KeNo's Housing and Economic Portal: Friday April 8 2016 Housing and Economic stories

Thursday, April 7, 2016

Friday April 8 2016 Housing and Economic stories

IMF Warns of Possible Crises for Emerging Markets Hit by Outflows - (online.wsj.com) An exodus of cash from emerging markets in recent years is closely tied to developing economies’ slower growth rates and could end with financial crises in the countries involved, the International Monetary Fund said Wednesday. The IMF highlighted weak growth as the leading culprit in the outflows, as well as investors’ risk appetite and the comparative interest rates in developed and developing economies. The 2013 “taper tantrum,” when investors faced the prospect of tighter monetary policy in the U.S., also contributed to outflows. Investors flocked to emerging markets for years to take advantage of higher growth rates. But when China, Russia or other emerging markets offer less of a growth premium to the U.S. and Europe, money tends to move the other way.

China Coal Miner Fails to Make Bond Payment Amid Slowing Economy - (www.bloomberg.com) A Chinese coal miner failed to make a bond payment Wednesday, highlighting rising credit risks in the nation as economic growth slows. The Shanghai Clearing House hadn’t received funds from Chinacoal Group Shanxi Huayu Energy Co. to pay holders of its 600 million yuan ($92.5 million) 6.3 percent notes, according to a statement on the clearing house’s website Wednesday. The coal miner, which is based in the northern province of Shanxi, sold the securities last year. Chinese firms are struggling with surging debt burdens amid the country’s worst economic slowdown in a quarter-century. At least 13 companies have defaulted on bonds in the past two years even as the central bank loosened monetary policy. Dongbei Special Steel Group Co., whose chairman was found dead by hanging last month, defaulted on securities a second time in two weeks on Tuesday.

California Faces Blackouts After Historic Sempra Gas Leak - (www.bloomberg.com) The biggest natural gas leak in U.S. history, permanently sealed in February, is still haunting California. Injections of gas into the Sempra Energy storage field where the leak occurred have been restricted since last year, with 15 billion cubic feet in supplies remaining at a time when the site is usually starting to stock up for the cooling season. The restrictions may lead to blackouts this summer for millions of Californians, state agencies said in a report Tuesday. Without tapping the Aliso Canyon site for supplies, plants may run out of gas, leading to short-term blackouts in Southern California for as many as two weeks, according to the report from the California Energy Commission, the California Public Utilities Commission, the California Independent System Operator and the Los Angeles Department of Water and Power. The agencies have proposed that utilities be able to draw from the billions of cubic feet in stock at the field when demand peaks this summer.

For Island of 500,000 Companies, Panama Leaks Unleash Storm - (www.bloomberg.com) It’s a real-world Treasure Island, a tiny Caribbean paradise that, on paper, is home to nearly half a million companies. But suddenly the British Virgin Islands, that outpost of sun, sand and offshore banking, has been swept up in the fury following the enormous leak of documents about the financial dealings of some of the world’s richest people. A vital link in the global money chain and the legal address for countless investment funds, the British Virgin Islands were singled out in the far-reaching investigations by a group of news media outlets into shell companies and tax shelters. The revelations about the islands have sent shock waves across the Atlantic, where some are now urging U.K. Prime Minister David Cameron to end the overseas territory’s status as a sort of financial no-man’s land.

Fretting over Mortgage Backed Securities, Fitch Warns about Home Prices in Texas - (www.wolfstreet.com) Texas is, let’s say, in transition – from a phenomenally booming economy to something other than a booming economy. The oil bust is hitting in some places, and contagion is spreading. In Houston, commercial real estate, particularly the office market, is melting down. Some smaller oil towns have been hit hard. Consumers, hit by “negative ripple effects,” as the Dallas Fed put it so elegantly, are having second thoughts about spending, for the first time since the Financial Crisis. But some cities are still hopping. And in terms of home prices, Dallas is still exuberant, as “David in Texas” wrote in an email: The real estate frenzy in the Park Cities area of Dallas and the surrounding neighborhoods continues unabated and west Plano (where Toyota is moving its North American HQ) is going completely nuts.

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