KeNo's Housing and Economic Portal: Wednesday March 30 2016 Housing and Economic stories

Tuesday, March 29, 2016

Wednesday March 30 2016 Housing and Economic stories

First Ocean Freight Rates Collapse to “Zero,” China Freight Index Plunges to Record Low, Bailouts Loom - (www.wolfstreet.com) The amount it costs to ship containers from China to ports around the world has plunged to historic lows. As container carriers are sinking deeper into trouble, whipped by lackluster global demand and rampant oversupply of container ships, they’re escalating a brutal price war with absurd consequences. Maritime research and advisory firm Drewry (emphasis mine): Recent news stories, backed up by anecdotal stories told to Drewry, report that carriers have quoted zero dollar freight rates to some forwarders on certain lanes out of Asia. Whether these are merely isolated cases or something more widespread is difficult to judge at the present time, but whatever the exact quantum, there is no denying the container rates are now close to the historic lows as seen in 2009.

Japan Seen Stuck With Negative Yields on 70% of Bonds for 2016 - (www.bloomberg.com) Japanese primary dealers say negative bond yields are here to stay in 2016, and room for capital gains has run out. Nine of 13 respondents to a poll conducted last week predict the benchmark 10-year Japanese government bond yield will end the year below zero, after sinking to a record minus 0.135 percent on March 18. The lowest forecast of minus 0.2 percent comes from Morgan Stanley MUFG Securities Co., while the median of minus 0.1 percent is in line with analyst estimates for Switzerland.

The big bust in the oil fields - (www.washingtonpost.com) He’d borrowed from banks and investors and retirement funds, all in a frenzied mission to drill for oil and gas, and by the time Terry Swift realized he’d gone too far, this was his debt: $1.349 billion. His company, founded by his father almost 40 years earlier, had plunged into bankruptcy and laid off 25 percent of its staff. Its shares had been pulled from the New York Stock Exchange. And now Swift was in a company Chevrolet Tahoe, driving back to the flat and dusty place where his bets had gone bust. Swift was coming to this energy-rich strip of South Texas trying to grapple with how much blame he shouldered for the failure of his company. A low-key and historically cautious oil chief executive who eschews private jets and orders low-fat salads for lunch, he had made what he thought was the best financial move of the past decade — a gamble on rising oil prices — and yet was ensnared in an industry-wide craze of dangerous debt.

America Hits Rock Bottom: Cities Are Paying Criminals $1000 Per Month "Not To Kill" - (www.zerohedge.com) It is widely known that in the past 6 months there has been a loud debate about helicopter money, i.e., giving out ordinary people (bypassing the banks) money directly printed by the Fed. What is less known is that when it comes to the most despicable underbelly of American society, cash to the tune of $1000 per month is already being "helicoptered" to some of the most brazen criminals living in the US today with one simple condition: "don't kill people." Take the case of Lonnie Holmes, 21, who lives in Richmond, a working-class suburb north of San Francisco and whose four his cousins had died in shootings. He was a passenger in a car involved in a drive-by shooting, police said. And he was arrested for carrying a loaded gun. When Holmes was released from prison last year, officials in this city offered something unusual to try to keep him alive: money. They began paying Holmes as much as $1,000 a month not to commit another gun crime.

Bond Offering Tied to Prosper Marketplace Loans Gets Chilly Reception - (online.wsj.com) A bond offering based on a batch of personal loans made by Prosper Marketplace Inc. got a cold reception late Thursday, the latest sign of investor skittishness toward fast-growing online lenders. Investors who bought the securities demanded yields as much as 5 percentage points higher than for a similar deal late last year. The response to the Prosper loans was comparable to other recent sales of online loans, and is further evidence that the firms are facing a big hurdle in their explosive growth. It is also notable because investor fears about other parts of the credit markets, such as corporate junk bonds, have receded in recent weeks.

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