My experience in texas during the S&L fiasco tells me regional banks failing, has a more immediate effect on the local economy than huge national banks loosing billions. Which of course leads to more regional banks failing...
The progression of disaster is unfolding as predicted here. Credit cards, foreclosures, banks and food riots. The surge in oil prices is the cream on our coffee if we could afford cream or coffee!
Barron's (April 14th issue) entitled McCAIN VS THE ECONOMY has a very pessimistic article that includes the following:
-As many as 500 banks are likely to be closed or merged out of existence over the next two to three years.
-Bank examiners don't appreciate the industry's distress because many banks are masking problems by lending troubled commercial borrowers new money to pay off old debts.
-Most people who bought homes since 2000 will find that they have negative equity, as home prices continue to fall.
-If unemployment rises to 6% from 5.1% now, many of those folks will be tempted to abandon their homes.....
The point of the article is that McCain will get tagged with this mess.
Just learned yesterday, nice neighbors who moved to SoCal from Minn. and were renting a large 4/3 2 doors down were packing up to move. When asked they told me that the house was going into fc and that the landlord had been pocketing the rent. Someone knocked on the door (the bank) and told them. The mgt co said, you are going to pay the next months rent right? They were told to get out and bought a house in Riverside. I cringed but they said they got a "good deal" Another brown lawn in the neighborhood...so glad I sold in Feb. and will be leaving end of the month!
ajmstilt - yes, that's generally true. As the larger banks pull back the smaller banks often extend lending, especially to smaller businesses and homeowners. If they get whacked, the money really does dry up.
So I just got off the phone with a couple of friends. Both own small companies(less than 2M gross). Both said the exact same thing. Absolutly buried in work. Last year was the most profitable in over 30 years. The first three months of this year are again at a record setting pace. Heck one mentioned this year he is on pace to DOUBLE last years business. With no debt they are able to keep prices low and kill the leveraged business(thier words).
The common item. Both of them are established business with ZERO debt.
They both have the ability to expand as needed without sweating a slowdown.
Oh,neither one is related to aerospace or ag...Both are automotive related!!
I am going with dryflys two divergent economies...
-Bank examiners don't appreciate the industry's distress because many banks are masking problems by lending troubled commercial borrowers new money to pay off old debts.
Well this is the essence of ponzi finance -- using new debt to pay off old debt when income doesn't suffice.
Some people will become enormously wealth doing this, so there is great individual incentive to do so, but collectively we'll get poorer.
More generally this applies to any inflationary solution to economic and financial problems.
These inflationary solution are repeatedly proposed, however, because they tend to benefit those in power at the expense of those who are not.
So these types of solutions will continue to be proposed, and we'll likely see more of the rioting and social unrest we've begun to witness recently.
Chris, not divergent economies at all. Every once in a while lightening strikes and causes a huge fire that seems to engulf everything. But after it passes, there is new growth in the forest, and many things survived. It just cleared the underbrush and consumed the deadwood. That is happening here, but the forest is one forest.
Oh and, btw, anyone who is in the forest and just stands there screaming about how bad the fire is gets killed. Those who see the safe ground survive. Read these threads wisely.
Those who see the safe ground survive. Read these threads wisely.
ipodius | 04.15.08 - 11:10 am | #
The friend in Knoxville says..."You interested in starting a med./heavy truck repair business in Florida?". He said he could use a place to hang out at in the winter in a couple of years.
I told him in a couple of years there will be some commercial land that once again will make sense to purchase and start a business on. Right now,still to expensive. He giggled on the phone when I told him land went from 40k for a 1 acre commercial lot to 1+ million in a total of five years...
The progression of disaster is unfolding as predicted here. Credit cards, foreclosures, banks and food riots. The surge in oil prices is the cream on our coffee if we could afford cream or coffee!
Viewing with alarm | Homepage | 04.15.08 - 10:43 am | #
I have to admit, the food riots caught me by surprise. Everything else, not so much.
WASHINGTON, DC James B. Lockhart, Director of the Office of Federal Housing Enterprise Oversight (OFHEO) today released OFHEOs 2008 Report to Congress, detailing the agencys annual examination conclusions and regulatory oversight of the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, for the year 2007. The report concludes that both Enterprises made very good progress in remediating their operational areas and providing stability and liquidity to the mortgage markets, but they remain a significant supervisory concern because of increased mortgage market and credit risk.
Fannie Mae and Freddie Mac should be commended for the timely filing of their 2007 annual statements, said Lockhart. While they have made progress in fixing many of their systems, internal controls and risk management problems, they still have much work to do, especially with the continuing challenges of todays mortgage market.
These challenges and the pressures on Fannie Mae and Freddie Mac to do even more to support the mortgage market require a stronger regulator, Lockhart said. As I noted in my transmittal letter, last month both GSEs agreed that a world-class regulatory structure is needed and they renewed a shared commitment to work for comprehensive GSE reform legislation. The time to act on the legislation is now.
Oh and, btw, anyone who is in the forest and just stands there screaming about how bad the fire is gets killed. Those who see the safe ground survive. Read these threads wisely.
Steakhouse Partners (BULLETIN BOARD: STKP), which is based in San Diego, says it had large non-recurring and for the most part, non-cash expenses totaling approximately $10.5 million, which adversely affected net income in 2007. These expenses included impairment of trade names, discontinued operations and penalties and interest associated with a forbearance agreement that was signed with creditors.
In addition, our independent registered public accountant included an explanatory note in its opinion on the company's 2007 financial statements indicating substantial doubt about the company's ability to continue as a going concern, it says.
The company says the uncertainty surrounding the U.S. economy may cause its customers to reduce their level of discretionary spending, likely reducing the number of times they dine out or the amount they spend while dining out.
USb increased its through the cycle NCO rate to 100 bps from 60-80 bps and said by takjing extra provision it gives itself room to prepare to take anothe rif things worsen? Also aid it si seeing flight to balance sheet quality from peers which is likley permanent. Flight to quality is aggressive these days.
Walked into my local Kemba credit union last week and got a sweet HELOC deal, prime minus 1.01 and no closing cost. They said they were balls-to-the-wall busy doing refinance mortgages. I said its probably all those no/low doc folks looking to refinance. The Kemba rep said she has always done full doc only. Seems some regional institutions are doing OK as long as you can verify your income.
I would really like to see reported inflation readings now compared directly with values reported in prior periods of high inflation, say mid '70s or late '80s - item for item. We might be running higher.
Inflation figures starting with the Boskin commission became one the key models to hide reality.
Substitution and hedonics can be twisted with models to completely obscure any reality. This is where we are today. We have scientists determining of a new headlight on a car actually reduces its costs though the car does not drive any faster, does not deliver you quicker to your destination. Without a clear impact on productivity, there should be no adjustment AND that is not even mentioning the adverse impact of road conditions on productivity (never considered), i.e. increased L.A. commute times which improved headlights do not necessarily solve...
Of the 13 deals involved, 60-day delinquency rates range from 32% to 41% and expected losses as a percentage of the original loan balances range from 5.2% to 15%.
The loans' originators include former Lehman subprime units BNC Mortgage LLC and Finance America, as well as H&R Block Inc.'s (HRB) Option One Mortgage Corp. and Ameriquest Mortgage Co.
Seems some regional institutions are doing OK as long as you can verify your income.
But how long will the job be there? In 2009, as the recession continues, the borrower loses his/her job and defaults. Or loses the job next month! Who could have possibly known?
Wall Street conventional wisdom says (much like Cheney): "So what?"
Don't worry be happy - the Fed will make sure all the banks are too big to fail, will prop up bank reserves, will keep it coming...
Steakhouse Partners (BULLETIN BOARD: STKP), which is based in San Diego, says it had large non-recurring and for the most part, non-cash expenses totaling approximately $10.5 million, which adversely affected net income in 2007.
The first problem is...a chain of 25 steakhouses probably had no biz going public.
Second, wrong place, wrong time. Locations are heavy in California and also Ohio, Indiana Michigan and Arizona.
Third, $29 porterhouse steak entrees may not be doing well in the recession.
Not hyper growth or hugely leveraged, like some other restaurant chains. Quality-minded and conservatively managed.
But no money left. $1+ million in current assets, and over $17 million in current liabilities. If you have their gift cards, redeem them quick:
US Bancorp is still one of the loosest lenders there is on the broker boards. They were tight underwriting during the boom, but they have barely tightened up since then and so the tight stuff is looking extra loose right about now. They need to pull it way back and have yet to do so.
Can anyone explain why SRS is down on the foreclosure news? It can't just all be a short squeeze, can it?
You might wish to read the last few chapters of the "Only Yesterday" link above.
Should dispel any notion that stock values respond to fundamentals during periods where the Federal Reserve lowers interest rates to "help" the economy.
JS said: "Can anyone explain why SRS is down on the foreclosure news? It can't just all be a short squeeze, can it?"
Nope. There's a REIT that I've owned off and on over the past few years, ICF. It bottomed-out in January and hasn't been able to make another new low since. Even at current prices it's still paying a respectable dividend. Not exactly a bearish scenario for REITs.
One thing about the smaller regional banks is that they have much more flexibility in how they handle their loans - we're seeing them bend over backward to accomodate developers who are unable to sell their homes. Be it automatically granting extensions to reducing payments and interest rate.
Not that the aggregate numbers won't be overwhelming, though.
Yes but click the "more" on that link to read the bad stuff that is hidden.
Cost Pressures Accelerate
The prices paid index climbed for a fourth consecutive month, reaching 57.3, its highest level since November 2005; 59 percent of respondents reported higher prices. The prices received index notched up 5 points to 20.8. Both the index for number of employees and the average workweek were zero.
Outlook Weakens
The future general business conditions index fell to 19.6, similar to Januarys near-record low. While the future new orders index rose to 33.3, the future shipments index declined to 26.4. The future prices paid index climbed to 61.5, and the future prices received index inched up to 34.4. After rising sharply last month, the future index for number of employees gave up its gain, falling to 4.1. The capital expenditures index dropped several points to 11.5, its lowest level since 2003, and the technology spending index, at 10.4, remained close to last months level.
Yes but click the "more" on that link to read the bad stuff that is hidden.
Also, there's the minor issue that the US is not a manufacturing or production economy -- it's a consumption economy.
Still anything that moves us away from that has to be interpreted as good news. Though the only real good news in that regard has been the increasing exports.
Seems to me there are a lot of perfectly good reasons for the government to systematically under-report inflation. Almost everything they fund is indexed to those readings, and it would be a backbreaker. Instead, fixed income people and those with revenue streams tied to inflation get their backs broken, courtesy of the US government.
--
CNBC: SoCal SFH resale prices for March 2008 down 24%, YoY.
I have not seen anything posted on DataQuick website yet. I am sure that it is led by interior areas that are collapsing.
Homebuilder Index stuck at 20. It has to rise to 50 and stay there for three months before the housing bottoms. That is like climbing Mt. Everest, or K2.
--
"Seems to me there are a lot of perfectly good reasons for the government to systematically under-report inflation. Almost everything they fund is indexed to those readings, and it would be a backbreaker. Instead, fixed income people and those with revenue streams tied to inflation get their backs broken, courtesy of the US government."
Ignorant people always look for conspiracy. People who report inflation are not politicians but among the more honest economists and statisticians in America. Rogue economists work for academia, e.g. UCLA, Conference Board, ECRI, Wall Street, industry groups, etc.
CPI is NOT understated. Only born-and-bred dopes (when 99%+ think that way it is easy to conclude that we are dealing with dopes) believe it is. I have an ironclad proof restaurant prices (they include most types of costs) in Silly.con Valley and LA Area have not gone as much as the reported CPI for the past 20-30 years.
solo said: "Yes but click the "more" on that link to read the bad stuff that is hidden."
But there was a large bounce upward despite the "bad stuff."
The written descriptions make things sound a lot worse than the actual data says it is, so what should a rational person do with this information?
Although Tanta doesn't want to live next door to me because she thinks I'm so mercenary, the answer is "Take advantage of the knee-jerk reactionaries who believe the prose but ignore the data."
Rogers' comments left much to chew on. "The yuan is one of the safest investments in the world right now against the U.S. dollar, and therefore against the Hong Kong dollar," he said.
He alluded to the inevitable: "You have a gigantic neighbor who's becoming the most incredible economy in the world. "It [the Hong Kong dollar] would be like having a special currency for Mississippi when the rest of the U.S. uses the U.S. dollar."
IMHO, I believe we are seeing a bit of "tit for tat". Russians, Chinese and Saudi's speculate in the market with their wads of cash and drive up the price of oil. Our team speculates with their bankroll to drive up commodity prices outside of oil. While we are in recession, they get to deal with civil unrest derived from food pricing etc. that may topple their governments.
The losses will be smaller for the regional banks compared to the multinationals, of course. But it'll be the regionals and mid-size banks that are overexposed that will be the ones to fail in larger numbers.
Citi, JPMorgan, Countrywide: these are all the ones the FDIC has declared "too big (i.e., profitable/criminal) to fail," so they'll get their federal bailouts.
Impoverish the community to enrich the multinational. Seems like it would be paradoxical... too bad it's standard operating procedure for the government/banks (or do I repeat myself?) right now.
--
"LOL! Anecdotal evidence from Jack in the box is only ironclad evidence used by sociopathic dopes."
Only dopes read what is not written. I meant all types of common restaurants -- Pizzerias, delis, Mexican, Chinese, Thai, and, yes, burger places, etc. Prices over the past 22 years (since I moved to SoCal) are up 30-100% for various menu items at different places with median increase of 70%. CPI is up more than 90% over the same period. What inflationary costs are not reflected in restaurants? Many deflationary items are not.
Jas is correct about food inflation not being the big deal the conspiracy theorists say it is. Elizabeth Warren has crunched the numbers repeatedly and food prices as a percent of income have been going down for decades. It is the price of housing, energy, health care, and the increase in the need for child care that has driven up the cost of living.
When this is all said and done.
I want a pigman or three to pull my plow.
They should be in abundant supply.
Oh, and I didn't yell FIRRRWSSSSST!
Yes, the individual losses may look small, but the aggregate of the individual losses won't be.
Also, these losses will continue for quite a time - 2-3 years at least. Weaker banks will go under.
My experience in texas during the S&L fiasco tells me regional banks failing, has a more immediate effect on the local economy than huge national banks loosing billions. Which of course leads to more regional banks failing...
There go the China made free toasters.
The progression of disaster is unfolding as predicted here. Credit cards, foreclosures, banks and food riots. The surge in oil prices is the cream on our coffee if we could afford cream or coffee!
State Street is down 9% and sinking fast.
I don't have stock holdings at all, but I do watch them. State Street has always been one of the stronger ones.
Barron's (April 14th issue) entitled McCAIN VS THE ECONOMY has a very pessimistic article that includes the following:
-As many as 500 banks are likely to be closed or merged out of existence over the next two to three years.
-Bank examiners don't appreciate the industry's distress because many banks are masking problems by lending troubled commercial borrowers new money to pay off old debts.
-Most people who bought homes since 2000 will find that they have negative equity, as home prices continue to fall.
-If unemployment rises to 6% from 5.1% now, many of those folks will be tempted to abandon their homes.....
The point of the article is that McCain will get tagged with this mess.
Just learned yesterday, nice neighbors who moved to SoCal from Minn. and were renting a large 4/3 2 doors down were packing up to move. When asked they told me that the house was going into fc and that the landlord had been pocketing the rent. Someone knocked on the door (the bank) and told them. The mgt co said, you are going to pay the next months rent right? They were told to get out and bought a house in Riverside. I cringed but they said they got a "good deal" Another brown lawn in the neighborhood...so glad I sold in Feb. and will be leaving end of the month!
ajmstilt - yes, that's generally true. As the larger banks pull back the smaller banks often extend lending, especially to smaller businesses and homeowners. If they get whacked, the money really does dry up.
So I just got off the phone with a couple of friends. Both own small companies(less than 2M gross). Both said the exact same thing. Absolutly buried in work. Last year was the most profitable in over 30 years. The first three months of this year are again at a record setting pace. Heck one mentioned this year he is on pace to DOUBLE last years business. With no debt they are able to keep prices low and kill the leveraged business(thier words).
The common item. Both of them are established business with ZERO debt.
They both have the ability to expand as needed without sweating a slowdown.
Oh,neither one is related to aerospace or ag...Both are automotive related!!
I am going with dryflys two divergent economies...
Chris
-Bank examiners don't appreciate the industry's distress because many banks are masking problems by lending troubled commercial borrowers new money to pay off old debts.
Well this is the essence of ponzi finance -- using new debt to pay off old debt when income doesn't suffice.
Some people will become enormously wealth doing this, so there is great individual incentive to do so, but collectively we'll get poorer.
More generally this applies to any inflationary solution to economic and financial problems.
These inflationary solution are repeatedly proposed, however, because they tend to benefit those in power at the expense of those who are not.
So these types of solutions will continue to be proposed, and we'll likely see more of the rioting and social unrest we've begun to witness recently.
Chris, not divergent economies at all. Every once in a while lightening strikes and causes a huge fire that seems to engulf everything. But after it passes, there is new growth in the forest, and many things survived. It just cleared the underbrush and consumed the deadwood. That is happening here, but the forest is one forest.
Oh and, btw, anyone who is in the forest and just stands there screaming about how bad the fire is gets killed. Those who see the safe ground survive. Read these threads wisely.
Those who see the safe ground survive. Read these threads wisely.
ipodius | 04.15.08 - 11:10 am | #
The friend in Knoxville says..."You interested in starting a med./heavy truck repair business in Florida?". He said he could use a place to hang out at in the winter in a couple of years.
I told him in a couple of years there will be some commercial land that once again will make sense to purchase and start a business on. Right now,still to expensive. He giggled on the phone when I told him land went from 40k for a 1 acre commercial lot to 1+ million in a total of five years...
Chris
The progression of disaster is unfolding as predicted here. Credit cards, foreclosures, banks and food riots. The surge in oil prices is the cream on our coffee if we could afford cream or coffee!
Viewing with alarm | Homepage | 04.15.08 - 10:43 am | #
I have to admit, the food riots caught me by surprise. Everything else, not so much.
Can anyone explain why SRS is down on the foreclosure news? It can't just all be a short squeeze, can it?
OT from OFHEO:
WASHINGTON, DC James B. Lockhart, Director of the Office of Federal Housing Enterprise Oversight (OFHEO) today released OFHEOs 2008 Report to Congress, detailing the agencys annual examination conclusions and regulatory oversight of the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, for the year 2007. The report concludes that both Enterprises made very good progress in remediating their operational areas and providing stability and liquidity to the mortgage markets, but they remain a significant supervisory concern because of increased mortgage market and credit risk.
Fannie Mae and Freddie Mac should be commended for the timely filing of their 2007 annual statements, said Lockhart. While they have made progress in fixing many of their systems, internal controls and risk management problems, they still have much work to do, especially with the continuing challenges of todays mortgage market.
These challenges and the pressures on Fannie Mae and Freddie Mac to do even more to support the mortgage market require a stronger regulator, Lockhart said. As I noted in my transmittal letter, last month both GSEs agreed that a world-class regulatory structure is needed and they renewed a shared commitment to work for comprehensive GSE reform legislation. The time to act on the legislation is now.
http://www.ofheo.gov/media/annualreports/ReporttoCongress2008.pdf
Oh and, btw, anyone who is in the forest and just stands there screaming about how bad the fire is gets killed. Those who see the safe ground survive. Read these threads wisely.
We're all small furry subprime animals now.
Casual dining taking a step backwards:
Steakhouse Partners (BULLETIN BOARD: STKP), which is based in San Diego, says it had large non-recurring and for the most part, non-cash expenses totaling approximately $10.5 million, which adversely affected net income in 2007. These expenses included impairment of trade names, discontinued operations and penalties and interest associated with a forbearance agreement that was signed with creditors.
In addition, our independent registered public accountant included an explanatory note in its opinion on the company's 2007 financial statements indicating substantial doubt about the company's ability to continue as a going concern, it says.
The company says the uncertainty surrounding the U.S. economy may cause its customers to reduce their level of discretionary spending, likely reducing the number of times they dine out or the amount they spend while dining out.
Central Valley Business Times
USb increased its through the cycle NCO rate to 100 bps from 60-80 bps and said by takjing extra provision it gives itself room to prepare to take anothe rif things worsen? Also aid it si seeing flight to balance sheet quality from peers which is likley permanent. Flight to quality is aggressive these days.
Walked into my local Kemba credit union last week and got a sweet HELOC deal, prime minus 1.01 and no closing cost. They said they were balls-to-the-wall busy doing refinance mortgages. I said its probably all those no/low doc folks looking to refinance. The Kemba rep said she has always done full doc only. Seems some regional institutions are doing OK as long as you can verify your income.
AC- In some of your comments yesterday (about 1931) what book/reference were you quoting from?
Thanks
The food riots were baked in a long time ago. There will be more.
I would really like to see reported inflation readings now compared directly with values reported in prior periods of high inflation, say mid '70s or late '80s - item for item. We might be running higher.
"Seems some regional institutions are doing OK as long as you can verify your income"
Ahhh! But 1 small detail. Your current income.
Lots of surprises coming, soon, to an unemployment line near you. We are only at the leading edge of the down cycle.
Inflation figures starting with the Boskin commission became one the key models to hide reality.
Substitution and hedonics can be twisted with models to completely obscure any reality. This is where we are today. We have scientists determining of a new headlight on a car actually reduces its costs though the car does not drive any faster, does not deliver you quicker to your destination. Without a clear impact on productivity, there should be no adjustment AND that is not even mentioning the adverse impact of road conditions on productivity (never considered), i.e. increased L.A. commute times which improved headlights do not necessarily solve...
Is it Friday already?
Fitch Downgrades $3.1B In Lehman Subprime Deals
Of the 13 deals involved, 60-day delinquency rates range from 32% to 41% and expected losses as a percentage of the original loan balances range from 5.2% to 15%.
The loans' originators include former Lehman subprime units BNC Mortgage LLC and Finance America, as well as H&R Block Inc.'s (HRB) Option One Mortgage Corp. and Ameriquest Mortgage Co.
Fitch Cuts Ratings on Lehman Deals - WSJ.com
Hey, my kid got pissed that he couldn't have the cereal he wanted this AM.
Does that constitute a food riot?
It's usually a tough sell to crack jokes at starvation, homedad, but you have truly bucked the trend with that fine piece of wit
Dennis Kneale - "inflation boogeyman" - with a straight face.
What a turd that dope is. Where do they find people like that? That station is truly amazing.
Seems some regional institutions are doing OK as long as you can verify your income.
But how long will the job be there? In 2009, as the recession continues, the borrower loses his/her job and defaults. Or loses the job next month! Who could have possibly known?
Wall Street conventional wisdom says (much like Cheney): "So what?"
Don't worry be happy - the Fed will make sure all the banks are too big to fail, will prop up bank reserves, will keep it coming...
i'm fresh out of ideas...what's gonna happen next?
Haitian food riots have real consequences in Miami. I expect we will be seeing more boat people soon.
Those that don't get caught will fade
into the Haitian community.
I have represented a number of Haitians. They are very nice, hardworking people, who often are very or at least somewhat successful in Miami.
Real people, bub.
However, they have also succeeded in devasting Haiti. But we are busy doing the same thing here, only our island is much bigger.
See Collapse.
"... i'm fresh out of ideas...what's gonna happen next?
...."
Convergence?
http://www.capitalstool.com/forums/index.php?act=Attach&type=post&id=97641
The first problem is...a chain of 25 steakhouses probably had no biz going public.
Second, wrong place, wrong time. Locations are heavy in California and also Ohio, Indiana Michigan and Arizona.
Third, $29 porterhouse steak entrees may not be doing well in the recession.
Not hyper growth or hugely leveraged, like some other restaurant chains. Quality-minded and conservatively managed.
But no money left. $1+ million in current assets, and over $17 million in current liabilities. If you have their gift cards, redeem them quick:
http://www.paragonsteak.com/
Time to try new positioning:
"Ground Beef Partners."
Surprised that U.S. Bancrop is doing poorly, though teh Ag economy was red-hot... must've been another bank I was thinking of.
AC- In some of your comments yesterday (about 1931) what book/reference were you quoting from?
Thanks
Only Yesterday
US Bancorp is still one of the loosest lenders there is on the broker boards. They were tight underwriting during the boom, but they have barely tightened up since then and so the tight stuff is looking extra loose right about now. They need to pull it way back and have yet to do so.
I believe "Ground Beef Partners" would be McDonalds.
PS picked up 100 more SDS at open.
Can anyone explain why SRS is down on the foreclosure news? It can't just all be a short squeeze, can it?
You might wish to read the last few chapters of the "Only Yesterday" link above.
Should dispel any notion that stock values respond to fundamentals during periods where the Federal Reserve lowers interest rates to "help" the economy.
TradingStats said: "i'm fresh out of ideas...what's gonna happen next?"
Well, recovery from the "recession."
Empire State Manufacturing Survey (overview) - Federal Reserve Bank of New York
Not quite sure how the "recession" is going to "deepen" from here if manufacturing won't cooperate by deteriorating.
Sebastia
JS said: "Can anyone explain why SRS is down on the foreclosure news? It can't just all be a short squeeze, can it?"
Nope. There's a REIT that I've owned off and on over the past few years, ICF. It bottomed-out in January and hasn't been able to make another new low since. Even at current prices it's still paying a respectable dividend. Not exactly a bearish scenario for REITs.
ICF: Basic Chart for ISHARE CS RTY MAJ IN - Yahoo! Finance
Sebastia
Barron's (April 14th issue) entitled McCAIN VS THE ECONOMY has a very pessimistic article that includes the following:
McCain is out their calling for more tax cuts to help the problem with energy costs while advocating aggressive bailouts for housing.
This attitude toward our nation's finances seems pretty pervasive, not confined to one party or individual. All the gain none of the pain.
Rate Cuts + Tax Cuts + Bail Outs + Inflation = Free Stuff & Prosperity!
Bankruptcy economics.
(BTW I'm all for tax cuts if we slash wasteful spending along with it. Do we really need farm subsidies with food prices in a melt-up?)
RE Haiti,
PM (Pres?) stepped down because of the food riots, no?
"Let them eat dirt". Sorry mess there.
One thing about the smaller regional banks is that they have much more flexibility in how they handle their loans - we're seeing them bend over backward to accomodate developers who are unable to sell their homes. Be it automatically granting extensions to reducing payments and interest rate.
Not that the aggregate numbers won't be overwhelming, though.
"Sebastian writes:
Well, recovery from the "recession."
Yes but click the "more" on that link to read the bad stuff that is hidden.
Cost Pressures Accelerate
The prices paid index climbed for a fourth consecutive month, reaching 57.3, its highest level since November 2005; 59 percent of respondents reported higher prices. The prices received index notched up 5 points to 20.8. Both the index for number of employees and the average workweek were zero.
Outlook Weakens
The future general business conditions index fell to 19.6, similar to Januarys near-record low. While the future new orders index rose to 33.3, the future shipments index declined to 26.4. The future prices paid index climbed to 61.5, and the future prices received index inched up to 34.4. After rising sharply last month, the future index for number of employees gave up its gain, falling to 4.1. The capital expenditures index dropped several points to 11.5, its lowest level since 2003, and the technology spending index, at 10.4, remained close to last months level.
Yes but click the "more" on that link to read the bad stuff that is hidden.
Also, there's the minor issue that the US is not a manufacturing or production economy -- it's a consumption economy.
Still anything that moves us away from that has to be interpreted as good news. Though the only real good news in that regard has been the increasing exports.
Seems to me there are a lot of perfectly good reasons for the government to systematically under-report inflation. Almost everything they fund is indexed to those readings, and it would be a backbreaker. Instead, fixed income people and those with revenue streams tied to inflation get their backs broken, courtesy of the US government.
ac - Did Barons really say "McCain is out their calling ".........guess I better cancel the subscription.
Since price inflation is so "low" majors like BCE are trying to remove COLA from contracts.
That means run for the hills.
ac - Did Barons really say "McCain is out their calling ".........guess I better cancel the subscription.
Nah... that was the WSJ.
McCain urged Congress to suspend the federal gas tax from Memorial Day to Labor Day to help reduce gas prices.
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CNBC: SoCal SFH resale prices for March 2008 down 24%, YoY.
I have not seen anything posted on DataQuick website yet. I am sure that it is led by interior areas that are collapsing.
Homebuilder Index stuck at 20. It has to rise to 50 and stay there for three months before the housing bottoms. That is like climbing Mt. Everest, or K2.
Jas
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"Seems to me there are a lot of perfectly good reasons for the government to systematically under-report inflation. Almost everything they fund is indexed to those readings, and it would be a backbreaker. Instead, fixed income people and those with revenue streams tied to inflation get their backs broken, courtesy of the US government."
Ignorant people always look for conspiracy. People who report inflation are not politicians but among the more honest economists and statisticians in America. Rogue economists work for academia, e.g. UCLA, Conference Board, ECRI, Wall Street, industry groups, etc.
CPI is NOT understated. Only born-and-bred dopes (when 99%+ think that way it is easy to conclude that we are dealing with dopes) believe it is. I have an ironclad proof restaurant prices (they include most types of costs) in Silly.con Valley and LA Area have not gone as much as the reported CPI for the past 20-30 years.
Jas
solo said: "Yes but click the "more" on that link to read the bad stuff that is hidden."
But there was a large bounce upward despite the "bad stuff."
The written descriptions make things sound a lot worse than the actual data says it is, so what should a rational person do with this information?
Although Tanta doesn't want to live next door to me because she thinks I'm so mercenary, the answer is "Take advantage of the knee-jerk reactionaries who believe the prose but ignore the data."
Sebastia
Jas, "I have an ironclad proof"
LOL! Anecdotal evidence from Jack in the box is only ironclad evidence used by sociopathic dopes. Blowme.
Hey, my kid got pissed that he couldn't have the cereal he wanted this AM.
Does that constitute a food riot?
homedad43 | 04.15.08 - 12:07 pm | #
Or did it constitute a sore butt?
"I have an ironclad proof"
Does this mean you only paid half price for the bridges where you live?
Wanta buy some more? I've got more (all styles, all colors - your choice) to sell you.
Rogers' comments left much to chew on. "The yuan is one of the safest investments in the world right now against the U.S. dollar, and therefore against the Hong Kong dollar," he said.
He alluded to the inevitable: "You have a gigantic neighbor who's becoming the most incredible economy in the world. "It [the Hong Kong dollar] would be like having a special currency for Mississippi when the rest of the U.S. uses the U.S. dollar."
IMHO, I believe we are seeing a bit of "tit for tat". Russians, Chinese and Saudi's speculate in the market with their wads of cash and drive up the price of oil. Our team speculates with their bankroll to drive up commodity prices outside of oil. While we are in recession, they get to deal with civil unrest derived from food pricing etc. that may topple their governments.
Got popcorn?
The losses will be smaller for the regional banks compared to the multinationals, of course. But it'll be the regionals and mid-size banks that are overexposed that will be the ones to fail in larger numbers.
Citi, JPMorgan, Countrywide: these are all the ones the FDIC has declared "too big (i.e., profitable/criminal) to fail," so they'll get their federal bailouts.
Impoverish the community to enrich the multinational. Seems like it would be paradoxical... too bad it's standard operating procedure for the government/banks (or do I repeat myself?) right now.
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"LOL! Anecdotal evidence from Jack in the box is only ironclad evidence used by sociopathic dopes."
Only dopes read what is not written. I meant all types of common restaurants -- Pizzerias, delis, Mexican, Chinese, Thai, and, yes, burger places, etc. Prices over the past 22 years (since I moved to SoCal) are up 30-100% for various menu items at different places with median increase of 70%. CPI is up more than 90% over the same period. What inflationary costs are not reflected in restaurants? Many deflationary items are not.
Jas
Jas is correct about food inflation not being the big deal the conspiracy theorists say it is. Elizabeth Warren has crunched the numbers repeatedly and food prices as a percent of income have been going down for decades. It is the price of housing, energy, health care, and the increase in the need for child care that has driven up the cost of living.