{"id":196181,"date":"2008-05-19T16:33:00","date_gmt":"2008-05-19T21:33:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2008\/05\/19\/economics-update-457\/"},"modified":"2008-05-19T16:33:00","modified_gmt":"2008-05-19T21:33:00","slug":"economics-update-457","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2008\/05\/19\/economics-update-457\/","title":{"rendered":"Economics Update"},"content":{"rendered":"

On the good news side, Leading indicator increased 0.1%<\/a> to 102, the first back to back gain in about 6 months. I’m calling a dead cat bounce.<\/p>\n

One of the reasons is because of good news like, southern California house sales “surging” 22%<\/a> from March to April, where the reporter ignores the fact that while this is a month-to-month gain, year over year, it’s still a 19% drop<\/a>, and one of the weakest Aprils on record.<\/p>\n

So Cal has a Mediterranean climate, which means that March is wet. People don’t house sit when it’s wet.<\/p>\n

It also ignores the small fact that 34% of those sales were REOs<\/a>, real-estate owned properties. So these were basically foreclosed properties.<\/p>\n

It’s why California Luxury home prices fell for the 2nd straight quarter<\/a>.<\/p>\n

Not only are real estate prices still falling, but Commercial property prices are falling<\/a>, the most since 2000. (A critique of the financial press on this in a later post)<\/p>\n

In contrast to Bernanke and Paulson, Jean-Claude Trichet, head of the European Central Bank is saying that the credit crunch is ongoing<\/a>. I think that this is true, and portends a major shift in the financial markets. (Again, I’ll go into more detail in a later post)<\/p>\n

As to why, perhaps the fact that banks are doing accounting backflips to keep $35 billion in losses off of their balance sheets<\/a> justifies a lack of faith in the financial markets and financial industry.<\/p>\n

Of course, boneheaded moves like UBS blowing $24 billion<\/a> by deciding to expand into asset based securities further erodes people’s confidence in financial “professionals”.<\/p>\n

My cats could do better on the cat-turd futures market than these guys.<\/p>\n

As a result, we are seeing another big LBO foundering, this time the the $51.8 billion Bell Canada takeover<\/a>, what is (was?) to be the largest LBO ever.<\/p>\n","protected":false},"excerpt":{"rendered":"

On the good news side, Leading indicator increased 0.1% to 102, the first back to back gain in about 6 months. I’m calling a dead cat bounce. One of the reasons is because of good news like, southern California house sales “surging” 22% from March to April, where the reporter ignores the fact that while …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[973,1004,1089,985],"tags":[],"class_list":["post-196181","post","type-post","status-publish","format-standard","hentry","category-economy","category-finance","category-recession","category-regulation"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/196181"}],"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=196181"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/196181\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=196181"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=196181"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=196181"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}