KeNo's Housing and Economic Portal: Wednesday November 6 Housing and Economic stories

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Insight: As Brazil's Batista falters, Rio dream does too - (www.reuters.com) Investors who bet on Eike Batista have lost billions over the past year as the Brazilian's ephemeral business empire imploded. But they haven't been the only losers - the onetime Amazon gold trader and former speedboat racer's hometown of Rio de Janeiro has also been shaken by his rapid decline. Beginning in 2006, Batista floated a series of mining, energy and shipping companies through share offers that by 2012 made him the world's seventh richest man, valued by Forbes magazine at $30 billion. All the companies' names, including that of his EBX conglomerate, ended in X, a letter he said symbolized the multiplication of wealth. With the same verve he used to woo investors, Batista also became the biggest booster of a hoped-for revival in Rio, the verdant, seaside metropolis whose glorious past as Brazil's capital and cultural center had in recent decades given way to crime, violence and the unfettered sprawl of slums. At his peak, Eike, as the 56-year-old is known locally, bankrolled the campaign that lured the 2016Olympics to Rio. He paid for police vehicles in poor neighborhoods and partially decontaminated a popular local lagoon.

Treasury may have even less room for maneuver in 2014 - (www.cnbc.com) Obama on Thursday signed into law a bill that would suspend a $16.7 trillion cap on the national debt until early February, when it will reset to whatever level the debt has reached. Absent a decision to raise it again, the Treasury Department has tools to manage its cash a little longer before it starts missing payments. The question is how long. This year, the Treasury bumped up against the debt ceiling in May but was able keep under it for another five months by doing things like stopping investments in some pension funds for federal workers. These steps are known in Washington as the Treasury's "extraordinary measures." They give the Treasury a buffer against an economically damaging default. When the debt cap is reset next year, several respected budget experts think the Obama administration might run out of wiggle room by mid-March. "Extraordinary measures are unlikely to last long," Shai Akabas and Brian Collins, analysts at the Bipartisan Policy Center think tank in Washington, wrote in a report on Friday.

Boeing Cuts 747 Production Again as Demand Wanes for Biggest Jet - (www.bloomberg.com) Boeing Co. (BA) is slowing production of its 747-8 jumbo jet, the planemaker’s biggest model ever, for the second time this year as demand continues to dwindle for four-engine aircraft. The new rate will be 1.5 planes a month, a pace that will be maintained through 2015, Chicago-based Boeing said yesterday in a statement. That’s a 14 percent drop from the 1.75 rate announced in April and a 25 percent decline from production at the start of 2013. While Boeing hasn’t yet netted any new sales for the jumbo this year, it’s in “active” discussions with several customers and looking forward to a 2014 rebound in the cargo market, which could spark interest in a freighter version of the 747-8, Doug Alder, a Boeing spokesman, said in an interview. Korean Air Lines Co. agreed to buy five of the passenger version in June, though it never completed its order. “It’s not a surprise, in fact it’s smart,” Howard Rubel, a New York-based aerospace analyst with Jefferies Inc., said in a phone interview. “It tightens up the market, doesn’t put airplanes out there that can’t be sold.”

Illinois Supreme Court strikes down 'Amazon tax' - (www.chicagotribune.com) Consumers who live in sales-tax states, such as Illinois, owe state sales tax

on their Internet purchases, whether they pay it during virtual checkout or when they file their state income tax returns. But few pay unless tax is collected at checkout. That has the effect of making online purchases cheaper than those at bricks-and-mortar retailers. In March 2011, Illinois passed the Main Street Fairness Act, informally dubbed the Amazon-tax law. It expanded the meaning of a merchant's physical presence to include that of affiliate companies. To avoid having to collect sales tax upon virtual checkout, some large Internet retailers, including Amazon.com, cut ties with affiliates in Illinois, which one trade

group said numbered about 9,000. After the law passed, some prominent Illinois-based Internet businesses

, such as CouponCabin.com and FatWallet.com, fled to Indiana and Wisconsin rather than be cut off from commissions from Amazon.com, Overstock.com and others.

Structured Notes Tied to Credit Indexes Surge Amid Low Defaults - (www.bloomberg.com) Structured notes tied to credit-default swap indexes are selling at a record pace as the corporate failure rate declines in Europe. Nordea Bank AB, SEB AB and Societe Generale SA led $1.7 billion of issuance this year, a 35 percent increase from all of 2012, according to data compiled by Bloomberg. Notes that speculate on the creditworthiness of the 50 junk-rated companies in the Markit iTraxx Crossover Index accounted for 60 percent of the sales, the data show. “These products now have a recent history of performing well with very few credit events,” said Peter Frosell, head of investment products at Nordea in Stockholm. “They are lower risk than equities, and while the returns may not be as high as with stocks, they are more than deposits and are less volatile.”

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