Wednesday March 8 2017 Housing and Economic stories

TOP STORIES:            

A Third Of All Shopping Malls Are Projected To Close As 'Space Available' Signs Go Up All Over America - (www.zerohedge.com) If you didn’t know better, you might be tempted to think that “Space Available” was the hottest new retail chain in the entire country.  Even though this giant bubble of false economic stability that we are currently enjoying has lasted far longer than it should have, the truth is that nothing has changed about the long-term economic outlook at all. About one-third of malls in the U.S. will shut their doors in the coming years, retail analyst Jan Kniffen told CNBC Thursday. His prediction comes in the wake of Macy’s reporting its worst consecutive same-store sales decline since the financial crisis. Macy’s and its fellow retailers in American malls are challenged by an oversupply of retail space as customers migrate toward online shopping, as well as fast fashion retailers like H&M and off-price stores such as T.J. Maxx. As a result, about 400 of the country’s 1,100 enclosed malls will fail in the upcoming years. Of those that remain, he predicts that about 250 will thrive and the rest will continue to struggle.

Definition of Madness: Spain Needs Bigger Banks, Apparently - (www.wolfstreet.com)  Spain’s banking sector is about to be hit by a new wave of mergers and acquisitions, according to US rating agency Standard & Poor’s. The new phase of industry consolidation will begin with the stealth merger of largely state-owned Bankia with wholly state-owned Banco Mare Nostrum (BMN). The two banks, each the product of two madcap mergers of Spain’s most insolvent savings banks, will be merged into one entity that is expected to become Spain’s fourth biggest bank by assets. The merger is more or less a done deal, for the simple reason that besides Bankia, BMN has no other suitors and its IPO last year was a complete dud. No private sector player seems willing to even touch its assets with a barge pole, let alone buy them at a “discount”. Two renowned Spanish economists, Daniel Lacalle and Javier Santacruz Cano, have already expressed serious reservations about the proposed operation. Most importantly, there are no synergies to be had, they argue, since Bankia already enjoys a strong presence in virtually all the regions where BMN is present.

Coming Home to Roost: Chinese Property Investors Head for U.S. Exit - (www.bloomberg.com) Chinese real-estate investors are losing interest in the U.S. as their concern over yuan depreciation eases and questions swirl around President Donald Trump's stance on protectionism.  That's the view of Andrew Haskins, executive director of Asia research and advisory services at Colliers International, who expects Chinese capital to return to Asia as investors pull out of America.  "The bulk of yuan depreciation has probably already happened, and if that's the case there is less incentive for Chinese investors to place money in dollar-denominated assets," Haskins said in an interview. After declining 13 percent against the greenback over the past two years, the yuan has gained almost 1 percent in 2017. Most other Asian currencies have also strengthened, led by the Korean won, which is up 4.3 percent. 

Is Mexico Facing “Liquidity Problems?” - (www.wolfstreet.com)  At 49% of GDP, Mexico’s public debt may seem pretty low by today’s inflated standards. It’s a mere fraction of the debt loads amassed by bigger, richer economies such as Japan (229% of GDP), Italy (133%) and the United States (104%). But when it comes to debt, everything is relative, especially if you don’t enjoy the benefits that come from having a reserve-currency-denominated printing press. In Mexico’s case it’s not so much the size of the debt that matters; it’s the rate of its growth. In the year 2000 the country had a perfectly manageable debt load of roughly 20% of GDP. Today, it is two and a half times that size. Last year alone the Mexican state issued a grand total of $20.31 billion in new debt, the largest amount since 1995, the year immediately after the Tequila Crisis when the country needed an international bailout to rescue its entire banking system from collapse. The money it received also helped repay a number of giant Wall Street investment banks that had gone all in on Mexican assets.

Protectionism in China is growing, German ambassador to mainland says - (www.cnbc.com)  China's leaders may be touting efforts to offer foreign investors a level playing field, but on the ground, protectionism appears to be growing, Germany's ambassador to China told CNBC. "It doesn't matter which trading partner you talk to – be it the Japanese or the U.S. or neighboring countries or European countries. They all feel the same, that there's a growing protectionism here," Michael Clauss, the German ambassador to China, told CNBC's "Squawk Box" on Monday. He noted that the protectionist concerns related to German investments within China.

OTHER STORIES:

Trump administration to propose 'dramatic reductions' in foreign aid - (www.reuters.com)
Deutsche Bank board to discuss capital hike on Sunday: sources - (www.reuters.com)
Asia’s Promise Gives Way to Its Growing List of Troubles - (www.wsj.com)

South Korea says to act against China's discrimination against South Korean firms - (www.reuters.com)
Xi Jinping’s Failed Promises Dim Hopes for Economic Change in 2nd Term - (www.nytimes.com)
China’s Premier Maps Out Cautious Economic Course - (www.wsj.com)