KeNo's Housing and Economic Portal: Wednesday June 28 2017 Housing and Economic stories

Tuesday, June 27, 2017

Wednesday June 28 2017 Housing and Economic stories

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Amazon to Slash Jobs at Whole Foods, Dump Cashiers, Switch to Cheaper Products in Price War with Wal-Mart - (www.wolfstreet.com) Here’s something Wal-Mart could do to Amazon, just to be nasty. Amazon expects to slash jobs and other costs at Whole Foods, “a person with knowledge of the company’s grocery plans” told Bloomberg. The ink isn’t even dry on the proposed deal, but synergies and efficiencies are already being trotted out. Amazon agreed to acquire Whole Foods for $13.7 billion, a 27% premium over the stock price on Thursday at close, and now intends to push down prices to slough off Whole Food’s nickname “Whole Paycheck,” and go after Wal-Mart Stores, Target, the German discounters Aldi and Lidl that are expanding in the US, Costco, and grocery store chains, such as Kroger and the private-equity owned chains Safeway and Albertson’s. The jobs to be cut include cashiers, who’d be replaced by Amazon’s own “Just Walk Out Technology,” now being tested at its Amazon Go convenience store in Seattle. When customers with the Amazon Go app on their smartphones walk into the store, the system logs them into the store’s network and establishes the connection to their Amazon account.

Australia's Haunted Housing Market - (www.bloomberg.com) You know that horror-film trope where some piece of ominous information is missed by all the characters? Where the dire warnings of the one wise old Cassandra who spots what's going on are inevitably ignored? Something similar is happening in Australia's frothy housing market. Forget all the headlines about the undimmed pace of house price inflation -- up 19 percent in Sydney during March, pushing the median house price in the city to A$1.15 million ($875,000) according to Domain, a property-listings website. House prices, after all, aren't so much a guide to the state of the housing market as to the 1 percent or so of homes that bought or sold in a typical year. Even there, they're less an indicator of supply and demand for housing than of how supply and demand for mortgage credit interact with real estate fundamentals.

Italy, EU Race to Find Solution for Two Troubled Banks - (www.bloomberg.com) Italian finance officials and the European Commission are racing to find a solution for two troubled banks in the northern Veneto region that have weighed on the nation’s financial system. Finance Minister Pier Carlo Padoan said Sunday the matter of Veneto Banca SpA and Banca Popolare di Vicenza SpA is being worked on “actively,” without offering details. The European Commission is working “hand in hand” with Italian authorities and Europe’s Single Supervisory Mechanism, and is making “good progress” on reaching a solution within the bloc’s rules, it said in a statement on Monday. Rome’s la Repubblica newspaper said Sunday that the Italian government and bank managers are seeking an agreement “by the end of next week.” Padoan said last week that an accord with the Commission in Brussels was “close.” Still there were differing news media accounts of the status of the talks with European Union officials who will need to sign off on any state involvement. La Stampa, quoting officials in the EU and the Treasury in Rome, said the current rescue plan has been determined to be unfeasible. The newspaper said a split into so-called good banks for performing assets and bad banks for deteriorated credit was one possibility. Under this option, Intesa Sanpaolo SpA may agree to buy the good banks, while the bad assets would be sold, the newspaper said on Monday.

Debt improves Greece's lot, Tsakalotos says - (www.ekathimerini.com) Greece’s finance minister says financial markets now have “much greater clarity” about the future of Greece’s debts, which will help the country regain market access when its current bailout program ends next year. Speaking after a meeting of the eurozone’s 19 finance ministers, Euclid Tsakalots said the country can “look forward with much greater confidence.” Tsakalotos said one big benefit from the deal Thursday was that future debt repayments could be linked to Greece's growth. In essence, that could mean payments could be postponed in the event of an adverse shock... As well as securing 8.5 billion euros ($9.5 billion) in bailout funds, which will help Greece meet a big summer repayment, Tsakalotos won a promise on future measures to ease the country's debt burden and possible IMF financial involvement in the coming year.'

South African Mining Stocks Crash To 5-Year Low Valuations After Policy Shock – (www.zerohedge.com) South Africa’s new mining charter (that all local mines should be 30% black-owned) is scaring away investors. The charter revision comes shortly after Africa’s most industrialised economy entered its first recession since 2009, with investor confidence already shaken by infighting within the ANC over the scandal-hit presidency of Jacob Zuma. The proposal was unveiled by the Department of Mineral Resources which said it intends to raise the minimum black-ownership level from the current 26% to ensure more proceeds from the country’s natural resources flow to the black majority, Mining Minister Mosebenzi Zwane told reporters on Thursday in Pretoria. The charter will also require companies to pay 1% of annual revenue to communities and new prospecting rights will require black control, Zwane said. “The mining sector does not exist in a vacuum,” Zwane said as he unveiled the charter on Thursday. South African miners needed “strong legislative regimes” to thrive, he added. “We have listened to miners who have not seen real economic benefit; people who don’t see benefit of transformation structures,” he said. And the reaction is clear, as Bloomberg notes, the average price-to-earnings

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