KeNo's Housing and Economic Portal: Friday June 5 Housing and Economic stories

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JIM CHANOS: There's a 'disaster waiting to happen' in the oil and gas industry - (www.businessinsider.com) Chanos said he’s “leery of the very leveraged guys in any company that’s running negative cash flow after capital spending. So they’re not covering their dividends or their buybacks.” As for specifics, he said, “So names like Chevron, names like British Gas-slash-Royal Dutch, and then of course some of the big national companies, the Petrobrases of the world.” Such comments from Chanos are nothing new. Earlier this month, at the May 5-8 Skybridge Alternatives Conference in Las Vegas, he said Kynikos is betting against shares of Chevron as well as both Shell and British Gas, now known as BG Group, which Shell has decided to buy for $70 billion, making it probably the world’s biggest LNG producer. Chanos said that making such a large bet on LNG could be a liability because in addition to the expense of producing, storing and shipping the fuel, there’s been languid demand for it during the past several years. BG’s CEO, Helge Lund, has since responded, saying demand for the fuel is growing and that LNG will gradually take over an increasingly larger share of global energy.

Another Chinese Company Says It Will Miss Full Bond Payment - (www.bloomberg.com) A bottle maker in China said it won’t be able to fully repay a bond due May 28, raising concern it will become the third company to default in the onshore note market this year as the economy slows. Zhuhai Zhongfu Enterprise Co., which supplies bottles for Coca-Cola Co. and PepsiCo Inc. in China, can only repay 148 million yuan ($23.9 million) of the 590 million yuan principal, according to a statement to the Shenzhen Stock Exchange Monday. It plans to pay all the 31.152 million yuan of interest. The manufacturer, which isn’t state-owned, sold the 5.28 percent securities in 2012. China’s economy, which slowed to its weakest pace since 1990 last year, has shown little evidence of an acceleration even after the central bank cut interest rates three times since November. Cloud Live Technology Group Co., another private-sector company, reneged on obligations in April and Baoding Tianwei Group Co., a power-equipment maker, became the nation’s first state-owned enterprise to default on domestic debt.

California Dreaming: Record $500 Million Tag on L.A. Home - (www.bloomberg.com) One of the biggest homes in U.S. history is rising on a Los Angeles hilltop, and the developer hopes to sell it for a record $500 million. Nile Niami, a film producer and speculative residential developer, is pouring concrete in L.A.’s Bel Air neighborhood for a compound with a 74,000-square-foot (6,900-square-meter) main residence and three smaller homes, according to city records. The project, which will take at least 20 more months to complete, will exceed 100,000 square feet, including a 5,000-square-foot master bedroom, a 30-car garage and a “Monaco-style casino,” Niami said. “The house will have almost every amenity available in the world,” he wrote in an e-mail. “The asking price will be $500 million.”

Texas Senate Passes Bill to Establish Bullion Depository, Facilitate Transactions in Gold and Silver - (www.tenthamendmentcenter.com) A bill taking a step towards gold and silver as commonly-used legal tender in Texas passed in the state Senate today by an overwhelming 29-2 vote. Introduced by State Rep. Giovanni Capriglione (R- Southlake) and four co-sponsors on Feb. 12, House Bill 483 (HB483) would create a state bullion depository. It reads, in part: (a) The Texas Bullion Depository is established as an agency of this state in the office of the comptroller. (b) The depository is established to serve as the custodian, guardian, and administrator of certain bullion and specie that may be transferred to or otherwise acquired by this state or an agency, a political subdivision, or another instrumentality of this state. What the bill essentially does is create a means for transactions to occur in precious metals. It allows people to open an account and deposit their precious metals in the state depository. They could then use the electronic system to make payments to any other business or person who also holds an account. This opening of the market is considered by many insiders to be the most important first step towards bringing sound money to mainstream acceptance.

Detroit Lawyer Busted For Running Loan Mod Scam - (www.mfi-miami.com) A suburban Detroit attorney is facing up to 20 years in prison after being charged with 30 felonies, including racketeering, in an alleged home mortgage scam that raked in hundreds of thousands of dollars and victimized three banks and 143 separate homeowners. Michigan Attorney General Bill Schuette and his Homeowner Protection Unit filed charges last week against Steven Barry Ruza, and his company, Home Legal Group PLLC, in West Bloomfield Township’s 48th District Court before Magistrate Nelson Klein. According to the Michigan AG’s complaint, Ruza and Home Legal Group promised victims mortgage modifications and that he could save their homes from foreclosure. Ruza and Home Legal Group allegedly did nothing, or very little, to obtain mortgage modifications for the victims and the majority of his clients lost their homes to foreclosure. Andrea Bitely, told Brian O’connor at the Detroit News, “We’ve been investigating Ruza for more than a year. Several victims contacted our office and lodged complaints about how they had lost their home even though they allegedly paid Ruza to help them save it.”

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