What I’m Reading
Blood in the Water: Beaten-down dollar bonds issued by Chinese property developers are enticing domestic and global fund managers, some of whom are even planning to launch new funds targeting bargains as Beijing relents in its concerted drive to clean up the sector. Roughly half of the dollar bonds issued by Chinese developers trade below 80 cents on the dollar, according to an estimate by Essence Securities last week. Some bonds issued by major developers currently yield more than 60%. WTVB
Material Shortfall: Dealers in John Burns’ building products survey appear to be planning and buying inventory based on an inaccurate expectation of growth in 2022. If the results of the survey turn out to be accurate, materials companies are underestimating demand, which will cause more shortages and put further upward pressure on costs. Globe Street
Betting on a Rebound: New York City hotels are still suffering from the effects of the pandemic, but that hasn’t slowed the flow of new properties expected to open this year and in the years to come as operators bet on a post-pandemic tourist boom. Its an aggressive bet as there was concern about oversupply before the pandemic after supply rose 47% in the previous decade. Wall Street Journal
On the Ropes: The National Restaurant Association has asked Congress to replenish the Restaurant Revitalization Fund as omicron and inflation continue to be a drag on operations. CNBC
Taking a Toll: The Omicron wave of the coronavirus appears to be cresting in much of the country. But its economic disruptions have made a post-pandemic normal ever more elusive. Forecasters are slashing growth projections for the first three months of the year and temporary job losses could weigh on consumer spending. New York Times
Chart of the Day
Context is important when we talk about rising housing costs. In the 1960s, 40% of the family budget was spent on food, clothing, & shelter. In 2019 it was around 25%. This chart doesn’t even adjust for the difference in quality and choice. It looks even better when you consider than people were living in 2-story starter homes with a single bathroom and eating canned veggies back then.
Source: Full Stack Economics
WTF
Shots Fired: A Minnesota man was charged with killing his roommate’s emotional support ferrets told police that he shot the caged animals with a BB gun because they “smell like shit.” He also claimed that one of the ferrets was laughing at him because drugs. The Smoking Gun
Mother of the Year: A woman was arrested and hit with a variety of charges after an investigation turned up 34,000 lethal doses of fentanyl hidden in a baby’s crib because Florida. MSN
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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