KeNo's Housing and Economic Portal: Friday June 10 2016 Housing and Economic stories

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Next Banking Scandal Explodes in Spain - (www.wolfstreet.com) And now, it seems a new scandal is in the works. Last month Spain’s sixth largest financial institution, Banco Popular, announced that it was urgently seeking to raise €2.5 billion in capital in a desperate bid to shore up its finances. The news triggered a sell-off that wiped out 33% of the bank’s market capitalization in just two days, before investor nerves were steadied somewhat by revelations that the bank had found 10 global mega banks as underwriters for its €2.5 billion rights issue, including Goldman Sachs, Morgan Stanley, Santander, Deutsche Bank and HSBC. But in recent days the stock has once again begun to crumble following allegations that Popular is also doing some creative selling of its own. The Spanish investment group Blackbird claims that the bank is offering customers dirt-cheap loans or refinancing deals, at an interest rate of just 2.5%, as long as they use some of the funds to purchase the bank’s new shares.

'Frightening' number of unemployed have stopped looking for work - (www.cnbc.com) Nearly half of unemployed Americans have quit looking for work, and the numbers are even worse for the long-term jobless, according to a poll released Wednesday that paints a grim picture of the labor market. Some 59 percent of those who have been out of work for two years or more say they have stopped looking, the Harris Poll of unemployed Americans showed. Overall, 43 percent of the jobless said they have given up, according to the poll released in conjunction with Express Employment Professionals, a job placement service. "This is a tale of two economies," Express CEO Bob Funk said in a statement. "It's frightening to see this many people who could work say they have given up." The results come just a few days after a government report showed thatthe unemployment rate fell to 4.7 percent in May, but the drop came primarily because of a sharp decline in the labor force participation rate. The number of people of all ages whom the government considers "not in the labor force" swelled by 664,000 to a record 94.7 million Americans, according to Labor Department data.

Lured by hopes of easy money, amateur Chinese commodity traders lose their shirts - (www.reuters.com) Chasing the promise of outsized returns, 48-year-old businessman He Xiaolun started trading oil last August on a platform developed by the Shaanxi Non-ferrous Metal Exchange. Over the next five months, he lost nearly 3 million yuan ($455,000). "Initially, I lost several thousand yuan," He said. "The exchange's trading advisor told me to put in more money, and guided me into trading more frequently." The exchange did not respond to questions from Reuters. The advisor said clients made trading decisions and it was not the exchange's fault if they lost money. He and other investors say they were duped by online commodity trading platforms that have cropped up over the last few years in China. Some have been using internet dating sites to lure customers.

Disenchantment with E.U. Grows, Poll Finds - (www.nytimes.com) As Britain prepares to vote on June 23 on whether to remain in the European Union, skepticism about the bloc is on the rise across Europe, with about two-thirds of Britons wanting some powers returned to their national government, according to an opinion poll released on Tuesday by the Pew Research Center, a nonpartisan institution based in Washington. The survey of respondents in 10 European countries showed increasing dissatisfaction with the European Union since last year, a period of low growth and during a migrant crisis, particularly in France and Spain. In France, 38 percent of respondents viewed the European Union favorably and 61 percent viewed it unfavorably. In Greece, 27 percent viewed it favorably and 71 percent unfavorably.

Draghi Fires Starting Gun on Corporate Bond Purchases in Europe - (www.bloomberg.com) The European Central Bank entered new territory in its efforts to stimulate the euro region’s flagging economy, plunging into the corporate bond market on Wednesday and buying the debt of some of the continent’s biggest companies. Purchases included securities issued by Anheuser-Busch InBev NV, the world’s largest brewer; Telefonica SA, Spain’s former telecommunications monopoly; Siemens AG, Europe’s biggest engineering company; Assicurazioni Generali SpA, Italy’s top insurer; Telecom Italia SpA; French automaker Renault SA and utilities Engie SA and RWE AG, according to people familiar with the matter, who aren’t authorized to speak about it and asked not to be identified. Investors are watching for an indication of whether they were right to pile into investment-grade corporate bonds on the promise of ECB President Mario Draghi’s purchases. Average yields for euro notes were down to 0.98 percent on Tuesday, the lowest in more than a year, according to Bank of America Merrill Lynch index data. The ECB’s intervention in the government bond market over the past year has pushed yields down to records.

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