Wednesday March 22 2017 Housing and Economic stories

TOP STORIES:            

Retail Store ‘Bubble’ Has Burst and CEOs Search for Answers - (www.wsj.com) Multiple U.S. retailer executives will be gathering this Sunday at “Shoptalk,” a conference in Las Vegas for retailers to discuss challenges in the market. A huge issue awaits discussion at this year’s conference, one that some executives are comparing to the housing crisis of 2008: there are too many stores. In decades past, opening stores meant corporate growth, and retail companies on the boom were opening as many as they could. In today’s world of online shopping, too many stores is a problem. Department stores are closing doors across the country and companies are scrambling to transform in a modern world of online retail. The Wall Street Journal reports: Declining foot traffic and falling profit margins have forced many chains to scale back. Limited Stores Co., RadioShack owner General Wireless Operations Inc. and Gander Mountain Co. have filed for bankruptcy protection this year. Department stores including Macy’s Inc.,Sears Holdings Corp. and J.C. Penney Co. are closing hundreds of locations. Some retailers intend to use the savings to increase their efforts to capture more e-commerce spending.

Too Poor To Fine? Town Forced To Pay $680K For "Running Debtor's Prison" - (www.zerohedge.com) The state has turned its people into serfs once again, and, as SHTFplan.com's Mac Slavo points out, through petty fines and regulations, everyone has once again come under the thumb. For the corporeally liberated, it is primarily a form of debt servitude, but for the poorest, who have nothing left to lose, it can mean jail time, sometimes for literally nothing more than getting caught up in a system of bureaucracy and unable to fork over more and more money for the process. The Southern Poverty Law Center has reached a $680,000 settlement in its lawsuit against the Alabama city of Alexander and its police chief Willie Robinson. The settlement was for depriving 190 of its residents their rights to due process (6th Amendment) and the unlawful seizure of their property (4th Amendment). Sheriff Robinson has even been asked to resign by lawyers representing their client. Each one of the 190 individuals will receive $500 cash from the city for jailing them for being too poor to pay the fines imposed on them by the town. As reported by AL.com, “Hundreds of impoverished residents have faced unconstitutional and unjust treatment in Alexander City simply because they were too poor to pay fines and fees,” said Sam Brooke, in a press release. Brooke is the SPLC’s deputy legal director.  He added, “The shuttering of this modern-day debtors’ prison, along with the monetary award, brings justice to many of the people who were unfairly targeted for being poor.”

Central Bank Shell Game: What Sweden’s Negative Interest Rates Do to Consumers - (www.wolfstreet.com) Sweden’s welfare state supposedly allows for success while providing a safety net for those unable to keep up with the market. In principle, it is an ideal, utopian-like state. However, Sweden’s touted economic success has come at the expense of its currency, the Krone (SEK), and long-term sustainability. Riksbank, the Swedish Central Bank, like its European contemporaries, has undertaken experimental policy, driving real and nominal interest rates below zero. Since 2014, Swedish deposit rates have been negative. Not only has overall negative real interest rate policy affected housing, but it also drove Swedish consumers deeper into debt. Embarking on the dual mandate policy may have staved off recession, but it created greater problems for the future. Although current deposit rates are at a record low of -1.25%, the latest GDP print came in at 2.3%, and the growth rate has been tapering since 2015. Sweden’s “hot” GDP growth – hot relative to the region – could be attributed, not to industrial growth, but rather increased government spending, funding social programs.

Shadow Lending Threatens China’s Economy, Officials Warn - (www.nytimes.com) The chairman of China’s biggest bank and a senior Chinese insurance regulator issued strong warnings on Saturday about the dangers of shadow banking to the Chinese economy, in the latest signs of growing top-level concern here about a rise in highly speculative, poorly regulated lending. Shadow banking, or lending that takes place outside official banking channels, plays a major role in the Chinese economy, where big government-controlled banks are often slow to lend to private businesses and entrepreneurs. But experts worry that untrammeled shadow lending could lead to ticking time bombs that could threaten the financial system of the world’s second-largest economy.

Hedge Fund Titan’s Surefire Bet Turns Into a $4 Billion Loss - (www.nytimes.com) A little over two years ago, William A. Ackman, one of Wall Street’s brashest and most self-assured hedge fund managers, was on top of the world. A billionaire before he hit 50, he was generating double-digit gains for his investors and raking in hundreds of millions in fees for his firm and himself. Hailed as a master investor, he clinched his highflier status in the fall of 2014 by paying $90 million with some friends to buy the penthouse at One57, a 13,500-square-foot aerie in Midtown Manhattan overlooking Central Park. He didn’t plan to live there — it was an investment property — but until he sold it, the apartment would make a good party space, he told The New York Times.

OTHER STORIES:

G-20 Drops Anti-Protectionist Pledge as Trump Stance Goes Global - (www.bloomberg.com)
New rifts emerge as Trump administration rejects free trade statement at G-20 meeting
Former U.S. officials say 'complex' relationship with China needs 'fresh start' - (www.reuters.com)

China Pushes Back on U.S. Talk of ‘All Options’ Over North Korea - (www.bloomberg.com)
Common bonds aside, Trump and Merkel show little rapport - (www.washingtonpost.com)
Gap Between Fed-Funds, Overnight Treasury Repo Rates Holds - (www.wsj.com)