John Williams at shadowstats estimates that:
1. M3 is running at +17% Y0Y
2. Inflation rate in March was about 10% YOY
3. So, if he's right doesn't that mean that Real Retail sales were actually -8%?
Well, yeah retail sales will increase when everything we buy has price increases. Just go to a major supermarket and purchase two weeks worth of food including meat & fresh produce. Then go gas up two autos. Oh, and stop by pricey Walgreens for a few things.
Sales tax collections in Missouri are down 15 percent for March, compared with the same month last year, according to a general revenue report the state Office of Administration released Friday.
Diesel weasels its way into costs, supply-chain strategy
Soaring fuel costs percolate through to a range of product pricesand call into question just-in-time inventory practices. Watch out for open-ended fuel surplus charges.
higher fuel costs have also made rail a legitimate option, especially for the steel coils the company ships from its mills in Ohio to plants in Mexico for finishing, and then ships back
one question... How can Amazon be the low cost book/junk seller?
If I see one more report blaming the weather, i swear, i'm going to climb a tower and take hostages. everything sells at the right price, even out-of-season clothes. the only true commentary on the figures is "comsumers have cut back as money and credit tighten, and discounts have not met expectations to counter that trend."
I was listening to the local radio this morning and people were calling in and yelling about the price of gas and the price of milk ($5/gallon they were saying).
I've listened to that station on the drive to work for several years now and that's the first time I've heard something like that.
Is Easter really that big of a retail day? Probably a naive question, but a lot of stores were closed on Easter Sunday, so wouldn't the increased spending beforehand be canceled out?
Sales are flat. Inventories are up again month to month. Business will cut production until inventories drop. Soon to be more layoffs. Retail was down in Feb. until maxed out cards from Christmas got payed down a little. The next blowup is consumer credit.
WASHINGTON - A growing majority say they won't buy a home anytime soon, the latest sign of increasing pessimism about the nation's housing crisis, a poll showed Monday.
Early Easter, late spring weather, yadda yadda. Oh, and subtract out another 0.92% for y-o-y population growth for anther perspective. You know how retailers like to cite "same store sales." This is the same kind of thing, "per person sales."
Let's look ahead for the looming largest excuse in modern retail history. 32 shopping days Thanksgiving to Christmas 2007. Only 27 in 2008.
Record-fast price increases for diesel fuel are shaking up the nations manufacturing and supply chains, contributing to price hikes in everything from Meow Mix to mattresses...
Rooting for higher retail sales is rooting against higher personal saving. But, personal saving is nearly zero for the last three years!!! See the second chart here:
Real Dow & Real Homes & Personal Saving & Debt Burden at Real Dow & Real Homes & Personal Saving & Debt Burden
This very low personal saving rate is widely accepted to be a very major flaw in our USA's behavior!
A couple more rate cuts and Big Bone Ben will have the US going right down the Japanese rabbit hole.
Collapsing housing bubble
Zombie banks
Eviscerate the poor and middle class by cutting rates and drive commodity prices threw the roof
Waves of closers of small business
Rising unemployment which keep wages low
Carry trade currency
Drive currency into the ground to boost exports
ipodius writes:
If I see one more report blaming the weather, i swear, i'm going to climb a tower and take hostages. everything sells at the right price, even out-of-season clothes.
Reporting in the US at all levels is beginning to sound more Soviet style every day.
Which is the first furniture chain to go BK?
-10% YOY. I'm sure it'll turn around when the weather warms up!
Sales at furniture and home furnishing stores decreased 0.3 percent seasonally adjusted from last month and 10.2 percent unadjusted year-over-year
Retailers were expecting $14.4 billion in Easter sales. The earlier Easter falls, the fewer spring apparel sales--still too cold for new outfits. Most of the spending was meals, cards, candy, etc.
Looks like stores were disappointed in their expectations of a resurrection.
March sales were "boosted" by an early Easter??? I swear I read a short while ago that lousy March sales were "harmed" by an early Easter. Or am I confusing which sales figures are being blamed on which holiday?
At least this time they got creative and also blamed the calendar too.
daveNYC
NEW YORK (CNN/Money) - Retailers on Thursday reported sluggish sales for August, as store chains blamed adverse weather and a late Labor Day for hurting back-to-school business. (9/2/04)
Hello, I saw you, I know you, I knew you
I think I can remember your name, name
Hello, I'm sorry, I lost myself
I think I thought you were someone else
Should we talk about the weather? (hi, hi, hi)
Should we talk about the government? (hi, hi, hi, hi)
gn, I remember being given powdered milk, too! It used to be cheaper than fresh milk. Not true anymore - much more expensive. People who don't use much still get it, but a box costs over $10.
Yalt, those are hilarious! They should be published on bloomberg, or at least run on the Daily Show. Thanks for making me laugh before a tedious meeting
matty writes:
Just got my hop bill: 187 lbs.= $4835.09. The good news? I got hops!
matty | 04.14.08 - 10:54 am | #
Your no Obama supporter... He disses Beer.
OBAMA SPEECH MONDAY: 'They'll promise you anything, give you a long list of proposals and even come around, with TV crews in tow, to throw back a shot and a beer
I saw many articles claiming that retail sales were expected to be poor BECAUSE of the early Easter. Reasoning being that the spring clothing sales usually associated with Easter were absent because of the cold weather.
Unbelievable, the idiotic spin we read these days.
Also--it is ALWAYS cold on Easter and the little girls ALWAYS wear sleeveless dresses no matter if there is frost on the ground. This is a rule of nature.
I think he was dissing Hilly, not beer.
matty | 04.14.08 - 11:07 am
i think he was stumbling , looking for something to diss hillary on, and chose a photo shot of HC celebrating a little americana with supporter's. Not to bright for a supposed bright fellow.rubs wrong, for some, jus sayi
There's no way I can be convinced that Hillary's a shot-and-a-beer, foot-on-the-barrail kind of gal. She's Chardonnay and white tablecloths all the way.
ah...i be a nonvotingpotstirrer. if i'm wrong , no problem... just think if one is going to make an argument, not to drag other stuff in with it. like" they'll promise anything and everything, deliver nothing.(period)"
I've stopped buyingcigarettes (as of 2 months ago was a pack a day smoker) wife is down to a pack a week form a pack a day. So $5 a week from $100. (or $20 a month now instead of $400) I no longer drive to work and now ride my bike saving an additional $100 a month...
and yet... two months on, I've lost all those gains to increases in the price of food.
Oh and the aprtments I'm in want to raise the rent, in Sacremento! unbelieivable.
Crisis to affect markets for a decade: JP Morgan
LONDON (Reuters) - The financial crisis will affect market structure and pricing for at least a decade and lead to greater regulatory powers for central banks in areas at the centre of the turmoil, analysts at JP Morgan said.
"Market participants and regulators will focus intensely on controlling the risks that were at the core of the crisis," analysts led by Jan Loeys and Margaret Cannella wrote in a note on Monday.
These risks include lending standards in mortgages, leverage in the funding of securitized products, and the use of short-term financing for illiquid long-term assets outside of the regulated banking sector.
This will change behavior for market participants "for at least a decade," they wrote, in line with fallout from previous crises.
This, from a Bloomberg story about Goldman Sachs, is so funny I had to stick it in somewhere:
Kostin's predecessor as Goldman's chief forecaster for the U.S. stock market, Abby Joseph Cohen, predicted in December the S&P 500 would rise 14 percent to 1,675 in 2008. Cohen, 56, was known for her bullish predictions during the 1990s at New York- based Goldman, the most-profitable securities firm
I think she was paid big bucks for her predictions, right?
"challenging" is press release, damage control speak of the most transparent sort. It's like a baseball manager saying "he likes to compete." No he doesn't. He likes to win.
Oh and the aprtments I'm in want to raise the rent, in Sacremento! unbelieivable.
Call their bluff. Rents are falling in Sacramento; take my word for it. If you show them some comps, they might change their mind. If not, screw 'em and move.
The same thing happened to me a few years back. The place was REIT owned and they had some formula they used to calculate rent increases that included how long you'd lived there. I called them posing as a "prospective" renter, and they would do a 12-month for my old rent, plus they were giving a bonus of 50% off the first month! Unfortunately, when I confronted them with the info, they still wouldn't give, so I moved.
One of my favorite breweries has been raising prices on their beer and now their food.... So much so we never go there anymore.... To bad I loved the place and the IPAs... They must be getting killed on both the revenue and expense sides... Must hurt....
Please ignore the price hikes. They're only asking prices, like in real estate. There's only so much money that can be spent. If coffee or Meow Mix go up in price, that means they'll sell less of each. There's only so much aggregate demand. Sales tax receipts are down, right?
Bernanke wants us to think there's inflation. He thinks if we have more inflationary expectations, he can prevent a 1930s deflation. He won't.
One measure of inflation, the monetary base of the US number (see St.Louis Fed data) is not skyrocketing--it's pretty flat. (Click on Range:5 yrs) That's not inflation.
""This is a great time to buy, but not necessarily to sell," said Robert Jackson, who lives in a two-bedroom house in Ferguson, Mo., with his wife and four young children. He said he would love to purchase a larger home, but can't because even if he found a buyer, he would probably lose thousands on his house, which he bought less than two years ago."
He thinks it's a great time to buy because he could now buy his home for less than he paid for it. The article talks about pessimism, but obviously faith in the housing market is not dead. Perhaps in a year, this guy will be begging to walk away free and clear and move back into an apartment? We'll see.
oh what the hell: Willamette, Cascade, Fuggles, Sterling, Magnum, Brewers Gold, Glacier, Horizon, Nugget, Tettnang, Chinook, Goldings, Santiam, and Liberty. $4.99/each. (Retail, so on topic).
I think what cliffo is saying is that, as the price rises, demand will fall. So sooner or later price hikes will not work anymore. This will be the effect of coffee shops raising their prices. People will take it with them in a mug, like I do now. Perhaps that will lower the number of coffee shops around. Over-expansion at its best there anyhow.
The same goes for gas. If everyone were to say "i'm not going anywhere this summer" the price would fall as decreased demand led to supply oversupply. Gas is extremely sensitive to stock amounts.
On the subject, price increases are not indicative of inflation, I agree. The money supply is shrinking, and asset prices are falling. What does that tell you? Food and fuel, however, do not act like deflationary items such as houses do because they are needed short-term. A house you will wait to buy because its price is falling (what is now happening and a classic deflationary spiral). Fuel and food, not so much.
OT - I'm looking at IBM and trying to figure out why (other than more ill-timed share buybacks) their stock is heading higher into earnings. I can't seem to find definitive data, but my sense is, they derive a disproportionately high share of their income from the financial services industry. They acknowledge as much in their 10K, defining financial services in their top sources of revenue, without providing details.
These are issues that would, in a more mentally-healthy republic, occupy center stage of the political conversation -- not whether a cohort of Cheez Doodle addicted rural Pennsylvania morons prays out loud for God to shoot all the Mexicans.
"...The number envisioning falling prices in their area has grown to one in four, while four in 10 think prices will rise..."
I had a long discussion with a friend that owns an RE office in a tony summer cape cod area this weekend. His analysis was that, for one, the pool of buyers has now shrunk to those that are fully qualified and didn't go to the "no money down" RE school. In other words, those with actual money. Secondly, now you're seeing who didn't have it in the first place as they are getting desparate to unload property they can no longer afford, and there is slightly more than 2 years of inventory on the market there.
What this means is that there are some hootin' bargains out there if you are in the market. And people ARE buying. Selectively. So his three words of wisdom are price, price and price now.
How much gas spending, and for that matter driving, is discretionary? Many things that look frivolous at first are tied to lifestyle arrangements (to avoid the loaded term "choices") like living in developments designed around cars where walking is at best impractical.
I think what cliffo is saying is that, as the price rises, demand will fall. So sooner or later price hikes will not work anymore.
Gasoline and heating oil and food prices are non-discretionary spending choices. Most automobile gasoline consumption is for people commuting to work -- a very non-discretionary fuel use.
Gary I don't think that politico understand just who the electorate is in most of America. Which is why the person who wins the election is going to be the one with whom regular people can see themselves knocking back a cold one with at a bar. Especially now that everyone is truly scared about jobs, prices, and their houses. They'll want a mom or dad figure, is my guess. Everyone else is allowed theirs, but the answer will come in a few months.
barely said: "OT - I'm looking at IBM and trying to figure out why (other than more ill-timed share buybacks) their stock is heading higher into earnings...."
A couple of esl type speakers in my local grocery store looking for powdered milk, having no success. I helped them search for a while, then hailed the store manager. He told us powdered milk is unobtainable at local grocery stores as it is all being sent to Irag.
That could help explain the inflated prices the previous poster noted.
Gasoline and heating oil and food prices are non-discretionary spending choices.
To a degree Watts. You can turn down the thermostat or shut off the AC(generally a lot), you can drive less (by going shopping less? vacation time?) and you can certainly cut your food bill by not shopping at Whole Foods, not buying prepared foods, and only buying items you need and on sale. You can eat out less (affects food prices), and not stop for that morning coffee at DDs or SBX.
ipodious said: "I had a long discussion with a friend that owns an RE office in a tony summer cape cod area this weekend. His analysis was that, for one, the pool of buyers has now shrunk to those that are fully qualified and didn't go to the "no money down" RE school..."
This is a great quote from the NYT, in an article about how the really well-off aren't being fazed by the "recession."
"...Mr. Sperling views the nations economic slump as a temporary problem, and is grateful that it has yet to affect him. I think if you have the means to ride it out, thats what you do, he said.
His view of the subprime mortgage crisis seemed to reflect a sort of inverse class resentment.
I dont want to sound harsh, but the people who were buying million-dollar houses with a combined household income of $70,000 or $80,000 were the ones who were chasing easy money, he said...."
Not to be a smart-ass, but maybe it's because their earnings are rising? Look at "Earnings History", and the upside surprises.
Many of IBMs contracts are long-term, as they provide first-level services and have arrangements that last out many years. Also, expect re-tooling of a lot of financial services software now in response to what is happening. If IBM surprises to the downside, it will lag the immediate problems and show up next year as budgets are slashed. IBM also has a very diverse global spread, which will mitigate the financial services sector problems for a couple of Qs. But they are not immune, Seb, they will lag. I know from first-hand experience there.
Gasoline and heating oil and food prices are non-discretionary spending choices
What?
There have been umpteen studies on the price elasticity of gasoline. Prices go up 10%, consumption drops about two and a half percent, increasing to double that if prices stay high.
"Gary I don't think that politico understand just who the electorate is in most of America. Which is why the person who wins the election is going to be the one with whom regular people can see themselves knocking back a cold one with at a bar."
The common political wisdom holds that George W. Bush was elected the first time for just that reason.
So what you're saying is that, once again, Americans will pick a president for the wrong reasons. And just hope against hope that he isn't a major twit.
There have been umpteen studies on the price elasticity of gasoline. Prices go up 10%, consumption drops about two and a half percent, increasing to double that if prices stay high.
Markel | 04.14.08 - 12:33 pm | #
Thanks. I was not aware of that. However, there is a great deal of inelasticity because discretionary fuel use is a small piece of a much larger non-discretionary pie, ie. commuting to work, heating the home with fuel oil, nat. gas etc.
Yes Sebastian, I agree with you and that Times article. Most people will just knuckle down and ride this out. Which is why my call has always been for a longer, shallow recession with the rapture delayed for at least another millenium
But those that thought they could live like they do on a television show making 80k a year are going to find out the hard way they can't.
I dont want to sound harsh, but the people who were buying million-dollar houses with a combined household income of $70,000 or $80,000 were the ones who were chasing easy money, he said...."
Now that we've all had our Wile E. Coyote moment, Mr. Sperling should begin to prepare for his Marie Antoinette moment.
So what you're saying is that, once again, Americans will pick a president for the wrong reasons. And just hope against hope that he isn't a major twit.
Given the economic insecurity, our position in the world, the war, terrorism, and everything else tossed at us over the last 8 years, let me ask you who you think middle america would like to given them comfort and make it better: their grandfather, their mother, or their smart-assed older brother who went to Harvard? Once again the strategists in the Democratic party amaze me with their total lack of understanding of the electorate.
Alec, GE threw in the towel on the charade by taking down guidance, after only upping it in March. IBM seems vulnerable here given their positioning - Financial services and government revenue sources just when both of those sectors are in retreat.
I have just come back to UK after a few weeks in Canada. Saw the show "Flip This House" for the first time. Canada has an entire network dedicated to this stuff (HGTV - Homes and Gardens TV). I'm not much of a tv watcher but found myself sans laptop and with a torn ligament (skiing - sigh...) so HGTV was my entertainment for a few days. Really, I just had to watch it. It was facsinating - like watching a train wreck. There was also "Buy Me", "Disaster DIY", "Get it Sold". I had never seen anything like this before. I'm sure some day Americans will reflect sadly on thes shows and understand the early 2000's housing craze was nothing more than a passing fad - kinda like real expensive bell bottoms.
ipodius: so they want someone dumb and/or dishonest--like the guy who got into West Point as a legacy admit, proceeded to finish at the very bottom of his class and admits he doesn't know much about that whole "economics" thing but he's sure Greenspan can sort it out--to tell them what they want to hear. Same difference.
It's interesting watching some consumer segments with inflation even as others deflate.
Seems like you need to look at the world of goods as spectrum from "Necessity" on one end and "Luxury" on the other. Goods closer to the Necessity end are under massive upwards price pressure while goods on the Luxury end are starting to feel massive downward price pressure.
Take the art market. That market is going to get crushed as it about as far on the luxury end as possible. There was an article in WSJ about Sotherby's basically writing puts on art. Sounds like a bad business strategy of the above is true.
markel: can I have some of what you and your studies are smoking re: gasoline demand. This Week In Petroleum indicates that gas prices are up just shy of 20% from last year for this time, but demand has only recently gone down about 2% when it "should" be 5% ... plus, if you examine this trend over about 5 years, gas has gone much higher than inflation numbers indicate, and it's only this year that demand has finally stopped growing and started shrinking in the us.
Do your studies mention a 5-10 year lagtime for full effect of this demand reduction? Because if not, they need a lot of tuning, if not just plain flat out wrong.
One measure of inflation, the monetary base of the US number (see St.Louis Fed data) is not skyrocketing--it's pretty flat. (Click on Range:5 yrs) That's not inflation.
That's almost a worst case scenario. Flat monetary base combined with rising cost of essentials and inputs.
It means consumers and producers are going to get murdered.
Citi Home Equity has recently reviewed certain existing Home Equity Lines of
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If Americans go with another one of those "I'd like to have a beer with him/her" candidate, then our ultimate demise is assured.
Nobody ever went broke underestimating the American public, however, so the odds are, we'll do it all over again (eight more years! eight more years!).
baruza, that is the exact sort of post that makes me say that democratic strategists don't get it. the voters that will cast the deciding percentage are turned off by that sort of talk. more mud-slinging and nothing more.
speaker, yes that is interesting, isn't it? but again, price increases can only be tolerated for so long, then they have to fall. finding a floor for asset-price deflation is more tricky. Just look at your personal expenditures. I can easily cut $300 to $400 a month just by doing what I described up-thread, turn down the thermostat, watch my driving, don't eat out, no prepared foods, no Whole Foods forays, and no stops at coffee shops and no lunches out.
There's a lot of discretion in food and fuel. There is also in cable bills, and cell phone bills and clothing too.
☺☺"I'm sure some day Americans will reflect sadly on thes shows and understand the early 2000's housing craze was nothing more than a passing fad - kinda like real expensive bell bottoms."
sterlingerl | 04.14.08 - 12:53 pm | #
I think you've hit the nail squarely upon the head.
I had this friend in college and everything he bought was an "investment." He was fond of saying: "I think I am going to 'invest' in a new pair of ski boots" or "I think I'm going to 'invest' in a a new back pack."
It is amazing the mental contortions people will got through to justify spending more money. And when it comes to the family home, with the help of skillful enablers such as crafty real estate professionals and dishonest politicians, the brain takes a permanent holiday.
The "family home as investment" canard is one of the greatest frauds that has been foisted upon the American people.
Re: Baruza . . . like the guy who got into West Point as a legacy admit, proceeded to finish at the very bottom of his class . . .
You're referring to McCain, of course, but he went to Annapolis. McCain was in the Navy, and discharged as a Captain. When you go to West Point, you wind up in the Army.
The "family home as investment" canard is one of the greatest frauds that has been foisted upon the American people.
DownSouth | 04.14.08 - 1:13 pm | #
Yup. And it unfortunately justified a much higher payment to income ratio that savings have been wiped out for a generation.
ipodius: well of course what I said on an anonymous message board is not what I expect a candidate to say while running for office. That space is best reserved for rah-rah morning in america talk and dry humping the flag. Everyone knows that.
FWIW: HGTV is an American company, based in Knoxville Tennessee.
There is also an HGTV Canada, 33% owned by HGTV (America).
The programming is almost identical.
(we have Flip this house, Buy me, HouseHunters, etc). for price reasons and canadian tax break reasons, a lot is filmed in Toronto (like Debbie Travis and Divine Design and Buy Me and Property Virgins)
what was interesting for me is that before the runup most of the programming were shows like do-it-yourself crafts and do-it-yourself mild remodelling. (like "Decorating Sense" and "design on a dime" and "Debbie Travis' painted house" and Curb Appeal)
then during the runup all the shows were like "Flip This house" with people putting little money in a property and flipping for big bucks. Or like "Designers Challenge" where people to $100k remodelling. Or like "Get Out Way Out" where they put in $100-300k outdoor patios.
now much of the programming is how to spruce up your house for that difficult sale (like Buy Me, or "Designed to Sell" and "Get it Sold!")
baruza, you mean like calling average middle americans "bitter", disparaging them? The fact that could even be thought of as a good thing to say is what worries me about the party and the candidate. Because the attitude you express in private will leak out in comments you make in public. It has to.
To return to the purpose of the thread...downsouth that is funny, we used to say the same thing with a wink. "I'm going to invest in a new pair of jeans"...knowing we were kidding. I'm thinking that some people don't get irony as a humor device. They're the ones that bought that over-priced 4000 sq ft house.
Now, in a radical move, the city - which has suffered since the steel industry left town and jobs dried up - is bulldozing abandoned buildings, tearing up blighted streets and converting entire blocks into open green spaces. More than 1,000 structures have been demolished so far.
IBM also has a very diverse global spread, which will mitigate the financial services sector problems for a couple of Qs. But they are not immune, Seb, they will lag. I know from first-hand experience there.
ipodius:
IBM is strategizing that China/India will be their big growth markets. They are actually trying to cut-off some of their limbs to move to the East faster. They have a longterm plan to layoff a large number of the US labor force, but to fly under the rador they've been laying off in a steady trickle...last year we watched them whack about 3,500, another 5,000 this year, we'll see more this year and next and next and next...they'll be profitable,...it's the Lean and Mean plan...they're going scorched earth.
Also, the commercial paper thirty day spread came down sharply last Thursday to 78 bps, then on Friday (posted today) bounced back up to 99 bps... all of last week was a ping pong match like that.
☺☺"Yup. And it unfortunately justified a much higher payment to income ratio that savings have been wiped out for a generation."
Interesting Times | 04.14.08 - 1:16 pm | #
And it seems most are still in denial.
Just imagine, a multi-billion dollar bailout for home-builders in the recent Senate housing bill!
That's just what we need. About 75% of the production capacity for new homes in this country needs to disappear. And keeping these guys on life support at the taxpayer's expense will only delay these people getting into some other line of production that the country needs.
And did you notice the NY Times editorial today concerning the Senate bill failed to specifically mention the builder bailout?
WASHINGTON - One in seven mortgage holders worry they may soon fail to make their monthly payments and even more fret that their home's value is shrinking, according to a poll showing widespread stress from the nation's housing crisis.
In an ominous snapshot of how the sagging real estate market and sour economy are intersecting, the Associated Press-AOL Money & Finance poll also found that 60 percent said they definitely won't a buy a home in the next two years.
That was up from 53 percent who said so in an AP-AOL poll in September 2006. Only 11 percent are certain or very likely to buy soon, down from 15 percent two years ago.
IBM is strategizing that China/India will be their big growth markets.
Well the strategy is a bit more complicated, but essentially true. What they are doing is shifting portions of their workforce to China and India. What IBM sees as most of the programming/IT grunt work, leaving the higher-level development, innovation centers, and managerial class here. In a 24x7 global environment, it does makes sense as development can happen in all time zones and in pace with all business. They are becoming more of a service organization, and a development outsourcing shop (we'll do all your services for you). They will also position themselves to be a player in these emerging markets. It's a great strategy, actually. But those emerging economies have a long way to come up, so for a while, I'm not sure how the earnings are going to work out. Nor am I sure how the rapid escalation of wages in these places going to work out for them either.
M-F thank you very much for that interesting link about Youngstown. The abandonment of certain areas is a fascinating topic to me - I'm trying to keep tabs on it, but it isn't covered much here on the East Coast.
ipodius: no, I agree that was extremely bad. Okay to think it. Very bad to say it. Again, what I say =/= what a candidate running for office should say.
ipodius writes:
Which is why the person who wins the election is going to be the one with whom regular people can see themselves knocking back a cold one with at a bar. ipodius | 04.14.08 - 12:26 pm | #
Yeah, that worked out pretty well for the country, right? That's the way to pick a president! I think Bush has spent too much time knocking back some cold ones down there at Crawford.
☺☺"Do your studies mention a 5-10 year lagtime for full effect of this demand reduction? Because if not, they need a lot of tuning, if not just plain flat out wrong."
anony-1797 | 04.14.08 - 1:02 pm | #
In the coming years it will be necessary for the United States to cut back on its oil consumption. Oil prices will go up, and those countries like the United States that do not have money, or have relatively less money than they did in the past, will be priced out of the market.
The only caveat to this is the occurance of something that upsets current trends, such as the U.S. embarking on another resourse war (such as the Iraq war) where it is more successful than it was in Iraq or if the world enters into a severe global depression.
Ipodius, the strategy may be "great" for IBM and its shareholders but it furthers the argument that many mid-level skilled positions in the US are disappearing at great cost to this country. Your "regular people" are close to realizing that life is getting harder in the long run not easier. Once that realization takes hold, Obama's non-pandering rhetoric will hold much greater value for "regular people." The problem for Obama may be that he's four years too early.
Standard & Poor's Ratings Services said on Monday that the risks the government-sponsored enterprises, or GSEs, pose to the U.S. government's triple-A debt rating are far greater than those posed by broker-dealers.
☺☺"Food riots spreading across the globe, in our new global economy. The global growth story! How long before we get to enjoy some of that here?"
barely | 04.14.08 - 2:19 pm | #
There's an extremely interesting interview with India's former finance minister on CNN International.
When asked about the possibility for social unrest in India due to soaring food prices, he said he didn't believe that would happen in his country. "We have the capacity to import food grains," he said, "we have export and over $300 billion."
Where does that leave the U.S. with its $5 trillion in debt and huge trade deficit?
Losses will go up the food chain. Billionaires may believe they're immune. They're not. Are you just "merely rich" or "ultra-rich"? If things get really bad, they will eat their young. It's already happening.
Check out this story on Bloomberg: "Jeweler Esmerian Fights Merrill to Stop 'Reckless' N.Y. Auction".
Goldman Forecasts "Awful" Profits « naked capitalism
"Goldman Sachs Group Inc. strategists say the U.S. corporate earnings season got off to an ``awful'' start and shares will drop as companies slash forecasts for the rest of 2008."
IBM is strategizing that China/India will be their big growth markets. They are actually trying to cut-off some of their limbs to move to the East faster. They have a longterm plan to layoff a large number of the US labor force, but to fly under the rador they've been laying off in a steady trickle...last year we watched them whack about 3,500, another 5,000 this year, we'll see more this year and next and next and next...they'll be profitable,...it's the Lean and Mean plan...they're going scorched earth.
You'd almost have to think every company in the US has that same plan about now.
OT, a bit. You can see what vast contempt the elite have for ordinary people when they think they will swallow the charges of McCain and Clinton, both millionaires many times over, that Obama is an "elitist" because he has the guts to analyze why Americans are unhappy and put it out there, instead of feeding the masses the disgusting pollyanna crap that the real elitists have been feeding the populace for years.
Exactly. Unless you can go to blogs by intelligent people you are stuck with the moronic crap dispensed every hour of the day, and night, by the disgustingly dumb US media.
downsouth: I don't doubt that the US will have to start using less oil in the long run. My point was that it's really not going to be pretty; and the adding some weight to the (unsupported in this thread) statement that demand for gasoline is relatively inelastic.
As you mention, currently poorer countries are getting outbid. Eventually supply goes down, and not only have the poor been outbid, but the richer countries will have to bid against each other. And how strong will the dollar be?
Just remember, anyone who thinks they have oil figured out probably doesn't. I know plenty of people who lost it all when oil went down to around $14 less than 10 years ago. They had it figured out that, worst case scenario, it wouldn't go below $15.
I'm not megarich, but it's 95% asset preservation, 3% chasing yield & 2% finding good opportunities to turn that 2 into 5.
Not easy but the 2% opportunities are showing up. The yield chasing worked when the ARS froze(hold to term or call in 10 years) but discipline is brutal.
A recourse state is one where the mortgage lender, if the foreclosure sale fails to pay off the loan, can get a deficiency judgment against the borrower for the unpaid balance.
So far as I know, most (if not all) states are recourse against all but a primary residence and against all but a purchase money mortgage, i.e. investment properties, vacation homes, HELOC's, and re-fi's can't walk.
Retailers need to find a way to make Easter like Christmas. Let's face it, the Easter bunny just doesn't get the job done. If only Easter weren't about sin, suffering, death and all that depressing stuff we could sell more HI-Def DVD and TVs.
The time to stock up on powdered milk was last year. It doubled in price about 4 months ago, and one brand even went out of stock for about 3 months before it showed up on the shelves again at the new, improved, price.
I hate that stuff, but if push comes to shove, it beats adding water to your coffee.
Haven't read the article yet, but, is it similar to the warning Bernanke gave the Banks a couple years ago to "pretty please, don't make loans to folks who can't repay them" , or does Fannies warning to home-squatters have more teeth in it?
retail sales should look great next month, because gas, eggs, milk, rice, and bread prices are all heaven bound.
what are the consensus expectation figures, are they stated in nominal or real?
And adjusted for real inflation, a nosedive.
Just another bad day in paradise. I fully expect our Kudlow to soon come on the message board and pontificate the data show a strong economy.
Someday this war's gonna end...
And the massive wave of 2008 ARM resets has yet to really get rolling.
John Williams at shadowstats estimates that:
1. M3 is running at +17% Y0Y
2. Inflation rate in March was about 10% YOY
3. So, if he's right doesn't that mean that Real Retail sales were actually -8%?
Ah, yes. The cooler weather. That's why the numbers stink up the joint.
Pretty soon it'll be the hot weather.
Well, yeah retail sales will increase when everything we buy has price increases. Just go to a major supermarket and purchase two weeks worth of food including meat & fresh produce. Then go gas up two autos. Oh, and stop by pricey Walgreens for a few things.
Sales tax collections in Missouri are down 15 percent for March, compared with the same month last year, according to a general revenue report the state Office of Administration released Friday.
Tiny URL - create a shorter link
Diesel weasels its way into costs, supply-chain strategy
Soaring fuel costs percolate through to a range of product pricesand call into question just-in-time inventory practices. Watch out for open-ended fuel surplus charges.
higher fuel costs have also made rail a legitimate option, especially for the steel coils the company ships from its mills in Ohio to plants in Mexico for finishing, and then ships back
one question... How can Amazon be the low cost book/junk seller?
one question... How can Amazon be the low cost book/junk seller?
Simple: No sales tax.
If I see one more report blaming the weather, i swear, i'm going to climb a tower and take hostages. everything sells at the right price, even out-of-season clothes. the only true commentary on the figures is "comsumers have cut back as money and credit tighten, and discounts have not met expectations to counter that trend."
I was listening to the local radio this morning and people were calling in and yelling about the price of gas and the price of milk ($5/gallon they were saying).
I've listened to that station on the drive to work for several years now and that's the first time I've heard something like that.
one question... How can Amazon be the low cost book/junk seller?
Oh, and subsidized media rate shipping courtesy of the USPS.
California: total general fund revenue -6.5% YoY; sales tax -7.6%; corporate tax (presumably corporate income tax) -10.7%; income tax (presumably personal income tax) suprisingly +4.2%.
If I see one more report blaming the weather
Is Easter really that big of a retail day? Probably a naive question, but a lot of stores were closed on Easter Sunday, so wouldn't the increased spending beforehand be canceled out?
Sales are flat. Inventories are up again month to month. Business will cut production until inventories drop. Soon to be more layoffs. Retail was down in Feb. until maxed out cards from Christmas got payed down a little. The next blowup is consumer credit.
If I see one more report blaming the weather, i swear, i'm going to climb a tower and take hostages.
At least this time they got creative and also blamed the calendar too.
MSM:
WASHINGTON - A growing majority say they won't buy a home anytime soon, the latest sign of increasing pessimism about the nation's housing crisis, a poll showed Monday.
Poll: Growing majority avoid buying homes
Americans' pessimism over housing crisis seen growing
I'm remembering the powered milk we used to have when I was a kid (70's). Not sure if it was to save money, or just as a convenience when we were out.
Time to stock up?
We need a spring Hallowee
Early Easter, late spring weather, yadda yadda. Oh, and subtract out another 0.92% for y-o-y population growth for anther perspective. You know how retailers like to cite "same store sales." This is the same kind of thing, "per person sales."
Let's look ahead for the looming largest excuse in modern retail history. 32 shopping days Thanksgiving to Christmas 2007. Only 27 in 2008.
FYI Meow Mix getting hit hard:
Record-fast price increases for diesel fuel are shaking up the nations manufacturing and supply chains, contributing to price hikes in everything from Meow Mix to mattresses...
Is it "pessimism" or realism?
Local Coffee Shop (not starbucks)
Sign on Register.
"Prices increasing 10% next week"
Rooting for higher retail sales is rooting against higher personal saving. But, personal saving is nearly zero for the last three years!!! See the second chart here:
Real Dow & Real Homes & Personal Saving & Debt Burden at
Real Dow & Real Homes & Personal Saving & Debt Burden
This very low personal saving rate is widely accepted to be a very major flaw in our USA's behavior!
A couple more rate cuts and Big Bone Ben will have the US going right down the Japanese rabbit hole.
Collapsing housing bubble
Zombie banks
Eviscerate the poor and middle class by cutting rates and drive commodity prices threw the roof
Waves of closers of small business
Rising unemployment which keep wages low
Carry trade currency
Drive currency into the ground to boost exports
Did I forget anything
ipodius writes:
If I see one more report blaming the weather, i swear, i'm going to climb a tower and take hostages. everything sells at the right price, even out-of-season clothes.
Reporting in the US at all levels is beginning to sound more Soviet style every day.
Which is the first furniture chain to go BK?
-10% YOY. I'm sure it'll turn around when the weather warms up!
Sales at furniture and home furnishing stores decreased 0.3 percent seasonally adjusted from last month and 10.2 percent unadjusted year-over-year
Retailers were expecting $14.4 billion in Easter sales. The earlier Easter falls, the fewer spring apparel sales--still too cold for new outfits. Most of the spending was meals, cards, candy, etc.
Looks like stores were disappointed in their expectations of a resurrection.
Houston Chronicle
Feel bad for the guy selling you $3.29 gas?
Many U.S. gas stations feeling the same pricing pain | Houston & Texas News | Chron.com - Houston Chronicle
Local Coffee Shop (not starbucks)
Sign on Register.
"Prices increasing 10% next week"
In a consumer recession that could be suicide. But of course that's why so many retailers will likely end up closing up shop.
They're cornered by rising costs and falling demand.
US citizens cant afford to save now. Everything costs too much. Foodbank visitors have jumped significantly.
Bernanke, the other politicians, and their rich benefactors have sold us down river.
Just got my hop bill: 187 lbs.= $4835.09. The good news? I got hops!
We must have the worst weather on the planet. It's always being blamed for the ills that affect us.
San Francisco Chronicle
FANNIE WARNS HOMEOWNERS WHO WALK AWAY
Fannie warns homeowners who walk away
Unseasonably cooler weather created a challenging sales environment for many apparel retailers last month, said NRF Chief Economist Rosalind Wells.
...
Warm weather blamed for first retail sales slip in 18 months (Independent, 11/16/01)
Mild weather blamed for slowing retail sales growth (Independent, 12/20/02)
"Retailers on Thursday reported sluggish sales for August, as store chains blamed adverse weather..." (CNN/Money, 9/2/04)
Weather blamed for slow economy (AP, 1/16/06)
Hot weather blamed for cool retail sales (USA Today, 10/11/07)
Worst Retail Sales Gains in 37 Years - Blame The Weather! (Reuters, 1/9/08)
March sales were "boosted" by an early Easter??? I swear I read a short while ago that lousy March sales were "harmed" by an early Easter. Or am I confusing which sales figures are being blamed on which holiday?
daveNYC writes:
At least this time they got creative and also blamed the calendar too.
daveNYC
NEW YORK (CNN/Money) - Retailers on Thursday reported sluggish sales for August, as store chains blamed adverse weather and a late Labor Day for hurting back-to-school business. (9/2/04)
LMFAO!!!!:
10:48 GE cut to peer perform at Bear Stearns,citing low visibility (marketwatch.com)
Yalt writes:
Nice! Reminds me of an REM song:
Pop Song 89
Hello, I saw you, I know you, I knew you
I think I can remember your name, name
Hello, I'm sorry, I lost myself
I think I thought you were someone else
Should we talk about the weather? (hi, hi, hi)
Should we talk about the government? (hi, hi, hi, hi)
gn, I remember being given powdered milk, too! It used to be cheaper than fresh milk. Not true anymore - much more expensive. People who don't use much still get it, but a box costs over $10.
"Reporting in the US at all levels is beginning to sound more Soviet style every day."
FoxNews = Pravda.
CNN = Tass
ABC/NBC/CBS = Isvestia
Yalt, those are hilarious! They should be published on bloomberg, or at least run on the Daily Show. Thanks for making me laugh before a tedious meeting
"Yalt, those are hilarious! They should be published on bloomberg, or at least run on the Daily Show."
I second that. Passing them on to friends. Thanks!
matty writes:
Just got my hop bill: 187 lbs.= $4835.09. The good news? I got hops!
matty | 04.14.08 - 10:54 am | #
Your no Obama supporter... He disses Beer.
OBAMA SPEECH MONDAY: 'They'll promise you anything, give you a long list of proposals and even come around, with TV crews in tow, to throw back a shot and a beer
Any other would-be prez not like thowin back a beer ????
I saw many articles claiming that retail sales were expected to be poor BECAUSE of the early Easter. Reasoning being that the spring clothing sales usually associated with Easter were absent because of the cold weather.
Unbelievable, the idiotic spin we read these days.
I think he was dissing Hilly, not beer.
As far as I can tell, Easter sales consist primarily of chocolate eggs and bunnies and foofy dresses for little girls.
Costco has foofy dresses really cheap.
Also--it is ALWAYS cold on Easter and the little girls ALWAYS wear sleeveless dresses no matter if there is frost on the ground. This is a rule of nature.
matty
Actually I can see Hillary knocking back a few beers. Then Bill has to ask her to turn her butt to the wall
I think he was dissing Hilly, not beer.
matty | 04.14.08 - 11:07 am
i think he was stumbling , looking for something to diss hillary on, and chose a photo shot of HC celebrating a little americana with supporter's. Not to bright for a supposed bright fellow.rubs wrong, for some, jus sayi
Max, it's all those white shoes selling in March instead of April.
Or it had better be - if those homemakers anticipate living thru Labor Day.
There's no way I can be convinced that Hillary's a shot-and-a-beer, foot-on-the-barrail kind of gal. She's Chardonnay and white tablecloths all the way.
politico, that Obama quote doesn't sound like disrespecting beer to me, it sounds like a dis to Hillary and BS politics.
Are you in the Hillary campaign, by chance? If not, you should join.
back on topic: retail value of said hops: $10442.08. We will sell it all!
"i think he was stumbling"
Nice try, politico.
Are all Hillary supporters that pathetic?
ah...i be a nonvotingpotstirrer. if i'm wrong , no problem... just think if one is going to make an argument, not to drag other stuff in with it. like" they'll promise anything and everything, deliver nothing.(period)"
end
Just got my hop bill: 187 lbs.= $4835.09. The good news? I got hops!
matty
Damn, you must be serious. Is that just a homebrewing operation? Can't you grow hops fairly easily?
Re retail sales, If you subject gasoline, yoy sales are flat even in nominal terms.
funny name for a non-voter.
bingo, matty!
Is there detail available on gasoline purchases? Did we buy less of it? More?
There's that word challenge again.
Challenging = Disastrous.
planting them as soon as the weather will allow. Also just got my bill for hop rhizomes (Root stock): $1802.89.
I've stopped buyingcigarettes (as of 2 months ago was a pack a day smoker) wife is down to a pack a week form a pack a day. So $5 a week from $100. (or $20 a month now instead of $400) I no longer drive to work and now ride my bike saving an additional $100 a month...
and yet... two months on, I've lost all those gains to increases in the price of food.
Oh and the aprtments I'm in want to raise the rent, in Sacremento! unbelieivable.
Please take the politics to a political blog.
Thanks.
Hmmmm... ya' think?
Off-topic:
Crisis to affect markets for a decade: JP Morgan
LONDON (Reuters) - The financial crisis will affect market structure and pricing for at least a decade and lead to greater regulatory powers for central banks in areas at the centre of the turmoil, analysts at JP Morgan said.
"Market participants and regulators will focus intensely on controlling the risks that were at the core of the crisis," analysts led by Jan Loeys and Margaret Cannella wrote in a note on Monday.
These risks include lending standards in mortgages, leverage in the funding of securitized products, and the use of short-term financing for illiquid long-term assets outside of the regulated banking sector.
This will change behavior for market participants "for at least a decade," they wrote, in line with fallout from previous crises.
This, from a Bloomberg story about Goldman Sachs, is so funny I had to stick it in somewhere:
Kostin's predecessor as Goldman's chief forecaster for the U.S. stock market, Abby Joseph Cohen, predicted in December the S&P 500 would rise 14 percent to 1,675 in 2008. Cohen, 56, was known for her bullish predictions during the 1990s at New York- based Goldman, the most-profitable securities firm
I think she was paid big bucks for her predictions, right?
"challenging" is press release, damage control speak of the most transparent sort. It's like a baseball manager saying "he likes to compete." No he doesn't. He likes to win.
Oh and the aprtments I'm in want to raise the rent, in Sacremento! unbelieivable.
Call their bluff. Rents are falling in Sacramento; take my word for it. If you show them some comps, they might change their mind. If not, screw 'em and move.
The same thing happened to me a few years back. The place was REIT owned and they had some formula they used to calculate rent increases that included how long you'd lived there. I called them posing as a "prospective" renter, and they would do a 12-month for my old rent, plus they were giving a bonus of 50% off the first month! Unfortunately, when I confronted them with the info, they still wouldn't give, so I moved.
One of my favorite breweries has been raising prices on their beer and now their food.... So much so we never go there anymore.... To bad I loved the place and the IPAs... They must be getting killed on both the revenue and expense sides... Must hurt....
OT,
Matty,
What kind of rhizomes?
Kents? goldings?
On topicy
Anybody get the UK PPI numbers?
Please ignore the price hikes. They're only asking prices, like in real estate. There's only so much money that can be spent. If coffee or Meow Mix go up in price, that means they'll sell less of each. There's only so much aggregate demand. Sales tax receipts are down, right?
Bernanke wants us to think there's inflation. He thinks if we have more inflationary expectations, he can prevent a 1930s deflation. He won't.
One measure of inflation, the monetary base of the US number (see St.Louis Fed
data) is not skyrocketing--it's pretty flat. (Click on Range:5 yrs) That's not inflation.
Alec: Kent Goldings are specifically from Kent, UK. The rest are just Goldings. I'd give you the whole list but we probably should go to a beer blog
!
From the "pessism over housing crisis" article.
""This is a great time to buy, but not necessarily to sell," said Robert Jackson, who lives in a two-bedroom house in Ferguson, Mo., with his wife and four young children. He said he would love to purchase a larger home, but can't because even if he found a buyer, he would probably lose thousands on his house, which he bought less than two years ago."
He thinks it's a great time to buy because he could now buy his home for less than he paid for it. The article talks about pessimism, but obviously faith in the housing market is not dead. Perhaps in a year, this guy will be begging to walk away free and clear and move back into an apartment? We'll see.
The price of gasoline is just as asking price.
oh what the hell: Willamette, Cascade, Fuggles, Sterling, Magnum, Brewers Gold, Glacier, Horizon, Nugget, Tettnang, Chinook, Goldings, Santiam, and Liberty. $4.99/each. (Retail, so on topic).
The price of gasoline is just as asking price.
I think what cliffo is saying is that, as the price rises, demand will fall. So sooner or later price hikes will not work anymore. This will be the effect of coffee shops raising their prices. People will take it with them in a mug, like I do now. Perhaps that will lower the number of coffee shops around. Over-expansion at its best there anyhow.
The same goes for gas. If everyone were to say "i'm not going anywhere this summer" the price would fall as decreased demand led to supply oversupply. Gas is extremely sensitive to stock amounts.
On the subject, price increases are not indicative of inflation, I agree. The money supply is shrinking, and asset prices are falling. What does that tell you? Food and fuel, however, do not act like deflationary items such as houses do because they are needed short-term. A house you will wait to buy because its price is falling (what is now happening and a classic deflationary spiral). Fuel and food, not so much.
☺☺"The article talks about pessimism, but obviously faith in the housing market is not dead."
Bob Dobbs | Homepage | 04.14.08 - 11:49 am | #
Bob,
The average bear out there is oblivious as to what is going on in the real estate market, as this passage from the CNN story demonstrates:
"...The number envisioning falling prices in their area has grown to one in four, while four in 10 think prices will rise..."
matty, you sound like you're all hopped up. What kind of hops, anyway? And what are you going to brew?
Donna: all kinds. We are a relailer of brewing and winemaking supplies, hence my (on topic) comments.
Relailer=Retailer, sheesh!
OT - I'm looking at IBM and trying to figure out why (other than more ill-timed share buybacks) their stock is heading higher into earnings. I can't seem to find definitive data, but my sense is, they derive a disproportionately high share of their income from the financial services industry. They acknowledge as much in their 10K, defining financial services in their top sources of revenue, without providing details.
Anyone got meaningful data on this?
oh my JHK over the top
These are issues that would, in a more mentally-healthy republic, occupy center stage of the political conversation -- not whether a cohort of Cheez Doodle addicted rural Pennsylvania morons prays out loud for God to shoot all the Mexicans.
is there a retail short ETF?
"...The number envisioning falling prices in their area has grown to one in four, while four in 10 think prices will rise..."
I had a long discussion with a friend that owns an RE office in a tony summer cape cod area this weekend. His analysis was that, for one, the pool of buyers has now shrunk to those that are fully qualified and didn't go to the "no money down" RE school. In other words, those with actual money. Secondly, now you're seeing who didn't have it in the first place as they are getting desparate to unload property they can no longer afford, and there is slightly more than 2 years of inventory on the market there.
What this means is that there are some hootin' bargains out there if you are in the market. And people ARE buying. Selectively. So his three words of wisdom are price, price and price now.
How much gas spending, and for that matter driving, is discretionary? Many things that look frivolous at first are tied to lifestyle arrangements (to avoid the loaded term "choices") like living in developments designed around cars where walking is at best impractical.
Q. What's a four syllable word for "douchebag"?
A. politico!
I think what cliffo is saying is that, as the price rises, demand will fall. So sooner or later price hikes will not work anymore.
Gasoline and heating oil and food prices are non-discretionary spending choices. Most automobile gasoline consumption is for people commuting to work -- a very non-discretionary fuel use.
Gary I don't think that politico understand just who the electorate is in most of America. Which is why the person who wins the election is going to be the one with whom regular people can see themselves knocking back a cold one with at a bar. Especially now that everyone is truly scared about jobs, prices, and their houses. They'll want a mom or dad figure, is my guess. Everyone else is allowed theirs, but the answer will come in a few months.
barely said: "OT - I'm looking at IBM and trying to figure out why (other than more ill-timed share buybacks) their stock is heading higher into earnings...."
IBM: Analyst Estimates for INTL BUSINESS MACH - Yahoo! Finance
Not to be a smart-ass, but maybe it's because their earnings are rising? Look at "Earnings History", and the upside surprises.
FWIW.
Sebastia
Re the powdered milk
A couple of esl type speakers in my local grocery store looking for powdered milk, having no success. I helped them search for a while, then hailed the store manager. He told us powdered milk is unobtainable at local grocery stores as it is all being sent to Irag.
That could help explain the inflated prices the previous poster noted.
FWIW
Gasoline and heating oil and food prices are non-discretionary spending choices.
To a degree Watts. You can turn down the thermostat or shut off the AC(generally a lot), you can drive less (by going shopping less? vacation time?) and you can certainly cut your food bill by not shopping at Whole Foods, not buying prepared foods, and only buying items you need and on sale. You can eat out less (affects food prices), and not stop for that morning coffee at DDs or SBX.
ipodious said: "I had a long discussion with a friend that owns an RE office in a tony summer cape cod area this weekend. His analysis was that, for one, the pool of buyers has now shrunk to those that are fully qualified and didn't go to the "no money down" RE school..."
This is a great quote from the NYT, in an article about how the really well-off aren't being fazed by the "recession."
- NY Times
"...Mr. Sperling views the nations economic slump as a temporary problem, and is grateful that it has yet to affect him. I think if you have the means to ride it out, thats what you do, he said.
His view of the subprime mortgage crisis seemed to reflect a sort of inverse class resentment.
I dont want to sound harsh, but the people who were buying million-dollar houses with a combined household income of $70,000 or $80,000 were the ones who were chasing easy money, he said...."
Right on.
Sebastia
Not to be a smart-ass, but maybe it's because their earnings are rising? Look at "Earnings History", and the upside surprises.
Many of IBMs contracts are long-term, as they provide first-level services and have arrangements that last out many years. Also, expect re-tooling of a lot of financial services software now in response to what is happening. If IBM surprises to the downside, it will lag the immediate problems and show up next year as budgets are slashed. IBM also has a very diverse global spread, which will mitigate the financial services sector problems for a couple of Qs. But they are not immune, Seb, they will lag. I know from first-hand experience there.
Gasoline and heating oil and food prices are non-discretionary spending choices
What?
There have been umpteen studies on the price elasticity of gasoline. Prices go up 10%, consumption drops about two and a half percent, increasing to double that if prices stay high.
"Gary I don't think that politico understand just who the electorate is in most of America. Which is why the person who wins the election is going to be the one with whom regular people can see themselves knocking back a cold one with at a bar."
The common political wisdom holds that George W. Bush was elected the first time for just that reason.
So what you're saying is that, once again, Americans will pick a president for the wrong reasons. And just hope against hope that he isn't a major twit.
You're probably right.
There have been umpteen studies on the price elasticity of gasoline. Prices go up 10%, consumption drops about two and a half percent, increasing to double that if prices stay high.
Markel | 04.14.08 - 12:33 pm | #
Thanks. I was not aware of that. However, there is a great deal of inelasticity because discretionary fuel use is a small piece of a much larger non-discretionary pie, ie. commuting to work, heating the home with fuel oil, nat. gas etc.
Right on.
Yes Sebastian, I agree with you and that Times article. Most people will just knuckle down and ride this out. Which is why my call has always been for a longer, shallow recession with the rapture delayed for at least another millenium
But those that thought they could live like they do on a television show making 80k a year are going to find out the hard way they can't.
There isn't a company like IBM that does everything possible to "beat the number", nobody.
If GE got bit in the ass late in the Q due to financial engineering, I could easily see the same thing happen to IBM.
We live in interesting times.
I dont want to sound harsh, but the people who were buying million-dollar houses with a combined household income of $70,000 or $80,000 were the ones who were chasing easy money, he said...."
Now that we've all had our Wile E. Coyote moment, Mr. Sperling should begin to prepare for his Marie Antoinette moment.
So what you're saying is that, once again, Americans will pick a president for the wrong reasons. And just hope against hope that he isn't a major twit.
Given the economic insecurity, our position in the world, the war, terrorism, and everything else tossed at us over the last 8 years, let me ask you who you think middle america would like to given them comfort and make it better: their grandfather, their mother, or their smart-assed older brother who went to Harvard? Once again the strategists in the Democratic party amaze me with their total lack of understanding of the electorate.
Alec, GE threw in the towel on the charade by taking down guidance, after only upping it in March. IBM seems vulnerable here given their positioning - Financial services and government revenue sources just when both of those sectors are in retreat.
Trading right around 52wk high & resistance...
I have just come back to UK after a few weeks in Canada. Saw the show "Flip This House" for the first time. Canada has an entire network dedicated to this stuff (HGTV - Homes and Gardens TV). I'm not much of a tv watcher but found myself sans laptop and with a torn ligament (skiing - sigh...) so HGTV was my entertainment for a few days. Really, I just had to watch it. It was facsinating - like watching a train wreck. There was also "Buy Me", "Disaster DIY", "Get it Sold". I had never seen anything like this before. I'm sure some day Americans will reflect sadly on thes shows and understand the early 2000's housing craze was nothing more than a passing fad - kinda like real expensive bell bottoms.
ipodius: so they want someone dumb and/or dishonest--like the guy who got into West Point as a legacy admit, proceeded to finish at the very bottom of his class and admits he doesn't know much about that whole "economics" thing but he's sure Greenspan can sort it out--to tell them what they want to hear. Same difference.
It's interesting watching some consumer segments with inflation even as others deflate.
Seems like you need to look at the world of goods as spectrum from "Necessity" on one end and "Luxury" on the other. Goods closer to the Necessity end are under massive upwards price pressure while goods on the Luxury end are starting to feel massive downward price pressure.
Take the art market. That market is going to get crushed as it about as far on the luxury end as possible. There was an article in WSJ about Sotherby's basically writing puts on art. Sounds like a bad business strategy of the above is true.
Our friend TED is still going up...
Value 1.57
Change 0.047
% Change 3.076
http://www.bloomberg.com/apps/quote?ticker=.TEDSP%3AIND
This will be interesting as only the FED dropping rates by .5 to 1% per wave was able to lower it in the past 3 waves.
Hey BB, got ammo ?
markel: can I have some of what you and your studies are smoking re: gasoline demand. This Week In Petroleum indicates that gas prices are up just shy of 20% from last year for this time, but demand has only recently gone down about 2% when it "should" be 5% ... plus, if you examine this trend over about 5 years, gas has gone much higher than inflation numbers indicate, and it's only this year that demand has finally stopped growing and started shrinking in the us.
Do your studies mention a 5-10 year lagtime for full effect of this demand reduction? Because if not, they need a lot of tuning, if not just plain flat out wrong.
One measure of inflation, the monetary base of the US number (see St.Louis Fed data) is not skyrocketing--it's pretty flat. (Click on Range:5 yrs) That's not inflation.
That's almost a worst case scenario. Flat monetary base combined with rising cost of essentials and inputs.
It means consumers and producers are going to get murdered.
HELOC Reductions/Suspensions
April 14, 2008
Citi Home Equity has recently reviewed certain existing Home Equity Lines of
Credit (HELOC) in light of recent real estate market conditions. In accordance
with the terms of these loans, Citi Home Equity has taken steps to limit new
draw activity upon these loans. These actions limit new draw activity, and do
not impact existing balances. Borrowers are expected to pay their current
balances per the terms of their loan, and will receive a letter with the details
on their specific line if it has been impacted.
A customer service phone number is provided to the borrower in their letter.
If you are contacted by a borrower who has been impacted by these events,
we ask that you have the borrower call our customer service line if they have questions or concerns. Please remember that due to financial privacy
requirements, Citi Home Equity will only speak to the consumer about their
account. Citi Home Equity is unable to discuss the borrower's account with you.
We appreciate your business, and look forward to continuing to serve your
first mortgage needs.
https://broker,citimortgage.com
ac just nailed it.
If Americans go with another one of those "I'd like to have a beer with him/her" candidate, then our ultimate demise is assured.
Nobody ever went broke underestimating the American public, however, so the odds are, we'll do it all over again (eight more years! eight more years!).
baruza, that is the exact sort of post that makes me say that democratic strategists don't get it. the voters that will cast the deciding percentage are turned off by that sort of talk. more mud-slinging and nothing more.
speaker, yes that is interesting, isn't it? but again, price increases can only be tolerated for so long, then they have to fall. finding a floor for asset-price deflation is more tricky. Just look at your personal expenditures. I can easily cut $300 to $400 a month just by doing what I described up-thread, turn down the thermostat, watch my driving, don't eat out, no prepared foods, no Whole Foods forays, and no stops at coffee shops and no lunches out.
There's a lot of discretion in food and fuel. There is also in cable bills, and cell phone bills and clothing too.
☺☺"I'm sure some day Americans will reflect sadly on thes shows and understand the early 2000's housing craze was nothing more than a passing fad - kinda like real expensive bell bottoms."
sterlingerl | 04.14.08 - 12:53 pm | #
I think you've hit the nail squarely upon the head.
I had this friend in college and everything he bought was an "investment." He was fond of saying: "I think I am going to 'invest' in a new pair of ski boots" or "I think I'm going to 'invest' in a a new back pack."
It is amazing the mental contortions people will got through to justify spending more money. And when it comes to the family home, with the help of skillful enablers such as crafty real estate professionals and dishonest politicians, the brain takes a permanent holiday.
The "family home as investment" canard is one of the greatest frauds that has been foisted upon the American people.
Re: Baruza
. . . like the guy who got into West Point as a legacy admit, proceeded to finish at the very bottom of his class . . .
You're referring to McCain, of course, but he went to Annapolis. McCain was in the Navy, and discharged as a Captain. When you go to West Point, you wind up in the Army.
Oh great another day of ipodus talking to jas and marcus..
Wow!
The "family home as investment" canard is one of the greatest frauds that has been foisted upon the American people.
DownSouth | 04.14.08 - 1:13 pm | #
Yup. And it unfortunately justified a much higher payment to income ratio that savings have been wiped out for a generation.
ipodius: well of course what I said on an anonymous message board is not what I expect a candidate to say while running for office. That space is best reserved for rah-rah morning in america talk and dry humping the flag. Everyone knows that.
El Cliffo, yeah my bad on that one. He still got in as a legacy admit though and finished at the bottom of his class though.
The page cannot be found
Sterlinggirl:
FWIW: HGTV is an American company, based in Knoxville Tennessee.
There is also an HGTV Canada, 33% owned by HGTV (America).
The programming is almost identical.
(we have Flip this house, Buy me, HouseHunters, etc). for price reasons and canadian tax break reasons, a lot is filmed in Toronto (like Debbie Travis and Divine Design and Buy Me and Property Virgins)
what was interesting for me is that before the runup most of the programming were shows like do-it-yourself crafts and do-it-yourself mild remodelling. (like "Decorating Sense" and "design on a dime" and "Debbie Travis' painted house" and Curb Appeal)
then during the runup all the shows were like "Flip This house" with people putting little money in a property and flipping for big bucks. Or like "Designers Challenge" where people to $100k remodelling. Or like "Get Out Way Out" where they put in $100-300k outdoor patios.
now much of the programming is how to spruce up your house for that difficult sale (like Buy Me, or "Designed to Sell" and "Get it Sold!")
baruza, you mean like calling average middle americans "bitter", disparaging them? The fact that could even be thought of as a good thing to say is what worries me about the party and the candidate. Because the attitude you express in private will leak out in comments you make in public. It has to.
To return to the purpose of the thread...downsouth that is funny, we used to say the same thing with a wink. "I'm going to invest in a new pair of jeans"...knowing we were kidding. I'm thinking that some people don't get irony as a humor device. They're the ones that bought that over-priced 4000 sq ft house.
One way to get rid of Housing Inventory:
Now, in a radical move, the city - which has suffered since the steel industry left town and jobs dried up - is bulldozing abandoned buildings, tearing up blighted streets and converting entire blocks into open green spaces. More than 1,000 structures have been demolished so far.
The incredible shrinking city - Apr. 14, 2008
ipodius:
IBM also has a very diverse global spread, which will mitigate the financial services sector problems for a couple of Qs. But they are not immune, Seb, they will lag. I know from first-hand experience there.
ipodius:
IBM is strategizing that China/India will be their big growth markets. They are actually trying to cut-off some of their limbs to move to the East faster. They have a longterm plan to layoff a large number of the US labor force, but to fly under the rador they've been laying off in a steady trickle...last year we watched them whack about 3,500, another 5,000 this year, we'll see more this year and next and next and next...they'll be profitable,...it's the Lean and Mean plan...they're going scorched earth.
Interesting Times,
I just pulled up a 1.64 quote on Bloomberg...
Also, the commercial paper thirty day spread came down sharply last Thursday to 78 bps, then on Friday (posted today) bounced back up to 99 bps... all of last week was a ping pong match like that.
☺☺"Yup. And it unfortunately justified a much higher payment to income ratio that savings have been wiped out for a generation."
Interesting Times | 04.14.08 - 1:16 pm | #
And it seems most are still in denial.
Just imagine, a multi-billion dollar bailout for home-builders in the recent Senate housing bill!
That's just what we need. About 75% of the production capacity for new homes in this country needs to disappear. And keeping these guys on life support at the taxpayer's expense will only delay these people getting into some other line of production that the country needs.
And did you notice the NY Times editorial today concerning the Senate bill failed to specifically mention the builder bailout?
EDITORIAL; Foreclosure Politics - NY Times
Lol, always an excuse, cool weather? Lol, I guess sales have been declining for over a year and a half because of cool weather.....RIIIIIIIGHT
Not sure if a repost - topical to housing:
AP poll: Mortgage payments worry many
By ALAN FRAM, Associated Press Writer
38 minutes ago
WASHINGTON - One in seven mortgage holders worry they may soon fail to make their monthly payments and even more fret that their home's value is shrinking, according to a poll showing widespread stress from the nation's housing crisis.
In an ominous snapshot of how the sagging real estate market and sour economy are intersecting, the Associated Press-AOL Money & Finance poll also found that 60 percent said they definitely won't a buy a home in the next two years.
That was up from 53 percent who said so in an AP-AOL poll in September 2006. Only 11 percent are certain or very likely to buy soon, down from 15 percent two years ago.
[snip]
IBM is strategizing that China/India will be their big growth markets.
Well the strategy is a bit more complicated, but essentially true. What they are doing is shifting portions of their workforce to China and India. What IBM sees as most of the programming/IT grunt work, leaving the higher-level development, innovation centers, and managerial class here. In a 24x7 global environment, it does makes sense as development can happen in all time zones and in pace with all business. They are becoming more of a service organization, and a development outsourcing shop (we'll do all your services for you). They will also position themselves to be a player in these emerging markets. It's a great strategy, actually. But those emerging economies have a long way to come up, so for a while, I'm not sure how the earnings are going to work out. Nor am I sure how the rapid escalation of wages in these places going to work out for them either.
M-F thank you very much for that interesting link about Youngstown. The abandonment of certain areas is a fascinating topic to me - I'm trying to keep tabs on it, but it isn't covered much here on the East Coast.
ipodius: no, I agree that was extremely bad. Okay to think it. Very bad to say it. Again, what I say =/= what a candidate running for office should say.
ipodius writes:
Which is why the person who wins the election is going to be the one with whom regular people can see themselves knocking back a cold one with at a bar. ipodius | 04.14.08 - 12:26 pm | #
Yeah, that worked out pretty well for the country, right? That's the way to pick a president! I think Bush has spent too much time knocking back some cold ones down there at Crawford.
TED spread is rising because short-term Treasury yields are falling off a cliff again.
Apparently, somebody thinks a 1% yield is looking pretty good right now...
Doh! Cut&paste failure. Let me try that again.
13-week T-Bill
Return of, not return on as they say...
☺☺"Do your studies mention a 5-10 year lagtime for full effect of this demand reduction? Because if not, they need a lot of tuning, if not just plain flat out wrong."
anony-1797 | 04.14.08 - 1:02 pm | #
In the coming years it will be necessary for the United States to cut back on its oil consumption. Oil prices will go up, and those countries like the United States that do not have money, or have relatively less money than they did in the past, will be priced out of the market.
The only caveat to this is the occurance of something that upsets current trends, such as the U.S. embarking on another resourse war (such as the Iraq war) where it is more successful than it was in Iraq or if the world enters into a severe global depression.
Food riots spreading across the globe, in our new global economy. The global growth story! How long before we get to enjoy some of that here?
Ipodius, the strategy may be "great" for IBM and its shareholders but it furthers the argument that many mid-level skilled positions in the US are disappearing at great cost to this country. Your "regular people" are close to realizing that life is getting harder in the long run not easier. Once that realization takes hold, Obama's non-pandering rhetoric will hold much greater value for "regular people." The problem for Obama may be that he's four years too early.
The chart on the 13 week T-Bill is spooky-wooky. Did the herd heard a clue?
barely,
Depends on how long we dodge ug99 vs. time for a resistant strain to be bred or developed via GMO...
IBM will (probably) head back into its long term growth channel which tops out at ~80 today.
Standard & Poor's Ratings Services said on Monday that the risks the government-sponsored enterprises, or GSEs, pose to the U.S. government's triple-A debt rating are far greater than those posed by broker-dealers.
UPDATE 2-S&P says GSEs may pose risk to US government rating
| Reuters
BOOM
☺☺"Food riots spreading across the globe, in our new global economy. The global growth story! How long before we get to enjoy some of that here?"
barely | 04.14.08 - 2:19 pm | #
There's an extremely interesting interview with India's former finance minister on CNN International.
When asked about the possibility for social unrest in India due to soaring food prices, he said he didn't believe that would happen in his country. "We have the capacity to import food grains," he said, "we have export and over $300 billion."
Where does that leave the U.S. with its $5 trillion in debt and huge trade deficit?
Losses will go up the food chain. Billionaires may believe they're immune. They're not. Are you just "merely rich" or "ultra-rich"? If things get really bad, they will eat their young. It's already happening.
Check out this story on Bloomberg: "Jeweler Esmerian Fights Merrill to Stop 'Reckless' N.Y. Auction".
"Oh great another day of ipodus talking to jas and marcus..Wow!"
No wonder noone else comes around anymore.
Bluestatedon @ 11:01
pravda = truth
isvestia = news/information
Old Russian proverb:
There's no pravda in Isvestia and no isvestia in Pravda.
Neither in Fox, CNN, or MSM for that matter.
Goldman Forecasts "Awful" Profits « naked capitalism
"Goldman Sachs Group Inc. strategists say the U.S. corporate earnings season got off to an ``awful'' start and shares will drop as companies slash forecasts for the rest of 2008."
IBM is strategizing that China/India will be their big growth markets. They are actually trying to cut-off some of their limbs to move to the East faster. They have a longterm plan to layoff a large number of the US labor force, but to fly under the rador they've been laying off in a steady trickle...last year we watched them whack about 3,500, another 5,000 this year, we'll see more this year and next and next and next...they'll be profitable,...it's the Lean and Mean plan...they're going scorched earth.
You'd almost have to think every company in the US has that same plan about now.
Anonymous writes:
"Oh great another day of ipodus talking to jas and marcus..Wow!"
No wonder noone else comes around anymore.
Anonymous | 04.14.08 - 2:40 pm | #
Oh, we come around, and drive by the noise.
OT, a bit. You can see what vast contempt the elite have for ordinary people when they think they will swallow the charges of McCain and Clinton, both millionaires many times over, that Obama is an "elitist" because he has the guts to analyze why Americans are unhappy and put it out there, instead of feeding the masses the disgusting pollyanna crap that the real elitists have been feeding the populace for years.
Neither in Fox, CNN, or MSM for that matter.
Exactly. Unless you can go to blogs by intelligent people you are stuck with the moronic crap dispensed every hour of the day, and night, by the disgustingly dumb US media.
downsouth: I don't doubt that the US will have to start using less oil in the long run. My point was that it's really not going to be pretty; and the adding some weight to the (unsupported in this thread) statement that demand for gasoline is relatively inelastic.
As you mention, currently poorer countries are getting outbid. Eventually supply goes down, and not only have the poor been outbid, but the richer countries will have to bid against each other. And how strong will the dollar be?
Ipodius and others who think the price of fuel will go down with lower US consumption aren't taking into account the world market.
[url="http://online.wsj.com/article/SB120776643548702349.html?mod=googlenews_wsj"]2.58 million vehicles were sold in China last quarter[/url].
That trend is going to greatly drive up global demand, and I doubt that lower demand from penny pinching US consumers would make a difference.
FLL Renter writes:
Which is the first furniture chain to go BK?
Actually, one has already gone. Not a truly national chain, but it had 43 stores:
Wickes Furniture going out of business - Portland Business Journal:
Just remember, anyone who thinks they have oil figured out probably doesn't. I know plenty of people who lost it all when oil went down to around $14 less than 10 years ago. They had it figured out that, worst case scenario, it wouldn't go below $15.
Oil paints 112 agai
Just for the commodity bears, I thought I'd repost from last night:
There is a huge commodities bubble??
Let's just compare the CRB against the S&P500. Now how much does the S&P 500 have to fall to find some balance?
Interesting Chart
Hmmmmm!!
I'm not megarich, but it's 95% asset preservation, 3% chasing yield & 2% finding good opportunities to turn that 2 into 5.
Not easy but the 2% opportunities are showing up. The yield chasing worked when the ARS froze(hold to term or call in 10 years) but discipline is brutal.
Mat Simons slide show
321energy :: Peak Oil’s Investment Implications :: Simmons & Company International
Marketwatch says another home-furnishings retailer, Linens 'n Things, with 589 stores, may file for bankruptcy by tomorrow.
I see all the bad news but don't know what to do.
We own 2 homes on one income. One is a vacation rental that is grossly underwater. One is the house we live in.
All of our retirement money is down.
What can we or should we do. I feel like we are paralyzed but probably should be doing something...or maybe nothing?
Isn't Levitz furniture close to Bankrupt?
Another day, another punch in the face:
Crude closes up $1.62, or 1.5%, at $111.76 a barrel
No wonder noone else comes around anymore.
Anonymous
Funny, this thread seems to have a lot of responses. Maybe that's why you're anonymous...so no one can track what you say and follow up.
atl... liquidate portfolio, offshore it, and walk...think of yourself as a BIG winner
seriously, I have seriously considered. investment property is in a recourse state. so, I imagine they would come after us.
how do you offshore?
my husband is very conservative and believes it will all come back.
Just walk away, ATL. Walk away. The best 41 cents you'll ever spend.
also, I have had a little luck with my TIP fund. should I put more in it?
If your property is in a recourse state, then you may have more problems.
Your property probably won't come back in nominal terms for a decade at least.
Well, try to enjoy your vacations till then.
sorry for the ignorance here but what is a recourse state?
And we're off to the new thread...
I'm surprised, no discussion of this:
OP-ED CONTRIBUTOR; Home Buyers Needed - NY Times
The only solution is for the federal government to offer a temporary 5 percent tax rebate up to $25,000 for first-time home buyers.
I like this idea, as my wife and I would qualify as first-time home buyers.
But my concern is that this would just cause sellers to raise their prices again, screwing up any chance of the markets returning to normal.
recourse means the bank can come after you for the shortfall. the laws on this vary by state.
thank you js
A recourse state is one where the mortgage lender, if the foreclosure sale fails to pay off the loan, can get a deficiency judgment against the borrower for the unpaid balance.
So far as I know, most (if not all) states are recourse against all but a primary residence and against all but a purchase money mortgage, i.e. investment properties, vacation homes, HELOC's, and re-fi's can't walk.
This advice is worth just what you paid for it.
Elvis | 04.14.08 - 3:01 pm |
Chris
They already are BK --
abc7news.com: Levitz furniture files for bankruptcy 11/27/07
if this story is correct.
Anyone know what the PPI guesstimate is for this week's release?
PPI was Clyde...
Found it. Bloomberg as PPI coming in at .5%, .2% without energy
Retailers need to find a way to make Easter like Christmas. Let's face it, the Easter bunny just doesn't get the job done. If only Easter weren't about sin, suffering, death and all that depressing stuff we could sell more HI-Def DVD and TVs.
gn-
The time to stock up on powdered milk was last year. It doubled in price about 4 months ago, and one brand even went out of stock for about 3 months before it showed up on the shelves again at the new, improved, price.
I hate that stuff, but if push comes to shove, it beats adding water to your coffee.
"FANNIE WARNS HOMEOWNERS (???!!!!) WHO WALK AWAY"
Haven't read the article yet, but, is it similar to the warning Bernanke gave the Banks a couple years ago to "pretty please, don't make loans to folks who can't repay them" , or does Fannies warning to home-squatters have more teeth in it?
Re: Baruza
. . . like the guy who got into West Point as a legacy admit, proceeded to finish at the very bottom of his class . . .
Baruza - graduating last at West Point or Annapolis means he graduated in the top 5% of the entire country.