Friday June 30 2017 Housing and Economic stories

TOP STORIES:            

Shale's Record Fracklog Could Force Crude Prices Even Lower - (www.bloomberg.com) There’s yet another concern growing as oil prices continue to erode: A record U.S. fracklog. There were 5,946 drilled-but-uncompleted wells in the nation’s oilfields at the end of May, the most in at least three years, according to estimates by the U.S. Energy Information Administration. In the last month alone, explorers drilled 125 more wells in the Permian Basin than they would open. That represents about 96,000 barrels a day of output hovering over the market. If OPEC thought shale was a thorn in its side before, just wait until U.S. explorers turn their spigots on full blast. Wells waiting to be fracked and flowing are an overhang that could mean a burst of new supply in the second half of the year and into 2018, according to Luke Lemoine an analyst at Capital One Securities Inc. in New Orleans.

Hong Kong Warns: Its Housing Bubble is a “Dangerous Situation” - (www.wolfstreet.com) The HK financial system is “very strong” and “can withstand an adjustment in the property market.” The Hong Kong dollar is pegged to the US dollar. Hong Kong’s monetary policy is follows the Fed’s monetary policy. The Fed has embarked on a tightening cycle, raising rates four times so far. The Hong Kong Monetary Authority has followed each time. Last week, it raised its policy rate by 25 basis points to 1.5%. This will have consequences for the most expensive and ludicrously inflated housing bubble in the world. “We have to warn our people about the dangerous situation of the property market at the moment,” Hong Kong Financial Secretary Paul Chan told Bloomberg TV.

China's Workers are Saying Goodbye to Double-Digit Pay Raises - (www.bloomberg.com) China’s workers may be starting to feel like they’re getting a raw deal. Amid soaring industrial profits, employees in the world’s second-largest economy saw slower wage growth last year -- and many are seeing the smallest raises since 1997. That’s another sign that the years of pay gains above ten percent and burgeoning spending power are coming to a close, as China confronts industrial overcapacity, mounting debt and waning competitiveness. Yet while slowing wage growth is bad for workers now, it’s not entirely negative for the economy as a whole – a cheaper labor bill helps China stay lean against the nations like Vietnam snapping at its heels. Where the balance falls will determine whether the workforce continues to see living standards rise –- or ends up finding common cause with peers in developed economies who’ve seen real incomes stagnate.

San Francisco and tech driven housing mania: The median home in San Francisco reaches a new high of $1.5M - (www.doctorhousingbubble.com) San Francisco real estate is deep into a tech driven mania.  Home prices in the Bay Area are comically out of reach for most families and people are getting squeezed out like ketchup in a disposable packet.  What seemed like a new peak was once again surpassed.  The housing market is running on massive fumes and delusions run rampant.  … Home prices are up nearly $300,000 in one year simply because San Francisco is going through a housing mania.  Tech valuations are off the charts and there seems to be this belief that prices will never come down.  The consensus seems to think that buying real estate at any given point is a smart move.  They simply cannot foresee a correction in the cards.

Funding scramble squeezes China's borrowers despite PBOC injections - (www.reuters.com) Generous money injections by China's central bank are helping to maintain some calm in the country's financial markets, but market rates are persistently high, reflecting worries that liquidity conditions remain unusually tight. Rates on 14-day repos climbed to 5.3 percent on Monday, their highest late April, showing that a large gap remains between the supply of funding and demand from banks. Liquidity conditions are typically tight in China in June due to tax payments and as companies look to make their balance books look healthier at the end of the month and quarter. A rigorous quarterly inspection by the People's Bank of China (PBOC) is also prompting banks to hoard cash.

OTHER STORIES:

Ryan Says Tax Overhaul Must Happen in 2017 to Rebuild Economy - (www.bloomberg.com)
Carney Ends Silence With Brexit Warning to Rebuff Rate-Hike Call - (www.bloomberg.com) - (www.reuters.com)
China Deploys Bond-Buying Tool First Time to Boost Liquidity - (www.bloomberg.com)

Wealthy Chinese rise to 1.6 million in past decade, up nearly 9 times - survey - (www.reuters.com)
Rise of Robots: Inside the World's Fastest Growing Hedge Funds - (www.bloomberg.com)
Argentina Sells $2.75 Billion of 100-Year Bonds - (www.wsj.com)