KeNo's Housing and Economic Portal: Monday December 7 Housing and Economic stories

Sunday, December 6, 2015

Monday December 7 Housing and Economic stories

Oil crash sparks OPEC revolt against Saudis - (money.cnn.com) Arabia inside the walls of OPEC. A war of words has broken out between OPEC kingpin Saudi Arabia and disgruntled smaller oil producers like Venezuela and Algeria. The smaller countries want the cartel to hit the brakes on production to help lift depressed oil prices -- and their own struggling economies. As the leading oil producer, the Saudis hold enormous sway over the oil cartel. Their long term bet is that by keeping oil prices low, they will squeeze American shale oil producers out of the game. That way, the Saudis can again regain market share lost to the U.S. Just 10 years ago, Saudi Arabia was the world's largest oil producing nation, churning out nearly twice as much crude oil as the U.S. But American output has skyrocketed in recent years thanks to the shale revolution, which has completely reshaped the global energy equation. Today the U.S. produces nearly as much as Saudi Arabia.

Nickel Slumps to '03 Low as Metals Trade Near Multi-Year Nadir - (www.bloomberg.com) Copper and nickel led an industrial-metals rebound on speculation that the slump encouraged some traders to close out bearish bets and as oil prices surged. The 14-day relative-strength indexes for each of the six main contracts on the London Metal Exchange were near or below the level of 30 that indicates to some traders that prices may be poised to rebound. Crude oil helped spark a rally in commodities as tensions in the Mideast rose after Turkey shot down a Russian warplane. The LME’s gauge of metals reached the lowest since April 2009 on Monday and has slumped 28 percent this year as a slowdown in China, the top commodities user, cut demand and added to a glut of metal. With prices of copper, aluminum and zinc close to the lowest in six years, mining companies are seeing profits fall. A Bloomberg gauge of producers’ shares is near its lowest in seven years.

Stung by Oil, Distressed-Debt Traders See Worst Losses Since '08 - (www.bloomberg.com) It’s mid-November, but for investors who trade in the debt of distressed companies, the year’s already done -- and they lost. Hedge funds that specialize in the debt are grappling with their worst declines in seven years. Funds managed by Knighthead Capital Management, Candlewood Investment Group, Mudrick Capital Management and Archview Investment Group all posted losses through October. And year-end bonuses at Wall Street desks that trade distressed debt could be slashed by a quarter, Options Group said. After six years of easy-money central-bank policies kept over-leveraged companies afloat and left scant opportunities for traders who profit off the market’s scrap heaps, a rout in commodities prices in 2014 presented what had seemed like a perfect chance tobuy again. Instead, those prices only declined further this year, causing the debt of everyone from oil drillers to coal miners to fall deeper into distress. As the losses intensified, gun-shy investors pulled back from almost anything that smacked of risk, spreading the losses to industries from retail to technology.

America has lost faith in the job market – (www.businessinsider.com) Americans are losing faith in the jobs market. The Conference Board's consumer-confidence index for November, released Tuesday, unexpectedly fell to 90.4, a 14-month low. Economists had expected the index to rise to 99.5 in November, from an upwardly revised 99.1 print (from 97.6) in October. The Conference Board's Lynn Franco explained in the report: "The decline was mainly due to a less favorable view of the job market. Consumers' appraisal of current business conditions, on the other hand, was mixed. Fewer consumers said conditions had improved, while the proportion saying conditions had deteriorated also declined.

Blame Obamacare for soaring drug costs: AEI - (www.cnbc.com) Americans concerned about not being able to afford life-saving treatments should not blame drug companies for high prices, a former health advisor to George W. Bush said Tuesday. Dr. Scott Gottlieb of the conservative American Enterprise Institute told CNBC's "Squawk Box" there's not really a drug cost problem in the U.S., except for a small subset of specialty drugs that cost a lot but are providing a lot of benefit. "What we have is an under-insurance problem," he said. "People are now under-insured, especially for catastrophic drugs if they get a disease like cancer or something like that because of these new [narrow] formulary designs … popularized by the Affordable Care Act."

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