Xmas & 2008 Year End Wrap Up
Same Store Sales... Heavy weather scuttled what was already a very poor December making for the worst holiday shopping season since 1970.
ICSC's same-store tally for the Dec. 27 week fell 1.5% compared to the prior week and is down 1.8% year-on-year.
Redbook reports a disappointing 0.4% year-on-year decline in same-store sales for the Dec. 27 week.
On line and Black Friday sales both declining for the first time ever. Consumer spending is responsible for 70- 75% of US GDP.
Don't Drink The Kool Aid your local realtor is serving...
Existing Home Sales Nov. -8.6%; supply +8.7% at 11.1 months vs 10.3; SFR -8%; supply 10.6 vs 9.7; yoy median sales price -13.2%; yoy average price -12.3%.
New Home Sales Nov. -2.9% at 407K; yoy -35.3%; ytd -37%; supply -2.5% at 11.5 months; Yoy +21.1%.
S&P Case Shiller Home Price Index... Home prices were still plunging early in the third quarter,
indicated by Case-Shiller data for October that show 2% plus month-to-month declines for both the composite 10 and 20 city indexes.
The year-on-year rate of decline is over or near 30 percent in Phoenix, Los Angeles, San Diego, San Francisco, Las Vegas and Miami.
These unprecedented declines reflect distressed sales and point to further foreclosures ahead.
Both of which are an indication that the long slump in the housing sector continues to deepen.
Housing was the sole growth engine responsible for 80% of all new jobs from 2001-2007.
Chicago PMI... little changed at 34.1, indicating that business conditions for firms in the Chicago area continued to deteriorate in December.
Prices paid are at a record low, down more than 20 points to 30.5 and signaling that buyers are scarce. Businesses are destocking, a key reason that prices are weak.
New orders and backlog orders, which are already in the 20s are unfortunately signaling a...
re-acceleration of overall decline in the months ahead. Such a decline of course would point to rising unemployment.
Initial jobless claims... four-week MA moving average is at 558K; Continuing claims +140K to 4.506 million; both at the highest rate since the 1982 recession.
Unemployment has spiked from 4.5 to 6.7% and will continue climbing towards the 10.8% reached in the 1982 recession.
President Elect Obama: "If we don’t act swiftly and boldly, we could see a much deeper economic downturn that could lead to double-digit unemployment.
We must make strategic investments that will serve as a down payment on our long-term economic future."
ISM factory index... fell to 32.4, below economists’ forecasts and the lowest level since 1980, from 36.2 the prior month.
Readings less than 50 signal contraction. The group’s new-orders measure reached the lowest level on record and prices slid the most since 1949.
The decline in U.S. manufacturing deepened in December as demand for such products as
cars, appliances and furniture reached the lowest level since at least 1948, signaling further cutbacks in factory jobs and production this year.
Mark Vitner, senior economist at Wachovia: "Every component (of the ISM) suggests that the weakness is going to carry over into 2009.
There’s just not a whole lot of new business coming in and companies will have a painful adjustment as consumers shun spending."
Auto Plant Closings... Chrysler idled all 30 of its assembly plants on Dec. 17 for at least a month...
while GM announced output cuts Dec. 12 that affected 20 plants. The closings will extend into this month.
Ford said 9 of 15 North American factories would shut for the first week in January.
Negative Q3 Final GDP... -0.5% vs Q2 +2.8%; the largest decline since 1980; as the price index increased +4.5% and real PCE decreased -3.8%.
In other words, prices increased; personal spending decreased and gross domestic product contracted.
Pesonal Income & Spending... declining -0.2% and -0.6% respectively; confirming a continuance of the Q3 GDP trend.
Durable Orders... -1%; the 4th consecutive decline. Ex transport new orders +0.9%; ex defense new orders -0.9%; ex defense capital goods orders -0.8%.
Europe and Asia... Business at European factories contracted in December by the most on record.
Japanese factories recorded their largest reduction in production in two decades.
Manufacturing declined in China for a fifth month in December...
for an eighth month in the U.K., for a seventh month in Australia and at the fastest pace in at least 14 years in Sweden.
Clueless Fed... David Swensen, Yale University investment chief: "I don’t think the Fed or the administration has figured out how to fix credit markets.
We are going to experience economic and financial stress as long as the credit markets are broken...
and it’s not until we start seeing the credit markets functioning properly will we be able to see a path to economic recovery.”
TED spread narrows... narrowed to 1.33% with 3 month Libor at 1.41% and the 3 month T note at .08%. That was below its 1.35%level on Sept. 12...
the last trading day before Lehman Brothers filed for bankruptcy and sparked a panic over the safety of financial institutions.
A month later, the spread had widened to 4.64%, the most since Bloomberg began compiling the data in 1984.
The Nattering One muses... all this "good" news the last two weeks has ebullient investors drinking the kool aid en masse...
markets advanced 7% this week as the DJIA broke 9K, furthering the headfake or chump pump started 11/21.
However, only twice in the past seven sessions has trading volume on the NYSE exceeded 1 billion shares.
Such low trading volume suggests a lack of conviction in the broader market.
We maintain this chump pump ends around Jan 16th or 18th as Q4 reporting kicks off Jan 12th with disasterous results.
The year that was... the largest bankruptcy, bank failure; bailout and Ponzi scheme in U.S. history;
over $1 Trillion in writedowns and losses; $30.1 trillion in global market valuation wiped out.
Tunisia was the only market out of 69 in MSCI indexes that rose. 28 national benchmarks lost more than half their value.
Only 8% of the 1,693 stocks in the MSCI World Index of 23 developed markets defied last year’s rout.
In the U.S., 62 out of the 68 “level 3” industry groups in the S&P 500 declined in 2008.
For a recap of last years market plague disaster sans Fannie & Freddie read here... for last years winners read here.
As always a very large hattip to Bloomberg and Breifing.com
ICSC's same-store tally for the Dec. 27 week fell 1.5% compared to the prior week and is down 1.8% year-on-year.
Redbook reports a disappointing 0.4% year-on-year decline in same-store sales for the Dec. 27 week.
On line and Black Friday sales both declining for the first time ever. Consumer spending is responsible for 70- 75% of US GDP.
Don't Drink The Kool Aid your local realtor is serving...
Existing Home Sales Nov. -8.6%; supply +8.7% at 11.1 months vs 10.3; SFR -8%; supply 10.6 vs 9.7; yoy median sales price -13.2%; yoy average price -12.3%.
New Home Sales Nov. -2.9% at 407K; yoy -35.3%; ytd -37%; supply -2.5% at 11.5 months; Yoy +21.1%.
S&P Case Shiller Home Price Index... Home prices were still plunging early in the third quarter,
indicated by Case-Shiller data for October that show 2% plus month-to-month declines for both the composite 10 and 20 city indexes.
The year-on-year rate of decline is over or near 30 percent in Phoenix, Los Angeles, San Diego, San Francisco, Las Vegas and Miami.
These unprecedented declines reflect distressed sales and point to further foreclosures ahead.
Both of which are an indication that the long slump in the housing sector continues to deepen.
Housing was the sole growth engine responsible for 80% of all new jobs from 2001-2007.
Chicago PMI... little changed at 34.1, indicating that business conditions for firms in the Chicago area continued to deteriorate in December.
Prices paid are at a record low, down more than 20 points to 30.5 and signaling that buyers are scarce. Businesses are destocking, a key reason that prices are weak.
New orders and backlog orders, which are already in the 20s are unfortunately signaling a...
re-acceleration of overall decline in the months ahead. Such a decline of course would point to rising unemployment.
Initial jobless claims... four-week MA moving average is at 558K; Continuing claims +140K to 4.506 million; both at the highest rate since the 1982 recession.
Unemployment has spiked from 4.5 to 6.7% and will continue climbing towards the 10.8% reached in the 1982 recession.
President Elect Obama: "If we don’t act swiftly and boldly, we could see a much deeper economic downturn that could lead to double-digit unemployment.
We must make strategic investments that will serve as a down payment on our long-term economic future."
ISM factory index... fell to 32.4, below economists’ forecasts and the lowest level since 1980, from 36.2 the prior month.
Readings less than 50 signal contraction. The group’s new-orders measure reached the lowest level on record and prices slid the most since 1949.
The decline in U.S. manufacturing deepened in December as demand for such products as
cars, appliances and furniture reached the lowest level since at least 1948, signaling further cutbacks in factory jobs and production this year.
Mark Vitner, senior economist at Wachovia: "Every component (of the ISM) suggests that the weakness is going to carry over into 2009.
There’s just not a whole lot of new business coming in and companies will have a painful adjustment as consumers shun spending."
Auto Plant Closings... Chrysler idled all 30 of its assembly plants on Dec. 17 for at least a month...
while GM announced output cuts Dec. 12 that affected 20 plants. The closings will extend into this month.
Ford said 9 of 15 North American factories would shut for the first week in January.
Negative Q3 Final GDP... -0.5% vs Q2 +2.8%; the largest decline since 1980; as the price index increased +4.5% and real PCE decreased -3.8%.
In other words, prices increased; personal spending decreased and gross domestic product contracted.
Pesonal Income & Spending... declining -0.2% and -0.6% respectively; confirming a continuance of the Q3 GDP trend.
Durable Orders... -1%; the 4th consecutive decline. Ex transport new orders +0.9%; ex defense new orders -0.9%; ex defense capital goods orders -0.8%.
Europe and Asia... Business at European factories contracted in December by the most on record.
Japanese factories recorded their largest reduction in production in two decades.
Manufacturing declined in China for a fifth month in December...
for an eighth month in the U.K., for a seventh month in Australia and at the fastest pace in at least 14 years in Sweden.
Clueless Fed... David Swensen, Yale University investment chief: "I don’t think the Fed or the administration has figured out how to fix credit markets.
We are going to experience economic and financial stress as long as the credit markets are broken...
and it’s not until we start seeing the credit markets functioning properly will we be able to see a path to economic recovery.”
TED spread narrows... narrowed to 1.33% with 3 month Libor at 1.41% and the 3 month T note at .08%. That was below its 1.35%level on Sept. 12...
the last trading day before Lehman Brothers filed for bankruptcy and sparked a panic over the safety of financial institutions.
A month later, the spread had widened to 4.64%, the most since Bloomberg began compiling the data in 1984.
The Nattering One muses... all this "good" news the last two weeks has ebullient investors drinking the kool aid en masse...
markets advanced 7% this week as the DJIA broke 9K, furthering the headfake or chump pump started 11/21.
However, only twice in the past seven sessions has trading volume on the NYSE exceeded 1 billion shares.
Such low trading volume suggests a lack of conviction in the broader market.
We maintain this chump pump ends around Jan 16th or 18th as Q4 reporting kicks off Jan 12th with disasterous results.
The year that was... the largest bankruptcy, bank failure; bailout and Ponzi scheme in U.S. history;
over $1 Trillion in writedowns and losses; $30.1 trillion in global market valuation wiped out.
Tunisia was the only market out of 69 in MSCI indexes that rose. 28 national benchmarks lost more than half their value.
Only 8% of the 1,693 stocks in the MSCI World Index of 23 developed markets defied last year’s rout.
In the U.S., 62 out of the 68 “level 3” industry groups in the S&P 500 declined in 2008.
For a recap of last years market plague disaster sans Fannie & Freddie read here... for last years winners read here.
As always a very large hattip to Bloomberg and Breifing.com
Comments
We are going to experience economic and financial stress as long as the credit markets are broken...
and it’s not until we start seeing the credit markets functioning properly will we be able to see a path to economic recovery.”
Untill folks have money enough to buy things, and feel secure in the descision to spend, nothing will change. Funny how they can't seem to grasp the obvious!