ragerunner

More green shoots (squirts) for Wall Street. We are not at the bottom yet. Unemployment in U.S. Jumps to 10.2%, Payrolls Fall (Update3) "Nov. 6 (Bloomberg) -- The unemployment rate in the U.S. soared to a 26-year high of 10.2 percent in October and employers cut more jobs than forecast, underscoring why Federal Reserve policy makers say interest rates will remain near zero. Payrolls fell by 190,000 workers last month, compared with a 175,000 drop anticipated by the median forecast of economists surveyed by Bloomberg News, figures from the Labor Department showed today in Washington. The jobless rate gained from 9.8 percent in September and exceeded 10 percent for the first time since 1983." http://www.bloomberg.com/apps/news?pid=20601087&sid=aM5vmVlHcV6A&pos=1

Fannie Mae to rent out homes instead foreclosing "WASHINGTON – Thousands of borrowers on the verge of foreclosure will soon have the option of renting their homes from Fannie Mae, under a policy announced Thursday. The government-controlled company, through its new "Deed for Lease" program, will allow borrowers to transfer ownership to Fannie Mae and sign a one-year lease, with month-to-month extensions after that." http://news.yahoo.com/s/ap/20091105/ap_on_bi_ge/us_foreclosures_rentals;_ylt=ArdHYkdJkvGw23fedY8k56JH2ocA;_ylu=X3oDMTNjMW83dnM0BGFzc2V0A2FwLzIwMDkxMTA1L3VzX2ZvcmVjbG9zdXJlc19yZW50YWxzBGNjb2RlA21vc3Rwb3B1bGFyBGNwb3MDNgRwb3MDNgRzZWMDeW5fdG9wX3N0b3JpZXMEc2xrA2Zhbm5pZW1hZXRvcg-- I say this is just more window dressing and will have very little impact on foreclosures.

Right now Cedar Fair is like many of the other park chains, the name of the game is survival. Sell parks, sell assets, go BK, whatever you have to do.

Is this our future? With Japan and Britian already in front. The default of one or both of these would send shockwaves throught the world financial system. It is Japan we should be worrying about, not America "Japan is drifting helplessly towards a dramatic fiscal crisis. For 20 years the world's second-largest economy has been able to borrow cheaply from a captive bond market, feeding its addiction to Keynesian deficit spending – and allowing it to push public debt beyond the point of no return." "The rocketing cost of insuring against the bankruptcy of the Japanese state is telling us that the model has smashed into the buffers. Credit default swaps (CDS) on five-year Japanese debt have risen from 35 to 63 basis points since early September. Japan has suddenly decoupled from Germany (21), France (22), the US (22), and even Britain (47)." http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6480289/It-is-Japan-we-should-be-worrying-about-not-America.html

Buffett's Berkshire buys Burlington Northern "NEW YORK (MarketWatch) -- Warren Buffett's Berkshire Hathaway on Tuesday said it is spending $44 billion to buy out railroad operator Burlington Northern Santa Fe, sealing the biggest acquisition in the company's history in what the famed investor called "an all-in wager on the economic future of the United States." http://www.marketwatch.com/story/berkshire-buys-burlington-northern-2009-11-03 This is very interesting. Warren Buffett is not a idiot, he may not always be right, but this is a huge 'wager'. He is very well connected and I am sure has info the average person doesn't. With that said, here is my little world take on this. He is preparing for inflation in oil prices and the increase demand to transport goods and people on rail in the future.

Factory sector strengthens in October ISM hits 55.7%, best since April 2006; production index at five-year high "WASHINGTON (MarketWatch) -- The nation's manufacturing firms grew at the fastest pace in more than three years in October, according to a closely followed survey of top executives released Monday." "One grey cloud in a sunny report was that the new-orders index fell in October, slipping to 58.5% from 60.8% in September, the ISM's data showed. This is the second monthly decline in orders." http://www.marketwatch.com/story/factory-sector-surges-in-october-ism-says-2009-11-02 Hopefully this upswing will be sustainable. But, if new orders continue to fall it will only be time before it starts to show up in ISM data.

U.S. Home Vacancies Rise to 18.8 Million on Defaults (Update1) "The number of vacant properties, including foreclosures, residences for sale and vacation homes, rose from 18.4 million a year earlier and 18.7 million in the second quarter, the U.S. Census Bureau said in a report today." "Sales of new U.S. homes fell 3.6 percent in September to an annual pace of 402,000, the Commerce Department said yesterday. That was lower than the 440,000 median forecast of 75 economists surveyed by Bloomberg News." http://www.bloomberg.com/apps/news?pid=20601103&sid=aNQJ9BUq2_yM 'Up, up and away in my beautiful, my beautiful, balloon.'

It was waiting for you with C4C and is still waiting for you with $8,000 if you buy a house. What more do you want. Billions for an end of the year bonus. To get that you must first run you company into the ground and then ask for trillions from the taxpayer. Then you can have your billion+ dollar bailout. :wink:

Economy grows in 3Q, signals end of recession By JEANNINE AVERSA AP Economics Writer "WASHINGTON—The economy grew at a 3.5 percent pace in the third quarter, the best showing in two years, fueled by government-supported spending on cars and homes. It's the strongest signal yet that the economy has entered a new, though fragile, phase of recovery and that the worst recession since the 1930s has ended. Going forward, many analysts expect the pace of the budding recovery to be plodding due to rising unemployment and continuing difficulties by both consumers and businesses to secure loans." http://www.denverpost.com/ci_13666896 So this is what we got for Trillions! I guess history will tell us if it was worth it and if it was enough to avoid bigger issues in the future. It concerns me that the bulk of the growth was in auto sales (cash for clunkers, 1.66 of the GDP), home ($8,000 credit) and other government spending. With cash for clunkers gone that number is going to drop significantly for the next GDP. But, the $8,000 for homes will continue and so will government stimulus spending. With the real economy and job lose still flat on its back it should be interesting to see how Holiday spending and 2010 go. It should also be interesting to see how this number is adjusted over time. If recent history is any indication, this number will end up being much lower in the future.

Because the FEDs, the Treasury and certain Wall Street firms are above the law or not held to the law by those appointed to enforce the laws of the land.

Here is a GREAT article to show just how much the American taxpayer has been fleeced. It's well worth the time to read this article. I think its time the American people know who got the $2 Trillion+. The New York FED decided to pay 100% 'value' for these swaps. Guess who the chairman of the board of directors of the New York Fed was when this decision was made. Stephen Friedman, chairman of Goldman Sachs. New York Fed’s Secret Choice to Pay for Swaps Hits Taxpayers "Goldman Sachs" "The deal contributed to the more than $14 billion that over 18 months was handed to Goldman Sachs, whose former chairman, Stephen Friedman, was chairman of the board of directors of the New York Fed when the decision was made. Friedman, 71, resigned in May, days after it was disclosed by the Wall Street Journal that he had bought more than 50,000 shares of Goldman Sachs stock following the takeover of AIG. He declined to comment for this article." "The Federal Reserve has been reluctant to publish information on its efforts to stabilize the financial system since the crisis began. The Fed has loaned more than $2 trillion, yet it refuses to name the recipients of the loans, or cite the amount they borrowed, saying that doing so may set off a run by depositors and unsettle shareholders." http://www.bloomberg.com/apps/news?pid=20601109&sid=a7T5HaOgYHpE

Wake me up when we start seeing year over year increases. Until then the direction of US home prices continue to go down, at a slower declining slope. U.S. home prices rise in August, Case-Shiller says Prices down 11.3% in the past year in 20 major cities "In the past year, prices are down 11.3% in the 20 cities. Prices in all 20 cities were lower in August 2009 than in August 2008, but in general, year-over-year declines have lessened." http://www.marketwatch.com/story/us-home-prices-rise-in-august-case-shiller-says-2009-10-27 Confidence drops for second straight month in Oct. Assessment of current conditions lowest in 26 years http://www.marketwatch.com/story/confidence-drops-for-second-straight-month-2009-10-27 I thought the data had no place to go but up? The economist, FEDs, Wall Street, etc... all said so. Could they have just been blow smoke out of their butts? That would be a huge surprise, since they have accurately forecasted all of the economic events over the last 3 years so correctly and honestly. When does these groups finally lose all creditability in the eye of the American people? The world has started to figure this out, when will Main Street?

Slowly let the blood out over a long period of time and hope the patient is alive at the end.

ING to split banking and insurance operations To sell discounted shares, repay half of state aid "LONDON (MarketWatch) -- Citing pressure from the European Commission's antitrust enforcers, ING on Monday announced a sweeping plan to break itself apart as well as to repay some of the state aid that Holland has provided." http://www.marketwatch.com/story/ing-to-split-banking-and-insurance-operations-2009-10-26 Trying to Rein In ‘Too Big to Fail’ Institutions "A senior administration official said on Sunday that after extensive consultations with Treasury Department officials, Representative Barney Frank, the chairman of the House Financial Services Committee, would introduce legislation as early as this week. The measure would make it easier for the government to seize control of troubled financial institutions, throw out management, wipe out the shareholders and change the terms of existing loans held by the institution." http://www.nytimes.com/2009/10/26/business/economy/26big.html This is starting to get interesting. It just a shame we didn't/don't follow our current rules for controling monoplies. If we did we wouldn't need this type of government intervention in the business system. The fight for power is growing. And on the topic of 'to big to fail'. Here is a look at the top five financial institutions derivative contracts (with a lot of it nothing more than toxic). 1. JPM0RGAN CHASE - $81 Trillion 2. BofA - $78 Trillion 3. G0LDMAN - $48 Trillion 4. M0RGAN - $39 Trillion 5. C1T1GROUP - $32 Trillion Compare the toxic level with their current assets. 1. JPM0RGAN CHASE - $2 Trillion 2. BofA - $2.3 Trillion 3. G0LDMAN - $925 billion 4. M0RGAN - $626 billion 5. C1T1GROUP - $1.8 Trillion (Source - http://www.occ.treas.gov/ftp/release/2009-72a.pdf) If this leveraged market continues to imploded and/or is forced to show its real value, we won't be able to print our way out this one.

A quick look across the pond (both sides) to see how Europe and Japan are doing. Sometimes it makes everyone feel better if they know others are feeling their pain as well. Sweden: “Husqvarna slashes staff in Sweden as profits fall….Truck maker Volvo posts heavy losses….Riksbank keeps interest rate at 0.25 percent….Ericsson hit by falling profits….Credit loses dent profits at SEB….Swedbank’s losses worse than expected.” http://thehousingbubbleblog.com/?p=5696#comments Germany: Bankers Stonewall Investigators in Crisis Probes "The investigation into public bank BayernLB highlights the problems the German justice system faces in tackling the shortcomings that led to the financial crisis. Investigators are overwhelmed, and managers and supervisors have formed a wall of silence." http://www.spiegel.de/international/spiegel/0,1518,655951,00.html U.K. Economy Unexpectedly Shrinks in Longest Slump (Update2) "Oct. 23 (Bloomberg) -- U.K. gross domestic product unexpectedly dropped in the third quarter as enduring slumps in services, manufacturing and construction kept the economy mired in its longest recession on record. The pound tumbled." http://www.bloomberg.com/apps/news?pid=20601068&sid=aA4yuANivXCQ Japan: Land of Rising Debt: Falling Tax Revenue Forces Japan to Sell More Bonds "Japan’s national debt accounts for 170% of its $5 trillion gross domestic product (GDP), and estimates say the figure will balloon to between 200% and 250% sometime next year." http://www.moneymorning.com/2009/10/21/japan-bonds-debt/

Sometimes that is exactly what happens. You finally get the right person(s) involved and a different outcomes starts to take shape. I give them credit for continuing to try. Some communities just give up on their downtown's and just let the core fall apart.

This brings up a good topic. I think a lot of the 'economist' or wall streeters (including myself) that have not painted rosy pics of the near future or even predicted worse conditions this year, are underestimating government intervention in the system. From the Dow, to home price declines, to interest rates, to GDP, these items are outperforming many predictions because the Feds are directly manipulating these economics and markets (by the trillions). I think there will be a drop in home prices even with an extended or increased house credit, but not as big as predicted. To many jobs are being lost and to many foreclosures are happening not to affect home prices next year. I also think that interest rates are going to go up in the next year or so. External pressures from others governments, and major economic players are increasing by the day. The FEDs will only be able to keep this up for so long.

Homes: About to get much cheaper National home prices are forecast to shrink another 11%. Miami, Las Vegas and Phoenix will record steep declines, but a few cities will actually post gains. "NEW YORK (CNNMoney.com) -- If you thought home prices were bottoming out, you may be wrong. They're expected to head a lot lower. Home values are predicted to drop in 342 out of 381 markets during the next year, according to a new forecast of real estate prices." http://money.cnn.com/2009/10/20/real_estate/home_price_forecast/index.htm?cnn=yes

Einhorn bets on major currency 'death spiral' Major institutions should be broken up if necessary, Greenlight manager says "NEW YORK (MarketWatch) -- Greenlight Capital is betting on the possibility of a major currency collapse and a surge in interest rates, the hedge-fund firm's manager David Einhorn said Monday, citing ballooning government deficits in some of the world's most developed countries." "No institution should be too big to fail, Einhorn contended. "The real solution is to break up anything that fails that test. Lehman shouldn't have existed in any size to threaten the financial system." The same applies to Citigroup and Bear Stearns, which J.P. Mortgage Chase & Co. acquired, as well as American International Group Inc. and "dozens" of other firms, he said." http://www.marketwatch.com/story/einhorn-bets-on-major-currency-death-spiral-2009-10-19

Here on one piece of the economy that is clearly not getting better. Foreclosures rise 5 percent from summer to fall "The foreclosure crisis affected nearly 938,000 properties in the July-September quarter, compared with about 890,000 in the prior three months, according to a report released Thursday by RealtyTrac Inc. That puts foreclosure-related filings on a pace to hit about 3.5 million this year, up from more than 2.3 million last year." http://news.yahoo.com/s/ap/20091015/ap_on_bi_ge/us_foreclosure_rates

Correct. Let the New Year's Eve partying begin.

Compare the job lose post above with this. Main Street is simply being fleeced and that would be a nice way of putting it. I thought by now their would be some real discontent on the part of Main Street. You do hear a lot about high gun sales!?! I wonder if they will at least send a thank you card to main street (taxpayer) for their bounty this year. Wall Street On Track To Award Record Pay "Major U.S. banks and securities firms are on pace to pay their employees about $140 billion this year -- a record high that shows compensation is rebounding despite regulatory scrutiny of Wall Street's pay culture." http://online.wsj.com/article/SB125547830510183749.html And on the dollar front and the please buy our debt front. Dollar loses reserve status to yen & euro "Ben Bernanke's dollar crisis went into a wider mode yesterday as the greenback was shockingly upstaged by the euro and yen, both of which can lay claim to the world title as the currency favored by central banks as their reserve currency. Over the last three months, banks put 63 percent of their new cash into euros and yen -- not the greenbacks -- a nearly complete reversal of the dollar's onetime dominance for reserves, according to Barclays Capital." http://www.nypost.com/p/news/business/dollar_loses_reserve_status_to_yen_hFyfwvpBW1YYLykSJwTTEL

Crime is always a top priority for most communities, which is understandable. But, I think one of the big issues with employment related to police/fire is to much cooked in title raises, and HUGE retirement funds. It nothing for 70% of a city or county budget to be going to these two agencies. A lot of this has come from the police and fire union system. That only leaves 30% of the budget for parks, public works, economic development, planning, utilities, health departments, libraries, etc.

I work in city government and I can tell you its happening at a rapid rate all across the country. At best, some city, county and state governments are holding the line (not adding to their overall employment base) but most are reducing at a significant rate. The only one that is currently on a hiring mode is the Feds. It helps when you can print money. Here are some quick examples of some of the layoff annoucements by government agencies within the last week or so. Compare this to the very few job creation annoucements that are happening and most of them are for X amount of jobs to be created by 2011, 2012, etc. Department of Health and Human Services North Carolina - Expects Thousands Of Job Losses, Cut Services http://wake.mync.com/site/wake/news|Sports|Lifestyles/story/43126/dhhs-expects-thousands-of-job-loses-cut-services New Hampshire - 250 state workers to lose jobs http://www.concordmonitor.com/apps/pbcs.dll/article?AID=/20091013/BREAK/910139996/1030 Aurora, CO - "Fifty people will lose their jobs and 85 open job positions will not be filled." http://cbs4denver.com/local/aurora.budget.cuts.2.1246016.html Iowa's Chief Justice warns staff of layoffs http://www.wcfcourier.com/news/local/govt-and-politics/article_c0dbb9ea-b73b-11de-95d0-001cc4c002e0.html Layoffs imminent - Massachusetts http://www.boston.com/yourtown/budgetblues/2009/10/layoffs_imminent_lt_gov_says.html Nixon to announce more job cuts - Missouri http://stlouis.bizjournals.com/stlouis/stories/2009/10/05/daily68.html Grand Rapids City Mgr.: 'Significant' layoffs coming http://www.wzzm13.com/news/news_story.aspx?storyid=114516&catid=14# "The Dayton suburb of Moraine also is laying off 187 full-time, part-time and seasonal workers, about 43 percent of the total." http://www.fox59.com/news/sns-ap-oh--waterpark-economy,0,4754409.story City to eliminate 89 employee positions - Coral Gables, FL http://www.miamiherald.com/news/miami_dade/east/story/1270780.html

So where are we heading over the next 12 months? If they can't get the banks to lend and get the financial multipler moving again then the system will have a second leg down. "The Fed's purchases of assets to increase this base automatically created deposits that positively charged the money supply growth to a 15.2% six-month growth rate (Chart 2). If the economy were operating near full capacity, a healthy banking system would take these deposits and multiply them roughly nine times; that circumstance could be inflationary. Unfortunately the banking system is not healthy, as evidenced by the fact that we have closed 95 banks this year, more than the cumulative total of the past 15 years, and another 416 banks are on a list destined to become extinct. With consumers' asset prices falling so rapidly and banks increasingly afraid of failure, banks are more interested in collecting loans than in lending. So with fewer consumers now credit worthy, loan volumes are collapsing. As loans are paid off, deposits are destroyed, and the money multiplier that should stand at nine has gone to zero. This is evidenced by the fact that the six-month change in M2 has fallen to a 1% growth rate, meaning that monetary stimulus is on hold. Get set for negative GDP in 2010." http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2009/10/12/quarterly-review-and-outlook-third-quarter-2009.aspx