Thursday September 22 20916 Housing and Economic stories

TOP STORIES:

As Deutsche Bank Comes Unglued, its CoCo Bonds Plunge - (www.wolfstreet.com) Early morning on Friday in Frankfurt – in the US, Thursday after the markets had closed, a strategic time for bad news – Deutsche Bank announced that the US Justice Department was trying to wring $14 billion out it. The fine is based on the investigation into mortgage backed securities that the bank had rolled into complex toxic products and sold to unsuspecting investors between 2005 and 2007, just before the Financial Crisis. The Justice Department already nailed other banks for it and extracted large fines; and it’s still investigating some banks, including UBS, Credit Suisse, Royal Bank of Scotland, and Barclays – which saw their shares get pummeled today. Deutsche Bank has already paid over $9 billion in fines and settlements since 2008. Other scandals are still simmering on the front burner, unresolved, including the money laundering scandal in Russia for which Deutsche Bank has reserved €5.5 billion this summer to cover the fines.

New tax on Chicago residents will fund pension shortfall – (money.cnn.com) Chicago residents and businesses will face a new tax on their water and sewage usage next year to help shore up a pension fund for municipal employees. The Chicago City Council approved the new tax Wednesday by a vote of 40 to 10. The measure was backed by Mayor Rahm Emanuel. The tax will rise about 29.5% over the next four years and is based on how much water you use. It will cost households $53 on average in 2017, according to data provided by the city. The money from the tax will go to the Municipal Employees' Annuity and Benefit Fund of Chicago, one of the city's four pension funds for public employees.

Europe demands YouTube pay more to artists - Sep. 14, 2016 – (money.cnn.com) Europe has opened a new battlefront in its war against big U.S. tech, announcing draft rules that could force YouTube and others to pay more money to the music industry. The European Commission, which administers EU law, has proposed a new Europe-wide copyright law on Wednesday, saying it wants to strengthen the rights of artists and make sure they receive a fair share of the profits made on their work. If approved, the new rules will force streaming services such as YouTube and Dailymotion to beef up their copyright protection measures by filtering out copyrighted content or paying for its use.

Cost of insuring Deutsche Bank's debt rises 8 percent after DOJ fine: Markit  - (www.reuters.com) The cost of insuring Deutsche Bank's debt against default rose around 8 percent on Friday after the U.S. Department of Justice asked the lender to pay $14 billion to settle an investigation into its selling of mortgage-backed securities. Data provider Markit said credit default swaps on Deutsche Bank's (DBKGn.DE) five-year senior debt rose to 211 basis points, up 16 bps from Thursday's close of 195 basis points. Credit default swaps on equivalent Deutsche subordinated debt rose to 421 basis points, up 33 bps from Thursday's close of 388 bps.

Monte Paschi Bonds Slide to Two-Month Low After Debt-Swap Report  - (www.bloomberg.com) Junior bonds of Banca Monte dei Paschi di Siena SpA fell to a two-month low after a media report said investors could be forced to swap their debt for equity in a bid to salvage the troubled Italian lender. Monte Paschi’s 379 million euros ($426 million) of 5.6 percent notes due in September 2020 fell 1.4 cents on the euro to 69 cents on Friday, the lowest level since July 13, according to data compiled by Bloomberg.  Italy’s third-largest bank may enforce a debt for equity swap to help reduce the size of a planned 5 billion-euro share sale if not enough investors voluntarily accept the offer, Il Sole 24 Ore reported on Friday, without citing anyone. The lender is also seeking to shift 28 billion euros of bad debt from its books to help boost capital after losses and replaced its chief executive officer this week.

OTHER STORIES:

Wall Street hit as Deutsche Bank fine triggers bank rout - (www.reuters.com)
U.S. Household Wealth Rose by $1.08 Trillion in Second Quarter - (www.bloomberg.com)

Global Stocks Slip With Crude as Lenders Wobble; Dollar Advances - (www.bloomberg.com)

Oil Falls to 1-Month Low as Nigeria, Libya Poised to Swell Glut - (www.bloomberg.com)
Deutsche Bank Shares Plunge on Fears of $14 Billion U.S. Settlement - (www.nasdaq.com)
Mexican Peso Slides to Record Low as Clinton Flags in U.S. Polls - (www.bloomberg.com)