First, here is an outline of what will be discussed tonight:

2 a) Gold trading overnight, Goldcore

(Mark OByrne)

3. ASIAN AFFAIRS

REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) REPORT ON JAPAN

ii)Through purchases of their ETF’s, the Bank of Japan is now a top 10 owner of an unbelievable 90% of Japanese stocks:

(courtesy zero hedge)

b) REPORT ON CHINA

( zero hedge)

4.EUROPEAN AFFAIRS

i)The White house is set to release some of the secret 28 pages.  Now we await the Saudi response and it may liquidate its bond holdings:

iii) SWEDEN AND THEIR HUGE MIGRANT PROBLEM

i)The huge real estate company URBANCORP has just filed for bankruptcy protection.

This will surely hurt Canada’s booming real estate sector. It looks like the Chinese money have stopped coming.

END

3d USA/Yen rate now well below the important 120 barrier this morning

3e WTI::  43.32  and Brent: 44.78

3f Gold UP  /Yen UP

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa.

Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.

3h Oil DOWN for WTI andDOWN for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund RISES to 0.219%   German bunds in negative yields from 8 years out

 Greece  sees its 2 year rate FALL to 10.11%/: 

3j Greek 10 year bond yield FALL to  : 8.60%   (YIELD CURVE NOW DEEPLY INVERTED)

3k Gold at $1233.90/silver $16.88 (7:45 am est) BROKE RESISTANCE AT 16.52 

3l USA vs Russian rouble; (Russian rouble UP 47 /100 in  roubles/dollar) 66.06

3m oil into the 43 dollar handle for WTI and 44 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/expect a huge devaluation imminently from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN COLLAPSES TO 108.33 DESTROYING WHATEVER IS LEFT OF OUR YEN CARRY TRADERS

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9745 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0968 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN STARTS ITS CAMPAIGN AS TO WHETHER EXIT THE EU.

3r the 8 Year German bund now  in negative territory with the 10 year FALLS to  + .219%

/German 8 year rate negative%!!!

3s The Greece ELA NOW at  71.4 billion euros,

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 1.88% early this morning. Thirty year rate  at 2.70% /POLICY ERROR)

5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.

Ahead of two key central banks events this week, the Fed announcement on Wednesday – in which Yellen is expected to do nothing and most likely will continue the dovish relent first seen a month ago – and then the BOJ on Thursday (which also mark the anniversary of the second longest and most artificial bull market in history) where Kuroda is increasingly expected to shock with something even more ridiculous, global shares have fallen modestly around the world as oil declined on signs a global surplus of crude is likely to persist. The yen strengthened with gold, reflecting investor caution before central bank meetings this week in the U.S. and Japan.

Futures are currently unchanged, but the E-mini was down as much as 12 points less than two hours earlier after the European open when this time it was up to the PBOC to intervene in global markets by pushing the Yuan higher (selling USDCNY via intermediary banks) sending global stocks sharply higher off session lows and leaving the S&P futures virtually unchanged. As Bloomberg reported, there has been increasing USD/CNY selling in afternoon session as Dollar Index edged lower. This is the PBOC entering the building and levitating stocks.

U.S. crude futures erased Friday’s gains on Saudi Arabia’s plan to complete an expansion of the Shaybah oilfield by the end of May (allowing the world’s largest exporter to maintain total capacity at 12m b/d) coupled with concern a global glut will be prolonged as Mideast producers boost supplies. Additionally, Iran has increased output by 1m b/d since sanctions lifted in January, according to Iran’s Oil Minister Bijan Namdar Zanganeh. Then the other upside catalyst, Kuwait’s now forgotten oil strike, has been fully offset as Kuwait oil output returns to 3m b/d after strike ends. 

Then consider that as we reported over the weekend, what until late January was record oil shorts has flipped to record oil longs, suggesting positioning is now stretched and a downside move may be imminent.

Combined, these indicate why there is little reason for significant oil upside from here: “We’re still in oversupply,” Wayne Gordon, executive director for commodities at UBS AG Wealth Management, told Bloomberg TV. “We don’t think that the production cuts that we’re seeing in the U.S. and non-OPEC countries are large enough yet to structurally support the oil price higher. For the next couple of months we’re going to the downside again.”

But while oil prices will be important, and especially whether the support level can defend the price, the market’s attention will be focused entirely of the Federal Reserve on Wednesday and Bank of Japan on Thursday. While the Fed is forecast to refrain from raising borrowing costs, investors will be on the lookout for shifts in guidance. Most economists predict monetary stimulus will be stepped up by the BOJ. Earnings are due from companies including Apple Inc. as well as China’s largest banks this week.

As the chart below shows, the rebound from the February lows has been all about central banks. What can they do to sustain the bounce in the future?

Energy companies and miners led declines in the Stoxx Europe 600 Index, which headed for its biggest loss in a week, as industrial metals also sank. The yen was the best-performing major currency, after tumbling on Friday by the most since 2014. Italian bonds fell with Spain’s, extending a decline from last week. The Stoxx Europe 600 Index dropped 0.6 percent. Anglo American Plc and Rio Tinto Group lost at least 3.5 percent, leading miners to the biggest decline of the 19 industry groups on the equity benchmark. BP Plc dragged oil companies lower as crude slid.

Automakers extended their drop into a second day, with Volkswagen AG and Daimler AG falling more than 1.5 percent. Royal Philips NV slid 4.7 percent after saying it is considering an initial public offering of its lighting business, as it reported better-than-estimated quarterly profit.

Standard & Poor’s 500 Index futures retreated 0.1 percent, indicating U.S. equities will decline after a lackluster end to last week on investor concern about earnings. Nasdaq 100 contracts lost 0.4 percent after technology shares tumbled the most in two weeks on Friday amid disappointing results from Microsoft Corp. and Google parent Alphabet Inc.

On the relatively quiet US calendar today, we will get new home sales data later and the Dallas Fed.

Global Market Snapshot

• S&P 500 futures down 0.1% to 2084
• Stoxx 600 down 0.6% to 346
• FTSE 100 down 0.3% to 6294
• DAX down 0.5% to 10277
• German 10Yr yield down 1bp to 0.22%
• Italian 10Yr yield up 2bps to 1.49%
• Spanish 10Yr yield up 1bp to 1.61%
• S&P GSCI Index down 1% to 344.4
• MSCI Asia Pacific down 0.4% to 133
• Nikkei 225 down 0.8% to 17439
• Hang Seng down 0.8% to 21304
• Shanghai Composite down 0.4% to 2947
• US 10-yr yield down less than 1bp to 1.88%
• Dollar Index down 0.2% to 94.92
• WTI Crude futures down 1.3% to $43.30
• Brent Futures down 1.1% to $44.654
• Gold spot down less than 0.1% to $1,232
• Silver spot down 0.5% to $16.89

Global Headline News

• Ball to Sell Beverage-Can Assets to Ardagh for $3.42 Billion: Will sell 17 can factories in the U.S., Europe and Brazil, plus other facilities, assets to be sold had rev. of $3b last yr
• Second U.S. Bid to Force Apple to Unlock Phone Ends in a Whimper: The U.S. government said it no longer needs Apple’s assistance to get into an iPhone used by a New York drug dealer
• Apple’s IPhone Maker Showcases Labor Changes to Silence Critics
• Yahoo Said to Narrow Field of Bidders as Soon as Next Week: Received more than 10 first-round offers for core unit, initial bids valued Yahoo’s core business at about $4b-$8b
• Halliburton Reports $2.1 Billion Charge on Job Cuts, Assets: Company delays earnings as it seeks to wrap Baker Hughes deal
• Carmakers Brace for Tough Scrutiny After Emission Scandals: Carmakers have to be clearer about the way they certify their fuel economy and emission ratings: Daimler CEO Dieter Zetsche
• Williams Northeast Natural Gas Line Denied New York Permit: Proposed $925m Constitution natural gas pipeline was denied a key environmental permit from New York state regulators
• Proposed Bank Pay Rules in U.S. May Boost Salaries, Deter Hiring: Changes would have biggest effect on early career top earners
• Oil Bulls Plunge Into Market as U.S. Gasoline Demand Hits Record: Hedge funds boost bullish wagers to highest since May: CFTC
• GE Seeks to Raise as Much as $922 Million in Czech Bank Unit IPO: Offering 260.6m of existing shares, or 51% of GE Money Bank at indicative price of 68 koruna ($2.83) to 85 koruna each
• Obama Said to Be Sending 250 More Military Personnel to Syria: Move comes a week after U.S. announced more forces for Iraq
• Disney’s ‘Jungle Book’ Holds Box-Office Lead Over ‘Huntsman’: “The Jungle Book” collected $60.8m in its second weekend at theaters in the U.S. and Canada: ComScore
• Ford CEO Assumes Apple Working on Car, May Become Rival: BBC: Co. working on assumption that major rivals in future may not be General Motors or Chrysler but Google and Apple, BBC reports
• N.Y. Times Said to Cut Hundreds of Jobs This Year: NYP
• Google CEO Said to Plan Corporate Incubator: The Information
• UMG, Sony Music, Warner Music Fight YouTube on Filtering: FT
• Disney-Alibaba’s Web-Streaming Service Halted in China: SCMP

Looking at regional markets, Asian stocks began in a lacklustre fashion amid a cautious tone ahead of key policy meetings this week from FOMC, BoJ and RBNZ, while market closures due to ANZAC day also contributed to the lack of buying. Nikkei 225 (-0.8%) snapped its 4-day win streak as JPY recovered from some of Friday’s slump, while Sony shares plunged around 5% in a continuation of the weakness seen after delaying its earnings forecast. Shanghai Comp (-0.4%) is also negative despite the PBoC continuing to inject ample funds into the market as rising debt concerns clouded sentiment with total debt said to have risen to 237% of GDP in Q1. 10yr JGBs are lower as participants booked profits and the BoJ refrained from its bond-buying operations.

Elsewhere, Japanese PM Abe ordered the compilation of a supplementary budget for rebuilding areas seriously affected by the recent earthquakes. In China, PBoC Vice-Governor Chen said that financial institutions are facing expanding credit risks.

Top Asian News

• The Tokyo Whale Is Quietly Buying Up Huge Stakes in Japan Inc.: BOJ is an estimated top 10 owner in about 90% of Nikkei 225
• Shanghai CBRC Halts Banks’ Business With 6 Property Agencies: Central bank said unauthorized mortgage loans increased risks
• Earliest China Economic Data Suggest Recovery Gathering Pace: Private gauges from 4 providers all picked up from March
• BOC Aviation Said to Gauge Demand for Up to $1.5 Billion IPO: Co. plans to start taking investor orders in mid-May
• Costliest Crudes Get a Lift as Cars Crowd Beijing And Mumbai: Light oils seen rising versus heavy grades on gasoline demand

In Europe, markets have kicked off the week in a shaky fashion so far, with European stocks trading firmly in the red (Euro Stoxxx -0.7%), slipping lower since the open. Sentiment has been dampened by lower than expected Ifo readings, while the likes of EDF (-7.9%) and Philips (-4.7%) underperform on stock specific news. Material names are also among the worst performers amid downside in the commodity complex, with energy also softer today as WTI Jun’16 futures slip back below USD 43.50/bbl.

In tandem with the downside in equities, Bunds trade higher this morning, with June’16 futures above 162.50. In terms of European supply, this week is set to see a sizeable drop to around EUR 7bIn from the EUR 22.5bIn that hit the market last week, while from a redemption perspective, today is set to see EUR 30bIn of principals due to be paid by France.

Top European News

• Philips Lighting IPO Looking More Likely as Profit Rises: Leaning toward holding an IPO of its historic lighting business after 1Q profit beat estimates and an attempt at a private sale has so far been unsuccessful
• German Business Confidence Unexpectedly Weakened in April: Ifo’s business climate index fell to 106.6 in April from 106.7 the previous month; median estimate was for increase to 107.1
• Deutsche Bank Co-CEO, Ex-Officials Cleared in Munich Fraud Case: Co-CEO Juergen Fitschen and four former bank officials were acquitted of charges that they lied to judges during a more than 14-year-old dispute with a German media mogul
• EDF Falls After Announcing Share Sale, Deeper Cuts, Divestments: To sell about EU4b billion of new shares and deepen cost cuts
• Cinven Said to Be Leading Bidder for TUI Hotelbeds Booking Unit: Tour operator may announce deal as early as this week
• Nordic Banks Warn Brexit Adds to Extreme Negative Rate Scenarios: Both Nordea and Handelsbanken, say a U.K. exit from the EU would push Denmark even further away from positive rates

In FX, there is not too much to get excited about this Monday, with the multiple event risks ahead causing some 2 way trade between the broader risk tone and USD sentiment. The FOMC on Wednesday is the man event, and although many expect the Fed to stay on hold for now, their rhetoric will be keenly monitored. USD/JPY is the focal point though, as the BoJ meeting has been built up on recent talk of negative rates being extended through the lending program, but a fair chunk of this has now been priced in , and with stocks coming off better levels, we have seen the lead spot rate giving up almost 1 JPY off the overnight highs at 111.90. The commodity currencies are also a little heavy this morning, but AUD is proving a little more resilient. CAD is underperforming with a slippage in Oil prices, though little momentum on the market at the moment. Cable still unable to put in a stronger test on 1.4500, but looks well supported on dips. German IFO the only major data release this morning, but despite coming in a touch softer vs expectations, had little impact on the EUR.

In commodities, oil has managed to trade above the USD 43.00/bbl level after hitting this support level overnight. It then met some pretty strong resistance at USD 43.50/bbl and is on its way back down to test USD 43.00/bbl once more. Gold initially trickled higher in EU trade as risk off sentiment grips the markets up as much as USD 7.00 at one stage before then ebbing in to negative territory. Elsewhere, copper and iron-ore prices were down amid cautiousness ahead of upcoming key risk events and after Chinese commodity exchanges raised transaction fees late last week to curb speculation.

Bulletin Headline Summary from RanSquawk and Bloomberg

• European equities start the week off on the backfoot in a week set to be dominated by risk ahead of FOMC, BoJ and RBNZ meetings
• German IFO the only major data release this morning, but despite coming in a touch softer vs expectations, had little impact on the EUR.
• Highlights Include US New Home Sales and potential comments from ECB’s Constancio and Coeure
• Treasuries rise during overnight trading amid equity weakness and lower crude oil; Treasury to sell $26b 2Y notes, WI 0.830%; last sold at 0.877% in March, compares with 0.752% in February.
• German business confidence unexpectedly deteriorated in the latest sign that Europe’s largest economy is losing some of its momentum
• Mario Draghi signaled last week that policy is going on hold; a pause that may hand Yellen an opportunity to raise interest rates in coming months, by reducing the risk of a sharp rally in the dollar if the policies of the two central banks conspicuously diverged
• Norway increased its withdrawals from the nation’s wealth fund again in March, running ahead of estimates made by the central bank just two months ago
• With the challenges to Japan mounting, an increasing number of officials at the central bank consider it’s time for the government to do more to spur economic expansion, according to people familiar with discussions at the BOJ
• While the BOJ’s name is nowhere to be found in regulatory filings on major stock investors, the bank’s exchange-traded fund purchases have made it a top 10 shareholder in about 90 percent of the Nikkei 225 Stock Average, according to estimates compiled by Bloomberg from public data
• Japan’s biggest life insurers will be looking for returns in corporate bonds and infrastructure lending in the year ahead, as central bank stimulus clouds the outlook for local sovereign debt
• Chinese banks’ surging lending to non-bank financial institutions such as fund managers may pose a “black swan” risk for the nation’s financial system, according to Royal Bank of Scotland Group Plc
• Sovereign 10Y bond yields mostly lower; European, Asian equity markets lower; U.S. equity-index futures fall. WTI crude oil, metals mostly higher

DB’s Jim Reid concludes the overnight wrap

With regards to the post-FOMC statement there is some debate as to whether the Fed will add back the “balance of risks” sentence which would re-open the door for a June rate hike. We don’t think they will do either but over the past week the probability of a June hike has increased from 14% to 23% (Bloomberg). One would expect the statement to be more confident given improved international conditions and a softer dollar of late but a Yellen led Fed will likely want to see more evidence of a US recovery before increasing the hawkish rhetoric again. The data is still ambiguous and it’s fair to say the global markets recovery is as much to do with the reduction of systemic risk (e.g. healthier $, EM, Oil and China news/moves) perhaps due to the early year Fed relent as it is to do with a strong pick up in growth. So the Fed continue to be trapped in our opinion.

Outside of this, Thursday’s first read of Q1 US GDP will be a key if backward looking release but one that will likely confirm why Yellen remains on the cautious side. DB expect 0.5% (Consensus 0.6%, Atlanta Fed at 0.3%). Durable goods (Tuesday) and the trade balance (Wednesday) might lead to a last minute fine tuning of Q1 estimates.

The BoJ meeting on Thursday could have been a bigger deal a couple of weeks ago when global markets were seeing renewed weakness. However since April 8th the Nikkei is up 13% and this means further action now is finely balanced. We’re also pretty much back to levels seen just before they cut rates into negative territory back at the end of January. Given the initial negative reaction to this base rate cut, the BoJ may wait to see more evidence as to the impact of this momentous move before calibrating policy further. They have a little breathing space for now but it feels to us that they will have to go even more unorthodox before too long in terms of policy. The consensus (as polled on Bloomberg 15-21 April) is fairly split on whether they’ll act this Thursday with a narrow majority (23 out of 41 economists) expecting further easing although 90% expect action by July. 19 expect an increase in ETF buying, with 8 expecting additional bond buying and the same number expecting a further cut in rates. Obviously some of these expect a combination of the above but 18 expect no new policy moves. There has also been some talk (after this polling) of the BoJ helping financials lend by offering negative borrowing costs on selected loans – a bit like that seen from the ECB in March. So all eyes on Thursday to see if they’re yet ready to try to ease the pressure on banks that their January cut created.

Asian markets are reasonably quiet overnight but are starting the weak on the softer side risk wise. The Yen has bounced back +0.6% after a -2.1% fall on Friday after the story discussed above re BoJ helping financials. The Nikkei is down -0.6% as we type (first time for 5 days) with the Shanghai Comp -0.8%. It’s a holiday in Australia and NZ.

Recapping markets on Friday, the S&P 500 closed flat after a late day rally (+0.9% on the week). The NASDAQ had its worst week since early February after weak results from Alphabet and Microsoft and poor guidance from the likes of Netflix. European equity markets closed down on Friday (STOXX -0.32%), with automobile stocks dragging the index lower after Daimler (-5.12%), Peugeot (-1.74%) and Volkswagen (-1.73%) were further scrutinised as part of the probe into the vehicle emissions scandal. Despite posting losses on both Thursday and Friday, equities were still positive on the week with gains of +1.65%. Over in credit markets, iTraxx Main was slightly wider on the Friday (+0.9bps) while Crossover widened by nearly +3bps. Over the course of the week the indices tightened by -5bps and -24bps respectively, with the bulk of the tightening attributable to the post-ECB rally. At the other end of the risk spectrum, 10Y Bund yields were slightly lower on Friday at 0.231% (-0.8bps) but ended the week over 10bps higher.

Friday was a big day in terms of PMIs. We saw the flash April PMI numbers out of the Euro area, with prints somewhat disappointing with Eurozone manufacturing (51.5 vs. 51.9 expected), services (53.2 vs. 53.3 expected) and composite numbers (53.0 vs. 53.3 expected) all posting marginally below consensus. The general levels were however broadly unchanged on the month, with manufacturing PMIs softening slightly (51.5 vs. 51.6 previous) while services PMIs were marginally higher (53.2 vs. 53.1 previous). The details also painted a more positive picture with composite new orders and employment improving in April, while the composite input prices rose by 1.6 points over 50. German manufacturing PMIs surprised on the upside (51.9 vs. 51.0 expected) but composite PMIs disappointed (53.8 vs. 54.2 expected). Meanwhile France saw its composite PMI beat estimates (50.5 vs. 50.2 expected) while its manufacturing PMI clocked in below expectations (48.3 vs. 49.9 expected).

We also saw the release of the flash April manufacturing PMIs in the US which painted a much more negative picture. The numbers missed expectations (50.8 vs. 52.0 expected; 51.5 previous) and eased to their lowest levels since September 2009. Softer rates of output combined with a slowdown in new business growth and declining order book backlogs proved to be the main drags on the index. So a bit of a worry given the bounce back in activity seen as Q1 progressed.

Kicking off the proceedings this morning we will see the April IFO survey readings out of Germany, shortly followed by the latest CBI orders data in the UK. This afternoon in the US the only releases of note will be March new home sales and the Dallas Fed manufacturing survey.

Away from the data, the only Fedspeak of note comes on Friday when Kaplan is due to speak. The BoE’s Cunliffe is due to speak on the same day. Away from this the other big focus this week will of course be earnings. 188 S&P 500 companies are set to report, or 33% of the market cap, with the big highlights being AT&T (Tuesday), eBay (Tuesday), Apple (Tuesday), Facebook (Wednesday), Boeing (Wednesday), Amazon (Thursday), Ford (Thursday), Exxon Mobil (Friday) and Chevron (Friday). In Europe we’ll get 102 Stoxx 600 company reports.

EUROPEAN AFFAIRS

The White house is set to release some of the secret 28 pages.  Now we await the Saudi response and it may liquidate its bond holdings:

(courtesy zero hedge)

What Oil Recovery? Saudi Borrowing Costs Spike To 7 Year Highs

SWEDEN AND THEIR HUGE MIGRANT PROBLEM

Swedes Revolt Over Refugees Near Schools: Demand “F##king Answers” From Stockholm City Council

Having documented the growing tensions in Sweden between an immigration-happy government and a nation beset by refugee-crime sprees, it appears ‘the people’ have had enough. Stockholm residents are upset over the city council’s plans to re-locate hundreds of Muslim migrants right next to a school and during a recent meeting, brawls broke out as Swedes exclaimed, “we demand f##king answers, now!” These are not ultra-right-wing nationalists exhorting their racist feelings, these are average Swedes and the revolution is building…

“You just can’t sit there, when we come here looking for answers, and SAY you can’t ANSWER that. That is not OK. There has to be some f**king order in a democracy! But you are NOT answering OUR questions, will want f**king answers! We will stop shouting when you answer out questions!”

As Shoebat notes, unfortunately, these ‘compassionate’ leftists, who have no respect for their own society or even themselves, are not only pushing the European people into a civil war, but possibly a world war.

This town council meeting is just one of the small ‘on the ground’ fires which shows that people are ANGRY they are being ignored and shoved aside along with their families and culture in the name of this ‘new Europe.’ This will end ultimately in nothing short of disaster.

GLOBAL ISSUES:  

less than two weeks ago we documented that Toronto based Urbancorp, one of Canada’s largest residential developers, was having significant issues. Its attorney’s had taken the highly unusual step of terminating their contract, it hadn’t released 2015 financials due to the audit committee having “open issues and questions”, and most intriguing, a board member quit just two weeks after being appointed specifically to provide expertise in accounting.

For those unfamiliar with the company, Urbancorp was launched in 1993 by Alan Saskin, a former Cadillac Fairview executive, and has built dozens of condos and other housing developments in the Greater Toronto Area. This is how it describes itself on its website:

Urbancorp is proud to have created some of the most visionary home and condominium communities in the GTA.

 

As the premiere developer of the King West neighbourhood, Urbancorp transformed the old industrial lands of King Street West into the vibrant residential community of King West Village, including Bridge, Fuzion and ,the latest, Kingsclub Condominium. In the West Queen West neighbourhood, Urbancorp built Westside Gallery Lofts, Curve and, most recently, Edge and Epic on Triangle Park.

 

Urbancorp has built thriving new communities in other up-and-coming Toronto neighbourhoods. The Neighbourhoods of Queen Street East is comprised of three stunning new home communities along the Queen Street East corridor. With locations in Riverdale, Leslieville and The Beach, The Neighbourhoods of Queen Street East bring a fresh, modern vibe to the urban renaissance currently underway in Toronto’s east end.

And while the Greater Toronto Area may not be exactly Vancouver (where the real estate situation is getting more outlanding by the day), the local housing market has been consistently portrayed as sufficiently resilient and an indication of Canada’s economic stability.

But perhaps it isn’t, because late last night we learned that Urbancorp has filed for bankruptcy.

The filing which is seeking court approval to sell assets “to maximize real estate values for the benefit of creditors and other stakeholders,” came just four months after the company issued roughly $48 million in debt traded on the Tel Aviv Stock Exchange, and eight months afterreportedly taking out at $225 million loan. To the best of our knowledge, the company failed to pay interest on its new debt even once (also known as a NCAA or No Coupon At All). As The Globe and Mail reports, several contractors have registered construction liens against a project in Toronto’s Leslieville neighborhood, and there are many lawsuits pending against the corporation as a result of contractors and brokers not being paid.

“We determined, after much consideration and consultation, that a court-supervised process is the best way to deal with current cash flow issues. This will allow us to reduce debt in an efficient manner while continuing to focus on our core business.” CEO Alan Saskin said in astatement.

Ironically, in filings with the Tel Aviv securities commission late last year, Urbancorp presented itself as a top ten developer with a “AAA credit rating.” Come to think of it, that’s Canada’s credit rating too…

Urbancorp has more than 1,000 homes under construction in the Toronto area, and the restructuring is meant to ensure the successful completion of those homes.

However, new projects may be a different story. As Bloomberg points out, government regulator Tarion Warranty Corporation has proposed to revoke Urbancorp’s registration. If the registration is ultimately revoked, it would mean that the company wouldn’t be able to build properties. An appeal has been filed.

From Tarion

Tarion has issued a Notice of Proposal (NOP) to revoke the registration of 17 Urbancorp related companies.  As the Registrar, Tarion has a duty to protect new home buyers by requiring builders to adhere to certain requirements in order to obtain registration, and ensure they continue to abide by ongoing obligations under the Act in order to maintain their licence.  The decision to issue this NOP was made due to the builder’s failure to meet Tarion’s ongoing registration requirements.

 

As with all builders who are issued an NOP by Tarion, Urbancorp companies have the right to appeal this proposal to the Licence Appeal Tribunal (LAT), which they have done.  This appeal is currently in process.  During this time, Urbancorp remains registered under Tarion until the LAT appeal process is concluded.

 

Despite the NOP, Urbancorp remains obligated to fulfill its commitments to its customers.  This includes addressing warranty claims, seeking registration for any current condominium projects and completing any existing sales.

 

It is important for home buyers and homeowners to know that they remain protected under the warranty, and Tarion will step in to fulfill the warranty obligations if Urbancorp fails to do so.  This includes deposit protection, delay compensation and construction warranties that can last up to seven years on a new home.

The bankruptcy filing of Urbancorp is the second major bankruptcy we have reported in the luxury residential space. Recall two weeks ago Manhattan’s Bauhouse Group filed for bankruptcy after defaulting on $147 million in debt.

The sudden and very rapid deterioration in the high-end real estate segment has received little attention so far. With everyone focusing on energy companies and their cash flow issues, few are paying attention to the fact that luxury real estate is collapsing, and not just in the US but as of last night, in Canada – at least in those cities where Chinese money laundering isn’t encouraged by the authorities – as well.

With the Urbancorp bankruptcy filing, and the first official canary death in Canada’s real estate “coal mine”, we anticipate that the near future for Canada’s real estate sector will be a far more volatile one. Excluding Vancouver of course: that particular Chinese money laundering hub will continue humming until the locals finally decide they have had enough of having their city sold to criminal Chinese oligarchs.

(courtesy zero hedge)

The Reason Why Oil Dropped: Saudis Set To Boost Production In Scramble For Chinese Demand

Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings/MONDAY morning 7:00 am

And now your closing MONDAY NUMBERS