Tag Archives: History Repeating

Distressed-Debt Market Upended Amid Deepening Commodities Rout

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“More than $7 billion of the distressed-debt market has been wiped out this month amid a renewal of a slide in commodities. The performance is a disappointment to investors who purchased about $40 billion of junk-rated bonds from energy companies this year, thinking that the worst of the slump was over. Speculative-grade borrowers are increasingly unable to pay their bills, with their default rate expected to rise to 3.1 percent next March from 2.02 percent last month, according to Moody’s Investors Service.  New Jersey’s pension system is planning a $300 million account with GoldenTree Asset Management to invest in stressed and distressed credits.”

http://www.bloomberg.com/news/articles/2015-07-22/distressed-debt-market-upended-amid-deepening-commodities-rout

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U.S. Homeownership Rate Falls to 20-Year Low

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“The U.S. homeownership fell to its lowest level in 20 years at the end of 2014—levels last seen when national leaders embarked on a broad push to expand homeownership in the mid-1990s.  Over the past year, President Barack Obama and other administration officials have voiced alarm that lending has gone from one extreme during the bubble—too loose —to the other—too tight—in the aftermath of the bust.  Officials have walked a fine line in attempting to bar a return of the reckless products and practices that allowed the bubble to inflate 10 years ago while loosening some standards elsewhere to provide broader access to homeowners without perfect credit or big down payments.”

http://blogs.wsj.com/economics/2015/01/29/u-s-homeownership-rate-falls-to-20-year-low/

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Bank of Canada Admits Recession, The Solution: More Bubbles

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“What made the Canadian recession easy to spot was the Canadian yield curve inverted out to three years following a surprise rate cut by the Bank of Canada on January 21.  It remains to be seen if the US follows. The US contracted in the first quarter, but the second quarter rebound was a bit stronger than I expected.  I awarded Canada the ‘Blue Ribbon’ for the first yield curve inversion of any major country following the great financial crisis. I smell an ‘Operation Twist‘ type move by the Canadian central bank to rectify this horrific ‘recession-signaling’ condition.  If so, the sweet spot for banks and hedge funds to front-run the trade appears to be 5Y or 7Y notes.  Some banks may already be in on it.”

http://globaleconomicanalysis.blogspot.com/2015/07/bank-of-canada-admits-recession-shades.html

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Fed rate-hike speculation lifts U.S. dollar to three-month high

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“The dollar reached its highest in nearly three months against a basket of currencies on Monday on a rise in U.S. bond yields as traders built bets the Federal Reserve would raise interest rates later this year.  A plummet in gold prices to five-year lows under $1,100 an ounce also increased the appeal of the greenback, the world’s reserve currency.  Last week, U.S. Fed Chair Janet Yellen testified before Congress, reiterating U.S. interest rates will go up later this year if the economy continues to expand.  St. Louis Fed chief James Bullard told Fox Business network on Monday there was a higher than 50 percent chance the U.S. central bank will raise rates in September.”

 

http://www.reuters.com/article/2015/07/20/us-markets-forex-idUSKCN0PU01920150720

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Cheap Oil Is Squeezing Property Owners in Energy Hubs

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“Even as U.S. commercial real estate values surge past records set in 2007, with cash from around the globe pouring into the best buildings in the biggest cities, lenders are becoming more cautious in regions that rely heavily on the oil industry for growth. That could create higher hurdles for borrowers that need to refinance mortgages in places such as Texas and North Dakota.  Lenders are reassessing risks in energy towns as roughly $1.1 trillion of property loans come due across the U.S. over the next three years. About $345 billion is left over from a lending binge on Wall Street that culminated in 2007 with a record $232 billion in sales of securities linked to properties.”

http://www.bloomberg.com/news/articles/2015-04-07/oil-rout-squeezes-property-owners-from-houston-to-north-dakota

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Wesley Clark Calls for Internment Camps for “Radicalized” Americans

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“Retired general and former Democratic presidential candidate Wesley Clark on Friday called for World War II-style internment camps to be revived for ‘disloyal Americans.’ In an interview with MSNBC’s Thomas Roberts in the wake of the mass shooting in Chatanooga, Tennessee, Clark said that during World War II, ‘if someone supported Nazi Germany at the expense of the United States, we didn’t say that was freedom of speech, we put him in a camp, they were prisoners of war.’ The comments were shockingly out of character for Clark, who after serving as supreme allied commander of NATO made a name for himself in progressive political circles.”

https://firstlook.org/theintercept/2015/07/20/chattanooga-wesley-clark-calls-internment-camps-disloyal-americans/

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Greek Banks Reopen but Cash Limits Remain and Taxes Soar

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“The cash-strapped nation got a short-term loan from European creditors to pay more than 6 billion euros ($6.5 billion) owed to the International Monetary Fund and the European Central Bank.  But for most Greeks, already buffeted by six years of recession, Monday was all about rising prices as tax hikes demanded by creditors took effect. There are few parts of the Greek economy left untouched by the steep increase in the sales tax from 13 to 23 percent. strict controls on cash flows, including a ban on check-cashing and payments abroad as well as limits on cash withdrawals, remained in effect.  New rules permit the withdrawal of up to 420 euros a week.”

http://abcnews.go.com/International/wireStory/greeks-find-banks-open-restrictions-place-32559279?singlePage=true

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Venture Capital Investment Close to Dot-Com Era

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“Venture capital investment in U.S. startups rose 24% in the second quarter to $19.19 billion, nearly matching levels last seen in the dot-com era, according to Dow Jones VentureSource.  Total investment in the first half of 2015 was $35.9 billion, more than the $35.7 billion deployed into U.S. venture-backed companies in all of 2013.  The number of deals in the second quarter (1,034) actually declined a little compared with the same period of 2014, Dow Jones said in its latest VC report, but that reflected the super-sized investments going to substantial ‘unicorn’ companies such as Uber Technologies and Airbnb.”

http://ww2.cfo.com/credit-capital/2015/07/vc-investment-2q-close-dot-com-era/

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PayPal returns to market with $52 billion valuation

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“PayPal Holdings Inc (PYPL.O) shares jumped as much as 11 percent in their highly anticipated return to the Nasdaq after more than a decade in eBay Inc’s (EBAY.O) fold, valuing the digital payment processor at about $52 billion.  PayPal is a giant in the market it helped create – it processed 4 billion payments tootling about $235 billion in 2014. But the online payments landscape has changed drastically since the company was snapped up by eBay in 2002.  PayPal shares soared to $42.55 in early trading. Wall Street analysts were overwhelmingly bullish on the stock. Nine of the 11 starting coverage on the stock have a ‘buy’ or similar rating.”

 

http://www.reuters.com/article/2015/07/20/us-paypal-hldg-debut-idUSKCN0PU1DF20150720

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Hidden Time Bombs Behind Greece Bailout

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“Just these top four derivatives players — B of A, Goldman, Citi and JPMorgan — control nearly $203.5 trillion, or 92% of all derivatives held in the U.S. banking system.  And the largest 25 U.S. banks control 99.8%. All told, the thousands of other regional, mid-sized and small banks in this country control a meager one-fifth of one percent of the derivatives.  This is an oligopoly unlike any other in the financial world — one that ties the fate of the U.S. economy to these firms’ stability far beyond anything ever witnessed in prior centuries.  In contrast, Lehman Brothers was actually smaller by comparison — with ‘only’ $7.1 trillion in derivatives.”

http://www.moneyandmarkets.com/72234-72234

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