KeNo's Housing and Economic Portal: Tuesday May 24 2016 Housing and Economic stories

Monday, May 23, 2016

Tuesday May 24 2016 Housing and Economic stories

Republicans, Democrats Agree On A Bill To Bailout Puerto Rico - (www.zerohedge.com) It turns out that Puerto Rico's plan to default on its debt and beg congress for help is working out as planned. After a slight delay, House Republicans have reached an agreement with the Obama administration to provide a path to restructure Puerto Rico's $70 billion debt load. The bill would offer the island a legal out similar to bankruptcy and wouldn't commit any federal money according to the WSJ. All of the political talking heads are supportive of the bill, with House Speaker Paul Ryan saying that "the stability of the territory is in danger. Today, Republicans and Democrats came together to fulfill Congress's constitutional and fiscal responsibility to address the crisis", and Treasury Secretary Jacob Lew called the proposal "a fair, but tough bipartisan compromise."

Silicon Valley Housing Market Hit as Chinese Money “Dried up” - (www.wolfstreet.com) Money from Chinese investors “has dried up,” a residential real-estate broker in San Francisco told me a few days ago, as he was fretting about the local housing market. It’s a result of the crackdown by the Chinese government on capital flight, he said. Chinese investors have been buying about 5% to 7% of residential properties in San Francisco, possibly more in parts of Silicon Valley. And other brokers are now publicly chiming in about money from China drying up. “We’ve recently noticed a slowdown,” Jack Woodson at Alain Pinel Realtors in Menlo Park in Silicon Valley, told Bloomberg. “Buyers are taking more time to decide about making offers.” He fingered Chinese investors who’ve suddenly curtailed their purchases after they had “really been driving the market.” Data coming out of China appear to support the thesis of a sudden money vacuum in some of the toniest West Cost Housing markets.

Petrobras Pays Record Yield in $6.75 Billion Bond Sale - (www.bloomberg.com) The company’s stocks and bonds have rallied this year on speculation that a new government in Brazil will be better able to restore growth in Latin America’s largest economy. They had tumbled since 2014 as an investigation began into kickback schemes in which Petrobras executives demanded bribes for handing out billions of dollars of work contracts. The probe has led to more than 150 arrests in Brazil and thrown the country’s politics into disarray, fueling efforts to impeach President Dilma Rousseff, who was Petrobras’s chairman when the alleged graft took place…. Petrobras has $126 billion of debt outstanding, making it the most heavily indebted company in emerging markets. Yields on its $5.25 billion of existing notes due in 2021 fell 0.4 percentage point to 8.3 percent Tuesday as of 12:41 p.m. in New York. Bonds due in 2025 from Argentina’s state oil company YPF SA yield 8.12 percent.

Lauded Wunderkind Medical Testing Startup Theranos Turns Out To Be One Big Fraud - (www.zerohedge.com) Just when you thought that the biggest ever "multi-billion" private company that also happens to be an utter fraud, would quietly disappear before it risked attracting even more unwarranted attention from regulators, enforcers, and criminal investigators which could potentially lead to prison time for "billionaire" Elizabeth Holmes, here she comes again reminding everyone of her fallen from grace presence, in this case with what should be the terminal news for this company, namely that as the WSJ reports (and as the company confirms) Theranos has told federal health regulators that the company voided and revised two years of results from its Edison blood-testing devices and has issued tens of thousands of corrected reports to doctors and patients.

US heavy equipment maker faces 'steeply depressed' demand - (www.cnbc.com) Even with crop prices trending higher, the worst of the agricultural downturn may be far from over for Deere. Continued weakness in the domestic market along with softness inSouth America are affecting the company's farm machinery business. The slump is being felt hard, particularly on high-horsepower tractors and combines. "Global demand for farm equipment remains steeply depressed," Longbow Research analyst Eli Lustgarten said in a note Friday. "Our 34 contacts across four different countries reported sequentially lower demand and steep year-over-year double-digit declines across all markets. North American and international markets seem to be worsening as crop prices stay low and farmers struggle to break even."

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