Tuesday August 2 2016 Housing and Economic stories

TOP STORIES:

Companies have a $10 trillion bill that is coming due - (www.cnbc.com) The corporate debt pile is continuing to pile up, with a $10 trillion bill coming due over the next several years. That's how much of the $51 trillion in global company IOUs is maturing between now and 2021, according to data from S&P Global Ratings, which warns of potential dangers ahead. "In recent years, credit conditions have been largely favorable, and corporate issuers have actively issued record levels of debt, much of which has been used to refinance existing debt, lower funding costs, and extend maturities," the agency said in a report. "Funding conditions began tightening last year as falling commodity prices and volatile equity markets contributed to investor unease and a flight to quality."

Monte Paschi Bailout In Peril As 3 Banks Walk Out: Are More "Pensioner Suicides" Next? - (www.zerohedge.com) Two days ago we reported that in a last ditch effort to prevent potential contagion within its banking system, one including bank runs and furious ordinary investors and depositors, ahead of Friday's stress test announcement which Italy's troubled Monte Paschi is widely expected to fail, Matteo Renzi's government was racing to organize a private bailout of the insolvent bank. Specifically, as of Monday night, the Italian government was, according to the FT, racing to secure a privately backed bailout of Monte dei Paschi di Siena, including a plan to raise €5 billion of fresh capital so as to avert nationalisation. There was no assurance this last ditch effort would succeed, especially in light of Monte Paschi's market cap which has dropped to a paltry €800 million, suggesting that the bailout would be an effective "out of court" bankruptcy, structured as a quasi investment, with fresh money coming in from the new equity owners diluting existing stakeholders over 90%.

Italians’ Nest Eggs Risk Cracking as Bank-Rescue Plans Mulled - (www.bloomberg.com)  Vincenzo Imperatore wants you to know he was just following orders: Selling risky bonds to customers seeking safe retirement nest eggs was only part of the job. When financial markets shut during the financial crisis, depositors were Italian banks’ most reliable source of funding. “I was getting five, six calls a day from my bosses pushing me to sell them,” says Imperatore, who helped sell products to retail customers for six years at UniCredit SpA in the Naples region and has written two tell-all books about his experiences. “I was instructing the local salesmen to do the same.” The households that helped prop up the nation’s banks during the crisis are again on the front line of efforts to bolster Italy’s tottering financial system. The subordinated debt they hold may be first to take losses in a government-orchestrated recapitalizationnow being negotiated in Rome and Brussels. It’s a popularity-destroying outcome Prime Minister Matteo Renzi is trying to avoid before a referendum later this year to overhaul the political system -- a vote he needs to win to stay in power.

U.S. Homeownership Rate Falls to Five-Decade Low - (www.wsj.com) The U.S. homeownership rate fell to the lowest level in more than 50 years in the second quarter of 2016, a reflection of the lingering effects of the housing bust, financial hurdles to buying and shifting demographics across the country. But the bigger picture also suggests more Americans are gaining the confidence to strike out on their own, albeit as renters rather than buyers. The homeownership rate, the proportion of households that are owner-occupied, fell to 62.9%, half a percentage point lower than the second quarter of 2015 and 0.6 percentage point lower than the first quarter 2016, the Census Bureau said on Thursday. That was the lowest figure since 1965.

Silicon Valley Elites Get Home Loans With No Money Down - (www.bloomberg.com) It turns out that even the well-off need help in a housing market as crazy as the one in the San Francisco Bay area, and lenders are elbowing each other in a rush to provide it. They’re courting Silicon Valley workers with tailored loans, guaranteed 24-hour approval and financial-planning services. Social Finance Inc. has deals with Google and other top technology companies that allow it to market to new hires. First Republic Bank -- which gave Facebook Inc. billionaire Mark Zuckerberg a 1.05 percent interest-rate mortgage -- has opened branches in Facebook and Twitter Inc. headquarters. San Francisco Federal Credit Union will finance 100 percent of houses costing up to $2 million. Michael Tannenbaum, senior vice president of SoFi’s mortgage group, calls it “white-glove service.” Lenders often give special treatment to the wealthy, of course, but the tech industry has created a particularly ripe crop of clients who are rich or on their way. It’s a smart bet to cater to a sector that’s created thousands of millionaires and dozens of billionaires, says Glenn Kelman, chief executive officer of the brokerage Redfin.

OTHER STORIES:

Most Asia Futures Tip Losses While Dollar Extends Drop After Fed - (www.bloomberg.com)
Fed Says Risks Have Diminished as It Leaves Rate Unchanged - (www.bloomberg.com)
Treasuries Rally, Dollar Pares Gain as Stocks Fluctuate on Fed - (www.bloomberg.com)
Oil Falls to Three-Month Low - (www.bloomberg.com)
China Said to Weigh Tighter Rules on Wealth-Management Products - (www.bloomberg.com)

China's Central Bank Ends Its War With Yuan Bears - (www.bloomberg.com)
Virgin Islands Echoes Puerto Rico as Utility’s Bonds Cut to Junk - (www.bloomberg.com)
Catalonia Approves Plan to Secede From Spain Amid Deadlock - (www.bloomberg.com)
Conspiracy theories flourish after Turkey's failed coup - (www.reuters.com)