Monday May 30 2016 Housing and Economic stories

TOP STORIES:

Auto, Mortgage Delinquencies Climb in Energy Regions - (www.wsj.com) The year-and-a-half-long spell of low oil prices is making it hard for households to pay the bills in energy-producing regions, an ominous localized trend that comes as the rest of the country returns to pre-recession levels of health. Delinquencies on auto loans have spiked in the U.S. counties that had the highest employment in the oil-and-gas industry, according to the Federal Reserve Bank of New York’s quarterly report on household debt and credit. Mortgage delinquencies have also climbed, though not as dramatically. Tuesday’s report underscores that although the decline in oil prices has saved many Americans money at the pump, it has caused significant economic fallout for those who were working in the energy industry during the boom.

Illinois’s Lost Year About to Become Two as Budget Cliff Nears - (www.bloomberg.com) Illinois lawmakers have been busy in the last week of the regular legislative session. They moved to establish a youth-only turkey hunting season, set standards on where podiatrists can perform amputations and allowed for the adoption of retired police dogs. Yet, the Land of Lincoln remains the only state in the nation without a budget, mired in the longest such standoff in its history. After leaving the government since June without a plan for what to spend and how, the Democrat-led legislature and Republican Governor Bruce Rauner have until May 31 to approve one by a majority vote. If not, for the rest of the year it will take three-fifths of the General Assembly to do so, making a compromise considerably harder to reach.

“NIRP is Killing Us,” Wheezes Spain’s Second Biggest Bank -(www.wolfstreet.com) In Europe, banks are beginning to feel the side effects from the ECB’s negative interest rate policy (NIRP), which (among other things) is meant to weaken the euro, fuel inflation, force banks into riskier lending, and prevent Eurozone economies from buckling under the sheer weight of their sovereign debt. But it doesn’t work. Inflation remains much lower than the ECB’s target headline rate of 2%, European sovereign debt continues to grow at an alarming rate, and bank lending remains anemic in most countries. And it could actually end up killing the patient, Europe’s biggest banks. That’s what Francisco González, Executive Chairman of Spain’s number-two financial institution, BBVA, just warned in a speech at the Spring Membership Meeting of the world’s most powerful financial lobby organization, the Institute of International Finance (IIF).

Big Banks Ladle On the Risk - (www.wsj.com) Hungry for revenue, Wall Street banks are taking on more risk to help companies sell large chunks of stock. In block-trade deals, a bank typically buys stock from a company or its private-equity backers at a discount, and then aims to flip the stock to money managers after the market closes that same day. If they can fetch a premium, it is a win for them. But if they can’t unload the shares and prices fall, they bear the loss, minus fees. About half of all share sales by already-public companies listed in the U.S. have been block trades this year, according to data provider Dealogic. In the past five years, these deals typically accounted for about a third of all share sales, and in the past decade that figure averages about a fifth, according to Dealogic. Energy companies, in particular, have sought block trades this year to quickly raise funds and pay down debt.

Former Patriot Coal CEO Murdered  - (www.zerohedge.com) While the US coal industry has had its share of bad news in the past year, following extensive plant shutdowns and numerous bankruptcies including that of the largest US coal producer Peabody Energy, there was some even more tragic news last night when as AP reported, West Virginia State Police say longtime coal company executive and recent Patriot Coal CEO Bennett K. Hatfield has been murdered. Last night, the local press reported that Hatfield, 59, was shot to death Monday at Mountain View Memory Gardens, a cemetery in southern West Virginia's Mingo County. Hatfield resigned in 2015 as president and CEO of Patriot Coal, a month before the company, headquartered in Creve Coeur until early 2015,  filed for Chapter 11 bankruptcy protection for the second time. He was International Coal Group's CEO when a 2006 explosion at the Sago Mine in northern West Virginia killed 12 miners.

OTHER STORIES:

Banks and tech drive Wall Street up over 1 percent - (www.reuters.com)
Insurance In China:  Safe or Sorry? - (www.economist.com)
Hedge funds: Overpriced, underperforming - (www.ft.com)

Treasuries World’s Worst-Performing Bonds as Fed Turns Hawkish - (www.bloomberg.com)
CEO pay climbs again, even as their stock prices don’t - (www.washingtonpost.com)
Banks Said to Devise Plans for Cutting Back Online Lending Risk - (www.bloomberg.com)

Stocks Gain With Emerging Markets as Fed Seen Pulling Off Hike - (www.bloomberg.com)
Oil Extends Gains Near $50 as U.S. Crude Stockpiles Seen Falling - (www.bloomberg.com)
Asian shares gain, dollar firm as U.S. data soothes rate fears - (www.reuters.com)