Once again. Blackstone Group LP and Deutsche Bank plan a Bond guaranteed by a flow of rentals

The Wall Street Journal published an article today about negotiations between Blackstone Group and
Deutsche bank "to create and sell the world's first bond backed by home-rental payments, people familiar with the matter say".
 The private-equity giant is among the firms that have spent billions buying homes out of foreclosure, an investment strategy that has helped to bolster demand and strengthen the U.S. housing market. 
"The creation of a new type of security shows that Wall Street's financial engineering, blamed for deepening the financial crisis, is becoming more active.

Some investors and analysts have said they are wary of a bond backed by rental payments, citing the dearth of long-term data on how often tenants living in previously foreclosed homes pay their rent on time.

Also, some investors and analysts have raised concerns about how quickly firms have purchased thousands of homes, and whether they have the management track record and expertise to oversee the maintenance of properties scattered across the country".

"Blackstone has emerged as the biggest investor in single-family rental homes, spending more than $5.5 billion since the beginning of last year to acquire about 32,000 homes.Other companies, such as American Homes 4 Rent, Colony Capital LLC and Waypoint Real Estate Group LLC also have been buying thousands of foreclosed homes, revamping them and renting them out".

"The investment strategy often is known as buy-to-rent,has been an institutional investment strategy that has helped to boost home prices in cities across the U.S". 

Precious Metals Prices

Gold Prices     3months Futures       US$  1,332.03

Silver Prices   3months Futures       US$      19.85

Larry Summers is skeptical of QE but see few side effects

According to an article published in the Wall Street Journal today "Lawrence Summers a leading
candidate to be next Fed Chairman, likely would not make a rapid ending of the bond buying
program,that Fed Chairman Bernanke introduced.
Mr Summers has been skeptical of the benefits of Quantative Easing,but also has said he sees few
side effects from this policy.
Both Mr Summers and Janet Yellen his apparent chief rival for the Fed nomination have said the government, in general,should do more to support the current weak economy.  
Mr. Summers has been an outspoken advocate of more federal spending now, particularly on infrastructure, to boost growth. His views on monetary policy are more nuanced "there is less efficacy from quantitative easing than is supposed," Mr Summers thoughts are that "if QE won't

have a large effect on demand, it will not have a large effect on inflation either. So this is not a compelling argument against QE." He believes that  "tax-and-spending stimulus would have more impact on the economy than monetary policy".

Mortgages and Car Loan rates

 Mortgages and  Car Loan Rates
                                                                                                  Change in
                                                 Last       Wk       52 - week       PCT  Points
                                                              Ago       Hi       Low   52-wk   3-year

30-year mortgage, fixed	4.50	4.45	4.78	3.54	0.78	-0.16
15-year mortgage, fixed	3.61	3.60	3.84	2.80	0.50	-0.52
Jumbo mortgages, $417,000-plus	4.78	4.72	5.11	3.97	0.48	-0.84
Five-year adj mortgage (ARM)	3.68	3.73	4.06	2.80	0.57	-0.19
New-car loan, 48-month	2.63	2.64	3.72	2.42	-0.47	-3.61

  Source:  WSJ

Marc Faber Thoughts on Money Printing and its end.

Asked if money printing will end?

Yes, until the system breaks down. My view would be that there will be money printing, and the problem with money printing is always that you don’t control where it goes to. Ideally, it would go into higher incomes of the middle class and of the working class, but this hasn’t really happened. The real weight is for the typical household or the medium household, they are going down. What is going up is basically selected asset markets, like the real estate market has recovered. In some areas, we’ve hit new highs. The stock market has gone up. But as you know, only very few people own stocks in the United States, so it doesn’t impact the wealth of the majority of people.

U.S. Home prices rose 5.8% in June YoY,headwinds build

The Wall Street Journal has published today an article that shows " U.S. home prices have posted
an increase of  5.8% in June from one year ago, according to Zillow Inc., the real-estate website, the largest gain since 2006.But rising mortgage rates and the potential for more supply could eventually slow the run-up".
  "Gains have been fueled  by strong demand from foreigners, record-low mortgage rates, and a slowly improving economy that has released pent-up demand and strong appetites from investors converting homes into rentals".
A separate and widely watched index released Tuesday showed that home prices in 20 major U.S. cities rose by 12.2% in May from one year earlier. The Standard & Poor's/Case-Shiller index shows that home prices are now down from their 2006 peak by 24.4%, compared to a peak-to-trough decline of 35.1% in March 2012.

"For now, inventories remain extremely tight in a majority of the nation's major housing markets. The Wall Street Journal's survey of quarterly housing-market conditions in 28 metro areas found that Phoenix, Seattle, Denver, and Sacramento, Calif., had less than a 2.5-month supply of homes for sale at the current sales pace. Dallas, Los Angeles, San Diego, Washington, D.C., and Orlando, Fla., had less than three months of supply, according to data compiled by John Burns Real Estate Consulting in Irvine, Calif.

Typically, real-estate agents consider a balanced market to have a six-month supply. Nationally, the supply of existing homes for sale stood at five months at the end of June, according to the National Association Realtors".

One question now is whether recent price gains can be sustained amid mortgage rates that have jumped by a full percentage point since May. Rising mortgage rates are most likely to squeeze prices in more expensive housing markets across coastal California and in cities such as New York and Boston.

Rising home prices could also encourage more homeowners  to sell. 

There are signs inventory declines will ease as price gains increase. In Sacramento, Calif., the number of homes for sale in June stood 7.5% above the level of a year ago, while inventories in Atlanta rose 9.7%. Both cities have witnessed large declines in homes available for sale as investors have scooped up large numbers of cheap properties".

UEA leads MENA region in contracts awarded in oil and gas sector.

"According to Arab News: The UAE leads the Middle East &North Africa region in value of contracts awarded in the oil and gas sector, with Zakum Development Company  awarding a  $3.7 billion contract on the development of the offshore Upper Zakum field.
The contract is more than 50 percent of the total $ 6.7 billion worth of engineering, procurement and construction  deals awarded so far in the region in the second quarter of 2013. The ground-breaking Upper Zakum Field Development project has a total budget of around $15.6 billion.

These developments mark a critical stage in the UAE’s push to expand its offshore output to new fields. Equally important, however, is the country’s push to optimize oil production, sustainability and innovation through successful integration of new and expanding projects.

The UAE is likely to award two more major contracts in the second quarter — both on the Umm Al-Lulu offshore oilfield development — which combined are worth in excess of $2 billion.

The only other billion-dollar-plus contract in the MENA region so far in the second quarter was Qatar Petroleum  awarding a deal to Taiwan’s CTCI and Japan-based Chiyoda Corporation. This was for the $1.2 billion expansion of its Ras Laffan refinery".

Japan's Prime Minister Shinzo Abe double face

 "Japanese Vice Foreign Minister Akitaka Saiki is wrapping up a two-day visit to China on Tuesday, the latest move taken by Tokyo to mend its strained ties with Beijing.

The senior diplomat was believed to be working for a possible summit between Chinese and Japanese leaders, for which Japanese Prime Minister Shinzo Abe has made repeated calls recently.

It seems that Japan, intends to repair its relations with China, which soured due to a heightened territorial dispute over the Diaoyu Islands in the East China Sea and Tokyo's unapologetic attitude toward historical issues.

By playing the good guy, Japan is trying to gain international support and sympathy, but the good-will gesture is just one face of Abe.

During his visit to Singapore on Friday, Abe voiced his desire for an unconditional summit with the Chinese leader as soon as possible.

However, a hawkish Abe wasted no time in pledging coast guard patrol boats to the Philippines when he was in Manila one day later. Philippines has also a territorial dispute with China. 

This is in line with Abe's hardline position on the Diaoyu Islands. Despite the fact that the uninhabited islands are inherent part of China as proved by history, Abe has been flatly denying the existence of a dispute with China, effectively shutting the door for any candid talks.

What is more disturbing is the ongoing push by Abe to revise Japan's pacifist constitution to allow for full-fledged military buildup.

All these aggressive moves exposed the other face of Abe, which may lead to a dangerous path of confrontation and raises doubt about the sincerity of his good-will for a candid dialogue.                      

Without sincerity, the repeated calls for dialogue are nothing but empty talks".

Source: Xinhua

Chinese mainland's trade with Hong Kong 206.65 billion US dollars in H1

"The Chinese mainland's trade with Hong Kong totaled 206.65 billion U.S. dollars in the first half of the year, surging 40.2 percent year on year, the Ministry of Commerce revealed on Tuesday.

The figure accounted for 10.3 percent of the mainland's total foreign trade in the first half, according to statistics from the Department of Taiwan, Hong Kong and Macao Affairs under the ministry.

The mainland's exports to Hong Kong hit 198.75 billion U.S. dollars, a sharp year-on-year increase of 42.7 percent, while the mainland's imports from Hong Kong dropped by 2.3 percent to 7.9 billion U.S. dollars, the statistics showed.

In June, trade between the mainland and Hong Kong stood at 26.74 billion U.S. dollars, declining by 8.8 percent from May.

Hong Kong is the mainland's third-largest trade partner and one of its major export markets".

Source: Xinhua

China CPC: China´s economy will mantain steady growth in H2

´´China's economy will maintain steady growth in the second half of this year amid "extremely complicated domestic and international conditions," according to the Political Bureau of the Communist Party of China (CPC) Central Committee.

The central authorities will continue to coordinate the tasks of stabilizing growth, restructuring the economy and promoting reforms, according to a statement released Tuesday after a meeting held by the Political Bureau of the CPC Central Committee.

The meeting was presided over by General Secretary of the CPC Central Committee Xi Jinping.

"Macro policy should be stable, micro policy should be flexible and social policy should support the bottom line. All of them should be coordinated," read the statement.

The direction, intensity and pace of the macro regulation should be managed well. The proactive fiscal policy and prudent monetary policy will remain, it said. 

The IMF in its latest Country report of China reccommended fiscal strong support if the economy fell more than anticipated.

Source  Xinhua

Government Bonds quotes

Government Bonds

                                                                                          Price          Yield
                                                                                          Change        %

U.S. 2 Year			0/32	0.321
U.S. 5 Year			3/32	1.375
U.S. 10 Year			5/32	2.586
U.S. 30 Year			11/32	3.654
Germany 2 Year			0/32	0.167
Germany 10 Year			0/32	1.668
Italy 2 Year			1/32	2.023
Italy 10 Year			11/32	4.407
Japan 2 Year			1/32	0.122
Japan 10 Year			0/32	0.796
Spain 2 Year			0/32	1.916
Spain 10 Year			1/32	4.662
U.K. 2 Year			-1/32	0.314
U.K. 10 Year			2/32	2.313

Saudi Arabia: Dispute over future oil production.

In an article published today in the Wall Street Journal it says that"Saudi billionaire Prince Alwaleed bin Talal has warned that the kingdom's oil-dependent economy is increasingly vulnerable to rising U.S. energy production, breaking ranks with oil officials in Riyadh who have played down its impact.
 He warned that the boom in U.S. shale oil and gas will reduce demand for crude from members of the Organization of the Petroleum Exporting Countries".
 In contrast the Saudi oil Minister has  played down the significance of rising shale-oil production. "At an OPEC meeting in late May, he said it wasn't the first time OPEC has had to compete with a surge in output from countries outside the group"
 "In April, Prince Turki al-Faisal, a former Saudi intelligence chief and ambassador, said the kingdom needs to increase its crude production capacity to 15 million barrels a day by 2020 in order to meet rising domestic consumption and maintain its export capacity. Mr. Naimi has ruled out increasing Saudi Arabia's capacity until at least 2030 or 2040".

EU Indicators

German GfK Consumer Confidence Index rose to 7.0 for August-the highest since September 2007-from 6.8 in July, and compared to the 6.9 level that economists had expected.
  Spain reported a -0.1% quarter-over-quarter contraction in 2Q GDP, matching expectations, eurozone economic confidence improved in July, and German consumer prices index rose 1.8%. And German consumer
price index Harmonised rose 0.1% MoM in July market expected an increase of 0.3%

Source 4-Traders