Friday October 8 Housing and Economic stories

TOP STORIES:

The Real Estate Crisis in North Dakota's Man Camps - (www.bloomberg.com) Chain saws and staple guns echo across a $40 million residential complex under construction in Williston, North Dakota, a few miles from almost-empty camps once filled with oil workers.  After struggling to house thousands of migrant roughnecks during the boom, the state faces a new real-estate crisis: The frenzied drilling that made it No. 1 in personal-income growth and job creation for five consecutive years hasn’t lasted long enough to support the oil-fueled building explosion. Civic leaders and developers say many new units were already in the pipeline, and they anticipate another influx of workers when oil prices rise again. But for now, hundreds of dwellings approved during the heady days are rising, skeletons of wood and cement surrounded by rolling grasslands, with too few residents who can afford them. 

Brazil's Record Overseas Borrowing Comes Back to Bite Companies - (www.bloomberg.com) Brazilian companies including state oil producer Petrobras are at risk from a weakening real after they issued a record amount of debt in foreign currency. The mismatch prompted President Dilma Rousseff to say over the weekend that she’s “extremely concerned” about the situation. Borrowing in overseas markets by non-finance companies reached a record $137 billion last year, seven times the level just a decade earlier, according to the Bank for International Settlements. Petroleo Brasileiro SA, with $56 billion of outstanding bonds, has become the world’s largest non-investment grade corporate issuer after Standard & Poor’s cut its rating this month following a similar move by Moody’s Investors Service. Brazil’s corporate debt is the worst performing in Latin America this year, losing 13 percent as the real plummeted the most among major currencies. 

Brazil corporate defaults hit three-year high as recession worsens - (www.reuters.com) Loan default and unpaid utility bills among Brazilian companies rose during the first eight months at the fastest pace in three years, reflecting the steepest economic recession in 25 years, soaring borrowing costs and a slump in the currency, credit research firm Serasa Experian said on Monday. The so-called Serasa Experian Corporate Default Index rose 13.3 percent in the January-to-August period from a year earlier, the biggest jump since a 14.3 percent rise three years ago. On an annual basis, corporate delinquencies surged 16.1 percent in August from a year earlier, Serasa said. On a monthly basis, corporate defaults fell 5.7 percent in August versus July, Serasa said.

Catalonia's president placed under investigation for 2014 independence referendum - (www.startribune.com) Catalonia's acting regional president has been placed under investigation by a court for his role in staging a referendum on independence last year, officials said Tuesday. Artur Mas will appear Oct. 15 for questions concerning the Nov. 9, 2014, independence referendum called by him, Catalonia's regional justice department said. The plebiscite was held despite having been suspended by the Constitutional Court. On Sunday, Catalonia held a regional election and the "Together for Yes" pro-independence alliance headed by Mas won 62 seats in Catalonia's 135-member parliament — six short of a majority. Mas had promised to go for secession if they had achieved a majority. Catalonia labeled the 2014 referendum an informal process to try to skirt the suspension order. The Constitutional Court later ruled the plebiscite to have been unconstitutional.

US junk bonds cracking after debt binge - (www.ft.com)  After the debt binge comes the bill and that is the grim message for investors looking at the present performance of the US corporate bond market. As the third quarter draws to a close, slowing global economic activity threatens the earnings power of many US companies, which have amassed $7.8tn in debt. Years of easy monetary policy that kept borrowing costs low, a wave of mergers and acquisitions and the spectre of shareholder activism have all contributed to an erosion of balance sheet quality. Most vulnerable are junk rated companies, which account for $2.5tn of the recent US corporate debt binge, with bonds worth roughly $1.5tn set to mature over the next five years, according to S&P. Refinancing that amount may prove a hurdle for corporate executives and chief financial officers if earnings come under more pressure.

OTHER STORIES:

Asian Stocks Tumble Toward 3-Year Low as China Angst Fuels Rout - (www.bloomberg.com)
Glencore Fear Trade Grips Debt Market as Commodity Pain Spreads - (www.bloomberg.com)
Glencore's Trading `Black Box' Leaves Analysts Split on Future - (www.bloomberg.com)
Stocks Tumble as Glencore, Biotech Roil Markets; Bonds Advance - (www.bloomberg.com)
Obama, Putin clash over Syria crisis at the United Nations - (www.washingtonpost.com)

Taliban storms into northern Afghan city in major blow for security forces - (www.washingtonpost.com)

Fed saying yes to rate hike but Congress may say no - (www.cnbc.com)

U.S. Stock Futures Drop After Health Rout as Dollar Holds Ground - (www.bloomberg.com)
The Fed speaks, and investors scratch their heads - (www.cnbc.com)