Thursday September 15 20916 Housing and Economic stories

TOP STORIES:

Tent Cities Full Of Homeless People Are Booming In Cities All Over America As Poverty Spikes - (www.zerohedge.com) Just like during the last economic crisis, homeless encampments are popping up all over the nation as poverty grows at a very alarming rate.  According to the Department of Housing and Urban Development, more than half a million people are homeless in America right now, but that figure is increasing by the day.  And it isn’t just adults that we are talking about.  It has been reported that that the number of homeless children in this country has risen by 60 percent since the last recession, andPoverty USA says that a total of 1.6 million children slept either in a homeless shelter or in some other form of emergency housing at some point last year.  Yes, the stock market may have been experiencing a temporary boom for the last couple of years, but for those on the low end of the economic scale things have just continued to deteriorate.

Bubble Bursting in Less Than a Week for Payment-in-Kind Bonds  - (www.bloomberg.com) Bonds that allow issuers to defer interest payments are nosediving less than a week after they were sold amid a sell-off of fixed-income assets. Ardagh Group SA’s 845 million euros ($948 million) payment-in-kind toggle notes due September 2023 are indicated at 95.5 cents on the euro, down 4.5 cents from when the Luxembourg-headquartered packaging company sold them on Wednesday, according to data compiled by Bloomberg. German auto components maker Schaeffler AG’s 750 million euros of notes due September 2026 are quoted 97.2 cents down from a sale price of 100 cents on Thursday, the data show. “Investors who bought risky bonds such as PIKs in the bull market phase, have woken up to a bear market this week,” said Bill Blain, a strategist at brokerage Mint Partners in London. “The global experimentation with monetary policy is being shown as ineffective.”

Barcelona just Declared War on Airbnb (and its Hosts) - (www.wolfstreet.com) It is about protecting its own racket. I live in Barcelona, Spain, and two days ago, the strangest thing arrived in the mail: a sealed, unaddressed envelope bearing the blue stamp of the Barcelona city authorities. Inside was a sheet of paper with five shortish paragraphs explaining the Council’s decision to intensify its crackdown on “illegal” tourist apartments in the city. Under a 2012 regional law, any apartment rented to visitors in Catalonia must be logged in the province’s Tourism Registry and have a permit. Unlicensed apartments “promote speculation, the underground economy, and could even threaten the harmonious and coexistence of resident communities” in the city, the letter warns. In the last paragraph, the council urges local Barcelona residents to snitch on any neighbors who they believe are running illegal tourist accommodation operations in their buildings. Residents are invited to cross-check their neighbors’ apartments against an open-access database of the city’s registered tourist flats, and if their suspicions are confirmed, they can denounce their neighbors on a free, around-the-clock hot line.

U.S Government Bond Selloff Picks Up Momentum Amid Rate-Rise - (www.wsj.com) U.S. government bonds weakened, sending yields to their highest levels since late June amid continued fallout from Thursday’s European Central Bank meeting and increased speculation that the Federal Reserve could raise interest rates this month. In late-afternoon trading, the yield on the benchmark 10-year Treasury note was 1.671%, compared with 1.614% Thursday. Yields rise when bond prices fall. Weakness in Treasurys began Thursday, when the ECB didn’t announce fresh stimulus measures, sparking a selloff of global bonds amid concerns that foreign central banks are reaching the limits of their easing policies. Selling picked up Thursday afternoon as word spread that Fed governor Lael Brainardwill deliver a speech in Chicago on Monday. While Ms. Brainard generally has been a vocal opponent of raising rates in the current economic climate, investors speculated that she might make a different argument Monday, paving the way for a rate increase at the Fed’s Sept. 20-21 meeting.

Woes at Italy's Biggest Bank Reverberate in Europe - (www.wsj.com) Troubles could worsen already-weak economy, imperil continent’s fragile financial stability. For UniCredit SpA, the summer of discontent for Italy’s banks looks likely to stretch well into the fall—and possibly beyond. UniCredit, Italy’s largest lender by assets, emerged as one of the weakest big banks in Europe in July’s stress tests, showcasing the failure of its attempts to respond to rock-bottom interest rates and a huge pile of bad loans. Now, as Jean-Pierre Mustier, the bank’s new chief executive, readies a big-bang plan to revive UniCredit’s fortunes, he faces a series of unpalatable choices: Aggressive action to cut the bank’s €80 billion ($89.9 billion) in bad loans—the largest of any European bank—would force the Milanese bank to raise billions in fresh capital, while an asset sale could help bolster its capital position but would hurt already thin profit.

OTHER STORIES:

Brazil prosecutors plan to launch probe into BNDES: media - (www.reuters.com)
Bank rally on shaky legs as traders assess rate hike odds - (www.reuters.com)
Schaeuble Says Global Bank Capital Rules Mustn’t Punish Europe - (www.bloomberg.com)

Is The Merkel Era Coming To an End? - (www.derspiegel.de)
Low-Volatility Funds Got Volatile as U.S. Stock Market Sold Off - (www.bloomberg.com)

China, Russia naval drill in South China Sea to begin Monday - (www.reuters.com)