Aurelia Butler

NEW YORK (Reuters) – Maybe Dorothy, Blanche, Rose and Sophia had it right all along.We remember the stars from the 1980s television series “The Golden Girls” for their wit and quick comebacks, but also for their unique home arrangement: Living (and eventually owning) with each other, without spouses or significant others.According to a new survey from LendingTree, an eye-opening 29% of Americans are open to the idea. Of those potential homebuyers, 63% said they would consider buying with a family member who is not their spouse, and 57% would do so with a good friend or current roommate.“That’s quite a lot of people, and I’m not surprised that people are considering it,” says Jacob Channel, senior economist for LendingTree. “It speaks to where we are in the housing market: It’s really expensive to buy a house right now, and a lot of people are looking into alternative ways to purchase.”Indeed, consider these figures: The median price for existing homes in June was $410,200, near an all-time high, according to the National Association of Realtors. Meanwhile, the average rate on a 30-year mortgage has risen to over 7%, following a series of rate hikes from the Federal Reserve.Combined, those two factors can make it very challenging to break into the housing market. Just ask Gus Gibbs of Boise, Idaho, who in 2021 bought a three-bedroom house with his partner and her sister.“All three of our names are on the mortgage, and we threw all the money that we could towards the down payment,” says Gibbs, a devoted ultrarunner. “We were growing weary of high rental prices – and glad we got into the market when we did.”To be sure, the percentage of people who co-buy with someone other than their spouse or significant other is still a relatively small share of buyers. Currently, it represents about 3% of the housing market, although that rises to 5% among first-time buyers, according to NAR.“That’s the highest we have seen among first-time buyers,” says Jessica Lautz, NAR’s deputy chief economist and VP of research. “This trend is a good way to pool resources when housing affordability is a challenge.”While the math may seem attractive, this path to homeownership is also fraught with potential dangers. Here are a few pointers before embarking on a Golden Girls-style co-living arrangement.TRUST COMES FIRSTMixing finances with friends or family is always a dangerous business, since money disputes could end up causing serious relationship damage. So this is not something to be entered into lightly, but should only be considered with relationships where there are very high levels of mutual trust.“I think this is a very tricky situation that has a decent chance of blowing up,” says Howard Pressman, a financial planner in Vienna, Virginia. “I understand the reasons for wanting to do things in this way, but would be very concerned with how this sort of relationship ages.”GET IT IN WRITINGIn any co-buying arrangement, there are all sorts of critical questions to consider: How long do you plan on staying there? What happens if one person wants to sell, and the other does not? Who handles which maintenance costs? And so on.Not only should you be discussing all those issues beforehand, you should put it all down on paper, with the help of a real estate lawyer. That way you both have a document you can point to later, and avoid potential misunderstandings.LOOK AT OTHER OPTIONS FIRSTOne reason people considering co-buying is because they think purchasing on their own is too far out of reach. Imagining a 20% down payment, for instance, may cause potential buyers to throw up their hands in despair.But those assumptions may be wrong. “People think you need 20% down, but the truth is you often don’t,” says LendingTree’s Channel. “Most people put down less than half of that, and with a (Federal Housing Administration) or (Veteran’s Administration) loan, you could put down less than 5%. So there is wiggle room, and you might be more equipped to buy on your own than you think.”Nonetheless, the harsh realities of the housing market may dictate more co-buying in future. With high prices and high interest rates, some potential buyers may not have much of a choice – and this relative rarity in the real estate world may soon become more common.“There is a very good chance these numbers will increase,” says Channel. “In a few years, I expect that even more people will be considering co-buying.” More

LONDON (Reuters – Hedge fund EDL Capital is betting on further falls for China’s offshore currency and says the yuan’s slide could be the next “black swan event” to rattle world markets, according to an investor presentation this month seen by Reuters.The U.S. dollar has strengthened roughly 6% against the offshore yuan so far this year and Chinese state banks have been seen selling dollars this week to stem the yuan fall.Back swan events refer to unexpected developments with far-reaching consequences.EDL Capital, which manages about $1 billion, said factors weighing on the yuan include geopolitical tensions driving Western countries to re-home supply chains that will starve China of foreign investment. China’s labour market has also grown less competitive versus other Asian countries such as Vietnam and India, while a post-pandemic recovery has sputtered and foreign currency reserves “might be lower than what they are believed to be,” it said. The hedge fund held a short position in the offshore yuan, the Aug. 2 presentation shows. A way to do this would be via derivatives called options aimed at profiting at certain price levels on dollar strength against yuan weakness, said the presentation, without confirming if EDL is using this strategy. China, the world’s second largest economy, is vital to global growth. An expectation of monetary policy easing in China, juxtaposed with dollar strength, has driven yield differentials between the United States and China to the widest level in 16 years, pressuring the yuan further. The hedge fund, run by star manager Edouard de Langlade, was up about 8% this year, said the presentation. It is one of the better performing hedge funds in 2023 that finds trade ideas in macro economic signals. Switzerland-based EDL has made most of its money this year with long positions in Brazilian and Japanese equities and Brazilian rates. Trades on mining, short positions in U.S. equities and bullish bets on Chinese stocks detracted from fund performance, the presentation showed. EDL declined to comment when contacted by Reuters. (This story has been refiled to add dropped word in paragraph 10) More

Data for July has highlighted the intensifying pressure on the economy on a number of fronts, including a property downturn and deflationary pressure, prompting Beijing to introduce direct stimulus to revitalise growth.The People’s Bank of China (PBOC) will “better leverage the dual functions of aggregate and structural monetary policy tools and firmly support the recovery and development of the real economy,” the bank said in its second-quarter monetary policy implementation report.The PBOC unexpectedly cut key benchmark interest rates for the second time in three months on Tuesday, in a bid to support a sputtering economic recovery. Markets widely expect the bank to loosen monetary policy further.The world’s second-biggest economy is facing “insufficient demand and challenges such as difficult business operations and high risks and hidden dangers in key areas” amid “deglobalisation risks” and a weakening global recovery, the central bank said.In response to a deepening property market crisis, the central bank also said it would adjust and optimize property policies in a timely manner.Debt problems at Country Garden, China’s largest property developer, and falls in home prices and sales have added to worries that the property sector crisis is stifling what little momentum China’s economy has left.The central bank said it would pay close attention to risks in key areas and coordinate financial support to resolve local debt risk.China will also prevent overshooting risks of the yuan exchange rate and fend off systemic financial risks, the central bank said. More

The profitability of UK private non-financial companies remained stable in the first quarter of 2023, according to official data that suggests higher corporate profit margins are not pushing up inflation. Companies made a net rate of return of 9.9 per cent in the three months to March, the Office for National Statistics said on Thursday, compared with 9.8 per cent in the final quarter of 2022 and lower than the prevailing rate before the onset of the pandemic. The figure supports the view of policymakers at the Bank of England that “greedflation” — where businesses drive up inflation by increasing prices beyond the extent that their own price pressures would demand — is not responsible for increasing inflation, which stands at 6.8 per cent.In its August monetary policy report, the central bank said the latest evidence suggested “that firms increasing prices to raise their margins is not currently a significant contributor to inflation”.“The majority of the increase in prices has resulted from increases in labour costs” while “the contribution from corporate profits has only risen slightly over 2023”, the report said. The bank found that the trend was broadly consistent with evidence based on companies’ self-reported margins.In May, Jonathan Haskel, who sits on the central bank’s Monetary Policy Committee, said in a speech that his “reading of official UK inflation data is that the contribution of rising business profits to recent inflation is small”. Other economists offer a similar reading of the data. Ruth Gregory, deputy chief UK economist at the consultancy Capital Economics, said Thursday’s data suggested that companies “had been able to maintain their margins, despite the fact that input costs have risen and economic growth has been weak”.“Crucially, though, this does not support the accusation that companies have expanded margins and thereby fuelled inflation,” she said, adding: “In aggregate, firms appear to have protected their margins, not padded them.”While continuing to fall from a 40-year high of 11.1 per cent in October last year, inflation of 6.8 per cent is still more than three times the BoE’s 2 per cent target. Food inflation also declined last month but remained in double digits at 14.8 per cent. Sharp rises in grocery costs earlier this year led the UK government to consider introducing voluntary price caps, with the competition watchdog warning retailers against food price profiteering. Thursday’s data showed that, excluding companies operating in the North Sea, the net rate of return on capital recovered to 10.2 per cent in the three months to March from 9.6 per cent in the previous quarter on the back of falls in wholesale oil and gas prices. That figure was, however, still below the 2014-19 average of 11.4 per cent. The average net profitability of UK companies operating in the North Sea, which soared after Russia’s invasion of Ukraine triggered an energy price shock, declined for the second consecutive quarter to 5.7 per cent. That was 7 percentage points lower compared with the three months to December 2022, and the lowest reading since the three months to June 2021.The rate of return of both manufacturing and services companies improved in the first quarter compared with the previous three months, but both remained below pre-Covid levels. Manufacturing’s net rate of return of 8.8 per cent in the three months to March compared with a peak of 18.1 per cent registered at the end of 2017. More

The group will conduct a debt restructuring, investors sources told Reuters after being briefed by management, a video seen by Reuters showed, after a trust firm controlled by the group missed payments on dozens of investment products.Zhongzhi’s trouble has raised worries of a contagion risk to the financial sector if other trust firms default on repayment obligations in the $3-trillion shadow banking industry, which traditionally has had high exposure to the property industry, which is in a deepening slump.Here are five facts about Zhongzhi:* Starting off with timber and real estate trades in the 1990s, Zhongzhi quickly expanded into businesses ranging from chipmaking, healthcare, new energy vehicles and finance, according to its website. Its financial businesses include trust, asset management, insurance, futures, and wealth management. * The group is a shadow banking empire, managing over 1 trillion yuan ($136.85 billion) in assets. It holds stakes in five asset management companies, four wealth management firms, and has a 33% stake in Zhongrong International Trust, a major trust company, which sold opaque trust products to individual as well as institutional investors promising as much as 6%-7% return, compared to the benchmark one-year bank deposit rate of 1.5%. * Xie Zhikun, the billionaire founder of Zhongzhi, died in December 2021 after suffering a heart attack in Beijing. Xie’s wife is popular singer Mao Amin, and he is the brother of Xie Zhichun, former executive director of Central Huijin. * Zhongzhi has been selling stakes in some listed companies it controlled over the past few years, and reducing the size of it business, after coming under pressure in the wake of China’s crackdown on shadow banking, and the property market downturn.* Still, Zhongrong, which manages more than 700 billion yuan of assets, has a comparatively high exposure to the real estate sector compared to its peers. Zhongrong Trust’s real estate investment exposure accounted for 10.7% of its total assets under management as of the end of 2022, higher than industry average of 5.8%, according to a report from Citigroup (NYSE:C).($1 = 7.3074 Chinese yuan renminbi) More

Banks’ net interest margins and rate of return on total assets are in a downward trend due to lowering lending rates, the People’s Bank of China said in a special column of the report.”China’s economic operation is facing many difficulties and challenges,” the report said. “It is necessary to give further play to the important role of banks in serving the real economy and smooth the virtuous circle of economy and finance.”Banks should have certain financial capabilities and risk buffers, as the exposure of banks’ credit risks usually lags a certain time behind the economic cycle, it said.The central bank also said it is normal to see banks’ profit conditions fluctuate with the economic cycle, which should be treated rationally. More