Blame It On The Locusts, Maybe
One of our favorite Natterings... "Blame it on the Locusts" a euphemism for using a non sequitur as an excuse for poor performance.
I.E. poor quarterly results due to bad weather or terrorist fears keeping shoppers away. Meanwhile...
railroads, chemical producers and insurance companies are blaming the worst U.S. housing slump in 16 years for their earnings woes.
The Nattering One has often mused... according to the Washington Post, housing responsible for 80% of all new jobs since 2000.
This year new housing starts & permits down 33%, equaling 600,000 less new homes being built... meanwhile, home values plunging.
What will be the economic impact on an emasculated economy with no durable economic base to fall back on?
In the past year, job losses : U.S. furniture retailers -5,900; building-material and garden- supply stores -18,900; residential building finishing contractors -24,700.
Also, the housing ATM spigot is shut, as consumers have taken about $400 billion less equity out of their homes than in the previous year.
From Feb to June 07: Sales at 53 retail chains rose 2.3% from a year earlier; down from 3.9% growth a year ago, according to the International Council of Shopping Centers.
David Rosenberg, chief North America economist at Merrill Lynch: Earnings growth is running at 6% and would be 19%.
So, profit growth has been cut by more than 66% because of the housing slowdown.
First American CoreLogic, estimated in March that $326 billion of adjustable-rate mortgages extended between 2004 and 2006 will lead to 1.1 million foreclosures over the next six to seven years.
We think that is a very conservative number.
The Joint Center for Housing Studies at Harvard University in Cambridge, Massachusetts:
The link with the property market is inextricable as housing and related industries account for almost 25% of GDP.
Burlington Northern said on July 24 that Q2 profit fell 8.1%, partly because industrial-product shipments, including lumber and other housing products, slipped 0.5%.
Homebuilders HGX, which is already -43% YTD, plunging 7% today.
Beazer Homes -40% YTD, may go bankrupt. Beazer's $350 million of 8.38% notes due 2012 plunged 11.5 cents on the dollar today to 72.5 cents.
Beazer "refutes the alligators" as scurrilous and unfounded rumors.
Unrealized losses on MetLife's $2.3 B portfolio of subprime residential mortgage-backed securities amounted to $29 M as of June 30.
The subprime portfolio represents less than 1% of Metlifes holdings; 98% of its asset-backed securities carry investment-grade Aaa or Aa ratings, and the remaining 2% are rated A or Bbb.
MetLife also owns $83 M of collateralized debt obligations that are backed by subprime mortgages. 95% of these securities are rated Aa or Aaa. The unrealized loss in the portfolio was $3.6 M at June 30.
Bear Stearns has reportedly suspended investor redemptions at a third hedge fund. The Asset-Backed Securities Fund had less than 0.5% of its $900 million of assets in securities linked to subprime loans.
More thunder from down under... Australia's largest securities firm Macquarie Bank, says investors in two of its funds may lose up to 25% due to subprime fallout.
Macquarie Fortress Investments was forced to sell assets and use the proceeds to reduce borrowings and comply with lending covenants,
Australian stocks S&P/ASX 200 plunged 3.3% the most since 09/11 & Macquarie Bank plunged 10.7% the most in 5.5 years.
Blame it all on the Locusts? Maybe.
I.E. poor quarterly results due to bad weather or terrorist fears keeping shoppers away. Meanwhile...
railroads, chemical producers and insurance companies are blaming the worst U.S. housing slump in 16 years for their earnings woes.
The Nattering One has often mused... according to the Washington Post, housing responsible for 80% of all new jobs since 2000.
This year new housing starts & permits down 33%, equaling 600,000 less new homes being built... meanwhile, home values plunging.
What will be the economic impact on an emasculated economy with no durable economic base to fall back on?
In the past year, job losses : U.S. furniture retailers -5,900; building-material and garden- supply stores -18,900; residential building finishing contractors -24,700.
Also, the housing ATM spigot is shut, as consumers have taken about $400 billion less equity out of their homes than in the previous year.
From Feb to June 07: Sales at 53 retail chains rose 2.3% from a year earlier; down from 3.9% growth a year ago, according to the International Council of Shopping Centers.
David Rosenberg, chief North America economist at Merrill Lynch: Earnings growth is running at 6% and would be 19%.
So, profit growth has been cut by more than 66% because of the housing slowdown.
First American CoreLogic, estimated in March that $326 billion of adjustable-rate mortgages extended between 2004 and 2006 will lead to 1.1 million foreclosures over the next six to seven years.
We think that is a very conservative number.
The Joint Center for Housing Studies at Harvard University in Cambridge, Massachusetts:
The link with the property market is inextricable as housing and related industries account for almost 25% of GDP.
Burlington Northern said on July 24 that Q2 profit fell 8.1%, partly because industrial-product shipments, including lumber and other housing products, slipped 0.5%.
Homebuilders HGX, which is already -43% YTD, plunging 7% today.
Beazer Homes -40% YTD, may go bankrupt. Beazer's $350 million of 8.38% notes due 2012 plunged 11.5 cents on the dollar today to 72.5 cents.
Beazer "refutes the alligators" as scurrilous and unfounded rumors.
Unrealized losses on MetLife's $2.3 B portfolio of subprime residential mortgage-backed securities amounted to $29 M as of June 30.
The subprime portfolio represents less than 1% of Metlifes holdings; 98% of its asset-backed securities carry investment-grade Aaa or Aa ratings, and the remaining 2% are rated A or Bbb.
MetLife also owns $83 M of collateralized debt obligations that are backed by subprime mortgages. 95% of these securities are rated Aa or Aaa. The unrealized loss in the portfolio was $3.6 M at June 30.
Bear Stearns has reportedly suspended investor redemptions at a third hedge fund. The Asset-Backed Securities Fund had less than 0.5% of its $900 million of assets in securities linked to subprime loans.
More thunder from down under... Australia's largest securities firm Macquarie Bank, says investors in two of its funds may lose up to 25% due to subprime fallout.
Macquarie Fortress Investments was forced to sell assets and use the proceeds to reduce borrowings and comply with lending covenants,
Australian stocks S&P/ASX 200 plunged 3.3% the most since 09/11 & Macquarie Bank plunged 10.7% the most in 5.5 years.
Blame it all on the Locusts? Maybe.
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