KeNo's Housing and Economic Portal: Tuesday October 27 Housing and Economic stories

TOP STORIES:

Oil Sands Boom Dries Up in Alberta, Taking Thousands of Jobs With it - (www.nytimes.com) At a camp for oil workers here, a collection of 16 three-story buildings that once housed 2,000 workers sits empty. A parking lot at a neighboring camp is now dotted with abandoned cars. Withoil prices falling precipitously, capital-intensive projects rooted in the heavy crude mined from Alberta’s oil sands are losing money, contributing to the loss of about 35,000 energy industry jobs across the province. Yet Alberta Highway 63, the major artery connecting Northern Alberta’s oil sands with the rest of the country, still buzzes with traffic. Tractor-trailers hauling loads that resemble rolling petrochemical plants parade past fleets of buses used to shuttle workers. Most vehicles carry “buggy whips” — bright orange pennants attached to tall spring-loaded wands — to help prevent them from being run over by the 1.6-million-pound dump trucks used in the oil sands mines. Despite a severe economic downturn in a region whose growth once seemed limitless, many energy companies have too much invested in the oil sands to slow down or turn off the taps. In addition to the continued operation of existing plants, construction persists on projects that began before the price fell, largely because billions of dollars have already been spent on them. Oil sands projects are based on 40-year investment time frames, so their owners are being forced to wait out slumps.

The world economic order is collapsing and this time there seems no way out - (www.theguardian.com) Europe has seen nothing like this for 70 years – the visible expression of a world where order is collapsing. The millions of refugees fleeing from ceaseless Middle Eastern war and barbarism are voting with their feet, despairing of their futures. The catalyst for their despair – the shredding of state structures and grip of Islamic fundamentalism on young Muslim minds – shows no sign of disappearing. Yet there is a parallel collapse in the economic order that is less conspicuous: the hundreds of billions of dollars fleeing emerging economies, from Brazil to China, don’t come with images of women and children on capsizing boats. Nor do banks that have lent trillions that will never be repaid post gruesome videos. However, this collapse threatens our liberal universe as much as certain responses to the refugees. Capital flight and bank fragility are profound dysfunctions in the way the global economy is now organised that will surface as real-world economic dislocation.

Fed officials seem ready to deploy negative rates in next crisis - (www.marketwatch.com) Federal Reserve officials now seem open to deploying negative interest rates to combat the next serious recession even though they rejected that option during the darkest days of the financial crisis in 2009 and 2010. “Some of the experiences [in Europe] suggest maybe can we use negative interest rates and the costs aren’t as great as you anticipate,” said William Dudley, the president of the New York Fed, in an interview on CNBC on Friday. The Fed under former chairman Ben Bernanke considered using negative rates during the financial crisis, but rejected the idea. “We decided — even during the period where the economy was doing the poorest and we were pretty far from our objectives — not to move to negative interest rates because of some concern that the costs might outweigh the benefits,” said Dudley.

Investment firm Fortress to shutter its macro hedge fund - (www.reuters.com) Oct 12 Fortress Investment Group is planning to close its global macro hedge fund after suffering heavy losses and Michael Novogratz, the fund's portfolio manager, is expected to leave the hedge fund and private equity company, two people familiar with the matter said on Monday. The news comes just three months after Fortress reshuffled the senior ranks at its macro fund, making Novogratz, 50, the sole chief investment officer. The Fortress fund is the latest in a series of macro hedge funds - which bet on interest rates, currencies, commodities, fixed income and stocks - to shut down lately. Bain Capital and Armored Wolf also announced last week that they would be returning outside capital. Fortress' stock price fell 5.3 percent to $5.15 in after-hours trading on the news.

If You're Young, The Job Outlook Is Grim No Matter Where You Live - (www.bloomberg.com) The World Bank has an unsettling message for young people around the globe: Whether you're male or female, live in Tunisia or the U.S., you will struggle to find a job. Across regions and continents, people 15 to 29 years old are at least twice as likely as adults to be unemployed. The world will have to create 600 million jobs over the next 10 years, or 5 million a month, just to prevent the situation from getting worse, the Washington-based lender said in a report it released Tuesday with coalition partners such as the International Labor Organization. The youngest workers have been hit hardest by the financial crisis and the global recession of the last decade because they often held the temporary jobs, which offer less protection. The youth unemployment rate is projected to be 13.1 percent in 2015, compared with 4.5 percent for adults, according to the ILO.

OTHER STORIES:

Buried in the Fed minutes is another downgrade to the U.S. economy - (www.marketwatch.com)