" The increases will fall far short of demand, forcing the price of crude oil to surge to US$150 a barrel by 2010, and over US$200 a barrel by 2012" J. Rubin, CIBC
(I have heard this guy a few times. I'd say he has a very good reputation)
A NY Times article quoted an expert as forecasting a 17% decline in lasik eye surgery (elective vision correction) procedures in 2008 vs. year-earlier. In most cases, insurance does not reimburse, so it's elective.
These are examples of tech (elective surgery) and traditional (newspaper) industries that were vulnerable to downturns even before the recession.
In fact, it's hard to say what part of the declines is cyclical and which part is fundamental.
It's not just the recession. There's a lot of vulnerable industries and businesses. Grew too fast, spent and borrowed too much, didn't change with the times. Now, cutbacks and layoffs everywhere.
othing like a change in administration after 8 years to help that RE velocity along here in DC. just read an article today in the Post as well that said DC proper median price increased 7% YOY from '06 to '07.
What a crazy place i live in.
LOVE IT
but just so you know i can relate (and am stoopid) i've just kicked off a new phase of 240 SFH lots and the village center in Fauquier County NoVa. Some good ole suburban new home developments...yippeee! closing a $30MM C&D loan today too!
regarding architectural billings:
our office (in san francisco) has never been busier. not only have we hired additional staff recently but we have recruiters calling (almost daily) attemping to steal our staff. At the moment, the Bay Area is still different. In additon, large institutional projects are keeping contractors busy and driving up the cost of steel and other items. The slowdown may indeed be "across regions" but at a micro level (here), i'm going to keep my Mad Max outfit in the closet for a couple more years.
but with respect to this thread, as a card carrying member of the AIA and the owner of an architectural practice I can verify the data in that report. institutional up, the rest, no so much.
we are also being solicited by builders and subs every day for work. its insane. on a commercial project we have i'm going to be able to reduce my construction costs by 10% jut by squeezing subs via increased competition.
and this in the face of rising materials costs.
have bidders coming in from western PA even.
and now that the great sucking sound of national harbor is slowing down - things will get even worse for the builders (but good for me!)
annectdotal evidence to the contrary notwithstanding, I'd tend to give more weight to the reported survey numbers. Absent unusual circumstances, the incentives for trade associations are to overstate the positives and obscure (lie about?) the negatives. So when a trade association reports a downturn in its area, I'd be inclined to believe.
Also, more annectdotal evidence, in Portland, Oregon, at least, general contractors are having a pretty good success squeezing the subs. I think the trades are hurting bad.
I had a heat pump installed last month, the contractor was pretty busy then, but saw him yesterday and he was begging for work. Like several posters said earlier, something happened in March.
He was also moaning about paying $40 a day in fuel costs for his truck.
"Tim writes:
What kinds of projects are people working on for San Francisco? It feels like business is going down here fast."
university projects, hotel renovations and construction(conventions are a constant), hospitals(this is very big at the moment), research labs and believe it or not, residential towers.
McClatchy, a huge newspaper publishing, had first quarter revenues that were down 13.8% and advertising that was down 15.3% from a year ago.
Perhaps they should go after the (soon to be very lucrative) legal advertisements ? If the projected number of FCs actually materialize, they might get their own section in the paper.
CHINA only has enough coal for 12 days of consumption, three days less than a month ago, state media reported Wednesday, sounding the alarm bells over the nation's most important source of energy
"Los Angeles is becoming a "Third World city" with immigrants making up half its workforce, says a new study."
You need to read a study to know that? Drive through it sometime. Check out who does every bit of the manual labor, 3/4 of the low-pay retail, the vast majority of restaurant worker (except the front of the house), etc.
This has happened before; like New York in the 19th and early 20th centuries. Vast numbers of immigrants at low-wage jobs. But the majority of their kids and grand-kids became middle class.
Will that happen this time? It doesn't depend on the immigrants... it depends on America.
"Top British designer Peter Inston (Inston Design International, 33, Cork Street, London W1X 1HB) has been chosen to design the new building, which will include a vast rotunda containing 5000 guest rooms and a central "activity" dome bigger than the controversial Millennium Dome in Greenwich in London. The Lunar Hilton project has gained momentum recently due to the possibility that there are vast ice reservoirs in lunar craters. Ice means plentiful supplies of water and oxygen."
...
"Peter George, chairman of Hilton International, insists that the Lunar Hilton will be the latest in a long line of world firsts (in this case, out-of-this world firsts) for the Company. "One day soon, there will be hotels on the Moon. The Hilton wants to be the first - that is the Hilton tradition."
"This has happened before; like New York in the 19th and early 20th centuries. Vast numbers of immigrants at low-wage jobs. But the majority of their kids and grand-kids became middle class.
Will that happen this time? It doesn't depend on the immigrants... it depends on America."
I'm in SoCal working with for a general contractor. Hospital and university work is killing it right now. The spec office buildings are mostly just finishing up. Subs are chopping their own heads off on bid day and its all just starting.
I was talking to a large electrical contractor last night. Trimmed their work force from 700 to 550 in Diego...
I think its going to be brutal for contractors over the course of the next 2 years....
You might want to keep the Mad Max costume handy in case you need to leave the bay area. Annecdotal evidence hints that there are large sections of the US that are not like CA.
This morning on my way to work I heard a National Association of Realtor's advertisement.
At first I thought it was their standard, "Every region is different, prices are low and housing choices are at an all time high. Now is a great time to buy"
But no - it was an advertisement for COMMERCIAL real estate using the same theme: "The market for commercial real estate has never been stronger and the NAR wants you to know that this is a GREAT time to buy."
Well, if the NAR is putting out these ads you can pretty much be guaranteed that the CRE market is really collapsing.
OT.
But the market rallies lately are early signs of the formation of another financial bubble. The pumps are set for another bubble. Lots of moneys out there (remember the tax cuts never got trickled down, the deficit spendings, foreign moneys, foreign central banks reserves, oil moneys, etc.) now with extra juices from the FED and probably not enough investment assets. Anyhow, the seeds (moneys and credits in the hands of Wall Street) for the next bubble are being planted. Market fundamentals serve only to remind investors who bought over-inflated assets to not to dump them; otherwise let's the hypes and manias go wild onto the next "innovations" that promise the new era, the new paradigm, the new economy... It's happening as we are witnessing it.
OT: Economists, many of whom are skeptical that government currency purchases can substantially alter currency values, had been unable to study the effect of Japans bold actions because the government did not officially report or discuss its activities in this area. That changed in 2001, when Japan began disclosing the date and amounts of its currency buying and selling.
The authors use this new information to study some 43 separate intervention events -- some of which took place over several days -- between 1991 and 2000. These were occasions in which Japanese officials, sometimes with the help of their American counterparts, attempted to influence the value of the yen. The authors were particularly interested in whether the intervention achieved the desired exchange rate changes even in the absence of the more tried and true tool: central bank-instigated interest rate adjustments. They find that, at least in the very short run intervention policy is effective in moving the exchange rate, even when not accompanied by interest rate changes.
They observe that Japans interventions were most effective when the BoJ joined forces with the Federal Reserve System to conduct currency transactions in excess of U.S. $1 billion. Of the 12 large scale coordinated interventions they study, 11 achieved the desired effect: they moved the yen either up or down in accordance with the policy goal of the moment.
This quarter started in Apr after the BSC bailout on March 20. My prediction since the beginning of the quarter was for a short squeeze up until 2 p.m. ET on the day of the FOMC announcement. The squeeze seems to be a habitual pleasure of the big money guys going into any Fed announcement, and while the news has continued to suck this month, it has sucked in the same way it has for months so the "priced in" blather gets people to buy. From a short sellers perspective, why get short in front of the Fed meeting? The reward is that something catastrophic happens, but the risk is getting jammed (again) by the Fed. Considering the way BSC was handled, catastrophic seemed a remote probability.
The market is a fight over billions of dollars so don't expect the bulls to roll over easily. And now that the market is the economy, shorting the stock market means fighting the Fed. I personally somewhat like what's going on in the market right now. No one really knows what's going on, but a lot of people are churning their accounts trying to make a dime. When people are sufficiently worn down something will give. Bulls can't go forever without making a return, so eventually they will start to worry in the same way a short seller worries when his position slowly starts ticking against him. My 2 cents on the market action.
Now, what happens when gasoline costs $8.00?
Barley | 04.24.08 - 1:38 pm | #
mock turtle responds;
you get an old dodge caravan..(very light)
strip out the internal combustion engine, and strip interior to minimum
buy two used electric golf cart motors and bolt to steel support plate in place of engine block, cost 1000 dollars
attach each electric motor directly to each half shaft of front wheels
buy six deep cycle marine 12 volt (like a car battery) batteries from costco, mount in back separate from front seats with vertical Plexiglass wall, ventilate battery compartment. cost 350 dollars
buy 10, 5 watt 1/3rd amp solar panels from harbor freight tools (yeah china made) cost 40 dollars each. mount on van roof.
use battery charger at night, solar panels during day, drive for about 3 cents per mile.
amortize investment in about 6 months of average driving.
Re: ..more krispy kreme, more sbux, more tgt, more wmt, more mcd....
You know, this service economy is a new way to socialize and subsidize the American economy, i.e, everything from healthcare to social security will be rolled into service jobs, with part time employees living at welfare levels, but they will have benifits and live in bailed out homes.
"nades
I think its going to be brutal for contractors over the course of the next 2 years...."
This applies nationally without question or arguement from me. I just have to point out their are so many very large institutional projects in the Bay Area currently under construction and about to begin that the slowdown for contractors will not be dramatic for 2 more years. They will simply shift to the larger projects.
This concept of banks speeding to the confessional, speeding up writedowns, speeding up recognition of bad debts, speeding up and acceleration depreciation and amortization, speeding up bad visibility.... is a great strategy on the surface, but the metaphor here is comparable to begin a growing season with crop-related disease , like a pathogen/fungus, as in potato blight or the beginning stages of a famine or drought.
If a farmer/banker were to rush to the commodity market with bad news about crops, I would imagine some traders would appreciate the honesty of an honest farmer, but then look at the economics related to the mutual benefit of exchange, i.e, if you know that the future yield is going to decrease in a sequential pattern and series of cascading implosions and result in compounding debt which like a black hole, will suck others into the defaults -- would you invest in rotten potato futures?
Re: Investing in rotten potato futures. You can't make a silk purse out of a dead sows ear and when crops are dead, they remain dead -- and they aint worth much as they rot, and worth even less as time goes by, and if they have a fungus, you need to destroy them and hope that between burning the crop and a killer freeze -- next spring may result in better conditions....but then you have to bet the farm and hope things grow, or else...
Where is Sebastian, to tell us this continued decline in billings (not "sentiment" as he claimed in response to this same release a month ago) is misleading? How can we learn the truth about the robust health of the economy without Sebastian to lead us?
rich said: "A NY Times article quoted an expert as forecasting a 17% decline in lasik eye surgery (elective vision correction) procedures in 2008 vs. year-earlier. In most cases, insurance does not reimburse, so it's elective."
I thought I was just contrarian in my views on the economy and the stock market, but evidently it's in all phases of my life.
I waited until this year (January) to get my Lasik procedure done, paying for it with a flexible benefit account. BTW, they (the laser center where I had the surgery done) raised their prices by 10% in November, 2007.
k harris said: "Where is Sebastian, to tell us this continued decline in billings (not "sentiment" as he claimed in response to this same release a month ago) is misleading? How can we learn the truth about the robust health of the economy without Sebastian to lead us?"
It's not how the indicators look on a chart, it's that they aren't quantified in any way that makes them of questionable value.
IOW, we don't know if that sharp downleg on the right side of the Architectural Billings chart is going to translate into something similar in the economy and the stock market. That's the widespread assumption, of course, but whether it's valid is another question.
From the link CR provided:
"...Based on a comparison of data compiled since the surveys inception in 1995 with figures from the Department of Commerce on Construction Put in Place, the findings amount to a leading economic
indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction activity...."
(asterisk mine)
Since the 1995 start in the figures there's only been the one recession (2001), so we have no idea what this index might have looked like in any previous recessions or mid-cycle slowdowns.
my friend works in SF architecture firm. He says that this year they had to change to international building code. As a result, number of projects are down, and take much longer to complete. His company had about 10 people, now cut back to only 6 people. He says things will probably pickup later when everyone gets familiar with the code.
Just so I make sure I understand here, slowing supply is bad for existing commercial real estate? The big issue with the early 90s bust is that despite all signals to stop, people kept developing because of the tax regime. Would I rather see a less steep decline? Sure. Would I be much more concerned if it were treding up. Hell Yeah.
Carolinas are pretty busy still. Some big projects are getting put on hold for lack of funding, but there is already so many out there it has not has an impact yet.
The biggest tight spot is small to medium size public bid jobs. Lots of bidders for those. The small ones are being swamped by the larger residential contractors, and the mid-size ones by the regional contractors who are being squeezed out of the big contracts by the Construction Management firms.
One bright spot down the road will be military work, but if you haven't already been doing some during the boom times, it will be hard to work your way into the system now.
The 4th quarter is going to be very interesting. There is a lot of bids now for work in the fourth quarter so the numbers for that quarter should be OK (not great, but ok). But that quarter will be crucial for seeing what happens next year. Every downturn has areas that manage to come through ok. That will be when we will see what happens in the Carolinas. The contractors who have a good pipeline set up (most don't) will probably be OK for a while. But I suspect the National trends are going to start dragging down our happy party by the 1st quarter of next year.
One of my clients here in SE Michigan is a small (~8 people) architecture firm that had been doing a lot of fairly high-end residential, both new construction and renovations. That has slowed down, but they've moved heavily into work for educational institutions in- and out-of-state, and that's going to keep them busy for quite a while. They've said there is plenty of institutional work going on. Like most other areas in the country, subs around here are really hurting, which is great for clients, architects and construction managers, but lousy for the contractors and their families.
first
First Off Topic
Red Necks slowing down.
Rising fuel, hotel costs the pits for NASCAR fans
Rising fuel, hotel costs the pits for NASCAR fans - USATODAY.com
More krispy kreme, more sbux, more tgt, more wmt, more mcd....
more growth!
Commercials builders and Homebuilders will continue the rally on this fantastically bullish news for them....
Banks on the hook for defaulted builders loan will rally on this too....
Puppetmasters Ben and Hank will deny involvement.
Re-it...
Fade OIL, here now, here again!
Other things are falling too:
St. Louis Fed: Series: DGS1MO, 1-Month Treasury Constant Maturity Rate
O/T
Oil:
" The increases will fall far short of demand, forcing the price of crude oil to surge to US$150 a barrel by 2010, and over US$200 a barrel by 2012" J. Rubin, CIBC
(I have heard this guy a few times. I'd say he has a very good reputation)
Gas, oil prices to double by 2012, CIBC economist predicts
Now, what happens when gasoline costs $8.00?
any one watching $TNX up hugh today. up 50 BPS in the last month .
More krispy kreme, more sbux, more tgt, more wmt, more mcd....
more growth!
BenB'sBailoutBonanza | 04.24.08 - 1:27 pm | #
Screw that... MORE GUBBMINT! MORE HEALTH CARE! MORE EDUMACATION! 'Institutional' was the only sub-index north of 50!
Now, what happens when gasoline costs $8.00?
Barley | 04.24.08 - 1:38 pm | #
You pay it or drive less.
funny. we made a strategic decision about 12 months ago to get into institutional and educational facilities.
thank god!
the bottom is closer than ever however. closer than ever!
More good news for builders as SRS plummets. WTF?
A NY Times article quoted an expert as forecasting a 17% decline in lasik eye surgery (elective vision correction) procedures in 2008 vs. year-earlier. In most cases, insurance does not reimburse, so it's elective.
- NY Times
McClatchy, a huge newspaper publishing, had first quarter revenues that were down 13.8% and advertising that was down 15.3% from a year ago.
McClatchy Reports Loss on Ad Sales Slump - NY Times?
These are examples of tech (elective surgery) and traditional (newspaper) industries that were vulnerable to downturns even before the recession.
In fact, it's hard to say what part of the declines is cyclical and which part is fundamental.
It's not just the recession. There's a lot of vulnerable industries and businesses. Grew too fast, spent and borrowed too much, didn't change with the times. Now, cutbacks and layoffs everywhere.
the bottom is closer than ever however. closer than ever!
dc1000 | 04.24.08 - 1:48 pm | #
I can call your bottom dc1000 - Jan 9, 2009. Rest of the country not so much.
oohhh...I love a good bubble bath!
the bottom is closer than ever however. closer than ever!
it's just the darn speed to impact is so darn fast !can we survive it?
In most cases, insurance does not reimburse, so it's elective.
Side note: Now that sounds like a campaign platform in the making guaranteed to shake down some contributions from ophthalmologists.
Back to regular programing.
othing like a change in administration after 8 years to help that RE velocity along here in DC. just read an article today in the Post as well that said DC proper median price increased 7% YOY from '06 to '07.
What a crazy place i live in.
LOVE IT
but just so you know i can relate (and am stoopid) i've just kicked off a new phase of 240 SFH lots and the village center in Fauquier County NoVa. Some good ole suburban new home developments...yippeee! closing a $30MM C&D loan today too!
wacked out.
regarding architectural billings:
our office (in san francisco) has never been busier. not only have we hired additional staff recently but we have recruiters calling (almost daily) attemping to steal our staff. At the moment, the Bay Area is still different. In additon, large institutional projects are keeping contractors busy and driving up the cost of steel and other items. The slowdown may indeed be "across regions" but at a micro level (here), i'm going to keep my Mad Max outfit in the closet for a couple more years.
but with respect to this thread, as a card carrying member of the AIA and the owner of an architectural practice I can verify the data in that report. institutional up, the rest, no so much.
we are also being solicited by builders and subs every day for work. its insane. on a commercial project we have i'm going to be able to reduce my construction costs by 10% jut by squeezing subs via increased competition.
and this in the face of rising materials costs.
have bidders coming in from western PA even.
and now that the great sucking sound of national harbor is slowing down - things will get even worse for the builders (but good for me!)
Vancouver is similar to SF.
Architects and designers can dictate their employment terms.
They've got 2 maybe 3 years - enjoy the party.
You pay it or drive less.
or steal it
What kinds of projects are people working on for San Francisco? It feels like business is going down here fast.
annectdotal evidence to the contrary notwithstanding, I'd tend to give more weight to the reported survey numbers. Absent unusual circumstances, the incentives for trade associations are to overstate the positives and obscure (lie about?) the negatives. So when a trade association reports a downturn in its area, I'd be inclined to believe.
Also, more annectdotal evidence, in Portland, Oregon, at least, general contractors are having a pretty good success squeezing the subs. I think the trades are hurting bad.
I still don't understand why the market is up.
Market is up b/c money is moving out of commodities as the dollar goes up. Just my guess.
--
Great news for CRE?
Los Angeles 'is a Third World city'
Last Updated: 7:18am BST 24/04/2008
Los Angeles is becoming a "Third World city" with immigrants making up half its workforce, says a new study.
...
A third of immigrants have not graduated from high school and 60 per cent do not speak English fluently, the Migration Policy Institute found.
...
Latest news, breaking news, current news, UK news, world news, celebrity news, politics news - Telegraph
BTW, what is happening in LA and CA has been spreading to many states.
Jas
I had a heat pump installed last month, the contractor was pretty busy then, but saw him yesterday and he was begging for work. Like several posters said earlier, something happened in March.
He was also moaning about paying $40 a day in fuel costs for his truck.
"Tim writes:
What kinds of projects are people working on for San Francisco? It feels like business is going down here fast."
university projects, hotel renovations and construction(conventions are a constant), hospitals(this is very big at the moment), research labs and believe it or not, residential towers.
Anonymous writes:He was also moaning about paying $40 a day in fuel costs for his truck.
Only $40.00 a day?
dc1000,
But on the way to the bottom are you starting from the 1st floor window...or the 101st?
I still don't understand why the market is up.
I think the more interesting question is - with everybody and their dog shorting the market, how can it ever go down?
Interesting to see all these guys who never saw the problems to begin with know exactly where the bottom is.
Great job guys.
Recovery Seen by Those Who Missed the Bust - Barrons.com
Now, what happens when gasoline costs $8.00?
Barley | 04.24.08 - 1:38 pm | #
You pay it or drive less.
dryfly | 04.24.08 - 1:47 pm | #
And/or organized crime moves in for the prime pickings.
But! The S&P Guys-Who-Want-to-Name-a-Building-After-Themselves Index is up...
Concentration of Wealth Gallery
Wall Street financier gets his name alongside New York Lions
The article requested is no longer available.
... so the indicator... for the architectural indicator is up. Tah da!
Trickle down works (well... will work... should work, according to our models at the American Enterprise Institute.)
Buy... Stocks... Now...
McClatchy, a huge newspaper publishing, had first quarter revenues that were down 13.8% and advertising that was down 15.3% from a year ago.
Perhaps they should go after the (soon to be very lucrative) legal advertisements ? If the projected number of FCs actually materialize, they might get their own section in the paper.
Page not found | News.com.au
CHINA only has enough coal for 12 days of consumption, three days less than a month ago, state media reported Wednesday, sounding the alarm bells over the nation's most important source of energy
"Los Angeles is becoming a "Third World city" with immigrants making up half its workforce, says a new study."
You need to read a study to know that? Drive through it sometime. Check out who does every bit of the manual labor, 3/4 of the low-pay retail, the vast majority of restaurant worker (except the front of the house), etc.
This has happened before; like New York in the 19th and early 20th centuries. Vast numbers of immigrants at low-wage jobs. But the majority of their kids and grand-kids became middle class.
Will that happen this time? It doesn't depend on the immigrants... it depends on America.
I guess now is not the time to build a Lunar Hotel.
http://www.resonancepub.com/space.htm
"Top British designer Peter Inston (Inston Design International, 33, Cork Street, London W1X 1HB) has been chosen to design the new building, which will include a vast rotunda containing 5000 guest rooms and a central "activity" dome bigger than the controversial Millennium Dome in Greenwich in London. The Lunar Hilton project has gained momentum recently due to the possibility that there are vast ice reservoirs in lunar craters. Ice means plentiful supplies of water and oxygen."
...
"Peter George, chairman of Hilton International, insists that the Lunar Hilton will be the latest in a long line of world firsts (in this case, out-of-this world firsts) for the Company. "One day soon, there will be hotels on the Moon. The Hilton wants to be the first - that is the Hilton tradition."
"This has happened before; like New York in the 19th and early 20th centuries. Vast numbers of immigrants at low-wage jobs. But the majority of their kids and grand-kids became middle class.
Will that happen this time? It doesn't depend on the immigrants... it depends on America."
bingo!
metabear - I'm going to guess A&A ?
I'm in SoCal working with for a general contractor. Hospital and university work is killing it right now. The spec office buildings are mostly just finishing up. Subs are chopping their own heads off on bid day and its all just starting.
I was talking to a large electrical contractor last night. Trimmed their work force from 700 to 550 in Diego...
I think its going to be brutal for contractors over the course of the next 2 years....
metabear -
You might want to keep the Mad Max costume handy in case you need to leave the bay area. Annecdotal evidence hints that there are large sections of the US that are not like CA.
This morning on my way to work I heard a National Association of Realtor's advertisement.
At first I thought it was their standard, "Every region is different, prices are low and housing choices are at an all time high. Now is a great time to buy"
But no - it was an advertisement for COMMERCIAL real estate using the same theme: "The market for commercial real estate has never been stronger and the NAR wants you to know that this is a GREAT time to buy."
Well, if the NAR is putting out these ads you can pretty much be guaranteed that the CRE market is really collapsing.
OT.
But the market rallies lately are early signs of the formation of another financial bubble. The pumps are set for another bubble. Lots of moneys out there (remember the tax cuts never got trickled down, the deficit spendings, foreign moneys, foreign central banks reserves, oil moneys, etc.) now with extra juices from the FED and probably not enough investment assets. Anyhow, the seeds (moneys and credits in the hands of Wall Street) for the next bubble are being planted. Market fundamentals serve only to remind investors who bought over-inflated assets to not to dump them; otherwise let's the hypes and manias go wild onto the next "innovations" that promise the new era, the new paradigm, the new economy... It's happening as we are witnessing it.
"Every region is different, prices are low and housing choices are at an all time high. Now is a great time to buy"
D R Horton ad I heard a few days ago on the radio:
"It's a buyer's market if you buy."
OT: Economists, many of whom are skeptical that government currency purchases can substantially alter currency values, had been unable to study the effect of Japans bold actions because the government did not officially report or discuss its activities in this area. That changed in 2001, when Japan began disclosing the date and amounts of its currency buying and selling.
The authors use this new information to study some 43 separate intervention events -- some of which took place over several days -- between 1991 and 2000. These were occasions in which Japanese officials, sometimes with the help of their American counterparts, attempted to influence the value of the yen. The authors were particularly interested in whether the intervention achieved the desired exchange rate changes even in the absence of the more tried and true tool: central bank-instigated interest rate adjustments. They find that, at least in the very short run intervention policy is effective in moving the exchange rate, even when not accompanied by interest rate changes.
They observe that Japans interventions were most effective when the BoJ joined forces with the Federal Reserve System to conduct currency transactions in excess of U.S. $1 billion. Of the 12 large scale coordinated interventions they study, 11 achieved the desired effect: they moved the yen either up or down in accordance with the policy goal of the moment.
Getting CLOBBERED here!
This quarter started in Apr after the BSC bailout on March 20. My prediction since the beginning of the quarter was for a short squeeze up until 2 p.m. ET on the day of the FOMC announcement. The squeeze seems to be a habitual pleasure of the big money guys going into any Fed announcement, and while the news has continued to suck this month, it has sucked in the same way it has for months so the "priced in" blather gets people to buy. From a short sellers perspective, why get short in front of the Fed meeting? The reward is that something catastrophic happens, but the risk is getting jammed (again) by the Fed. Considering the way BSC was handled, catastrophic seemed a remote probability.
The market is a fight over billions of dollars so don't expect the bulls to roll over easily. And now that the market is the economy, shorting the stock market means fighting the Fed. I personally somewhat like what's going on in the market right now. No one really knows what's going on, but a lot of people are churning their accounts trying to make a dime. When people are sufficiently worn down something will give. Bulls can't go forever without making a return, so eventually they will start to worry in the same way a short seller worries when his position slowly starts ticking against him. My 2 cents on the market action.
Now, what happens when gasoline costs $8.00?
Barley | 04.24.08 - 1:38 pm | #
mock turtle responds;
you get an old dodge caravan..(very light)
strip out the internal combustion engine, and strip interior to minimum
buy two used electric golf cart motors and bolt to steel support plate in place of engine block, cost 1000 dollars
attach each electric motor directly to each half shaft of front wheels
buy six deep cycle marine 12 volt (like a car battery) batteries from costco, mount in back separate from front seats with vertical Plexiglass wall, ventilate battery compartment. cost 350 dollars
buy 10, 5 watt 1/3rd amp solar panels from harbor freight tools (yeah china made) cost 40 dollars each. mount on van roof.
use battery charger at night, solar panels during day, drive for about 3 cents per mile.
amortize investment in about 6 months of average driving.
abandoned real estate = art
BLDGBLOG: Hotels in the Afterlife
Maybe someday we will be touring the ruins of the Inland Empire
drive a dodge caravan...priceless
Re: ..more krispy kreme, more sbux, more tgt, more wmt, more mcd....
You know, this service economy is a new way to socialize and subsidize the American economy, i.e, everything from healthcare to social security will be rolled into service jobs, with part time employees living at welfare levels, but they will have benifits and live in bailed out homes.
"nades
I think its going to be brutal for contractors over the course of the next 2 years...."
This applies nationally without question or arguement from me. I just have to point out their are so many very large institutional projects in the Bay Area currently under construction and about to begin that the slowdown for contractors will not be dramatic for 2 more years. They will simply shift to the larger projects.
This concept of banks speeding to the confessional, speeding up writedowns, speeding up recognition of bad debts, speeding up and acceleration depreciation and amortization, speeding up bad visibility.... is a great strategy on the surface, but the metaphor here is comparable to begin a growing season with crop-related disease , like a pathogen/fungus, as in potato blight or the beginning stages of a famine or drought.
If a farmer/banker were to rush to the commodity market with bad news about crops, I would imagine some traders would appreciate the honesty of an honest farmer, but then look at the economics related to the mutual benefit of exchange, i.e, if you know that the future yield is going to decrease in a sequential pattern and series of cascading implosions and result in compounding debt which like a black hole, will suck others into the defaults -- would you invest in rotten potato futures?
One last thing,
Re: Investing in rotten potato futures. You can't make a silk purse out of a dead sows ear and when crops are dead, they remain dead -- and they aint worth much as they rot, and worth even less as time goes by, and if they have a fungus, you need to destroy them and hope that between burning the crop and a killer freeze -- next spring may result in better conditions....but then you have to bet the farm and hope things grow, or else...
Where is Sebastian, to tell us this continued decline in billings (not "sentiment" as he claimed in response to this same release a month ago) is misleading? How can we learn the truth about the robust health of the economy without Sebastian to lead us?
seems like today was a sucker's rally?! but why? maybe we learn more after the close? Very strange
rich said: "A NY Times article quoted an expert as forecasting a 17% decline in lasik eye surgery (elective vision correction) procedures in 2008 vs. year-earlier. In most cases, insurance does not reimburse, so it's elective."
I thought I was just contrarian in my views on the economy and the stock market, but evidently it's in all phases of my life.
I waited until this year (January) to get my Lasik procedure done, paying for it with a flexible benefit account. BTW, they (the laser center where I had the surgery done) raised their prices by 10% in November, 2007.
S.
k harris said: "Where is Sebastian, to tell us this continued decline in billings (not "sentiment" as he claimed in response to this same release a month ago) is misleading? How can we learn the truth about the robust health of the economy without Sebastian to lead us?"
It's not how the indicators look on a chart, it's that they aren't quantified in any way that makes them of questionable value.
IOW, we don't know if that sharp downleg on the right side of the Architectural Billings chart is going to translate into something similar in the economy and the stock market. That's the widespread assumption, of course, but whether it's valid is another question.
From the link CR provided:
"...Based on a comparison of data compiled since the surveys inception in 1995 with figures from the Department of Commerce on Construction Put in Place, the findings amount to a leading economic
indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction activity...."
(asterisk mine)
Since the 1995 start in the figures there's only been the one recession (2001), so we have no idea what this index might have looked like in any previous recessions or mid-cycle slowdowns.
Sebastia
Does anyone know why IYR keeps going up?
I tried to short it today but my brokers (2 different ones!) won't let me.
my friend works in SF architecture firm. He says that this year they had to change to international building code. As a result, number of projects are down, and take much longer to complete. His company had about 10 people, now cut back to only 6 people. He says things will probably pickup later when everyone gets familiar with the code.
Teich said: "Does anyone know why IYR keeps going up?"
It's already gone through a correction of about -40% (last year's peak to this year's trough), which is a major one.
Also, it looks as though at current levels it's paying a dividend of between 4%-5%, which is also substantial.
Doesn't sound like a very good short, IMO.
Sebastia
My daughter is an architect in Boston.
They have work, but who knows how long? She says it's slow. They do commercial RE.
Just so I make sure I understand here, slowing supply is bad for existing commercial real estate? The big issue with the early 90s bust is that despite all signals to stop, people kept developing because of the tax regime. Would I rather see a less steep decline? Sure. Would I be much more concerned if it were treding up. Hell Yeah.
Carolinas are pretty busy still. Some big projects are getting put on hold for lack of funding, but there is already so many out there it has not has an impact yet.
The biggest tight spot is small to medium size public bid jobs. Lots of bidders for those. The small ones are being swamped by the larger residential contractors, and the mid-size ones by the regional contractors who are being squeezed out of the big contracts by the Construction Management firms.
One bright spot down the road will be military work, but if you haven't already been doing some during the boom times, it will be hard to work your way into the system now.
The 4th quarter is going to be very interesting. There is a lot of bids now for work in the fourth quarter so the numbers for that quarter should be OK (not great, but ok). But that quarter will be crucial for seeing what happens next year. Every downturn has areas that manage to come through ok. That will be when we will see what happens in the Carolinas. The contractors who have a good pipeline set up (most don't) will probably be OK for a while. But I suspect the National trends are going to start dragging down our happy party by the 1st quarter of next year.
One of my clients here in SE Michigan is a small (~8 people) architecture firm that had been doing a lot of fairly high-end residential, both new construction and renovations. That has slowed down, but they've moved heavily into work for educational institutions in- and out-of-state, and that's going to keep them busy for quite a while. They've said there is plenty of institutional work going on. Like most other areas in the country, subs around here are really hurting, which is great for clients, architects and construction managers, but lousy for the contractors and their families.