Friday May 6 2016 Housing and Economic stories

TOP STORIES:

Google Growing on Fumes: Something Is Rotten in the State of Online Advertising - (www.wolfstreet.com)  A couple of months ago, I was going through Google’s newly released 10-K filing. The night before, we had had an argument with Philippe, the other co-founder of our start-up, about how ad dollars were fueling a new kind of economy. We realized we had no clue of who was making money, by what means, or how much. I just wanted to understand. What mesmerized me were the sheer amounts of cash Google (ehm, Alphabet) was raking in: $75 billion dollars in revenue for 2015. For 2016, they’re set to generate as much as the GDPs of Lithuania, Latvia and Estonia put together. That’s six million people. Another thing that was weird: how vague Google was about how they actually made all this money.

China Unleashes SPR (Strategic Porcine Reserve) As Pork Price Surge Threatens Social Unrest - (www.zerohedge.com) Porkflation is a very delicate, and very concerning issue for China.The massive amounts of layoffs that China has experienced as a result of a slowing economy has already lead to some social unrest, and pork prices exploding higher for those unemployed will only add fuel to that simmering fire. As such, Beijing has announced that it will release 3.05m kilograms of frozen pork reserve into the capital's market between May 5 and July 4, in an attempt to lower prices. The impact on prices may be short lived however, as China may not have the sows to be able to continue the subsidy.

Italian banks extend share price rout - (www.ft.com) Italian bank shares suffered another punishing day of trading on Tuesday, as a poorly received capital raising prompted investor doubt over official efforts to bolster the sector. The FTSE Italia All-Share banks index fell 3.7 per cent, and has lost 6.6 per cent so far this week. UniCredit, Italy’s largest bank by assets, fell 4.7 per cent. Falling share prices come after a period in which Italian bank shares recovered some of their previous losses. Atlante, a private fund designed to support the country’s banks, had provided some reassurance that the ailing sector would be supported. “Markets hate uncertainty and what we have right now is uncertainty,” said Anis Lahlou-Abid, European equities portfolio manager at JPMorgan Asset Management. “As long as there is a lack of clarity on how the situation is going to be resolved, you’re unlikely to see any new re-rating [valuation]”.

The $571 Billion Debt Wall That Points to More Defaults in China - (www.bloomberg.com) Chinese debt investors are turning bearish at just the wrong time for the nation’s corporate borrowers, which face a record 3.7 trillion yuan ($571 billion) of local bond maturities through year-end. With this year’s biggest note payments concentrated in some of the country’s most-cash strapped industries, China needs buoyant markets to help its companies refinance. Instead, yields in April rose at the fastest pace in more than a year and issuance tumbled 43 percent as borrowers canceled 143 billion yuan of planned debt sales. Deteriorating investor sentiment has heightened the risk of defaults in a market that’s already seen at least seven companies renege on obligations this year, matching the total for all of 2015. While government-run banks may step in to help weaker borrowers, missed debt payments by three state-owned firms in the past three months suggest policy makers are becoming more tolerant of corporate failures as the economy slows.

Petrobras Boomtown Turns Desolate as Refinery's Billions Vanish - (www.bloomberg.com) Located just 30 miles east of Rio de Janeiro’s bustling Copacabana beach, Itaborai looks like many oil boomtowns after the bust -- except the deserted stores and empty glass towers that loom over this town of 220,000 speak of some bigger cataclysm than the collapse of crude prices. “They said this would be the new oil city,” says Jefferson Costa, one of scores of migrants from Brazil’s impoverished north lured here by a multibillion-dollar petrochemical project that was supposed to create more than 100,000 jobs. Work on the complex, known as Comperj, has stopped, and unless new investors materialize, the single refinery now standing may never produce a single drop of fuel. “It’s empty inside,” says Costa, a plumber who lost his job six months ago when construction came to a halt. “People say it will become a large warehouse.”

OTHER STORIES:

China's Improbable Commodities Frenzy Leaves Stocks in the Dust - (www.bloomberg.com)
Venezuela Bonds Tumble After Oil Output Falls More Than Expected - (www.bloomberg.com)
China Presses Economists to Brighten Their Outlooks - (online.wsj.com)

Million-dollar home market slumps - (www.cnbc.com)
Commodities become China’s hottest new casino - (www.ft.com)

China’s Steel Makers Undercut Rivals as Economy Slows - (www.nytimes.com)
Workers Are Getting a Bit More of the Economic Pie (and Shareholders Less) - (www.nytimes.com)