Monday June 5 2017 Housing and Economic stories

TOP STORIES:            

THE GREAT U.S. ENERGY DEBT WALL: It's Going To Get Very Ugly (www.srsroccoreport.com) As we can see, the outstanding debt (in bonds) will jump to $110 billion in 2018, $155 billion in 2019, and then skyrocket to $230 billion in 2020.  This is extremely bad news because it takes oil profits to pay down debt.  Right now, very few oil and gas companies are making decent profits or free cash flow.  Those that are, have been cutting their capital expenditures substantially in order to turn negative free cash flow into positive. Unfortunately, it still won't be enough... not by a long-shot. If we use some simple math, we can plainly see the U.S. oil industry will never be able to pay back the majority of its debt

Mania Continues: Hong Kong Throngs of Thousands Defy Bid to Cool Home Market - (www.bloomberg.com) “Successive moves by the government in recent memory to cool the property market only resulted in it becoming crazier," The Standard newspaper said in an editorial on Monday. “The result is a sea of madness.” The Hong Kong Monetary Authority has been tightening rules for lenders, including restricting levels of lending to developers, as it tries to limit financial risks and take some of the heat out of the market. The Centaline Property Centa-City Leading Index of existing homes has advanced 23 percent in the past year, setting new price records week after week. At a Legislative Council meeting on Monday, HKMA Chief Executive Norman Chan said levels of demand were reminiscent of 20 years ago -- before Hong Kong suffered a property bust -- and he expressed concern that people with limited financial resources were buying just because they thought prices would only keep going up.

More Trapped Homeowners: Pending Home Sales Decline Again, Index Below 2016 Level - (www.mishtalk.com)  The pending home sales index, an estimate of existing home sales, has accurately provided the direction of the monthly home resale reports.

The survey is down for the second month, providing further evidence of a housing slowdown. “Spring sales data have not been favorable for the housing sector. Pending home sales are down for a second straight month, 1.3 percent lower in April to an index of 109.8 which is 3.3 percent below this time last year. This index tracks contract signings for resales and the results point to weakness for final sales in May and June. Final resales contracted in April as did new home sales while the month’s housing starts were also weak. Spring is the big season for housing and these are not the results of a sector that will be leading the 2017 economy.”

Mexico’s Economy Reels from a Blast from the Past - (www.wolfstreet.com) “Green gold.” That’s the new name Mexicans have given to avocado, one of the country’s staple foods and most important agricultural exports. Unlike real gold, the price of green gold is soaring, having more than doubled in the last year alone, to reach an average price of 71.4 pesos ($3.85) in Mexico City, according to data from Mexico’s National Institute of Statistics and Geography (Inegi). Avocado prices are soaring for a whole variety of reasons, including rising global demand. Mexico is the world’s biggest exporter of avocado, accounting for just under half of the global market. And that market is growing by the day, particularly in the U.S., Europe, and China. But there’s another reason why the price of green gold is rising in Mexico, and it’s much closer to home: inflation. After decades of trying to tame the tempest of rising prices, with a reasonable degree of success, Mexico’s inflation rate soared to 6.17% in May, as measured by the INPC, the CPI version used by Inegi. It was fueled largely by the rising cost of food and energy after the government hiked gasoline prices by almost one-fifth at the beginning of the year. 

Stocks Rebound As Chicago PMI Changes Its Mind, "Corrects" Earlier Dismal Data To Highest Since 2014 - (www.zerohedge.com) After Market News International reproted a dismal 4-month low drop in Chicago PMI this morning which sparked a decent reality check drop in stocks, they decided to change their mind. And so stocks are rebounding.

0945ET - U.S. MAY MNI CHICAGO REPORT BUSINESS INDEX AT 55.2; EST 57.0 - lowest since Jan 2017

1121ET - CORRECT: U.S. MAY MNI CHICAGO REPORT BUSINESS INDEX AT 59.4 - highest since Nov 2014.

OTHER STORIES:

U.S. Stocks Slip From Records, Treasuries Advance: Markets Wrap - (www.bloomberg.com)
Fed's Brainard Says Soft Inflation May Warrant Rate Rethink - (www.bloomberg.com)
Another Warning Sign Flashes for Subprime Auto Loans - (www.bloomberg.com)

Investors Go All-In on Tech Giants - (www.bloomberg.com)

U.S. Stocks Slip From Records as Commodities Slump: Markets Wrap - (www.bloomberg.com)
U.S. Consumer Spending Signals Second-Quarter Rebound On Track - (www.bloomberg.com)