Wednesday September 30 Housing and Economic stories

TOP STORIES:

Saudi Stocks Drop Most in Mideast as Fed Stirs Growth Concerns - (www.bloomberg.com) Saudi Arabian equities fell the most in the Arab world after the Federal Reserve’s decision to keep interest rates unchanged sparked concern over global growth and the price of oil capped its third week of losses. The Tadawul All Share Index fell 1.4 percent to 7,365.98 at the close in Riyadh to the lowest in almost a month, marking a seventh day of losses. Banks made up four out of the top five contributors to the decline. Abu Dhabi’s ADX General Index advanced 0.6 percent. The Bloomberg GCC 200 Index, made up of the biggest and most liquid shares in the six-nation Gulf Cooperation Council, slipped 0.6 percent. That sent the premium it commands over MSCI Inc.’s emerging markets index on a future price-to-earnings basis to the lowest in almost five months.

FBI launches investigation into Malaysian state fund 1MDB: WSJ - (www.channelnewsasia.com) The U.S. Federal Bureau of Investigation (FBI) has launched an investigation into allegations of money-laundering at troubled Malaysian state fund 1MDB, the Wall Street Journal reported on Sunday citing an unidentified source. The scope of the investigation into the debt-laden 1Malaysia Development Berhad (1MDB) was not clear, said the newspaper, which cited "a person familiar with the matter". Neither the FBI nor 1MDB responded to a request for comment. The reported FBI investigation comes shortly after a former member of Malaysia's ruling party was arrested just before travelling to the United States where he planned to make a police complaint and urge U.S. authorities to look into the allegations of money-laundering at 1MDB.

One energy company is on the verge of a 'liquidity death spiral' – (www.businessinsider.com) Occidental Petroleum made a sweet deal on November 30, a masterpiece of Wall Street engineering. And just about every investor that touched it is now getting their hands burned off. That day, Oxy spun off California Resources. It held Oxy’s oil-and-gas exploration-and-production assets in California. It’s the state’s largest natural gas producer and its largest oil-and-gas acreage holder with operations in the basins of Los Angeles, San Joaquin, Ventura, and Sacramento. The EIA finally conceded that point in May 2014 and slashed the delusional estimates of the reserves by 96%. California isn’t exactly the easiest place for fracking in the US. When the EIA finally acknowledged reality, Oxy was the biggest loser…. Bondholders and stockholders have serious doubts. Its stock is currently trading at $3.35 a share, down 66% from its 52-week high, as bottom-fishers have jumped in after the low of $2.67 in August. And its bonds are getting killed. S&P Capital IQ’s LCD reported that all three bond issues hit record lows yesterday after the Moody’s whack-down the day before:

For Hedge Funds, The Real Pain Is Only Just Starting - (www.zerohedge.com) In the aftermath of the August hedge fund slaughter in which the most widely held by "smart money" stocks got pummeled leading to the marquee hedge fund names reporting their worst month in years, and leading others - such as us - to once again mock the concept of "hedging" (only a handful of funds actually were hedged against "black Monday" such as Mark Spitznagel, who had a billion dollar payday on August 24 and who has since warned that if investors thought August was scary "They Ain't Seen Nothin' Yet"), the consensus opinion was that the pain for the hedge fund "Hotel California" is over, and that the worst of the pain is behind us. Once again consensus is dead wrong. Presenting Exhibit A: Goldman's latest YTD performance breakdown by strategy basket.

FBI Ramps Up Biometrics Programs to Catalogue Information on Everyone in America - (www.wolfstreet.com) In the last few years, FBI has been dramatically expanding its biometrics programs, whether by adding face recognition to its vast Next Generation Identification (NGI) database or pushing out mobile biometrics capabilities for  “time-critical situations” through its Repository for Individuals of Special Concern (RISC). But two new developments—both introduced with next to no media attention—will impact far more every-day Americans than anything the FBI has done on biometrics in the past. FBI Combines Civil and Criminal Fingerprints into One Fully Searchable Database: Being a job seeker isn’t a crime. But the FBI has made a big change in how it deals with fingerprints that might make it seem that way. For the first time, fingerprints and biographical information sent to the FBI for a background check will be stored and searched right along with fingerprints taken for criminal purposes.

OTHER STORIES:

Fed Dissenter Lacker Says U.S. Economy Needs Higher Rates Now - (www.bloomberg.com)
Credit Suisse, BofA Say Fed Makes it Tougher to Be a Dollar Bull - (www.bloomberg.com)
Turkish jets hit Kurdish militant camps in Iraq, at least 55 killed: sources - (www.reuters.com)
U.S. says Assad must go, timing down to negotiation - (www.reuters.com)
China warns Japan over expanding military role abroad - (www.bbc.com)
East European leaders argue as migrants pour across borders - (www.reuters.com)

A Divided Fed Pits World's Woes Against Domestic Growth - (www.reuters.com)
Fed Officials Make Case for 2015 Liftoff After September Hold - (www.bloomberg.com)
The Richest Americans Are Winning the Economic Recovery - (www.bloomberg.com)
Bullard Says He Argued Against Fed’s Call to Leave Rates on Hold - (www.bloomberg.com)
Catalonia’s separatists: ‘The Spanish state has failed. We can change this’ - (www.theguardian.com)