KeNo's Housing and Economic Portal: Wednesday December 10 Housing and Economic stories

Tuesday, December 9, 2014

Wednesday December 10 Housing and Economic stories

Fed Leak Tipped Traders to Historic Stimulus Move, Prompted Secret Inquiry - (www.bloomberg.com) Alarms went off inside the Federal Reserve: the Fed’s innermost secrets had leaked to Wall Street. Confidential deliberations of the Federal Open Market Committee made their way into a research note circulated among traders. The report -- a fly-on-the-wall account of the FOMC’s September 2012 meeting, with hints of Fed action to come that December -- prompted a mole hunt that reached the highest levels of the central bank. The story of the FOMC leak underscores the lengths to which outsiders will go to penetrate the inner workings of the Fed, and how valuable access can be. The Fed has never disclosed the investigation or its findings.

North Dakota Is Making A Huge Bet That Oil Prices Bounce Back - (www.businessinsider.com) North Dakota Governor Jack Dalrymple proposed a two-year state budget on Wednesday that forecasts rebounding oil prices and a 23 percent jump in oil taxes, a tacit bet the state's energy boom will continue unabated. Oil prices have dropped more than 30 percent since June amidst global oversupply and demand concerns. Last week OPEC opted not to cut its oil production, a step seen by many as designed to squeeze North Dakota and other oil-producing regions of the United States. Despite OPEC's decision, Dalrymple expects oil extraction and gross production taxes of $8.32 billion for the 2015 through 2017 biennium, well above the projected $6.76 billion for the two-year term about to end.

What’s Worse: Big Banks or Bondholders Shaking Markets? - (www.bloomberg.com) Banks may have gotten safer since the 2008 credit crisis, but risk is migrating to bond buyers. That’s worrying analysts and policy makers alike, who see investors plowing into infrequently-traded debt while Wall Street reduces its role in making markets. The combination has “resulted in a new world for investors,” one that’s fraught with pockets of less trading and bigger price swings, Royal Bank of Scotland Group Plc (RBS) analysts wrote in a November report. The U.S. Treasury Department has taken note, too, saying this week that investors pose a growing threat to financial stability. “Markets have become more brittle because liquidity may be less available in a downturn,” according to the annual report by the Treasury’s Office of Financial Research. “Recent volatility in financial markets focused attention on some of the vulnerabilities that have been growing over the past several years.” On Oct. 15, benchmark Treasury yields plunged the most since 2009 as investors fled riskier assets for the perceived safe haven of U.S. government debt. Implied swings in Treasury prices rose the most since 1989 that day, as measured by Bank of America Merrill Lynch’s MOVE index, showing how quickly volatility can surge from near record-low levels.

Oil at $40 Possible as Market Redraws Politics From Caracas to Tehran - (www.bloomberg.com) Oil’s decline is proving to be the worst since the collapse of the financial system in 2008 and threatening to have the same global impact of falling prices three decades ago that led to the Mexican debt crisis and the end of the Soviet Union. Russia, the world’s largest producer, can no longer rely on the same oil revenues to rescue an economy suffering from European and U.S. sanctions. Iran, also reeling from similar sanctions, will need to reduce subsidies that have partly insulated its growing population. Nigeria, fighting an Islamic insurgency, and Venezuela, crippled by failing political and economic policies, also rank among the biggest losers from the decision by the Organization of Petroleum Exporting Countries last week to let the force of the market determine what some experts say will be the first free-fall in decades.

The TV Industry As We Know It May Really, Finally Be Entering A Death Spiral - (www.businessinsider.com) In the past six months, something has changed with the TV industry, according to AOL CEO Tim Armstrong. On stage at our Ignition conference, Armstrong said he recently heard from an advertiser who said he got a rebate for his TV ad budget because the ads weren't going to be filled. The advertiser needed to spend the extra money digitally as quickly as possible. It's unclear whether this was just a one-time blip or the start of something different. Armstrong seemed to believe the latter. He thinks digital video advertising is finally starting to suck dollars from TV advertising. New data from Nielsen explains why this is happening. Last quarter, TV viewing was down 4%, while video streaming was up 60%.

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