From the Wall Street Journal:
Economy Has Further to Fall, According to Economists’ Survey
Bernanke, Paulson Grades Still Low, Despite Getting Thumbs Up on Bear Deal
By PHIL IZZO
April 10, 2008
The weakening U.S. economy has further to fall, according to the majority of economists in the latest Wall Street Journal forecasting survey.
By a 3-to-1 margin, respondents said the economy is in a recession, and almost three quarters said the economy hasn’t yet hit bottom. “It’s hard to say,” said Lou Crandall of Wrightson ICAP, since “it doesn’t feel like anything we’ve experienced in decades.”
…
Richard DeKaser of National City Corp. was among the economists who think the nadir has been reached and that the economy will soon start to recover. “First, we’ve begun to see some stabilization in existing- and new-home sales,” he said. “Second, the uncertainties plaguing the credit markets are beginning to narrow. And third, the policy actions taken by the government [the economic stimulus package and Fed rate cuts] will begin to take effect soon.”Mr. Wyss isn’t convinced. “Home prices are still diving,” he said, adding, “I won’t believe that home sales have stabilized until we see the spring numbers. That’s when activity picks up.” He also suspects that consumer spending will slow further because of the economic turmoil.
Iam Shepherdson of High Frequency Economics agrees. “I expect soft consumption will keep growth way below trend right through next year and I would not be surprised by a soft 2010 either,” he said. “You can’t party for a decade, stop on Saturday and expect the hangover to be gone by Sunday lunchtime so you can go out and start all over again.”
…
One area supporting the point on consumption is the employment outlook. After three consecutive drops in nonfarm payrolls, the economists now expect the economy to shed 1,625 jobs a month, on average, over the next year. They expect the unemployment rate, now 5.1%, to rise to 5.6% by December. Meanwhile, just 21% of economists expect home prices to hit a bottom this year, while 67% see the bottom in 2009 and 12% say it won’t be until 2010.
(emphasis added)
From Bloomberg:
Goldman Cuts More Jobs, Citing `Market Conditions’
Goldman Sachs Group Inc., the world’s biggest securities firm by market value, is cutting deeper into its ranks, eliminating posts in its mortgage and investment banking units as the credit contraction saps demand.
“As you’d expect given market conditions, we have been looking at a number of areas of the firm where we believe we have too many people,” Lucas van Praag, a spokesman in New York, said today in an interview. “We have transferred some to other areas and other regions but unfortunately others have been asked to leave the firm.”
From CNBC:
Senate Passes Housing Bill, But More Changes Likely
The Senate on Thursday passed a bipartisan package of tax breaks and other steps designed to help businesses and homeowners weather the housing crisis.
The measure passed by an impressive 84-12 vote, but even supporters of it acknowledge it’s tilted too much in favor of businesses like home builders and does little to help borrowers at risk of losing their homes.
The plan combines large tax breaks for homebuilders and a $7,000 tax credit for people who buy foreclosed properties, as well as $4 billion in grants for communities to buy and fix up abandoned homes.
Despite the impressive vote, the bill will be significantly redrawn by critics in the House who say it’s tilted toward businesses such as home builders instead of borrowers.
The White House opposes the plan but has not issued an explicit veto threat.
It says parts of the legislation would make the problem worse by depressing some home values and the measure inappropriately uses taxpayer money to bail out lenders saddled with foreclosed houses.
It’s all in the way you define help.
From the AP:
Bush Plan Helps Few Troubled Borrowers
A program President Bush is expanding to help struggling homeowners head off foreclosure has helped only 1 percent of the borrowers it originally set out to assist and is expected to reach just 100,000 more by the end of the year.
The administration claims the initiative has reached 60 times more homeowners and will help a half a million by year’s end.
Rushing to counter Democratic calls for a broad housing rescue to help between 1 million and 2 million people avoid losing their homes, the Bush administration announced Wednesday it will expand a Federal Housing Administration program to allow more homeowners who have fallen behind on their mortgage payments refinance into more affordable government-insured loans.
However, that program, created in August 2007 and called FHASecure, has helped fewer than 2,500 such borrowers to date — a tiny fraction of the 240,000 the administration first projected, and the 150,000 the White House now claims.
(emphasis added)
#1 grim: its mortgage and investment banking units as the credit contraction saps demand.
But Mr. De KAser says the uncertainties plaguing the credit markets are beginning to narrow.
Mr. Kudlow is heartened by the drop in unemployemnt claims. says America is not out yet.
grim/richnnj: If you one of you guys gets a chance, can you tell me what the average sold price was in River Edge March 07, vs. March 08? Thanks.
grim, I’m in moderation (sorry for repeat post)
3b,
River Edge – Sold
SFH/Condo/Coop/TH
March 2007
Total Sold: 12
Average List Price: $593,508
Average Sold Price: $553,933
Median Sold Price: $512,500
Sale/List: 93.332%
March 2008
Total Sold: 4
Average List Price: $499,225
Average Sold Price: $440,250
Median Sold Price: $457,500
Sale/List: 88.187%
River Edge – Under Contract
SFH/Condo/Coop/TH
March 2007
Total UC: 18
Average List Price: $558,215
March 2008
Total UC: 10
Average List Price: $537,680
recent stats
Unemployment
BLS Broadset(U-6)1: 9%
SGS Alternative2: 13%
1* U1: Percentage of labor force unemployed 15 weeks or longer.
* U2: Percentage of labor force who lost jobs or completed temporary work.
* U3: Official unemployment rate per ILO definition.
* U4: U3 + “discouraged workers”, or those who have stopped looking for work because current economic conditions makes them believe that no work is available for them.
* U5: U4 + other “marginally attached workers”, or those who “would like” and are able to work, but have not looked for work recently.
* U6: U5 + Part time workers who want to work full time, but can not due to economic reasons.
2 The SGS Alternate Unemployment Rate reflects current unemployment reporting methodology adjusted for SGS-estimated “discouraged workers” defined away during the Clinton Administration added to the existing BLS estimates of level U-6 unemployment.
M3
SGS calculation: 17%
CPI
CPI-U3: 4%
SGS calculated CPI4: 12%
3current government CPI calc
4includes food and energy
source and more data:
http://www.shadowstats.com/alternate_data
As it relates to the security of one’s home I wanted to pass this on for anyone else who may have missed it. I can’t believe a fellow Republican is responsible for this assertion. It makes me sick.
WAR ON TERROR
Federal memo questioned 4th Amendment rights
Justice Department repudiates 2001 missive asserting presidential power on searches
THE WASHINGTON POST
Friday, April 04, 2008
WASHINGTON — The Justice Department concluded in October 2001 that military operations combating terrorism inside the United States are not limited by Fourth Amendment protections against unreasonable searches and seizures, according to one of several secret memos containing potentially controversial assertions of presidential power.
The memo, sent Oct. 23, 2001, to the Defense Department and the White House by the Office of Legal Counsel, focused on the rules governing any deployment of U.S. forces inside the country “in the event of further large-scale terrorist activities” by al Qaeda, a Justice Department official said Thursday.
Administration officials declined to comment on what domestic military operations were being contemplated at the time, and the legal status of the memo is now unclear. Although the memo has not been formally withdrawn, the Justice Department on Thursday repudiated the idea that there are no constitutional limits to military searches and seizures in a time of war, saying it depends on “the particular context and circumstances of the search,” according to a statement by the department.
No court has ruled that the Fourth Amendment doesn’t apply to the military, said Jameel Jaffer, national security director at the American Civil Liberties Union.
“In general, the government can’t send an FBI agent to search your home or listen to your phone calls without a warrant, and it can’t send a soldier to do it either,” Jaffer said. “The applicability of the Fourth Amendment doesn’t turn on what kind of uniform the government agent is wearing.”
The plan combines large tax breaks for homebuilders and a $7,000 tax credit for people who buy foreclosed properties
Why not just be intellectually honest and give the $7k right to the banks? This is just a wealth transfer to banks via home buyers. The foreclosed “homeowner” will see no benefit. Home buyers will see little benefit as this will just be factored into the price of a foreclosure. And, this puts others in the neighborhood at a disadvantage because they can’t offer a $7k tax credit.
“It will take an awful lot of stupidity for Manhattan to relinquish this role, and this is unlikely given the current trend of smart leadership in the city.”
Smart leadership? IMF and Soros estimate close to 1 trillion in losses. How smart does one have to be to accomplish this? Deleveraging has just begun. Banks will be hoarding cash for years.
Either start a hedge fund, Mumbai, Dubai, Shanghai or goodbye. Go east young man.
kettle [10],
Bingo.
will rebates be retroactive? What if you’re buying now?
I’m closing on a home in early June… If rebate incentives are coming, should I delay my purchase?
re: (10 + 14) BC Bob and Kettle1
Unemployment * CPI = DOUBLE BINGO or game over
Sean (17)-
“Unemployment * CPI = DOUBLE BINGO or game over”
One word: tilt.
tilt?
please, could you give me some info about MLS ID# 2470194?
thanks a lot
“Goldman Cuts More Jobs, Citing `Market Conditions’”
But not in Manhattan
There’s quite the discussion brewing at http://www.rahwayrising.com – check the comments for the lead post. I encouraged the “Rahway is the Next Hoboken” crowd to check out Grim’s site and get a reality check ;-)
Poster Scott at 12 cracked me up – By the way, NCR how’s your website that you keep advertising doing? Gettin’ any hits yet?
(19)-
Tilt, like with a pinball machine.
“We have transferred some to other areas and other regions but unfortunately others have been asked to leave the firm.”
When you’re firing people, the passive voice is your friend
grim…for tomorrow
WSJ
RATING GAME
As Housing Boomed,
Moody’s Opened Up
By AARON LUCCHETTI
April 11, 2008
Bond-rating agency Moody’s Investors Service used to be an ivory tower of finance. Analysts were discouraged from having a drink with a client. Phone calls from bankers went unanswered if they rang during intense, almost academic debates about credit ratings.
A decade ago, as the housing market was just beginning to take off, Moody’s was a small player in analyzing complex securities based on home mortgages. Then, Moody’s joined Wall Street and many investors in partaking of the punch bowl.
A firm once known for a bookish culture began to focus on the market share that affected its own revenue and profit. The rating firm became willing, on occasion, to switch analysts if clients complained. An executive overseeing mortgage ratings went skydiving with a client. By the height of the mortgage-securities frenzy in 2006, Moody’s had pulled even with its largest competitor, rating nine out of every 10 dollars raised in these instruments. It gave many of the bonds its coveted triple-A rating.
[edit]
4 pretorius
that’s not one of your prouder moments.
Chi
I’m not sure what, if anything, makes moody’s any less of a fraudulent sh*tbucket than S&P, Fitch, or Jimmy the Greek.
4 pret
That deserves a better response.
I’ll address it tomorrow.
[4] pret,
Not sure you can compare Montreal to NYC or London. There were factors there that made a huge difference, notably the separatist movement and the aggressive francophone majority of separatists and nonseparatists (coupled with the liberal leadership) that caused huge dollar flight from Montreal. Finally, the 76 Olympics bankrupted the city at a time when the later contretemps made it impossible to recover. All of the above was more akin to a political Katrina than to economic missteps that other cities could make.
In the same thread, you are correct that (at least, I assume that you mean that) RI and NYC/NJ cannot be compared. RI, as one friend from Warwick remarked “is a suburb of Boston” and it is heavily dependent on the Mass. economy, which, as we have seen over the past three decades, is more volatile than in other areas. RI has always been last to rise, first to fall, along with SE Mass and Eastern Conn. because they have no specialized local economy and have been dependent on the wealth flowing down from above for years. While NJ has a lot wrong with it, and is dependent on two major metro areas outside its borders, it is better insulated than RI.
My $0.02