Friday August 5 2016 Housing and Economic stories

TOP STORIES:

No Government No Problem for Balkan Bond as Investors Hunt Yield - (www.bloomberg.com) Some nations don’t even need a government for investors to snap up bonds and send their borrowing costs to record lows in the post-Brexit hunt for yield. That’s what’s happening in Croatia, whose Eurobonds are heading for their fifth straight quarterly gain even after the country’s government imploded in June, triggering early elections. The Adriatic nation’s Eurobonds handed investors a 1.5 percent return last month, matching the payout for 67 nations in the Bloomberg USD Emerging Market Sovereign Bond Index. The European Union’s youngest member is now counting on a record year in its tourism industry to help it recover from a six-year recession. That has helped temper fallout from the political turmoil and lured investors who, finding it tough to book returns in a world where almost $12 trillion of government debt pay negative rates, are pouring funds into emerging-market debt at a record pace.

Crude Plunges Into Bear Market as U.S. Stocks Slip; Bonds Drop - (www.bloomberg.com)  Crude oil sank into a bear market, falling below $40 a barrel for the first time since April amid renewed concerns over a supply glut. Energy producers drove declines in U.S. stocks, while emerging-market equities jumped to their highest level in almost a year. Oil settled 22 percent below its June high as Saudi Arabia cut prices to Asian customers and U.S. drillers boost rigs for a fifth week, fueling angst a global surplus will worsen. The S&P 500 Index fell from near a record as energy shares slid the most since March, while biotechnology shares advanced. Treasuries slipped, sending 10-year yields up seven basis points to 1.52 percent. Technology stocks led gains in the MSCI Emerging Markets Index as a gauge of developing-nation currencies reached its highest point since last July.

Monte dei Paschi Bailout Is a Bailout of Investors; LaRouche - (www.larouchepac.com) By issuing guarantees on Step 2 of the rescue plan for Monte dei Paschi di Siena, the Italian government is de facto bailing out the banks that will be part of Step 1, which is the EU5 billion capital increase. In fact, those banks shall buy up to EU5 billion of new MPS shares, only on the condition that the bank gets rid of EU27 billions in nonperforming loans (NPLs), thus promising market "profitability." This will occur through a fund called Atlante, which will buy those NPLs at 30% of their value, and issue securities guaranteed by the Italian government at a 6% interest. The members of the consortium which participate in Step 1 are: J.P. Morgan, Mediobanca, Goldman Sachs, Santander, Citi, Credit Suisse, Deutsche Bank and Bank of America Merrill Lynch.

“We’re Not Dangerous”: Deutsche Bank’s Chief Risk Officer - (www.wolfstreet.com) When Stuart Lewis, Chief Risk Officer at Deutsche bank, was asked in an interview, published in the Frankfurter Allgemeine on Sunday, if his institution is “the most dangerous bank in the world” – a reference to the IMF’s call that among globally systemically important banks, “Deutsche Bank appears to be the most important net contributor to systemic risks” – he replied: “No, not at all. Only one IMF report has recently muddled up the situation: We are not dangerous. We are very relevant. Deutsche Bank is interwoven with the entire financial sector. We are one of the largest universal banks in the world. But to make it clear: Our house is stable. The balance sheet is healthy.” Could he say that “in good conscience?”  “Absolutely. Look at how we have capitalized the bank since the Financial Crisis. We have taken €115 billion in risks off the balance sheet and have €220 billion of liquidity. Concern for us is unfounded.”

Smith & Wesson Hits All Time High After FBI Reports Record Gun Sales For July - (www.zerohedge.com) According to the latest just released FBI data, a total of 2,197,169 gun background checks were processed last month, according to the National Instant Criminal Background Check System. That’s up 37% from the 1,600,832 background checks processed in July 2015 and 891,224 checks processed in July 2008, months before Barack Obama was elected president.

OTHER STORIES:

Asian shares edge up as soft U.S. GDP cuts Fed rate hike bets - (www.reuters.com)
Oil Falls After U.S. Drillers Bring Back Rigs for a Fifth Week - (www.bloomberg.com)
China Factory Gauge Signals Deterioration as Property Boost Ebbs
Global Earnings Tumble as Companies Dig Deeper for Cost Savings - (www.bloomberg.com)

China’s Imports From Samoa Soar as Nomura Sees Outflows: Chart - (www.bloomberg.com)
Abe’s Fiscal Plan Follows a Long Road of Packages That Failed - (www.bloomberg.com)
Europe in Crisis: The Elections to Watch for Political Risk - (www.bloomberg.com)