Friday April 22 2016 Housing and Economic stories

TOP STORIES:

Big U.S. banks grapple with costs as they face an ominous 2016 - (www.reuters.com) Five large U.S. banks cut more than $5 billion from their expenses during the first three months of the year, but it was still not enough to stop the financial bleeding in what was by many measures the worst quarter for Wall Street since the financial crisis. Volatile stock and bond markets, a rout in energy prices and stubbornly low interest rates left big banks' earnings in the dumps. As they reviewed results over the past week, some bank executives said conditions have improved in the early days of the second quarter, but there was little optimism that 2016 will be a year to celebrate. Goldman Sachs Group Inc and Morgan Stanley, whose earnings are more reliant on markets than peers, both saw their profits drop by more than half. Their returns on equity of around 6 percent were well below what investors and analysts say is acceptable. "They're not cutting costs fast enough to keep ahead of revenue declines," said Paul Miller, FBR Capital Markets.

Intel Cuts 12,000 Jobs, Forecast Misses as PC Blight Takes Toll - (www.bloomberg.com) Intel Corp. will eliminate 12,000 jobs, or 11 percent of its workforce, embarking on the deepest cutbacks in a decade to gird for a fifth year of declines in the personal-computer market. The world’s biggest maker of semiconductors said it’s shifting focus to higher-growth areas, such as chips for data center machines and Internet-connected devices. Intel also posted disappointing first-quarter revenue and gave a second-quarter sales forecast that fell short of analysts’ estimates. Shipments of PCs, a market that provides Intel with more than half of its sales, fell to their lowest level in a decade in the first three months of 2016. The depth and duration of the slump mean Intel can no longer fall back on booming demand for server chips or market-share gains against weaker rival Advanced Micro Devices Inc. The job cuts mark the most radical action yet by Chief Executive Officer Brian Krzanich, who has brought in new executives and shaken up his team as he works to reduce Intel’s dependence on PCs and rekindle growth by pushing into newer businesses.

Canada’s Financial Sector just Crapped on its Bondholders, Hoping They Don’t Care - (www.wolfstreet.com)  Canadian financial companies issued a total of $45 billion of a special kind of hybrid bonds. And now that Great-West has become the trailblazer, they might all be subjected to the same treatment. These bonds come with an option to be called after 10 years. If the option is not exercised, maturity is extended by another 30 years and the coupon is converted from the nice fixed-rate payment of yore to a floating-rate coupon based on an interest rate of “Libor plus,” in a world of ZIRP and NIRP. “Canadian investors never believed a Canadian bank or issuer would do that kind of thing in Canada,” Marc Goldfried, CIO at Canoe Financial LP in Toronto which manages $3.5 billion, told Bloomberg. But Great-West decided to become a trailblazer by not exercising this option on US$300 million in notes issued in 2006. Now the coupon converts to a floating rate based on the 3-month US-dollar Libor (currently 0.63%) plus 2.54 percentage points, so at the moment 3.17%. And investors have to wait another 30 frigging years before they get their money back! 40 years in total. And they believed they had a 10-year note! And had priced it like one!

China Default Chain Reaction Looms Amid 192 Day Cash Turnaround – (www.bloomberg.com) Chinese companies have never had to wait so long to get paid, as stockpiles build and customers delay sending funds. Firms now take a record 192 days to collect payment for their goods or services from when they pay for the inputs, according to data compiled by Bloomberg on non-financial corporations traded in Shanghai and Shenzhen. The cash conversion ratio is up from 125 days five years ago. Liquidity is tightening in China after company profits declined for the first time in three years and as debtors face their hardest time ever paying interest. “The longer the cash conversion cycle, the higher the risk of corporates not having enough cash to repay their debts,” said Iris Pang, senior economist for greater China at Natixis SA in Hong Kong. “That creates a chain reaction.”

US banks endure biggest drop in revenues since 2011 - (www.ft.com)  JPMorgan Chase, Bank of America, Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo generated total revenues of $98bn in the first quarter, down 9 per cent from a year earlier - the steepest fall in five years, according to a Financial Times analysis of Bloomberg data. Deep cost cuts failed to counteract the fall in revenue so the six lenders also saw their collective net income plummet 24 per cent year on year to $18bn. Goldman on Tuesday became the latest victim of the slowdown in trading and dealmaking when the investment bank posted its lowest first quarter revenue since Lloyd Blankfein became chief executive in 2006. The aggregate figures for the big six banks illustrate the sector’s reliance on turbulent securities businesses. Banks that have sizeable consumer divisions held up significantly better. Net income at the retail arms of JPMorgan Chase and Bank of America rose 12 per cent and 22 per cent, respectively.

OTHER STORIES:

Asian Stocks Extend Four-Month High as Commodities Shares Jump - (www.bloomberg.com)
PBOC Signals Less Appetite for Stimulus as Outlook Strengthens - (www.bloomberg.com)
Weaker Dollar Sparks Commodities Rally; Earnings Weigh on Stocks - (www.bloomberg.com)

China Faces Make-or-Break Moment, Says Forecaster of Japan Slide - (www.bloomberg.com)
Rio Warns of Fiscal Collapse as Brazil States Seek Debt Relief - (www.bloomberg.com)
BoC's Poloz Says Global Monetary Stimulus Is Reaching its Limit - (www.bloomberg.com)

Thursday April 21 2016 Housing and Economic stories

TOP STORIES:

It's All Suddenly Going Wrong in China's $3 Trillion Bond Market - (www.bloomberg.com) The unprecedented boom in China’s $3 trillion corporate bond market is starting to unravel.  Spooked by a fresh wave of defaults at state-owned enterprises, investors in China’s yuan-denominated company notes have driven up yields for nine of the past 10 days and triggered the biggest selloff in onshore junk debt since 2014. Local issuers have canceled 61.9 billion yuan ($9.6 billion) of bond sales in April alone, and Standard & Poor’s is cutting its assessment of Chinese firms at a pace unseen since 2003. While bond yields in China are still well below historical averages, a sustained increase in borrowing costs could threaten an economy that’s more reliant on cheap credit than ever before. The numbers suggest more pain ahead: Listed firms’ ability to service their debt has dropped to the lowest since at least 1992, while analysts are cutting profit forecasts for Shanghai Composite Index companies by the most since the global financial crisis.

As Olympics Looms, Governor Warns Rio Is "Close To Social Collapse" - (www.zerohedge.com) With feces-infested waterways, Zika-carrying mosquitoes, a collapsing economy, and political corruption that runs from top to bottom, Brazil is in trouble. All that excludes now impeached president Dilma Rousseff who refuses to step down, which has cast the country in political limbo. But just a few short weeks ahead of The Olympics, the people are revolting as Sao Paulo state governor Geraldo Alckmin warns "Rio de Janeiro is close to social collapse” after state payments to retirees have not been made. Of course, none of this matters as long as Ibovespa is soaring and Real is strengthening:

U.S. Regulators to Focus on Borrowing at Large Hedge Funds – (online.wsj.com)  Top U.S. regulators are set to focus on borrowing by the hedge-fund industry, particularly large funds, as they assess potential risks in the asset-management sector. The Financial Stability Oversight Council voted unanimously at a public meeting Monday to endorse a 27-page “update” of its more-than-two-year review of financial-stability risks tied to the asset-management industry. Treasury Secretary Jacob Lew said the oversight council, a group of senior regulators that he heads, has found that leverage in the hedge-fund industry appears to be concentrated at larger funds, though he cautioned that “greater leverage does not necessarily imply greater risk or systemic risk” and more factors need to be considered.

Wall Street banking revenue is in free fall, and here's why - (www.cnbc.com) Fixed income, currencies and commodities trading declines hit Wall Street hard in a volatile first quarter. Goldman Sachs reported first-quarter earnings Tuesday morning that while crossing a low bar also saw a 47 percent year-over-year drop in fixed income, currencies and commodities, or FICC, to $1.66 billion. It was part of a report that showed revenue growth tumbling 40 percent, from $10.62 billion from the year-ago period to $6.34 billion in the first three months of 2016. With growing uncertainty on the horizon in the second quarter, the FICC struggle could continue. In part thanks to more central banks embracing negative interest rates, S&P Global Markets Intelligence equity analyst Kenneth Leon said more FICC pain could continue on Wall Street in 2016.

This Also Happened the Last 2 Times before Stocks Crashed - (www.wolfstreet.com) Something that happened just before the prior two market crashes, and the recessions that accompanied them, including the Great Recession, is happening again: the boom in financial engineering is starting to backfire against the companies doing it. Their credit ratings are getting slashed, and their borrowing costs are therefore rising, even while they need newly borrowed money to buy back even more shares to keep the charade going. Until the music stops. Downgrades ascribed to “shareholder compensation,” as Moody’s calls share buybacks and dividends, have been soaring, according to John Lonski, Chief Economist at Moody’s Capital Markets Research. The moving 12-month sum of Moody’s credit rating downgrades of US companies, jumped from 32 in March 2015, to 48 in December 2015, and to 61 in March 2016, nearly doubling within a year.

OTHER STORIES:

Media Websites Battle Faltering Ad Revenue and Traffic - (www.nytimes.com)
Saudi Arabia turns oil weapon on Iran: Kemp - (www.reuters.com)

Crude's Losses Drag Ruble, Loonie Lower; Stocks Pare Their Drop - (www.bloomberg.com)

U.S. Stocks Advance as Investors Look Past Declines in Crude Oil - (www.bloomberg.com)
China March home prices rise at fastest rate in two years, top cities boom - (www.reuters.com)
China State Enterprises Likely to Suffer More Defaults, S&P Says - (www.bloomberg.com)

Wednesday April 20 2016 Housing and Economic stories

TOP STORIES:

China Ocean Freight Index Collapses to Record Low - (www.wolfstreet.com)  The amount it costs to ship containers from China to ports around the world, a function of the quantity of goods to be shipped and the supply of vessels to ship them, just dropped to a new historic low. The China Containerized Freight Index (CCFI) tracks contractual and spot-market rates for shipping containers from major ports in China to 14 regions around the world. It reflects the unpolished and ugly reality of the shipping industry in an environment of deteriorating global trade. For the latest reporting week, the index dropped 0.6% to 636.14, its lowest level ever. It has plunged 41% from the already low levels in February last year, and 36% since its inception in 1998 when it was set at 1,000. 

Credit Suisse: Germany Is Asking for a Different Kind of Bailout - (www.bloomberg.com) Forget about Greek debt sustainability. Another part of the continent is in need of relief—and this time, it's a part of the core, not the periphery. That's how Credit Suisse Group AG analysts led by Peter Foley characterized comments from German Finance Minister Wolfgang Schaeuble earlier this month. "The German Finance minister said record low interest rates were causing'extraordinary problems' for German financial institutions and pensioners and risked undermining voters' support for European integration," writes Foley. "His words sounded like a request of a bailout for his countries' saving industry and savers, in an ironic twist from previous bailout requests coming from the periphery."

Saudi Arabia Warns of Economic Fallout if Congress Passes 9/11 Bill - (www.nytimes.com) Saudi Arabia has told the Obama administration and members of Congress that it will sell off hundreds of billions of dollars’ worth of American assets held by the kingdom if Congress passes a bill that would allow the Saudi government to be held responsible in American courts for any role in the Sept. 11, 2001, attacks. The Obama administration has lobbied Congress to block the bill’s passage, according to administration officials and congressional aides from both parties, and the Saudi threats have been the subject of intense discussions in recent weeks between lawmakers and officials from the State Department and the Pentagon. The officials have warned senators of diplomatic and economic fallout from the legislation.

Merkel Feels Heat From Backing Prosecution of Erdogan Satirist - (www.bloomberg.com) Chancellor Angela Merkel, already weakened by Europe’s refugee crisis, came under fire over the weekend for granting a Turkish request to prosecute a German satirist who derided President Recep Tayyip Erdogan. Merkel took criticism from Germany’s Turkish community, opposition leaders, a journalist group and her junior coalition partner after deciding to leave the legal fate of comedian Jan Boehmermann in the hands of the country’s courts. Two-thirds of Germans surveyed said her decision was wrong, Bild am Sonntag reported Sunday. “The German government is passing the buck for protecting free speech to the courts, instead of upholding its own human rights obligations,” Hugh Williamson, Europe and Central Asia director at Human Rights Watch, said in a statement. “The government is contributing to the violation of free speech that a potential prosecution would constitute.”

Could the San Francisco real estate market finally be slowing down? - (www.marketwatch.com)  Some air may finally escaping from the inflated San Francisco real estate market. Home prices in the San Francisco Bay Area were down 1.8% on a year-over-year basis in March, the first such drop in four years, according to Redfin, a Seattle-based real estate brokerage. “For years, San Francisco has been one of [the most] — if not the most — competitive markets in the country,” said Redfin’s chief economist, Nela Richardson. “Now we are seeing this white-hot market start to cool and contract,” she said. Richardson noted that the share of Redfin properties attracting multiple offers dropped to 77% in March from 94% a year earlier. “This,” she said, “suggests that the price drop is not about inventory; it’s about buyers fed up with high Bay Area prices and crazy competition.”

OTHER STORIES:

Saudi Prince Sticks to Oil Freeze Ultimatum as Iran Stays Home - (www.bloomberg.com)
Saudi Prince Says He Could Add a Million Barrels Immediately - (www.bloomberg.com)
Japan's pitch for FX action meets cool G20, US response - (www.reuters.com)

Brazilians watch helplessly as impeachment crisis nears climax - (www.latimes.com)
As China’s Growth Slows, Banks Feel the Strain of Bad Debt - (www.nytimes.com)
Erdogan and the Satirist: Inside Merkel's Comedy Conundrum - (www.spiegel.de)

Tuesday April 19 2016 Housing and Economic stories

TOP STORIES:

Soured Corporate Loans Surge at Biggest U.S. Banks on Oil - (www.bloomberg.com)  Soured loans to companies jumped 67 percent at the three biggest U.S. banks in the first quarter, the latest sign that corporate credit quality is eroding after energy prices plunged. At Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co., bad loans to companies reached their highest levels since at least 2013. For now, weakness is mainly confined to oil and gas and related industries, executives said. U.S. crude has tumbled more than 60 percent since June 2014, although they have rallied since February. Troubled loans have broadly been declining at big banks for years, and at JPMorgan and Bank of America, are less than 1 percent of total assets. But there are signs that default risk is rising in sectors outside of energy, including health care, James Elder, a director in corporate and financial institutions at Standard & Poor’s, said in a presentation this week.

China May Have $1.3 Trillion of Risky Loans, IMF Report Shows - (www.bloomberg.com)  China may have $1.3 trillion loans extended to borrowers that don’t have sufficient income to cover interest payments, with potential losses equivalent to 7 percent of the country’s gross domestic product, according to the International Monetary Fund. Loans “potentially at risk” would amount to 15.5 percent of total commercial lending, the IMF said in its latest Global Financial Stability Report. That compares with the 5.5 percent problem loan ratioreported by China’s banking regulator after including nonperforming and special-mention loans. The true amount of bad debt sitting on the books of China’s banks is at the center of a debate about whether the country will continue as a locomotive of global growth, or sink into decades of stagnation like Japan after its credit bubble burst. Hayman Capital Management’s Kyle Bass in January flagged a $3.5 trillion potential loan loss for China banks, though analysts from China International Capital Corp. and Macquarie Securities Ltd. have said that estimate overstates the real situation.

It’s Gotten So Bad in Europe, Even Eurocrats Begin to Worry - (www.wolfstreet.com)  You know that things are bad when even the firmest believers begin questioning their faith. That’s what’s starting to happen in Europe, where the EU faces a dizzying constellation of threats and challenges and even the staunchest of eurocrats are beginning to express doubts. Many people have lost trust in “entire institutions, whether national or European,” laments European Parliament Chief Martin Schulz. In an interview with the Frankfurter Allgemeine, he warned over a possible “implosion of the EU” due to the blossoming Euroskeptic movements in member states. The main reason for Schulz’s gloomy disposition is the Dutch referendum vote last week against an EU-Ukraine trade agreement.

Buyback boost to US stocks to dwindle as cash flow shrinks - (www.reuters.com) The S&P 500 is close to its record high as earnings season heats up, but one of the major drivers of the market's advance - stock buybacks - looks to be sagging. U.S. companies announced about $182 billion in buybacks in the first quarter, according to Birinyi Associates research, putting buybacks on pace for their weakest year since 2012. Strategists link this, in part, to falling cash flow, a trend that is expected to worsen in coming quarters. First-quarter earnings per share are expected to fall 7.8 percent, but more importantly for the outlook for buybacks, revenues are set for a fifth consecutive quarter of decline. Thomson Reuters data forecasts a 1.1 percent revenue drop.

China Averts a Hard Landing With a Credit-Powered Trampoline - (www.bloomberg.com) So much for the hard landing scenario. Chinese leaders appear to have stabilized their $10 trillion-plus economy by relying on a tried and true playbook: unleash a torrent of credit to power a borrowing surge and spending splurge. The flood of money has helped house prices rebound, spurred investment, stabilized markets and buoyed consumers. It also ensured that gross domestic product in the first quarter came in at a 6.7 percent gain from a year earlier, matching expectations and well within the government’s 2016 target of 6.5 percent to 7 percent. It’s all a world away from the start of the year, when stock markets reeled in Shanghai and Shenzhen and investors around the world were baffled by currency policy and the direction of the yuan. In January, what looked like a decelerating and unstable China loomed as a negative for the global economy and all manner of commodities, from copper to crude oil. That’s no longer the case, at least for now.

OTHER STORIES:

Financial shares mint fifth day of gains; indexes close flat - (www.reuters.com)
Investors Pour $10.7 Billion Into Junk Bonds as Fears Fade - (www.bloomberg.com)
'Let them sell their summer homes': NYC pension dumps hedge funds - (www.reuters.com)
Policymakers fret as storm clouds gather over world economy - (www.reuters.com)

Most Americans think economy is 'getting worse' - (www.cnbc.com)
China says enhanced U.S.-Philippine military ties invoke 'Cold War mentality' - (www.reuters.com)

Brazil’s Economy Tanks as Political Upheaval Looms - (online.wsj.com)
Japan Inc. Profits Head for Biggest Abe-Era Drop on Stronger Yen - (www.bloomberg.com)

Monday April 18 2016 Housing and Economic stories

TOP STORIES:

Hillary Clinton Promise: ‘We’re Going to Put a Lot of Coal Miners and Coal Companies Out of Business’ - (www.breitbart.com) Appearing at a CNN town hall in Columbus, Ohio, on Sunday, Democratic presidential candidate Hillary Clinton promised that in her administration, “We’re going to put a lot of coal miners and coal companies out of business.” Clinton’s stark statement was not only an acknowledgement that she plans to continue waging President Obama’s “war on coal,” it was a clear sign she intends to accelerate the destruction of one of the country’s leading energy sector industries. It may also have an undesirable political effect in Ohio, which was the ninth largest coal producing state in 2013. Ohio is one of five states holding primaries tomorrow. A week ago, Sen. Bernie Sanders (I-VT) % defeated Clinton in the Democratic primary held in neighboring Michigan.

 

Hedge Funds Slammed: Tudor Hit With $1BN In Redemptions; NYC Pensions To Pull $1.5BN From Key Names - (www.zerohedge.com)  In a world in which the average hedge fund has failed to outperform the stock market for 8 years running, many have asked themselves what is the point of paying 2 and (not so much 20) to consistently underperform a global asset class which is now actively micromanaged by central banks themselves. And while redemptions from hedge funds have been growing in recent months, coupled with the first year since the crisis in which more hedge funds shut down than were created, it all culminated moments ago when Bloomberg reported that clients of none other than hedge fund legend Paul Tudor Jones have asked to pull more than $1 billion after three years of lackluster returns.

NYC Pension Weighs Liquidating $1.5 Billion Hedge Fund Portfolio - (www.bloomberg.com)  New York City’s pension fund for civil employees is weighing exiting its $1.5 billion portfolio of hedge fund investments because of lagging performance, high fees and the riskiness of the asset class. A vote to terminate the funds, which include D.E. Shaw & Co., Brevan Howard Asset Management, and Perry Capital, will come as soon as Thursday, according to a person familiar with the matter. Hedge funds make up 3 percent of the civil employees’ fund’s$51 billion portfolio.  “Hedge funds are charging exorbitant fees for high-risk and opaque investments” said New York City Public Advocate Tish James. ”Our public employees work hard for their money, and they deserve to know their investments are secure. We can and must invest responsibly and also honor our fiduciary responsibility.”

SunEdison Misses Payment on Convertible Bonds, Facing Default - (www.bloomberg.com) SunEdison Inc., the renewable-energy company already teetering on the brink of bankruptcy, missed a bond payment this month. The company was supposed to pay $2.6 million April 1 on its 2 percent convertible bonds, which are due in 2018, according to data compiled by Bloomberg. SunEdison has a grace period through May 1. The trustee, Wilmington Trust Corp., confirmed April 11 that the payment was missed, according to data compiled by Bloomberg. Not making the payment “means SunEdison is likely in technical default,” Greg Jones, an analyst at CreditSights, said in an e-mail Wednesday. Failure to cure by May 1 “could potentially trigger cross-default provisions in other debt obligations.”

Coal Slump Sends Mining Giant Peabody Energy Into Bankruptcy - (www.bloomberg.com) Peabody Energy Corp. filed for bankruptcy on Wednesday, the most powerful convulsion yet in an industry that’s still waiting for the coal market to bottom out. The company is seeking to reorganize U.S. operations in federal court in its hometown of St. Louis, reducing an estimated $10.1 billion in debt, according to court filings. It’s the biggest U.S. corporate bankruptcy this year by liabilities, according to data compiled by Bloomberg.  The outcome of the case may turn on what trajectory coal prices take over the course of the reorganization, with battles over environmental obligations and non-bankrupt Australian operations complicating matters, according to analysts and environmental activists.

OTHER STORIES:

Hedge funds post best gains in 4 years in March - (www.cnbc.com)
Brazil’s Economy Tanks as Political Upheaval Looms - (online.wsj.com)
Japan Inc. Profits Head for Biggest Abe-Era Drop on Stronger Yen - (www.bloomberg.com)
China and India Have Different Answers for Their Debt Messes - (www.bloomberg.com)

Retail Sales Unexpectedly Fall as U.S. Consumers Scrimp - (www.bloomberg.com)
JPMorgan Sets Aside More Cash to Cover Souring Oil and Gas Loans - (www.bloomberg.com)
IMF Warns of Possible ‘Spiral’ of Waning Growth, Escalating Debt - (www.bloomberg.com)

Friday April 15 2016 Housing and Economic stories

TOP STORIES:

Bank bail-ins are back, and they begin in Austria - (www.examiner.com)  Entering into 2016, all members of the European Union (EU) were required by law to have bail-in legislation on their books in preparation for the next potential crisis that in previous times would have resulted in a taxpayer funded bailout. This was accomplished both by individual countries, and at the central bank level, and is regulated under the auspices of the European recovery and resolution framework for banks.  And on April 10, it appears that these new rules have come not a moment too soon asAustria is to become the first European state to implement a bail-in as it induces the new policy on the failed Hypo Alpe Adria (bank), which is known today as the Heta Asset Resolution AG when it was nationalized by the Austrian government six years ago.

Wells Fargo Misjudged the Risks of Energy Financing - (www.bloomberg.com)  At its annual investor conference in San Francisco in May 2014, with oil trading at $102 a barrel, Wells Fargo & Co. boasted that in just two years it had almost doubled its energy exposure and seized the title of Wall Street’s top oil and gas banker. The timing couldn’t have been worse. Crude prices peaked a month later and have since plummeted to $40. Wells Fargo has downgraded 38 percent of its energy loans and set aside $1.2 billion to cover potential losses, according to company filings. The loans are coming under increasing scrutiny from regulators and investors, even though they make up only 2 percent of the bank’s portfolio. Wells Fargo’s foray into oil shows how Wall Street misjudged the risks hidden in an esoteric type of energy financing long thought to be bulletproof. To fuel the growth of its energy desk, the bank targeted some of the least creditworthy borrowers in the shale patch, offsetting the risk by demanding oil and gas as collateral. This type of financing, known as reserves-based lending, was considered safe because banks historically got back every penny they loaned, even after default, according to a 2013 Standard & Poor’s report.

Banks Face Massive New Headache on Oil Loans - (online.wsj.com)  The $147 billion question for banks: Will energy companies max out their credit lines? When big banks announce earnings starting Wednesday, the spotlight will be on vast energy loans that most investors didn’t know much about until recently. These unfunded loans have been promised to energy companies, which haven’t yet tapped the money. Many banks historically haven’t disclosed these loans, but began doing so recently following the extended slide in prices for oil and gas. In the first quarter, a handful of energy borrowers announced more than $3 billion of drawdowns against these types of loans. Those commitments are expected to trickle down to bank earnings and saddle firms with more energy exposure just as they are trying to pare it back.

China Steelmaker Misses Third Bond Payment as Defaults Spread - (www.bloomberg.com) Dongbei Special Steel Group Co. defaulted on bonds a third time since its chairman was found dead by hanging last month, adding to mounting debt nonpayments in China. The maker of alloy steels used in machinery and car parts failed to fully pay 45.04 million yuan ($6.97 million) of interest due April 12 on its 5.63 percent notes that mature in 2018, it said in a statement on Chinamoney’s website. The firm, based in the northeastern city of Dalian, cited tight cash flow and said it is raising money through various means. Chinese firms are struggling with surging debt burdens as Premier Li Keqiang seeks to weed out zombie corporations amid the country’s worst economic slowdown in a quarter-century. At least seven firms have missed local note payments this year, already reaching the tally for the whole of 2015.

What in the World’s Going on with Banks this Week? Emergency Meetings, Summits, Crashing EU Banks… - (www.wolfstreet.com)  Just about every major banker and finance minister in the world is meeting in Washington, D.C., this week, following two rushed, secretive meetings of the Federal Reserve and another instantaneous and rare meeting between the Fed Chair and the president of the United States. These and other emergency bank meetings around the world cause one to wonder what is going down. Let’s start with a bullet list of the week’s big-bank events:

·         The Federal Reserve Board of Governors just held an “expedited special meeting” on Monday in closed-door session.

·         The White House made an immediate announcement that the president was going to meet with Fed Chair Janet Yellen right after Monday’s special meeting and that Vice President Biden would be joining them.

·         The Federal Reserve very shortly posted an announcement of another expedited closed-door meeting for Tuesday for the specific purpose of “bank supervision.”

·         etc.

OTHER STORIES:

Asian Stocks Rise as Crude Rally Buoys Energy Shares, Yen Drops - (www.bloomberg.com)
Valeant shares fall on default fears - (www.cnbc.com)
Brazil's Rousseff decries conspiracy as impeachment advances - (www.reuters.com)
US budget deficit up sharply to $108 billion in March - (www.wtop.com)
How China’s fishermen are fighting a covert war in the South China Sea - (www.washingtonpost.com)
Chinese Scions’ Song: My Daddy’s Rich and My Lamborghini’s Good-Looking - (www.nytimes.com)

Britain's Cameron says he mishandled Panama Papers tax scrutiny - (www.reuters.com)
Italian banks' situation 'difficult but manageable': minister - (www.reuters.com)
ECB's policy must be 'proportionate' and respect rules: Mersch - (www.reuters.com)
Germany's Schaeuble says offshore companies must be transparent - (www.reuters.com)