Economic News 04/10/07
Summary: No sub prime overspill, right?? Alt A delinquencies growing... National mortgage delinquencies rate hits an all time high... Largest homebuilder results, "suck", no really...
Big bank & lender, cuts capital spending, outsourcing jobs, laying off, ... Drive maker warns on lower demand... Alcoa's outlook, perhaps not so rosy...
Equifax/Moody's reported the national mortgage delinquency rate hit an all-time high of 2.87% in Q1.
D.R. Horton Inc. (DHI) the largest U.S. home builder, said on Tuesday orders for new homes tumbled 37 % last quarter and the spring selling season has been slower than usual, suggesting the U.S. housing market has not yet hit bottom.
Last month, D.R. Horton Chief Executive Don Tomnitz said this year was "going to suck" for home builders. He said the company may have to take further write-offs to reflect unsold homes and lower land values.
D.R. Horton's net sales orders in the fiscal second quarter, ended March 31. fell to 9,983 homes from 15,771 a year earlier, and the dollar value of the orders sank 41 %, to $2.6 B from $4.4 B.
While new home orders fell in all regions, the biggest decline was in California, where they fell 59 % to 1,107 homes. California was also the market that saw the biggest dip in dollar value of orders, down about 57 % to $533.5 M.
Prospective buyers canceled at a 32 % rate from January to March, down from 33 % in the prior quarter, but above the usual 16 % to 20 % rate, D.R. Horton said.
Through Monday, the shares had fallen 17 % this year, matching the decline in the Dow Jones U.S. Home Construction Index .
Citigroup (C) bank is preparing to announce a major restructuring plan, cutting or reassigning 26,000 jobs -- 8% of the company's total work force.
The company's investment and consumer banking businesses will likely be hit the hardest. Citigroup's operating expenses rose 15%, while the bank's revenue was up 7%.
The bank will consolidate some of its businesses as well as increase technology efforts and move some work to lower-cost areas
Hard-drive maker Seagate Technology (STX) fell -8% this morning after saying late yesterday that fiscal Q3 sales would be below the company's earlier forecast and analysts' expectations.
Alcoa (AA) this year's best performing Dow component +16.8%, kicks off earnings season after the bell.
Most analysts are expecting single digit earnings growth, the lowest in 5 years, which would break an 14 quarter SP500 double digit earnings streak.
Meanwhile, the Consumer Discretionary sector is expected to post a 10% decline in Q1 earnings. "Beginning next year, there is a lot of capacity coming online," Charles Bradford of Soleil Securities told CNBC this morning.
Speaking of which, there is overcapacity in housing, automotive, semis and consumer electronics. The Nattering One reminds enquiring Naybob's and little drooghies alike...
When Japan went into its 18 year asset deflation spiral, which they are just coming out of, consumption stayed the same while asset prices (real estate in particular) tanked.
In this global economy, even if US consumer demand wanes, China with their war chest of trade dollars and overcapacity, will continue to produce goods AT A LOSS.
And yes, 90% of the factories in China are government owned and many are ALREADY operating at a loss. Gotta keep those peasants employed and a bowl of rice in their bellies, lest they rebel. Food for thought...
Big bank & lender, cuts capital spending, outsourcing jobs, laying off, ... Drive maker warns on lower demand... Alcoa's outlook, perhaps not so rosy...
Equifax/Moody's reported the national mortgage delinquency rate hit an all-time high of 2.87% in Q1.
D.R. Horton Inc. (DHI) the largest U.S. home builder, said on Tuesday orders for new homes tumbled 37 % last quarter and the spring selling season has been slower than usual, suggesting the U.S. housing market has not yet hit bottom.
Last month, D.R. Horton Chief Executive Don Tomnitz said this year was "going to suck" for home builders. He said the company may have to take further write-offs to reflect unsold homes and lower land values.
D.R. Horton's net sales orders in the fiscal second quarter, ended March 31. fell to 9,983 homes from 15,771 a year earlier, and the dollar value of the orders sank 41 %, to $2.6 B from $4.4 B.
While new home orders fell in all regions, the biggest decline was in California, where they fell 59 % to 1,107 homes. California was also the market that saw the biggest dip in dollar value of orders, down about 57 % to $533.5 M.
Prospective buyers canceled at a 32 % rate from January to March, down from 33 % in the prior quarter, but above the usual 16 % to 20 % rate, D.R. Horton said.
Through Monday, the shares had fallen 17 % this year, matching the decline in the Dow Jones U.S. Home Construction Index .
Citigroup (C) bank is preparing to announce a major restructuring plan, cutting or reassigning 26,000 jobs -- 8% of the company's total work force.
The company's investment and consumer banking businesses will likely be hit the hardest. Citigroup's operating expenses rose 15%, while the bank's revenue was up 7%.
The bank will consolidate some of its businesses as well as increase technology efforts and move some work to lower-cost areas
Hard-drive maker Seagate Technology (STX) fell -8% this morning after saying late yesterday that fiscal Q3 sales would be below the company's earlier forecast and analysts' expectations.
Alcoa (AA) this year's best performing Dow component +16.8%, kicks off earnings season after the bell.
Most analysts are expecting single digit earnings growth, the lowest in 5 years, which would break an 14 quarter SP500 double digit earnings streak.
Meanwhile, the Consumer Discretionary sector is expected to post a 10% decline in Q1 earnings. "Beginning next year, there is a lot of capacity coming online," Charles Bradford of Soleil Securities told CNBC this morning.
Speaking of which, there is overcapacity in housing, automotive, semis and consumer electronics. The Nattering One reminds enquiring Naybob's and little drooghies alike...
When Japan went into its 18 year asset deflation spiral, which they are just coming out of, consumption stayed the same while asset prices (real estate in particular) tanked.
In this global economy, even if US consumer demand wanes, China with their war chest of trade dollars and overcapacity, will continue to produce goods AT A LOSS.
And yes, 90% of the factories in China are government owned and many are ALREADY operating at a loss. Gotta keep those peasants employed and a bowl of rice in their bellies, lest they rebel. Food for thought...
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