All the bits and pieces

[solarbird]

Good morning, Cascadia; good afternoon, points east.

I haven't been paying much attention the last week, but there were several news items of note before that which I never mentioned. First is that consumer credit continued to crater in the third quarter. Over time, that's good! But in the short term, it indicates continued contraction in spending is likely - there's not even a slowing in the rate of contraction.

Jonathan Tonge, in a letter to Mish Shedlock, thinks that the Canadian property bubble didn't collapse enough and that you'll see another sharp slide in property values soon after this temporary reprieve. He also notes falling Canadian exports to the US - I'll be curious to see whether that's true in the new trade balance data out today. (US imports surged, jacking up the US trade deficit, but it's not showing up in sales tax receipts. What?) Greater Fool follows up with commentary yesterday on the Calgary real estate bubble, as well as that in Vancouver.

Mind you, the US housing market is not really getting better, despite the mass monitisation of US housing debt. (Click on that and read, really. It's too long to summarise but watch what the Fed has been doing. I mean it.) Also check out this chart of FHA home loan default rates, courtesy Iacono Research:

Over a 30% default rate on 2007 loans, and 2008 loans climbing the same curve. That's nasty. That'll get worse as the job situation continues to worsen. What bothers me really is Chart 2 over here, which shows seasonally-adjusted nonfarm payroll employment, month over month. What I'm looking at here from January 09-October 09 looks suspiciously like - at best - a levelling off of the rate of job losses. That's bad. But worse is the implied bell curve of the negative space (um, sorry, art major speak and I don't know how else to put it) that it looks suspiciously the front half of a standard bell curve, not just the back half of the obvious inverted improvement curve.

There was some talk on the radio when this report came out that discouraged job seekers were re-entering the job market, helping drive unemployment rates up. This is a complete fabrication. It's not in the report at all. Go read Karl's analysis of the data.

Over at The Big Picture, Barry Ritholtz says to beware buyer surveys, but also notes:

The most interesting aspect of the survey response to me is the plan to spend more on home goods — perhaps this reflects an acceptance of the changing lack of mobility in residences. Many underwater or constrained homeowners are realizing they are going to be stuck where they are for some time to come. Hey, might as well make the best of it.

One thing we do know - and which I've seen confirmed other places - is that stores ordered far less merchandise this year than usual.

I don't like linking to Financial Sense, and please do not consider this an endorsement of their goldbuggery ways, but I do think these notes on consumer confidence against stock market performance and spending are of interest. Consumer sentiment fell sharply in today's announcement, as well, so that's not a good trend at all. Karl has the obvious commentary on this and the stock market reaction - which is to say, to spike up.

Myra Saefong at Marketwatch is talking about silver as the "poor man's gold," and a precious metals investment opportunity. I'm not an investment advisor and this is not investment advice, but when you start seeing these articles, it's usually smart to be ready to run like hell from metals at a moment's notice. These usually indicate the start of exposure overhangs.

Oh, and nothing good can come from Goldman Sachs's CEO saying that his bank is doing "God's work." Whenever someone in business says something like - particularly banking, particularly at the top - I assume rational thought is gone. And I wonder whether that's what they were thinking when they were betting on a US housing crash while simultaneously setting up the bubble that lead to that same crash.

US Dollar Index is still hanging out in the mid to low 75 range. Can$ at US95.2¢. Oil continues to decline, despite the flat dollar, to US$76.51. That's all for now; good luck.

Comments

[ankh-f-n-khonsu.livejournal.com]

From the Market Ticker (http://market-ticker.denninger.net/archives/1592-Employment-Report-OUCH.html) you linked:

Our government, by choosing to protect the oligarchs and banksters instead of allowing the market to force the bad debt out into the open where it defaults has chosen to saddle our nation's citizens with unconscionable and unsustainable debt loads, both at a government and personal level. This was a critical error and, as I expected and predicted, it is now being reflected directly into the employment situation.

There is no reason for cheering in this report; you can argue over "productivity gains" all you want but without jobs the civilian population cannot buy "stuff", whether that be goods or services, and a durable economic recovery is impossible.

Buckle up folks; this ride could get a bit rough, especially with the holidays right around the corner upon which virtually all retailers depend for their continued viability.

Agreed. This holiday season, as near as I can guess, may be pivotal.

[kallisti.livejournal.com]

Toronto and Vancouver real-estate has been sky high since the 1980s...back then, I paid $750/month for a 1 bedroom in downtown Toronto that was above a pizza place which had cockroaches...they could never understand why I constantly had pizza delivered from elsewhere!

That same apt today is rented out as a store at $1500 a month!

[jessie-c.livejournal.com]

Goldman Sachs's CEO saying that his bank is doing "God's work." Whenever someone in business says something like - particularly banking, particularly at the top - I assume rational thought is gone

Whenever any CEO says that I assume the presence of Evil (http://tvtropes.org/pmwiki/pmwiki.php/Main/CorruptCorporateExecutive). Religion has no place in business.

[peristaltor.livejournal.com]

If you're hesitant about linking to questionable sites, try adding the No Follow tag in the link. Add rel="nofollow" just before closing the bracket of the link, and the search engines will not count that link, thus denying questionable places and businesses "Google Juice."

I use it for all kinds of fundie sites.