Monday May 15 2017 Housing and Economic stories

TOP STORIES:            

Retail Meltdown Demolishes Mall Investors - (www.wolfstreet.com) The closure of thousands of retail chain stores last year and this year, with many more to come – from big anchor tenants such as Macy’s to smaller stores such as Payless Shoes – and the bankruptcies and debt restructurings ricocheting through the industry are having an impact on retail malls. And mall investors – that may include your retirement account – are getting crushed. The commercial real estate industry has been claiming that these shuttered retail spaces are being converted into restaurants or fitness centers or smaller shops or whatever. And zombie malls are leasing out their parking lots to car dealers to store their excess new vehicle inventory, and that everything is going to be fine. But investors in publicly traded Real Estate Investment Trusts that were for years among the stars in the S&P 500 are voting with their feet.

Just One Week Later, Atlanta Fed's Q2 GDP Forecast Crumbles From 4.3% to 3.6% - (www.zerohedge.com) It's deja vu all over again.  Just one week after its initial forecast, the Atlanta Fed has lobbed off a whopping 17% from its initial GDP estimate of 4.3%, and moments ago revised its Q2 GDP tracker to 3.6% due to declines in real consumer spending growth and real private fixed investment.  Four months after the Atlanta Fed started off its Q1 GDP nowcast at 2.5%, then raised it just shy of 3.5% before eventually crashing, and closing the books at 0.2%, slightly below where the BEA reported Q1 GDP, on May 1 the regional Fed released its initial GDP forecast for Q2, and, as we noted last week, it came as no surprise to anyone that the initial estimate was just a tad optimistic at 4.3%, to which we commented that if past is prologue, "expect this number to end roughly 50% lower in three months when the first advance Q1 GDP report is released." One week later, we are a third of the way there, because moments ago, the Atlanta Fed did just as expected, and chopped off a whopping 17% from its initial estimate, revising its Q2 GDP estimate from 4.3% as of May 1 (and 4.2% as of May 4) to 3.6%, due to a decline in forecast real consumer spending growth and real private fixed investment.

Santander has dropped 800-plus car dealerships amidst loan-quality worries - (www.autonews.com)  Santander Consumer USA has terminated more than 800 dealerships since 2015, based on "performance-related issues," leaving the lender with more than 15,000 dealership customers nationwide, the lender said late last month. ... In March, Santander Consumer agreed to pay $25.9 million to resolve investigations by the attorneys general in those two states into its financing and securitization of subprime auto loans. Santander Consumer said that starting in 2013, it monitored dealer performance quarterly, based on quantitative metrics such as loss performance vs. expectations. In 2014, it created a monthly dealer performance management process.

Wall Street fear barometer falls to 1993 low  - (www.reuters.com) The S&P 500 ended flat on Monday after briefly touching a record high, while Wall Street's "fear gauge" dropped to its lowest in over two decades following centrist Emmanuel Macron's victory in the French presidential election. The CBOE Volatility index dropped 0.8 point to close at 9.77, its lowest since 1993 as investors took comfort from Macron's victory, as well as from strong quarterly reports in recent weeks. A declining VIX typically indicates a bullish outlook for stocks, but the extreme lows the index has touched are sounding caution for some stock investors...

Repeat foreclosures in New York have reached an all-time high (proving HAMP mostly protected banks, not consumers) - (www.nypost.com) The number of repeat foreclosure filings in New York City far outstrips that of other major cities like Los Angeles, while New York state is No. 1 for repeat foreclosures, outpacing every other state and the US as a whole. In a report prepared exclusively for The Post, Attom Data Solutions found that in New York City last year, roughly 4,900 -- or more than half of all new foreclosures filed -- were repeats, up from just 5 percent in 2008. Statewide, 73 percent of the 49,200 new foreclosure cases -- or roughly 35,916 foreclosures -- over the past 12 months were repeats, up from 20 percent in 2007, according to Black Knight, which collects data reported by servicers. ...

"The same owners in the same properties ... are stuck in distress that never seems to resolve," said Daren Blomquist, senior vice president at Attom, adding, "It's more acute in New York than in other markets."

OTHER STORIES:

U.S. Stocks Mixed, VIX at 24-Yr Low as Bonds Drop: Markets Wrap - (www.bloomberg.com)
China's Stock Shakeout Creates Most Divided Market in 15 Years - (www.bloomberg.com)
China has now become the biggest fear for markets - (www.cnbc.com)

Trump review of Wall Street rules to be done in stages: sources - (www.reuters.com)
Italy’s bad debt problem refuses to go away - (www.ft.com)
Forget Taxes, Warren Buffett Says. The Real Problem Is Health Care. - (www.nytimes.com)