Thursday February 25 2016 Housing and Economic stories

TOP STORIES:

5,525 Companies Went Bankrupt In Brazil Last Year: "It's A Legitimate Credit Crisis" - (www.zerohedge.com)  Well another day, another horrible piece of economic data out of Brazil. Core retail sales in South America’s most important economy slid 2.7% M/M in December, erasing a meager gain the country eked out in November when the numbers got a boost from promotions. Broad retail sales, meanwhile, declined 0.9% marking the eleventh decline in thirteen months. They’re now off more than 16% since peaking in August of 2012. The breakdown is a veritable disaster, with sales of office and telecommunications equipment down 9.1%, furniture and appliances down 8.7%, and clothing and footwear lower by 2.1%. Goldman sums it up: “The near-term outlook for private consumption and retail sales remains challenging owing to the continuing deceleration of credit flows from both private and public banks, high levels of household indebtedness, declining employment and real wages, higher interest rates, rising local and federal taxes (including via inflation), higher utility and transportation tariffs, heightened economic and political uncertainty and depressed consumer confidence.” Oh, is that all?

Deloitte About to Pay for its Spanish Sins? - (www.wolfstreet.com) Spain’s two biggest bankruptcies ever, Bankia (2011-2012) and Abengoa (2015-?), share one thing in common: their auditor. In both cases, the New York-based big-four firm Deloitte was responsible for making sure the financial statements fairly represent the financial position and performance of the companies, and that they conform to the accounting standards. Turns out, the accounts were as crooked as they come. Both companies ran aground. Investors in the US and Spain got bilked. The US government got stiffed. And now it seems the auditor may actually end up paying a hefty price for having “seriously” infringed Spain’s account auditing laws.

Turkey seeks allies' support for ground operation as Syria war nears border  - (www.reuters.com) Turkey is asking allies including the United States to take part in a joint ground operation in Syria, as a Moscow-backed government advance nears its borders, raising the possibility of direct confrontation between the NATO member and Russia. A large-scale joint ground operation is still unlikely: Washington has ruled out a major offensive. But the request shows how swiftly a Russian-backed advance in recent weeks has transformed a conflict that has drawn in most regional and global powers. Syrian government forces made fresh advances on Tuesday, as did Kurdish militia, both at the expense of rebels whose positions have been collapsing in recent weeks in the face of the Russian-backed onslaught.

Hong Kong Land Price Plunges Nearly 70% in Government Tender  - (www.bloomberg.com) In the latest sign that Hong Kong’s property correction is deepening, a parcel of land sold by the government in the New Territories went for nearly 70 percent less per square foot than a similar transaction in September. The 405,756 square foot (37,696 square meter) site in Tai Po sold for HK$2.13 billion ($274 million) or HK$1,904 per square foot, in a tender that closed on Feb. 12, according to the Hong Kong Lands Department website. The buyer was Asia Metro Investment Ltd., a subsidiary of China Overseas Land & Investment Ltd. The plunge in the price of land comes amid weaker appetite from Hong Kong developers against the backdrop of a nearly 11 percent drop in housing prices since their September high, according to the Centaline Property Centa-City Leading Index. In January, sales of new and secondary homes reached their lowest monthly level since Centaline started tracking data in January 1991.

Italy’s Banking Crisis Spirals Elegantly out of Control  - (www.wolfstreet.com) Italy, the Eurozone’s third largest economy, is in a full-blown banking crisis. Four small banks were rescued late last year. The big ones are teetering. Their stocks have crashed. They’re saddled with non-performing loans (defined as in default or approaching default). We’re not sure that the full extent of these NPLs is even known. The number officially tossed around is €201 billion. But even the ECB seems to doubt that number. Its new bank regulator, the Single Supervisory Mechanism, is now seeking additional information about NPLs to get a handle on them. Other numbers tossed around are over €300 billion, or 18% of total loans outstanding.

OTHER STORIES:

Banks' Surge Takes Europe's Stock Rally Into 2nd Day; HSBC Rises - (www.bloomberg.com)
Emerging Stocks Rebound on Stimulus Bets as China Vows Stability - (www.bloomberg.com)
Turkish bonds fall, CDS rise on Syria border tensions - (www.reuters.com)
China's Bad Loans Rise to Highest in a Decade as Economy Slows - (www.bloomberg.com)
ECB in talks with Italy over buying bundles of bad loans - (www.reuters.com)

Storm clouds gather on Italy's budget horizon - (www.reuters.com)
ECB's 'Whatever It Takes' May Be Too Much for German Top Court - (www.bloomberg.com)
Soaring Chinese Imports From Hong Kong Renew Fake Trade Concerns - (www.bloomberg.com)
Brazil's 5,500 Bankruptcies in 2015 Signal Deeper Credit Crisis - (www.bloomberg.com)
There is worse to come as QE loses its impact- (www.ft.com)