KeNo's Housing and Economic Portal: Friday August 28 Housing and Economic stories

TOP STORIES:

Low Oil Prices Pose Threat to Texas Fracking Bonanza - (www.nytimes.com) No place in Texas produces more oil than Karnes County, but suddenly the roaring economy here is cooling fast, chilled by the plunging price of crude. Workers who migrated from far and wide to find work here, chasing newfound oil riches, are being laid off, deserting their recreational vehicle parks and going home. Hay farmers who became instant millionaires on royalty checks for their land have suddenly fallen behind on payments for new tractors they bought when cash was flowing. Scores of mobile steel tanks and portable toilets used at the ubiquitous wells are stacked, unused, along county roads. “Everybody is waiting for doomsday,” said Vi Malone, the Karnes County treasurer. “Everything was good, and everybody was getting these big checks, and everybody waited for their land to be leased, and then it all came to a screeching halt around the beginning of the year.”

Ukraine fears 'big war' as Russia sends in more troops - (www.independent.co.uk) Military authorities in Ukraine believe the number of Russian troops within and close to its borders has risen to more than 50,000, raising fears of a substantial escalation in the conflict raging in Ukraine's eastern regions. Almost 9,000 Russian Federation Armed Forces personnel are believed to be based inside Ukraine, according to reports from the country’s National Security and Defense Council (NSDC) seen by The Independent on Sunday. The rest are based in the neighbouring Rostov region of Russia, including mechanised assault units and communications command systems. This is in addition to 33,400 so-called “illegal armed formations” of Russian-backed separatist soldiers inside eastern Ukraine, with 400 main battle tanks and close to 2,000 armoured troop carriers reported to be at “full combat readiness”. Western countries have repeatedly accused Russia of becoming involved in the conflict, a claim Moscow has denied – despite what Ukraine and other observers see as evidence of troop build-up.

China Tianjin blasts: Evacuations as sodium cyanide found - (www.bbc.com) Chinese authorities have ordered the evacuation of residents within a 3km radius of the Tianjin blast site over fears of chemical contamination. The evacuations came after an apparent change in wind direction, and as police confirmed the highly toxic chemical sodium cyanide was found near the site. At least 112 people died in the blasts, officials said on Sunday, and more than 700 have been hospitalised. Officials have identified 24 of the dead, with 88 still to be identified. Remarkably, a man was found alive just 50m from the blast core, Chinese state news agency Xinhua reported. The man was able to talk when he was found and is now in hospital, according to the report.

Doomsday clock for global market crash strikes one minute to midnight as central banks lose control - (www.telegraph.co.uk) Time is now rapidly running out. From China to Brazil, the central banks have lost control and at the same time the global economy is grinding to a halt. It is only a matter of time before stock markets collapse under the weight of their lofty expectations and record valuations. ... The great props to the world economy are now beginning to fall. China is going into reverse. And the emerging markets that consumed so many of our products are crippled by currency devaluation. The famed Brics of Brazil, Russia, India, China and South Africa, to whom the West was supposed to pass on the torch of economic growth, are in varying states of disarray. As central banks run out of silver bullets then, credit markets are desperately seeking to reprice risk. The London Interbank Offered Rate (Libor), a guide to how worried UK banks are about lending to each other, has been steadily rising during the past 12 months. Part of this process is a healthy return to normal pricing of risk after six years of extraordinary monetary stimulus. However, as the essential transmission systems of lending between banks begin to take the strain, it is quite possible that six years of reliance on central banks for funds has left the credit system unable to cope.

Funds For Fracking Finally Dry Up: One Last Hail Mary Pass Remains – (www.zerohedge.com) Is Saudi Arabia on the verge of winning the war on US Shale firms? It appears the spigot of malinvestment-subsidizing liquidity that kept numerous zombie energy firms alive has been shut off almost entirely. As oil prices return to cycle lows, so credit risk has spiked to record highs and issuance of life-giving bonds has collapsed. As Reuters reports, this has opened up opportunities for deep-pocketed private equity firms to push for restructuring or buy assets as many oil companies need cash to replenish banks' slimmed-down lending facilities, service their bonds and finance drilling of new wells to keep pumping oil and sustain cash flow. But hope is fading as one private equity form CEO warns "I would say, this is a good time to be careful when it comes to investing in energy."

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