KeNo's Housing and Economic Portal: Tuesday August 16 2016 Housing and Economic stories

Monday, August 15, 2016

Tuesday August 16 2016 Housing and Economic stories

Soaring Debt Has U.S. Companies as Vulnerable to Default as 2008 - (www.bloomberg.com) U.S. companies have taken on so much debt that they’re at least as vulnerable to defaults and downgrades as they were leading up to the 2008 financial crisis, according to a report by S&P Global Ratings Tuesday. Corporate leverage in the U.S., excluding financial firms, is at the highest level in 10 years, driven by a combination of low interest rates and slowing profits, S&P analysts Jacob Crooks and David Tesher wrote. This has resulted in record leverage ratios across a universe of 2,200 companies, they wrote. Junk-rated firms are particularly at risk because the credit cycle may have peaked and future tightening in interest rates could shut the spigot on new borrowings right when the companies would want to refinance their debt.

Marc Faber: S&P is set to crash 50%, giving back 5 years of gains - (www.cnbc.com) The notoriously bearish Marc Faber is doubling down on his dire market view. The editor and publisher of the Gloom, Boom & Doom Report said Monday on CNBC's "Trading Nation" that stocks are likely to endure a gut-wrenching drop that would rival the greatest crashes in stock market history. "I think we can easily give back five years of capital gains, which would take the market down to around 1,100," Faber said, referring to a level 50 percent below Monday's closing on the S&P 500. In fact, stocks would need to fall by at least that much in order for some of Faber's calls to be proven correct. In October 2009, when the S&P was trading near 1,100, Faber said on Indian CNBC-TV18 that U.S. and Indian stocks were "very overbought" and "the gravy's out" on the rally.

LendingClub turmoil takes toll as company posts widening losses - (www.ft.com) LendingClub Corp. on Monday reported its largest quarterly loss in a year as it struggles to bring banks back to its online lending platform following the departure of its chief executive and a scandal involving altered loan documents. LendingClub, which matches borrowers and lenders via an online marketplace, reported a second-quarter loss of $81.4 million, or 21 cents per share, compared to a loss of $4.1 million, or 1 cent per share, a year ago. The company also continued its executive shakeup, with the resignation of Chief Financial Officer Carrie Dolan. Her departure is the first high-profile exit since the departure of Renaud Laplanche, the company's founder, as chief executive on May 9.

Theranos' Elizabeth Holmes Resigns As Advisor To President Obama ... - (www.zerohedge.com) 2016 has not been too kind to Elizabeth Holmes, the Steve-Jobs wannabe in charge of fraudulent Theranos. She has thus far been banned for 2 years from operating labs, removed from hosting fundraisers for Hillary and lost her entire net worth. One area of Holmes’ life that has not been as prevalent in the MSM is how entrenched she was with the elite Democrats, including the Clinton Foundation and President Barack Obama. In fact, the President had nominated her to join a 9-person board to the Administration’s Presidential Ambassadors for Global Entrepreneurship in 2015. Other members included AOL CEO Steve Case, Airbnb founder Brian Chesky, Tory Burch and Stripe’s Patrick Collison. When she first joined, Holmes said “Today I was honored and privileged to join President Barack Obama and Secretary of Commerce, Penny Pritzker, for an event announcing the next class of their Presidential Ambassadors for Global Entrepreneurship (PAGE) Initiative.

China Furious, French Energy Giant Desperate, as UK Stalls $24bn Nuclear Deal - (www.wolfstreet.com) The UK government’s decision to postpone the signing of a controversial, tripartite $24-billion nuclear energy deal with state-owned companies from China and France could end up having serious ramifications not only for Britain’s relations with the world’s second largest economy, but also for the financial health of one of France’s biggest corporations. In an opinion piece in today’s Financial Times, China’s ambassador to the UK, Liu Xiaoming, said the Hinkley Point deal represents a “crucial historical junction” for relations between the U.K. and China, which has a one-third stake in the nuclear power station that was scheduled to be built by France’s majority state-owned energy giant EDF.

OTHER STORIES:

S&P 500 Daily Volatility Vanishes as Index Sets Records: Chart - (www.bloomberg.com)
BOE Can’t Part Investors From Long Bonds as QE Hits Early Snag - (www.bloomberg.com)
The Rich Get Richer as Billionaires Increase in Number - (www.wsj.com)