Thursday May 5 2016 Housing and Economic stories

TOP STORIES:

Puerto Rico Warns of More Defaults After Missing May Payment - (www.bloomberg.com) Governor Alejandro Garcia Padilla warned that Puerto Rico bond investors face a cascade of defaults starting in July unless Congress passes legislation that facilitates a restructuring of the commonwealth’s debt. The exhortation made Monday in San Juan came a day after Garcia Padilla announced a moratorium on the payment of $400 million in Government Development Bank debt that matured Sunday. The governor said he was choosing to focus on providing essential services as the commonwealth’s financial crisis worsens, rather than to pay creditors. The default is the biggest yet by the island. The missed payment opens the door to larger and more consequential defaults on general-obligation bonds, which are protected by the island’s constitution. 

Houston Office Market Melts Down - (www.wolfstreet.com)  Office leasing activity in Houston in the first quarter plunged 25% from the already beaten-down levels a year ago, to 1.56 million square feet (msf), worse even than during the Financial Crisis, according to commercial real estate services firm Savills Studley. That’s down 59% from the 3.8 msf of signed deals in the fourth quarter 2014, back when the oil bust was still considered a blip and hadn’t yet impacted the office market. The availability rate rose by 4 percentage points from a year ago to 24.5%, or 47.4 msf for Greater Houston. A horrendous office glut! The availability for Class A buildings jumped by 5.3 percentage points to 26.5%, the “highest mark in more than a decade as sublease space continues to hit the market.”

Three Years After Going Public, Fairway Files Chapter 11 - (www.zerohedge.com) Back in April 2013, during the height of the IPO scramble, the NYT gushed about Fairway's just concluded IPO: "Until recently, Fairway was not much more than a popular market on Manhattan’s Upper West Side, where residents went for goods like smoked salmon, medjool dates and cheeses. Today, it is a fast-growing 12-store grocery chain with ambitions of opening 300 outlets across the country." Just over three years later, the once successful IPO is now a distant memory and soon enough, so will the company behind it because overnight Fairway Group Holdings filed for Chapter 11 bankruptcy protection,

Freddie Mac Won't Pay Treasury Dividend After $354 Million Loss – (www.bloomberg.com)  Freddie Mac won’t make a dividend payment to the U.S. Treasury Department after declining interest rates and widening spreads on investments triggered a $354 million first-quarter loss for the mortgage finance giant. Because the company’s net worth stood at $1 billion as of March 31, it will escape having to draw on its government line of credit, according to a regulatory filing Tuesday. Analysts forecasting the quarterly loss had speculated that it might lead to a request for U.S. aid for the first time since 2012 and rekindle calls to speed reform of the housing finance market. While Freddie Mac reported $3.4 billion of net interest income in the first quarter, that figure was overshadowed by a $4.6 billion decline in the value of derivatives.

China statistics bureau halts some commodities data amid probe - (www.reuters.com)  China has suspended the release of output data for several key commodities amid a crackdown on the illegal sale of state statistics by government officials, raising further concerns about transparency in the world's second-largest economy. With Chinese economic growth at a 25-year low, the lack of such data makes it increasingly difficult for economists to gauge the strength of local demand as Beijing tries to avert a faster slowdown. Key monthly output numbers for several oil and metal products over the first quarter have still not been published, and the National Bureau of Statistics (NBS) has also failed to release regional data for products like coal, steel and electricity since the turn of the year.

OTHER STORIES:

Hedge Fund Fees Slammed at Milken as Investors Join Buffett - (www.bloomberg.com)
Gold's surge is making it feel a lot like late 2007 - (www.cnbc.com)

US Manufacturing Sinks Deeper into Mire, Sep. 2009 evoked - (www.wolfstreet.com)  

China's banking regulator moves to contain off-balance sheet risk - (www.reuters.com)
China Clamps Down on Tool for Banks to Report Lower Bad Loans - (www.bloomberg.com)
China statistics bureau halts some commodities data amid probe - (www.reuters.com)
Puerto Rico Debt Crisis: Everything You Need to Know - (abcnews.go.com)