Friday May 12 2017 Housing and Economic stories

TOP STORIES:            

Answers Emerge: This is How Badly Uber Eats into Hertz  - (www.wolfstreet.com) Shares of rental-car conglomerate Hertz Global Holdings closed at $14.98 on Friday, after reaching an all-time low of $14.32 on Thursday. These shares have only been around since last June, when Hertz spun off its equipment leasing division. They’ve plunged 73% from their high last July. Hertz will report first quarter earnings on Monday. In the fourth quarter, it lost $440 million or $5.30 a share, much worse than “expected.” Expectations for Q1 are so low that it will be hard to report “worse than expected” numbers.

November 9 was its big day. Its shares plunged 52% to $17.20. Carl Icahn had been vociferously hyping and buying the shares, including 15 million shares during the plunge. He has lost money relentlessly. That day, Hertz doused car-befuddled Wall Street analysts with a dose of reality about the auto bubble. Deprecation of its vehicles was soaring as residual values were dropping. It also cited falling rental volume and falling rental rates in the US.

Iron Ore Revival Snuffed Out as ‘Weakest Commodity’ Drops Again  - (www.bloomberg.com) Iron ore’s attempt at a rebound lasted just a few short hours as investor concern over robust supplies, including near-record port stockpiles, and speculation some traders in China were rushing to offload holdings combined to snuff out the brief gain. In Singapore, SGX AsiaClear futures fell 2.1 percent to $59.70 a metric ton, overturning an earlier climb of as much as 2.7 percent. In China, the most-active contract on the Dalian Commodity Exchange pared a 5 percent jump to close just 1.1 percent higher. Benchmark spot prices tumbled toward $60 a dry ton. The commodity plunged into a bear market last month amid concern low-cost mine supplies will go on rising just as China’s mills enter a weaker period for demand and policy makers in Asia’s top economy move to rein in leverage. With stockpiles at mainland ports still near unprecedented levels, Shanghai Cifco Futures Co. said in a note on Monday signs are now emerging that traders are dumping their holdings, with some transactions done at low prices.

VIX Crashes To A 9 Handle - Lowest Level Since Feb 2007 – (www.zerohedge.com) Amid the 'calmest' market for the S&P 500 since 1964, traders are shedding protection at a record clip. VIX just traded down to 9.73 - the lowest since Feb 2007... The last two trading days have seen some 'odd' shifts in the equity-vol correlation regime though...  And judging by the collapse in realized vol, VIX could have further to fall...

NY Foreclosure Mills Are Using A New Tactic - (www.mfi-miami.com) New York Foreclosure Mills Are Using The Federal Courts To Kick You Out Of Your Home Faster. Foreclosure mills in New York are packing up their cases and moving them from state court to federal court. New York foreclosure mills are using a new tactic to speed up the foreclosure process. They are using Diversity of Citizenship to move the cases from state court to federal court. Foreclosures in New York average 18-24 months. New York foreclosure mills hope to cut that time by 75% by bypassing the safeguards put in by the Foreclosure Prevention and Responsible Lending Act. To get into federal court, a lender needs to have diversity. This means the citizenship of the plaintiff or lender is different than the citizenship of the homeowner.  Let’s say the lender is Ocwen. Ocwen holds the note and they are in Florida. The borrower and the property are in New York. Because the citizenships are different, they’re diverse. 

German Investors Dumping Italian Bonds: Italy Increasingly Dependent on ECB, Target2 Capital Flight Revisited - (www.mishtalk.com) Italy is increasingly dependent on the ECB to hold down bond yields as foreign investors dump Italian bonds like mad. Eurointelligence bills this as “Further Evidence of Capital Flight in Italy“. In a column earlier this week, Federico Fubini notes that, according to the Bank of International Settlements, in 2016 international banks reduced their exposure to Italy by 15%, or over $100bn, half of it in the last quarter of the year. The counterpart to this exposure reduction is the increase in the negative Target2 balance of Italy, which the ECB has already attributed to foreign investors selling into its asset purchase programs, and reinvesting the proceeds away from Italy. As a result of all this, Italy’s financial stability is increasingly dependent on the ECB.

  

OTHER STORIES:

China Reserves Rise a Third Month Amid Tighter Capital Controls  - (www.bloomberg.com)
Fed's Williams Stands by Hike Outlook as Unemployment Drops - (www.bloomberg.com)

FX Traders Losing Confidence in Dollar With Few Catalysts to Buy - (www.bloomberg.com)
Traders Are Fleeing the Options Market - (www.wsj.com)
Wall Street’s hopes for deregulation switch from laws to watchdogs - (www.ft.com)

Italy’s bad debt problem refuses to go away - (www.ft.com)
Risk of dollar shortage hits investors’ radar - (www.ft.com)