When do we start Stress Test 2.0, using more severe variables for housing and unemployment, which are offset by including new accounting gimmicks allowing banks to purchase their own bonds at a hefty discount and book this as revenue?
A private research group says that consumer confidence soared in April amid hopeful signs that the economy is starting to stabilize.
The Conference Board says that its Consumer Confidence Index rose 12 points to 39.2, up from a revised 26.9 in March. The reading marks the highest point since November and well surpasses economists' expectations for a level of 29.5.
The Expectations Index, which measures how shoppers feel about the economy over the next six months, skyrocketed to 49.5 from 30.2 in March.
Earlier Tuesday, a housing index showed that home prices dropped sharply in February, but for the first time in 25 months the decline was not a record — another sign the housing crisis could be bottoming.
Thanks for this - you appear to be absolutely on target in predicting that the more-adverse is the proper baseline. One wonders if that is what policymakers did deliberately - put it out there, but mislabel, and hope things aren't even worse.
It's beginning to feel like early 2008 all over again. The market is happily going north regardless of whatever news. Swine flu? up; GM bankrupt? Up; Stress test in doubt? Up.
Wall street salaries are going up again; with that new salary and bonus, NYC will experience a huge recovery by year end. That'll stop the housing decline in it's track for NYC and surrounding areas like NJ, PA, NY, etc.
The tide is slowly turning, so much so that being a bear feels exactly like it was -- a position that is ridiculed, shamed and even thought of as crazy.
Consumer Confidence is up again. I'm sure I'll feel confident if I don't have to pay mortgage for n months and now have huge amounts of disposable money for retail discounted stuff -- and the banks don't even chase me out of my NOD home!!
With the market going up like this, I'm pretty sure we'll hit DOW 9000 or even 10,000 before year end, and 12,000 by next year.
Remember GW Bush (at the WH Correspondent's Dinner) with his self parody of 'looking for the WMDs' under the sofa, etc.?
Wall Street, the media, and DC are looking for the bottom in the eCONomy in exactly the same way. It HAS to be here somewhere, right? Right under our noses.
Johnson has Summers saying (point two in a Summers presentation last Friday):
We will get out of the crisis by encouraging exactly the kind of behaviors that “previously we wanted to discourage” two years ago. It is “this insight, this view” particularly with regard to leverage (overborrowing, to you and me) that “undergirds the policy program in the United States.”
I heard a virulent strain of Whine Flu hit the Titans of Finance in the fall, but thanks to a steady iv drip of trillions of dollars, they were able to recover.
Just unveiled yesterday, Google's latest offering — google.org/flutrends — takes the results of millions of searches with phrases like "flu symptoms," mixes them with Google's special proprietary algorithm sauce and produces a real-time map (above) showing where in the U.S. it's hitting.
Miguel Helft's front page story in today's New York Times on the new new thing in infectious disease tracking follows.
Google Uses Searches to Track Flu’s Spread
There is a new common symptom of the flu, in addition to the usual aches, coughs, fevers and sore throats. Turns out a lot of ailing Americans enter phrases like “flu symptoms” into Google and other search engines before they call their doctors.
That simple act, multiplied across millions of keyboards in homes around the country, has given rise to a new early warning system for fast-spreading flu outbreaks, called Google Flu Trends.
Tests of the new Web tool from Google.org, the company’s philanthropic unit, suggest that it may be able to detect regional outbreaks of the flu a week to 10 days before they are reported by the Centers for Disease Control and Prevention.
ICSC/Goldman Sachs Chain Store Sales Down 0.7% In Apr 25 Wk
NEW YORK (Dow Jones)--The International Council of Shopping Centers and Goldman Sachs Retail Chain Store Sales Index fell 0.7% in the week ended Saturday from its level a week before on a seasonally adjusted, comparable-store basis.
On a year-on-year basis, retailers saw sales fall 1.7% in the latest week.
Customer traffic was down relative to the prior period for most segments, including grocery, drug, department stores and discounters, pulling the week's sales down.
Week Ending Index 1977=100 Yr/Yr Change Weekly Change
How can consumer confidence soar at the same time trucking and same store sales are down? Does consumer confidence lead the other two indicators? Confused...
My intuition is telling me we are going to see a period of relative calm here for awhile. Things are going to look better for some time (I'm sorry to say to the bears). I see andecdotal evidence in the businesses with which I work (May looks a lot better than April was for almost everyone), local housing market is heating up with the season (meaning a cessation of free-fall), CEOs are complaining they laid people off too quickly (and now need them back), etc. Not to mention this whole Swine Flu pandemic appears to be grossly overblown given the data we have at the present.
The declines in LA, SF, and SD would have been much larger if not for SB 1137. There is now a much bigger backlog of defaults and foreclosures.
Versus Feb 2008, in Feb 2009 the CA cities saw declines which were about half as fast. The other 17 cities in the 20 city index saw declines which were on average 51% larger than a year ago.
We will get out of the crisis by encouraging exactly the kind of behaviors that “previously we wanted to discourage” two years ago. It is “this insight, this view” particularly with regard to leverage (overborrowing, to you and me) that “undergirds the policy program in the United States.”
Wow. Admitting that they are trying to re-inflate the bubble. That is going to work out well.
The auto numbers will be slightly better this month too..Thats how it will be painted. Credit application index is up...I'm not hearing of Ceo's hiring back though!
I'll disagree regarding Swine flu..Too early in the game...
The Administration has pre-announced some details on the modification plan for junior liens. While like everyone I am sick of the constant bailouts of the irresponsible, the good news is that the servicers won't have any excuses to forestall foreclosure once all the details are finaly. We should see the next leg down in prices coming later this summer as the REO inventory hits the market.
How can consumer confidence soar at the same time trucking and same store sales are down? Does consumer confidence lead the other two indicators? Confused...
It's amazing how good you feel when you walk away from the mortgage burden and have some money in the bank.
It's beginning to feel like early 2008 all over again. The market is happily going north regardless of whatever news. Swine flu? up; GM bankrupt? Up; Stress test in doubt? Up. "
Or early 2009. I was just thinking "it's beginning to look a lot like Christmas..."
How can consumer confidence soar at the same time trucking and same store sales are down? Does consumer confidence lead the other two indicators? Confused...
The Baltic Dry Index dropped 2.7% to close lower for the third consecutive session. DryShips Inc.
The "eyesbergs" that will take down the Jolly Rogers on Wall Street, is somebody high up enough that will sing like a canary about dirty deeds done not so dirt cheap.
Here is a nice, cogent overview of the probable economic impact (incl by industry sector and by state) of a flu pandemic along the lines of 1918. It was written in 2007, at which time it was estimated that GDP would take, on average, a 5.5% hit. (that was when GDP had not already taken a big hit ... not sure how that affects the calculus).
One point to note ... pandemics follow a course of roughly 18 months. Importantly, that course consists of waves of 6 to 8 weeks each. So we might reasonably expect a good news/bad news scenario to unfold.
The report is authored by Trust for America's Health - a non-profit, non-partison advocacy group for health issues (although I'm sure there is some big pharma money kicking around in there somewhere). The Board is listed in the report, which reads quite credibly.
I'm hopeful the initial relief over this being a relatively mild flu outside of Mexico is not misguided, because the kind of economic impact suggested by this report would definitely slam dunk a serious Depression, given the current fragile state of the global economy.
We won't have a clue how the swine flu plays out until after it breaks out in Asia - and which baseline is more 'typical', the US or Mexico...
Official: US flu victims may be infecting others
By ANDREW O. SELSKY – 48 minutes ago
MEXICO CITY (AP) — The swine flu epidemic crossed new borders Tuesday with the first cases confirmed in the Middle East and the Asia-Pacific region, as world health officials said they suspect American patients may have transmitted the virus to others in the U.S.
Most people confirmed with the new swine flu were infected in Mexico, where the number of deaths blamed on the virus has surpassed 150.
But confirmation that people had become infected outside Mexico would indicate that the disease was spreading beyond travelers returning from the country, World Health Organization spokesman Gregory Hartl told reporters on Tuesday in Geneva.
Hartl said the source of some infections in the United States, Canada and Britain was unclear.
Peaked at $275k, now $99k. Mortgage would be around $430/mo. But here is the kicker. HOA fees are $432/mo!
Any thoughts on where HOA fees are going? They kind of have a chicken and egg problem with high rates causing and begin caused by higher vacancy rates.
I dont think that $430 HOA fees on a crappy condo in Ventura are reasonable though. Any data on historic HOA fees?
I always wondered how the way the TPTB, esp Bernake, look at 2008. I recently realized that their only regret must be:
Allowing Lehman to go BK.
None of the other actions are viewed as failures. TARP, BARF, TALF, etc; are viewed as success.
Certainly none of the ridiculous bailout or the fraudulent use of bailout money for lavish bonus (and still ongoing for new 2009 bonus!) and certain no regret whatsoever on the spike in unemployment.
In fact, the market also concurs. As long as they can keep everything together, things can only go up. It's not just stock market -- bonds, commodities are all enjoying the "calm" in 2009. (When's the last financial crisis in Well Street?) As long as they no longer let any financials fail in 2009, they're looking GOOD for all markets concerned -- unemployment and foreclosures be damned.
Someone explain to me why they cannot hold this facade (of non-failing financials) forever, or at least for a LONG TIME (like 5-10 years)?
"It's amazing how good you feel when you walk away from the mortgage burden and have some money in the bank."
Better yet, you stay in the house but just stop paying, living rent free. At first you are a bit nervous about it, but after 6 months go by and you are still there, you start to feel confident again.
The U.S. Treasury Department will on Tuesday tap a $50 billion housing rescue fund to pay off mortgage investors and reduce monthly payments for millions of borrowers, said a senior administration official.
that's just a scare tactic. "Give us money or else..."
Lehman bankruptcy was planned, eliminated a Goldman competitor.
The government may lie but the market can't.
Who are the conference board talking to? I don't know, but it just feels a little dodgy with all these earnings reports steadily beating estimates and now this...
Has anyone ever used the Better Homes stats and trends tools? It indicates 8 sales in Quarter one of 2009, down from 116 in 08 and 174 in 07. This seems really extreme to me, I wonder if there is a problem with the data?
Milan Police Seize UBS, JPMorgan, Deutsche Bank FundsMilan’s financial police seized 476 million euros ($620 million) of assets belonging to UBS AG, Deutsche Bank AG, JPMorgan Chase & Co. and Depfa Bank Plc amid a probe into alleged fraud linked to the sale of derivatives.
The police froze the banks’ stakes in Italian companies, real estate assets and accounts, the financial police said in a statement today. The assets seized yesterday also include those of an ex-municipality official and a consultant, the police said.
The City of Milan is suing the four banks after it lost money on derivatives it bought from the lenders in 2005. The securities swapped a fixed rate of interest on 1.7 billion euros of bonds for a variable rate that was losing the city 298 million euros as of June. Milan is among about 600 Italian municipalities that took out 1,000 derivatives contracts worth 35.5 billion euros in all, the Treasury said.
“Milan is an important case because it can be used as an example by others,” said Alfonso Scarano, who is heading a study into the trades by AIAF, a group representing Italian financial analysts. “This is a unique time for borrowers to shed light on their potential losses and renegotiate contracts” to take advantage of interest rates that have fallen to record lows. AIAF will next week testify before the Italian Senate’s inquiry into the cities’ use of derivatives contracts.
Will, I don't know anything about Chicago, but shocks like that happen when the price that people are asking, and the price that people are willing to pay don't overlap. It typically indicates prices are going to head down in a big way.
My apologies if these stories were already linked. I thought it interesting from a "class" angle. Looting going on at every level of society. It will get worse.
"Chrysler ...has also reached an agreement with the United Auto Workers leaders to modify the union's labor contract and to reduce the amount that the company owes a retiree health fund." Chrysler lenders, US Treasury reach a deal-source
| Reuters
@tim:
"The government may lie but the market can't. "
Huh? You and I must be looking at a different market.
Banks like Citi, BoA are enjoying their best stock streak ever; ditto to investment banks like GS, JP Morgan; even AIG and FNM/FRE is enjoying runups!
Runups also cover REITS, esp the weaker they are, the better they run. Forward P/E ratios of 40 or above is normal, and there's no letup: Retailers are doing great (stockwise).
Even soon to be bankrupt GM had a huge runup this month.
Either the market's lie, or I've been kidnapped into Bizzaro world.
I'm even tempted to throw caution to the wind and buy some C. How's that for nuts!
It wont be too very long before the laws of supply and demand dictate that the real minimum wage is well under $5.00 an hour, here in these United States.
"Some loans require the government to cover the loss when a homeowner defaults on a loan. When homeowners sell appliances and other fixtures in the home, its value decreases. The government covers the gap between what the home is worth and what the bank can sell it for, and that money comes directly from taxpayers."
Are these FHA loans?
After the homeowner strips the house of everything...
"I don't think there is any way you can rationalize this kind of conduct as you've indicated in your examples," Childears said. "It damages everybody who borrows because it drives up the cost of credit. It damages people who own property nearby because it drives down the appraisals on their homes even though it's a block or two away."
Totally OT: Sen. Schumer called the pandemic flu funding 'porky', and it was eliminated from the stimulus spending. I sent him this:
Hi "Porky",
You and Sen Collins better hope the swine flu is contained. Losing family members to an awful disease is a powerful motivator to vote for someone else. You are a banker butt licking ass.
"I'm even tempted to throw caution to the wind and buy some C. "
That is exactly the point, the stock market is being manipulated so thousands of investors like you will be suckered into throwing caution to the wind and investing in stocks like C. Then they will of course float a secondary offering at the newly inflated price. It's all a confidence game, designed to reinflate the bubble.
"Some loans require the government to cover the loss when a homeowner defaults on a loan. When homeowners sell appliances and other fixtures in the home, its value decreases. The government covers the gap between what the home is worth and what the bank can sell it for, and that money comes directly from taxpayers."
SOME? That would be 95% of the loans made today. FHA are insured directly by the government, Fannie/Freddie loans are insured indirectly by the government, and if they did fail, the Fed is on the hook since they own much of their MBS.
Eventually it ALL comes from the taxpayers, at least for every loan that is originated in 2009.
BTW, these low mortgage rates the Fed is pumping? Don't kid yourself into thinking that is being done to benefit borrowers, they are along for the ride. It is being done so those borrowers will refinance out of the toxic debt on the banks books, and onto the Fed's books.
The person says Treasury needs to convince all 46 banks and hedge funds that hold Chrysler debt to go along. If not, a bankruptcy filing could still be possible for the nation's third largest automaker.
Nothing new for North Aurora and Green Valley ranch. Stealing is a way of life for many low lifes that have moved in there. Green Valley has been the leader of foreclosures for a long time.
Cross post from Zacks, charts are from CR in this post and the previous one
The S&P Case Schiller index, the best measure of housing prices, showed prices were still declining in February. The ten city composite was down by 2.1% for the month, 18.8% year over year and is 31.6% off its peak (May 2006). The 20 city composite has a shorter history but tells much the same story, it was down 2.2% for the month, 18.6% for the year and is off 30.7% from its peak (also May 2006). As the chart below (larger version available at Blogger: Page not found shows, the most positive thing that can be said is that the year over year rate of decline has started to slow a bit, particularly for the 10 city composite. This was the first time in over two years (20 city composite, 16 months for the 10 city composite) that the year over year decline did not set a record. For the month, housing price indexes were down for every one of the 20 metropolitan areas followed. For eight of the 20 cities the monthly declines were at least 3.0%.
The worst hit cities for the month included many of the usual suspects, which means that the hardest hit places continue to get hammered. For the month, Cleveland registered a 5.0% decline, followed by Phoenix with a 4.5% drop and Detroit with a 3.8% decline. The other hard hit cities include (in order of monthly declines) Las Vegas, Chicago, San Francisco, Minneapolis and Miami. The only city to have less than a 1.0% decline for the month was San Diego. However only two cities have housing prices below January 2000 levels (when the indexes were all at 100), Detroit and Cleveland. The three cities with the highest current index levels are New York (178), Washington D.C. (168) and Los Angeles (163). Only time will tell if they are simply behind the curve, or are more resilient than other areas. I suspect the former.
The level of house price decline is one of the key metrics for the so called stress tests. As the second graph shows, the “more adverse” scenario under the stress tests is the one that most closely matches the economic reality. The baseline scenario is not even worth considering, for it involves no stress at all. Any bank that can not pass the baseline scenario should be avoided by investors at all costs (depositors are fine up to $250,000, for at least as long until the FDIC runs out of money, but even then the Treasury or the Fed will bail it out). Such a bank is insolent, not just illiquid, insolvent. They will need to raise very large amounts of capital that will severely dilute the existing shareholders. Passing the “more adverse” scenario means that the bank should be able to make it, provided there are no major exogamous shocks to the system, like say a worldwide flu pandemic.
The decline in housing values is really at the core of the current economic troubles. To be more precise it was the unwarranted rise in those housing values, which are now returning to earth that was the core problem, it is just that the pain is felt on the downside of the bubble. The continuing decline in housing prices will lead to more people being underwater on their homes. That will lead to more foreclosures (and rising unemployment will speed that process along). Those foreclosures will cause more pressure on bank balance sheets. Since the administration seems intent on being extremely nice to the bankers, it means that there will be more taxpayer money flowing to the coffers of the banks, to shore them up. It certainly does not come as a surprise that Citigroup (C) and Bank of America (BAC) are likely to need to raise more capital. However, if recent history is any guide (under both administrations) they will probably get it from the government on extremely preferential terms, with the government going out of its way to asset any ownership rights that might protect the taxpayers.
The decline in housing values also means that those still with positive equity in their houses will have less of it, further diminishing retirement nest eggs for millions. This will keep the pressure on for people to try to save out of current income. That is a good thing over the long run, but the savings will come at the expense of consumption, and the lower consumption will further depress the economy. On the bright side, young people (and renters) may actually be able to afford a house in the near future. They will need a low monthly mortgage payment given the amount of taxes they will have to pay in the future given the debt the country is taking on to make sure that bankers can live in the style that they have become accustomed too.
@ghostfaceinvestah:
"I'm even tempted to throw caution to the wind and buy some C. "
That is exactly the point, the stock market is being manipulated so thousands of investors like you will be suckered into throwing caution to the wind and investing in stocks like C. Then they will of course float a secondary offering at the newly inflated price. It's all a confidence game, designed to reinflate the bubble.
I understand the trap; but look one step further than the secondary offering...
If they pull this off, then although they've suckered more fools to use as cannon fodders; but they'll have solved their capital problem. Once that's solved, it truly forms the bottom in these stocks.
Thus the conundrum in reflexive economics: Maintain a lie long enough, and it will influence the fundamentals and become the new truth.
I absolutely see that happening, unfortunately it'll only be obvious in hindsight, where we'll look back and say -- gee that was the spring before the banks recapitalized themselves on the backs of fools, but those fools look so smart now...
No chance I would join them, if just to make a point; but I don't dismiss that as the "plan in execution".
Regarding the previous comment about things getting better. My sense in talking to companies in the tech industry is that we are seeing an inventory restocking bump, but final demand is less clear, probably it has stabilized at lower levels--my guess. CEO's are still cautious, I haven't heard a single one say they are thinking about hiring (besides the usual critical fill positions). I hear a lot of "the pipeline looks great" but if you remember 2001-2002, the pipeline looked great then, because sales people are loathe to cut the pipeline numbers, it's always the grass (pipeline) looks greener next quarter. Several companies I talked to seem to had to stretch to make March numbers, so we will see in July if they drained their pipeline or not.
Do I get bonus points for ~9 months ago predicting that if things get really bad we can expect an outbreak of an epidemic to prevent people from taking to the streets and reduce the excess population that can't be employed? I need to search through the log and pull my post. Not that I endorse such conspiracy theories...
Agree ponzi scheme is getting rediculous to just about everyone..avg. people are not becoming more confident they grow more skeptical by the day with the more and more obvious disconnect between reality and the fictitiious data/prices/markets. This team looks to FDR as the lodestar so make no mistakke they have lready enshrined themselves in that cloak and will use it as pretext for their interventionalist meddling under the gusie of necessity. Sad to watch
Regarding the high consumer confidence number -- all the increase is in higher expectations for the future; the present still sucks -- maybe that was why Summers was out on Sunday lowering expectations?
Flu updates:
1) Globalization of the epidemic - cases now in at least 7 EU countries, Middle East, Asia-Pacific region.
2) Confirmation that people infected in Mexico, who are in these other countries, are now spreading the virus further.
3) AP has good article on worst-case scenario (1918-1919 like) for the U.S. Note, it really shouldn't get this bad, but it could get pretty bad.
AP article says government worst-case scenario is 90 million get sick (out of population of ~300 million); 10 million hospitalizations; 1.5 million intensive care; 750,000 needing mechanical ventilators to keep breathing. Potential for 2 million deaths. Note: same article notes that based on some analyses, hospitals in some states could be overwhelmed if the pandemic goes all-out like this.
GH go to inforwars.com and see comments on how the timing, strain mutations and migratory pattern are all inconsistent with nature / TH required, but the mosiac of data points grows more worrying by the day..
Talked to people in software services. Clients are dropping steadily still albeit at a slower rate. Perhaps this is do to outsourcing?
I heard second hand that another round of layoffs in the low thousands is coming to IBM by summer.
Gav. the new CDS clearinghouse, just opened in March, already guarantees over 100 billion in CDS. (ICE Trust US) They say there's a guaranty fund, pro rata according to risk, but I haven't been able to find out how much is in it.
This could wind up being the bad bank sinkhole. From website:
"Clearing members to date are Bank of America/Merrill Lynch, Barclays Capital, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan Chase, Morgan Stanley and UBS. ICE Trust is in discussions with additional market participants regarding membership."
I understand the trap; but look one step further than the secondary offering... If they pull this off, then although they've suckered more fools to use as cannon fodders; but they'll have solved their capital problem. Once that's solved, it truly forms the bottom in these stocks.
9:45 ET: Northern Trust (NTRS 51.99, -3.02) has commenced a public offering to sell $750 million of common stock, which is not conditioned upon the concurrent consummation of approximately $500 million in original principal amount of senior notes.
The time horizon for the stress tests is too short imo. It seems very possible that house prices will decline back to 1998 prices over the next 4 or 5 years - a total retrace to pre-bubble levels.
Real estate prices in Japan have declined 80% over the past 18 years. Plus, aggregate employment today in the U.S. is no higher than in 1999. No joke. But debt levels are much higher and we have a massive oversupply of housing units.
How massive an oversupply? 15% of our housing and rental stock is unoccupied (19 million units)!
Actually paying your mortgage is so 1999. State and muni tax revenues are collapsing and soon there will be no cops to actually enforce foreclosures for what few banks are still standing. Most cops do not give a shit because many fellow cops have also stopped paying theirs! Free housing for everybody!
Agreed, I have seen this lack of ethics grow in this area for several decades. I lived and had businesses there. This a problem with way to many in America. Crime does pay as our legal system just gives probation out like candy. Builds the legal industry at great expense to the rest of us.
Funny, now that I think about it. In 2005 I spent a week in the hospital. They treated prisoners there, and on my floor there were usually 3 or 4 Sherrifs Deputies. I remember listienng to him tell the other 2 how he had bought 2 townhouses and was going to flip them. He went on to tell them how it was a great way of making money.
Today I did a favor for an investigator. He is a attorney but he has never practiced. After law school he went into real estate in Florida. Now he is scrambling to get back in the lawyer game. All he can find is freelance investigator work...
I don't believe the stress test scenarios are on a seasonally adjusted basis. So as we get closer to the stronger summer months, it will start to look like the actual is going up relative to the worst case line but that will just be the seasonal impact, later in the year it will swing back down below the worst case line I think. Here is a slightly different view of the seasonality in the case shiller: Caveman Forecaster: Data Analysis, Graphing, and Forecasting: Case-Shiller Housing Index: Seasonal Effects
1
Driving down the street yesterday and saw 1 retail outlet that had a JAM PACKED parking lot.
Riddle: Try to guess the retail outlet
Hint: Its name appears in bold type on WFC's balance sheet
bearly - perhaps it was Hair Cuttery?
That Case-Schiller composite 10 chart looks suspiciously like the iceberg that took out the Titanic.
And the fraud preyed on...
When do we start Stress Test 2.0, using more severe variables for housing and unemployment, which are offset by including new accounting gimmicks allowing banks to purchase their own bonds at a hefty discount and book this as revenue?
-bh
gotta love all the could copy writers in america
A private research group says that consumer confidence soared in April amid hopeful signs that the economy is starting to stabilize.
The Conference Board says that its Consumer Confidence Index rose 12 points to 39.2, up from a revised 26.9 in March. The reading marks the highest point since November and well surpasses economists' expectations for a level of 29.5.
The Expectations Index, which measures how shoppers feel about the economy over the next six months, skyrocketed to 49.5 from 30.2 in March.
Earlier Tuesday, a housing index showed that home prices dropped sharply in February, but for the first time in 25 months the decline was not a record — another sign the housing crisis could be bottoming.
Thanks for this - you appear to be absolutely on target in predicting that the more-adverse is the proper baseline. One wonders if that is what policymakers did deliberately - put it out there, but mislabel, and hope things aren't even worse.
bearly - perhaps it was Hair Cuttery?
NO.
Unions to own car companies under Obama's workers' paradise model.
GLORIOUS!
It's beginning to feel like early 2008 all over again. The market is happily going north regardless of whatever news. Swine flu? up; GM bankrupt? Up; Stress test in doubt? Up.
Wall street salaries are going up again; with that new salary and bonus, NYC will experience a huge recovery by year end. That'll stop the housing decline in it's track for NYC and surrounding areas like NJ, PA, NY, etc.
The tide is slowly turning, so much so that being a bear feels exactly like it was -- a position that is ridiculed, shamed and even thought of as crazy.
Consumer Confidence is up again. I'm sure I'll feel confident if I don't have to pay mortgage for n months and now have huge amounts of disposable money for retail discounted stuff -- and the banks don't even chase me out of my NOD home!!
With the market going up like this, I'm pretty sure we'll hit DOW 9000 or even 10,000 before year end, and 12,000 by next year.
Crisis? What crisis?
Why am I always not invited to the party?
Remember GW Bush (at the WH Correspondent's Dinner) with his self parody of 'looking for the WMDs' under the sofa, etc.?
Wall Street, the media, and DC are looking for the bottom in the eCONomy in exactly the same way. It HAS to be here somewhere, right? Right under our noses.
Have you all read Simon Johnson's take on Lloyd Summers at The Baseline Scenario?
Johnson has Summers saying (point two in a Summers presentation last Friday):
We will get out of the crisis by encouraging exactly the kind of behaviors that “previously we wanted to discourage” two years ago. It is “this insight, this view” particularly with regard to leverage (overborrowing, to you and me) that “undergirds the policy program in the United States.”
I heard a virulent strain of Whine Flu hit the Titans of Finance in the fall, but thanks to a steady iv drip of trillions of dollars, they were able to recover.
Gentlemen, we saw consumer confidence woo'd and won all through April and from every imaginable quarter.
No surprise there. None at all.
"Driving down the street yesterday and saw 1 retail outlet that had a JAM PACKED parking lot."
Perhaps it was the local car dealer.
This looks timely....(Nov 12 2008)
Just unveiled yesterday, Google's latest offering — google.org/flutrends — takes the results of millions of searches with phrases like "flu symptoms," mixes them with Google's special proprietary algorithm sauce and produces a real-time map (above) showing where in the U.S. it's hitting.
Miguel Helft's front page story in today's New York Times on the new new thing in infectious disease tracking follows.
Google Uses Searches to Track Flu’s Spread
There is a new common symptom of the flu, in addition to the usual aches, coughs, fevers and sore throats. Turns out a lot of ailing Americans enter phrases like “flu symptoms” into Google and other search engines before they call their doctors.
That simple act, multiplied across millions of keyboards in homes around the country, has given rise to a new early warning system for fast-spreading flu outbreaks, called Google Flu Trends.
Tests of the new Web tool from Google.org, the company’s philanthropic unit, suggest that it may be able to detect regional outbreaks of the flu a week to 10 days before they are reported by the Centers for Disease Control and Prevention.
That would be great if the union gets Chrysler! They can suck blood directly from the government! Obama Water boarding taxpayers for their own good!
JimInPortlandOregon - I think you mean Larry (Lawrence) Summers
A whole bunch of folks in my office just came down with Incomenza, they got laid off.
ICSC/Goldman Sachs Chain Store Sales Down 0.7% In Apr 25 Wk
NEW YORK (Dow Jones)--The International Council of Shopping Centers and Goldman Sachs Retail Chain Store Sales Index fell 0.7% in the week ended Saturday from its level a week before on a seasonally adjusted, comparable-store basis.
On a year-on-year basis, retailers saw sales fall 1.7% in the latest week.
Customer traffic was down relative to the prior period for most segments, including grocery, drug, department stores and discounters, pulling the week's sales down.
Week Ending Index 1977=100 Yr/Yr Change Weekly Change
25-Apr-09 488.0 -1.7% -0.7%
18-Apr-09 491.3 -0.1% -0.4%
11-Apr-09 493.5 -0.4% 0.8%
04-Apr-09 489.5 -0.3% 0.6%
ICSC/Goldman Sachs Chain Store Sales Down 0.7% In Apr 25 Wk
"A whole bunch of folks in my office just came down with Incomenza, they got laid off. "
Are you in Ohio or NC? They may have caught it from me, as I was traveling on "vacation."
Sales aren't the only thing taking a mauling, as I watched a cougar stalking carnaliverously through the mall.
[Perhaps it was the local car dealer]
NO. There's a hint.
Another: Think "Obama's New, more austere, US Economy"
How can consumer confidence soar at the same time trucking and same store sales are down? Does consumer confidence lead the other two indicators? Confused...
My intuition is telling me we are going to see a period of relative calm here for awhile. Things are going to look better for some time (I'm sorry to say to the bears). I see andecdotal evidence in the businesses with which I work (May looks a lot better than April was for almost everyone), local housing market is heating up with the season (meaning a cessation of free-fall), CEOs are complaining they laid people off too quickly (and now need them back), etc. Not to mention this whole Swine Flu pandemic appears to be grossly overblown given the data we have at the present.
Enjoy it while it lasts I suppose.
The declines in LA, SF, and SD would have been much larger if not for SB 1137. There is now a much bigger backlog of defaults and foreclosures.
Versus Feb 2008, in Feb 2009 the CA cities saw declines which were about half as fast. The other 17 cities in the 20 city index saw declines which were on average 51% larger than a year ago.
It's not slowing down. It's dropping faster.
boxed in:
http://ibankcoin.com/chart_addict/wp-content/uploads/2009/04/spx1m.png
We will get out of the crisis by encouraging exactly the kind of behaviors that “previously we wanted to discourage” two years ago. It is “this insight, this view” particularly with regard to leverage (overborrowing, to you and me) that “undergirds the policy program in the United States.”
Wow. Admitting that they are trying to re-inflate the bubble. That is going to work out well.
Rocky,
The auto numbers will be slightly better this month too..Thats how it will be painted. Credit application index is up...I'm not hearing of Ceo's hiring back though!
I'll disagree regarding Swine flu..Too early in the game...
The Administration has pre-announced some details on the modification plan for junior liens. While like everyone I am sick of the constant bailouts of the irresponsible, the good news is that the servicers won't have any excuses to forestall foreclosure once all the details are finaly. We should see the next leg down in prices coming later this summer as the REO inventory hits the market.
Effective Demand: Administration set to announce plan for junior liens.
"NO. There's a hint. "
NO as in ON?
How can consumer confidence soar at the same time trucking and same store sales are down? Does consumer confidence lead the other two indicators? Confused...
It's amazing how good you feel when you walk away from the mortgage burden and have some money in the bank.
cr,
i think the Ad Council has some pamphlets on how to make your posts more compliant with Suggested Voluntary Optimism Guidelines (SVOG).
" hc (profile) wrote on Tue, 4/28/2009 - 7:47 am
It's beginning to feel like early 2008 all over again. The market is happily going north regardless of whatever news. Swine flu? up; GM bankrupt? Up; Stress test in doubt? Up. "
Or early 2009. I was just thinking "it's beginning to look a lot like Christmas..."
The only known cure for Incomenza, is 33 weeks of wages.
Bearly can we cheat and look at the balance sheet?
How can consumer confidence soar at the same time trucking and same store sales are down? Does consumer confidence lead the other two indicators? Confused...
The Baltic Dry Index dropped 2.7% to close lower for the third consecutive session.
DryShips Inc.
Friedman Billings comments on Bank of America(8.50 -0.42)
The firm believes BAC needs at least $60B-$70B in capital to maintain a TCE ratio above 3% at the end of 2010
No wonder the stock is trending up...The sureal continues must be that booming consumer confidence
The "eyesbergs" that will take down the Jolly Rogers on Wall Street, is somebody high up enough that will sing like a canary about dirty deeds done not so dirt cheap.
Here is a nice, cogent overview of the probable economic impact (incl by industry sector and by state) of a flu pandemic along the lines of 1918. It was written in 2007, at which time it was estimated that GDP would take, on average, a 5.5% hit. (that was when GDP had not already taken a big hit ... not sure how that affects the calculus).
One point to note ... pandemics follow a course of roughly 18 months. Importantly, that course consists of waves of 6 to 8 weeks each. So we might reasonably expect a good news/bad news scenario to unfold.
The report is authored by Trust for America's Health - a non-profit, non-partison advocacy group for health issues (although I'm sure there is some big pharma money kicking around in there somewhere). The Board is listed in the report, which reads quite credibly.
I'm hopeful the initial relief over this being a relatively mild flu outside of Mexico is not misguided, because the kind of economic impact suggested by this report would definitely slam dunk a serious Depression, given the current fragile state of the global economy.
pdf report: http://healthyamericans.org/reports/flurecession/FluRecession.pdf
We won't have a clue how the swine flu plays out until after it breaks out in Asia - and which baseline is more 'typical', the US or Mexico...
Official: US flu victims may be infecting others
By ANDREW O. SELSKY – 48 minutes ago
MEXICO CITY (AP) — The swine flu epidemic crossed new borders Tuesday with the first cases confirmed in the Middle East and the Asia-Pacific region, as world health officials said they suspect American patients may have transmitted the virus to others in the U.S.
Most people confirmed with the new swine flu were infected in Mexico, where the number of deaths blamed on the virus has surpassed 150.
But confirmation that people had become infected outside Mexico would indicate that the disease was spreading beyond travelers returning from the country, World Health Organization spokesman Gregory Hartl told reporters on Tuesday in Geneva.
Hartl said the source of some infections in the United States, Canada and Britain was unclear.
The article requested is no longer available.
OT but:
So I was browsing some new listings today and came across this fine place:
1300 Saratoga Ave #1304, Ventura, CA 93003
Peaked at $275k, now $99k. Mortgage would be around $430/mo. But here is the kicker. HOA fees are $432/mo!
Any thoughts on where HOA fees are going? They kind of have a chicken and egg problem with high rates causing and begin caused by higher vacancy rates.
I dont think that $430 HOA fees on a crappy condo in Ventura are reasonable though. Any data on historic HOA fees?
Home prices - Its your leading indicator.
Capitulation far and away in many markets still a lot of knife catchers
Mike HOA fees have been going up and not going down until the development changes hands usually
I always wondered how the way the TPTB, esp Bernake, look at 2008. I recently realized that their only regret must be:
Allowing Lehman to go BK.
None of the other actions are viewed as failures. TARP, BARF, TALF, etc; are viewed as success.
Certainly none of the ridiculous bailout or the fraudulent use of bailout money for lavish bonus (and still ongoing for new 2009 bonus!) and certain no regret whatsoever on the spike in unemployment.
In fact, the market also concurs. As long as they can keep everything together, things can only go up. It's not just stock market -- bonds, commodities are all enjoying the "calm" in 2009. (When's the last financial crisis in Well Street?) As long as they no longer let any financials fail in 2009, they're looking GOOD for all markets concerned -- unemployment and foreclosures be damned.
Someone explain to me why they cannot hold this facade (of non-failing financials) forever, or at least for a LONG TIME (like 5-10 years)?
"It's amazing how good you feel when you walk away from the mortgage burden and have some money in the bank."
Better yet, you stay in the house but just stop paying, living rent free. At first you are a bit nervous about it, but after 6 months go by and you are still there, you start to feel confident again.
Treasury has new mortgage incentives: official
Treasury has new mortgage incentives: official
| Reuters
The U.S. Treasury Department will on Tuesday tap a $50 billion housing rescue fund to pay off mortgage investors and reduce monthly payments for millions of borrowers, said a senior administration official.
Oh, I got it. But I cheated. That was a "challenge".
http://www.youtube.com/watch?v=x2wET1OlK4Q
REM - Exhuming McCarty.
So, was Stipe channeling the future Paulson or Geithner?
hc
that's just a scare tactic. "Give us money or else..."
Lehman bankruptcy was planned, eliminated a Goldman competitor.
The government may lie but the market can't.
Chrysler lenders, US Treasury reach a deal-source
| Reuters
Chrysler lenders, US Treasury reach a deal-source
Why is consumer confidence up when credit card use has dropped precipitously
Federal Reserve's February 2009 G.19 report on consumer credit shows biggest drop in 31 years
bankruptcies are up:
Personal bankruptcy figures on the rise - ABC News (Australian Broadcasting Corporation)
and unemployment is rising?
Who are the conference board talking to? I don't know, but it just feels a little dodgy with all these earnings reports steadily beating estimates and now this...
Has anyone ever used the Better Homes stats and trends tools? It indicates 8 sales in Quarter one of 2009, down from 116 in 08 and 174 in 07. This seems really extreme to me, I wonder if there is a problem with the data?
Untitled Document
I meant to say 8 sales in my zipcode.
This great off-topic news just in:
Milan Police Seize UBS, JPMorgan, Deutsche Bank FundsMilan’s financial police seized 476 million euros ($620 million) of assets belonging to UBS AG, Deutsche Bank AG, JPMorgan Chase & Co. and Depfa Bank Plc amid a probe into alleged fraud linked to the sale of derivatives.
The police froze the banks’ stakes in Italian companies, real estate assets and accounts, the financial police said in a statement today. The assets seized yesterday also include those of an ex-municipality official and a consultant, the police said.
The City of Milan is suing the four banks after it lost money on derivatives it bought from the lenders in 2005. The securities swapped a fixed rate of interest on 1.7 billion euros of bonds for a variable rate that was losing the city 298 million euros as of June. Milan is among about 600 Italian municipalities that took out 1,000 derivatives contracts worth 35.5 billion euros in all, the Treasury said.
“Milan is an important case because it can be used as an example by others,” said Alfonso Scarano, who is heading a study into the trades by AIAF, a group representing Italian financial analysts. “This is a unique time for borrowers to shed light on their potential losses and renegotiate contracts” to take advantage of interest rates that have fallen to record lows. AIAF will next week testify before the Italian Senate’s inquiry into the cities’ use of derivatives contracts.
Will, I don't know anything about Chicago, but shocks like that happen when the price that people are asking, and the price that people are willing to pay don't overlap. It typically indicates prices are going to head down in a big way.
My apologies if these stories were already linked. I thought it interesting from a "class" angle. Looting going on at every level of society. It will get worse.
Everything but the kitchen sink:
9NEWS.com | Colorado's Online News Leader | Everything must go: Sales cost taxpayers thousands
The art of the bezzle, megamillionaire style:
404 Page Not Found | Idaho Statesman
what's the diff between the two? Not much....
"Chrysler ...has also reached an agreement with the United Auto Workers leaders to modify the union's labor contract and to reduce the amount that the company owes a retiree health fund."
Chrysler lenders, US Treasury reach a deal-source
| Reuters
dum luk
The plan is to raid the company of money a little longer than dump Chryslers pensions on the government in another 2 years or so
@tim:
"The government may lie but the market can't. "
Huh? You and I must be looking at a different market.
Banks like Citi, BoA are enjoying their best stock streak ever; ditto to investment banks like GS, JP Morgan; even AIG and FNM/FRE is enjoying runups!
Runups also cover REITS, esp the weaker they are, the better they run. Forward P/E ratios of 40 or above is normal, and there's no letup: Retailers are doing great (stockwise).
Even soon to be bankrupt GM had a huge runup this month.
Either the market's lie, or I've been kidnapped into Bizzaro world.
I'm even tempted to throw caution to the wind and buy some C. How's that for nuts!
It wont be too very long before the laws of supply and demand dictate that the real minimum wage is well under $5.00 an hour, here in these United States.
Sheila Bear:
"Bank closures will accelerate this year and next year"
"Some loans require the government to cover the loss when a homeowner defaults on a loan. When homeowners sell appliances and other fixtures in the home, its value decreases. The government covers the gap between what the home is worth and what the bank can sell it for, and that money comes directly from taxpayers."
Are these FHA loans?
After the homeowner strips the house of everything...
"I don't think there is any way you can rationalize this kind of conduct as you've indicated in your examples," Childears said. "It damages everybody who borrows because it drives up the cost of credit. It damages people who own property nearby because it drives down the appraisals on their homes even though it's a block or two away."
Uh, Doc, I had it covered on the late shift.
The race is on. Sharpen those claws.
hc
How long can that last?
Totally OT: Sen. Schumer called the pandemic flu funding 'porky', and it was eliminated from the stimulus spending. I sent him this:
Hi "Porky",
You and Sen Collins better hope the swine flu is contained. Losing family members to an awful disease is a powerful motivator to vote for someone else. You are a banker butt licking ass.
"How can consumer confidence soar at the same time trucking and same store sales are down?"
......one Helluva PR campaign and less D&G on MSM News - and lets not forget the TRUE professionals; the shills & pimps on Wall Street.
"I'm even tempted to throw caution to the wind and buy some C. "
That is exactly the point, the stock market is being manipulated so thousands of investors like you will be suckered into throwing caution to the wind and investing in stocks like C. Then they will of course float a secondary offering at the newly inflated price. It's all a confidence game, designed to reinflate the bubble.
This season's hottest accessories
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Doc Holiday wrote:
Milan’s financial police seized 476 million euros ($620 million) of assets belonging to UBS AG, Deutsche Bank AG, JPMorgan Chase
Financial police? ha ha ha ha ha
Oh well, couldn't have happened to a nicer bunch of bankstas.
Looks like another mortgage pig interday formation. Who is running the PPT, CR?
Mixing Crocuses & Mustard Seeds are like Richard Pryor's mixture of warm milk & cookies.
"Some loans require the government to cover the loss when a homeowner defaults on a loan. When homeowners sell appliances and other fixtures in the home, its value decreases. The government covers the gap between what the home is worth and what the bank can sell it for, and that money comes directly from taxpayers."
SOME? That would be 95% of the loans made today. FHA are insured directly by the government, Fannie/Freddie loans are insured indirectly by the government, and if they did fail, the Fed is on the hook since they own much of their MBS.
Eventually it ALL comes from the taxpayers, at least for every loan that is originated in 2009.
BTW, these low mortgage rates the Fed is pumping? Don't kid yourself into thinking that is being done to benefit borrowers, they are along for the ride. It is being done so those borrowers will refinance out of the toxic debt on the banks books, and onto the Fed's books.
they convinced only 4 banks on chrysler bond deal
INO.com News - US gov't, major Chrysler debtholders reach deal (apnews)
The person says Treasury needs to convince all 46 banks and hedge funds that hold Chrysler debt to go along. If not, a bankruptcy filing could still be possible for the nation's third largest automaker.
WRAPUP 11-New swine flu infections intensify travel fears
| Reuters
I'm guessing there's no way swine flu can be Kosher ...
Paradigm Lost,
Nothing new for North Aurora and Green Valley ranch. Stealing is a way of life for many low lifes that have moved in there. Green Valley has been the leader of foreclosures for a long time.
I'm just waiting and watching in rapt fascination for this entire ponzi economy to collapse. It will.
How come the US media keeps telling me how loved BHO is around the world?
American capitalism gone with a whimper - Pravda.Ru
Cross post from Zacks, charts are from CR in this post and the previous one
The S&P Case Schiller index, the best measure of housing prices, showed prices were still declining in February. The ten city composite was down by 2.1% for the month, 18.8% year over year and is 31.6% off its peak (May 2006). The 20 city composite has a shorter history but tells much the same story, it was down 2.2% for the month, 18.6% for the year and is off 30.7% from its peak (also May 2006). As the chart below (larger version available at Blogger: Page not found shows, the most positive thing that can be said is that the year over year rate of decline has started to slow a bit, particularly for the 10 city composite. This was the first time in over two years (20 city composite, 16 months for the 10 city composite) that the year over year decline did not set a record. For the month, housing price indexes were down for every one of the 20 metropolitan areas followed. For eight of the 20 cities the monthly declines were at least 3.0%.
The worst hit cities for the month included many of the usual suspects, which means that the hardest hit places continue to get hammered. For the month, Cleveland registered a 5.0% decline, followed by Phoenix with a 4.5% drop and Detroit with a 3.8% decline. The other hard hit cities include (in order of monthly declines) Las Vegas, Chicago, San Francisco, Minneapolis and Miami. The only city to have less than a 1.0% decline for the month was San Diego. However only two cities have housing prices below January 2000 levels (when the indexes were all at 100), Detroit and Cleveland. The three cities with the highest current index levels are New York (178), Washington D.C. (168) and Los Angeles (163). Only time will tell if they are simply behind the curve, or are more resilient than other areas. I suspect the former.
The level of house price decline is one of the key metrics for the so called stress tests. As the second graph shows, the “more adverse” scenario under the stress tests is the one that most closely matches the economic reality. The baseline scenario is not even worth considering, for it involves no stress at all. Any bank that can not pass the baseline scenario should be avoided by investors at all costs (depositors are fine up to $250,000, for at least as long until the FDIC runs out of money, but even then the Treasury or the Fed will bail it out). Such a bank is insolent, not just illiquid, insolvent. They will need to raise very large amounts of capital that will severely dilute the existing shareholders. Passing the “more adverse” scenario means that the bank should be able to make it, provided there are no major exogamous shocks to the system, like say a worldwide flu pandemic.
The decline in housing values is really at the core of the current economic troubles. To be more precise it was the unwarranted rise in those housing values, which are now returning to earth that was the core problem, it is just that the pain is felt on the downside of the bubble. The continuing decline in housing prices will lead to more people being underwater on their homes. That will lead to more foreclosures (and rising unemployment will speed that process along). Those foreclosures will cause more pressure on bank balance sheets. Since the administration seems intent on being extremely nice to the bankers, it means that there will be more taxpayer money flowing to the coffers of the banks, to shore them up. It certainly does not come as a surprise that Citigroup (C) and Bank of America (BAC) are likely to need to raise more capital. However, if recent history is any guide (under both administrations) they will probably get it from the government on extremely preferential terms, with the government going out of its way to asset any ownership rights that might protect the taxpayers.
The decline in housing values also means that those still with positive equity in their houses will have less of it, further diminishing retirement nest eggs for millions. This will keep the pressure on for people to try to save out of current income. That is a good thing over the long run, but the savings will come at the expense of consumption, and the lower consumption will further depress the economy. On the bright side, young people (and renters) may actually be able to afford a house in the near future. They will need a low monthly mortgage payment given the amount of taxes they will have to pay in the future given the debt the country is taking on to make sure that bankers can live in the style that they have become accustomed too.
ghostface
Hugo tells me hes a nice guy
@ghostfaceinvestah:
"I'm even tempted to throw caution to the wind and buy some C. "
That is exactly the point, the stock market is being manipulated so thousands of investors like you will be suckered into throwing caution to the wind and investing in stocks like C. Then they will of course float a secondary offering at the newly inflated price. It's all a confidence game, designed to reinflate the bubble.
I understand the trap; but look one step further than the secondary offering...
If they pull this off, then although they've suckered more fools to use as cannon fodders; but they'll have solved their capital problem. Once that's solved, it truly forms the bottom in these stocks.
Thus the conundrum in reflexive economics: Maintain a lie long enough, and it will influence the fundamentals and become the new truth.
I absolutely see that happening, unfortunately it'll only be obvious in hindsight, where we'll look back and say -- gee that was the spring before the banks recapitalized themselves on the backs of fools, but those fools look so smart now...
No chance I would join them, if just to make a point; but I don't dismiss that as the "plan in execution".
Regarding the previous comment about things getting better. My sense in talking to companies in the tech industry is that we are seeing an inventory restocking bump, but final demand is less clear, probably it has stabilized at lower levels--my guess. CEO's are still cautious, I haven't heard a single one say they are thinking about hiring (besides the usual critical fill positions). I hear a lot of "the pipeline looks great" but if you remember 2001-2002, the pipeline looked great then, because sales people are loathe to cut the pipeline numbers, it's always the grass (pipeline) looks greener next quarter. Several companies I talked to seem to had to stretch to make March numbers, so we will see in July if they drained their pipeline or not.
Do I get bonus points for ~9 months ago predicting that if things get really bad we can expect an outbreak of an epidemic to prevent people from taking to the streets and reduce the excess population that can't be employed? I need to search through the log and pull my post. Not that I endorse such conspiracy theories...
Agree ponzi scheme is getting rediculous to just about everyone..avg. people are not becoming more confident they grow more skeptical by the day with the more and more obvious disconnect between reality and the fictitiious data/prices/markets. This team looks to FDR as the lodestar so make no mistakke they have lready enshrined themselves in that cloak and will use it as pretext for their interventionalist meddling under the gusie of necessity. Sad to watch
Regarding the high consumer confidence number -- all the increase is in higher expectations for the future; the present still sucks -- maybe that was why Summers was out on Sunday lowering expectations?
Flu updates:
1) Globalization of the epidemic - cases now in at least 7 EU countries, Middle East, Asia-Pacific region.
2) Confirmation that people infected in Mexico, who are in these other countries, are now spreading the virus further.
Yahoo! 404 - Page Not Found
3) AP has good article on worst-case scenario (1918-1919 like) for the U.S. Note, it really shouldn't get this bad, but it could get pretty bad.
AP article says government worst-case scenario is 90 million get sick (out of population of ~300 million); 10 million hospitalizations; 1.5 million intensive care; 750,000 needing mechanical ventilators to keep breathing. Potential for 2 million deaths. Note: same article notes that based on some analyses, hospitals in some states could be overwhelmed if the pandemic goes all-out like this.
Yahoo! 404 - Page Not Found
on average, how many people a day die from normal flu in mexico city, population 22 million?
GH go to inforwars.com and see comments on how the timing, strain mutations and migratory pattern are all inconsistent with nature / TH required, but the mosiac of data points grows more worrying by the day..
daveinsv
Talked to people in software services. Clients are dropping steadily still albeit at a slower rate. Perhaps this is do to outsourcing?
I heard second hand that another round of layoffs in the low thousands is coming to IBM by summer.
"With the market going up like this, I'm pretty sure we'll hit DOW 9000 or even 10,000 before year end, and 12,000 by next year.
Crisis? What crisis?"
Great! We can get out of our investments as soon as we break even, and put them some place safer.
Ben Dover: I see it this way...homeowners loot it now, or the bandos loot it later. Doesn't make it right or ethical, of course.
Gav. the new CDS clearinghouse, just opened in March, already guarantees over 100 billion in CDS. (ICE Trust US) They say there's a guaranty fund, pro rata according to risk, but I haven't been able to find out how much is in it.
This could wind up being the bad bank sinkhole. From website:
"Clearing members to date are Bank of America/Merrill Lynch, Barclays Capital, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan Chase, Morgan Stanley and UBS. ICE Trust is in discussions with additional market participants regarding membership."
"on average, how many people a day die from normal flu in mexico city, population 22 million?"
Different age cohort and affects.
I understand the trap; but look one step further than the secondary offering... If they pull this off, then although they've suckered more fools to use as cannon fodders; but they'll have solved their capital problem. Once that's solved, it truly forms the bottom in these stocks.
9:45 ET: Northern Trust (NTRS 51.99, -3.02) has commenced a public offering to sell $750 million of common stock, which is not conditioned upon the concurrent consummation of approximately $500 million in original principal amount of senior notes.
currently, NTRS 53.66 ..... -$1.39 .... -2.4%
Bearly - was it Orange Julius?
"Not that I endorse such conspiracy theories..."
Good thing.
Briefing.com: Stock Market Update
"Different age cohort and affects."
Language police. effects.
The time horizon for the stress tests is too short imo. It seems very possible that house prices will decline back to 1998 prices over the next 4 or 5 years - a total retrace to pre-bubble levels.
Real estate prices in Japan have declined 80% over the past 18 years. Plus, aggregate employment today in the U.S. is no higher than in 1999. No joke. But debt levels are much higher and we have a massive oversupply of housing units.
How massive an oversupply? 15% of our housing and rental stock is unoccupied (19 million units)!
Actually paying your mortgage is so 1999. State and muni tax revenues are collapsing and soon there will be no cops to actually enforce foreclosures for what few banks are still standing. Most cops do not give a shit because many fellow cops have also stopped paying theirs! Free housing for everybody!
Paradigm Lost,
Agreed, I have seen this lack of ethics grow in this area for several decades. I lived and had businesses there. This a problem with way to many in America. Crime does pay as our legal system just gives probation out like candy. Builds the legal industry at great expense to the rest of us.
Funny, now that I think about it. In 2005 I spent a week in the hospital. They treated prisoners there, and on my floor there were usually 3 or 4 Sherrifs Deputies. I remember listienng to him tell the other 2 how he had bought 2 townhouses and was going to flip them. He went on to tell them how it was a great way of making money.
Today I did a favor for an investigator. He is a attorney but he has never practiced. After law school he went into real estate in Florida. Now he is scrambling to get back in the lawyer game. All he can find is freelance investigator work...
Was it 99 cent store?
The DQ numbers for OC are chilling. Look at the %increase in NODs in the wealthier areas. Very scary....
Early foreclosure filings spike across O.C. - Mortgage Insider : The Orange County Register
I don't believe the stress test scenarios are on a seasonally adjusted basis. So as we get closer to the stronger summer months, it will start to look like the actual is going up relative to the worst case line but that will just be the seasonal impact, later in the year it will swing back down below the worst case line I think. Here is a slightly different view of the seasonality in the case shiller:
Caveman Forecaster: Data Analysis, Graphing, and Forecasting: Case-Shiller Housing Index: Seasonal Effects