It's Too Late Baby
Foreign investor shuffle... Total holdings of equities, notes and bonds fell a net $69.3 billion after an increase of $19.2 billion in July.
Including short-term securities such as Treasury bills, foreigners sold a net $163 billion.
Chinese investors decreased their holdings of U.S. government debt $8.8 billion... while Japanese investments declined $24.8 billion,
UK Holdings increased $33.4 billion, Caribbean banking centers, read hedge funds, bought a net $33.1 billion.
Benny & The Inkjets: "I will have little to say this evening about the serious implications of rising rates of mortgage delinquency and foreclosure...
for troubled borrowers and their communities or about the Federal Reserve's responses to these important problems.
no amount of liquidity provision by the central bank can be expected to solve the problems regarding the valuation of complex securitized assets...
or to reverse the credit losses on subprime mortgages. These underlying difficulties will be resolved only over time by financial markets.
it is not the responsibility of the Federal Reserve--nor would it be appropriate--to protect lenders and investors from the consequences of their financial decisions.
the Federal Reserve Board has highlighted as a downside risk the possibility that housing weakness might spill over to other parts of the economy...
for example, by acting as a restraint on consumer spending. Thus far, however, direct evidence of such spillovers onto the broader economy has been limited.
Prices of crude oil and other commodities have increased somewhat in recent weeks, and the foreign exchange value of the dollar has weakened.
The pace of private-sector job creation has slowed this year... homebuilders have sharply curtailed new construction.
Significant spillovers to household and business spending were not yet evident.
The further contraction in housing is likely to be a significant drag on growth in the current quarter and through early next year.
However, it remains too early to assess the extent to which household and business spending will be affected."
It's not too early... Wells Fargo missed on Q3 results:
"Losses have increased on a linked-quarter basis as the softness in the residential real estate market continued to impact consumers."
JnJ Q3 net income down 7.7% despite favorable currency exchange rates (devalued dollar) and strong growth rates overseas across all three of its major segments drove the performance this quarter.
In fact it's too late...
Since the start of 2006, more than 110 mortgage companies, many of them subprime lenders, have closed, filed for bankruptcy or put themselves up for sale.
During Q3, the world's largest financial institutions have written down more than $21 billion of mortgages, securities and corporate loans whose value plummeted.
Yesterday, as reported, after a bit of PPT brokering by Treasury Secretary Hank Paulson...
Citigroup, Bank of America, and JPMorgan Chase said they will establish a "Superfund" to buy "toxic" assets from structured investment vehicles.
In other words, playing musical chairs by lending themselves money to buy back their own toxic debt. Today Hank said the Bush administration will...
review accounting rules for the off-balance sheet units (SIV's) that large U.S. banks set up to invest in assets including mortgage backed securities.
Hank mentions an adverse impact: "The ongoing housing correction is not ending as quickly as it might have appeared late last year.
It now looks like it will continue to adversely impact our economy, our capital markets, and many homeowners for some time yet.
The longer housing prices remain stagnant or fall, the greater the penalty to our future economic growth."
Really? Do Ya Think? But I thought there was no spillover and it was too early to assess any impact?? Can't you guys even get your stories straight?
How low can it go??? NAHB Wells Fargo Building Confidence Index hitting an all time low 18 vs prior 20 Full Report
FYI, this Friday Oct 19th, the 20th anniversary of Black Monday in 1987.
Including short-term securities such as Treasury bills, foreigners sold a net $163 billion.
Chinese investors decreased their holdings of U.S. government debt $8.8 billion... while Japanese investments declined $24.8 billion,
UK Holdings increased $33.4 billion, Caribbean banking centers, read hedge funds, bought a net $33.1 billion.
Benny & The Inkjets: "I will have little to say this evening about the serious implications of rising rates of mortgage delinquency and foreclosure...
for troubled borrowers and their communities or about the Federal Reserve's responses to these important problems.
no amount of liquidity provision by the central bank can be expected to solve the problems regarding the valuation of complex securitized assets...
or to reverse the credit losses on subprime mortgages. These underlying difficulties will be resolved only over time by financial markets.
it is not the responsibility of the Federal Reserve--nor would it be appropriate--to protect lenders and investors from the consequences of their financial decisions.
the Federal Reserve Board has highlighted as a downside risk the possibility that housing weakness might spill over to other parts of the economy...
for example, by acting as a restraint on consumer spending. Thus far, however, direct evidence of such spillovers onto the broader economy has been limited.
Prices of crude oil and other commodities have increased somewhat in recent weeks, and the foreign exchange value of the dollar has weakened.
The pace of private-sector job creation has slowed this year... homebuilders have sharply curtailed new construction.
Significant spillovers to household and business spending were not yet evident.
The further contraction in housing is likely to be a significant drag on growth in the current quarter and through early next year.
However, it remains too early to assess the extent to which household and business spending will be affected."
It's not too early... Wells Fargo missed on Q3 results:
"Losses have increased on a linked-quarter basis as the softness in the residential real estate market continued to impact consumers."
JnJ Q3 net income down 7.7% despite favorable currency exchange rates (devalued dollar) and strong growth rates overseas across all three of its major segments drove the performance this quarter.
In fact it's too late...
Since the start of 2006, more than 110 mortgage companies, many of them subprime lenders, have closed, filed for bankruptcy or put themselves up for sale.
During Q3, the world's largest financial institutions have written down more than $21 billion of mortgages, securities and corporate loans whose value plummeted.
Yesterday, as reported, after a bit of PPT brokering by Treasury Secretary Hank Paulson...
Citigroup, Bank of America, and JPMorgan Chase said they will establish a "Superfund" to buy "toxic" assets from structured investment vehicles.
In other words, playing musical chairs by lending themselves money to buy back their own toxic debt. Today Hank said the Bush administration will...
review accounting rules for the off-balance sheet units (SIV's) that large U.S. banks set up to invest in assets including mortgage backed securities.
Hank mentions an adverse impact: "The ongoing housing correction is not ending as quickly as it might have appeared late last year.
It now looks like it will continue to adversely impact our economy, our capital markets, and many homeowners for some time yet.
The longer housing prices remain stagnant or fall, the greater the penalty to our future economic growth."
Really? Do Ya Think? But I thought there was no spillover and it was too early to assess any impact?? Can't you guys even get your stories straight?
How low can it go??? NAHB Wells Fargo Building Confidence Index hitting an all time low 18 vs prior 20 Full Report
FYI, this Friday Oct 19th, the 20th anniversary of Black Monday in 1987.
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