Monday June 26 2017 Housing and Economic stories

TOP STORIES:            

Amazon Deal for Whole Foods Starts a Supermarket War - (www.nytimes.com) Shares of Walmart, Target, Kroger and Costco, the largest grocery retailers, all tumbled on Friday. And no wonder. Grocery stores have spent the last several years fighting against online and overseas entrants. But now, with its $13.4 billion purchase of Whole Foods, Amazon has effectively started a supermarket war. Armed with giant warehouses, shopper data, the latest technology and nearly endless funds — and now with Whole Foods’ hundreds of physical stores — Amazon is poised to reshape an $800 billion grocery market that is already undergoing many changes. And much of the battle is expected to take place online, Amazon’s home turf.

Negative-yielding government debt 'supernova' jumps to $9.5 trillion - (www.cnbc.com)  The staggering level of government debt carrying negative yields, after falling from its peak a year ago, is back on the rise. A slew of factors converged in May to send the global total to $9.5 trillion of sovereign debt — a situation where governments effectively are getting paid to borrow money, according to Fitch Ratings. The total represented a 10.5 percent increase from April. Prominent investors have warned of the dangers of so much negative-yielding debt. Janus Henderson's Bill Gross has called it a "supernova" that will "explode," while Deutsche Bank CEO John Cryan has cautioned about "fatal consequences" of central banks being enticed by slashing rates to that extent.

For Whole Foods workers, fears of robots, drones and culture clash  - (www.reuters.com) The merger that shook food and retail stocks on Friday - Amazon.com Inc's proposed deal to buy Whole Foods Market Inc - rattled some employees of the upscale grocery chain who expressed fears ranging from layoffs to the loss of their laid-back corporate culture. The online retailer hopes the $13.7 billion acquisition helps it disrupt the grocery business and expand its real-world store footprint. Carmen Clark, 37, a six-year employee at a store in Mount Pleasant, South Carolina, said some workers worry that Amazon-led automation could lead to job cuts. "Everybody's been kind of joking that it's going to be robots and drones," Clark said of potential changes from Amazon, which uses robots in its warehouses and is testing drones for delivery.

What Happens When the Machines Start Selling? - (www.wolfstreet.com) The infamous FAANG stocks – Facebook, Apple, Amazon, Netflix, and Google’s parent Alphabet – along with other “tech” stocks have been getting “hammered,” to use a term that for now exaggerates their “plight.” The FAANG stocks are down between 1.7% and 2.5% at the moment and between 5.5% and 11% since their peak on June 8. Given how far these stocks have soared over the past few years, this selloff is just a barely visible dip. But fundamental analysis has long been helpless in explaining the surge in stocks. The shares of Amazon now sport a Price-Earnings ratio of 180, when classic fundamental analyses might lose interest at a PE ratio of 18 for the profit-challenged growth company that has been around for over two decades. For them, the stock price might have to come down 90% before it makes sense.

Illinois Death Watch Continues... - (www.zerohedge.com) It’s been a long time coming, but Illinois’ slow-mo financial disaster is now front page news. A few recent examples: Roadwork Could Shut Down Across Illinois Due To Budget Impasse.  Roadwork across Illinois may grind to a halt at the end of June due to the continued state budget impasse, a representative for the Illinois Department of Transportation (IDOT) announced Wednesday. IDOT will be unable to pay contractors on July 1, unless the state passes a stopgap funding measure.  IDOT has told contractors that “all construction work is to shut down on June 30,” according to a statement. “Contractors will be advised to secure work zones to ensure their safety during any potential shutdown.”  Illinois has gone almost two full years without a state budget, which has hit education funding throughout the state and generated more than $14 billion in unpaid bills. Summer is both a high-volume construction season and a vaguely ominous time to cease road repairs; just last week, IDOT released a statement warning that the heat could lead to pavement “buckling or blowing out.”

OTHER STORIES:

May Is Living Brexit Nightmare She Warned Of - (www.bloomberg.com)
Brexit Talks Set to Begin amid Chaos in London - (www.spiegel.de)

Iran's Revolutionary Guard Strikes Syria for Tehran Attacks - (www.bloomberg.com)

Politicians and investors adapt to the age of radical uncertainty - (www.ft.com)
Record level of investors fear corporate bonds are overvalued - (www.ft.com)
The New Cold War Pits a U.S. General Against His Longtime Russian Nemesis - (www.wsj.com)