Tuesday, March 25, 2008

A change in the zeitgeist?

It is only one article "Thinking the unthinkable: what if it's not that bad" - but - could the tide already be shifting?

I don't think so - not yet. The stock market may have stabilized, but does that really mean anything for the overall economy? Housing news supposedly looks better? Who are we kidding - maybe month to month some things are improving - but these are still bad numbers overall and YOY they are TERRIBLE (DOWN 23.8% below February 2007 levels). There is a lot of inventory to work off, and many bad loans out there. It is going to take some time. Maybe the market panic is over - but the real work on the economy has hardly started.

Thursday, March 13, 2008

Carlyle Capital says unable reach deal with lenders

More humor:

"The credit angst is back," said Tim Condon, head of Asia research with investment bank ING."
How long was it gone for - one day?!? What is wrong with these people... can we at least get serious reporting on this mess?

Home loan demand drops as rates near 5-month high

It is really amazing that everything the Fed does, timing wise, seems to be because how the stock market is acting, and is actually having no effect on the real world. I know it isn't that simple, but it really seems to be. Check out this headline: Home loan demand drops as rates near 5-month high.

The cutting of interest rates was supposed to... lowere interest rates, right? Instead, real mortgage rates are going UP!

Some other recent headlines: Unemployment rate rises in 27 states in January, Consumer bankruptcies leap in February, Subprime crisis and poverty hand-in-hand: study. And yet many economists are still saying that technically there will not be a "real recession". At this point, who cares? The pain seems real enough. The country is convulsing in a leaderless vacuum.

Friday, March 7, 2008

Economy Lost 63,000 Jobs in February

The NY Times tells us today that "The economy shed 63,000 jobs in February... the fastest falloff in five years and the strongest evidence yet that the nation is headed toward — or may already be in — a recession."

What I can't get is how many news reports repeatedly call this kind of news "unexpected". What the hell were they expecting!

Sunday, March 2, 2008

Vacant Homes in U.S. Climb to Most Since 1970s With Ghost Towns

This is really bad on several levels, besides the stark economic one. These empty houses are going to attract squatters, drug users, vandalism, etc. These neighborhoods with just a few residents are going to be like cancerous growths on the immediate areas. And you can only imagine that eventually there will be people showing up to rip out windows and interior finishings, etc.

Feb. 29 (Bloomberg) -- When Quinn Cuthbertson looks around his new neighborhood in El Dorado Hills, California, he sees rows of empty homes and barren hillsides. A promised new school and a clubhouse haven't materialized.

Cuthbertson paid $460,000 for a four-bedroom house in this northern California town named for the mythical golden city. He now suspects his neighbor spent $45,000 less. Nearby, 87 of 98 Toll Brothers Inc. home sites are undeveloped.

Almost 200,000 newly constructed single-family homes are sitting empty in the U.S., the most since Commerce Department statistics began in 1973. Partially completed developments reduce revenue for cities and towns and hurt businesses, said Nicolas Retsinas, the director of Harvard University's Joint Center for Housing Studies. Rising foreclosures and falling property values may cut tax revenue by more than $6.6 billion for 10 states, including New York, California and Florida, the U.S. Conference of Mayors said in a November report.

Saturday, March 1, 2008

But seriously folks...

Welcome to March. I started out hot here - 20 posts in January, 13 in February - but the last one was almost 2 weeks ago. Personally I have just had too much work to deal with, and the economic news has been so bad that just trying to read it all was taking up most of my free time. But I digress.

What I want to mention seriously is this - I don't think most people, including economists and financial professionals, are really grasping what is potentially happening to the US and global economy. The word subprime got out there in the media and was latched on to by the general public. It seemed plausible, a bunch of people who shouldn't have bought houses did, and now they are in trouble. Oh, and the mortgages that they were supposed to be paying were actually securitized and sold off around the world as SAFE investments. Problem contained. Maybe 40 billion in losses. Okay 200 billion. Well, maybe 400 billion. Okay, shit, let's say a trillion - whatever. And really - I mean whatever. Because whatever paper losses the real estate crash produces in America and then ripple around the globe, that is only one part of the problem.

We have insolvent banks. We have soaring inflation. We have a huge national debt and trade imbalance. We have growing unemployment and falling wages. Folks - what we have is a mess. Recession? Hell yes. It is just the beginning.