More Market Observations 11/15/08
To avoid default... Pakistan agreed to an IMF bailout loan of $7.6 billion.
Watch retail & the transports... the ATA for hire truck tonnage index decreased 0.9% in September, the 3rd consectutive drop.
From ATA's weekly report... total business inventories, relative to sales, climbed from 1.27 in August to a 19-month high of 1.29 in September...
which is not a positive sign for future trucking volumes. Inventories need to be worked off before volumes may increase again.
Retail sales fell for the 4th consecutive month, plunging 2.8% in October.
October’s drop, which was the largest monthly decline on record and largest Yoy drop in decades...
provides further evidence that consumers are cutting back sharply on their spending amid tighter credit conditions, a weaker labor market, decreasing home values, and falling net wealth.
What do they have in common? Nokia, Nordstrom, JCPenney, Intel, WalMart, Kohl's, Abercrombie & Fitch?
This week they joined a host of other companies by issuing downside guidance for Q4.
The $200 billion auto industry bailout?... not if, but when GM liquidates...
the cost to taxpayers is estimated at $200 billion. Hmmm... the resulting 2.5 million jobs loss would push unemployment to over 10%...
a 50% reduction in US automaker operations would cause federal, state and local governments to lose $108.1 billion in taxes over three years.
Don't forget, the cost of unemployment & pension benefits that the taxpayer would assume... and $15 billion in recent junk bond issues which are already 75% off...
and GM accounts for $200 billion of the $900 billion junk bond market... GM & GMAC are present in 65% of all CDO issued; GM underlies $1 Trillion in default swaps... PRICELESS.
More layoffs & underfunded pensions... Sillybank AKA Citigroup -10K; Sun Microsystems -5K; Siemens Europes largest engineering firm -17K...
Siemens net loss $3.1 billion; stock YTD -61%; sector profit (industry, healthcare, energy) -25%; their pension plan is now underfunded by $3 billion.
Good Kill Hunting... The FDIC has issued a proposal to promote affordable loan modifications to over 1.4 million non GSE mortgage loans.
The plan includes paying servicers to cover expenses of loans modified and sharing losses in the event a modified loan falls back into default.
Sharing losses if the loan falls back into default... simply brilliant, theres nothing like killing two birds with one shot, the FDIC & our bank deposits.
Saved by ZERO? Bennie & The Ink Jets stated in a prepared speech regarding coordination among central banks that...
financial turmoil was the product of a global credit boom, and monetary policy actions have not resolved the ongoing strains in financial markets.
He also stated that continuing volatility of markets and recent indicators of economic performance confirm that challenges remain.
Here's some Nattering questions for ol' Bennie... whose deregulation of banks has allowed the house of finances ascendancy to global power?
While attempting to rescue the dot com bubble, which central bank started the credit boom lowering to 1%?
After seeing what happened under Greenspan, in an attempt to rescue the echo (secondary) bubble (real estate & its leveraged debt instruments)...
Why have you done the exact same thing? Did you really think that after lowering to 1% (effective negative real rates after subtracting inflation)...
failed miserably the first time, that sprinkling your fairy dust would somehow...
make this pile of manure "solution" magically resolve any problems this time around?
Me thinks Bennie & Greenspun are both sly dogs who merely do their masters bidding.
The tertiary bubble has already started, that is an inverted bubble, repleat with liquidity trap vortex, in which every asset deflates.
Watch retail & the transports... the ATA for hire truck tonnage index decreased 0.9% in September, the 3rd consectutive drop.
From ATA's weekly report... total business inventories, relative to sales, climbed from 1.27 in August to a 19-month high of 1.29 in September...
which is not a positive sign for future trucking volumes. Inventories need to be worked off before volumes may increase again.
Retail sales fell for the 4th consecutive month, plunging 2.8% in October.
October’s drop, which was the largest monthly decline on record and largest Yoy drop in decades...
provides further evidence that consumers are cutting back sharply on their spending amid tighter credit conditions, a weaker labor market, decreasing home values, and falling net wealth.
What do they have in common? Nokia, Nordstrom, JCPenney, Intel, WalMart, Kohl's, Abercrombie & Fitch?
This week they joined a host of other companies by issuing downside guidance for Q4.
The $200 billion auto industry bailout?... not if, but when GM liquidates...
the cost to taxpayers is estimated at $200 billion. Hmmm... the resulting 2.5 million jobs loss would push unemployment to over 10%...
a 50% reduction in US automaker operations would cause federal, state and local governments to lose $108.1 billion in taxes over three years.
Don't forget, the cost of unemployment & pension benefits that the taxpayer would assume... and $15 billion in recent junk bond issues which are already 75% off...
and GM accounts for $200 billion of the $900 billion junk bond market... GM & GMAC are present in 65% of all CDO issued; GM underlies $1 Trillion in default swaps... PRICELESS.
More layoffs & underfunded pensions... Sillybank AKA Citigroup -10K; Sun Microsystems -5K; Siemens Europes largest engineering firm -17K...
Siemens net loss $3.1 billion; stock YTD -61%; sector profit (industry, healthcare, energy) -25%; their pension plan is now underfunded by $3 billion.
Good Kill Hunting... The FDIC has issued a proposal to promote affordable loan modifications to over 1.4 million non GSE mortgage loans.
The plan includes paying servicers to cover expenses of loans modified and sharing losses in the event a modified loan falls back into default.
Sharing losses if the loan falls back into default... simply brilliant, theres nothing like killing two birds with one shot, the FDIC & our bank deposits.
Saved by ZERO? Bennie & The Ink Jets stated in a prepared speech regarding coordination among central banks that...
financial turmoil was the product of a global credit boom, and monetary policy actions have not resolved the ongoing strains in financial markets.
He also stated that continuing volatility of markets and recent indicators of economic performance confirm that challenges remain.
Here's some Nattering questions for ol' Bennie... whose deregulation of banks has allowed the house of finances ascendancy to global power?
While attempting to rescue the dot com bubble, which central bank started the credit boom lowering to 1%?
After seeing what happened under Greenspan, in an attempt to rescue the echo (secondary) bubble (real estate & its leveraged debt instruments)...
Why have you done the exact same thing? Did you really think that after lowering to 1% (effective negative real rates after subtracting inflation)...
failed miserably the first time, that sprinkling your fairy dust would somehow...
make this pile of manure "solution" magically resolve any problems this time around?
Me thinks Bennie & Greenspun are both sly dogs who merely do their masters bidding.
The tertiary bubble has already started, that is an inverted bubble, repleat with liquidity trap vortex, in which every asset deflates.
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