{"id":197380,"date":"2008-02-08T17:53:00","date_gmt":"2008-02-08T22:53:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2008\/02\/08\/economics-update-526\/"},"modified":"2008-02-08T17:53:00","modified_gmt":"2008-02-08T22:53:00","slug":"economics-update-526","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2008\/02\/08\/economics-update-526\/","title":{"rendered":"Economics Update"},"content":{"rendered":"

Consumer confidence sinks lower<\/a> the RBC Cash Index falls to its lowest level since it was created in 2002, and consumer borrowing tumbles<\/a>, rising at an annual rate of 2.1%, the lowest rate since April.<\/p>\n

On a “beat my own drum” note, it’s nice seeing a real economist warning that the stimulus package is going to damage Fannie Mae and Freddie Mack<\/a> by increasing the loan limits, and hence exposure. I warned about this yesterday<\/a>, and it’s nice to see a real economist agree.<\/p>\n

In high finance, it looks like there will be significant writedowns on the $160 billion of “pier” loans out in finance land<\/a>.<\/p>\n

Basically, a “pier loan” is a bridge loan for things like a private equity transaction where the banks cannot sell the debt, and hence it’s a “bridge to nowhere”, or a “pier”.<\/p>\n

The average price for the most actively traded U.S. loans fell to 88.37 cents on the dollar this week, from 91.14 cents last month, according to S&P’s LCD. Prices have fallen from 100, or face value, last June.<\/p><\/blockquote>\n

This means that no one is interested in buying the loans, so they have to discount.<\/p>\n

Finally, look at these charts on The Financial Ninja<\/a>, and be very, very afraid.<\/p>\n","protected":false},"excerpt":{"rendered":"

Consumer confidence sinks lower the RBC Cash Index falls to its lowest level since it was created in 2002, and consumer borrowing tumbles, rising at an annual rate of 2.1%, the lowest rate since April. On a “beat my own drum” note, it’s nice seeing a real economist warning that the stimulus package is going …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[973,1004,1088,985],"tags":[],"class_list":["post-197380","post","type-post","status-publish","format-standard","hentry","category-economy","category-finance","category-real-estate","category-regulation"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/197380"}],"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=197380"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/197380\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=197380"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=197380"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=197380"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}