Oil slump weighing on housing markets in Texas,
North Dakota - (www.chron.com) There's a dark side to those delightfully low
gas prices: Housing markets are slumping in communities that were recently
flush from the U.S. shale oil fracking boom. Home sales are down sharply this
year in North Dakota and the West Texas cities of Midland and Odessa. Home
sales have also slowed in El Paso, and, more recently, in Houston. The drilling
boom, driven by high oil prices and new discoveries, brought tens of thousands
of workers to oil fields in several states to run drilling rigs and supply the equipment
and services needed to produce crude. Then the price of oil tanked, plummeting
by half in late 2014 and reaching levels this year not seen since the financial
crisis. Oil companies abandoned drilling projects and began laying off workers.
"When your economic base is undergoing that kind of pressure, your local
market is going to feel it," said Jim Gaines, chief economist at the Real
Estate Center at Texas A&M University.
Oil-Producing States Battered as Tax-Gushing
Wells Are Shut Down - (www.bloomberg.com) In Kern County, California, one
of the nation’s biggest oil producers, tumbling energy prices have wiped more
than $8
billion from its property-tax base, forcing officials to tap into
reserves and cut every department’s budget. It’s only getting worse. The county
of 875,000 in the arid Central Valley north of Los Angeles may face another
blow in January, when it reassess the oil-rich fields that line the landscape.
Last year’s tax bills were based on crude selling for $54 a barrel. It finished
Monday at less than $37. “We may never go back to $99 a barrel, but we were
good at $54,” said Nancy Lawson, assistant administrative officer of Kern
County, which includes the city of Bakersfield. “If it keeps going down and
stays down we may have to look at more cuts in the next budget.”
Hedge Funds Struggle With Steep Losses and High
Expectations - (www.nytimes.com) When
David Einhorn, the founder of Greenlight Capital, plays host to his investors at
the American Museum of Natural History in January, his guests will sip
cocktails and dine under a 94-foot blue whale in the Milstein Hall. William A.
Ackman will hold court one week later, at the New York Public Library at Bryant
Park, where investors in his Pershing Square Capital Management will mingle in
the historic halls of marble, wood and gold. The lavish settings will be the
same as in years past, but the circumstances will be strikingly different: Both
billionaire hedge fund managers, and many of their peers, will be under
pressure to explain to their investors how they lost so much money this year. As
the final performance figures for the industry come in, one thing is clear:
2015 could not have ended soon enough for many managers and their investors.
Hedge fund managers like Mr. Einhorn, Mr. Ackman and Larry Robbins have stunned
investors with the depth of their losses — in the double digits for some of
their investment portfolios through early December.
Oil companies brace for a grim 2016 amid
sustained price crash - (www.ft.com) As
a miserable year for the oil industry draws to a close, any relief executives
might feel will be tempered by the knowledge that 2016 is shaping up to be even
worse. The collapse in
oil and gas prices that
began in the summer of last year has already cost hundreds of thousands of jobs,
and caused projects worth hundreds of billions of dollars to be cancelled or
delayed. Today, the external environment is more challenging than it was a year
ago, and the energy companies’ ability to cope with tough conditions is
diminished. For oil and gas producers, 2016 will be a year of cost-cutting,
restructuring, refinancing when it is possible, and in some cases bankruptcy
when it is not. Merger and acquisition activity, which was sluggish this year
because of disagreements over valuations, may pick up speed. Oil and gas
producers that have other sources of revenues such as refining and chemicals
operations, and that still have access to capital markets, will find life
difficult but should be able to survive. Companies that are exclusively focused
on production and have weak balance sheets will have done well if they can make
it through the year.
China’s Xi tells grumbling party cadres: ‘Don’t
talk back’ - (www.washingtonpost.com) Careless
talk could cost you your job. Especially if you bad-mouth the boss. Chinese
President Xi Jinping has carried out the most far-reaching anti-corruption
campaign in Communist Party history — at the same time as the harshest crackdown on free speech in decades. Now he is tightening the
screws further, outlawing internal dissent within the party through new
disciplinary rules that have led to an academic, a newspaper editor and a
senior police officer getting fired for “improper discussion” of government
policy. The purge is an attempt to silence rising dissent within the party,
experts say, and is a reflection of Xi’s obsession with control, as well as the
dramatic centralization of power he has engineered in the past two years.
Double-digit home price gains continue in some cities, S&P/Case-Shiller says - (www.marketwatch.com)
Putin's Bailout Bank Needs a Rescue; It's an $18 Billion Whopper - (www.bloomberg.com)
China Shares Log Biggest Fall in a Month - (online.wsj.com)
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