mostly about debt
Dec. 11th, 2008 09:49 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
solarbirdGood morning. The unemployment numbers (new filings) were even worse than expected today, at +58,000 to 573,000. But this post isn't about all that, I've got a shred of a theme and I'm trying to stick to it.
The dollar move down that started yesterday has continued, smashing through the 50-day moving average and effortlessly through November's recent lows. We're now in the middle of mid-October's large run up. This looks head-and-shoulders-y to technical traders, which implies a return to around 77-78. A falling dollar makes US treasuries negative outright for foreign investors. Keep in mind how that affects US government debt financing.
Shipping continues to pick up a bit - at least in some sectors - with the Baltic Dry Index back over 700. That's still a very low number by recent terms, but back from the precipice. Capesize ship rates - these are the largest dry bulk class, freighters which cannot use the Panama or Suez canals and as such must traverse the capes - have been the source of most of the rise over the last few days. Many ports can't serve vessels of this size, which probably indicates something about market segments. (Here's a summary of the different sizes; it leaves out Supramax, but wedge Supramax in as a class covering the top-end of Handymax and low end of Panamax.)
One wonders whether this is related to the TED spread falling below 200 bp for the first time in some time a the LIBOR has made a substantial move down. It's possible that the largest concerns are becoming more easily able to access shipping lines of credit. That's speculation, of course, but it would be one of the few active signs of increased lending in any field.
Marketwatch reports that total household US debt fell in the third quarter for the first time since at least 1952. The phrase "at least" is in there because that's as far back as the records go. They're reporting it as "pay down" in the headline, and the story says, "Households paid off more mortgage debt than they took on for the first time on record. Mortgage debt fell at a 2.4% annual rate to $10.54 trillion." But I wonder - no, that's not strong enough. I strongly suspect that this is due to walkaways and foreclosures. Note that all other debt classes increased. I don't think much if any of this decline is true "pay down;" I think it's just eliminated debt, which means eliminated money, which does not mean good news, contrary to the headline spin. Either way, it indicates essentially the formal end of the mortgage-equity-withdrawal/house-as-ATM phenomenon, which appropriate ramifications for consumer spending.
Also, total US debt per capita soared, thanks to bailouts: "Total U.S. domestic nonfinancial debt increased at a 7.2% annual rate, boosted by a postwar record 39.2% increase in debt taken on by the federal government."
Anyway, I don't know where they're running up those credit card balances, but it's not in malls; General Growth Properties, the second largest operator of malls in the US, is on the verge of bankruptcy due to the spending slowdown and credit collapse. Not in this article is that their interest payments exceed their gross income (according to an unlinkable source, sorry) and that they have a debt deadline to meet by Friday midnight; this implies strongly that they're done.
December sales figures are going to be interesting. January is going to be difficult.
The dollar move down that started yesterday has continued, smashing through the 50-day moving average and effortlessly through November's recent lows. We're now in the middle of mid-October's large run up. This looks head-and-shoulders-y to technical traders, which implies a return to around 77-78. A falling dollar makes US treasuries negative outright for foreign investors. Keep in mind how that affects US government debt financing.
Shipping continues to pick up a bit - at least in some sectors - with the Baltic Dry Index back over 700. That's still a very low number by recent terms, but back from the precipice. Capesize ship rates - these are the largest dry bulk class, freighters which cannot use the Panama or Suez canals and as such must traverse the capes - have been the source of most of the rise over the last few days. Many ports can't serve vessels of this size, which probably indicates something about market segments. (Here's a summary of the different sizes; it leaves out Supramax, but wedge Supramax in as a class covering the top-end of Handymax and low end of Panamax.)
One wonders whether this is related to the TED spread falling below 200 bp for the first time in some time a the LIBOR has made a substantial move down. It's possible that the largest concerns are becoming more easily able to access shipping lines of credit. That's speculation, of course, but it would be one of the few active signs of increased lending in any field.
Marketwatch reports that total household US debt fell in the third quarter for the first time since at least 1952. The phrase "at least" is in there because that's as far back as the records go. They're reporting it as "pay down" in the headline, and the story says, "Households paid off more mortgage debt than they took on for the first time on record. Mortgage debt fell at a 2.4% annual rate to $10.54 trillion." But I wonder - no, that's not strong enough. I strongly suspect that this is due to walkaways and foreclosures. Note that all other debt classes increased. I don't think much if any of this decline is true "pay down;" I think it's just eliminated debt, which means eliminated money, which does not mean good news, contrary to the headline spin. Either way, it indicates essentially the formal end of the mortgage-equity-withdrawal/house-as-ATM phenomenon, which appropriate ramifications for consumer spending.
Also, total US debt per capita soared, thanks to bailouts: "Total U.S. domestic nonfinancial debt increased at a 7.2% annual rate, boosted by a postwar record 39.2% increase in debt taken on by the federal government."
Anyway, I don't know where they're running up those credit card balances, but it's not in malls; General Growth Properties, the second largest operator of malls in the US, is on the verge of bankruptcy due to the spending slowdown and credit collapse. Not in this article is that their interest payments exceed their gross income (according to an unlinkable source, sorry) and that they have a debt deadline to meet by Friday midnight; this implies strongly that they're done.
December sales figures are going to be interesting. January is going to be difficult.
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no subject
Date: 2008-12-11 06:22 pm (UTC)no subject
Date: 2008-12-12 04:11 am (UTC)no subject
Date: 2008-12-13 08:51 pm (UTC)My mom actually has the money to pay her cards and this was just a "took longer to get there than she thought" thing; then look at all the people who can choose between paying the card bill on time and having plenty of food that week or something . . .