KeNo's Housing and Economic Portal: Sunday June 20 Housing and Economic stories

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TOP STORIES:

Debt-induced stress continues for many Americans - (news.yahoo.com/s/ap) The economy trudges ahead yet debt dogs many Americans, stressing them out even as they firm up their own financial foundations. There are new jobs produced but old worries persisting for people despite belt-tightening and boosted savings, according to an Associated Press-GfK poll. About 46 percent of those surveyed say they're suffering from debt-related stress, and half of that group described their stress as "great deal" or "quite a bit." ….. A growing number of people are at risk of falling into foreclosure, and only those with the most stellar credit probably can get a new loan. AP-GfK polls show that only 20 percent say the economy is good, compared with 15 percent last year. Cynthia Bryant, 73, feels stress from her bills — much of that heartburn related to medical expenses. "I need a different car. I can't afford it. I have to watch every penny that comes in," says Bryant, who worked as a purchasing agent for a computer company before she retired. Bryant, who lives in a Denver suburb, gets by on a fixed-income that hasn't budged, although her expenses — rent, groceries and other basics_ have risen. Ken Goldstein, economist at the Conference Board, a research group that keeps close tabs on consumers, says it's people's individual circumstances — more so than their sentiment about the economy — that shape their confidence and their stress over debt. "It's about what happens to me — my house, my car, my job," he says. Christina Standridge, 33, of Milwaukee, says she's stressed about her debts, including car payments. Laid off twice in the past two years, Standridge has watched her income drop. She worries about losing her current job as an administrative assistant for a company that designs and builds waste water control systems

Lula Cuts Bond Sales to Smallest in 17 Months as Costs Climb - (www.bloomberg.com) Brazilian local government debt sales fell to a 17-month low in May after Europe’s debt crisis drove up emerging-market borrowing costs. The Treasury raised 12.5 billion reais ($6.9 billion) of the 18.6 billion reais offered in weekly auctions, down from an average of 26.9 billion reais in the first four months and the smallest amount since December 2008. President Luiz Inacio Lula da Silva’s government scrapped two sales of fixed-rate bonds due 2021 after receiving no bids it found acceptable. Yields on the notes rose as much as 71 basis points, or 0.71 percentage point, to 13.2 percent before falling to 12.67 percent on May 28. “At this time of high volatility, we have this strategy of reducing our sales,” Deputy Treasury Secretary Paulo Valle said in a telephone interview from Brasilia on May 28. While Valle said Brazil has enough cash to cover six months of spending without selling debt, the Treasury announced plans on May 28 to increase local issuance to 45 billion reais in June to help pay back 50.4 billion reais of debt maturing in the month. The extra yield investors demand to buy emerging-market dollar debt instead of U.S. Treasuries has jumped 60 basis points this month to 325 basis points, according to JPMorgan Chase & Co. Brazil needs to step up sales to avoid eroding cash reserves before October’s presidential elections, said Carlos Eduardo Olinto, who helps oversee 3 billion reais at Mercatto Gestao de Recursos in Rio de Janeiro.

Unrest May Signal New Phase in China Economy - (www.nytimes.com) Add another entry to the list of worries for the global economy and financial markets: labor unrest in China. Rapidly rising industrial wages are beginning to allow China’s workers to share in their country’s rising prosperity. The question is whether these gains can be maintained and even increased without disrupting supply lines to companies around the world, and without discouraging much future investment by Chinese and global companies alike. The biggest eye-opener for multinationals in China recently has been a nine-day-old strike at a sprawling Honda transmission factory here in Foshan, about 100 miles northwest of Hong Kong. The strike, which has forced Honda to suspend production at all four of its joint venture assembly plants in China, has shown that Chinese authorities are willing to tolerate work stoppages at least temporarily, even at high-tech operations on which many other factories depend.

We’re too broke to be this stupid - (www2.macleans.ca) Beleaguered taxpayers may finally put a stop to the sheer waste of government spending. Back in 2008, when I was fulminating against multiculturalism on a more or less weekly basis, a reader wrote to advise me to lighten up, on the grounds that “we’re rich enough to afford to be stupid.” Two years later, we’re a lot less rich. In fact, many Western nations are, in any objective sense, insolvent. Hence last week’s column, on the EU’s decision to toss a trillion dollars into the great sucking maw of Greece’s public-sector kleptocracy. It no longer matters whether you’re intellectually in favour of European-style social democracy: simply as a practical matter, it’s unaffordable. How did the Western world reach this point? Well, as my correspondent put it, we assumed that we were rich enough that we could afford to be stupid. In any advanced society, there will be a certain number of dysfunctional citizens either unable or unwilling to do what is necessary to support themselves and their dependents. What to do about such people? Ignore the problem? Attempt to fix it? The former nags at the liberal guilt complex, while the latter is way too much like hard work: the modern progressive has no urge to emulate those Victorian social reformers who tramped the streets of English provincial cities looking for fallen women to rescue. All he wants to do is ensure that the fallen women don’t fall anywhere near him. So the easiest “solution” to the problem is to throw public money at it. You know how it is when you’re at the mall and someone rattles a collection box under your nose and you’re not sure where it’s going but it’s probably for Darfur or Rwanda or Hoogivsastan. Whatever. You’re dropping a buck or two in the tin for the privilege of not having to think about it. For the more ideologically committed, there’s always the awareness-raising rock concert: it’s something to do with Bono and debt forgiveness, whatever that means, but let’s face it, going to the park for eight hours of celebrity caterwauling beats having to wrap your head around Afro-Marxist economics. The modern welfare state operates on the same principle: since the Second World War, the hard-working middle classes have transferred historically unprecedented amounts of money to the unproductive sector in order not to have to think about it. But so what? We were rich enough that we could afford to be stupid.

Double Digit Health Insurance Hikes Crush Small Businesses – (Mish at globaleconomicanalysis.blogspot.com) Small businesses across the country are getting hammered by rising medical insurance costs. Blue Shield of California is jacking up rates as much as 76%. Is this what president Obama meant when he said "Change You Can Believe In"? The LA Times reports Health insurance rate hikes hitting California small businesses could hurt state's economic recovery. Small businesses in California are being hit this year with double-digit hikes in health insurance costs that could hurt the state's economic recovery as companies curtail plans for hiring and expansion to pay their insurance bills. Five major insurers in California's small-business market are raising rates 12% to 23% for firms with fewer than 50 employees, according to a survey by The Times. Similar increases are being felt by many small businesses across the nation, including those in Texas, Ohio and Florida — mainly the result of escalating costs for medical care and pharmaceuticals, insurers say.