KeNo's Housing and Economic Portal: Wednesday May 18 2016 Housing and Economic stories

Tuesday, May 17, 2016

Wednesday May 18 2016 Housing and Economic stories

More than 35000 Teamsters in Kentucky and Indiana asking for bailout after union fund fails – (www.wdrb.com) More than 35,000 Teamsters in Kentucky and Indiana are at risk of losing their pensions and leaders are asking lawmakers for a bailout. They called it a rescue plan, but to Angelyne Fleming, that's not quite how it turned out. "Disgusting," Fleming said. "That was just a disgusting plan." She's one of the 400,000 people facing a cut from the Central States Pension Fund. The retirement she paid into for 25 years as a subcontractor to Ford now wants to send her $1,400 less each month. "It's inevitable," said Kenneth Feinberg, Treasury Department Special Master, on CNN Money. "The plan cannot survive." The change would have started July 1. However, last week, Feinberg rejected Central States' so-called "rescue." "Is there a better way to maintain the viability of the plan without cutting those benefits or being less draconian in cutting the benefits, [it's] very important," Feinberg said on CNN Money.

Silicon Valley Commercial Property Boom Ends, Totally Exposed to Big-5: Apple, Google, Facebook, Amazon, LinkedIn - (www.wolfstreet.com) Apple shares have plunged 32% from June last year, and $282 billion in shareholder wealth has evaporated, on swooning sales and crummy data from suppliers. Today shares fell briefly below $90 for the first time since June 2014. But still, Apple’s market capitalization is about $507 billion. And Alphabet’s is $498 billion. Along with Facebook, Amazon, and LinkedIn, they constitute the Big Five in Silicon Valley, with a giant footprint on commercial real estate that continues to grow. So just how exposed is Silicon Valley’s office market to a slowdown among the Big Five?

SunEdison Yieldco Hit With Default Notice Over Late Financials - (www.bloomberg.com) A unit of TerraForm Global Inc. has 90 days to issue its delinquent annual report or it could face demands to pay off hundreds of millions in debt six years early, partly because bankrupt parent SunEdison Inc. hasn’t filed its own financial statement. Holders of bonds issued by TerraForm Global Operating LLC sent a notice of default on the yieldco’s 9.75 percent senior notes due in 2022, according to a statement Wednesday from their law firm, Willkie Farr & Gallagher. The group represents more than 25 percent of aggregate principal of the notes, according to the firm, which said failure to remedy the problem in 90 days would constitute an “event of default.” If that happens, bondholders could demand payment in full, said Julia Winters, a bankruptcy analyst at Bloomberg Intelligence. There’s $760.4 million outstanding on the issue, according to data compiled by Bloomberg.

Big Oil Gobbles Up Record Debt as Borrowing Costs Decline – (www.bloomberg.com) The world’s biggest oil companies are borrowing record amounts of money to cope with a slump in crude prices. Luckily, there’s rarely been a better time to go on a debt binge. Exxon Mobil Corp., Royal Dutch Shell Plc, Chevron Corp., Total SA, BP Plc and Eni SpA have together sold the equivalent of $37 billion of bonds this year, about double the amount issued in the period before oil prices plunged, according to data compiled by Bloomberg. While this is stretching their balance sheets and even resulting in credit-rating downgrades, the lowest debt costs in a year are softening the blow. “They’re making hay while the sun shines,” benefiting from improved investor sentiment as oil prices have recovered, said Alex Griffiths, a London-based managing director at Fitch Ratings Inc. “Treasurers are making use of good market conditions to maintain liquidity buffers.”

California may cut spending plan amid lower than expected tax receipts – (www.reuters.com) California Governor Jerry Brown on Friday is expected to amend his proposed $170.7 billion spending plan for the next fiscal year in the wake of unexpectedly low tax revenues. In January, Brown proposed a new state budget that increased public spending on education, healthcare and infrastructure in an indication of the state's continued rebound from years of economic doldrums. But earlier this week, state officials said that tax revenues for the first four months of the year were $869 million below projections, due in large part to unexpectedly low income tax revenues in April, which were more than $1 billion below expectations.

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