Investment – Joy Peppers http://joypeppers.com/ Fri, 05 Aug 2022 23:39:00 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 http://joypeppers.com/wp-content/uploads/2021/05/joy-peppers-icon-150x150.png Investment – Joy Peppers http://joypeppers.com/ 32 32 WyoFile reporter examines large number of federal COVID-19 loans received by officials http://joypeppers.com/wyofile-reporter-examines-large-number-of-federal-covid-19-loans-received-by-officials/ Fri, 05 Aug 2022 23:39:00 +0000 http://joypeppers.com/wyofile-reporter-examines-large-number-of-federal-covid-19-loans-received-by-officials/

You’ve probably heard a number of political candidates complaining about federal spending related to COVID-19. But it turns out that many of those candidates and party officials accepted more than $3.5 million in federal relief grants. WyoFile reporter Maggie Mullen is the author of a story look into the matter.

Bob Beck: Let’s talk a bit about this story. What is it about? And what prompted you to investigate this?

Maggie Mullen: So, first of all, I think it’s worth explaining, this program was the Paycheck Protection Program (PPP) that was created in 2020 by the Trump administration. And that was part of the Cares Act, if people remember, it was the Coronavirus Aid Relief and Economic Security Act. And it was one of the federal government’s largest coronavirus relief programs. And inside of that was this PPP loan program. It was about those forgivable loans that allowed companies to keep their employees on the payroll. And so the story is about this program, but also about the number of lawmakers, candidates, party officials, who have relied on this federal program to ensure their businesses survive the pandemic, while coming out really strong this season of campaign against the federal government and specifically against federal government spending. And that’s really what led me to look at this data on PPP loans, because this program has been over for a while. But I kept hearing over and over again in my own reporting, in these candidate forums and debates, who said that as lawmakers they would reject federal dollars. It was a very hard line that they followed. So, originally, I was planning to do some kind of basic fact-checking on this, like, how practical is a campaign promise? So, I originally planned to do a story about, you know, “That’s the role of federal spending in the state of Wyoming.” That’s how it fits into the state fiscal equation. And part of that involves thinking about how federal dollars have helped the state during the pandemic. And that led me down the path of these PPP loans.

BB: Are there a few highlights of people who may have been more outspoken than others you’ve identified?

MM: Unfortunately, many of these people did not return my calls or emails. They just didn’t want to weigh in on this story. But when it comes to people who have engaged with me, I’ve heard a number of responses. Some of these people have described to me that it was a really difficult decision. That they maintain this political position that federal funding, which they’re against, and that they think the state of Wyoming should really wean off of that, but they’ve been kind of forced into that position because of government restrictions and because of the general economic picture that the pandemic has caused. That they had to rely on those federal loans. I think there were also some, what I would call a little more nuanced of some who say, you know, they may have voted against the spending bill in the Legislature for ARPA, which was the American Rescue Plan Act, which was another pandemic-related federal spending bill. They may have voted against it, but they got PPP loan dollars. And they felt like these two packages were different. I think of a response I heard from a legislator that they really felt like the ARPA spending bill was allowing Wyoming to kick the road, neglecting to address the structural deficit facing the state. So I really encourage people to spend some time with the article because it’s not just about this seeming contradiction, but about the really complicated kind of role that your federal dollars play, not just in the government of the ‘State, but in people’s personal business ventures. It’s more complicated than what we often hear in extremist political campaign talking points.

BB: Has anyone acknowledged, after you mentioned it, that they certainly benefited from some federal funds and that they should perhaps reconsider some of their positions?

MM: I didn’t hear that so much that I really heard that this PPP lending business was really separate from other federal aid, because business owners were forced into it. And I feel like that also explains why it was important to do this story. Because at this time of year, before an election, we really hear so much, I guess, just kind of noise from the campaigns in terms of what they say they’re going to do. And most of the time, a lot of governance is full of compromises and it can be very difficult to maintain those hard lines politically. It’s often a huge practical problem in our current system that we don’t want to make those compromises.

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Auto loans are the fastest growing category of non-home debt. Here are 3 tips to stay ahead of your payments http://joypeppers.com/auto-loans-are-the-fastest-growing-category-of-non-home-debt-here-are-3-tips-to-stay-ahead-of-your-payments/ Thu, 04 Aug 2022 10:32:39 +0000 http://joypeppers.com/auto-loans-are-the-fastest-growing-category-of-non-home-debt-here-are-3-tips-to-stay-ahead-of-your-payments/

Image source: Getty Images

Do you owe a lot of money on your car? Here’s how to make sure you don’t get left behind.


Key points

  • Rising vehicle costs have led to an increase in auto loan debt.
  • It is important to track your payments to avoid unsavory consequences.
  • If you can refinance your loan or transfer the extra money into the payments, you may be able to get out of debt sooner.

During 2021, many supply chains have been challenged due to COVID-related shutdowns. This has led to a shortage of everything from foodstuffs to building materials to computer chips, including those needed to operate today’s vehicles.

Due to this shortage, vehicle prices soared last year in the new car and used car markets. And unsurprisingly, consumers have had to borrow more to finance their cars.

In 2021, auto loans were the fastest growing non-housing consumer debt category, according to Visual Capitalist. But the danger is that some vehicle owners could now be overwhelmed with the monthly loan payment.

If you’ve taken out an expensive car loan, it’s imperative that you keep track of your ongoing payments. Falling behind on this debt could cause considerable damage to your credit score. It could also put you at risk of having your car repossessed, which could lead to consequences such as losing your job due to not having a way to get there.

If you’re worried about your car loan debt, here are some tips for sticking to the payments you’ve committed to.

1. Follow a budget

The better you control all of your bills, the easier it will be for you to pay them individually. If you don’t have a budget in place, take the time to establish one. Simply mapping out your monthly expenses could save you from falling behind on bigger expenses, like paying for your car.

Of course, you can set a budget and find that you can not swing your car payments. At this point, you may need to choose other spending categories to cut, such as cable or entertainment. After all, having a way to get around (including your job) is essential – more so than accessing content or attending social events and outings.

2. Consider refinancing

Just as it is possible to refinance a mortgage, it is also possible to refinance a car loan if there is a better deal to be had. If you’re stuck with a high borrowing rate on your car loan, explore your options for trading in your existing loan for a new one with better terms. You could be able to significantly reduce your monthly payments.

3. Pay off your debt when the bargains hit

The sooner you can pay off your auto loan, the less interest you’ll accrue on it — and the sooner you can stop worrying about having those monthly payments hanging over your head. If you earn extra money during the year, it could be beneficial to use it to pay off your vehicle sooner than expected. This is something to keep in mind before spending your next bonus or tax refund.

Many Americans are carrying large amounts of car loan debt due to the higher cost of cars these days. If you’re in this boat, these tips could save you from falling behind and suffering the consequences.

The Ascent’s Best Personal Loans for 2022

Our team of independent experts have pored over the fine print to find the select personal loans that offer competitive rates and low fees. Start by reviewing The Ascent’s best personal loans for 2022.

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Home equity loan and HELOC requirements in 2022 http://joypeppers.com/home-equity-loan-and-heloc-requirements-in-2022/ Tue, 02 Aug 2022 18:15:46 +0000 http://joypeppers.com/home-equity-loan-and-heloc-requirements-in-2022/

Our goal at Credible Operations, Inc., NMLS Number 1681276, hereafter referred to as “Credible”, is to give you the tools and confidence you need to improve your finances. Although we promote the products of our partner lenders who pay us for our services, all opinions are our own.

If you’re considering tapping into your home equity soon, learn more about home equity loan and HELOC requirements, and how they might benefit you. (Shutterstock)

Home equity is the difference between the value of your home and the amount owed on your mortgage. Your net worth can change in two ways: by paying off your mortgage or when the value of your home increases.

You can tap into the equity in your home to fund various expenses, such as home renovations, medical bills, and financial emergencies.

Two popular ways to access the equity in your home are through a home equity loan or a home equity line of credit (HELOC). Each option has its own advantages and disadvantages. The requirements to qualify for a home equity loan vary by lender, but there are some general guidelines you’ll need to follow if you’re seeking approval.

A cash refinance is another way to leverage the equity in your home. Credible, it’s easy to compare mortgage refinance rates from several lenders.

Requirements to leverage the equity in your home

For the most part, the requirements for home equity loans and HELOCs are generally the same. What is required can often depend on the lender and their underwriting standards. Here is an overview of the common requirements to qualify for a home equity loan or HELOC.

Equity in your home

In many cases, lenders will only allow you to borrow up to 80% of the equity accumulated in your home minus the amount you owe, but some lenders have lower or higher borrowing limits.

If you haven’t accumulated a lot of equity yet, tapping into it might not make much sense. Lenders generally require that you have at least 15-20% of the equity in your home to qualify for a HELOC or home equity loan.

Debt-to-income ratio (DTI)

Lenders also consider your debt-to-equity ratio when approving loan applications. The DTI ratio compares your monthly income to recurring monthly debts. The lower your DTI ratio, the less you turn to lenders. Lenders generally seek borrowers with a DTI ratio below 43%, but often require a DTI ratio below 36%.

To calculate your debt-to-equity ratio, add up your mortgage payment, outstanding loans, credit card bills, and other recurring monthly expenses. Divide this number by your monthly income and multiply it by 100 to get your DTI percentage.

Credit score

Lender credit score requirements may vary, but you will generally need a FICO score in the mid-600s to qualify for a HELOC or home equity loan.

The higher your credit score, the more likely you are to qualify for a loan and get a lower interest rate. Credit scores play an important role in determining rates on all loan products.

credit history

Lenders want to reduce their risk by ensuring that you will make your payments each month.

To do this, lenders look at your credit history. This allows them to see your on-time payment history, current debts, and other financial obligations. Your credit score is a quick indicator of your financial and credit history, but lenders use your credit report to dig into your past to determine if you’re a low-risk borrower. Your credit history also plays a role in the interest rate you will receive.

Verification of employment and income

Lenders also assess your income to make sure you are making enough money to cover the repayment. It is also a factor that determines how much you can borrow.

To verify your income, lenders may ask you to provide documents, such as:

  • payslips
  • W-2s
  • tax returns
  • Bank statements

You can compare mortgage refinance rates all in one place with Credible.

Home Equity Loan vs. HELOC

A home equity loan is a loan secured by the equity accumulated in your home. Sometimes called a second mortgage, a home equity loan is distributed to you in a lump sum that you repay in installments over a set term, usually between five and 30 years. Loan limits are based on the difference between the current market value of the home and the remaining balance on your mortgage.

A home equity line of credit is a line of credit secured by the equity in your home. HELOCs usually have a credit limit and work like a credit card. You can use a HELOC up to your credit limit for any expense during the HELOC draw period. Your lender only charges interest on the portion of your HELOC that you spend during this time. Once the drawdown period is over, you will enter the repayment period, where you will repay the remaining balance in installments over a fixed number of years.

HOME CAPITAL LOAN VS. HELOC: HOW TO CHOOSE WHAT’S RIGHT FOR YOU

Benefits of a home equity loan

Home equity loans offer distinct advantages over other loan products:

Benefits of a HELOC

HELOCs offer unique benefits that make them an attractive option for owners:

  • Interest rate options While HELOCs typically come with a variable interest rate, some lenders allow you to convert to a fixed rate option.
  • Pay only what you spend With a HELOC, you only have to make principal and interest payments on what you spend. You can take out a HELOC without actually using it.
  • Can use the money for anything Unlike other loans, there’s no limit to how much money you can spend with a HELOC.
  • Higher borrowing limit HELOCs generally offer higher borrowing limits than credit cards or personal loans.

If you decide that a cash-out refinance is a better fit for your financial goals, start with compare mortgage refinance rates from multiple lenders with Credible.

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See how mortgage rates change over time http://joypeppers.com/see-how-mortgage-rates-change-over-time/ Sun, 31 Jul 2022 17:22:04 +0000 http://joypeppers.com/see-how-mortgage-rates-change-over-time/

Select’s editorial team works independently to review financial products and write articles that we think our readers will find useful. We earn commission from affiliate partners on many offers, but not all offers on Select are from affiliate partners.

Average 30-year fixed rate mortgage in the United States

St. Louis Federal Reserve

Given recent Q2 GDP or Gross Domestic Product data suggesting a technical “recession,” it will be interesting to see how mortgage rates react. We can look at this chart over the weeks to see how rates change and compare it to other recessionary periods in previous years. For example, the 2008 recession saw a 30-year mortgage peak of 6.63%. The current 30-year rate, at the time of this writing, is 5.30%, but we’ll see how recession fears will impact that.

While the best mortgage rate is really the lowest you can get, you can get better context as to where your rate ranks when you look at the St. Louis Federal Reserve chart.

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Mortgage lenders who help you get a lower rate

Much of your mortgage rate will depend on personal factors such as where you live, your credit score and the amount you plan to pay as a down payment, as well as the type, term and amount of the mortgage. That said, some mortgage lenders have been known to help buyers get as low a rate as possible.

For instance, SoFi offers a 0.25% cashback when you set a 30-year rate on a conventional loan, while another special offer offers customers up to $9,500 cash when buying a home through the SoFi Real Estate Center, which is powered by HomeStory. SoFi members can also get $500 off their mortgages.

SoFi

  • Annual Percentage Rate (APR)

    Apply online for personalized rates; fixed and adjustable rate mortgages included

  • Types of loans

    Conventional loans, jumbo loans, HELOC

  • Terms

  • Credit needed

  • Minimum deposit

Working with a lender that offers shorter loan terms, such as 15-year loans, can also help you get a lower rate, as these are usually based on your level of risk. If you pay off your loan faster – which usually requires a higher monthly principal payment since the term is shortened – you may be rewarded with a lower interest rate, as your declining balance shows you are at less risk when it’s about defaulting on your loan.

rocket mortgage offers loan repayment terms as low as eight years. Keep in mind, though, that applying for a mortgage with a low credit rating, which Rocket Mortgage allows, most likely means you’ll get an interest rate above the lender’s APR range, regardless of the term. of the loan you choose.

rocket mortgage

  • Annual Percentage Rate (APR)

    Ask online for personalized rates

  • Types of loans

    Conventional Loans, FHA Loans, VA Loans, and Jumbo Loans

  • Terms

    8 to 29 years old, including 15 years old and 30 years old

  • Credit needed

    Generally requires a credit score of 620, but will consider applicants with a credit score of 580 as long as other eligibility criteria are met

  • Minimum deposit

    3.5% if you go ahead with an FHA loan

Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.

]]> SBA has approved $4.5 million in disaster loans so far | State http://joypeppers.com/sba-has-approved-4-5-million-in-disaster-loans-so-far-state/ Sat, 30 Jul 2022 01:15:00 +0000 http://joypeppers.com/sba-has-approved-4-5-million-in-disaster-loans-so-far-state/

A federal agency announced on Friday that millions of dollars in disaster loans had been approved for people affected by the June floods.

The Small Business Administration said in a statement that more than $4.5 million in disaster loans had been approved. The agency offers three types of loans: business physical disaster loans, economic disaster loans and home disaster loans.

The application period deadline for Physical Injury Loans is August 29, while the Economic Injury Loan application period ends on March 30, 2023.

Business loans are for repairs or replacement of property damaged by a disaster. Private businesses, nonprofits, churches, universities and others are eligible, according to the agency.

Economic damage loans are for businesses that cannot meet their financial obligations due to flooding. Home loans are for homeowners or tenants who need to repair or replace real estate and personal property damaged by a disaster.

The agency approved $2.55 million in business and economic injury loans and $1.98 million in home loans, according to the statement.

Rick Tillery, an SBA spokesperson, said more applications are still being processed and the amount approved so far is expected to increase.

Tillery said the agency received 171 applications and he expects to receive more.

It’s been just over a month since the Yellowstone River and other waterways were flooded in June, destroying roads and bridges and damaging homes throughout southern Montana. Park, Carbon and Stillwater counties were hardest hit by the raging waters.

The SBA’s involvement is part of President Joe Biden’s major disaster declaration on June 16. This statement also engaged the Federal Emergency Management Administration’s response, which was later expanded after individual assistance programs were approved in late June.

People can get help navigating the FEMA loan process disaster recovery centers and in recovery centers.


22 AGs sue USDA to stop withholding school lunches over gender and sexual orientation rules

There are rescue centers in Park, Carbon, and Stillwater counties. However, a mobile recovery center at Gardiner High School closed Friday and the recovery center at Absarokee Elementary School is scheduled to close Saturday.

There are three Disaster Recovery Centers, each open Monday through Friday from 9 a.m. to 6 p.m. These locations include the Super 8 in Cooke City, the Livingston Area Chamber of Commerce and Welcome Center, and the Gardiner Community Center.

Some people might not have a good grasp of their finances, or important documents like insurance or bank documents might have been destroyed or lost in the floods, Tillery said.

Tillery said disaster recovery center customer service representatives are trained to help survivors.

Although people looking for a loan must go through the process themselves, center representatives can offer advice on who to contact or what documents a person might need when dealing with loan companies. insurance.

The loans are not gifts or grants, Tillery said. The agency looks at a person’s overall financial situation and grants loans to people who present an acceptable risk.

“We need to know that someone who makes a claim has the ability to pay it back, that’s the main thing,” Tillery said.

The maximum amount for business and economic injury loans is $2 million. Home loans are capped at $200,000. Business and economic harm loans typically take longer to process than home loans, Tillery said.

Economic injury loans are available for residents of Gallatin, Big Horn, Golden Valley, Meagher, Musselshell, Rosebud, Sweet Grass and Treasure counties. Tillery said it’s likely the agency will see a lot of economic injury loan applications because of the length of the park’s closure.

All businesses, such as hotels, restaurants, tour guide businesses, and AirBnBs or VRBOs are eligible for economic injury loans. While businesses may not have suffered physical damage, many suffered a full month of reduced business due to flooding.

“We’re trying to reach out to businesses that have suffered and let them know there’s assistance out there for them,” Tillery said.

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Santander Brasil beats net profit forecast but increases loan loss provisions http://joypeppers.com/santander-brasil-beats-net-profit-forecast-but-increases-loan-loss-provisions/ Thu, 28 Jul 2022 09:07:00 +0000 http://joypeppers.com/santander-brasil-beats-net-profit-forecast-but-increases-loan-loss-provisions/

The Santander bank office building is seen in Sao Paulo, Brazil January 9, 2019. REUTERS/Amanda Perobelli

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SAO PAULO, July 28 (Reuters) – Banco Santander Brasil SA’s second-quarter net profit beat market expectations, but loan loss provisions rose sharply amid a tough macroeconomic backdrop, data showed on Thursday.

Net profit rose 2% from the previous quarter to 4.08 billion reais ($778.08 million), better than expected, as analysts polled by Refinitiv had forecast Banco’s Brazilian unit Santander SA (SAN.MC) would post a net profit of 3.88 billion.

However, Santander Brasil said in a securities filing that provisions for loan losses reached 5.75 billion reais, up 59.7% from a year earlier, with general expenses up by 8.4% in the same comparison.

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Such indicators have been in the spotlight for market participants, with Itau BBA analysts saying in a client note that Santander Brasil was their “first name to avoid among banks” on lower coverage and higher provisions. already expected.

Investors polled by Bank of America ahead of the earnings season said the company was likely to deliver the weakest quarterly numbers among large-cap banks in Brazil, with provision charges among their top concerns.

The South American country’s third largest private bank, Banco Santander Brasil competes with players such as Itau Unibanco (ITUB4.SA), Bradesco (BBDC4.SA) and Banco do Brasil (BBAS3.SA).

In a statement on Thursday, the company’s chief financial officer, Angel Santodomingo, said: “Despite a still challenging macroeconomic environment, loan portfolio quality indicators remained stable over the period.”

The lender’s loan portfolio increased by 2.9% in the quarter to reach 468.54 billion reais.

Brazil is the Spanish lender’s largest customer base and accounts for almost a third of the group’s underlying profit. Read more

($1 = 5.2437 reais)

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Reporting by Gabriel Araujo; Editing by David Goodman and Clarence Fernandez

Our standards: The Thomson Reuters Trust Principles.

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BUA Cement is working with the International Finance Corporation to obtain loans for its expansion http://joypeppers.com/bua-cement-is-working-with-the-international-finance-corporation-to-obtain-loans-for-its-expansion/ Tue, 26 Jul 2022 09:24:50 +0000 http://joypeppers.com/bua-cement-is-working-with-the-international-finance-corporation-to-obtain-loans-for-its-expansion/

Also note that the loan would fund the development of other ancillary public services, BUA Cement said.

Business Insider Africa has learned that the IFC, which specializes in advisory services and loan mobilization, will arrange the deal alongside other lenders that have not yet been disclosed.

“Under our disclosure obligations under Chapter 17 of the Rulebook, BUA CEMENT PLC (BUA CEMENT or the COMPANY) hereby gives notice to Nigerian Exchange Limited (NGX), its valued shareholders and the investing public that the Company has entered into discussions with the International Finance Corporation (IFC), acting as lead arranger in conjunction with a number of other lenders in a syndication pool, to secure a loan for the expansion of BUA Cement’s integrated cement plant at Kalambaina, Sokoto State, Nigeria, which will include increasing its capacity from 2.0 million tonnes per annum (MTPA) to 8.0 MTPA and developing other ancillary utilities (the expansion)” says part of the BUA Cement statement.

Note that BUA Cement’s total borrowings (excluding issued debt instruments) currently stands at $198.058 million (82.3 billion naira), according to information from its H1 2022 financial report.

The company is one of the largest cement manufacturers in Africa’s largest economy (in terms of GDP) and most populous country. It is also majority owned by Abdulsamad Rabiu, one of Africa’s richest men with a net worth of $6.3 billion, according to the Bloomberg Billionaire Index. Business Insider Africa checks show that Mr. Rabiu owns around 56.2% of the stock market-listed Nigerian company.

BUA Cement reported a profit after tax of $148 million (61.3 billion naira) for the six months ended June 30, 2022.

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Deadline to apply for EIDL loans due to Texas drought is approaching http://joypeppers.com/deadline-to-apply-for-eidl-loans-due-to-texas-drought-is-approaching/ Sun, 24 Jul 2022 10:00:04 +0000 http://joypeppers.com/deadline-to-apply-for-eidl-loans-due-to-texas-drought-is-approaching/

The U.S. Small Business Administration (SBA) has sent out a reminder that the deadline to apply for economic disaster loans for small, nonfarm businesses in eight Texas counties is approaching.



Deadline to apply for EIDL loans due to Texas drought is approaching

Director Tanya N. Garfield of the SBA’s Disaster Field Operations Center-West Texas reminded non-farm small businesses of the August deadlines to apply for an SBA federal disaster loan for economic injury. The low-interest loans were offered to compensate for economic losses due to the drop in income caused by the drought.

Texas EIDL deadlines are approaching

The deadline for main counties Fisher, Jones and Scurry is August 15 and is the same for neighboring counties Borden, Callahan, Garza, Haskell, Kent, Mitchell, Nolan, Shackelford, Stonewall and Taylor.

The deadline for primary counties Camp, Franklin, Hopkins, Knox, Titus, Upshur and Wood is August 22, and is the same deadline for neighboring counties Baylor, Delta, Foard, Gregg, Harrison, Haskell, Hunt, King , Marion, Morris, Rains, Red River, Smith, Stonewall, Throckmorton and Van Zandt.

The loan interest rate is as low as 2.83% for businesses and 1.875% for private non-profit organizations. Terms can be up to 30 years, with actual loan amounts and terms to be determined by the SBA, which bases them on each applicant’s financial situation.

Helping businesses meet their working capital needs

Director Garfield said small non-farm businesses, small agricultural cooperatives, small businesses engaged in aquaculture and most private non-profit organizations of any size can apply Economic Disaster Loans up to $2 million. The loans are intended to help these businesses meet working capital needs caused by disasters.

“Economic disaster loans can be used to pay fixed debts, payroll, accounts payable and other bills that cannot be paid due to the impact of the disaster,” said director Garfield.

“SBA eligibility covers both economic impacts on businesses dependent on farmers and ranchers who have suffered agricultural production losses caused by disasters and businesses directly affected by disasters. Economic loss assistance is available whether or not the claimant has suffered property damage. »

Texas Drought Monitor Ratings

Texas has experienced many droughts over the years and has a specialized Drought Watch Service that updates weekly to show drought conditions in the Lone Star State.

The Drought Monitor uses a five category system, D0 meaning ‘abnormally dry’ conditions and represented by the color yellow on the drought map. These conditions typically result in delayed forage germination, reduced hay cutting, and increased grass fires. The next category is D1 which stands for “moderate drought” and is represented by a pale pink color on the drought map. These conditions delay dryland crops and lead to an increase in the frequency of forest fires.

The next category is D2 which means “severe drought” and is represented by the orange color on the drought map. Expect poor grazing conditions and the increased risk of wildfire necessitating burning bans. Category D3 means “extreme drought” and is represented by the color red on the drought map. There will be dust and sand storms as well as huge crop yield reductions.

The last category is D4 and means “exceptional drought” and is represented by a dark red color on the drought map. These conditions lead to significant financial losses in the seafood, forestry, tourism and agricultural sectors.

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Image: Depositphotos


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Housing crisis: Chinese banking regulator extends loans as mortgage boycott grows http://joypeppers.com/housing-crisis-chinese-banking-regulator-extends-loans-as-mortgage-boycott-grows/ Fri, 22 Jul 2022 08:49:00 +0000 http://joypeppers.com/housing-crisis-chinese-banking-regulator-extends-loans-as-mortgage-boycott-grows/ The China Banking and Insurance Regulatory Commission (CBIRC) reiterated on Thursday that it will provide “active credit support” to property developers, so that they can complete delayed or stalled projects as soon as possible.

He also urged banks to provide more mortgages to qualified buyers to sustain demand and support the housing market.

Mortgages rose after the People’s Bank of China lower mortgage rates two-tenths of a percentage point in May for first-time home buyers. Almost all – 90% – of mortgage loans were granted to first-time buyers.

“The current pace of real estate-related lending has reached the fastest pace since 2019,” Liu Zhongrui, a CBIRC official, said at a press conference Thursday in Beijing.

Last month, new developer loans issued by banks also reached 52.2 billion yuan ($7.7 billion), Liu added.

The pledge is the latest in a series of moves by Chinese authorities to quell a revolt by homebuyers across the country. A growing number of disgruntled buyers are refusing to pay mortgages on unfinished projects, compounding the country’s housing problems and raising concerns about a systemic financial crisis and social unrest.

The move is a sign of how the cash crunch faced by developers is spilling over to other aspects of society.

The problem began in 2020, when Beijing began cracking down on excessive borrowing by developers in a bid to contain their high debt loads and rein in house prices. The crisis deepened last year when Evergrande – the country’s most indebted developer – scrambled to raise funds to repay lenders. As the real estate sector cools, several large companies seek protection from creditors. Many real estate projects across the country have been delayed or put on hold due to developers running out of cash.
Public anger is growing over the stalled projects, as many homebuyers had started paying off their mortgages before they got the new property. In China, real estate companies are allowed to sell homes before they are completed and use the funds to finance construction. This is the most common way to sell homes in the industry.
Chinese buyers refuse to pay mortgages on unfinished apartments
The mortgage boycott could lead to an increase in bad loans at banks and further dampen sentiment in the real estate sector, analysts said. If sales continue to decline, developers could face a bigger cash flow problem, which could lead to more defaults and project delays, creating a vicious circle in the market. The real estate crisis will also strain the economy and the financial system – real estate and related industries account for up to 30% of China’s GDP.

Earlier this week, the city of Zhengzhou in central China set up a bailout fund for property developers to deal with unfinished projects, one of the first bailout measures by local governments to combat the mortgage boycott.

The fund will be jointly established by Zhengzhou-based Henan Asset Management and Zhengzhou Real Estate Group, according to a statement by the asset manager on Tuesday. Zhengzhou is the capital of central Henan Province and is currently at the center of the nationwide mortgage boycott.

Both companies are supported by local governments in the province.

The fund will be used to “relaunch problematic real estate projects and bail out struggling developers,” the statement said, without disclosing the size of the fund.

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Big banks are suffering lending pain, but not the kind we expected http://joypeppers.com/big-banks-are-suffering-lending-pain-but-not-the-kind-we-expected/ Tue, 19 Jul 2022 02:22:49 +0000 http://joypeppers.com/big-banks-are-suffering-lending-pain-but-not-the-kind-we-expected/

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Everyone was watching U.S. bank earnings for signs that consumers were in financial trouble — but the pain came from other places, especially buyout funding.

In second-quarter earnings, Bank of America Corp. topped the chart of price cuts on loans to fund transactions, mostly for private equity-backed companies, with a $320 million hit reported on Monday. The leveraged loan market has been closed for weeks as investors fled in the face of soaring interest rates. Total losses reported by the big six US banks on business loans for sale – a combination of leveraged finance and other loans – now stand at $1.32 billion in the second quarter. Goldman Sachs Group Inc., which also reported on Monday, lost $225 million on those loans, putting it fourth on the list behind Morgan Stanley and JPMorgan Chase & Co.

Banks around the world still have around $80 billion worth of transactions to offload, and losses like the ones US banks have suffered are also a danger to European bank results. Ahead of the second-quarter results, JPMorgan analysts looked at banks’ likely exposures based on their exposure to unsold loans reported in the media. They placed Bank of America as the main player in these blocked transactions, followed by Barclays PLC. On the heels of those two, Morgan Stanley, Citigroup, Deutsche Bank and Credit Suisse, in that order. Citigroup ultimately didn’t do so badly – No. 5 on the list so far – and this kind of analysis is only a rough guide. Credit Suisse and Deutsche are both due to report on July 27, with Barclays the following day.

Alastair Borthwick, chief financial officer of Bank of America, said on Monday that the bank does not have a significant pipeline of other transactions to underwrite, so it should be able to reduce its exposures relatively quickly. JPMorgan has also reduced its risks and tried to reduce its market share since last year. This is good news in some respects, but it could also reflect an upcoming drop in trading advisory fees. Some M&A bankers say they are currently only signing new deals that are likely to close quickly and won’t have any delays for regulatory or competitive approvals.

One of the top areas for banks in the second quarter was M&A advisory fees as previously negotiated deals were either announced or closed. But the collapse in advisory fees on equity sales and debt issuance led to an overall decline in investment banking revenue of about 50% in the second quarter compared to the period of l ‘last year.

Bond and equity trading desks fared much better, benefiting from the volatility and uncertainty that beset investors. Goldman led the way in fixed income, commodities and currencies trading, with revenue up 55% year-over-year in the second quarter; and second best behind JPMorgan in equity trading, with revenue up 11% year-over-year.

Part of Goldman’s secret lies in the growth of its equity and fixed income financing businesses. Stock lending is for hedge funds, and Goldman’s revenue is up nearly 40% year over year in this prime brokerage, as it’s called. In part, Goldman took market share from rivals, especially those in Europe. Its gains also came despite falling stock markets, which reduced the value of hedge fund long positions. Citigroup, for example, reported lower prime brokerage balances in its business due to falling stock values ​​last week. On the fixed income financing side, revenues were up 82% year over year. This activity is driven by the financing and reconditioning of loans granted by other companies such as mortgage brokers or fintechs. The bank said it was also boosted by buyout (or repo) markets in the second quarter.

Total revenue from these two financing businesses has accelerated over the past two years for Goldman. The bank says these are mostly market share gains and the revenue is more sustainable than its other deals. But with new mortgages and refinances in sharp decline in the United States, stock markets still down and many fintechs short of growth, there is a chance that these income gains will also hit a wall during the rest of this year at least.

The lesson to be drawn from the results of US banks in the second quarter is that credit risks generally appear to be well under control. But if interest rates and financial markets do not stabilize over the next few months, expect banks’ income from trade, investment and some forms of financing to slow, perhaps significantly. significant.

More writers at Bloomberg Opinion:

• Wells Fargo and Citi customers are still spending: Paul J. Davies

• British companies are abandoning black professionals: Chris Hughes

• The Beast of Inflation won’t sit still for long: Allison Schrager

This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners.

Paul J. Davies is a Bloomberg Opinion columnist covering banking and finance. Previously, he was a reporter for the Wall Street Journal and the Financial Times.

More stories like this are available at bloomberg.com/opinion

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