Monday November 14 20916 Housing and Economic stories

TOP STORIES:

Social Security loses no matter who wins the 2016 US presidential election - (www.qz.com) During the next US president’s term, Social Security will reach an important milestone. In 2019, it will start paying out more in benefits than it takes in taxes and interest income. That does not mean benefits will need to be cut, at least not right away. Social Security has a stock of US Treasury bonds that’s expected to pay benefits for another 15 years. But in 2034 something has to happen—either benefits are cut, taxes increased, the government takes on more debt, or spending on other programs gets cut to fill the gap. According to the Trustees Report from the Social Security Administration, there’s a cost to waiting.

Warning Light Flashes on Auto Loans - (www.wsj.com) After the auto-lending boom of recent years, signs of trouble are starting to pop up. Total auto loans outstanding in the U.S. reached $1.1 trillion in the second quarter, according to Federal Reserve data. Auto-loan originations in the period were $149 billion, close to the record $151 billion in the third quarter of last year. There are two major risks: One is that borrowers will prove less creditworthy than expected, giving rise to defaults and write-offs. The second is that used-car prices will fall by more than lenders anticipated. This is most important for auto leasers, as it reduces the value of the car that is brought back into possession at the end of a lease. It also hurts the assumed value of collateral on car loans.

France Just Set a Very Scary Precedent - (www.wolfstreet.com) On October 30, the French government announced, as quietly as possible, the creation of a massive new database that will collect and store personal information and biometric data on nearly everyone living in the country. As tends to happen whenever a government seeks to enact this type of “reforms,” the law wasn’t passed by parliament but by decree on the eve of a national holiday. As France 24 reports, the new decree will affect 60 million people and “marks the first time the country has collected population data on such a scale since the start of the Nazi Occupation in 1940.”

'LOCK HER UP': Traders on the NYSE floor reportedly booed Hillary Clinton during her concession speech - (www.businessinsider.com) Some traders on the New York Stock Exchange floor booed Hillary Clinton, the defeated presidential candidate, during her televised concession speech on Wednesday morning, shouting "loser" and "lock her up," according to CNBC's Carl Quintanilla and Cheddar's Hope King, who were tweeting from the floor. Traders booed Clinton's vice presidential pick, Tim Kaine, and shouted "lock her up" when he came on stage, at around 11:35 a.m. Wednesday, according to the two. Some then booed Clinton herself when she appeared on stage, and shouted "liar" as she began to speak.

The Chilling Thing Hertz Just Said about the US Auto Boom - (www.wolfstreet.com) Hertz Global Holdings, the giant rental car company which also owns Dollar and Thrifty, got crushed on Tuesday, as is so often the case, by an otherwise boring accounting entry. Depreciation of its cars had to be adjusted. Depreciation of the rental fleet is a huge expense in the industry: for Hertz, 29% of its total expenses. Depreciation is supposed to bring the value of these cars down to what they can be sold for when they’re scratched and dented and have 37,000 miles on them. Depreciating the fleet just a little less aggressively would boost earnings for a little while and is a very tempting strategy. But a few quarters later, when the cars have to be sold, reality comes home to roost. This accounting entry also shows how ever so slowly the rug is being pulled out from under the booming auto industry. Hertz shares plunged 52% in the morning to a low of $17.20. 

OTHER STORIES:

Asian Stocks Advance as Investors Brace for U.S. Election Result - (www.bloomberg.com)
Stocks Advance, Bonds Fall as Americans Vote; Dollar Fluctuates - (www.bloomberg.com)
Ominous Sign for China Debt as Cash Crunch Bites - (www.bloomberg.com)

Banks warn clients to brace for FX volatility after U.S. vote - (www.reuters.com)
Prosiris’s Billion-Dollar Hedge Fund Plunges to $284 Million - (www.bloomberg.com)

Italy’s Next in the Crosshairs for Anti-Establishment Wave - (www.bloomberg.com)