Zoe Jackson's Blog

Chinese Real Estate Billionaire Makes Big Bet On Bank Amid Worries About Financial System

Amid worries in China about the exposure of its financial industry and investors to bust trust products, one of the country’s richest people is making a big bet on a bank.

Hong Kong-listed Evergrande Real Estate Group, whose chairman Hui Ka Yan ranked No. 13 on the 2013 Forbes China Rich List with a fortune worth $5.4 billion, said on Friday it has spent 3.3 billion yuan, or $545 million, to buy a 4.5% stake in Beijing-based Huaxia Bank. Evergrande bought the shares on the open market at the Shanghai Stock Exchange, where Huaxia is listed, between Nov. 13 and Jan. 24, the real estate developer said in a statement after the end of trade.  

Evergrande believes “cooperation between the company and Huaxia Bank will foster the relationship” between the banking and real estate industries in China and “enhance both the property development and banking businesses of each of the parties.”

Some contrarian investment thinking and cozying up with a bank might not be a bad thing for Evergrande, whose shares have lost a quarter of their value in the past year.  If the arrangement proves workable from regulatory and business points of view, other big developers could seek similar “cooperation.”

If you really want that house, grab a pen and start pouring your heart out to the seller.

And, above all, don’t forget to gush. Shed that New England reserve and let it all tumble out about how you will cherish the seller’s house long after they have moved on to that retirement community in Arizona.

Apparently, your closing argument should paint an idyllic vision of you and your family sitting by the fire in the seller’s house, forever grateful to the generous, wise, and bountiful sellers who gave you the keys to this paradise.

Don’t forget the cute photos of kids and pets as well, preferably your own, but really any will do.

Says Trulia: This should be the emotional punch line statement that bonds the seller to the buyer so much that they yell out — “I like these buyers and want them to live in my home!”

Wow, now that’s a letter!

OK, I am only half serious here. Still gushing seems to be a prerequisite if you want to write one of these letters, at least based on the advice being doled out on the many real estate websites out there.

Nearly 30 percent of all winning bids by Boston-area buyers included a “cover letter” or personal appeal to the seller, according to Redfin’s latest report on bidding wars in various metro markets across the country.

That’s down somewhat from the height of the spring market, when 41 percent of all winning buyers penned personal appeals.

If you have a bad case of writer’s block, no worries. There is a whole cottage industry out there online, offering advice on what to write and how to write it, as well as sample letters.

Above all, don’t be shy. Says Trulia:

Pepper it with personality: Express your true inner feelings, emotions and excitement. Your sincerity and authenticity will shine through. After all, you have nothing to lose and everything to gain.

Pending sales hit new highs

Massachusetts pending home sales hit record highs this fall, recent data show.

The number of single-family homes put under agreement in September and October was the highest on record since the Massachusetts Association of Realtors began tracking the numbers in 2004.

Pending home sales across Massachusetts rose 17 percent, to 4,793, this October compared with last year. September sales were also up 16.2 percent year over year, to 4,297.

Prices also rose — by double digits yet again.

They were up 12.3 percent in October, to $320,000, compared with October 2012, the Massachusetts Association of Realtors reports.

By comparison, back during the bubble years, there were 4,048 pending home sales in October and 3,959 in September, according to Multiple Listing Service numbers collected by the organization.

The October numbers were particularly telling, coming smack dab in the middle of the government shutdown and fears that Congress might send the country barreling over the fiscal cliff.

Looks like most buyers here simply shrugged this nonsense off.

After all, pending sales are the freshest indicator of market activity, based on purchase and sales agreements just inked, but which won’t actually close and become official sales for another couple months.

It was much the same story with pending condo sales as well, which were up 22 percent over last year, to 1,853 in October.

Of course, the grumpy housing bears out there will read this as some sort of cheer for the real estate industry.

Learn to read more closely then, for the numbers, if anything, are a warning sign that whatever fleeting affordability the downturn created in the Greater Boston real estate market is fading fast.

The real issue now is not whether there is some big cool-down lurking around the corner. Rather, the real issue is what buyers are increasingly struggling with across Greater Boston, frankly the state as well. And that’s how to afford to buy a half decent home in the one of the most expensive housing markets in the country.

PHILADELPHIA-en Berks County kvinne vender fengsel og husarrest for hennes engasjement i en $6 millioner eiendomsmegling svindel-ordningen med tidligere Pottstown pastor.

Denise Haines, 43, av Birdsboro, en engangs boliglån megler med amerikansk gruppe boliglån Corporation, ble dømt i US District Court onsdag til 10 dager i et fengsel som skal følges av åtte måneders husarrest, der hun vil også bruke helger i en halvveis hus, tiltalt for banken svindel, lån programmer bedrageri og hjelpe og abetting i forbindelse med ordningen, ifølge US Attorney's Office.

US District Court Judge Mitchell S. Goldberg også bestilt Haines å fullføre tre års prøvetid og 100 timers samfunnstjeneste i andre og tredje år av prøvetid. Les hele artikkelen på DAILYLOCAL.COM

Prøv besøk: Chris Cruse and Associates Real Estate

Scandinavian Banks, G-20 Meeting, Everbright: Compliance

Scandinavia’s biggest banks have failed to curb funding risks linked to financial innovation and will probably only avoid downgrades if national regulators force through stricter measures, according to Standard & Poor’s.

Steps taken to date by lenders including Denmark’s Danske Bank A/S (DANSKE) and Nykredit A/S, as well as Nordea Bank AB (NDA) and Svenska Handelsbanken AB (SHBA) in Sweden, aren’t enough, said Per Tornqvist, a Stockholm-based analyst at S&P. As competitive pressure “forces banks to maintain short-term funding,” regulators need to step in and help banks extend their funding maturities, he said.

AAA-rated Scandinavia’s biggest banks are more vulnerable to funding shocks than their peers in the U.S., France and Italy, according to a July analysis by S&P, which measured liquidity risks five years after the collapse of Lehman Brothers Holdings Inc. paralyzed the global financial system. The rating company criticized Nordic lenders’ practice of using funds as short as one year to finance loans as long as 30 years, as well as a reliance on short-term offshore borrowing.

Swedish banks are more dependent on market funding than banks in most other countries, according to the Financial Supervisory Authority in Stockholm.

In Denmark, home to the world’s largest mortgage bond market per capita, banks refinance as much as $228 billion annually, spread over quarterly auctions. About 50 percent of Danish borrowers refinance their mortgages annually, according to the FSA in Copenhagen.

Efforts to sidestep funding mismatches by inventing new securities will do little to persuade S&P the lenders are really addressing liquidity risks, Tornqvist said.

Banks are responding to the latest regulator demands that they protect themselves against funding misalignments by inventing new securities.

Special Section: G-20 Meeting

Merkel Says G-20 Agrees on Regulation Plan for Shadow Banks

Group of 20 summit leaders in St. Petersburg Sept. 6 agreed on a road map for regulating shadow banks throughout the G-20, German chancellor Angela Merkel told reporters after the meeting.

Leaders from outside Europe “recognize that the euro areas crisis isn’t over yet but that confidence is returning, and when structural reforms continue and if we keep to our commitments and show we’re reliable -- that then we can overcome this crisis step by step,” Merkel said.

Merkel also said the G-20 leaders agreed to extend a commitment to refrain from new protectionist measures for another two years.

Carney Calls for Bank Risk-Model Clampdown to Repair Trust

Regulators must restrict lenders’ ability to escape tougher capital rules by changing how they measure risk, Financial Stability Board Chairman Mark Carney said, as he urged nations to finish an overhaul of bank rules.

“The risk models that banks use to calculate their capital needs show worryingly large differences,” Carney, governor of the Bank of England, said in a letter Sept. 5 to leaders from the Group of 20 nations meeting in St. Petersburg, Russia. “This must be addressed for depositors, investors, clients and authorities to have full confidence in the strength of bank balance sheets and their resilience during a downturn.”

The Basel Committee on Banking Supervision, an international regulators group, said in July that some lenders were backing investments with as much as 20 percent more capital than other banks. European banks generally apply lower risk weights to their holdings of bank-issued debt than lenders based elsewhere, the Basel group said.

International standards set by the Basel committee require banks to meet minimum capital requirements, measured as a percentage of their assets.