KeNo's Housing and Economic Portal: Thursday August 18 2016 Housing and Economic stories

Wednesday, August 17, 2016

Thursday August 18 2016 Housing and Economic stories

Big Unwind Begins in San Francisco, Miami, New York, Houston: Rents in “Primary Markets” Sunk by Apartment & Condo Glut - (www.wolfstreet.com) This is how it is happening in Miami: A heroic building boom in Greater Downtown has created a phenomenal condo glut just when federal regulators decided earlier this year to track down money laundering in the real estate sector. It coincided with Brazil and Venezuela – Miami’s largest feeder markets – falling into political turmoil and economic chaos respectively. The “strong” dollar doesn’t help. And buyers from abroad have become scarce. No one was prepared for this. The slowdown started a year ago when the resale inventory began to balloon. According to a new report by Integra Realty Resources for the Miami Downtown Development Authority, in May listings soared 58% from two years ago, to about 3,000 units, while monthly sales plunged 43%.

Italian Economy Unexpectedly Stagnates in Threat to Renzi - (www.bloomberg.com) Italy’s economy unexpectedly stalled in the second quarter, which will further weigh on Prime Minister Matteo Renzi as he prepares for a referendum on which he has staked his political future. Gross domestic product was unchanged in the three months through June, Rome-based statistics agency Istat said in a preliminary report on Friday. That compares with the 0.2 percent median estimate in a Bloomberg survey of 25 analysts. The economy grew 0.7 percent from a year earlier. Close all those tabs. Open this email. Get Bloomberg's daily newsletter. The Bank of Italy and the International Monetary Fund have both revised down their economic outlook, predicting growth of less than 1 percent this year.

Russia Warns of ‘Consequences’ After Deaths as Ukraine on Alert - (www.bloomberg.com) Russia said the deaths of servicemen in Crimea would carry “consequences” and Ukraine put its troops on “high alert,” warning that Vladimir Putin is seeking to reignite the conflict in the disputed territories. The Foreign Ministry in Moscow raised the threat of retaliation a day after the Russian president vowed to respond with “very serious” measures and said Ukrainian agents had engaged in “terror” tactics on the Black Sea peninsula, which Putin seized in 2014. Poroshenko dismissed the accusations as “fiction” that could be an “excuse for further military threats” by Russia. The worst diplomatic standoff between the two countries since a truce signed last year raised alarm in foreign capitals and reverberated across markets. The confrontation coincided with a surge in violence in Ukraine’s eastern territories, where government troops have been locked in a struggle against pro-Russian separatists. It also torpedoed plans to revive four-way peace talks at the September G-20 meeting in China.

Michigan Pension Funds Boost Tesla Stake By Over 200% - (www.zerohedge.com) Several days ago we reported that as a result of ongoing "financial repression" and record low rates,public pensions in the US are currently facing a $2 trillion funding shortfall ($4.5 trillion in assets on $6.5 trillion liabilities), however the shortfall soars to as much $8.4 trillion if one discounts the future at "safe" rates of return around the current 2% level. While that may be an exaggeration, the pension shortfall even under current actuarial assumptions is a major issue for future pension payments, and one which is forcing public asset managers to take drastic steps to cut the shortfall. Case in point, is the Michigan Department of Treasury which according to Detroit News, bought $48 million shares in Tesla Motors for state retirement funds in the second quarter, increasing its shares 224 percent in the electric-car builder. "Our original $25 million position in Tesla was relatively minor, and we added approximately $50 million during the past quarter," the department said in a statement. "The additional shares did not materially add to the risk of the overall $60 billion investment portfolio."

Brexit Hits U.K. Housing as Sales Decline Most Since 2008 - (www.bloomberg.com) Brexit is undermining the near-term outlook for the U.K. housing market, with both demand and sales dropping in July, according to the Royal Institution of Chartered Surveyors. The London-based group said new buyer inquiries fell for a fourth month, while its index of sales is pointing to the fastest decline in transactions since the global financial crisis in 2008. Prices continued to rise, but at the slowest pace in three years. Just 5 percent more surveyors recorded an increase than a fall, compared with 15 percent in June. Britain’s vote to leave the European Union has undermined confidence among U.K. consumers and increased worries about their finances and property values. That’s curbing demand for housing, though a worsening supply picture is proving some support to prices, according to RICS. New sales listings are falling at a record pace, it said.

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