Monday, October 29, 2012

Tuesday October 30 Housing and Economic stories


TOP STORIES:

Spain Waits, and Europe Frets - (www.nytimes.com) As long as Spain’s borrowing costs remain below 6 percent, as they have since the European Central Bank said it would buy the country’s bonds if asked, the Rajoy government might seem to have no reason to rush. But the downgrade of Spanish debt to near junk status last week by Standard & Poor’s underscored the fragility of the country’s finances. And the seeming political paralysis in Madrid may be reinforcing a wider economic stasis. “The economy has stopped,” said Ángel Berges, the chief executive of AFI, an economic consulting firm based in Madrid. The indicators are grim: Cement production has reached its lowest level since the 1960s. Car sales are down 37 percent from last year. And on weekdays the public squares of Madrid are filled with the unemployed — young and old — whiling away the hours. Even the wealthy are feeling the strain. In the boat slips of Barcelona, “For Sale” signs hang on nearly every moored yacht.

Electric Vehicle Battery Maker Bailed Out By Obama Files For Bankruptcy - (www.businessinsider.com) Electric vehicle battery maker A123 and its US subsidiaries filed for Chapter 11 bankruptcy protection this morning, it announced. It will sell its automotive business assets to Johnson Controls, another battery producer. After Mitt Romney's attack on Tesla and other clean energy investments as "losers" in the last debate, expect this news to come up in round two, tonight. A123 benefitted from a $249 million grant from the U.S. government in 2009. In 2010, President Obama hailed the company as a success.

Spain prepares to make rescue request - (www.ft.com) The Spanish government is prepared to make a rescue request that would allow the European Central Bank to begin buying its debt, but the issue is being delayed by the needs of other countries in the single currency. Madrid has now found a formula that it feels comfortable with to make a rescue request – a significant shift in position compared to before the summer. It is waiting for external factors – such as the way it would influence other countries, for example Italy – to be resolved. A senior official within the Spanish ministry of economy said Spain did not require any money from the European Stability Mechanism, the eurozone’s state rescue fund, but would be comfortable making a request for a credit line only in order to satisfy the conditions of the ECB to begin buying bonds.

Sugar Glut Extending to Longest in More Than Decade: Commodities - (www.bloomberg.com) The global sugar glut is extending into a third year, the longest stretch in more than a decade, as Brazil and Australia expand output and imports contract to the smallest since 2008. Production will exceed demand by 5.9 million metric tons in the year that began Oct. 1, more than the U.S. consumes in six months, the International Sugar Organization estimates. Global supply including inventories will be the highest ever, the London-based group says. Raw-sugar futures traded in New York may drop 10 percent to 18 cents a pound by the end of the year, according to the median of 15 estimates from traders and analysts compiled by Bloomberg. Futures fell 45 percent since reaching a three-decade high of 36.08 cents in February 2011 as farmers from Russia toThailand planted more crops. 

In Reversal, Cash Leaks Out of China - (online.wsj.com) China, once a catch basin for the world's money, is now watching cash stream out. Wealthy Chinese citizens are buying beachfront condos in Cyprus, paying big U.S. tuition bills for their children and stocking up on luxury goods in Singapore, frequently moving cash secretly through a flourishing network of money-transfer agents. Chinese companies, for their part, are making big-ticket foreign acquisitions, buying up natural resources and letting foreign profits accumulate overseas.





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