All Time Low New Home Sales, Sears, Blackstone & The Asian Flu
Summary: Bottom? Recovery? Uh-Uh sure thing, the worst sales year since records began in 1963.
New Home Sales Dec -4.7% at 604K vs prior 634K Full Report
Inside the number: Prior revised down 13K. YOY -40.7%, the lowest since 1995. For all of 2007 -26%, the largest decline ever.
Inventory climbed from 9.4 to 9.6 months. The median sales price for a new home YOY fell 10.9% to $219,200, the largest drop in 37 years.
Stocks hit the number... Verizon & Sysco make the number, Corning, Halliburton & McDonalds topping but Mickey D's Dec same store sales flat.
CEO hits the door... After U.S. holiday sales fell, Sears said that Q4 profit may drop more than 50%.
Same store sales have fallen every quarter since the 2005 Kmart merger. Today, Sears CEO Aylwin Lewis shown the door..
Terms hit the buyer... Manager of the world's largest LBO fund ($21.7 billion)...
Blackstone Group's $6.6 billion LBO leveraged buyout of credit card payments processor Alliance Data Systems may collapse.
Conditions requested by the U.S. Office of the Comptroller of the Currency would impose "unlimited" liability on the LBO firm and are thus unacceptable to Blackstone.
Flu hits Asia & China... Overnight Nikkei 225 -4%; Hang Seng -4.3%; Shanghai -7.2%; Chinas exports: US 20%; Europe 20%; Japan 20%.
Alcoa COO Klaus Kleinfeld foresees "a difficult year. I don't think the world can decouple itself from what's happening in the U.S."
Yu Yongding, director of the Chinese Academy of Social Sciences and a former adviser to the central bank:
"If there is weakness in the world economy, the impact on the Chinese economy will be very serious."
Tetsufumi Yamakawa, chief Japan economist at Goldman in Tokyo, in a report dated Jan. 25:
It's "highly likely" Japan is already in a recession or will enter one this quarter.
The yen's 13% rise (unwinding of leveraged carry trade positions) vs the dollar (rate cuts) in the last six months is taking a toll on Japanese export profits.
The yen hit a 2.5 year high of 104.97 vs $ last week. Japanese exporters can only remain profitable as long as the currency is weaker than 106.6.
Japans housing market is slumping and a drop in construction demand led Tokyo Steel Manufacturing...
the nation's biggest maker of steel girders, to lower its profit forecast.
Spain is grappling with a massive housing boom (responsible for 18% of GDP) gone bust.
Housing is also slumping in the U.K., and other European countries, including Germany, are showing signs of slowing.
The Nattering One muses... Ah Chou!! We keep repeating ourselves, some dim, some not, we catch little cold, they get big flu.
After 2008 Summer Olympic showcase, big facade and Chinese stock market come down, flu turns into plural bronchitis. Hattip to Bloomberg.
New Home Sales Dec -4.7% at 604K vs prior 634K Full Report
Inside the number: Prior revised down 13K. YOY -40.7%, the lowest since 1995. For all of 2007 -26%, the largest decline ever.
Inventory climbed from 9.4 to 9.6 months. The median sales price for a new home YOY fell 10.9% to $219,200, the largest drop in 37 years.
Stocks hit the number... Verizon & Sysco make the number, Corning, Halliburton & McDonalds topping but Mickey D's Dec same store sales flat.
CEO hits the door... After U.S. holiday sales fell, Sears said that Q4 profit may drop more than 50%.
Same store sales have fallen every quarter since the 2005 Kmart merger. Today, Sears CEO Aylwin Lewis shown the door..
Terms hit the buyer... Manager of the world's largest LBO fund ($21.7 billion)...
Blackstone Group's $6.6 billion LBO leveraged buyout of credit card payments processor Alliance Data Systems may collapse.
Conditions requested by the U.S. Office of the Comptroller of the Currency would impose "unlimited" liability on the LBO firm and are thus unacceptable to Blackstone.
Flu hits Asia & China... Overnight Nikkei 225 -4%; Hang Seng -4.3%; Shanghai -7.2%; Chinas exports: US 20%; Europe 20%; Japan 20%.
Alcoa COO Klaus Kleinfeld foresees "a difficult year. I don't think the world can decouple itself from what's happening in the U.S."
Yu Yongding, director of the Chinese Academy of Social Sciences and a former adviser to the central bank:
"If there is weakness in the world economy, the impact on the Chinese economy will be very serious."
Tetsufumi Yamakawa, chief Japan economist at Goldman in Tokyo, in a report dated Jan. 25:
It's "highly likely" Japan is already in a recession or will enter one this quarter.
The yen's 13% rise (unwinding of leveraged carry trade positions) vs the dollar (rate cuts) in the last six months is taking a toll on Japanese export profits.
The yen hit a 2.5 year high of 104.97 vs $ last week. Japanese exporters can only remain profitable as long as the currency is weaker than 106.6.
Japans housing market is slumping and a drop in construction demand led Tokyo Steel Manufacturing...
the nation's biggest maker of steel girders, to lower its profit forecast.
Spain is grappling with a massive housing boom (responsible for 18% of GDP) gone bust.
Housing is also slumping in the U.K., and other European countries, including Germany, are showing signs of slowing.
The Nattering One muses... Ah Chou!! We keep repeating ourselves, some dim, some not, we catch little cold, they get big flu.
After 2008 Summer Olympic showcase, big facade and Chinese stock market come down, flu turns into plural bronchitis. Hattip to Bloomberg.
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