More Bloodletting
Summary: Initial claims shows long term unemployment worsening with the bleed out being felt throughout the nation, from coast to coast and north to south.
Philly Fed confirms slowing manufacturing with commodities input price pressures. Read the carnage if you dare...
Initial Claims 10/13 +28K at 337K vs 309K Full Report
Inside the number: 4 week MA +6K at 316.5K. Continuing unemployment +19K at
2.534, 4 week MA -1.5K at 2.532.
STATES WITH AN INCREASE OF MORE THAN 1,000
State Change State Supplied Comment
AR +1,268 No comment.
MA +1,299 construction, service, finance, insurance, public administration, manufacturing
FL +1,316 construction, trade, service, manufacturing, agriculture.
NJ +1,342 construction, trade, service, manufacturing
WA +1,508 construction, manufacturing
VA +1,694 automobile, finance, information, manufacturing
PA +1,992 manufacturing, agriculture.
OR +2,139 No comment.
MO +2,431 manufacturing.
MI +2,506 automobile
IL +2,865 trade, service, manufacturing
NY +3,094 construction, manufacturing
KY +3,159 automobile, manufacturing
GA +3,255 manufacturing
CA +6,317 construction, service, finance, insurance, real estate
Philadelphia Fed Oct 6.8 vs prior 10.9 Full Report
Inside the number: New orders falling 2.7 vs 15.1; Shipments plunging -4.1 vs 16.9; Delivery Times quickening +0.9 vs -6.1.
Inventories drawing down as restocking slows without new orders -15 vs +4; Prices paid jumped 40.3 vs 23.1.
Bleeding out II...
Bank of America, the 2nd largest U.S. bank, said profit declined 32% in Q3 after trading mistakes led to $717 million of losses. Defaults and writedowns cost $4 billion.
In Q3, profit at the corporate and investment banking division plummeted 93% to $100 million from $1.43 billion a year earlier.
Andrew Seibert, Stewart Capital Advisors:
"The next couple of quarters will be messy for Bank of America. You are only seeing the beginning. The banks will be putting up a lot of money for reserves."
The Nattering One muses... we've commented before on increased reserve requirements, and not just for non performing loans.
$600 Billion in ARM resets through the end of 08 will ballon non performing loan reserve requirements and increase REO inventory.
Reserve requirements for "hung loans" or ABCP assets backed up in the system which cannot be sold, will increase.
Except when the banks form other "Enron" conduits or three card monty's, to buy it back from themselves, but get it off the books.
And pouring salt into the wounds, when the CDO, MBS or "paper" the banks are now forced to hold on the books...
gets downgraded by the rating agencies, reserve requirements will grow exponentially.
Once again, this is not a liquidity issue, its a solvency problem. Much like the housing bubble with high risk premiums...
prices at absurd levels and no legitimate buyers in sight, carrying costs start dragging profits under, thats when devaluation and liquidation ensue.
As layoffs mount and consumer discretionary spending declines, this emasculated service based economy will falter.
No amount of rate cuts, liquidity injections or financial chicanery will stop this trainwreck.
Philly Fed confirms slowing manufacturing with commodities input price pressures. Read the carnage if you dare...
Initial Claims 10/13 +28K at 337K vs 309K Full Report
Inside the number: 4 week MA +6K at 316.5K. Continuing unemployment +19K at
2.534, 4 week MA -1.5K at 2.532.
STATES WITH AN INCREASE OF MORE THAN 1,000
State Change State Supplied Comment
AR +1,268 No comment.
MA +1,299 construction, service, finance, insurance, public administration, manufacturing
FL +1,316 construction, trade, service, manufacturing, agriculture.
NJ +1,342 construction, trade, service, manufacturing
WA +1,508 construction, manufacturing
VA +1,694 automobile, finance, information, manufacturing
PA +1,992 manufacturing, agriculture.
OR +2,139 No comment.
MO +2,431 manufacturing.
MI +2,506 automobile
IL +2,865 trade, service, manufacturing
NY +3,094 construction, manufacturing
KY +3,159 automobile, manufacturing
GA +3,255 manufacturing
CA +6,317 construction, service, finance, insurance, real estate
Philadelphia Fed Oct 6.8 vs prior 10.9 Full Report
Inside the number: New orders falling 2.7 vs 15.1; Shipments plunging -4.1 vs 16.9; Delivery Times quickening +0.9 vs -6.1.
Inventories drawing down as restocking slows without new orders -15 vs +4; Prices paid jumped 40.3 vs 23.1.
Bleeding out II...
Bank of America, the 2nd largest U.S. bank, said profit declined 32% in Q3 after trading mistakes led to $717 million of losses. Defaults and writedowns cost $4 billion.
In Q3, profit at the corporate and investment banking division plummeted 93% to $100 million from $1.43 billion a year earlier.
Andrew Seibert, Stewart Capital Advisors:
"The next couple of quarters will be messy for Bank of America. You are only seeing the beginning. The banks will be putting up a lot of money for reserves."
The Nattering One muses... we've commented before on increased reserve requirements, and not just for non performing loans.
$600 Billion in ARM resets through the end of 08 will ballon non performing loan reserve requirements and increase REO inventory.
Reserve requirements for "hung loans" or ABCP assets backed up in the system which cannot be sold, will increase.
Except when the banks form other "Enron" conduits or three card monty's, to buy it back from themselves, but get it off the books.
And pouring salt into the wounds, when the CDO, MBS or "paper" the banks are now forced to hold on the books...
gets downgraded by the rating agencies, reserve requirements will grow exponentially.
Once again, this is not a liquidity issue, its a solvency problem. Much like the housing bubble with high risk premiums...
prices at absurd levels and no legitimate buyers in sight, carrying costs start dragging profits under, thats when devaluation and liquidation ensue.
As layoffs mount and consumer discretionary spending declines, this emasculated service based economy will falter.
No amount of rate cuts, liquidity injections or financial chicanery will stop this trainwreck.
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