Thursday March 17 2016 Housing and Economic stories

TOP STORIES:

NIRP Kills Off All Money Market Funds in Japan - (www.wolfstreet.com)  All 11 Japanese asset managers that offer money market funds have stopped accepting new investments into them and are planning to scuttle them after returning their remaining assets to investors. This marks another big accomplishments of negative interest rates. After years of zero-interest-rate policy, and after gobbling up every Japanese government bond that wasn’t nailed down, the Bank of Japan decided in January to go beyond what had already failed and introduced its negative-interest-rate policy. As a result of QQE, as it calls its asset-buying program, and the new NIRP, even the 10-year JGB yield is now negative, and yields on shorter maturities are sinking deeper into the negative. Money market funds, which invest in commercial paper and government debt with maturities of less than one year, are at risk of seeing these negative yields eat into their principal.

College Endowments in U.S. Show Losses in Volatile Stock Markets - (www.bloomberg.com) It’s shaping up to be a difficult time for U.S. college endowments. A dozen funds that responded to requests from Bloomberg for their returns for the first six months of fiscal 2016 showed an average loss of 3.8 percent. Indiana University’s $2.3 billion endowment had the biggest loss at 6.1 percent through Dec. 31. Pennsylvania State University’s $3.7 billion fund had the smallest decline at 1.8 percent. The Standard & Poor’s 500 Index lost 1.6 percent in that time. The interim results from schools, nearly all with assets of at least $1 billion, provide a snapshot of performance at endowments, which are typically heavily invested in equities, hedge funds and private equity. While global equities have rallied recently, endowments may be unable to make up for lost ground when the fiscal year ends June 30. Investment returns contribute to a school’s annual operating budget.

Lehman Lawyer Warns China Distressed Debt Investors: Expect Pain  - (www.bloomberg.com) Investors betting on troubled Chinese companies could be waiting some time for their salvation, according to U.S. law firm Jones Day. Debts tied to battered commodities and a lack of legal protections for offshore creditors will pose significant challenges for recovery of monies owed, said Jayant W. Tambe, a New York-based partner who is representing Lehman Brothers Holdings Inc. in derivatives lawsuits after its collapse. Clients are still “not so comfortable” about emerging markets even as raw material prices rebound recently from multi-year lows, he said. “We don’t see a fundamental change in the risk factors, in that there’s still a high level of debt load and there’s still a fair amount of exposure to the commodity cycle,” Tambe said in an interview in Singapore. “We see an increase in defaults through the rest of 2016 in emerging markets.”

Emerging-Market Rally Unwinds as Won Tumbles With Chinese Stocks  - (www.bloomberg.com) Developing-nation currencies resumed their advance, rising for the seventh time in eight days as commodity prices rebounded and concern eased that China’s economic slowdown will damp global growth. The real strengthened the most, rallying 1.8 percent as Brazilian inflation slowed more than forecast, fueling bets that policy makers may have room to cut borrowing costs that are the highest in 10 years. The currencies of raw-material exporters including South Africa, Chile and Mexico each gained at least 0.9 percent. The MSCI Emerging Markets Index of developing-nation stocks ended the session little changed after erasing a 0.3 percent gain. A Bloomberg gauge of 20 developing-nation exchange rates has rebounded 5.6 percent from a record low on Jan. 20 while stocks narrowed this year’s decline to less than 1 percent as commodity prices stabilized and China stepped up economic stimulus. Emerging-market assets retreated Tuesday after trade data showed Chinese exports slowed.

Japan central bank to hold off rate cut amid unstable bond market - sources - (www.reuters.com)  The Bank of Japan is set to hold off cutting interest rates at next week's rate review, sources say, as it scrambles to soothe market jitters caused by January's surprise decision to adopt negative interest rates. Markets are rife with speculation the BOJ will expand monetary stimulus in coming months to reflate a stagnant economy, after January's move failed to boost stock prices or arrest an unwelcome rise in the yen. But many central bank policymakers are reluctant to ease again soon unless external shocks jolt global financial markets enough to derail Japan's fragile economic recovery.

OTHER STORIES:

New Zealand Dollar Falls as Central Bank Unexpectedly Cuts Rate - (www.bloomberg.com)
U.S. Stocks Gain With Commodities as Euro Fluctuates Before ECB - (www.bloomberg.com)
The ETF Files: How the U.S. government inadvertently launched a $3 trillion industry. - (www.bloomberg.com)
Fukushima Nuclear Disaster Q&A: 5 Years Down, 40 More to Go - (www.bloomberg.com)

The ETF Files - (www.bloomberg.com)
China’s Surging Credit Has Some Raising the Caution Flag - (online.wsj.com)
China’s Outflows of Money Slowed in February - (www.nytimes.com)