{"id":192199,"date":"2009-04-29T17:23:00","date_gmt":"2009-04-29T22:23:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2009\/04\/29\/economics-update-232\/"},"modified":"2009-04-29T17:23:00","modified_gmt":"2009-04-29T22:23:00","slug":"economics-update-232","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2009\/04\/29\/economics-update-232\/","title":{"rendered":"Economics Update"},"content":{"rendered":"
Banks’ turnaround<\/a><\/div>\n

Great Googly Moogly, the new GDP numbers are in for the first quarter, and they show that the economy contracted at a 6.1% annual rate<\/a>, which follows a 6.3% rate for Q4 of 2008, the worst contraction for a 6 month period in 50 years.<\/p>\n

There is a bright spot, however. As Calculated Risk notes<\/a>, is that sectors that have been traditionally leading are doing better than those that typically lag a recession, which might<\/span> point toward a bit of a moderation.<\/p>\n

At least we are not Lithuania, whose economy contracted by 12%<\/a> year over year.<\/p>\n

It’s news like this that makes the Federal Open Market Committee (FOMC) statement<\/a> minor economic news.<\/p>\n

Basically, they said, “We think that it’s getting worse more slowly, and we can’t cut rates any more, but we will keep shoveling money out the door, and we are<\/span> watching inflation, really we are.”<\/p>\n

If that means anything, it’s beyond me, but it appears that the
Fed’s aggressive asset purchase program will not be further expanded<\/a>, which implies that they think that we are at\/near bottom.<\/p>\n

In other banking news, remember yesterday’s stress test update<\/a>, which fingered BoA and Citi?<\/p>\n

Well, there are now reports that at least 6<\/span> of the 19 banking giants are under capitalized<\/a>, hoocoodanode?<\/p>\n

Meanwhile, in real estate, we have mortgage applications falling by 18%<\/a>, and it appears that there is a <\/span>tidal wave of troubled commercial mortgages on the horizon<\/a>, with, “volume of commercial mortgages at risk of default has quintupled since the beginning of 2008.”<\/p>\n

One of the interesting things here is that commercial real estate loans are generally short term, 5 years or so, so people who have to refinance into the teeth of the recession and credit crisis may be up a certain creek without a paddle, even though they would be otherwise solvent.<\/p>\n

Meanwhile, oil rose<\/a> on the slightly positive Fed statement and reports of a drop in gasoline inventories, while the dollar fell<\/a> on on optimism about the world economy.<\/p>\n","protected":false},"excerpt":{"rendered":"

Banks’ turnaround Great Googly Moogly, the new GDP numbers are in for the first quarter, and they show that the economy contracted at a 6.1% annual rate, which follows a 6.3% rate for Q4 of 2008, the worst contraction for a 6 month period in 50 years. There is a bright spot, however. As Calculated …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[973,984,1004,1088,1089,985],"tags":[],"class_list":["post-192199","post","type-post","status-publish","format-standard","hentry","category-economy","category-europe","category-finance","category-real-estate","category-recession","category-regulation"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/192199"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=192199"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/192199\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=192199"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=192199"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=192199"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}