Thursday November 24 2016 Housing and Economic stories

TOP STORIES:

What Surging Interest Rates Mean for Your Credit Cards, Auto, Student and Home Equity Loans - (www.wsj.com) Mortgage rates have increased since Donald Trump was elected president—but that doesn’t mean consumers will immediately pay more for credit cards and other loans. So far, rates for much shorter-term lending have risen at a far slower pace than those for longer-dated debt. And, in many cases, the speed and amount of increases in borrowing costs depends on the benchmark lending rate or index to which a loan is pegged. The yield on the 10-year, U.S. Treasury, for example, was at 2.23% early Tuesday, up 0.38 percentage point since election day, or about 20%. The yield on the six-month Treasury bill has risen slightly more than 10%, to 0.62% from 0.56%, over the same period.

Trouble Brewing in Commercial Real Estate - (www.wsj.com) Defaults are rising in a key corner of the commercial real-estate debt market just as borrowing costs are set to jump, raising the likelihood of a slowdown of the $11 trillion U.S. commercial property sector in 2017. A financial crisis-era regulation is about to take effect that is expected to make some commercial real-estate borrowing more expensive and complicated, analysts said. At the same time, interest rates have increased since the election ofDonald Trump as the nation’s 45th president last week and seem poised for a sustained rise from recent historic lows, which would further squeeze an industry built on borrowed money. “I can paint a picture that it could be disastrous, with runaway inflation and high interest rates,” said Charlie Bendit, co-chief executive of Taconic Investment Partners LLC, at a New York industry luncheon last week.

Germany Threatens to Abandon Basel Talks If Demands Not Met - (www.bloomberg.com) Germany’s Bundesbank delivered an ultimatum to other major banking powers including the U.S. that it will walk away from talks on revamping global capital rules unless its key demands are met. Andreas Dombret, a member of the Bundesbank Executive Board, said on Tuesday that Germany won’t accept a deal “at any price.” He laid out a series of demands, including two “essential areas of action” for talks later this month in the Basel Committee on Banking Supervision, the international standard-setter. Both will probably be met with skepticism in Washington.

U.S. panel says China state firms should be banned from buying U.S. companies - (www.reuters.com) A U.S. congressional commission charged with monitoring security and trade links between the United States and China has recommended that CFIUS, the body that vets acquisitions from foreign firms, be required to block purchases from Chinese state-owned companies. In its annual report to the U.S. Congress, the U.S.-China Economic and Security Review Commission said on Wednesday the Chinese Communist Party has used state-owned enterprises (SOEs) as the primary economic tool to advance and achieve its national security objectives. "The Commission recommends Congress amend the statute authorizing the Committee on Foreign Investment in the United States (CFIUS) to bar Chinese state-owned enterprises from acquiring or otherwise gaining effective control of U.S. companies," the report said.

Who’ll Get Hit by Fallout from the $11-Trillion Commercial Property Bubble in the US? - (www.wolfstreet.com) Warnings about the loans, bonds, and commercial-mortgage-backed securities (CMBS) tied to the vast $11-trillion commercial property sector in the US have been hailing down for months. Moody’s Investor Services just warned about the rising delinquency rate of some $360 billion in CMBS it rates. Delinquencies of 60+ days jumped from 4.6% last year to 5.6% in September. Fitch Ratings has been fretting about valuations in the sector, and CMBS, for months. “Valuation and lending trends are not sustainable in the medium term,” it said most recently in its November report. It pinpointed debt backed by apartment buildings as a particular trouble spot. But now it’s also fretting about construction loans, which “experienced the highest loss severity in the last crisis, and we expect a similar trend in the next downturn,” it said.

OTHER STORIES:

Asian Stocks Advance With South Korea’s Won as Trump Shock Fades - (www.bloomberg.com)
Wall Street rises, lifted by technology and energy stocks - (www.reuters.com)
Bonds Rise With Emerging Markets After Trump Selloff; Oil Surges - (www.bloomberg.com)

Oil Jumps Most in Seven Months as OPEC Members Seen Pushing Deal - (www.bloomberg.com)
Trump digs in for major U.S. trade reset with the world - (www.cnbc.com)
Fannie and Freddie’s Status Continues to Provoke Criticisms - (www.nytimes.com)