KeNo's Housing and Economic Portal: Wednesday February 3 2016 Housing and Economic stories

Tuesday, February 2, 2016

Wednesday February 3 2016 Housing and Economic stories

Failed Talks Raise Specter of Biggest Default in Puerto Rico Crisis - (www.nytimes.com) Negotiations to restructure roughly $9 billion of the debt of Puerto Rico’s power company collapsed late Friday, raising the prospect of the biggest default yet in Puerto Rico’s deepening debt crisis. The creditors blamed the utility, the Puerto Rico Electric Power Authority, or Prepa, for scuttling the talks, saying Prepa officials had decided to let a critical expiration date pass without taking action. But Prepa said it was the creditors’ fault for trying to impose a requirement that Prepa had already rejected. Prepa is one of the largest single issuers of Puerto Rico’s $72 billion in debt, most of it in the form of municipal bonds, which are widely held through mutual funds and other investment firms. It is a monopoly, owned by the residents of the island, and until 2014, it was self-regulated.

Amid mounting bills, farmers forced to sell grain at low prices - (www.reuters.com) Facing mounting bills and nervous creditors, U.S. farmers are beginning to sell off their crop stockpile - sometimes at a loss - and easing a months-long logjam prompted by the lowest grains prices in at least five years. Farmers now looking for cash to pay off debts and buy seeds for next season have been lured to sell by a four percent rise in corn futures over the past two weeks. That rise came after speculators with huge short positions were caught off guard when the U.S. Department of Agriculture (USDA) cut its corn and soybean harvest views on Jan. 12. Speculators slashed their bearish bets in the CBOT corn market by more than 36,000 contracts in the week ended Jan. 19. They also cut net short holdings by nearly 28,000 contracts in soybeans, according to data released by the Commodity Futures Trading Commission on Friday.

Investor Chill Hits Technology Sector - (online.wsj.com) The chill in the air here last week wasn’t just from the altitude. A sharp slide in public and private valuations for prominent technology firms hung like a snow cloud over the World Economic Forum’s annual event this year. As investors and entrepreneurs crammed into meetings and parties in this mountain town, many wondered if the tech boom was finally cooling off. “Obviously there are a lot of unicorns,” said Nathan Blecharczyk, co-founder and chief technology officer of Airbnb Inc., referring to venture capital-backed startups with a valuation of more than $1 billion. “Some of those unicorns won’t survive.” For years, the tech sector was going nowhere but up. Fast-spreading connectivity promised a massive potential market for large Internet firms. Artificial intelligence and new data-analytics tools would help companies and governments gain orders of magnitude in efficiency.

US junk-rated energy debt hits two-decade low - (www.ft.com) The value of debt issued by junk-rated US energy companies has plummeted to the lowest level for more than two decades, sending a warning signal about the outlook for the North American oil industry. The average high-yield energy bond has slid to just 56 cents on the dollar, below levels touched during the financial crisis in 2008-09, as investors brace for a wave of bankruptcies. The slump in bond prices took a further step down last week, as crude dropped to 12-year lows below $28 per barrel. Although oil rebounded sharply, at about $32 per barrel on Friday, it was still 14 per cent lower than at the start of the year.

Future Land Development Shares Plunge 14% on Chairman Probe - (www.bloomberg.com) Future Land Development Holdings Ltd. shares plunged by the most since July after the company said its chairman and controlling shareholder Wang Zhenhua was being probed by Changzhou city authorities. In a statement to the Hong Kong stock exchange Friday, the company said the investigation by the Commission of Discipline Inspection of Changzhou city’s Wujin district was of a personal nature and unrelated to company activities. The shares fell as much as 14 percent in Hong Kong, the biggest intraday decline since July 8, and were down 8 percent at 11:15 a.m. Wang is the latest executive to be caught up in a sweep of countrywide investigations in the wake of President Xi Jinping’s anti-corruption drive. Chinese developer Kaisa Group Holdings Ltd. last year was caught up in a government probe, and Agile Property Holdings Ltd.’s founder has also come under scrutiny.

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