a few addenda

[solarbird]

Yesterday, I talked about tax receipts imploding. Today we have some numbers. Net tax receipts down 20%, and the first April (tax month) deficit since 1983. Individual income tax receipts are down 24% ($-181B), corporate tax receipts are down 58% ($-100B) in April. Spending rose 20% at the same time.

The Fed just bought US$6B in treasuries, mostly short-term. This is the first back-to-back buy. The US trade deficit is down year-to-year to US$27B, which is good in terms of trading accounts deficit, but in worse in that China, Japan, et al. have less impetus to buy US treasury bills to sterilise their trade surpluses with the US and keep their currency valuations from rising. eta: To clarify, that's down year-to-year, but up from last month, mostly on falling US exports.

Advanta - a major speciality credit house for small businesses - is closing vast swaths of credit lines. As many as one million businesses have just had a substantial chunk of their credit cut off. Mish has more here.

An assortment of top GM executives have sold out their remaining shares, to "advantage of a trading window to sell their shares while there's still some value 'like most reasonable people would do.'" Calculated Risk reports that a GM bankruptcy is "more probable" than previously, but that they have found three bidders for the Hummer line. Naked Capitalism reports that various Credit Default Swap (CDS) holders are going to force GM to bankruptcy rather than a government-backed settlement deal. Karl at Market Ticker is extremely unhappy at the deal the government is handing unsubordinated bondholders. A variety of people are wondering who will be willing to buy any future (post-bankruptcy/makeover/whatever) GM bonds, given the circumstances bondholders are facing here.

CR also has a clarifying post on why bankruptcy and foreclosure house sales are a weaker class of sale than normal sales, even leaving prices completely aside. It's because they're "one-and-done" sales, where the seller isn't proceeding to buy another house - typically of higher value - themselves. There's no sell-through chain.

Meanwhile, oil is quietly approaching $60/barrel again, closing today at $58.85 as the economy continues to shrink, not grow. Brad Setser discusses the decline in oil imports year-to-year despite a year-to-year halving of prices here, as part of a general discussion on the trade balance you might want to read.

Zero Hedge has a post entitled "Why I Am Freaking Out." It's a guest post, and long, but interesting. Meanwhile, European Central Bank president Jean-Claude Trichet thinks the global economy has bottomed out. We'll see.

That's all for now. Good luck.

Comments

[maellenkleth]

Just had lunch with my consultant-economist friend Stokos, who suggests that the incidences of piracy in southeast Asia (in and around Indonesia and the Phillipines) are commercially-driven, as a trade-war by proxy between major commodity-brokers. No sources offered, but it certainly fits some of the patterns we've already seen in disruption of trading of solid commodities (mid-distance coal movement, for example, is way down between Indonesia and the Indian subcontinent). That's why we are getting all the calls for spot shipments of coal to India, even over here diagonally across the Pacific.

Also, with the day rates for large bulk carriers being as low as they are, ship-owners are caught in a squeeze between their clients (the charterers or the single-cargo shippers) and their insurers. Maritime insurance rates, like most other insurance rates, are rising. (Similarly, I've just seen that with an extortionate demand for increased premium in my C&GL coverage for the overseas business: no explanation other than the usual "market forces." We are not big enough players to self-insure, not by a long shot).

Anyway, that's why I pay for those nice lunches every few weeks, gems of commercial information like that.

[phillipalden.livejournal.com]

Great post! Thanks for gathering all that data and presenting it so well.