Tuesday, September 6, 2016

Wednesday September 7 2016 Housing and Economic stories


Supply-Chain Contagion Arrives - "Global Trade" Roiled, Cargo-Owners Panic In Wake Of Hanjin Bankruptcy -  (www.zerohedge.com) We did not have long to wait for the aftershocks to emerge. As we first reported last night, just hours after the insolvency news hit the tape, three Hanjin ships promptly found themselves stranded off the California coast, stuck - together with the hundreds of tons of cargo - in legal and financial limbo. That was just the beginning and as Reuters updates this morning, more Hanjin vessels have been seized at Chinese ports, "further roiling the industry as freight rates jump and manufacturers scramble for alternatives." The Korea International Trade Association said on Thursday that about 10 Hanjin vessels in China have been either seized or were expected to seized by charterers, port authorities or other parties. That adds to one other ship seized in Singapore by a creditor earlier this week.

Elon Musk Faces Cash Squeeze at Tesla, SolarCity - (www.wsj.com) Two pillars of Elon Musk’s empire are facing financial crunches as the entrepreneur seeks to combine the two companies through a controversial acquisition. Tesla Motors Inc., which makes electric cars, disclosed in a securities filing Wednesday that it has to pay $422 million to its bondholders in the third quarter, and that it will raise additional money by the end of the year. The purpose of the additional capital, among other things, is to support its proposed merger with home-solar company SolarCity Corp. Mr. Musk is the chairman of both companies. The filing also revealed that in recent weeks, 15 institutional investors passed on either acquiring SolarCity or injecting equity into it. The company is having difficulty tapping the public markets amid the proposed merger and is facing a liquidity squeeze, the filing indicated. SolarCity’s cash declined to $146 million on June 30, from $421 million a year earlier, the company has reported.

Bank of Japan Has an 8.7 Trillion Yen Balance-Sheet Problem - (www.bloomberg.com) There’s an 8.7 trillion yen ($84 billion) gap between the value of government bond holdings on the Bank of Japan’s balance sheet and their face value. While not an immediate problem because the BOJ’s income can cover the losses, the widening gap raises questions about the sustainability of the central bank’s bond purchases, which Governor Haruhiko Kuroda has said could be expanded. The costs of the central bank’s record stimulus are mounting, while its chief goal -- spurring inflation to 2 percent -- appears as far away as it was when Kuroda took the helm in 2013. The BOJ is in the midst of reviewing its policy before a board meeting later this month, but the governor has said there will be no scaling back of his monetary program.

Hanjin’s Ships Get Stranded in High Seas, Roiling Supply Chain - (www.bloomberg.com) Hanjin Shipping Co.’s vessels are getting stranded at sea after the South Korean container mover filed for court protection, roiling the supply chain of televisions and consumer goods ahead of the holiday season. LG Electronics Inc. is trying to find new carriers for its goods, the world’s second-largest manufacturer of televisions said. Shipments through Hanjin account for between 15 percent and 20 percent of LG’s deliveries to America. Hyundai Merchant Marine Co., the nation’s second-biggest container line, stepped in saying it plans to add 13 more vessels to ease the squeeze.

We’ve Reached the “Zero Point” of Debt Creation - (www.wolfstreet.com) Forty-five years and counting: We’ve been on a debt spree since the early 1970s when we went off the gold standard, covering every possible angle. Trade deficits, government deficits, unfunded entitlements, private debt – you name it! Our total debt has grown 2.5-times GDP since 1971. How could economists not see this as a problem? How is this the least bit sustainable? It isn’t. We’re hurtling toward a massive financial crisis, and all we have to show for it are financial asset bubbles destined to burst. And when they do, they’ll wipe out the artificial wealth they’ve created for many decades… in just a few years, as they did from late 1929 into late 1932!



Energy drags Wall St. lower; S&P down slightly in August - (www.reuters.com)
Dilma Rousseff Ousted in Historic Brazil Impeachment Trial
- (www.bloomberg.com)
America’s Corporate Bond Party Goes on as Sales Near $1 Trillion
- (www.bloomberg.com)
Rajoy Loses Confidence Vote as Spain’s Political Impasse Endures
- (www.bloomberg.com)

Mexico Central Bank Cuts Growth Forecast as Manufacturing Slows
- (www.bloomberg.com)
China Engages in 'Backdoor QE' as Monetary Policy Shifts, Says Jefferies
- (www.bloomberg.com)
Global bank stocks extend summer rally
- (www.ft.com

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