Tuesday March 8 2016 Housing and Economic stories

TOP STORIES:

SkyBridge Withdraws $1 Billion From Paulson, Loeb and Rosenstein - (www.bloomberg.com) Anthony Scaramucci’s SkyBridge Capital, a high-profile investor in hedge funds, pulled about $1 billion in the fourth quarter from event-driven strategies run by John Paulson, Daniel Loeb and Barry Rosenstein in a shift away from volatile stock markets. SkyBridge disclosed Thursday that it reduced its exposure to a pair of Paulson funds whose value swung widely during the year. The New York-based firm also cut its holding in Loeb’s Third Point Ultra fund and Rosenstein’s Jana Nirvana, according to a regulatory filing by SkyBridge’s public vehicle for allocating investor capital to different money managers.

Now It’s Even Worse Than it Was When Lehman Collapsed, But It’s “Contained” - (www.wolfstreet.com) The pile of toxic corporate bonds in the US, euphemistically called “distressed” debt, ballooned 15% in the single month of February to $327.8 billion, up 265% from a year ago, according to S&P Capital IQ. The number of S&P rated US companies with distressed debt rose 9% in February to 353, up 128% from a year ago. The last time the pile of distressed debt had soared to this level was in November 2008, and the last time the number of distressed issuers had shot up to these levels was in October 2008; Lehman had declared bankruptcy in September.

Mansion sales and discount dining: oil rout hits Houston's rich - (www.reuters.com) Prices for mansions in Houston's swankiest neighborhood have tumbled in lock step with crude prices. The Houston Opera has offered free season tickets to patrons who lost their jobs in the oil bust. A fancy restaurant offers cut-price dinners. Twenty months into the worst oil price crash since the 1980s, well-heeled residents of the world's oil capital are among the hardest hit largely because tanking energy firm shares make up much of oil and gas executives' compensation. In River Oaks, a neighborhood of palatial mansions and lush gardens, the average sales price of a home has tumbled to $1.3 million from $2 million in the middle of 2014 when oil began its more than 70 percent slide, according to data from the Houston Association of Realtors and Keller Williams. Median property prices in the area have already fallen further in this downturn, which is not yet over, than the 16 percent drop in the previous oil slump in 2008 and 2009.

Liquidity, Kill Switches Are the Talk of the Currency Universe - (www.bloomberg.com) The specter of shrinking liquidity gripping fixed-income desks globally is creeping its way into the world’s biggest, most liquid financial market. Amid conversations about central bank policy and algorithmic trading, it was concerns about diminishing liquidity -- or the prospects of it drying up entirely during times of market stress -- that dominated discussions this week at the TradeTech FX conference in Miami. Pension funds, hedge funds and other asset managers were seeking answers after a string of so-called flash crashes in recent months sent some of the world’s most-traded currencies plunging. New Zealand’s dollar, the Norwegian krone and South Africa’s rand have all become victims to the phenomenon, as regulation pushes banks to reduce their size and cut down on market making. The ability to exchange currencies rapidly and cheaply is vital to everyone from importers and exporters to central banks seeking to ensure the smooth functioning of global markets.

Goldman Struggling to Sell $2 Billion in Bonds Backing Solera Buyout - (online.wsj.com)  Goldman Sachs Group Inc. is struggling to sell $2 billion in bonds backing the buyout of software firm Solera Holdings Inc., another sign of cracks in the market for the low-rated debt that has been a key driver of the takeover boom. Solera’s sale to Vista Equity Partners was one of the biggest leveraged buyouts of last year, at $6.5 billion including debt, and has been widely viewed as a test of the credit market. The bond sale comes at a time when U.S. junk-bond issuance has dropped more than 70% from a year ago and borrowing costs have increased, as risk-averse investors back away from riskier securities or demand sweeter terms.

OTHER STORIES:

China's Equities Plunge Most in a Month as Volatility Reignites - (www.bloomberg.com)
U.S. Stocks Fluctuate as Commodity Shares Slip With Crude Oil - (www.bloomberg.com)
Oil Retreats From Three-Week High as U.S. Crude Supplies Expand - (www.bloomberg.com)

Biggest Wave Yet of U.S. Oil Defaults Looms as Bust Intensifies - (www.bloomberg.com)
Chinese Finance Official Says World Economy Needs Fiscal Jolt - (www.bloomberg.com)
China Unveils Its Deliverables for G-20 -- And No Plaza Pact - (www.bloomberg.com)
Rush of Corporate Bonds Inflames Worries About China’s Debt - (online.wsj.com)
China's Shadow Banking Evolves to Dodge Crackdown - (www.bloomberg.com)