KeNo's Housing and Economic Portal: Friday July 31 Housing and Economic stories

TOP STORIES:

The "Energy" Cash Flow Alarm Is Back: Chesapeake Suspends Dividends, Stock Plunges To 12 Year Low - (www.zerohedge.com) Back in January, the panic surrounding the energy space and specifically the collapse in industry cash flows as a result of the collapse in oil prices, peaked when one after another company announced they would halt dividend payments and all other distributions to shareholders to conserve cash, culminating with the dramatic announcement on January 30 when one of the giants in the space, energy major Chevron, suspended its stock buybacks. Subsequently, oil experienced a brief oily (but dead) cat bounce, with WTI and Brent both making it briefly into the $60 price range and have since resumed their decline with WTI sliding back under $50 yesterday, and as a result all the attention is once again back on energy companies. And as if to confirm just that, earlier today one of Icahn's favorite energy names (you won't find him tweeting about this one much thought) Chesapeake Energy, the second-largest US natural gas producer, announced it too is now scrambling to conserve cash (in this case $240 million per year) by suspending its $0.35/share dividend payment.

Elderly Crime Rate Skyrockets as Japan's Grandmas and Grandpas Reduced To Shoplifting - (www.washingtonpost.com) New Japanese government data revealed for the first time that crime was higher among the country's elderly than teenage youth. According to the Kyodo News Agency, police authorities reported on Thursday that "the number of people aged 65 or older subject to police action reached 23,656 between January and June, compared to 19,670 for those aged 14-19." It's the first time the elderly have exceeded the young in crime data since 1989, when Japan started keeping tabs of crimes by age group. It's a sign, Kyodo reports, of "Japan's graying society." For quite some time, there's been a considerable focus on Japan's aging, shrinking population and the potential effects of its steady demographic slide. Some projections suggest Tokyo's population will halve by the end of the century; the Japanese capital is one of the few major urban centers in the world that is shrinking rather than expanding.

U.S. banks prepare for oil and gas company loans to worsen - (www.reuters.com) U.S. banks are setting aside more money to cover bad loans to energy companies after oil prices plunged over the last year, raising the possibility that deteriorating loans could start to weigh on their earnings, some analysts said. Loan credit quality for U.S. banks has been improving since the financial crisis. In the first quarter, 2.49 percent of loans on banks' books were delinquent, the lowest level since the fourth quarter of 2007, according to the Federal Reserve, which hasn't released second quarter data. The rate peaked at 7.4 percent in the first quarter of 2010. Weakness among energy company loans could be a sign that overall credit quality among U.S. banks has little room to improve, analysts said. Executives from both JPMorgan Chase & Co. and Wells Fargo & Co. told investors last week, when posting earnings, that they were increasingly concerned about loans to oil and gas companies.

Toshiba Executives Resign Over $1.2 Billion Accounting Scandal - (www.bloomberg.com) Toshiba Corp. President Hisao Tanaka and his two predecessors quit after investigators found that the Japanese conglomerate inflated earnings by at least $1.2 billion since the global financial crisis. Along with Tanaka, Vice Chairman Norio Sasaki and adviser Atsutoshi Nishida also resigned to take responsibility for accounting irregularities that occurred under their watch. The Tokyo-based company said Tuesday it will correct earnings by at least 152 billion yen, based on the results of an independent investigation of its books stretching back about six years. “For the company to rebuild there needs to be a renewal of the management structure,” Tanaka, a 42-year veteran, said during a briefing in which he, Chairman Masashi Muromachi and Vice President Keizo Maeda all bowed in apology.

Wall Street Lenders Growing Impatient With U.S. Shale Revolution - (www.bloomberg.com) Halcon Resources Corp. almost ran into trouble with its banks in June 2013. And again in March 2014. And in February 2015. Each time, the shale driller came close to violating debt limits set by its lenders, endangering a credit line that provided as much as $1.05 billion in much-needed cash. Each time, Halcon’s banks, led by JPMorgan Chase & Co. and Wells Fargo & Co., loosened their restrictions, allowing Halcon to keep borrowing. That kind of patience may be coming to an end. Bank regulators have issued warningson the risks involved in lending to U.S. drillers, threatening a cash crunch in an industry that’s more dependent than ever on other people’s money. Wall Street has been one of the biggest allies of the shale revolution, bankrolling thousands of wells from Texas to North Dakota. The question is how that will change with oil prices down by half since last year to about $50.64 a barrel. “Lenders in general are increasing pressure on oil companies either to raise more equity or do some sort of transaction to pay down their credit lines and free up extra cash,” said Jimmy Vallee, a partner in the energy mergers and acquisitions practice at law firm Paul Hastings LLP in Houston.

OTHER STORIES:

New Data Show How Bad Things Were for Greek Banks the Week Capital Controls Were Introduced - (www.bloomberg.com)
Four Signs of Pain in Commodities - (www.bloomberg.com)

As Markets Swing, Beijing Steadies Yuan - (online.wsj.com)
New Brics bank in Shanghai to challenge major institutions - (www.ft.com)