{"id":197077,"date":"2008-03-03T18:08:00","date_gmt":"2008-03-03T23:08:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2008\/03\/03\/economics-update-510\/"},"modified":"2008-03-03T18:08:00","modified_gmt":"2008-03-03T23:08:00","slug":"economics-update-510","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2008\/03\/03\/economics-update-510\/","title":{"rendered":"Economics Update"},"content":{"rendered":"

Let’s lead off with the dollar on it’s way down, it’s at a 3-year low vs. the Yen<\/a>, and a new record low vs. the Euro<\/a>, which is one of the things that has oil breaking another all time record<\/a>, $104\/bbl.<\/p>\n

The value of the dollar is dropping, so the price of oil, which is sold in dollars, is increasing. One wonders how many countries are considering a Euro oil bourse other than Iran.<\/p>\n

In real estate, we have the largest drop in residential and commercial construction in 14 years<\/a>.<\/p>\n

So much for commercial real estate being “immune” from this contagion.<\/p>\n

The poster child for the real estate meltdown, Countrywide, is still hemorrhaging on its mortgages<\/a>, with 90 day delinquencies at 5.6% (up 900% from a year ago), and this is threatening to torpedo the deal with Bank of America to buy them out<\/a>.<\/p>\n

FWIW, there are more foreclosures than sales<\/a> in a number of the states in the West, and Florida.<\/p>\n

On the macro level, we have Warren Buffett saying that the recession is pretty much all ready here<\/a>, and the president of the Philadelphia Federal Reserve saying that inflation is not important<\/a>, and that the first priority is keeping the economy on track.<\/p>\n

When a central banker says, “Inflation, no big deal”, you know that you are up a certain creek sans paddle.<\/p>\n

Further evidence of a slowdown is the fact that Ford and Toyota sales declined in February<\/a>. Ford having declines is not a shocker, but when Toyota is not selling cars, no one is selling cars.<\/p>\n

The happy news is that the FDIC doesn’t see there being a surge in bank failures<\/a>, though it does make one wonder why they are calling back retirees and generally staffing up.<\/p>\n

They expect to be as busy as a one legged man in an ass-kicking contest.<\/p>\n

In the world of municipal bonds, which should be safe-havens in a time like this, it appears that the costs are increasing, and the ratings falling, for municipal bonds<\/a>, because of the collapse of the auction security markets.<\/p>\n

In bond insurance, we have a new, or at least new to me, bond insurer bleeding, Security Capital’s to the tune of $1.5 billion<\/a> on various complex investments.<\/p>\n

It’s already been downgraded.<\/p>\n

Finally, Buffet is now saying that his offer to buy the muni business of bond insurers is no longer operative<\/a>.<\/p>\n

Berkshire Hathaway is aggressively bidding on municipal bond portfolios, and as other insurers are downgraded, their position can only get stronger.<\/p>\n","protected":false},"excerpt":{"rendered":"

Let’s lead off with the dollar on it’s way down, it’s at a 3-year low vs. the Yen, and a new record low vs. the Euro, which is one of the things that has oil breaking another all time record, $104\/bbl. The value of the dollar is dropping, so the price of oil, which is …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1261,1080,973,1135,1004,1265,1088],"tags":[],"class_list":["post-197077","post","type-post","status-publish","format-standard","hentry","category-bubble","category-currency","category-economy","category-energy","category-finance","category-housing-crash","category-real-estate"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/197077"}],"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=197077"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/197077\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=197077"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=197077"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=197077"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}