Is it possible to create a CRE metric/index for “shadow inventory”? It would be similar to the “real” unemployment measures that include those who are discouraged (used up their benefits) and part-time for economic reasons. The metric would include office space that is available for sublet (maybe set a minimum square footage?) and buildings that are all-but-completed. In NYC, for example, I think that there must be a dozen or more office buildings that are all-but complete. And I think that many firms that had acquired space for future expansion and/or have laid people off are now seeking to sublet.
The incentive for not fully completing buildings has been discussed here already (it seems it delays repayment of construction loans - I am not a CRE guy).
There must be some data set that shows office construction due dates. Any building that has not yet come on the market after that expected date would be candidate for the metric/index. And broker MLS systems would have a list of available sublets.
I see the auction as a growing realization that the future will be smaller than many previously thought. In my view, that means discounted valuations of risky assets like stocks are too high.
I could be wrong of course. And if so, I'll be wrong and loud about it.
Meh, neither I am sure, would even qualify for welterweight. It would just be a sad affair of scratching, hair pulling, eye gouging, dope calling, screech fest. Unless Thain vs. Fuld is at the top of the ticket, I think I'd pass.
While the point of paying off debt is correct, as usual most journalists
cannot do math. 3.7% of 930 billion is 33 billion, not close to 3 billion as
reported. Wonder what the correct numbers are.
This report is a measure of consumer credit not consumer debt. If I pay for $500 of merchandise on my credit card then that amount is included in this report even if I pay it off when the next bill comes and do not accrue any interest. I can't find the Federal Reserve explanation at the moment but when I do I will post the link.
We're still uncertain about what to do, so right now we're doing nothing. But we'll have to come to a decision in about six months. There is a safe haven - it's a very conservative one.
This is no surprise. The banks have put consumers on run-off mode on many of their debts. Credit cards are lowering credit limits as they are paid off. People are paying off car loans but would be unable to get a new one. The bank bail out was sold to the public as a tool to get them lending again. Ha ha! After the fix was in this motivation somehow disappeared from the scene.
shill (profile) wrote on Wed, 7/8/2009 - 3:14 pm Anyone find any info on how much the Fed purchased....seems to be a insider held secret......transparency my ass.
Every penny that needed purchasing and a little more for window-dressing.
Don't let yourself get wrapped up in the specifics. If the specifics mattered, it'd be a different sort of crisis. There will never be another failed Treasury auction, just like there will never be another major bank failure -- political concerns have assumed control of the situation.
The questions are, what are the long-term effects of these decisions, and they can be discerned without any reference to the specifics of an individual auction. They're central bankers, they rig the system every day and twice on important days. Rigging banking systems is their job. We can definitely know how they're rigging it and why, the specific "how much" parts won't matter until a major counterparty feels compelled to kick.
Except for the nascent slim jim shortage, we are floating in everything.
Even credit, judging by the three sets of credit card checks that met the shredder yesterday.
Alack and alas, the other shortage is in employment- this recession is not going to end so soon, the interesting part about the graph is that credit keeps on contracting after the declared end of the most of the recessions.
So this is most likely a lagging indicator, but that drop is magnificent.
Time to start hunting for more bargain in what I want, and watch the market have a summer blech.
It's like a balance sheet without an income statement--there doesn't seem to be anything here to let us distinguish between payments and writedowns. It's also possible that some of the reduction is a reduction in spending among people who pay their balance off every month--they would have less outstanding at the moment of the snapshot.
BR,
Exactly. The McKinsey piece on state capitalism that somebody linked the other day attempted to address the questions...the key is capital allocation is being made based on political factors, not economic ones.
Citizen AllenM , too much oil in storage (all the leased tankers we've heard about). At least lower prices would be good for the economy (except oil producing areas)
Here's a link to a paper on the Philly Fed web site. Scroll down to page 18 and there's an interesting discussion of whether the report should measure consumer debt instead of consumer credit.
Unless it is in GS's interest. GS was very happy to see Lehman sink.
Just my humble opinion, but, they wont let any other major institutions die. People might be pushed into shotgun weddings or supported behind the scenes with tens of billions of liquidity but there will be no failure. I don't think even GS can get another major Us bank to actually fail.
lets see- consumer debt down, jobs down, wages flat to down, hours worked down but spending is flat ?
Earlier somebody had posted with regard to the amount consumers are saving by not making mortgage payments. So that is acting as support or alternatively there is a black economy developing in which people claim to be unemployed but in fact are not.
Would you pledge your soul as loan collateral? Mirosiichenko said his company would not employ debt collectors to get its money back if people refused to repay, and promised no physical violence. Signatories only have to give their first name and do not show any documents. "If they don't give it back, what can you do? They won't have a soul, that's all," he told Reuters in a basement office, with one desk, a computer and three chairs.
an aside, but you gotta love the tinfoiling going on at KD's blog today. Supposedly GS is set up as a massive front running operation. I mean, it makes sense, and it's a super way to fund the banking sector, or at least the one bank the Treasury cares about that is part of the banking sector. Oh heck, call it what it is, it's THE banking sector. The rest is window dressing.
Thanks for the link, CR. Hmm, convenience use is 10%. I would have guessed much higher, but then again like most people on this thread I pay off my card at the end of the month.
I noticed that YOY Consumer credit growth has averaged only about 5% for the last several years. It would be interesting to see that overlain with the chart for cash-out refis and HELOCs, because I think the fairly tame-looking consumer credit number belies reality. Anyone have a line on that data?
Sell in May and go away - forever.
I'm glad I stick to safe investments like short equities. Messing around with a crazy, unstable market like US treasuries is strictly a mug's game.
I don't know, AS. That auction today is worth a close look. Something is going on and it may not fit into the doomer socket very well...
You want a shot at the title, Nemo? You want some of this? Bring the bot, bring the monkey, bring it all.
Pay down that debt!
Anyone find any info on how much the Fed purchased....seems to be a insider held secret......transparency my ass.
Market is officially open in 15 minutes.
It's only transparent to those smoking the green shoots.
OT
@CR
RE: Prior post - office vacancy rate
Is it possible to create a CRE metric/index for “shadow inventory”? It would be similar to the “real” unemployment measures that include those who are discouraged (used up their benefits) and part-time for economic reasons. The metric would include office space that is available for sublet (maybe set a minimum square footage?) and buildings that are all-but-completed. In NYC, for example, I think that there must be a dozen or more office buildings that are all-but complete. And I think that many firms that had acquired space for future expansion and/or have laid people off are now seeking to sublet.
The incentive for not fully completing buildings has been discussed here already (it seems it delays repayment of construction loans - I am not a CRE guy).
There must be some data set that shows office construction due dates. Any building that has not yet come on the market after that expected date would be candidate for the metric/index. And broker MLS systems would have a list of available sublets.
Rocky R,
I see the auction as a growing realization that the future will be smaller than many previously thought. In my view, that means discounted valuations of risky assets like stocks are too high.
I could be wrong of course. And if so, I'll be wrong and loud about it.
with respect to the TNX, there are multiple flavors of doomers. for example, jas jain v. peter schiff
State Of The Real Estate Market July 2009: Plenty More Downside
Real Estate Market Update July 6 2009: Plenty More Downside
/for example, jas jain v. peter schiff/
In a cage match, and when a winner is declared, we throw away the cage.
--bh
So how was the debt reduced?
A. The borrower paid it back
B. The bank wrote it off
less consumer debt is a good thing no? or is it less debt accrued, though many tried?
I FOUND THE NEW BUBBLE GET IN QUICK!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Slim Jim shortage causes panic and hoarding
Slim Jim shortage causes panic and hoarding
So how was it reduced?
A. The borrower paid it back
B. The bank wrote it off
Really good question - anyone know - does the fed report say?
I choose B.... The bank wrote it off
paid it back with money from what jobs?
I vote for wrote it off too.
" /for example, jas jain v. peter schiff/
In a cage match"
Meh, neither I am sure, would even qualify for welterweight. It would just be a sad affair of scratching, hair pulling, eye gouging, dope calling, screech fest. Unless Thain vs. Fuld is at the top of the ticket, I think I'd pass.
we need to get conjure involved in this cage match some how....
paid it back with money from what jobs?
BURN,
Walmart is planning to hire 20K. Gotta love the new (e)CONomy.
Lol
look at that dollar chart
http://www.weblinks247.com/indexes/idx24_usd_en_2.gif
While the point of paying off debt is correct, as usual most journalists
cannot do math. 3.7% of 930 billion is 33 billion, not close to 3 billion as
reported. Wonder what the correct numbers are.
This report is a measure of consumer credit not consumer debt. If I pay for $500 of merchandise on my credit card then that amount is included in this report even if I pay it off when the next bill comes and do not accrue any interest. I can't find the Federal Reserve explanation at the moment but when I do I will post the link.
I think they are dividing by 12 or multiplying depending on which number you're looking at....
Holy Yen movement today... Japan must not be happy with that....
............
Whats the odds we get a stick save today at the close?
"This report is a measure of consumer credit not consumer debt."
ok, so banks are still ganking people's credit limits. Deflationary?
We're still uncertain about what to do, so right now we're doing nothing. But we'll have to come to a decision in about six months. There is a safe haven - it's a very conservative one.
This is no surprise. The banks have put consumers on run-off mode on many of their debts. Credit cards are lowering credit limits as they are paid off. People are paying off car loans but would be unable to get a new one. The bank bail out was sold to the public as a tool to get them lending again. Ha ha! After the fix was in this motivation somehow disappeared from the scene.
Maybe Jas was right.
Ninja bot monkey pirate first posters
How many people are replacing their old car payment with a new higher payment? Exactly, These types of run-off declines are going to go on for years.
shill (profile) wrote on Wed, 7/8/2009 - 3:14 pm
Anyone find any info on how much the Fed purchased....seems to be a insider held secret......transparency my ass.
Every penny that needed purchasing and a little more for window-dressing.
Don't let yourself get wrapped up in the specifics. If the specifics mattered, it'd be a different sort of crisis. There will never be another failed Treasury auction, just like there will never be another major bank failure -- political concerns have assumed control of the situation.
The questions are, what are the long-term effects of these decisions, and they can be discerned without any reference to the specifics of an individual auction. They're central bankers, they rig the system every day and twice on important days. Rigging banking systems is their job. We can definitely know how they're rigging it and why, the specific "how much" parts won't matter until a major counterparty feels compelled to kick.
BR +10 well said!
Maybe Jas was right.
Untactful but right.... at least so far... I'm sure he's doing well where ever he is.... probably laughing at BBAD right now tooo....
@AS - hahaha!
"there will never be another major bank failure"
Unless it is in GS's interest. GS was very happy to see Lehman sink.
OT Personal Note...I'm an idiot today.
Equities indexes are all down, and yet my shorts (AAPL AMZN CRM GOOG HPQ IBM PCLN JWN URBN WFMI ) are all up, except for PCLN.
And to add insult to injury, gold below $910.
Ouch.
here's about $30M of that decrease.
lenny dyskstra filed BK, which is not a surprise to anyone who's been following this joker.
Lenny Dykstra files for Chapter 11 bankruptcy protection - ESPN
Watching oil drop like a stone.
Fascinating.
Hanging on at $60 by less than a thin dime.
Next stop $45?
Except for the nascent slim jim shortage, we are floating in everything.
Even credit, judging by the three sets of credit card checks that met the shredder yesterday.
Alack and alas, the other shortage is in employment- this recession is not going to end so soon, the interesting part about the graph is that credit keeps on contracting after the declared end of the most of the recessions.
So this is most likely a lagging indicator, but that drop is magnificent.
Time to start hunting for more bargain in what I want, and watch the market have a summer blech.
Someday this war's gonna end...
ShortCourage, the market will end green today.
It's like a balance sheet without an income statement--there doesn't seem to be anything here to let us distinguish between payments and writedowns. It's also possible that some of the reduction is a reduction in spending among people who pay their balance off every month--they would have less outstanding at the moment of the snapshot.
FRB: G.19 Release--Consumer Credit--November 6, 2009
Starbucks asked the question I was wondering.
How much of this CC decline is due to charge-offs. Aren't they reporting record high charge-offs?
"Whats the odds we get a stick save today at the close? "
Well atleast we know it won't be a rate cut.
So when do the Michael Jackson Funeral dvd's go on sale, I am sure the Iphone crowd must be lining up already.
"lenny dyskstra filed BK"
Wow! TSC/Cramer were pumping this guy and his $1000/yr "deep-in-the-money" options strategy service that "has never failed".
Now they have some ex-NFL guy peddling the same crap.
Wow. Just wow.
Re Fed transparency...
Across the Curve » Blog Archive » Indirect Bidding Revisited
BR,
Exactly. The McKinsey piece on state capitalism that somebody linked the other day attempted to address the questions...the key is capital allocation is being made based on political factors, not economic ones.
Citizen AllenM , too much oil in storage (all the leased tankers we've heard about). At least lower prices would be good for the economy (except oil producing areas)
best wishes
Here's a link to a paper on the Philly Fed web site. Scroll down to page 18 and there's an interesting discussion of whether the report should measure consumer debt instead of consumer credit.
http://tiny.cc/SnVBh
BURN (profile) wrote on Wed, 7/8/2009 - 3:39 pm
Unless it is in GS's interest. GS was very happy to see Lehman sink.
Just my humble opinion, but, they wont let any other major institutions die. People might be pushed into shotgun weddings or supported behind the scenes with tens of billions of liquidity but there will be no failure. I don't think even GS can get another major Us bank to actually fail.
lets see- consumer debt down, jobs down, wages flat to down, hours worked down but spending is flat ?
Earlier somebody had posted with regard to the amount consumers are saving by not making mortgage payments. So that is acting as support or alternatively there is a black economy developing in which people claim to be unemployed but in fact are not.
But wasnt the increase the price of oil the only that kept the PCE positive last time?
I don't think even GS can get another major Us bank to actually fail.
I agree. IndyMac will be the largest bank CLOSURE. Nobody wants to revisit the images of depositors standing in line to receive their deposits.
Goblins...MS went postal on JJ over at ATC. Totally uncalled for...
Would you pledge your soul as loan collateral?
Mirosiichenko said his company would not employ debt collectors to get its money back if people refused to repay, and promised no physical violence. Signatories only have to give their first name and do not show any documents. "If they don't give it back, what can you do? They won't have a soul, that's all," he told Reuters in a basement office, with one desk, a computer and three chairs.
Finally! Bring back the good times!
Might have been posted earlier...from Bloomberg:
"Yuan Deposes Dollar on China Border in Sign of Future "
Yuan Deposes Dollar on China Border in Sign of Future (Update1) - Bloomberg.com
Kermit poked his head up, but it looks like he got shot when he showed himself.
PPT fighting hard with brand new dollars.
wow that's some fight going on in the market today. Last time we had this type of volatility was right before the last major leg down.
1) i edited out the barnyard epithet.
LOL!
Sonic Seuss
Interesting paper - and something I've wondered about (how much of credit card debt was convenience - as opposed to real credit). Thanks! Here is the key paper:
http://www.cramton.umd.edu/workshop/papers/johnson-credit-card-debt.pdf
It sounds like 10% is a decent number for convenience (how most CR readers use their credit cards!)
best wishes
Oh I agree, CR, but the real problem is the level of use in the real economy has cratered.
What is troubling to me is the drop in economic activity on all levels seems to continue, albeit at a slower pace.
Another year of these declines and we will be replicating 1933 levels of decline in economic activity.
Meanwhile, the inanity of the political chattering class continues.
Even Krugman has turned pretty pessimistic.
I do believe we are going Japanese, until our currency steeply declines.
Someday this war's gonna end...
It's Not Easy Being Green - Kermit the Frog
It's Not Easy Being Green - Kermit the Frog pictures from jokes & humor photos on webshots
"MS went postal on JJ over at ATC. Totally uncalled for..."
He is right in my opinion
We need to have a Market Wrap-Up Headline writing contest... like for today maybe:
Stocks Gain as Consumer Credit declines less than expected.
Consumer discretionary sector leads the way
an aside, but you gotta love the tinfoiling going on at KD's blog today. Supposedly GS is set up as a massive front running operation. I mean, it makes sense, and it's a super way to fund the banking sector, or at least the one bank the Treasury cares about that is part of the banking sector. Oh heck, call it what it is, it's THE banking sector. The rest is window dressing.
"wow that's some fight going on in the market today. Last time we had this type of volatility was right before the last major leg down."
My thoughts exactly. This is some VERY familiar looking territory.
Thanks for the link, CR. Hmm, convenience use is 10%. I would have guessed much higher, but then again like most people on this thread I pay off my card at the end of the month.
"an aside, but you gotta love the tinfoiling going on at KD's blog today."
That explains why AA will have good earnings. Shortage of tinfoil due to all the super-sized tinfoil colianders being employed at TF lately.
Citizen AllenM (profile) wrote on Wed, 7/8/2009 - 3:54 pm
What is troubling to me is the drop in economic activity on all levels seems to continue, albeit at a slower pace.
[x] Stage 1: Titantic hits iceberg, everyone falls down.
[x] Stage 2: Everyone picks themselves up, says, "wow, that was a hard knock. Well, at least the ship isn't sinking"
[ ] Stage 3: The ship sinks.
Meanwhile, the inanity of the political chattering class continues.
"And the numb and stupid and dumb and vain
Have their fatuous theories to explain
Why nobody any longer feels the pain
Down to the east of Eden"
I noticed that YOY Consumer credit growth has averaged only about 5% for the last several years. It would be interesting to see that overlain with the chart for cash-out refis and HELOCs, because I think the fairly tame-looking consumer credit number belies reality. Anyone have a line on that data?
Also, don't fall for that green shoots BS cause they ain't real. No recovery.
this co called 'recovery' is artifical
hat tip to: Interesting Finance & Economic articles
for the good articles