Brexit Countdown Clock.
Brexit Quote of the Day.
"On the whole Dave wants to be good, but not too good, and
not quite all the time.”
With apologies to George Orwell.
This weekend we focus on the USA, where the early
signs of a new recession arriving, continue to mount. I know, conventional
wisdom says that you can’t have a US recession in a US presidential election
year, because the Fedster’s in Washington will go all out to prevent it. But
this time, for once, it really might be different. The Fedster’s themselves are
out of ammo, and already deep into voodoo economics. But it doesn’t look likely there’s
any relief coming from the global economy.
China keeps stumbling forward towards its own hard
landing. The EU is all but dead in the water, mired in dangerous migrants on
the continent, facing a Brexit vote in GB that could go either way, with rising
banking and political difficulty, in Germany, France, Spain and Italy. The
emerging market economies ex-India, are all on the ropes, with Brazil, South
Africa and Turkey, also mired deep into severe local recessions and political scandal. Most industrial commodities are buried in a
depression following the bursting of the Chinese Ponzi economy that fuelled the
Great Commodity Supercycle.
Below, the realistic, not rosy, view of the world.
Just don’t let on to main stream media and their Muppet business news presenters.
Consumer Sentiment in U.S. Edges Down Amid Economic Concerns
April 1,
2016 — 3:00 PM BST
Consumer
confidence in the U.S. dipped slightly in March as concerns persisted that the
world’s largest economy will cool.
The
University of Michigan final sentiment index for last month eased to 91 from
91.7 in February. The median projection in a Bloomberg survey of economists
called for a reading of
90.5. The
gauge was up from a preliminary reading of 90 as Americans grew more upbeat
about their own finances, offsetting less favorable views in economic growth.
Consumers’
views on the outlook for the economy deteriorated as prices at the pump climbed
higher and wage gains remained modest. Continued improvement in the labor market
will be needed to reassure consumers, whose spending is the primary driver of
economic growth.
“We saw
some fairly rapid increases in gasoline prices over the course of late February
to the end March,” Terry Sheehan, an economic analyst at Stone & McCarthy
in Princeton, New Jersey, said before the report. “Changes in gas prices always
make consumers uncomfortable. It’s kind of a wake-up call to consumers that
those exceptionally low prices aren’t going to be holding on forever.”
Estimates
for the Michigan survey in the Bloomberg survey of 53 economists ranged from 89
to 92.
The
sentiment survey’s current conditions index fell to 105.6 in
March from 106.8 the prior month. The measure of expectations six months from
now decreased to 81.5 from 81.9.
More
Condo Bust 2.0—-Miami Sales Down 20% And Dropping Fast
by Wall Street Journal •
Miami is
facing a condo bust—again.
Developers
have started canceling projects, slashing prices and offering incentives such
as private-jet access to spur sales, an ominous echo of the housing crash that
pounded South Florida especially hard.
Easy
financing and rising prices prompted developers to build about 21,000 condos in
the downtown Miami area from 2004 to 2008. Many of those units sat empty for
years.
Developers
say this time they have insulated themselves by requiring buyers to put down
50% deposits by the time buildings break ground and by canceling projects
instead of moving forward as the market slows.
Still, it
may not be easy for some to sidestep the damage. In the fourth quarter of 2015,
the number of Miami Beach condo transactions declined nearly 20% from a year
earlier, while inventory jumped by nearly a third, according to a report from
appraisal firm Miller Samuel Inc. The median sales price slipped 6.6%, according
to the report.
“The
condo market has peaked,” said Neisen Kasdin, a real-estate development lawyer
at Akerman LLP in Miami. “Sales velocity has slowed down considerably.”
Many of
the forces buffeting the Miami market are also hitting luxury markets in New
York, Southern California, Australia and London. A strong U.S. dollar and
weakening local currencies, dropping oil prices and global economic turbulence
have crimped the buying power of foreign investors.
At the
same time, stock-market turbulence has made wealthy locals hesitant to
undertake big purchases. Luxury-home prices in 10 global cities analyzed by
broker Knight Frank LLP are expected to increase by 1.7% this year, down from
3% growth in 2015.
----Other Miami developers have put on hold or canceled more than half a dozen projects planned earlier in the cycle, from the Ion East Edgewater, a 35-story tower planned by a local Florida development firm, to Krystal Tower, a downtown tower planned by a Brazilian developer, according to consulting firm Integra Realty Resources Miami. Overall, the pipeline of units in active projects in Miami has shriveled by 42%, according to a report released a month ago by Integra.
At the
Aurora, a new 61-unit building off the Miami waterfront, the developer is
offering buyers a free membership to JetSmarter, a service that allows members
to use shared private jets for free.
Tim
Lobanov, managing director of Verzasca Group, which is developing the building,
said the perk has a retail value of about $12,000 and is part of the project’s
pitch to appeal to New Yorkers. JetSmarter offers flights several times a week
from New York to southern Florida.
Morehttp://davidstockmanscontracorner.com/condo-bust-2-0-miami-sales-down-20-and-dropping-fast/
Four things you better worry about this earnings season
Published: Apr 1, 2016 2:49 p.m. ET
If you thought the fourth-quarter earnings season that just ended was
miserable, brace yourself: the next one will be a real doozy.S&P 500 companies are expected to post their fourth straight quarter of earnings declines and fifth straight quarter of sales declines, according to FactSet. The last time earnings fell for such a long stretch was the period between the fourth quarter of 2008 and the third quarter of 2009, right after the financial crisis.
And stop blaming energy. This time, the pain is more evenly spread across sectors.
“While much of the softness is attributable to the energy sector, it is worth noting only three of the S&P’s 10 macro sectors are expected to show an increase in earnings,” said Jeffrey Saut, chief investment strategist at Wells Fargo. “ Those are consumer discretionary, telecoms and health care.”
The season unofficially kicks off on April 11, when aluminum giant Alcoa Inc. AA, +0.52% reports after the bell.
S&P 500 companies are expected to show an overall earnings decline of 8.5%, and a sales decline of 1.1% for the quarter, compared to the same quarter a year earlier, according to FactSet.
More
http://www.marketwatch.com/story/four-things-you-better-worry-about-this-earnings-season-2016-04-01
And now a new financial scandal emerges in America. Whatever next? How many more will come pouring out in 2016, as the USA seems to be heading into a new recession, and not just in the energy sector?
SunEdison falls more than 50% after report of bankruptcy plans
Published: Apr 1, 2016 6:16 p.m. ET
SunEdison Inc. SUNE, -20.40%
stock, which has
been plunging amid an investigation by the Securities and Exchange
Commission, was cut in half in late trading Friday after a report that the
company is preparing to declare bankruptcy. The Wall Street Journal reported Friday afternoon that
SunEdison plans to to file for bankruptcy in the coming weeks, and is in talks
with creditor groups about bankruptcy financing. The report follows the
solar-power company's announcement earlier this week of an
SEC investigation into its public disclosures about the amount of cash it
had available. Shares fell more than 50% in after-hours action following the
report, hitting 22 cents after closing with a 14.9% decrease at 46 cents.
Before the late decline, SunEdison stock had declined 91% so far this year and
more than 98% in the past 52 weeks.http://www.marketwatch.com/story/sunedison-falls-more-than-50-after-report-of-bankruptcy-plans-2016-04-01
From $10 Billion to Worthless in 8 Months: Solar Hype Financial Engineering at Its Finest
Posted | April 1, 2016 8:10:12In one of the largest financial collapses in recent years, Sun Edison, valued at $10 billion in July, now prepares for bankruptcy.
How do you do that?
Cheap money (thank the Fed) and financial engineering (thanks to company wizards who no doubt saw this coming and cashed out long ago).
The Wall Street Journal notes SunEdison Preparing to File for Bankruptcy.
Solar-energy company SunEdison Inc. plans to file for bankruptcy protection in coming weeks, a dramatic about-face for a company whose market value stood at nearly $10 billion in July.
The company is preparing a chapter 11 filing and is in talks with two creditor groups to obtain a loan to fund its operations during the process, according to people familiar with the matter. Creditors are likely to take control of the company and its portfolio of power projects, the people said.
SunEdison, whose stock has plunged in recent months, would rank among the largest financial collapses in recent years.
SunEdison’s stock fell to fresh lows this past week on bankruptcy fears and news that the company is facing Securities and Exchange Commission and Justice Department investigations.
Its market capitalization is now about $150 million, and it had long-term debt of about $7.9 billion as of Sept. 30, according to a regulatory filing.
A SunEdison bankruptcy filing would be problematic for its two yieldcos, TerraForm Power Inc. and TerraForm Global Inc. The two entities, which own power plants and sell energy to utilities under long-term contracts, are in far better financial shape than SunEdison but depend on it for many services.
----SunEdison’s collapse is a setback for the yieldco corporate structure, which was once seen as a breakthrough for energy financing. SunEdison and peers such as NextEra Energy Inc. floated vehicles that raised public funds to buy power projects from their sponsors. Investors initially rewarded the structure, attracted by yieldcos’ high dividend payouts during a time of ultralow interest rates, but expectations of rising rates damped their enthusiasm.
End WSJ
----Here is is a nice article I discovered right on the Sun Edison home website: Will Obama Be Remembered As The Renewable Energy President?
Nothing like using Obama to hype up your worthless company. That coupled with financial engineering is how you get a $10 billion valuation.
Sun Edison will soon be bankrupt. President Obama’s ideas have been bankrupt for a long time.
Mike “Mish” Shedlock
http://mishtalk.com/2016/04/01/from-10-billion-to-worthless-in-8-months-solar-hype-financial-engineering-at-its-finest/#more-36634
“We
all know what to do, but we don’t know how to get re-elected once we have done
it.”
Jean-Claude Juncker. Failed
Luxembourg Prime Minister and ex-president of the Euro Group of Finance
Ministers. Confessed liar. EC President.
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