Wednesday May 10 2017 Housing and Economic stories

TOP STORIES:            

Puerto Rico Triggers Largest Ever US Muni Bankruptcy Process - (www.wolfstreet.com) Puerto Rico’s Governor Ricardo Rosselló took the momentous step on Wednesday to trigger the largest municipal bankruptcy-type process in the US, four times larger than the prior record, Detroit’s bankruptcy. Puerto Rico’s population has declined by about 10% since 2004 to 3.4 million. Its economy has declined by as much since 2005. Unemployment is at 14%. Public deficits have ballooned. Puerto Rico and over a dozen agencies, after years of reckless spending amid an aiding and abetting bond market, piled up about $73 billion in debt. That this was a mega problem became official two years ago; bonds crashed, and bond insurers got clobbered.

Even Wealthy feel pinch of housing costs as one in four Australians face mortgage stress – (www.theguardian.com) Households in affluent suburbs struggle to meet repayments as survey finds financial distress from property price surges reaching beyond ‘battlers and mortgage belt’. The survey, which analyses real cash flows against mortgage repayments, finds more than 767,000 households or 23.4% are now in mortgage stress, which means they have little or no spare cash after covering costs. The burden of housing costs is biting even in Australia’s wealthiest suburbs as an unprecedented one in four households nationally face mortgage stress, according to the latest in a 15-year series of analyses. Households in Toorak and Bondi, prestigious pockets of affluence in Australia’s biggest cities, have made the list of those struggling to meet repayments amid rising costs and stagnating wages, research firm Digital Finance Analytics has found. The firm’s principal, Martin North, said it was surprising new evidence showed that financial distress from property price surges reached beyond “the battlers and the mortgage belt” and was a “much broader and much more significant problem”.

Federal budget bill deal offers $296M for Puerto Rico Medicaid - (www.floridapolitics.com) The $1 trillion stop-gap budget deal congressional leaders have struck to keep the federal government open through September includes $295.9 million to shore up Medicaid in Puerto Rico, U.S. Rep. Darren Soto‘s office said Monday afternoon. That’s a little less than halfway between the $500 million congressional Democrats such as Soto were pushing for, and the $146 million opening offer from Republican negotiators. There is no indication that there are any strings attached to the money that would threaten, through delay or repeal, provisions in last year’s PROVESA Act creating debt relief mechanisms for the island government, “as far as we know,” according to Soto’s Communications Director Iza Montalvo.

One Of The World's Biggest Oil Hedge Funds Just Liquidated All Its Longs - (www.zerohedge.com) Earlier in the week we shared Pierre Andurand's hedge fund note blame-casting his fund's dismal drawdowns on "CTA flows eclipsing the gradual improvement in fundamentals.

he market sell-off is missing the larger picture, he proclaims. “Market participants remain extremely focused on micro developments like US crude inventories while the big picture has been telling us a different supply story for quite some time,” he wrote. “In fact, the gradual tightening of crude oil spreads has led to the release of expensive onshore and offshore inventories globally.” So what could be driving prices lower? Andurand looks at the algorithmic traders and places blame on their non-economic outlook for the price movements. “Without consistent and significant draws invisible onshore inventories, we remain stuck in a trendless and choppy market with CTA flows eclipsing the gradual improvement in fundamentals,” he wrote, pointing to an oddity.

Universal Basic Income is Not "Free Money"  - (www.futurism.com) In Alaska, Alaskans are paid on average about $1000 per year for being an Alaskan. Why? Because the oil companies didn't make the oil in Alaska. They're merely bringing it up out of the ground and processing it. The oil is considered owned by all Alaskans, and so they should as owners see some of the revenue generated by its sale... Do you see now that basic income is not "free money" or "money for nothing?" You are owed it. It is your just and due compensation as part of this interdependent system we call society. We are all stakeholders in it. We are all owed a dividend as investors. We agree with this logic, but the hazards of any form of welfare or handouts are the incentives it creates. I.e., in this case, the problem is really if people come to see the UBI as "free money," not whether it "really" is or not. 

OTHER STORIES:

House Passes Obamacare Repeal in Razor-Thin GOP Victory - (www.bloomberg.com)
With House vote, Obamacare replacement heads to more skeptical Senate - (www.cnbc.com)
Wall Street ends flat as health bill passes; energy slammed - (www.reuters.com)

Iron Ore Routed as ‘Center of Gravity’ Seen in Constant Decline - (www.bloomberg.com)
Oil's OPEC-Driven Gain Wiped Out as Shale Boom Offsets Cuts - (www.bloomberg.com)
Atlanta Fed trims U.S. second-quarter GDP growth view to 4.2 percent - (www.reuters.com)
Macron cements bid for French presidency after bitter TV debate - (www.reuters.com)