Wednesday October 12 20916 Housing and Economic stories

TOP STORIES:

The Great Debt Unwind: Business Bankruptcies Soar 38% - (www.wolfstreet.com) Something funny happened on the way to the bank: In August, commercial and industrial loans outstanding at all banks in the US fell for the first time month-to-month since October 2010, which had marked the end of the collapse of credit during the Financial Crisis. In October 2008, the absolute peak of the prior credit bubble, there were $1.59 trillion commercial and industrial loans outstanding. As the Great Recession chewed into the economy, C&I loans plunged. Many of them were cleansed from bank balance sheets via charge-offs. But then the Fed decided what the US needed was more debt to fix the problem of too much debt, thus kicking off what would become the greatest credit bubble in US history. By July 2016, C&I loans had surged to $2.064 trillion, 30% above their prior bubble peak.

Theranos Is Shutting Its Blood-Test Facilities, Shedding 40 Percent Of ... - (www.npr.com) Just two years after the blood-testing company Theranos was valued at $9 billion, the company has announced that it will close its clinical labs and blood-test centers and cut more than 40 percent of its staff. Theranos says it is shifting its focus to a product it calls the miniLab, with the goal of commercializing "miniaturized, automated laboratories." The company once seemed poised to revolutionize the blood-testing industry, with low-cost tests that used only a few drops of blood. But then, "the government began to scrutinize the company after experts found that the results of the blood tests were inaccurate," as NPR's Laura Sydell has reported. The fall from grace was dramatic. 

Deutsche Bank Dumped On Heavy Volume As German Government Denies Talks With US DOJ - (www.zerohedge.com) In addition to 100s more job cuts, Deutsche Bank stock is tumbling on the back of Bloomberg reports that the German government isn’t in talks with the U.S. Department of Justice over Deutsche Bank. There are no talks taking place with the DoJ, German government official says on customary condition of anonymity. German government has always made clear that this is about talks between the U.S. authorities and Deutsche Bank: official. And the reaction is a heavy volume dump...

Berlin pursues Deutsche Bank talks discreetly with US officials - (www.cnbc.com) The German government is pursuing discreet talks with U.S. authorities to help Deutsche Bank secure a swift settlement over the sale of toxic mortgage bonds, according to sources in Berlin. Until now, German officials have played down their role in the standoff, saying it is up to Deutsche to work out a deal with the U.S. Department of Justice, which is demanding up to $14 billion to settle claims the lender mis-sold mortgage-backed securities before the financial crisis. But government officials in Berlin, speaking on condition of anonymity, told Reuters they hoped to facilitate a quick deal that would buy Deutsche Bank time to regain its footing. One senior government official told Reuters there was "contact at all levels" between German and American officials.

Understanding Deutsche Bank’s $47 Trillion Derivatives Book - (www.wsj.com) Shares in Deutsche Bank AG have fallen by more than 48% this year amid concerns that the lender faces a hefty fine from the Justice Department and as its core lending business suffers from low interest rates and weak economic growth. But some analysts also worry about the exposure at Germany’s largest bank by assets to derivatives and the large pool of hard-to-value assets that the bank holds on its books. Derivatives are financial contracts that draw their value from the performance of an underlying asset, index or interest rate. They can be used to hedge risks.

OTHER STORIES:

Deutsche Bank’s $14 Billion Scare - (www.bloomberg.com)
Goldman Employees Said to Pull $300 Million From Omega Advisors - (www.bloomberg.com)
Lacker Warns Fed Governors Can Be Subject to Political Influence - (www.bloomberg.com)

Russia suspends nuclear agreement, ends uranium research pact with United States - (www.reuters.com)
Emerging Market Rally Fades as Central Bank Angst Outweighs Oil - (www.bloomberg.com)

ECB 'taper' talk hits stocks, sterling plumbs 31-year low - (www.reuters.com)