Tuesday June 14 2016 Housing and Economic stories

TOP STORIES:

Pound Traders Rush to Hedge Against Drop Before Brexit Vote - (www.bloomberg.com) Less than two weeks before the U.K. votes on whether to remain in the European Union, traders are piling into more options on the pound that protect against a decline versus a gain. The bias toward the downside, the most in at least 13 years, coincided with sterling depreciating for a second week as opinion polls had until yesterday signaled the June 23 vote is too close to call. A poll published late Friday showed the ‘Leave’ campaign taking a 10 percentage-point lead, sending sterling plunging to its lowest since April against the dollar. The Brexit referendum has dominated trading in the pound, overshadowing economic data. Next week, reports are predicted by economists to show faster inflation, the unemployment rate holding at the lowest level since 2006 and retail sales increasing slightly. Bank of England officials will also make their latest policy decision on June 16. None of the economists surveyed by Bloomberg are forecasting a change. Benchmark 10-year U.K. government bond yields fell to a record low on Friday. 

Fearful of EU Disintegration and Mired in Crisis, France Wants Britain Punished for Brexit Revolt - (www.wolfstreet.com) As support for a British exit from the EU strengthens, at least according to thelatest polls that give some people whiplash, policy makers on both sides of the English Channel are finally beginning to think about the days, weeks and months after June 23. Some countries, such as Germany, seem more inclined to favor a soft, pragmatic approach in the event of a Brexit, while others, led by the government of France, are calling for a more punitive response. As originators of the phrase “Pour encourager les autres,” (to encourage the others), it is fitting that France is leading calls for Brussels to punish the UK if its public has the temerity to vote to leave the EU. Among the measures under discussion are to expedite Britain’s removal from all EU treaties rather than let negotiations drag on, as well as restrict the “passporting” of financial services, which allows foreign-owned companies to do business with the EU via offices located in Britain. “I would be very tough [on this point],” said Sylvie Goulard, a French MEP who sits on the committee for economic and monetary affairs. “I see no reason to give passporting to a country that decides in a sovereign way to leave the EU… The day the U.K. leaves … you cannot consider the British supervising authority as an authority of the EU.”

Violent Riots And Looting Are Now A Daily Occurrence In Venezuela - (www.zerohedge.com) Last month we reported that citizens in Venezuela had finally become so desperate for food that angry mobs flooded the streets and looted all of the supermarkets that were rumored to still have anything left on their shelves. Not long after, tired and hungry protesters took to the streets of Caracas once again, this time marching toward the presidential palace as they chanted "No more talk - we want food!." The mob was able to get within about six blocks of the palace before police in riot gear blocked the way, and began to shoot tear gas into the crowd to disperse the protest. And now, as president Maduro remains defiant on allowing a referendum to take place to vote on his ouster, food riots and violent looting are taking place every day in a stark reminder of just how far the socialist utopia has fallen.

LinkedIn Job Postings Plunge, “by far the Worst Month since January 2009”  - (www.wolfstreet.com) The jobs data in the US has recently taken a nasty spill. Last week it was an ugly jobs report from the Bureau of Labor Statistics. It could bounce off next month, and the current data could be revised higher, but we’re not seeing the signs of this sort of hiring momentum. Instead, we’re confronted with a sharp and ongoing deterioration of a leading indicator of the labor market: temporary jobs. They rise and fall months ahead of the overall number of jobs. The sector peaked in December 2015 at 2.94 million. It shed 21,000 jobs in May, and 63,800 since December. This is also what happened in 2007 and 2000, at the eve of recessions [read… What Makes this Jobs Report so Truly Ugly?]. This week, it was the Fed’s very own Labor Market Conditions Index which dropped to the worst level since the Financial Crisis, a level to which it typically drops shortly before the onset of a recession – and shortly before employment gives way altogether. It still could bounce off as it had done in early 2003, but it better do so in a hurry:

Brexit campaigner Farage says UK, Italy to launch EU's disintegration - (www.reuters.com) The European Union will start disintegrating after Italians pick the anti-establishment 5-Star Movement candidate as mayor of Rome on June 19 and Britons vote to leave the EU four days later, the leader of the UK Independence Party was quoted as saying. UKIP's Nigel Farage told Italy's Corriere della Sera in an interview published on Saturday that British Prime Minister David Cameron should resign even if the 'Remain' camp won by a narrow margin in a June 23 referendum on EU membership. Bookmakers still predict Britons will vote to stay in the EU, while opinion polls have see-sawed - though one on Friday gave a 10 percentage point lead to the 'Leave' side, for which Farage is a prominent campaigner. "We can't lose this referendum ... there will be a Big Bang of British politics: nothing will remain the same," Farage said. He said he would "destroy the old EU", together with 5-Star leader Beppe Grillo.

OTHER STORIES:

Betting odds, poll indicate rising chance of Brexit - (www.reuters.com)
76 million Americans are struggling financially or just getting by - (www.cnn.com)
Bond Investors Losing Faith in Central Banks Turn to German Debt - (www.bloomberg.com)

China must quickly tackle rising corporate debt, warns IMF official - (www.reuters.com)
Negative Rates Alone Struggle to Lift Growth - (www.wsj.com)
Brazil’s Fiscal Accounts Were a Nasty Surprise to Temer’s Team - (www.bloomberg.com)