Monday February 29 2016 Housing and Economic stories

TOP STORIES:

Five-Year Retail Boom in Texas Implodes - (www.wolfstreet.com)  Retail sales in Texas were a boom machine after March 2010, their low point during the Great Recession. It lasted over five years. Sales tax collections, reported by the Texas Comptroller of Public Accounts, jumped 46% from the first half of 2010 to the first half of 2015. Blinding growth for a mature market! Given the size of the Texas economy, it helped prop up overall retail sales in the US. But by mid-2015, the retail sales boom came to a screeching halt. In the second half, sharp year-over-year declines set in. And in December, over the crucial holiday period, retail sales sagged.

Federal Reserve Staffers Say Mutual Funds Vulnerable to Runs - (www.bloomberg.com) Mutual funds are vulnerable to runs that can spill over and cause problems in the broader financial system, according to a blog post published today on Liberty Street Economics by staffers at the Federal Reserve Bank of New York. The authors, Nicola Cetorelli, Fernando Duarte and Thomas Eisenbach, argue that a run can occur when heavy withdrawals from a mutual fund cause the fund company to sell illiquid assets at fire sale prices. In that situation, the post said, investors will have an incentive to get their money out early, triggering a race for the door that can have a ripple effect beyond the original fund. “Redemption runs at the fund level trigger fire sales that depress market prices and spread losses to the broader financial system,” the authors wrote.

Overproduction Swamps Smaller Chinese Cities, Revealing Depth of Crisis - (online.wsj.com) Even in China’s remotest places, relentless overproduction—here it is mushrooms and cement trucks—is clouding the country’s path to prosperity and jolting the global economy. When 48-year-old farmer Yang Qun began trading at Suizhou’s bustling morning mushroom market a half decade ago, the fungus industry was expanding, even attracting a rural lending arm of British financial giant HSBC Holdings PLC. Ms. Yang saved enough to buy a minivan. When wet snow fell last month, she was settling for closeout prices to unload six bags of dried mushrooms that took a half year to cultivate.

Tough road for Venezuela after dire data, lacking measures - (www.reuters.com) Venezuela's central bank on Thursday released long-awaited data showing the depth of the OPEC country's recession, a day after President Nicolas Maduro announced a package of measures seen as insufficient to salvage the unraveling economy. The bank reported that Venezuelan inflation hit 180.9 percent in 2015, one of the highest rates in the world, while the economy contracted 5.7 percent. The data showed the depth of Venezuela's crisis and raised the prospect new measures may hurt Venezuelans without significantly improving finances in a country already facing shortages of basics like milk and medicines.

Citadel Said to Cut Staff as Main Funds Drop 6.5% to Start 2016 - (www.bloomberg.com) Ken Griffin’s $26 billion firm cut about 15 investment professionals from one of its stock-trading units as its main hedge funds lost 6.5 percent in the first six weeks of the year, according to a person familiar with the firm. Citadel trimmed portfolio managers, analysts and junior analysts from its Surveyor arm that was formed in 2009, said the person, who asked not to be identified because the information is private. The group currently has about 200 employees across 25 teams. Surveyor’s previous head, Jon Venetos, left the firm last month after 10 years. He was replaced by Todd Barker, who has been at Citadel for 12 years and was most recently co-head of equities in San Francisco. Surveyor is one of three units that trade equities at Citadel, each feeding into the firm’s main Kensington and Wellington funds. 

OTHER STORIES:

Global Stocks Extend Rally as Oil Gains Lift Emerging Markets - (www.bloomberg.com)
OECD Cuts Global Growth Forecast and Warns of Growing Risks - (www.bloomberg.com)
Few fiscal, monetary policy moves left to fight global growth slowdown, Moody's warns  - (www.cnbc.com)
Brazil's Banks Cut by S&P After Nation's Junk Rating Is Lowered - (www.bloomberg.com)
Bank of Japan’s Kuroda Seeks Global Coordination to Tackle Market Volatility - (online.wsj.com)

China's Banks May Be Getting Creative About Hiding Their Losses - (www.bloomberg.com)
Chaos in Ukraine Is Making Putin Stronger - (www.bloomberg.com)
U.S.-Beijing Spat Escalates Over South China Sea - (online.wsj.com)
Turkey blames Kurdish militants for Ankara bomb, vows response in Syria and Iraq - (www.reuters.com)