed oversight; the Fed was shocked by with it had found in the non-public facing records. The lunch was also confirmed by employees at a reputable Swiss investment bank operating in Houston. This is what took place: the Dallas Fed met with the banks a week ago and effectively suspended mark-to-market on energy debts and as a result no impairments are being written down. Furthermore, as we reported earlier this week, the Fed indicated "under the table" that banks were to work with the energy companies on delivering without a markdown on worry that a backstop, or bail-in, was needed after reviewing loan losses which would exceed the current tier 1 capital tranches. In other words, the Fed has advised banks to cover up major energy-related losses.

Indebted Chinese Companies Increase Pressures on Government - (www.nytimes.com) Sainty Marine Corporation started small, buying and selling a few ships in the 1980s. But the state-owned Chinese company went on a debt-fueled binge over the last few years, opening its own shipyards and signing orders worth hundreds of millions of dollars apiece. Now, heavily indebted companies like Sainty Marine are at the center of the economic troubles in China that have unsettled currency, commodity and stock markets of late. Sainty Marine just found itself in court, as one of China’s biggest banks asked to dismantle the company to recoup overdue loans. Government regulators are investigating the accuracy of the company’s financial reports, its bank accounts have recently been frozen and its shares have not traded on the Shenzhen stock market since August.

Mideast Stocks Plummet as Iran Plans to Boost Crude Exports  - (www.bloomberg.com) Stocks across the Middle East tumbled as the easing of sanctions against Iran raised the prospect of a surge in oil supplies to a market already reeling from the lowest prices in more than a decade. Shares in Tehran gained. Saudi Arabia’s Tadawul All Share Index dropped 5.4 percent to its lowest level since March 2011. Abu Dhabi’s ADX General Index fell into a so-called bear market. The Bloomberg GCC 200 Index, which tracks 200 of the six-nation Gulf Cooperation Council’s biggest companies, traded at 9.5 times estimated 12-month earnings, the lowest in almost seven years. Iran’s TEDPIX Index climbed 0.9 percent, according to data on the bourse’s website, extending Saturday’s 2.1 percent advance. 

Blame, anger, frustration as China's stock rescue effort looks defeated - (www.reuters.com) A Chinese government campaign to restore confidence in the country's volatile stock markets appeared to be in tatters on Friday as the benchmark Shanghai index wiped out all the gains made since the depths of last year's crash. Among a flurry of measures, a so-called national team of institutional investors had promised last summer to buy and hold stocks on the index until it returned to 4,500 points - a level which at the time was considered in reach. However, the Shanghai Composite Index .SSEC - the most closely watched by Chinese investors - fell through the lows seen during the depths of last year's crash and closed on Friday at 2,900 points - its weakest level since December 2014.

Oil Plunges To $28 Cycle Lows As Iran Supply Looms, Stocks Slide - (www.zerohedge.com)  February WTI Crude futures have plunged to new cycle lows at $28.60 (down 2.7%) as Iran supply looms over an already over-glutted global crude market. Brent is down even more (-3.7%). Dow futures are down 60 points at the open. Feb futures (which have just rolled) are under $29...

OTHER STORIES:

Buckle your seatbelts: China could rock markets next week - (www.cnbc.com)
China launches new AIIB development bank as power balance shifts - (www.reuters.com)
Merkel allies step up pressure over welcoming refugee policy - (www.reuters.com)

HKMA Pledges to Keep Currency Peg: These Are Some Alternatives - (www.bloomberg.com)
South China Sea? For Beijing, Taiwan is the No. 1 security issue - (www.reuters.com)
After vote, China tells Taiwan to abandon independence "hallucination" - (www.reuters.com)