KeNo's Housing and Economic Portal: Thursday June 4 Housing and Economic stories

TOP STORIES:

Venezuela's Currency Just Collapsed 30% on the Black Market - (www.bloomberg.com) The stunning collapse of Venezuela's bolivar in black market trading this month -- it fell to as low as 423 bolivars per dollar from 279 at the start of the month -- has left Venezuelans scratching their heads, with many wondering why it has sunk below the value of gold and hard currency the central bank has to back it. Venezuela has maintained strict currency controls since 2003 and currently has three legal exchange rates of 6.3, 12 and 199 bolivars per dollar used for priority imports. On the black market, where people and businesses turn when they can’t obtain government approval to purchase dollars at the three legal rates, the bolivar has weakened 82 percent in the past year to 397 bolivars per dollar on May 26, according to dolartoday.com, a widely watched website that tracks the exchange rate in the Colombian border city of Cucuta.

Pensions and Politics Fuel Crisis in Illinois - (www.nytimes.com) Illinois is facing one of the worst fiscal crises of any state in recent decades, largely because it has mismanaged its pension system.

The shortfalls could potentially mean sharply higher taxes and cuts in spending. And even though the state’s highest court just this month threw out a landmark plan to cut worker and retiree benefits, some lawmakers say they may have to find another way to make those reductions as well. Illinois’s problems resonate well beyond its borders. Pennsylvania, New Jersey and Kentucky are among the states confronting similar problems, and to them, Illinois is a model of what can go wrong — with political intransigence, mounting costs and a complicated legal terrain. So elected officials, union leaders, investors, fiscal hawks and even bankruptcy lawyers across the country are watching Illinois closely to see how it addresses the crisis. In Washington, some Republicans have even raised pointed concerns that President Obama’s home state might someday seek federal help. “What has happened is the loudest wake-up call possible,” said Laurence J. Msall, president of the Civic Federation, a watchdog group. “This is a financial tsunami for the City of Chicago and the State of Illinois that will not be fixed without politically painful changes.”

With Money Drying Up, Greece Is All but Bankrupt - (www.nytimes.com) Bulldozers lie abandoned on city streets. Exhausted surgeons operate through the night. And the wealthy bail out broke police departments. A nearly bankrupt Greece is taking desperate measures to preserve cash. Absent a last-minute deal with its creditors, the nation will run out of money early next month. Two weeks ago, Greece nearly defaulted on a debt payment of 750 million euros, or about $825 million, to the International Monetary Fund. For the rest of this month, Greece should be able to cover daily cash deficits of around 100 million euros, government ministers say. Starting June 5, however, these shortfalls will rise sharply, to around 400 million euros as another I.M.F. obligation comes due. They will then double in size on June 8 and 9.

Spain’s Establishment Hurt by Graft as Podemos Gathers Force - (www.bloomberg.com) Spanish voters embraced parties seeking to overturn the political establishment in local elections Sunday, signaling time may be up for the two-party system that has dominated the country for a generation. The anti-austerity party Podemos claimed its biggest victory in Barcelona, where activist Ada Colau seized control of the city hall. Podemos and Ciudadanos, which proposes market-based solutions to Spain’s problems, made advances across the country that will give them a chance to shape policy for the first time. “Tomorrow’s Spain doesn’t feel identified with the establishment parties,” Jose Juan Toharia, president of polling firm Metroscopia, said at an event in Madrid Monday. Prime Minister Mariano Rajoy’s People’s Party suffered its worst result in a municipal election for 24 years, paying the price for four years of austerity and a raft of corruption scandals that left many of its supporters disenchanted. Rajoy has to call a general election by the end of the year.

[Bloomberg] Nigeria Fuel Shortages Ground Planes, Threaten MTN, Banks - (www.bloomberg.com) A fuel crisis in Nigeria has grounded airplanes, shut banks and threatens businesses including MTN Group Ltd.’s local operation, as gasoline and diesel retailers halt distribution over a pay dispute with the government. MTN, Africa’s biggest mobile phone company with 61 million customers in Nigeria, said in a statement it’s running low on fuel reserves and its phone network will be “significantly degraded” if it doesn’t receive supplies before Tuesday. Guaranty Trust Bank Plc, Nigeria’s biggest lender, will close its offices at 1 p.m. local time from Monday because of the shortages, while Arik Air Ltd., the country’s biggest carrier, has cut two-thirds of its 120 daily flights.

OTHER STORIES:

Trannies Tumble As Death Cross Triggers - (www.zerohedge.com)

Chinese Stocks Surge Most Since 2008 for World’s Biggest Rally - (www.bloomberg.com)
German Bonds Jump as Multiplying Political Risks Spur Safety Bid - (www.bloomberg.com)
Dollar Jumps on Fed Rate Outlook as Italian, Spanish Bonds Fall - (www.bloomberg.com)