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Tracking the many faces of the global credit implosion. You can pull sub-categories from this feed by adding a ?tags=a,b,c,... style parameter. The category tags (which can be given as numbers or handles) are : id handle category description 1 housing_finance "Housing Finance News/ML-Implode Main" 2 hedge_funds "Hedge Funds News" 3 fed "The Fed, Central Banking and fin. reg." 4 foreclosures "Foreclosures (News)" 5 chavez "Hugo Chavez Watch (News)" 6 builders "Home Builders News" 7 banks "Banks News" 8 credit_bubble "Credit Bubble and Crash (News)" 9 peak_oil "Peak Oil and Energy Security (News)" 10 BRIC_v_us "BRIC countries vs. U.S. (News)" 11 gov_bk "Government Bankruptcy (News)" 12 mediawatch "Mainstream Media Watch" 13 Our commentary "IEHI Original Commentary" 14 rebalancing "Economic Rebalancing (News)" 15 pm "Precious Metals News" 16 inflation "Inflation and Deflation News" 17 nr "Natural Resources News" 18 consumer "Consumer Capitulation/Issues and Populism" 20 pe "Private Equity Implosion (News)" 21 recession "Recession/depression News" 22 ML_implosion "Mortgage Lender IMPLOSIONS" 23 HF_implosion "Hedge Fund IMPLOSIONS" 24 HB_implosion "Home Builder IMPLOSIONS" 25 Bank_implosion "Bank IMPLOSIONS" 26 ML_update "Mortgage Lender UPDATES" 27 HF_update "Hedge Fund UPDATES" 28 HB_update "Home Builder UPDATES" 29 Bank_update "Bank UPDATES" 30 RFWS "Radio Free Wall Street" 31 FHA "FHA and Mtg Regulation (News)" 32 martial_law "Martial Law/Big Brother/NWO Watch" 33 pension "Retirement Implosion (News)" 34 mtgindustry "Mortgage Industry (News)" 35 econlists "Econ insider lists" 36 iehi_fb "IEHI facebook feed" 37 robin_fb "robin facebook" 38 IEHItwitter "IEHI Twitter Feed" 39 ak_linkedin "akrowne LinkedIn (mtg industry)"
Updated: 1 hour 21 min ago

Indian solar power prices hit record low, undercutting fossil fuels

6 hours 10 min ago
Wholesale solar power prices have reached another record low in India, faster than analysts predicted and further undercutting the price of fossil fuel-generated power in the country.

The tumbling price of solar energy also increases the likelihood that India will meet -- and by its own predictions, exceed -- the renewable energy targets it set at the Paris climate accords in December 2015.

...

At a reverse auction in Rajasthan on Tuesday, power companies Phelan Energy and Avaada Power each offered to charge 2.62 rupees per kilowatt-hour (kWh) of electricity generated from solar panels they hope to build at an energy park in the desert state. Last year's previous record lowest bid was 4.34 rupees per kWh .

Analysts called the 40% price drop "world historic" and said it was driven by cheaper finance and growing investor confidence in India's pledge to dramatically increase its renewable energy capacity.

It reduces the market price of solar tariffs well past the average charged by India's largest thermal coal conglomerate, currently around 3.20 rupees per kWh . Wholesale price bids for wind energy also reached a record low of 3.46 rupees in February.

Interest-only loans could be 'Australia's sub-prime'

7 hours 56 min ago
High-risk mortgage loans to young families, professionals and other over-extended borrowers amounting to more than six times household incomes could wipe out 20 per cent of the major banks' equity base, institutional investment fund JCP Investment Partners has warned.

...

In a proprietary study of the nation's record high-and-growing household debt mountain, the Melbourne-based fund said Irish-style housing losses for the bigger-than-recognised pool of riskier borrowers could wipe out half of the banks' equity capital.

Interest-only loans, said JCP -- which is one of three Australian equities managers appointed by the Future Fund -- could be "Australia's sub-prime".

...

Among the biggest concerns is what may happen when households feel they can no longer service their loans, for instance, as borrowing costs are reset higher or those with interest only mortgages are forced to repay the principal as well.

That creates a negative feedback loop -- experienced by Ireland after the financial crisis -- in which stressed borrowers slash their spending, in turn crunching the economy, driving up unemployment and adding to downward pressure on house prices.

...

The fund's senior researchers Matthew Wilson and Craig Shephard found that about half of all the nation's mortgage debt was in the hands of borrowers whose debt was more than four times larger than their gross income.

The same borrowers had paid off less than half of their loans, the team found, based on data from several official and private sector sources that adjusted for changes in incomes and the collateral values of their homes.

The average loan-to-income ratio of these heavily indebted households was 6.4, or more than double the old banking "rule of thumb" that mortgage managers didn't lend more than three times a household's income "unless they were doctors".

...

JCP calculated how the banks' balance sheets would handle an 2008 Irish-style loss on the high risk loans. It estimated that 50 per cent of the equity of Australian banks would be destroyed by soured loans to these high-risk borrowers.

Car loans, low rates, second mortgages: all the ingredients for a new credit crunch (UK)

8 hours 14 min ago
A credit crunch is brewing and when it happens, the UK is going to get hurt. That is the message emerging from senior executives in the financial services industry, who do not think Britain has changed that much since the 2008 credit disaster and the devastating crash that followed. Three developments lie at the heart of this disturbing analysis: spectacular growth in the sale of second mortgages, car loans and credit cards.

...

Officials at the Bank have a growing list of concerns. Not only is there the second mortgage problem and the number of car loans: figures show consumer spending on unsecured credit has also rocketed in the last year. In March alone, the amount UK consumers owed on loans and cards grew by £1.9bn, the highest figure in 11 years.

Households are known to have increased their reliance on short-term unsecured loans to buy cars and furniture, and to kit out new kitchens. Some use them to maintain their lifestyle in the face of a decade of flat wages. Unfortunately, another group use credit to pay the monthly rent.

...

Try as they might, the UK's two big high street lenders cannot put the financial crisis behind them. Last week, when Lloyds Banking Group was congratulating itself over its return to the private sector, it was still being haunted by the fraud perpetrated at the Reading branch of HBOS, the hotshot lender it rescued in 2008. To add to the pressure, Noel Edmonds, the TV celebrity, is leading the campaign for compensation for the victims of the fraud which took place in the run-up to the financial crisis.

This week, Royal Bank of Scotland will be transported back to those calamitous days of 2008. A high court judge will begin hearing a claim for compensation from investors who backed a £12bn cash call by RBS in April 2008 -- only for the Edinburgh-based institution to be bailed out by taxpayers six months later.

The Wild West of Deep-Sea Mining

8 hours 39 min ago
``In the coming years, a new gold rush will begin. Deep beneath the ocean's waves, from scalding hydrothermal vents to the frigid stretches of the abyssal plain, ocean processes have deposited vast quantities of valuable minerals on the seafloor. Now, the convergence of technological development and political will has placed this ore within reach. But like the gold rushes of old, the deep-sea-mining industry is emerging on the frontiers of society, far from legislatures and law enforcement.''

May school lunch cut ‘would hit 900,000 children of struggling families' (UK)

Sun, 05/21/2017 - 14:36
``The Education Policy Institute's analysis found that about 100,000 children who are in relative poverty will no longer receive a free meal under May's proposals. It found that an additional 667,000 children defined as coming from "ordinary working families" would no longer receive a free lunch.''

Trump's weapons deal ratifies US support for Yemen war

Sun, 05/21/2017 - 12:07
Saudi Arabia, armed with American weapons, fought a proxy war with Iran in Yemen, where the government was overthrown by a rebel group tied to the Iranians. Allegations that Saudi Arabia has bombed civilians and committed other human rights abuses compromised what would otherwise tend to be unanimous U.S. support for the conflict. A $1.15 billion arms deal last year turned controversial, but that pact is dwarfed by the $110 billion pact signed Saturday.

...

Sen. Todd Young, R-Ind., wanted Tillerson to make a series of demands on the Saudis designed to ease civilian suffering in Yemen, such as ending delays on humanitarian aid at a port city held by the rebels.

...

Instead, Tillerson's counterpart rebuffed any charges of humanitarian abuses, denying that the Saudis carried out airstrikes against civilians and blaming the rebels for humanitarian aid delays at the port.

A Quarter Of American Adults Can't Pay All Their Monthly Bills; 44% Have Less Than $400 In Cash

Sun, 05/21/2017 - 12:02
Not surprisingly, the highest percentage, or 92%, of those who responded they were "living comfortably" was among the group with more than $100,000 in family income. For Americans making less than $40,000 the breakdown was almost evenly split with 49% saying they are "just getting by." According to the same study, 28% of respondents said that their income in the last 12 months was less than $25,000, and 40% report that their income was less than the key $40,000 cutoff, which suggests that roughly 4 in 10 Americans are "finding it difficult to get by." ... Nearly eight years into an economic recovery, nearly half of Americans didn't have enough cash available to cover a $400 emergency. Specifically, the survey found that, in line with what the Fed had disclosed in previous years, 44% of respondents said they wouldn't be able to cover an unexpected $400 expense like a car repair or medical bill, or would have to borrow money or sell something to meet it. Troubling as this statistic remains, the overall share of adults who would struggle to come up with $400 in a pinch has declined by 2% from the last survey conducted in 2015, and down 6% since 2013. Of the group that could not pay in cash, 45% said they would go further in debt and use a credit card to pay off the expense over time. while a quarter would borrow from friends of family, and another 27% just couldn't pay the expense. Others would turn to selling items or using a payday loan.

U.K. Threatens to Quit Brexit Talks If It Faces Massive Bill

Sun, 05/21/2017 - 11:59
The U.K. will quit talks on leaving the European Union unless the bloc drops its demands for a divorce payment as high as 100 billion euros ($112 billion), Brexit Secretary David Davis said.

Britain's negotiations would otherwise be plunged into "chaos," and even a 1 billion-pound settlement would be "a lot of money," Davis said in an interview published in the Sunday Times.

..

Davis also said the negotiations, which are expected to begin on June 19, will be "fairly turbulent" and that he would reject any blueprint for discussions that requires the issues of the divorce bill, EU citizens' rights and Northern Ireland's border to be solved before talks can begin on future trade.

Home ownership among young families halves in 20 years (UK)

Sat, 05/20/2017 - 13:30
``Research by The Resolution Foundation found that 31 per cent of 25 to 34-year-olds surveyed were home owners in 2016, compared to 58 per cent in 1994. Regionally, 30 per cent of those surveyed in West Yorkshire owned homes last year, compared to 61 per cent in 1994.''

The Housing Moment Investors Dread Is Here

Sat, 05/20/2017 - 08:35
The May University of Michigan Consumer Sentiment survey showed a six-year low among those who think it's a good time to buy a house and a 12-year high among those who say it's a good time to sell. Disparities of this breadth tend to coincide with break points and that's just where we've landed in the cycle.

...

The silver lining in the dynamic that's just beginning to play out is what pricing pressures on the home front imply for the future of household finances -- that is after the recession comes and goes. The cost to rent and buy has never been as high as it is today for the average working young American. The preponderance of apartments constructed in the current cycle has been luxury units. At the same time, private equity investors with deep pockets swooped in and bid up the price of rental homes, leaving many would-be first-time homebuyers and renters alike with no choice but to remain at home with their parents after graduating from college.

Manafort's Real-Estate Deals Said to Be Probed by N.Y.'s Top Cop, Manhattan DA

Fri, 05/19/2017 - 16:54
The probe by New York Attorney General Eric Schneiderman, one of the most outspoken critics of the president, is in a preliminary stage, according to a person familiar with the matter who asked not to be named because the investigation isn't public. Manafort, who ran Trump's campaign from April to August last year, has owned property in the Hamptons and Trump Tower in Manhattan.

Manhattan District Attorney Cyrus Vance Jr. is also in the early stages of an investigation into Manafort's transactions, a person familiar with that probe said. Representatives for Schneiderman and Vance declined to comment.

...

The inquiries by the two Democrats could pose added legal peril for Manafort if investigators find evidence of a crime. Unlike a probe by the U.S. Justice Department and FBI, the president and Attorney General Jeff Sessions have no authority over New York state investigators scrutinizing whether Manafort broke state laws. Schneiderman is responsible for enforcing New York's securities laws under the Martin Act, which gives him broad powers to pursue white-collar crime.

...

Manafort's business dealings have featured prominently in discussions of links between the Trump campaign and Russia. He used Cypriot bank accounts to receive money from Russian tycoon Oleg Deripaska and Ukrainian clients, according to court records and former executives at the bank where the accounts were kept. Manafort and Deripaska have said the accounts were opened for legitimate business transactions.

Get Ready for "Quantitative Tightening"

Fri, 05/19/2017 - 16:47
``The Fed's decision not to buy new bonds will be just as much a form of tightening as raising interest rates. How come it's stimulative when they print money, but it's not contractionary when they make money disappear? The argument contains a basic contradiction. The contradiction leads to two results. One is that the Fed is engaged in happy talk and wants us to believe QT is not contractionary when it is. The other is that QT actually is contractionary, and we'll be in a recession sooner than later. Unfortunately, both things are true.''

Trump Admin's Mnuchin Backtracks on Glass-Steagall

Fri, 05/19/2017 - 11:56
``Warren tried repeatedly to get Mnuchin to explain what "21st century Glass-Steagall" is supposed to mean without separation of bank functions. Mnuchin threw out a bunch of noise about integrated banks not causing the financial crisis (though investment/commercial hybrids did provide the lion's share of the warehouse lending for mortgage originations that fueled the housing bubble, and hybrid bank Citigroup received the largest bailout of any financial entity), and how liquidity and lending would be affected by a Glass-Steagall type of separation (a common industry complaint).''

ECB Tapering May Trigger "Disorderly Restructuring" of Italian Debt, Return to National Currency

Fri, 05/19/2017 - 11:50
Since 2008, 88% of government debt net issuance has been acquired by the ECB and Italian Banks. At current government debt net issuance rates and announced QE levels, the ECB will have been responsible for financing 100% of Italy's deficits from 2014 to 2019. But now there's a snag... The ECB has already reduced the rate of purchases to €60 billion a month. And it plans to further withdraw from the super-expansionary monetary policy.

...

Astellon Capital's report on Italy's dependence on ECB bond purchases poses the question: If the ECB tapers its purchase of Italian bonds further, who would pick up the slack?... According to Astellon , the only long-term solution to this problem is to carry out an orderly restructuring of Italian debt. In fact, by this stage in proceedings, the stark choice is between an orderly or disorderly restructuring of Italy's debt... [the latter] would significantly increase the likelihood of an Italian exit from the Eurozone.

Households owe record amount, topping pre-recession peak

Thu, 05/18/2017 - 08:41
The Federal Reserve Bank of New York said Wednesday that household debt, which also includes home equity lines of credit, stood at $12.73 trillion in the first quarter. That's above the $12.68 trillion outstanding in the fall of 2008, the previous record. The figure isn't adjusted for inflation or population size.

Even with debt levels back to record heights, analysts note that household borrowing appears more sustainable now than it did nearly a decade ago. Interest rates are lower, and lenders are much more focused on credit-worthy borrowers.

The Germans Are Coming... And Their Groceries Will Cost Up To 50% Less Than Wal-Mart

Thu, 05/18/2017 - 08:36
``... we can safely assume that the upcoming grocer price war is about to turn nuclear because the abovementioned German discount grocery chain Lidl, which is opening its first U.S. stores this summer and is eager to capture US market share at all costs, said its products would be up to 50% cheaper than competitors... which are already caught up in a margin-crushing price war.''

Banks Tighten Auto Lending as More Borrowers Fall Into Default

Thu, 05/18/2017 - 08:12
``Lenders are tightening the spigot on new auto loans, making it harder for U.S. consumers with weak credit to buy a car, data from the Federal Reserve Bank of New York show. New car loans for subprime borrowers fell in the first quarter to $25.9 billion, the lowest in two years, according to the New York Fed's quarterly report on household debt and credit. Drivers with credit scores below 620 now comprise less than 20 percent of new loans, down from almost 30 percent a decade ago. Borrowers with the highest credit scores -- 760 or more -- made up nearly a third of new auto loan originations in the first quarter as lenders target the safer deals.''

Turmoil over recent Trump controversies triggers the Dow's biggest losses since September

Wed, 05/17/2017 - 14:56
``The stock market on Wednesday took its biggest dive since before President Trump's election, as investors began to grapple with the increasing possibility that Washington would be consumed with chaos and fail to enact policies to boost the economy.'' -- Anyone just getting this now is an idiot. Which, we suppose, makes up the vast bulk of the public securities markets...

Jack Welch: Impeachment of Trump would 'blow the market away'

Wed, 05/17/2017 - 08:21
``"An impeachment proceeding would blow the market away," Welch said on "Squawk Box." Welch also said Trump's firing of James Comey as FBI director was a "rookie mistake." He added, "You don't make any friends doing it the way [Trump] did it."'' -- We may yet find out...

Gold Rallies as Trump's ‘Toughest Time in Office' Batters Dollar

Wed, 05/17/2017 - 08:16
``The metal climbed for a fifth day, the longest run in a month, on reports that the president asked FBI Director James Comey to drop an investigation into a former National Security Adviser. The dollar has dropped and European stocks fell amid the latest controversy, which prompted references to the 1970s Watergate scandal that helped to sink the then president, Richard Nixon.''