Empiric Student Property Share Discussion Threads

[briarberry] 01/9/2010 11:56

The Great Deleveraging Lie

Total credit market debt peaked at $52.9 trillion in the 1st quarter of 2009. It is currently at $52.1 trillion. The GREAT DE-LEVERAGING of the United States has chopped our total debt by (only) 1.5%.

During the Great Depression of the 1930's Total Credit Market Debt as a % of GDP peaked at 260% of GDP. As of today, it stands at 360% of GDP. The Federal Government is adding $4 billion per day to the National Debt. GDP is stagnant and will likely not grow for the next year. The storyline about corporate America being flush with cash is another lie. Corporations have ADDED $482 billion of debt since 2007. Corporate America has the largest amount of debt on their books in history at $7.2 trillion.

...
If consumer debt was $13.8 trillion at the end of 2008 and the banks have since written off 5.66% of that debt, total write-offs were $800 billion. If total consumer debt now sits at $13.5 trillion, then consumers have actually taken on $500 billion of additional debt since the end of 2008. The consumer hasn't cut back at all. They are still spending and borrowing.

[briarberry] 31/8/2010 23:33

Does the IMF know something ???


IMF Enhances Crisis Prevention Toolkit
Press Release No. 10/321 - August 30, 2010
The International Monetary Fund (IMF) today expanded and enhanced its lending tools to help contain the occurrence of financial crises.

[briarberry] 31/8/2010 22:50

Municipal (Bond) Yields Reach 43-Year Lows

Don't worry about too much red ink in state and local budgets and not enough money in public pension plans. Forget about the prospect of inflation.

That's what the municipal market is telling investors. The last time yields were this low, Jacqueline Susann had been on the bestseller list with "Valley of the Dolls" for 62 weeks (1966-67).

The oldest gauge of yields in the market, the Bond Buyer 20-General Obligation Bond Index, fell to 3.88 percent last week. Yields were last this low on May 11, 1967.

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municipal credit-default swaps, as measured by the Markit MCDX index, are climbing back to their record highs, signaling danger ahead.

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Is 3.88 percent the new normal in the municipal market? Keep this in mind: From 1935 to 1965, the 20-bond index never exceeded 4 percent, and averaged 2.71 percent over the period.

[briarberry] 30/8/2010 13:22

There are too many points to give a good summary...

[briarberry] 27/8/2010 20:42

Back in April he said; Fed will not monetize budget deficits...


briarberry - 7 Apr'10 - 19:51 - 2581 of 2699 edit

Bernanke: Fed will not monetize budget deficits
Bernanke: Deficits don't lead to higher inflation

(Is he trying to talk rates down?)

[briarberry] 27/8/2010 20:39

Bernanke said, additional purchases of longer-term securities if needed...


Bernanke Says Fed Will Do `All It Can' to Ensure U.S. Recovery Federal Reserve

Chairman Ben S. Bernanke said the U.S. central bank "will do all that it can" to ensure a continuation of the economic recovery and said more securities purchases may be warranted if growth slows.

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Bernanke said, "Additional purchases of longer-term securities, should the FOMC choose to undertake them, would be effective in further easing financial conditions."

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"Specifically, the Fed's strategy relies on the presumption that different financial assets are not perfect substitutes in investors' portfolios," he said. Fed purchases of Treasuries should push investors into other types of bonds with similar types of risks, lowering their yields as well, he said.

Risks of the strategy include a lack of "very precise knowledge" of the effects of the purchases and the chance that expanding the Fed's balance sheet further "could reduce public confidence in the Fed's ability to execute a smooth exit from its accommodative policies at the appropriate time."

[briarberry] 25/8/2010 22:32

(CNBC) Changes to the US bankruptcy code, enacted in 2005, are coming back to haunt banks, according to Yra Harris, a veteran trader at Praxis Trading. Harris told CNBC that banks lobbied hard for changes to the bankruptcy code, but the legislation is now having the effect of encouraging consumers to do all they can to pay down their credit cards, while leaving their mortgage payments on the backburner.

[briarberry] 24/8/2010 12:58

bond bubble ???


(Bloomberg) -- The amount of money flowing into bond funds is poised to exceed the cash that went into stock funds during the Internet bubble, stoking concern fixed-income markets are headed for a fall. Investors poured $480.2 billion into mutual funds that focus on debt in the two years ending June, compared with the $496.9 billion received by equity funds from 1999 to 2000, according to data compiled by Bloomberg and the Washington-based Investment Company Institute

[briarberry] 23/8/2010 10:22

In just six months, the largest tax hikes in the history of America will take effect. They will hit families and small businesses in three great waves on January 1, 2011:

First Wave: Expiration of 2001 and 2003 Tax Relief
In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families. These will all expire on January 1, 2011

Second Wave: Obamacare
There are over twenty new or higher taxes in Obamacare. Several will first go into effect on January 1, 2011.

Third Wave: The Alternative Minimum Tax and Employer Tax Hikes
When Americans prepare to file their tax returns in January of 2011, they'll be in for a nasty surprise-the AMT won't be held harmless, and many tax relief provisions will have expired.

[briarberry] 17/8/2010 17:26

Fed buys $2.551 billion in Treasury debt
Treasurys extend loss after Fed's first buyback

[briarberry] 11/8/2010 22:33

July = $165 billion

The Treasury's deficit is enormous but is improving from last year, at $165.0 billion vs. last July's $180.7 billion.

[briarberry] 11/8/2010 13:44

The imbalance is still there...

The U.S. trade deficit with China widened to $26.2 billion in compared with $18.4 billion in the same month last year. This is the largest trade gap with China since October 2008.

[briarberry] 10/8/2010 19:15

2:15 Fed to reinvest proceeds of maturing MBS

[briarberry] 10/8/2010 11:04

U.S. Economy Is Increasingly Tied to the Rich

Who cares how the rich spend their money?

Well, perhaps everyone should these days. Consumer spending accounts for roughly two-thirds of U.S. gross domestic product, or the value of all goods and services produced in the nation. And spending by the rich now accounts for the largest share of consumer outlays in at least 20 years.

According to new research from Moody's Analytics, the top 5% of Americans by income account for 37% of all consumer outlays.

...
By contrast, the bottom 80% by income account for 39.5% of all consumer outlays.



(I guess the rich, being investors, are heavily influenced by any large movement in the stock market)

[briarberry] 07/8/2010 19:05

Goldman Sachs are saying it now too...


Fed Easing Debate Intensifies as Economic Data Point to Slowing Recovery

The Federal Reserve may return to "unconventional" monetary stimulus as early as next week's policy meeting as the U.S. economy continues to lose momentum, according to Goldman Sachs Group Inc.

The Fed is likely to begin with reinvesting the proceeds from maturing securities in its existing portfolio of mortgage- backed debt in other debt instruments, Goldman economists said. The measures could also include asset purchases, such as Treasuries, or a more "ironclad" commitment to low short-term policy rates, Goldman said.

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Should the central bank decide to resume purchasing fixed-income securities it would buy "at least $1 trillion," they said.

[briarberry] 04/8/2010 14:23

Ben Banky needs a deflationary scare as an excuse to start printing. Positive jobs numbers won't help the reflation cause.
Some Americans do seem to be worried about deflation, and some of them see inflation as a cure...


Why Is Deflation Bad?

That's why the fact that inflation, while still positive, is below the Fed's target is bad news; and it's why respectable people like Olivier Blanchard (pdf) have suggested that a higher target, something like 4 percent inflation, might make sense.

And no, 4 percent inflation wouldn't turn us into Zimbabwe. I remember when we had stable inflation of around 4 percent – and it was morning in America.

[briarberry] 03/8/2010 23:00

Are we all betting on China to save us ???


New car sales in Germany plunged by 30 percent last month, data from the automakers' federation FDA showed on Tuesday.
...

The slowdown has been seen across Europe, with new car sales off in July by 26 percent in Italy, 24 percent in Spain and 13 percent in France.

German automakers have nonetheless managed to unveil very strong results in recent days, mainly owing to soaring demand in China.

[briarberry] 03/8/2010 15:04

US Factory Orders M/M change -1.2 %
Pending Home Sales Index M/M -2.6 %

Some places are doing well compared to last years poor figures...
Brazil - Industrial Production - June: +11.7%

Although Brazil's industrial production fell 1 % MoM, the third consecutive decrease in the year