Monday January 25 2016 Housing and Economic stories

TOP STORIES:

Copper Sags to Six-Year Low as Barclays Cuts Forecasts on China - (www.bloomberg.com) Copper fell to the lowest since 2009 as Barclays Plc cut its price forecast and said recent data makes a recovery in the first half less likely in China, the world’s biggest user. Metals have been hammered in 2016 as concerns intensify that China’s economic growth is faltering. The nation’s stock selloff and depreciation of the yuan has roiled global financial markets, and data released Saturday showed inflation in December was about half the government’s 2015 target. Mining companies are suffering as prices slump, with shares of Freeport-McMoRan Inc. on Tuesday reaching the lowest since 2000.

The Possibility of $20 Oil Doesn't Sound So Crazy Anymore - (www.bloomberg.com) The world mostly ignored Ed Morse 11 months ago when the head of commodities research at Citigroup said oil could drop as low as $20. It’s paying attention now that crude has tipped below $30. Crude futures in the U.S. sank into the $20s for the first time in more than 12 years on Tuesday, hours after BP Plc said it would slash an additional 4,000 jobs, Petroleo Brasileiro SA cut its spending plan and Petroliam Nasional Bhd. warned that it faces several tough years. Morse, who wrote in a Feb. 9 research note that oil could fall "perhaps as low as the $20 range for a while," said in Calgary Tuesday that the world is now confronting $20 oil. “The $20 number is something you have to talk about,” Morse said. “When you’ve seen a $10 price slide and WTI is trading just slightly above $30, the likelihood is fairly great. Clearly oil markets cannot maintain a price at below the $30 level for very long. The question is how much longer.”

Balance Sheets to Swell $2.8 Trillion as Leasing Rules Tighten - (www.bloomberg.com) Users of leased assets such as airlines and chain stores will have to account for them in their financial statements, bringing at least $2.8 trillion of leases out of the footnotes and on to balance sheets under new accounting rules. A standard issued by the International Accounting Standards Board replaces reporting requirements for leases introduced more than 30 years ago which it says are no longer considered fit for the purpose. That’s because the current standard allows companies to put leases into different categories, only one of which has to be reported on the balance sheet, while the rest can remain in the footnotes. Traded companies using International Financial Reporting Standards or U.S. principles currently have about $3.3 trillion of lease commitments, which represent liabilities. More than 85 percent of those are not reflected on balance sheets, according to IASB estimates. While sophisticated investors and ratings analysts can often estimate the real size of a borrower’s liabilities, that isn’t necessarily true of all investors, said Sue Lloyd, an IASB member.

Canadian Stocks in Bear Market, Loonie Swoons, Crude Crashes to $16, Consumer & Business Confidence Dives… - (www.wolfstreet.com)  Since Christmas Eve, the Toronto Stock Exchange index has dropped every single day, 10 trading days in a row, including so far today as I’m writing this, the longest losing streak since 2002. Now at 12,210, it’s down 21% from its 52-week high, set on April 17, and thus in bear market purgatory. Beaten down energy producers, at about 20% of the index, have had a big impact. But the problems are broader. Among the standouts is the must-own, super-growth, TSX mega-cap Valeant, whose shares have plunged 65% from their 52-week high. The Canadian dollar just dropped below US$0.70 for the first time since spring 2003, to US$0.6996. It now takes C$1.43 to buy a US dollar, up from about parity in 2011, 2012, and much of 2013. That year, Stephen Poloz became governor of the Bank of Canada. His solution was to demolish the currency. 

FANG stumble bad omen for market – (www.cnbc.com)  The popular FANG basket of stocks could be out of gas after stellar returns last year — and that could be troublesome for the stock market. FANG is an acronym created by Jim Cramer for a basket of top-performing technology stocks — Facebook, Amazon.com, Netflix and Alphabet (formerly known as Google). The S&P 500 would have been decidedly more negative for 2015 if it were not for these four stocks. But FANG giveth and FANG taketh away. Forget oil stocks, all four FANG stocks are down more than 3 percent this year, and that's why the market is faltering, statistics show. The bull market has lost its leader.

OTHER STORIES:

Oil slump nears $30 a barrel mark on unabated output
Yen Starts 2016 as Currency of Choice on China Tumult, Oil Slide - (www.bloomberg.com)
An Attack on Democracy? Worries over Poland Mount in Brussels and Berlin - (www.spiegel.de)

Beijing Flexes Muscle to Put Yuan in Line - (www.online.wsj.com)
Surging China-Hong Kong Trade Raises Doubts Over Recovery - (www.bloomberg.com)
From chaos to calm: one year on from Swiss 'Frankenschock' - (www.reuters.com)
Podemos Raises Spanish Socialists' Hopes of Pact to Oust Rajoy - (www.bloomberg.com)