December 8, 200915 yr The Dot Com boom was actually a boom in sales of fiber optic network cables, apparatus, and test equipment. Keithley in Solon, Ohio did quite well. Poorly-informed investors thought that the great gains applied to *everything and anything* associated with the internet. When long term capital gains taxes were cut, there was an incentive for long term investors to cash out and take some gains. That started a selling trend on the stock market and burst the Dot Com bubble.
December 8, 200915 yr Author Gallup: Holiday spending off 21% from 2008 "After a diffident start to the Christmas shopping season, consumers have turned pessimistic very pessimistic. According to the latest Gallup survey, sales have dropped 21% compared to 2008, a year that was itself a disaster:.." http://content.usatoday.com/topics/article/Organizations/Companies/Gallup/0ffJh2Jebz78E/1 This won't be good for the economic 'rebound'. I can only do so much people! Look at it as a last stand.
December 8, 200915 yr Gallup: Holiday spending off 21% from 2008 "After a diffident start to the Christmas shopping season, consumers have turned pessimistic — very pessimistic. According to the latest Gallup survey, sales have dropped 21% compared to 2008, a year that was itself a disaster:.." http://content.usatoday.com/topics/article/Organizations/Companies/Gallup/0ffJh2Jebz78E/1 This won't be good for the economic 'rebound'. [/quot[/url]e] I can only do so much people! [/quote] Look at it as a last stand. [/quote] Consider me King Leonidas. I will try my best to keep the stores afloat!
December 8, 200915 yr If we put the 7-14 million that are out of work into new jobs they still won't get loans to buy houses and cars anytime soon because their credit is now shot. The USA needs to bowl a 300 to get things back in order again.
December 9, 200915 yr Author This almost brought tears to my eyes. To hear someone that still has some influence finally tell it like it is. Hopefully more and more of this reality will be presented to Main Street. Ex-Fed chief Paul Volcker's 'telling' words on derivatives industry "The former US Federal Reserve chairman told an audience that included some of the world's most senior financiers that their industry's "single most important" contribution in the last 25 years has been automatic telling machines, which he said had at least proved "useful". Echoing FSA chairman Lord Turner's comments that banks are "socially useless", Mr Volcker told delegates who had been discussing how to rebuild the financial system to "wake up". He said credit default swaps and collateralised debt obligations had taken the economy "right to the brink of disaster" and added that the economy had grown at "greater rates of speed" during the 1960s without such products." http://www.telegraph.co.uk/finance/economics/6764177/Ex-Fed-chief-Paul-Volckers-telling-words-on-derivatives-industry.html
December 10, 200915 yr Author Initial jobless claims rise 17,000 to 474,000 Total jobless claims, including extended benefits, top 10 million "WASHINGTON (MarketWatch) -- The number of people filing claims for state unemployment benefits rose by 17,000 to a seasonally adjusted 474,000 in the week ending Dec. 5, while the total number of people claiming benefits of any kind topped 10 million, a sign of very sluggish hiring, the Labor Department reported Thursday." http://www.marketwatch.com/story/initial-jobless-claims-rise-17000-to-474000-2009-12-10-83100 Guess what, the economist were surprised by this. Now there is a shock. Also, the unadjusted umemployment numbers for the Department of Labor shows initial claims at 664,865, up 204,703 from the previous week.
December 11, 200915 yr Author Retail sales sparkle in November Signals economy on firmer footing "WASHINGTON (MarketWatch) -- Consumer spending was solid in November, suggesting that the economy is on sounder footing than previously thought." http://www.marketwatch.com/story/retail-sales-sparkle-in-november-2009-12-11 Glad to see numbers are up. But, I don't think its as good as the media would like us to think. The majority of the increase came from Gas. If you take away the gas increase you get about a .6% growth. It was also pointed out in the report that for the quarter retail sales are still below last year (which was terrible). It should be interesting to see the retailers report in January. I don't think they will reflect such strong sales.
December 11, 200915 yr Retail sales sparkle in November Signals economy on firmer footing "WASHINGTON (MarketWatch) -- Consumer spending was solid in November, suggesting that the economy is on sounder footing than previously thought." http://www.marketwatch.com/story/retail-sales-sparkle-in-november-2009-12-11 Glad to see numbers are up. But, I don't think its as good as the media would like us to think. The majority of the increase came from Gas. If you take away the gas increase you get about a .6% growth. It was also pointed out in the report that for the quarter retail sales are still below last year (which was terrible). It should be interesting to see the retailers report in January. I don't think they will reflect such strong sales. Me either considering what I've see in NY, DC, LA. Madison Ave and Rodeo Drive are ghost towns.
December 12, 200915 yr Labor Dept: Available Labor Rate Increases To 10.2% December 5, 2009 | Issue 45•49 WASHINGTON—In what is being touted by the Labor Department as extremely positive news, the nation's available labor rate has reached double digits for the first time in 26 years, bringing the total number of potentially employable Americans to an impressive 15.7 million. Enlarge Image Solis Hilda Solis briefs the press corps on the unprecedented level of untapped manpower. "This is such an exciting time to be an employer in America,"... http://www.theonion.com/content/news/labor_dept_available_labor_rate I laughed my ass off when I first read the article yesterday. It's so true. It's an employer's dreamland. I didn't even realize it was an article from The Onion. It's sad when you can't discern satirical news from real news, anymore.
December 14, 200915 yr Author Lenders put bad loans in subsidiaries "Some call the technique 'extend and pretend,' others 'delay and pray.' But by any name, the FDIC calls it fine." http://www.heraldtribune.com/article/20091214/ARTICLE/912141013/2413/BUSINESS?Title=Lenders-put-bad-loans-in-subsidiaries It creates a picture of fairies flying wildly around sprinkling pixie dust as fast as they can and chanting please make it so, please make it so.
December 16, 200915 yr Author Home construction rebounds from 6-month low "Construction of new homes rose to an annual rate of 574,000 during the month, 8.9% above the revised October rate of 527,000. The rate was still 12.4% below the 655,000 rate during November 2008." http://money.cnn.com/2009/12/16/real_estate/housing_starts_November/index.htm Lets be honest here. Any data that is below 2008 is not good. Since 2008 data was in the middle of the deepest recession in American history. Year over year the industry is still in free fall. But, I give the media and the industry an A for spin.
December 16, 200915 yr Home construction rebounds from 6-month low "Construction of new homes rose to an annual rate of 574,000 during the month, 8.9% above the revised October rate of 527,000. The rate was still 12.4% below the 655,000 rate during November 2008." http://money.cnn.com/2009/12/16/real_estate/housing_starts_November/index.htm Lets be honest here. Any data that is below 2008 is not good. Since 2008 data was in the middle of the deepest recession in American history. Year over year the industry is still in free fall. But, I give the media and the industry an A for spin. The bigger issues is that we are adding homes, to an already bloated number product market. There are people that cant even get mortgages and the government is subsidizing this?! WTH!! People are not spending. Prices of still falling. Unemployment is still high. Individual credit is shot!
December 16, 200915 yr Author Home construction rebounds from 6-month low "Construction of new homes rose to an annual rate of 574,000 during the month, 8.9% above the revised October rate of 527,000. The rate was still 12.4% below the 655,000 rate during November 2008." http://money.cnn.com/2009/12/16/real_estate/housing_starts_November/index.htm Lets be honest here. Any data that is below 2008 is not good. Since 2008 data was in the middle of the deepest recession in American history. Year over year the industry is still in free fall. But, I give the media and the industry an A for spin. The bigger issues is that we are adding homes, to an already bloated number product market. There are people that cant even get mortgages and the government is subsidizing this?! WTH!! People are not spending. Prices of still falling. Unemployment is still high. Individual credit is shot! Sing it to the choir.
December 16, 200915 yr Author Home buyers need good credit score even with 20% down payment "But in this new era of tight credit, having a big down payment no longer guarantees you’ll qualify for a mortgage. Starting this week, mortgage finance giant Fannie Mae will require borrowers with a 20% down payment to have a credit score of at least 620. Previously, the cutoff was 580." http://www.usatoday.com/money/perfi/columnist/block/2009-12-15-ym15_ST_N.htm If they stick to this, this will drive another knife into the housing system. I think this is what we need to someday get back to a solid housing market, but the pain will be even more severe until we reach that point. U.S. gave up billions in tax money in deal for Citigroup's bailout repayment "The federal government quietly agreed to forgo billions of dollars in potential tax payments from Citigroup as part of the deal announced this week to wean the company from the massive taxpayer bailout that helped it survive the financial crisis." http://www.washingtonpost.com/wp-dyn/content/article/2009/12/15/AR2009121504534.html?hpid=topnews The backdoor fun just keeps on going and going and going and so does the corruption.
December 16, 200915 yr ^because in america we've become so clueless we don't know how to function if we aren't building "new homes" and "retail centers". rebuilding isn't in our vocabulary.
December 18, 200915 yr Author Harvard Swaps Are So Toxic Even Summers Won’t Explain (Update3) "Dec. 18 (Bloomberg) -- Anne Phillips Ogilby, a bond attorney at one of Boston’s oldest law firms, on Oct. 31 last year relayed an urgent message from Harvard University, her client and alma mater, to the head of a Massachusetts state agency that sells bonds. The oldest and richest academic institution in America needed help getting a loan right away." http://www.bloomberg.com/apps/news?pid=20601087&sid=axcFIC0N68k0 A lot of retirement funds, investment funds, university etc... got/are caught in this ponzi scheme create by Wall Street and the big boys.
December 18, 200915 yr thx gawker! Perhaps an Amusing Dog Photo Will Take Your Mind Off Unceasing Economic Doom ...Here is exactly how broke the city of Sacramento is: They have rolling brownouts of their fire stations. Then they hope there is not a fire there, by the station that is browned out. That would suck!... http://gawker.com/5429824/perhaps-an-amusing-dog-photo-will-take-your-mind-off-unceasing-economic-doom
December 20, 200915 yr Lets be honest here. Any data that is below 2008 is not good. Since 2008 data was in the middle of the deepest recession in American history Actually, no. The economy in general was moving into recession in 2008, with an accelerating slide in the third and fourth quarters. 2009 and probably early 2010 is probably the "middle". 2008 was the "start".
December 21, 200915 yr Author Where is this recession that you speak of? It is in the millions upon millions of Americans that are unemployed. Ohio jobless rate rises in November http://www.bizjournals.com/cincinnati/stories/2009/12/14/daily53.html It is in the trillions that have been needed to keep our financial system from a depression. It is in the construction industry that has only begun to see huge defaults in the commercial sector. It is in the housing sector that needs taxpayer money to keep sales from drop even more. It is in biggest foreclosure crisis since the great depression. It is in state and local government budgets that in many places are nearing default levels. Including Ohio. It is in the growing concern that major nations in Europe and Asia may default on their national debt. I know to some these are small, minor issues. But for those that are trying to insure shelter for themselves or their family (tent cities are become quiet popular around the country), are on food stamps and living on unemployment checks, its seems a little larger. Unfortunately, those having these issue continue to grow and are at levels not seen since the great depression. Other than that you are right, what recession?
December 23, 200915 yr Author Full Housing Crisis Effect Yet To Be Felt: Economist "I think we haven't seen the full effect of (the housing crisis) yet, because the servicers are not foreclosing that fast on homeowners… they realized they can leave these people in houses for a while, not paying," Geanakoplos told "Squawk Box." "The servicers don't own the mortgages, they have no interest in cutting down the principals," he explained." http://www.cnbc.com/id/34571747 Add this to the shadow inventory of homes the banks do own but are not putting on the market and the massive resets that will start in 2010 for ARMs and I/O loaned homes and you have a lot more pain/loses still to come.
December 23, 200915 yr Where is this recession that you speak of? It is in the millions upon millions of Americans that are unemployed. Ohio jobless rate rises in November http://www.bizjournals.com/cincinnati/stories/2009/12/14/daily53.html It is in the trillions that have been needed to keep our financial system from a depression. It is in the construction industry that has only begun to see huge defaults in the commercial sector. It is in the housing sector that needs taxpayer money to keep sales from drop even more. It is in biggest foreclosure crisis since the great depression. It is in state and local government budgets that in many places are nearing default levels. Including Ohio. It is in the growing concern that major nations in Europe and Asia may default on their national debt. I know to some these are small, minor issues. But for those that are trying to insure shelter for themselves or their family (tent cities are become quiet popular around the country), are on food stamps and living on unemployment checks, its seems a little larger. Unfortunately, those having these issue continue to grow and are at levels not seen since the great depression. Other than that you are right, what recession? You two might be arguing apples and oranges. Perhaps Cincinnatus' question was operating under a traditional definition of a recession as a "business cycle retraction" Things are bad, no doubt. But if they are better then they were 6 months ago, we are not currently "in" a recession. The "end" of a recession is not when things get back to the way they were. The "end" is when the economic "slowdown" ends and we either reach the point of stagnation or growth. That said, I have no opinion on whether we are currently in a recession. I leave that analysis to more boring people.
December 23, 200915 yr Author Where is this recession that you speak of? It is in the millions upon millions of Americans that are unemployed. Ohio jobless rate rises in November http://www.bizjournals.com/cincinnati/stories/2009/12/14/daily53.html It is in the trillions that have been needed to keep our financial system from a depression. It is in the construction industry that has only begun to see huge defaults in the commercial sector. It is in the housing sector that needs taxpayer money to keep sales from drop even more. It is in biggest foreclosure crisis since the great depression. It is in state and local government budgets that in many places are nearing default levels. Including Ohio. It is in the growing concern that major nations in Europe and Asia may default on their national debt. I know to some these are small, minor issues. But for those that are trying to insure shelter for themselves or their family (tent cities are become quiet popular around the country), are on food stamps and living on unemployment checks, its seems a little larger. Unfortunately, those having these issue continue to grow and are at levels not seen since the great depression. Other than that you are right, what recession? You two might be arguing apples and oranges. Perhaps Cincinnatus' question was operating under a traditional definition of a recession as a "business cycle retraction" Things are bad, no doubt. But if they are better then they were 6 months ago, we are not currently "in" a recession. The "end" of a recession is not when things get back to the way they were. The "end" is when the economic "slowdown" ends and we either reach the point of stagnation or growth. That said, I have no opinion on whether we are currently in a recession. I leave that analysis to more boring people. Actually this exchange is more about a little 3 year pissing match on this subject. He shows up in this thread every once in a while, makes a little comment, then I or someone else response and life goes on. :shoot: The official determination if a recession is over will come from National Bureau of Economic Research(NBER). They have said they will not make any determination until probably mid 2010. They are concerned that we may only be seeing a short one or two quarter GDP bump from artifical government stimulus and not real long term economic growth. If you look at previous recessions many of them have positive GDP data for certain quarters, but the entire event was still determined to be a recession. I hope we are getting better, I am just not convinced it from the real economy. I think its mostly on the back of taxpayer money (stimulus) and not from the 'real' economy. I am believing more and more we have decide to take the Japanese way out. Slowly bleed the system for a decade or more to avoid the more severe, short term pain. I guess if the second biggest economy in the world can be in its second lost decade, then why not us?
December 23, 200915 yr Pissing match? That isn't the right term for our discussions RE: a recession. Ragerunner, you are too uptight and take things way out of control.
December 23, 200915 yr Author Pissing match? That isn't the right term for our discussions RE: a recession. Ragerunner, you are too uptight and take things way out of control. I thought the little gun guy would make you realize I thought the exchange was no big deal? That aside, Merry Christmas Cincinnatus and I hope you have a great new year.
December 23, 200915 yr The Recession in Ohio so far…in employment numbers. This is sort of a wrap for the year as the next important numbers wont be available until the end of February. As in the past I don’t pay attention to the unemployment rate, but instead work backwards by seeing how many jobs there are, based on BLS statistics for Ohio. The long view Then a month by month comparison to pop out the trends. As you can see the employment trend seems to have bottomed out, or is following the 2006 and 2007 pattern of flattening within a range in the late summer and fall. This is a good sign. It’s good because we are not dropping like in 2008. However, we can also anticipate that big seasonal drop in the winter. After that, an increase in employment during the winter and spring to a high in the early summer. If we have a “typical” drop as in 2006 and 2007 we will still be in the hole during 2010 and into 2011 for unemployment. How much depends on how the economy produces jobs during the winter/spring/early summer run-up. Or if we have a shallow drop after December. This projection shows two scenarios. Even the better one doesn’t improve the situation much, but we’d be in better shape to start climbing out of the employment hole in 2011 Note that this is employment for Ohio. I recognize that there has been reported GDP growth at the national level. This may or may not translate to employment growth in Ohio, and I think employment might lag the expansion somewhat. On edit, for the big national picture, the Brookings Metro Monitor reports on the recovery: Nationwide, the recession is over—at least in the view of most economists in light of third quarter 2009 indicators. They revealed a real U.S. gross domestic product (GDP) increasing at a 2.8 percent annual rate, after four consecutive quarters of contraction. Most interpreted that rate of output growth, along with other signals such as increasing housing prices, as indication that the economic recovery is underway. Yet the recovery seems fragile. The output increase may have resulted largely from the replenishment of manufacturing inventories and from temporary federal policies: the “cash-for-clunkers” program (already over), the first-time homebuyer tax credit (now extended through April 2010), and the American Recovery and Reinvestment Act’s economic stimulus. As the effects of these policies recede, the recovery could slow or give way to yet another recession or a prolonged period of economic stagnation. Real recovery in the labor market, moreover, remains elusive.... ....more at the link.
December 24, 200915 yr The biggest tweak to those numbers will come via the abnormal seasonal spike due to the census higher anyone with a pulse.
December 30, 200915 yr Author Speaking of date. Here is some date that I came across in another forum. It makes you realized the underlining economics are not improving like the media and FEDs would like people to think. Petroleum Distillates Distribution Historic Annual Levels Off Peak - anything below 0.8% growth is recessionary to previous periods historically: 1993 ….. 3.0% 1994 ….. 1.9% 1995 ….. 0.4% 1996 ….. 2.2% 1997 ….. 2.7% 1998 ….. 1.0% 1999 ….. 2.4% 2000 ….. 2.2% 2001 ….. -0.1% Last acknowledged recession 2002 ….. -0.1% Ibid 2003 ….. 2.0% 2004 ….. 1.9% 2005 ….. 1.6% 2006 ….. 0.6% 2007 ….. 0.5% 2008 ….. -4.2% 2009 YTD ….. -10.4% Durable Goods Shipments and New Orders YTD Comparisons Year Category ….. Y/Y % Change 1993 Shipped ….. 0.0% 1994 Shipped ….. 9.9% 1995 Shipped ….. 8.1% 1996 Shipped ….. 4.0% 1997 Shipped ….. 8.4% 1998 Shipped ….. 4.0% 1999 Shipped ….. 4.4% 2000 Shipped ….. 2.4% 2001 Shipped ….. -8.2% Last acknowledged recession 2002 Shipped ….. -2.3% Ibid 2003 Shipped ….. 0.3% 2004 Shipped ….. 5.5% 2005 Shipped ….. 6.9% 2006 Shipped ….. 6.2% 2007 Shipped ….. 0.3% 2008 Shipped ….. -2.1% 2009 Shipped ….. -17.0% 1993 New ….. 0.0% 1994 New ….. 11.7% 1995 New ….. 7.3% 1996 New ….. 5.7% 1997 New ….. 7.3% 1998 New ….. 2.2% 1999 New ….. 4.9% 2000 New ….. 4.1% 2001 New ….. -10.7% Last acknowledged recession 2002 New ….. -3.2% Ibid 2003 New ….. 3.3% 2004 New ….. 5.7% 2005 New ….. 9.3% 2006 New ….. 6.9% 2007 New ….. 1.1% 2008 New ….. -4.3% 2009 New ….. -21.7% Federal Budget Performance YTD Year ….. Rcpts (Millions) Outlays (Millions) Deficit (Millions) Deficit % 1999 YTD ….. 233,952 ….. 283,531 ….. 49,579 ….. 17.5% 2000 YTD ….. 242,410 ….. 296,712 ….. 54,302 ….. 18.3% 2001 YTD ….. 260,777 ….. 295,787 ….. 35,011 ….. 11.8% 2002 YTD ….. 278,396 ….. 342,048 ….. 63,652 ….. 18.6% 2003 YTD ….. 244,971 ….. 358,062 ….. 113,091 ….. 31.6% 2004 YTD ….. 254,047 ….. 366,564 ….. 112,517 ….. 30.7% 2005 YTD ….. 271,447 ….. 386,621 ….. 115,174 ….. 29.8% 2006 YTD ….. 288,328 ….. 418,617 ….. 130,290 ….. 31.1% 2007 YTD ….. 313,559 ….. 435,921 ….. 122,363 ….. 28.1% 2008 YTD ….. 329,230 ….. 483,025 ….. 153,795 ….. 31.8% 2009 YTD ….. 309,630 ….. 711,203 ….. 401,574 ….. 56.5% TARP $ 2010 YTD ….. 268,916 ….. 565,569 ….. 296,653 ….. 52.5% No TARP $ Unemployment Filings YTD 2009 ……. 2008 ……. 2007 ……. 2006 ……. 2005 28,771,747 .. 20,905,776 .. 16,393,559 .. 15,740,398 .. 16,752,987 Federal Food Stamp Data (SNAP) Month .. People .. Households .. $/Total Month .. $/Person .. $/Household Sep-07 .. 26,929,496 .. 12,029,068 .. 2,578,932,497 .. 95.77 .. 214.39 Sep-08 .. 31,586,923 .. 14,087,387 .. 3,365,488,472 .. 106.55 .. 238.90 Sep-09 .. 37,175,938 .. 16,890,668 .. 4,937,365,687 .. 132.81 .. 292.31 http://www.marketwatch.com/story/us-stocks-open-lower-as-investors-avoid-risk-2009-12-30
December 30, 200915 yr Why does the media want us to falsely think the economy is improving? Is there a conspiracy at play between the FEDs and the media we should all be aware of? Where do they meet and plot such a thing?
December 30, 200915 yr Author Why does the media want us to falsely think the economy is improving? Is there a conspiracy at play between the FEDs and the media we should all be aware of? Where do they meet and plot such a thing? Part of the attempt to turn the economic stituation around is to convince Main Street things are really improving (consumer sentiment is very important in a consumer driven economy). This thread is full of these PR attempts. They started by selling hard the concept that subprime was contained, and used the media system on a daily basis to try and convince someone it would be fine (of course it turned out to be anything but contained). Then we moved to CDOs are no problem, housing prices will not drop, and even telling Main Street the banking industry had no problems, etc. (We now see how those things are working out.) Now we are being feed on a daily bases that ARMs, I/O and commercial defaults will be contained. Is their a conspiracy, not in my opinion, is there a strong PR movement to paint a rosier picture than what exists, YES!! I also think part of the problem is the media has become lazy. They cut and past the press releases from RE industry, banking industry, the FEDs and do very little questioning. It would be nice to see a reporter on a major network asked Tim or Ben, how are the ARMs, I/O resets and commercial defaults going to be contained?
December 30, 200915 yr I just don't buy it. The powers that be are too busy covering up UFO landings and hatching new plans to bomb brown people to spend the time necessary to carry out such an intentionally misleading nationwide scheme.
December 31, 200915 yr The biggest tweak to those numbers will come via the abnormal seasonal spike due to the census higher anyone with a pulse. I won't be picking that up since I'm screening for just the private sector employment. Which might be picking up on jobs generated by the stimulus. I just don't buy it. The powers that be are too busy covering up UFO landings and hatching new plans to bomb brown people to spend the time necessary to carry out such an intentionally misleading nationwide scheme. ...I'd like to know the source for those durable goods numbers as that is a good indicator.
January 4, 201015 yr Author The biggest tweak to those numbers will come via the abnormal seasonal spike due to the census higher anyone with a pulse. I won't be picking that up since I'm screening for just the private sector employment. Which might be picking up on jobs generated by the stimulus. I just don't buy it. The powers that be are too busy covering up UFO landings and hatching new plans to bomb brown people to spend the time necessary to carry out such an intentionally misleading nationwide scheme. ...I'd like to know the source for those durable goods numbers as that is a good indicator. I got that data from another blog site. But, here is some info from the New York Fed. http://www.newyorkfed.org/education/bythe.html#durgoods
January 4, 201015 yr Author Fed economist calls for US government MBS guarantees "* Fed economist wants asset-backed securities guaranteed * Would avert Fannie Mae, Freddie Mac collapse, he argues * Suggests guarantees similar to FDIC's structure * Comments come as fate of Fannie Mae/Freddie Mac debated" "ATLANTA, Jan 3 (Reuters) - A U.S. Federal Reserve economist called on Sunday for the creation of a new federal institution to backstop losses on asset-backed securities to prevent any future collapse of mortgage finance giants Fannie Mae (FNM.N) and Freddie Mac (FRE.N)." http://www.reuters.com/article/idUSN0320287220100103?type=marketsNews The concept of risk is simply being removed from the system as the taxpayer is being asked to be the one to bailout all things. Including bad home investments.
January 4, 201015 yr Author Speaking of Frannie and Freddie. The system is broke, in more ways than one. The Biggest Losers Behind the Christmas Eve taxpayer massacre at Fannie and Freddie. "Even better for the political class, much of this is being done off the government books. The White House budget office still doesn't fully account for Fannie and Freddie's spending as federal outlays, though Washington controls the companies. Nor does it include as part of the national debt the $5 trillion in mortgages—half the market—that the companies either own or guarantee. The companies have become Washington's ultimate off-balance-sheet vehicles, the political equivalent of Citigroup's SIVs, that are being used to subsidize and nationalize mortgage finance." http://online.wsj.com/article/SB10001424052748704152804574628350980043082.html?mod=WSJ_hpp_sections_opinion
January 5, 201015 yr Author Are we taping future buyers today, leaving tomorrow with a smaller and smaller buying pool? Sales were up year over year because of the taxpayer handout. Without the taxpayer hand out sales would be below 2008. Pending home sales index plunges 16% Expiration of federal subsidy drives sales lower, NAR says "The fact that pending home sales are comfortably above year-ago levels shows the market has gained sufficient momentum on its own," said Lawrence Yun, chief economist for the lobbying group. "We expect another surge in the spring." http://www.marketwatch.com/story/pending-home-sales-index-plunges-16-2010-01-05 The NAR has and is full of it. What sad leadership this organization provides. The market has gained NO momentum on its own. The taxpayer ($50 billion and growing) has had to provide the momentum. Take what this group and its leaders have to say with a grain of salt. Below is a nice sample of how 'WRONG' they have been. I will give this organization one thing, they are consistent with being wrong. Great NAR Quotes (in chronological order): 08/2005: "All of the doom and gloom forecasts of a housing debacle are not only irresponsible, but also downright wrong." David Lereah, National Association of Realtors 04/2006: “We can expect a historically strong housing market moving forward, earmarked by generally balanced conditions across the country and fairly stable levels of home sales with some month-to-month fluctuations.", NAR 07/2006: "Right now we are on course for a soft-landing in housing.", NAR 10/2006: "The worst is behind us, as far as a market correction. This is likely the trough for sales. When consumers recognize that home sales are stabilizing, we'll see the buyers who've been on the sidelines get back into the market.", NAR. 12/2006: "At least the bottom appears to have already occurred. It looks like figures will be improving.", NAR. 01/2007: "It appears we have established a bottom" David Lereah, NAR Chief Economist. 07/2007: "Home sales will probably fluctuate in a narrow range in the short run, but gradually trend upward with improving activity by the end of the year.", NAR 11/2007: "I don't anticipate any further major sales declines," Yun said. However, the NAR didn't anticipate the sales declines of the past two years, and it's been predicting a bottom nearly every month since early 2006. (from Marketwatch) 02/2008: Reuters reports that "The NAR's chief economist, Lawrence Yun, said the market is 'scratching the bottom,' with sales holding at a deflated rate of around 5 million units for the past several months." 07/2008: “There are signs of pent up demand …. I think we are very near to the end of the housing downturn,” Yun said. 04/2009: "We are close to the bottom, says Lawrence Yun, chief economist for the National Association of Realtors. Once home sales begin to rise that could boost home buying confidence and get others off the sidelines." 04/2009: The "worst may be over" in parts of the West, said Lawrence Yun, NAR Chief Economist. Will their latest quote(s) be added to this list in the future? I think we have a good chance. The truth to all of this is the real estate market needs to fully correct itself. Prices must come in line with incomes and excess inventory must be consumed or removed from the market. This is and will continue to be very painful for the economy and will take years to work through (since we are taking the Japanese approach to this problem - i.e. lost decades).
January 10, 201015 yr An exodus of discouraged workers from the job market kept the U.S. unemployment rate from climbing above 10 percent in December, economists said. Had the labor force not decreased by 661,000 last month, the jobless rate would have been 10.4 percent, according to economists including David Rosenberg at Gluskin Sheff & Associates in Toronto and Harm Bandholz at UniCredit Research in New York. Source: Bloomberg Details a the link.
January 11, 201015 yr It just keeps getting worse for much of the US. Stockton, California Is Foreclosureville, USA, Has One Of The Worst Foreclosure Rates In The United Sates By Evelyn Nieves, AP, January 10, 2010 STOCKTON, Calif. — Stockton hardly looks like the most miserable city in the country. But the statistics and stories over the last two years make a case that it is: Since the housing crisis began, this inland port city 80 miles east of San Francisco has had one of the worst foreclosure rates in the country – for most of the time, the worst.
January 11, 201015 yr Author A quick look at the average price of homes in Ohio from the peak to today. 2005 2006 2007 2008 2009 Cincy $183,277 $173,331 $174,106 $163,874 $150,563 Columbus $172,834 $167,371 $173,441 $165,377 $157,352 Cleveland Area $171,229 $164,761 $164,761 $141,523 $118,903 Dayton $132,524 $129,322 $134,419 $126,139 $122,123 Average Price lose per area: Cincy ($32,714), Columbus ($15,482), Cleveland Area ($52,326), Dayton ($10,401) http://www.ohiorealtors.org/news/stats/index.aspx I think these numbers will continue to drop year over year in 2010 as the foreclosures continue and the ARM and I/O resets begin in force. I do think we may start seeing more loses and foreclosures in suburbia (as well as the urban condo market) and less in the urban city area since most ARMs and I/O where used for higher income individuals and more expense homes/condos.
January 11, 201015 yr Author It just keeps getting worse for much of the US. Stockton, California Is Foreclosureville, USA, Has One Of The Worst Foreclosure Rates In The United Sates By Evelyn Nieves, AP, January 10, 2010 STOCKTON, Calif. Stockton hardly looks like the most miserable city in the country. But the statistics and stories over the last two years make a case that it is: Since the housing crisis began, this inland port city 80 miles east of San Francisco has had one of the worst foreclosure rates in the country for most of the time, the worst. Add in their crime problems and its one 'happening' city.
January 11, 201015 yr A quick look at the average price of homes in Ohio from the peak to today. 2005 2006 2007 2008 2009 Cincy $183,277 $173,331 $174,106 $163,874 $150,563 Columbus $172,834 $167,371 $173,441 $165,377 $157,352 Cleveland Area $171,229 $164,761 $164,761 $141,523 $118,903 Dayton $132,524 $129,322 $134,419 $126,139 $122,123 Average Price lose per area: Cincy ($32,714), Columbus ($15,482), Cleveland Area ($52,326), Dayton ($10,401) http://www.ohiorealtors.org/news/stats/index.aspx I think these numbers will continue to drop year over year in 2010 as the foreclosures continue and the ARM and I/O resets begin in force. I do think we may start seeing more loses and foreclosures in suburbia (as well as the urban condo market) and less in the urban city area since most ARMs and I/O where used for higher income individuals and more expense homes/condos. Wait. It's only a loss if it's sold at the lower price. Who in their right mind would sale now is beyond me.
January 11, 201015 yr Author A quick look at the average price of homes in Ohio from the peak to today. 2005 2006 2007 2008 2009 Cincy $183,277 $173,331 $174,106 $163,874 $150,563 Columbus $172,834 $167,371 $173,441 $165,377 $157,352 Cleveland Area $171,229 $164,761 $164,761 $141,523 $118,903 Dayton $132,524 $129,322 $134,419 $126,139 $122,123 Average Price lose per area: Cincy ($32,714), Columbus ($15,482), Cleveland Area ($52,326), Dayton ($10,401) http://www.ohiorealtors.org/news/stats/index.aspx I think these numbers will continue to drop year over year in 2010 as the foreclosures continue and the ARM and I/O resets begin in force. I do think we may start seeing more loses and foreclosures in suburbia (as well as the urban condo market) and less in the urban city area since most ARMs and I/O where used for higher income individuals and more expense homes/condos. Wait. It's only a loss if it's sold at the lower price. Who in their right mind would sale now is beyond me. All those that are unemployed and can't find employment to cover their cost, those that need to move due to jobs, all those that can't afford what they bought and those that are having their rates reset. That covers a lot of homes and condos and will cover even more over the next few years.
January 14, 201015 yr Author But, but, but... up until today everyone from Wall Street on down was telling people that sales were strong and would be positive for the holidays. Another prediction bits the dust. Retail sales drop 0.3% on widespread declines For 2009, sales sank a record 6.2% to $4.14 trillion "WASHINGTON (MarketWatch) - U.S. retail sales fell a seasonally adjusted 0.3% in December on widespread weakness across different kinds of stores, the Commerce Department estimated Thursday. The decline was unexpected, as economists surveyed by MarketWatch were forecasting a 0.5% gain." http://www.marketwatch.com/story/retail-sales-drop-03-on-widespread-declines-2010-01-14 Jobless claims jump in latest week; trend positive "WASHINGTON (MarketWatch) -- First-time jobless claims rose last week by the largest amount in five weeks, surprising economists who had expected a decline." http://www.marketwatch.com/story/jobless-claims-up-in-latest-week-trend-positive-2010-01-14 Man, the economist are on one impressive streak.
January 14, 201015 yr Author Retail sales drops should come as no surprise. There are still an above average amount of people who are unemployed or under-employed. Those who still are employed, even those in safe positions making comfortable salaries, have started to cut back. Though the country still lives a lifestyle of excess many are starting to be a little more frugal and sensible with their finances. Businesses will have to adjust their operating plans accordingly. The increase in jobless claims should have been no surprise either. It happens after every holiday. Temporary, seasonal workers get let go. Part-time workers either get cut back or let go b/c of the post-holiday slow down. Some impending layoffs also don't go into effect until the end of the year. So true, but it was a surprise to the Wall Street economist. What has become amazing in all of this is they apparently don't see the obvious like you do.
January 15, 201015 yr Retail sales drops should come as no surprise. There are still an above average amount of people who are unemployed or under-employed. Those who still are employed, even those in safe positions making comfortable salaries, have started to cut back. Though the country still lives a lifestyle of excess many are starting to be a little more frugal and sensible with their finances. Businesses will have to adjust their operating plans accordingly. The increase in jobless claims should have been no surprise either. It happens after every holiday. Temporary, seasonal workers get let go. Part-time workers either get cut back or let go b/c of the post-holiday slow down. Some impending layoffs also don't go into effect until the end of the year. I was about to post the same thing before I read your post. Happens every year, same time.
January 15, 201015 yr Author Retail sales drops should come as no surprise. There are still an above average amount of people who are unemployed or under-employed. Those who still are employed, even those in safe positions making comfortable salaries, have started to cut back. Though the country still lives a lifestyle of excess many are starting to be a little more frugal and sensible with their finances. Businesses will have to adjust their operating plans accordingly. The increase in jobless claims should have been no surprise either. It happens after every holiday. Temporary, seasonal workers get let go. Part-time workers either get cut back or let go b/c of the post-holiday slow down. Some impending layoffs also don't go into effect until the end of the year. I was about to post the same thing before I read your post. Happens every year, same time. There usually is a drop in workforce after the holidays. But, to have a retail sales drop from November to December (with the holidays) is not normal. That is why the economist were predicting a nice up tick, not a lose. Johio is right, they should have know it was coming because of all the unemployed, underemployed, decreases in incomes and foreclosures. The economy is still in serious pain, expecting people to go out and spend, spend, spend is not in the cards at this time.
January 15, 201015 yr ^ as to the retail sales drop being a "surprise" to WS analyst, I have this to say... The analysts got caught looking at the trees and not the forest. They saw individual companies reporting better than expected results, but failed to realize that the # of companies in the sector was declining. You have a situation of concentrating sales in fewer companies. When Circuit City went out of business, some of that sales volume switched to Best Buy and Walmart. Those companies reported sales increase. Unfortunately, the overall volume dropped. Concentration of sales hid that from lazy analysts. It's like the analysts measured the diameter of the 3 nearest large trees in a forest, reported that they grew over the course of the year, and declared that the overall amount of lumber in the forest grew 0.5%. What the analyst failed to see is that 5% of the trees in the back were cut down.
January 15, 201015 yr Author This is only the tip of the iceberg. The commercial defaults have only started their engines. These defaults are going to grow significantly over the next few years. These are some unattractive numbers considering a lot of lenders have been 'postponing' moving foward on a lot of the loans that are already in default. Cincinnati’s real estate problems threaten recovery "Cincinnati’s commercial real estate owners were in default on $306 million in securitized loans at the end of 2009, boosting the region’s default rate to nearly 9 percent. New figures from the New York-based research firm Trepp show Cincinnati’s default rate is 284 basis points higher than the national average of 6.1 percent. Cincinnati ranks 28th in the country in the value of loans in default. Eight cities have more than $1 billion in delinquencies." http://www.bizjournals.com/cincinnati/stories/2010/01/18/story1.html?b=1263790800^2727911
January 15, 201015 yr Author ^ as to the retail sales drop being a "surprise" to WS analyst, I have this to say... The analysts got caught looking at the trees and not the forest. They saw individual companies reporting better than expected results, but failed to realize that the # of companies in the sector was declining. You have a situation of concentrating sales in fewer companies. When Circuit City went out of business, some of that sales volume switched to Best Buy and Walmart. Those companies reported sales increase. Unfortunately, the overall volume dropped. Concentration of sales hid that from lazy analysts. It's like the analysts measured the diameter of the 3 nearest large trees in a forest, reported that they grew over the course of the year, and declared that the overall amount of lumber in the forest grew 0.5%. What the analyst failed to see is that 5% of the trees in the back were cut down. Agreed, I think a lot of the analyst thought that the money that was flowing to those, now gone retail companies, would simply be diverted to others. (Circuit City to Best Buy, Frys and Wal-Mart.) The real truth of the matter is, there is not as much money on Main Street today as there was 2 years ago. Trillions have been wiped out during this recession and I think Trillions more is still to come.
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