kibbles and bits
Oct. 27th, 2009 11:58 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
solarbirdGood evening, Cascadia; good morning, Europe and other points east.
The US dollar index rose today, breaking back up above 76 and stabilising at that point. Various technical analysts are arguing over the significance of channel breakages either present or not, depending upon how you draw your graphs; I don't care much about that, because it's silly, but I what I did see was three attempts - all failing - to break convincingly below 75. This despite news of the opening of the non-US-dollar Iranian oil bourse. Paolo Pellegrini thinks the US dollar has devaluated too quickly for the short term, but also says shorting US debt is 'attractive,' and he has a bit of a history.
Consumer confidence came in unexpectedly low, with a Wyle-E-Coyote plummet down in the Present Situation Index. (Combine this with a spate of credit card rate hikes and cancellations to create FUN TIMES in Christmas retail.) One of the smaller manufacturing indices (Richmond Manufacturing Index) came in sharply below expectations as well. American Trucking Association Truck Tonnage Index fell in September, but not by very much. Chinese shipper COSCO reports a major rise in bulk-cargo (raw materials) shipping but a decline in finished-goods - testament to the power of Chinese materials stockpiling, I think.
Banks are charging off loans at rates greater than 1932. GMAC - the financing arm of General Motors - is asking for another bailout, between US$2.8 and $5.6B. States are continuing to see lower-than-projected tax revenue, as well, one latest being Oklahoma looking at 26% shortfalls.
Mish Shedlock lists his 12 reasons for a job-loss recovery, and points at this article in particular talking about the "pathology" of a recovery with continuing employment losses throughout. If you're over 65, the situation is particularly bad - which normally isn't a big segment, but is more of one just now, with a lot of retirement funds wiped out.
Some of that has been recovered, I suppose, in the stock rally, but everyone agrees a "correction" is due in the equities markets, with market-overvaluation rates of 20% to 40% being tossed about. Those are pretty severe swings to be called corrections, but there's that 20 week / 50 week moving average indicator staring us in the face. On the third hand (third hand?), Dr. Roubini at RGE Monitor thinks that stocks are now part of a bubble that's also affecting commodities, fuelled by the new US dollar carry trade. (This rally has felt artificial to me throughout, and I've said so.)
In housing, Yale economist Robert Schiller is saying that he thinks the small but important stabilisation in housing prices won't last, and that some areas are going to see another leg down. That makes sense, given the foreclosure queue, but if we can get housing to three times income, we'll be in reasonable territory again, and we're not that far away now in gross average. And not to pile on or anything, but former Fannie Mae Chief Credit Officer Edward Pinto calls the Home Affordable Modification Program numbers a complete sham:
McDonald's has been one of the companies - like Wal-Mart and other discounters - benefiting from the recession, as buyers shift down the scale of cost (and, one might add, quality) to cheaper restaurants. They're now seeing customers as being in 'retreat mode.'
Everyone in North America is waiting for the US 3Q economic growth report this week. That'll be a big deal as soon as it comes out. For whatever it's worth, Australia's doing better than expected with September business confidence rising sharply, and there are rumours of a small central bank interest rate hike.
There are also a lot of people wondering about Citigroup and Citibank, but I don't have anything substantial enough to talk about here. I wish I did.
Good luck tomorrow, everyone.
The US dollar index rose today, breaking back up above 76 and stabilising at that point. Various technical analysts are arguing over the significance of channel breakages either present or not, depending upon how you draw your graphs; I don't care much about that, because it's silly, but I what I did see was three attempts - all failing - to break convincingly below 75. This despite news of the opening of the non-US-dollar Iranian oil bourse. Paolo Pellegrini thinks the US dollar has devaluated too quickly for the short term, but also says shorting US debt is 'attractive,' and he has a bit of a history.
Consumer confidence came in unexpectedly low, with a Wyle-E-Coyote plummet down in the Present Situation Index. (Combine this with a spate of credit card rate hikes and cancellations to create FUN TIMES in Christmas retail.) One of the smaller manufacturing indices (Richmond Manufacturing Index) came in sharply below expectations as well. American Trucking Association Truck Tonnage Index fell in September, but not by very much. Chinese shipper COSCO reports a major rise in bulk-cargo (raw materials) shipping but a decline in finished-goods - testament to the power of Chinese materials stockpiling, I think.
Banks are charging off loans at rates greater than 1932. GMAC - the financing arm of General Motors - is asking for another bailout, between US$2.8 and $5.6B. States are continuing to see lower-than-projected tax revenue, as well, one latest being Oklahoma looking at 26% shortfalls.
Mish Shedlock lists his 12 reasons for a job-loss recovery, and points at this article in particular talking about the "pathology" of a recovery with continuing employment losses throughout. If you're over 65, the situation is particularly bad - which normally isn't a big segment, but is more of one just now, with a lot of retirement funds wiped out.
Some of that has been recovered, I suppose, in the stock rally, but everyone agrees a "correction" is due in the equities markets, with market-overvaluation rates of 20% to 40% being tossed about. Those are pretty severe swings to be called corrections, but there's that 20 week / 50 week moving average indicator staring us in the face. On the third hand (third hand?), Dr. Roubini at RGE Monitor thinks that stocks are now part of a bubble that's also affecting commodities, fuelled by the new US dollar carry trade. (This rally has felt artificial to me throughout, and I've said so.)
In housing, Yale economist Robert Schiller is saying that he thinks the small but important stabilisation in housing prices won't last, and that some areas are going to see another leg down. That makes sense, given the foreclosure queue, but if we can get housing to three times income, we'll be in reasonable territory again, and we're not that far away now in gross average. And not to pile on or anything, but former Fannie Mae Chief Credit Officer Edward Pinto calls the Home Affordable Modification Program numbers a complete sham:
On October 9 Treasury Secretary Geithner announced that the Obama administration’s HAMP had enrolled its 500,000 participant.This is probably spurring on efforts to extend homebuyer tax credits, and, in particular, to extend them from first-time to move-up buyers as well.
However, only about 1200 borrowers have entered the permanent modification phase; with the balance being in the 3-5 month trial period. This is in spite of the fact that there were 200,000 trials in progress back in July. ...
The number of permanent modifications resulting from these 500,000 trial modifications could be low as 100,000-200,000. Finally, at a 50% ultimate redefault failure rate, only 50,000-100,000 performing loans will result. At this success rate, it is mathematically impossible for the administration to meet its announced goal
McDonald's has been one of the companies - like Wal-Mart and other discounters - benefiting from the recession, as buyers shift down the scale of cost (and, one might add, quality) to cheaper restaurants. They're now seeing customers as being in 'retreat mode.'
Everyone in North America is waiting for the US 3Q economic growth report this week. That'll be a big deal as soon as it comes out. For whatever it's worth, Australia's doing better than expected with September business confidence rising sharply, and there are rumours of a small central bank interest rate hike.
There are also a lot of people wondering about Citigroup and Citibank, but I don't have anything substantial enough to talk about here. I wish I did.
Good luck tomorrow, everyone.
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no subject
Date: 2009-10-28 07:12 am (UTC)Not if you're human. However, if you're a Motie (or someone with a taste for hard sf), you can say "on the gripping hand (http://en.wikipedia.org/wiki/On_the_gripping_hand_(idiom))."
This rally has felt artificial to me throughout, and I've said so.
I've been calling it the mother of all sucker rallies since July. I thought it would peter out before the Dow hit 10,000. Looks like I underestimated it.
Thanks for the news and for wishing your readers good luck. We all need it.
no subject
Date: 2009-10-28 03:44 pm (UTC)no subject
Date: 2009-10-28 04:52 pm (UTC)no subject
Date: 2009-10-28 05:23 pm (UTC)no subject
Date: 2009-10-28 05:46 pm (UTC)no subject
Date: 2009-10-28 03:32 pm (UTC)no subject
Date: 2009-10-28 03:43 pm (UTC)That said, there are all sorts of things you wouldn't like about Mish's politics
no subject
Date: 2009-10-28 04:51 pm (UTC)no subject
Date: 2009-10-28 05:24 pm (UTC)