Finally Friday

[solarbird]

Good afternoon.

I want to punch this guy in the face. Why? Not because he was an idiot with his finances and is a portrait of all the stupid individual manoeuvres made over the last few years - tho' he's certainly that - but because he's a New York Times financial reporter who actually reported on all these kinds of stupidity while he was emulating them. Honesty's nice and all, but EDMUND L. ANDREWS is an idiot, and should never work as a financial reporter again. Seriously, read it, it has it all; liar loans, multiple refinances, automatic withdrawals(!) from credit cards in response to bouncing cheques, idiotically frivolous spending - and as of right now, he's living in a house rent- and mortgage-free for the last eight months because his latest bank is so far behind in processing restructuring applications that they still haven't even got to him!

Punchings. Lots and lots of punchings.

Anyway.

US consumer sentiment rose in May "on a rosier outlook," says Marketwatch, or, on buying into the bear-market rally, says me. Well, that, and falling prices - the biggest drop in 54 years - will make people happier, until and unless a deflationary cycle really starts to eat people.

There's a neat contradiction in polled perceptions and reality, however; take this from the CNBC version of the Reuters story:

"Consumer confidence rose in early May as consumers became increasingly convinced that the economy is in its final stages of contraction, and paradoxically, that their personal finances would remain dismal and keep their spending at reduced levels for the foreseeable future," the Reuters/University of Michigan Surveys of Consumers said in a statement.

Confidence remained shaky overall however, with the majority of consumers in early May reporting their financial situation had worsened due primarily to income declines, shorter work hours and lost jobs, according to the survey.

Neat, huh? The typical poll respondent is saying essentially, "The economy's going to start getting better now for everybody but me. My sitation is getting worse, and I expect it to keep getting worse. Externalised optimism of this sort is kind of a new one on me.

Oh, and credit card defaults set another new record in April. Citigroup's charge-off rate hit an annualised 10.21%, Wells Fargo hit 10.03% (also annualised, as these all are), JP Morgan Chase and Company hit 8.07%, Discover's hit 8.26%.

GM announced its dealership cuts today - 1,100 across the US on the GM label, another 470 from cutting Saturn, Saab, and Hummer. Mergers will bring the total cuts to 2,600 for GMC as a whole; add in Chrylser's closings and you're looking at about 100,000 in job cuts.

If you want some bear pr0n, by which I mean economic bear pr0n, check out Marc Faber on CNBC and John Browne of Euro Pacific Capital, the latter calling for a DJIA - yes, DJIA - of 1,000, also on CNBC. Bill Spiropoulos argues back that jobless claims are falling - and they're still below April peaks - which is the counter-argument. Idly, the atmosphere right now feels a lot like 1930 - everyone optimistic and thinking it's about wound up, but, well.

Mish expects oil prices to drop as Chinese storage capacity is reached. Russia's economy, already reeling from oil price drops, will not like that. Meanwhile, Hong Kong's economy contracted at the worst rate since 1955 in the first quarter, down at an annualised rate of 6.5%. Germany and Italy both set modern decline records, leading Europe down in the last quarter.

Today's another FDIC Friday. Florida expects to see at least one bank seizure today. We'll find out, and I'll eta this later if appropriate.

Comments

[flashfire.livejournal.com]

I read the thing by Andrews last night, elsewhere. Couple people questioned it even running, but I wrote:

I think it's good that they ran it, even though it happened to someone who's supposed to know better. It just goes to show that anyone can lose track of things and get in over their heads.

I made some bad credit decisions in the past and piled up too much debt, but somehow I still had credit scores around 730 before I was able to clean it all up. Now those scores are even higher.

Now my goal is to remain debt free and when I went looking for a house, my biggest decision was to buy a place that would allow me to keep my monthly payments to about 30-40% of my income. I didn't want to get a place that's so expensive that I'd be paying $2,000 or more a month and have next to nothing left over for food and gas, and I'd be stuck unable to really go anywhere. So, I kept my price range lower and my payments will be very affordable. I should be just fine.

Still, I had to learn some lessons along the way and I'm fortunate to be in a better situation now.

[solarbird]

I'm still mad. IF YOU KNOW BETTER THAT MEANS YOU SHOULD KNOW BETTER. I mean, it shouldn't be abstract for this guy - it's his goddamn job.

And yet.

Recently zarq posted a couple of things about the American rejection of knowledge and expertise. This addresses that post - it doesn't reject the idea that Americans are rejecting knowledge and expertise; they are. But the reasons for doing so - aside from the propaganda reinforcing it - are from successive failures of those presented as experts. This guy should be an expert. He should've known better. But, well, here we are. Given that this yet another example of expert failure, is it any wonder people have been discounting those presented as experts?

[flashfire.livejournal.com]

The underlying constant I got out of what he was saying was that he kept thinking they'd be fine "if this," or "if that," things that didn't happen.

That's probably the first and largest problem right there. If you can't handle it without certain other things falling into place, it shouldn't be tried.

[anfalicious.livejournal.com]

I read it as "Yeah, I should have known better, but this was someone else's fault dammit"

I mean really, getting a loan that will take up ALL of your income, based on the hope of someone who has been out of the workforce for 25 years getting a job is somewhat delusional. The bit about Mastercard was especially nice, damn those nasty Mastercard people for letting me have this option.

I'm all for regulation to keep the average joe who knows about as much about banking and economics as a box of hammers, but this guy is supposed to be an expert. Having said that, don't get me started on the people who gave out these loans. I was a loan manager back in the heady days of free money, and I had to get out of it because I couldn't morally give loans to people who I knew would be unable to afford it, whereas my colleagues could, did and made a pile of cash off it.

[elfs.livejournal.com]

If you want some bear pr0n, by which I mean economic bear pr0n,

Nudes of Andrew Sullivan? Finally?

[solarbird]

Andrew is a political bear.

[hugh-mannity.livejournal.com]

Damn. I'm no financial wizard, but I know enough not to spend more than I can afford to pay.

Interestingly enough, I just got approximately $100/month pay raise (I'm in health care -- business is still good) and within a week discovered that my RE taxes and house insurance, both of which are handled by my mortgage company through an escrow account, have increased, so I'm going to be paying $100/month more to the mortgage company to cover that.

[kayjayuu.livejournal.com]

Re: punching Andrews -- one simple statement in six webpages of reading:

"We were spending way more than we were earning."

And he didn't see that as the problem.