Thursday December 24 Housing and Economic stories

TOP STORIES:

Is $50 Billion the Price of Repo Safety? - (online.wsj.com) A firm at the center of Wall Street’s plumbing is seeking $50 billion in commitments from banks and trading firms to shore up a crucial but increasingly illiquid short-term lending market, according to people familiar with the discussions. Depository Trust & Clearing Corp. wants its members to support the multibillion-dollar credit line to bolster the finances of a unit called Fixed Income Clearing Corp., which facilitates trades in the $2.6 trillion repo market, the people said. Repos, or repurchase agreements, are short-term loans secured by U.S. Treasurys and other bonds. They play a critical role in the financial system by keeping cash and securities circulating among hedge funds, investment banks and other financial firms.

Chevron slashes budget by 24 pct to weather low oil prices - (www.cnbc.com) Chevron plans to slash its budget by 24 percent next year, part of a revamped strategy to rein in spending and position the energy giant to be nimble as oil prices show little sign of rising in the near future. The dramatic cutback in spending is likely to be echoed by other oil majors who will soon release spending plans, with rival ConocoPhillipsset to release its 2016 budget on Thursday. Shares of Chevron fell 0.5 percent to $87.20 in after-hours trading. As of Wednesday's close, the stock has dropped 21 percent so far this year. Chevron had previously signaled it could slash its budget for next year.

Energy Company Assets on the Block as Oil Plunge Bites - (online.wsj.com) During past oil market slumps, big energy companies went on merger-and-acquisition sprees to consolidate. This time around, they are turning to decidedly less sexy deals: selling pipelines, storage tanks and fuel terminals to raise money. They are finding a growing band of investors willing to snap them up at premium prices, betting that midstream energy assets will be dependable cash cows. There have been more than $318 billion worth of deals globally for this type of infrastructure announced over the past two years, nearly $100 billion more than the three previous years combined, according to U.K. energy-data provider 1Derrick. Energy companies consider midstream assets like pipelines more expendable than the oil-and-gas fields and refineries that are the backbone of their businesses.

Corporate Bond Market Has Potential Emerging Risks, Finra Says - (www.bloomberg.com)  The corporate bond market is characterized by emerging risks, including a surge in computer-driven trading and volatility of exchange traded funds that invest in debt, according to a report released Thursday by the Financial Industry Regulatory Authority. “While the data indicate a robust market, they also highlight several areas of potential emerging risk that merit more attention,” Jonathan Sokobin, Finra’s chief economist, said in a statement. “These issues include increased electronic trading in corporate bonds, volatility of bond ETFs and sector-specific problems in high yield originating in the energy sector.” Finra, a Wall Street regulator funded by the financial industry, based its findings on analysis of trades from 2003 through September of this year. Positive signs for corporate bonds include the fact that issuance is at a record level and that trading costs have fallen, the regulator said.

STARTUP INVESTOR: 'We're going to see some high-profile companies go bust' - (www.businessinsider.com)  Are we in a bubble? It's the question on everyone's lips in the tech world. Startups are closing ever-larger rounds of funding at ever-higher valuations, often with no real revenue to speak of. Some have speculated that the current state of affairs is unsustainable and that a crunch point or correction is imminent. Many tech companies are playing a "high-stakes game," Fred Destin, a European-based investor at the top-tier venture-capital firm Accel Partners, tells Business Insider. "A number of companies are taking a chance on the fact the capital markets will remain open." Those companies can take VC money and remain wildly unprofitable, promising to solve the money question later down the line.

OTHER STORIES:

Asian Stocks Extend Drop; Aussie Strengthens as Oil, Copper Gain - (www.bloomberg.com)
China Stocks Fall as Industrials Bear Brunt of Economic Concerns - (www.bloomberg.com)
Zuma Rattles South African Markets by Firing Nene as Risks Rise - (www.bloomberg.com)
As Fed tightening looms, big share repurchasers could be pressured - (www.reuters.com)

Middle class Americans 'no longer majority' - (www.cnbc.com)
The Veneer of Consensus at the Fed - (online.wsj.com)
Mersch says 'very large majority' of ECB policymakers do not want more QE - (www.reuters.com)
China Billionaire Guo Guangchang Unreachable, Caixin Reports - (www.bloomberg.com)