KeNo's Housing and Economic Portal: Wednesday January 13 2016 Housing and Economic stories

Tuesday, January 12, 2016

Wednesday January 13 2016 Housing and Economic stories

Hedge Funds Are Shuttered as Investors Go With Europe's Big Guns - (www.bloomberg.com) The next casualty in Saudi Arabia's oil price war might be its own economy. That's because, with oil revenues drying up, Saudi Arabia is about to make the same mistake that Europe has over and over and over again. What's that? Well, trying to cut its budget without cutting interest rates or otherwise softening the economic blow. Now, it's true that Saudi Arabia has to do something. You can't have an economy based on redistributing oil money when there isn't that much oil money to redistribute. Especially when it doesn't look like that's going to change anytime soon. Saudi Arabia, you see, has been flooding the market with cheap crude to try to drive its high-cost competitors out of business, but that isn't as easy as it used to be.

China's Seven-Minute Selling Frenzy That Shook Global Markets - (www.bloomberg.com) The sell orders piled up fast on Monday at Shenwan Hongyuan Group, China’s fifth-biggest brokerage by market value. China’s CSI 300 Index had just tumbled 5 percent, triggering a 15-minute trading halt, and stock investors were scrambling to exit before getting locked in by a full-day suspension set to take effect at 7 percent. When the first halt was lifted, the market reaction was swift: it took just seven minutes for losses to reach the limit as volumes surged to their highs of the day. “Investors rushed to the door during the level-one stage of the circuit breaker as they fretted the market would go down further,” said William Wong, the head of sales trading at Shenwan Hongyuan in Hong Kong.

Saudi Arabia has a giant mess on its hands - (www.washingtonpost.com) The next casualty in Saudi Arabia's oil price war might be its own economy. That's because, with oil revenues drying up, Saudi Arabia is about to make the same mistake that Europe has over and over and over again. What's that? Well, trying to cut its budget without cutting interest rates or otherwise softening the economic blow. Now, it's true that Saudi Arabia has to do something. You can't have an economy based on redistributing oil money when there isn't that much oil money to redistribute. Especially when it doesn't look like that's going to change anytime soon. Saudi Arabia, you see, has been flooding the market with cheap crude to try to drive its high-cost competitors out of business, but that isn't as easy as it used to be.

Biggest Economies Face $7 Trillion Debt Refinancing Tab in 2016 - (www.bloomberg.com) The amount of debt that the governments of the world’s leading economies will need to refinance in 2016 will be little changed from last year as nations make strides in cutting budget deficits to a third of the highs seen during the financial crisis. The value of bills, notes and bonds coming due for the Group-of-Seven nations plus Brazil, China, India and Russia will total $7.1 trillion, compared with $7 trillion in 2015 and down from $7.6 trillion in 2012. Japan, Germany, Italy and Canada will all see redemptions fall, while the U.S., China and the U.K. face increases, data compiled by Bloomberg show. The amount of maturing debt has gradually fallen since Bloomberg began collating the data in 2012. The decline may bring some support to the bond market as the U.S. Federal Reserve gradually raises interest rates, pushing yields up from record lows. Budget deficits are forecast by economists to narrow for a seventh straight year in 2016 as governments extend the maturity of their outstanding debt and continue to cut back on the extra spending put in place to combat the global financial meltdown.

European Stocks Suffer Worst Start To Year Ever - (www.zerohedge.com) Led by a 4.3% collapse in Germany's DAX index, European Stocks plunged 2.5% today which is the worst start to a year ever. European credit markets spiked higher in risk. 10Y bund yields tumbled over 6bps and peripheral sovereign risk spreads jumped 10-15bps. Not a good start for Draghi and his pals... Germany led the collapse... Which has driven Stoxx 600 - the broadest European stock index - down over 2.5% for its worst start to a year ever!!

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