Monday February 15 2016 Housing and Economic stories

TOP STORIES:

Exxon slashes spending after smallest profit in years - (www.reuters.com) Exxon Mobil Corp on Tuesday reported its smallest quarterly profit in more than a decade and said it will cut 2016 spending by one-quarter and suspend share repurchases as it copes with a prolonged downturn in crude prices. Shares of the world's largest publicly traded oil company fell as much as 3.6 percent on the New York Stock Exchange as the price of crude slid 4.2 percent. Crude oil prices have dropped about 70 percent from the 2014 high over $100 barrel. Current prices at around $30 barrel have triggered a wave of spending cuts as oil companies slash investment in new wells and projects to conserve cash.

Restaurant Industry Suddenly Tanks, Worst Plunge since the Beginning of the Financial Crisis - (www.wolfstreet.com)  The restaurant industry has been unscathed by the economic slowdown. The meme is that Millennials like to spend their money on “experiences” – such as eating out, drinking at their favorite watering holes, and going places (and eating out) – rather than buying stuff, particularly stuff at brick-and-mortar stores. These brick-and-mortar stores have been singing the blues of dismal sales, earnings warnings, layoffs, and store closings as consumers refuse to splurge. And to add insult to injury, consumers have been shifting their spending online. But the restaurant industry has been flying above the fray, benefiting from Millennials’ preference for “experiences.”

Credit Market Fear Gauge Jumps as Oil Plunge Renews Global Rout - (www.bloomberg.com) Credit markets were ensnared in the global equities selloff Tuesday, with measures of corporate default risk in the U.S. jumping to a two-week high. The risk premium on the Markit CDX North American High Yield Index, a credit-default swaps benchmark tied to the debt of 100 speculative-grade companies, jumped 26 basis points to 536 basis points at 4:32 p.m. in New York. A similar index for investment-grade debt jumped 4.6 basis points to 108.652, also a two-week high. Yields on benchmark 10-year Treasuries dropped to the lowest in almost 10 months Tuesday, as declines in stocks and oil again darkened outlook for global growth. 

Kuroda Surprise Poses $250 Billion Question for Japanese Banks - (www.bloomberg.com) The Bank of Japan’s surprise decision to start charging lenders for as much as 30 trillion yen ($250 billion) of deposits they have parked with it has left them with a quandary: what else to do with all that cash? When Governor Haruhiko Kuroda’s policy takes effect on Feb. 16, the 0.1 percent negative rate will probably apply to about 10 trillion yen to 30 trillion yen of funds held in current accounts at the BOJ, according to people with knowledge of the matter. Negative rates are likely to shrink net interest margins that are already among the lowest in the world. Below are options for banks to put their excess reserves to other use, and to make up for the charges they face if they continue to leave the cash at the BOJ.

With NFL Rams gone, St. Louis still stuck with stadium debt - (www.reuters.com)  The National Football League’s Rams left behind more than bitterness when the team ditched St. Louis for Los Angeles last month - it left a stadium saddled with about $144 million in debt and maintenance costs. Taxpayers will now shoulder the remaining payments for the Edward Jones Dome with only the help of revenue from tractor pulls, volleyball tournaments, concerts and the like. St. Louis Board of Aldermen President Lewis Reed has asked the NFL to help pay off the stadium, but so far has gotten no response. “The fans are being left holding the bag,” Reed said. “I think they should factor that into the total cost of the move."

OTHER STORIES:

Stock Rout Deepens in Asia as Oil Slumps Below $30; Yen Climbs - (www.bloomberg.com)
Yen Shrugs at BOJ Negative Rate as Fear and Oil Drive Haven Bid - (www.bloomberg.com)
Bank Bear Market Gets Worse as Goldman, Citi Sell Off Again - (www.bloomberg.com)

China's $7.6 billion Ponzi scam highlights growing online risks - (www.reuters.com)
S&P thinks 10 of the world's biggest oil companies just got a lot riskier - (www.businessinsider.com)
The Fed Wants to Test How Banks Would Handle Negative Rates - (www.bloomberg.com)