Friday June 23 2017 Housing and Economic stories

TOP STORIES:            

Illinois State Official: "We Are In Massive Crisis Mode, This Is Not A False Alarm" - (www.zerohedge.com) Last week we reported that as Illinois, a state which now faces over $15 billion in backlogged bills, struggles over the next two weeks to somehow come up with its first budget in three years ahead of a June 30 fiscal year end, and faces an imminent ratings downgrade to junk - the first ever in US state history - traders finally puked, sending the yield on its bonds surging after a judge ruled at the start of the month that the state is violating consent decrees and previous orders, and instructed the state to achieve "substantial compliance with consent decrees", further pressuring its financial situation. In a last ditch attempt to resolve the ongoing budget impasse and prevent a potential crisis, which may culminate with an eventual default by the distressed state, yesterday the WSJ reported that Illinois Gov. Rauner ordered lawmakers to return for a special session this week, but the two sides still seem far apart. Republican Gov. Bruce Rauner ordered the special session starting Monday, as the backlog of unpaid bills reaches $15.1 billion.

San Francisco Bay Area Sheds Jobs and Workers - (www.wolfstreet.com) Commercial and residential real estate bubbles choke the economy. The upper bounds of hype and craziness have been reached. The San Francisco Bay Area has seen an astounding jobs boom since the Great Recession. The tsunami of global liquidity that washed over it after the Great Recession, central-bank QE and zero-interest-rate policies that sent investors chasing blindly after risk, a blistering no-holds-barred startup bubble with the craziest valuations, one of the greatest stock market bubbles ever – whatever caused the boom, it created one of the craziest housing bubbles ever, a restaurant scene to dream of, traffic jams to have nightmares over, and hundreds of thousands of jobs. But it’s over.

Amazon-Whole Foods Deal Is Bad News For Store Cashiers And The Fight For $15 Minimum Wage - (www.forbes.com) Among the losers will be traditional neighborhood stores, which won't be able to compete with Amazon's razor thin operating margins -- and minimum wage employees like cashiers, as Amazon's technology will make them dispensable and speed  up a trend already underway in traditional retail chains...and in the process, make the $15 minimum wage irrelevant.... ... other store chains will also have to do away with cashiers to keep up with Amazon, accelerating and broadening a trend already underway in the retail industry. Wal-Mart and Target have been using technology to replace labor that is usually paid the minimum wage.

Small and midsized banks could get regulatory relief from Senate. Wall Street? Probably not – (www.latimes.com) One of the key targets of the House bill and the Treasury report is the Consumer Financial Protection Bureau, which would have its authority gutted. The changes include making its director subject to removal by the president for any reason, eliminating the independent funding stream so Congress could reduce its budget, and stripping the agency of its ability to send supervisors into banks to make sure they are complying with consumer protection laws. For [Sen. Sherrod] Brown and Senate Democrats, changes like that amount to a poison pill for any legislation.

It's a 'scary' time with a global crisis on the way, LVMH CEO says - (www.cnbc.com) A financial crisis could be just around the corner, according to the chief executive of LVMH, who has described the global economic outlook as "scary". "For the economic climate, the present situation is...mid-term scary," Bernard Arnault told CNBC Thursday. "I don't think we will be able to globally avoid a crisis when I see the interest rates so low, when I see the amounts of money flowing into the world, when I see the stock prices which are much too high, I think a bubble is building and this bubble, one day, will explode." Arnault, who is responsible for the world's largest luxury goods company, couldn't say whether the crash would be imminent or within the next few years, but he insisted that almost a decade on from the global financial crisis of 2008, one was due.

OTHER STORIES:

Brazil's Temer led graft scheme, billionaire tells Época magazine - (www.reuters.com)
Official Warns Illinois Finances in 'Massive Crisis Mode' - (www.ap.org)
Negative-yielding government debt 'supernova' jumps to $9.5 trillion - (www.cnbc.com)

Millionaires own a record 45% of the world's wealth — and their share is growing - (www.cnbc.com)
Amazon Deal for Whole Foods Starts a Supermarket War - (www.nytimes.com)
A deal too far for China’s Anbang - (www.ft.com)