Off to Woodinville Wednesday Market

...to face a possibly psychotic weather situation and possibly empty market, but! I'm still goin'! Wish me luck, 'cause today I'm really gonna need it. There'll be some econochat when I get back, or if you want to figure it out yourself, look at credit spreads. Mmmm, parabolic.


Petals like Planks

that went about as damply as feared

That went about as, um, damply as could be expected. When I left the house, the sun had come out again, but walking down the hill you could see this striking sharp edge of clouds right over Lake Washington - the west half, including us, was mostly open sky; the east half - particularly the bit over Kirkland - looked like doom incarnate.

But it stayed dry on the bus ride there, and I got out, and checked in, and the sky looked scary but... still dry! And while the crowd waiting seemed a bit thin, it still didn't look bad. So I set up in a better place than the tent, and I'm waiting for the market to officially open - Kirkland Wednesday is the only market I do that actually has a strict open-time policy, you're not allowed to do anything before 2pm - and the rain started.

I had just enough time to fleet to the tent I'd been told I could use until they needed to set up for 3pm storytime before - after opening bell rang and I started playing - it started coming down in buckets and the market emptied out. I even had to move further back in the little tent a couple of times to get away from blowing rain. And I wasn't even through my set before they booted me because they needed to set up for storytime. So that was kind of a drag, but on the other hand, I did have someone curious about my flutemaking (gave card), one of the few people who did stay for a while said they quite liked my new song, and I did get a couple of dancing kids, one of whom was particularly energetic, which is always fun.

On the way home I stopped at the little store at the bottom of the hill, and the owner was in; he noticed my large flute (Splinter) and we talked some, and I played some for him, and he said that at his restaurant they occasionally have music events and asked if I was interested in playing, so I of course said sure and gave him a card. Maybe something will come of that; you never know.

commercial credit risk going parabolic

This is a little less coherent than I'd hoped, sorry; I wanted to make sure it got posted tonight instead of delayed yet again!

Commercial real-estate credit risks - which is "up" in these graphs - appears to be going parabolic. This implies that something's exploding, possibly two government-sponsoured GSEs with initials FM. The residential real-estate CDO/ABX markets have lost their small recovery almost entirely. The Alt-A implosion is starting to hit as some of the worst of that sector is already exploding badly and wrecking attempts to 'salvage' what's left of subprime value. C.f. the start of the downgrades avalanche on alt-A securities. (Regular readers will recognise a familiar - and previously-credited - chart.)

In similar and related "wuh oh" moments, agency bond spreads are also jumping. That's important because it raises concerns that the Fannie May/Freddie Mac bailout plan - not yet triggered, but give it time, it will be - was forced by overseas governments. Not helping: 2007-originated prime, as in prime, as in best grade mortgages are starting to fail at disturbing rates. This is no doubt related to how nearly one-third of all homeowners who bought a house in the last five years owes more on their loan than the value of the house. Fun!

Oh, housing inventory reports often don't include bankruptcy bank possessions, particularly in places like California. This makes the real number worse than reported, and again implies a longer time to recovery.

Dr. Roubini posted a column a week(ish) ago about why the recession will be global, and the worst since the Great Depression, but not as bad as said depression. However, it has a lot of data on credit, the banks and banking system, and is worth reading. He's still strongly in stagflation camp, but contraction in the M3 ("broad money") supply is starting to kick in pretty fiercely, adding credibility to the deflationista case. "Doctor Doom" is starting to sound like the optimist.

Kevin Depew writes again that the word of the moment is frugality, which is bad news for a discretionary-spending economy. Mish had similar commentary but I dropped the link - sorry. And Paul Farrell writes a rather angry column about how much Americans love their war economy and is going to keep liking it right up until it can't.