KeNo's Housing and Economic Portal: Tuesday March 31 Housing and Economic stories

Monday, March 30, 2015

Tuesday March 31 Housing and Economic stories

Oil Rigs Fall for the 15th Straight Week and Twitter Nails it Again - (www.bloomberg.com) U.S. oil rigs fell for the 15th straight week. Estimates gathered from Twitter guessed it perfectly. Drillers idled 41 oil rigs (excluding gas rigs), dropping the number to 825, Baker Hughes reported on Friday. The total oil rig count is down 49 percent since October, an unprecedented retreat that has eliminated thousands jobs in the drilling industry. The median forecast from a Bloomberg survey of 12 #RigCountGuesses on Twitter was for a decline of 41. But production isn't slowing yet, and new efficiencies in U.S. drilling and pumping may make raw numbers of rigs in the field misleading. The U.S. will pump 9.3 million barrels a day this year, the most since 1972, despite the fewest rigs in the field in almost four years, according to the Energy Information Administration.

Greek Coffers Running Empty Bring ‘Accident’ Threat Closer - (www.bloomberg.com) With Greece’s coffers emptying and payments looming, Prime Minister Alexis Tsipras’s government is in a tight race to avoid a financial day of reckoning after receiving a “final political push” from his EU partners. While Tsipras may have bought some time after yesterday’s European Union summit in Brussels, he acknowledges Greece is facing “liquidity pressure”, without revealing how much money is left in the bank. The country’s cash shortfall is projected to hit 3.5 billion euros ($3.7 billion) in March, according to Bloomberg calculations based on 2015 budget figures.

U.S. Borrowers Cross Atlantic to Sell Record Amount of Junk Debt - (www.bloomberg.com) U.S. borrowers have sold a record amount of junk bonds in Europe this year to take advantage of investor demand for risky assets. VWR Corp., a laboratory products supplier, Huntsman Corp., Infor Inc. and IMS Health Holdings Inc. raised 1.43 billion euros ($1.53 billion) of high-yield debt this week, according to data compiled by Bloomberg. The issuance boosted 2015 sales to 3.28 billion euros, the busiest start to a year since the single currency was introduced in 1999. American companies are capitalizing on demand from investors who’ve seen yields quashed as the European Central Bank purchases bonds as part of its quantitative easing program. Bondholders are taking on more risk as yields on government securities from Austria to Finland turn negative and investment-grade notes pay record-low premiums.

Biotech Has Surged Massively Since Warning From the Fed - (www.bloomberg.com) Investors are kicking themselves if they listened to Fed Chair Janet Yellen and the Board of Governors last July and sold their biotech stocks. As Bespoke Investment Group points out, the Nasdaq Biotech index is up well over 40 percent since Yellen's valuation comments. Here is what the Fed said in its Monetary Policy Report on July 15: "Nevertheless, valuation metrics in some sectors do appear substantially stretched—particularly those for smaller firms in the social media and biotechnology industries, despite a notable downturn in equity prices for such firms early in the year. Moreover, implied volatility for the overall S&P 500 index, as calculated from option prices, has declined in recent months to low levels last recorded in the mid-1990s and mid-2000s, reflecting improved market sentiment and, perhaps, the influence of ‘reach for yield’ behavior by some investors."

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