Thursday June 29 2017 Housing and Economic stories

TOP STORIES:            

Illinois Comptroller: "The State Can No Longer Function, We Have Reached A New Phase Of Crisis" - (www.zerohedge.com) With just 10 days to go until Illinois enters its third year without a budget, resulting in the state's imminent downgrade to junk status and potentially culminating in a default for the state whose unpaid bills now surpass $15 billion, Democratic Illinois Comptroller Susana Mendoza issued a warning to Illinois Gov. Rauner and other elected officials on Tuesday, saying in a letter that her office has "very serious concerns" it may no longer be able to guarantee "timely and predictable payments" for some core services. In the letter posted on her website, Mendoza who over the weekend warned that Illinois is "in massive crisis mode" and that "this is not a false alarm" said the state is "effectively hemorrhaging money" due to various court orders and laws that have left government spending roughly $600 million more a month than it's taking in. Mendoza said her office will continue to make debt payments as required, but indicated that services most likely to be affected include long-term care, hospice and supportive living centers for seniors. She added that managed care organizations that serve Medicaid recipients are owed more than $2.8 billion in overdue bills as of June 15. "The state can no longer function without a responsible and complete budget without severely impacting our core obligations and decimating services to the state's most in-need citizens," Mendoza wrote. "We must put our fiscal house in order. It is already too late. Action is needed now."

Argentina (!) Sells 100-Year Dollar-Denominated Junk Bonds - (www.wolfstreet.com) Yield-desperate investors stop before nothing. What have central banks wrought? Junk-rated, deficit-plagued, inflation-whacked Argentina just sold $2.75 billion of 100-year dollar-denominated bonds. This was the first time ever that a junk-rated country was able to sell 100-year bonds denominated in a foreign currency, or any currency. Argentina sports a “B” credit rating from Standard & Poor’s. Five notches below investment grade. Deep junk. And 100 years is a very, very long time for Argentina and its regularly beaten-up creditors: Just over the past 65 years, it has defaulted six times – in 1951, 1956, 1982, 1989, 2001, and  its “selective default” in 2014. Its default in 2001 on $80 billion of dollar-denominated debt was the largest sovereign default at the time.

Carrington Mortgage To Throw Korean War Hero To The Street  - (www.mfi-miami.com)  Korean War Hero Faces Being Homeless Thanks To Carrington Mortgage And Being Scammed By A Michigan Lawyer. Large mortgage servicers like Carrington Mortgage seem to care more about their bottom line than our nation’s military. Soldiers and sailors are coming home from battle only to find they have no home. Some have been fortunate to sue their lender and be victorious. Yet, the vast majority of servicemembers and veterans haven’t been so lucky.  Bob Chalice is a combat veteran of the Korean War. He was a Navy gunner during the Battle of Inchon. He also shot down Chinese and North Korean planes during Operation Wonsan. You would think Carrington Mortgage would be honoring this man and his service. Nope. Carrington Mortgage and their lawyer, Randall Miller and Associates had other ideas. They decided to take Bob Chalice’s money and then foreclose on him and his family anyway. Miller is the brother of prominent Michigan Democratic politician Lisa Brown.

Fed is Careening Into Housing and Stock Bubble... Look Out Below! - Ben Hunt - (www.zerohedge.com)  What has happened (and apologies for the ten dollar words) is that the Fed's reaction function has flipped 180 degrees since the Trump election. Today the Fed is looking for excuses to tighten monetary policy, not excuses to weaken. So long as the unemployment rate is on the cusp of "instability", that's the only thing that really matters to the Fed (for reasons discussed below). Every other data point, including a market sell-off or a flat yield curve or a bad CPI number -- data points that used to be front and center in Fed thinking -- is now in the backseat. I'm not the only one saying this about the Fed's reaction function. Far more influential Missionaries than me, people like Jeff Gundlach and Mohamed El-Erian, are saying the same thing. If you think that this Fed still has your back, Mr. Investor, the way they had your back in 2009 and 2010 and 2011 and 2012 and 2013 and 2014 and 2015 and 2016 ... well, I think you are mistaken. I think Janet Yellen broke up with you this week.

Amazon Is Now Cash-Poor -- Big Contrast From Tech Giant Peers - (www.seekingalpha.com) The big merger of last week had one key aspect mostly overlooked by the market. The surprise purchase of Whole Foods Market (NASDAQ:WFM) by Amazon (NASDAQ:AMZN) was made with cash leaving the company in a precarious cash position in comparison to other tech giants. Amazon traded up and topped the magical $1,000 mark on Monday. Will the shift towards a brick and mortar focus finally place Amazon into a retail type valuation? …. The purchase price knocks the net cash balance down to virtually zero. This doesn't even account for Whole Foods trading above the offer price with expectations that a bidding war might ensue causing Barclays to place a $48 price target on the stock. For Amazon, another billion in cash doesn't really alter the equation for owning the organic food retailer. What it does though is highlight the vast differences between the retail giant and tech giants that are so commonly lumped into the same investment discussions.

OTHER STORIES:

Japan business mood up, points to better BOJ tankan - Reuters Tankan - (www.reuters.com)
Shale's Record Fracklog Could Force Crude Prices Even Lower - (www.bloomberg.com)

China's Workers are Saying Goodbye to Double-Digit Pay Raises - (www.bloomberg.com)
White House says it retains right to self-defense in Syria; Moscow warns Washington - (www.reuters.com)
Russia Warns U.S. as Risks Rise in Syria - (www.wsj.com)