KeNo's Housing and Economic Portal: Tuesday July 5 2016 Housing and Economic stories

Monday, July 4, 2016

Tuesday July 5 2016 Housing and Economic stories

Oil-rigged states face a full-blown economic budget crisis - (www.cnbc.com) Legislators in a handful of oil-rich states are struggling to do the seemingly impossible as the 2016 fiscal year draws to a close this week: balancing their budgets, as required by law, despite massive declines in revenues due to falling oil prices. The National Conference of State Legislatures says nearly a dozen states still had not enacted budgets for the new fiscal year as of mid-June. Some — including oil states Louisiana and Alaska — are facing a full-blown budget crisis. Even after painful cuts, budget gaps in those two states alone total nearly $4 billion. The low oil prices that are roiling state capitals could also shake up CNBC's 10th annual America's Top States for Business rankings, where our Economy category considers factors like economic growth, job growth and state fiscal conditions. (See our methodology here.) These are some of the states that could find their economies and their rankings oil-rigged in 2016.

Negative-yield government debt surges $1.3tn to $11.7tn - (www.ft.com) The universe of negative-yielding government debt has increased by more than $1tn in the last month to reach a high of almost $12tn in one of the most tangible results of Britain’s decision to leave the EU. Record lows yields, which move inversely with price, have produced outsize returns for bondholders in some of the world’s largest, safest and most liquid securities. Low sovereign bond yields reflect gloomy economic outlooks and expectations of central bank stimulus. In turn a record $11.7tn of global sovereign debt has now entered sub-zero territory — an increase of $1.3tn since the end of May, according to data released by Fitch Ratings, meaning investors who buy the bonds and hold them to maturity will lose money.

Hollande heightens City Brexit fallout fears - (www.ft.com) One of the City of London's post-Brexit fears edged closer to reality on Tuesday as French President François Hollande said that the City of London would no longer be able to clear euro-denominated trades. Speaking at the end of a summit in Brussels where EU leaders started trying to pick through the wreckage after David Cameron's referendum defeat, Mr Hollande warned that it would be unacceptable for clearing — a crucial stage in trading of derivatives and equities — to take place in the UK. "The City, which thanks to the EU was able to handle clearing operations for the eurozone, will not be able to do them," he said. "It can serve as an example for those who seek the end of Europe . . . It can serve as a lesson."

Obamacare enrollment at 11.1M, as some drop off after premium bills come due - (www.cnbc.com) Is this a ceiling or a launch pad? Federal health officials in a new report say that about 11.1 million people were enrolled in Obamacare insurance plans as of the end of March. That's 1.6 million or so fewer people than had actually selected a plan on one of the government-run health marketplaces by the close of the third season of open enrollment in February. The drift-down, which was expected, is largely a result some people who had selected a plan not making their first month's premium payments once they came due. For enrollment to be considered official that payment has to be made.

Manhattan Apartment Sales Sputter - (www.wsj.com) Manhattan apartment sales are tumbling, according to new market data, and several brokers said it is a sign that a significant correction is underway as buyers hold back. Sales in the second quarter were down more than 10% compared with the same quarter in 2015, the slowest pace since the recession year of 2009. Sales of co-ops fell by 26% and sales of lower priced apartments going for less than $1 million were down 20%, according an analysis of city records by The Wall Street Journal. “I think it is a correction, a serious correction,” said Hall F. Willkie, president of brokerage Brown Harris Stevens. The slowdown, which began in the second half of last year among high-price apartments, deepened and widened this year. Many brokers said asking prices were set too high after a run-up in prices a few years ago. Brokers also cited volatility earlier this year in financial markets, which can weigh on wealthy buyers’ decisions.

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