Tuesday May 16 2017 Housing and Economic stories

TOP STORIES:            

Miami “Preconstruction” Condo Flippers Drown in Glut - (www.wolfstreet.com) Because there have been zero resales, “the actual market value of the units in the project is uncertain.” Miami, particularly near the waterfront, has experienced one of the hottest post-housing-bust construction booms in the country, creating a veritable mecca for “preconstruction” condo flippers – often institutional investors – that are trying to make a buck. The construction boom is quite a sight to behold, still, as seen from a cruise ship, where crane counting might while away the time. This photo, taken by Matthew Brandley, shows the rising condo towers in the New Edgewater area: That this might eventually create a supply problem is clear. Alas, “eventually” got here in a hurry. Brickell, an area that is part of Miami’s “condo corridor” by the waterfront, is just an example, similar to New Edgewater above. Andrew Stearns, founder of StatFunding, who analyzed the Brickell condo area – more on that in a moment – mused about the New Edgewater area: “There is an unprecedented glut of new preconstruction condos coming to market there too, but different neighborhood.”

Student Loans Just Got A Lot More Expensive For Our Snowflakes - (www.zerohedge.com) Snowflakes looking to take out massive student loans for next year to fund the $50,000 price tag of their liberal bastion of choice, and maybe the occasional binge-drinking trip to Cancun for Spring Break, are about to get a little price hike. But, don't worry, you won't have to start paying on those loans for at least 4 years. Beginning in July, interest rates on new federal student loans are set to rise by 0.69%, per data published by the Treasury, which would drive the interest cost of new undergraduate loans up to 4.45% from 3.76% for the academic year ending in June, a nearly 20% increase off an historically low base. Meanwhile, rates on some graduate loans are set to rise from 5.31% to 6% and rates on loans to parents and guardians are due to jump from 6.31% to 7%.  As an example, the cost of a $10,000 loan would increase by about $400, according to an online calculator maintained by Bankrate.com. Of course, these higher borrowing costs shouldn't be that big of a deal as some 44 million Americans only owe $1.4 trillion on their student loans, or a modest average of only $32,000 per borrower. 

China's $246 Billion Foreign Buying Spree Is Unraveling - (www.bloomberg.com) China’s biggest-ever foreign acquisition frenzy is ending almost as dramatically as it began. After stunning the world with a record $246 billion of announced outbound takeovers in 2016, Chinese dealmakers are now struggling to cope with tighter capital controls and increasingly wary counterparties. Cross-border purchases plunged 67 percent during the first four months of this year, the biggest drop for a comparable period since the depths of the global financial crisis in 2009, according to data compiled by Bloomberg. Analysts see few signs of a rebound as Chinese regulators make it difficult for acquirers to move money overseas. Foreign sellers have also thrown up new hurdles after getting spooked by a string of canceled deals. Some are forcing suitors to pay unusually large penalties if offers fall through, while others are shunning Chinese bids in favor of lower-priced offers from elsewhere.

Tesla’s Solar Roof Pricing Is Cheap Enough to Catch Fire - (www.bloomberg.com) Tesla Inc. has begun taking $1,000 deposits for its remarkable solar roof tiles—to be delivered this summer at a price point that could expand the U.S. solar market.  Tesla will begin with production of two of the four styles it unveiled in October: a smooth glass and a textured glass tile. 1 Roofing a 2,000 square-foot home in New York state—with 40 percent coverage of active solar tiles and battery backup for night-time use—would cost about $50,000 after federal tax credits and generate $64,000 in energy over 30 years, according to Tesla’s website calculator.  That’s more expensive upfront than a typical roof, but less expensive than a typical roof with traditional solar and back-up batteries. The warranty is for the lifetime of your home. 

Money From Chinese State Giants Helped Fund Aluminum Stockpile - (www.wsj.com)  Money from state-run Chinese companies was used to help finance the buildup of a massive aluminum stockpile that has crisscrossed the globe, depressed prices and sparked a criminal investigation in the U.S., according to business records, emails and people with direct knowledge of the transactions. Any such involvement by these entities could further strain relations between China and the U.S., which says Beijing undercuts global competition by giving government assistance to its commodity companies. Aluminum is among several commodities that the Trump administration has singled out for potential protectionist policies against cheap Chinese imports.

OTHER STORIES:

U.S. Stocks Boosted by Oil Rally as Dollar Slips: Markets Wrap - (www.bloomberg.com)
Fed's Rosengren Favors Three More 2017 Hikes to Foil Overheating - (www.bloomberg.com)
Delay seen, again, on Trump growth agenda after Comey sacking - (www.reuters.com)

Bond Market Volatility Plunges to Lowest Since August '14: Chart - (www.bloomberg.com)
What Happens When Central Banks Stop Buying Bonds? - (www.wsj.com)
Buying Into the Turmoil: Investors Embrace the Risks - (www.nytimes.com)

How ‘Brexit’ Could Alter London, the World’s Banker - (www.nytimes.com)