{"id":195093,"date":"2008-07-30T17:42:00","date_gmt":"2008-07-30T22:42:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2008\/07\/30\/economics-update-404\/"},"modified":"2008-07-30T17:42:00","modified_gmt":"2008-07-30T22:42:00","slug":"economics-update-404","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2008\/07\/30\/economics-update-404\/","title":{"rendered":"Economics Update"},"content":{"rendered":"

Well, you know that the economy sucks when lawyers are being laid off<\/a>, in this case at Cadwalader, Wickersham*<\/sup> & Taft because the 70% decline in the commercial real estate market<\/a> had created redundant personnel.<\/p>\n

When you consider the fact that Citi will likely write-down its CDOs to the tune of $8 billion<\/a>, following Merrill Lynch’s $5.7 B writedown of its CDOs, it’s not surprising nothing is moving.<\/p>\n

Citi currently values its CDOs at 53\u00a2 on the dollar, but Merrill sold at somewhere between 22\u00a2 and 5.5\u00a2 on the dollar (see this post<\/a>), so this will be ugly for them, and for a lot<\/span> of other financial institutions.<\/p>\n

Some people are predicting writedowns of over $100 billion for Fannie Mae and Freddy Mac<\/a>, but it could be worse if there is a rush to the exits.<\/p>\n

I think that it’s also pretty likely that the credit crunch had a lot to do with Mervyns, department stores filing for bankruptcy<\/a>, reorganization, not liquidation, as the straw that breaks the Camel’s back is typically the withdrawal of credit.<\/p>\n

Still, we have a decent numbers in the ADP jobs report<\/a>, which has also strengthened the dollar<\/a>.<\/p>\n

Additionally, the efforts by government institutions continue with Federal Reserve extending its loan program to Wall Street banks, “Cash for Trash,” from mid-September to January 30<\/a> and the SEC has extended its naked short-selling ban until August 17<\/a>.<\/p>\n

In energy, oil is up<\/a>, and retail gasoline is down<\/a>.<\/p>\n

*<\/sup>Interestingly enough, I probably would not have even noticed the story, but for the fact that the name Wikersham<\/a> was there. he first political story that I have any recollection about was about that ship, and the problems that developed as a result of cabotage related issues with the Jones Act, which required it to stop in Canada between American ports,<\/p>\n

I actually rode on the ship when my family was leaving Alaska.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Well, you know that the economy sucks when lawyers are being laid off, in this case at Cadwalader, Wickersham* & Taft because the 70% decline in the commercial real estate market had created redundant personnel. When you consider the fact that Citi will likely write-down its CDOs to the tune of $8 billion, following Merrill …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[973,975,1004],"tags":[],"class_list":["post-195093","post","type-post","status-publish","format-standard","hentry","category-economy","category-employment","category-finance"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/195093"}],"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=195093"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/195093\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=195093"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=195093"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=195093"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}