Monday May 23 2016 Housing and Economic stories

TOP STORIES:

Mall Owners Begin to Feel the Pain of Brick & Mortar Retailers - (www.wolfstreet.com) Retail landlords are on edge. Their tenants in malls across America are reporting awful revenues and earnings, and they’re shuttering stores, and some are going bankrupt. And they’re all getting their clocks cleaned by ecommerce. Ecommerce sales in the first quarter jumped 15% from a year ago to $86.3 billion, not seasonally adjusted, or $92.8 billion seasonally adjusted, the Census Bureau reported today. They accounted for 7.7% of total retail sales. Over the last four quarters, ecommerce also jumped 15%, to 354.3 billion. Meanwhile, much of brick-and-mortar retail is stuck in a quagmire. Total retail sales inched up 3.3% year-over-year. A third of that “growth” was inflation as measured by CPI. Another third was the impact of ecommerce.

Mexico’s ICA Says Debt Threatens Its Future as a ‘Going Concern’ - (www.bloomberg.com) Empresas ICA SAB, the Mexican construction company that defaulted on $1.35 billion in bonds last year, said its debt woes may prevent it from continuing as a “going concern.” The builder said it may be forced to seek court protection from creditors if restructuring talks are unsuccessful. Creditors could also pursue involuntary reorganization proceedings, ICA said in a U.S. regulatory filing Tuesday. “Our insufficient liquidity could severely impact our ability to continue as a going concern,” it said, using language that didn’t appear in a similar document last year. ICA’s future “could also be affected by our overall inability to pay our debt and other payment obligations, such as taxes and secured credit arrangements,” according to the filing.

Why oil and gas companies are barely scraping by - (finance.yahoo.com) The U.S. energy sector (XLE) is facing $370 billion of debt, a number that has more than doubled in the past decade. But even as oil rebounds off 13-year lows, many energy companies are struggling to stay afloat. To simply make the interest payments on the debt, energy companies shelled out $16.7 billion last year—about half of their total operating profit, according to data compiled by FactSet and Yahoo Finance. The figures from the past quarter are increasingly grim: over 86% of energy sector operating profits were used to cover the interest payments on debt. “Servicing debt is a huge component right now, which is why they need a higher oil price,” said Dan Dicker, President of MercBloc. “But even if they were able to service…the question becomes how will they be able to raise capital when these notes come due?”

LendingClub Shares Fall After Investors Suspend Debt Purchases - (www.bloomberg.com) LendingClub Corp. shares resumed their slide in New York trading Tuesday amid a scandal that cost the chief executive officer his job, prompted investors to suspend debt purchases and spurred a U.S. Justice Department probe. The stock tumbled 11 percent to $3.52 at 1:23 p.m. following a regulatory filing from the company late Monday that said strategies to restore investor confidence and obtain new capital for loans might include equity or debt sales, fee changes or other moves that could be “costly or dilutive” to shareholders. The shares, which traded as high as $11.25 in January, plunged 51 percent last week after the surprise departure of Chairman and CEO Renaud Laplanche and the disclosure of faulty internal controls.

Trump and Sanders Shift Mood in Congress Against Trade Deals - (www.bloomberg.com) The first casualty may be the 12-nation Trans-Pacific Partnership, which was already facing a skeptical Congress. A European trade pact in the works may also be in trouble... "The gravity has shifted," said Representative Marcy Kaptur, an Ohio Democrat. She said it could give new traction to proposals like one she's put forth that would reopen trade deals with nations that have a trade deficit of $10 billion with the U.S. for three years in a row. The success of Trump and Sanders in Rust Belt states and elsewhere will make it even harder, if not impossible, for Congress to back TPP, even in a lame-duck session after the election. Lawmakers say it could also hamper a looming agreement between the U.S. and the European Union if it looks like the next president would change course.

OTHER STORIES:

Petrobras Pays Record Yield in $6.75 Billion Bond Sale - (www.bloomberg.com)

U.S. Stocks Extend Losses on Fed Rate Bets as Dollar Firms - (www.bloomberg.com)
Consumer Prices Rise by Most Since 2013 as U.S. Inflation Stirs - (www.bloomberg.com)

Silicon Valley Mansions Linger on Market in Real Estate Slowdown - (www.bloomberg.com)

Placid VIX Tells Little of Volatility Story as Futures Take Off - (www.bloomberg.com)
Chinese investors have spent $300 billion on US property, study finds - (www.reuters.com)