Empiric Student Property Share Discussion Threads

[briarberry] 10/4/2010 00:24

Banks still cooking their books...


Goldman Sachs, Morgan Stanley, J.P. Morgan Chase, Bank of America and Citigroup are among 18 banks revealed by data from the New York Fed to be hiding their risk levels in the past five quarters by lowering the amount of leverage on the balance sheet before making it available to the public, The Wall Street Journal reported.

The Federal Reserve's data shows that, in the middle of successive quarters, when debt levels are not in the public domain, that banks would acknowledge debt levels higher by an average of 42 percent, The Journal says.

[briarberry] 10/4/2010 00:10

In May the Treasury will auction an estimated $130 billion in net new paper, and in June, $149 billion. (wallstreetexaminer.com)

(and don't forget)

Bernanke: Fed will not monetize budget deficits

+
China May Post Trade Deficit

[briarberry] 07/4/2010 23:40

this would create deflation ? ...


Economic Recovery and Balance Sheet Normalization

Narayana R. Kocherlakota - President Federal Reserve Bank of Minneapolis

To pick one of many possible plans, suppose we were to commit to the public to sell 15 billion to 25 billion dollars worth per month of MBSs. This path of sales, combined with prepayments, would get the Federal Reserve out of MBSs within five years after the start of selling.

[briarberry] 07/4/2010 20:44

Although that's if you believe anything Ben Bailout Banky says...


briarberry - 3 Oct'09 - 20:14 - 2401 of 2583 edit

Ben Banky, would you take his advice ???

20 October 2005
Ben Bernanke told Congress, "(house) price increases largely reflect strong economic fundamentals"


March 28, 2007
Ben Bernanke told Congress, "At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained".


19 July 2007
Ben S. Bernanke told Congress that he only expected subprime losses in the $50 to 100 billion range.


15 Sep 2009
Federal Reserve Chairman Ben Bernanke said that the recession was "very likely over".


(he only sees positive outcomes and only mentions something negative once it's already so obvious it cannot be denied)

[briarberry] 07/4/2010 20:29

signs of deflation in the real economy...

Consumer Credit, M/M change, $-11.5 B

M2 Weekly Change, $-10.0 B (prior week $-23.3 B)

[briarberry] 07/4/2010 19:58

Is Ben Bailout Banky seriously saying he isn't going to print any more ???

Then stocks would be doomed and public deficit spending would be too !

[briarberry] 07/4/2010 19:51

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

(Is he trying to talk rates down?)

[briarberry] 07/4/2010 00:16

Rates ??? ...

Fed officials said the "extended period" pledge would not keep them from hiking early if it looked like the economy was overheating, the minutes said. If the economy was signaling strength and inflation was rising, the Fed could hike quicker. If inflation trends continued lower, then rates could be delayed.

A few FOMC members warned against an early start to rate hikes, the minutes said.


(Surely if GDP growth really was +5% and job growth was +162K monthly then the Fed would be raising rates now? Who knows ? LOL)

[briarberry] 05/4/2010 23:44

US budget deficit, interesting comment, not sure if it's true ? ...

CautiousInvestor

If you include intergovernmental borrowings.....primarily social security and some pension funds......our debt will be at 92% sometime during FY 2010 and at 103% during FY 2020.

I think it fair that we include this debt as the CBO includes it their debt ceiling limits. Additionally, it remains debt until we default or repudiate it.

Another interesting measures of fiscal profligacy is deficit spending as a percentage of total government spending; when it exceeds 40% it is a harbinger of hyperinflation. During both FY 2009 and FY 2010 it will exceed 40% and if interest rates increase it could go beyond these years.

[briarberry] 05/4/2010 23:34

Bond Market Forcing Fed's Hand ?

Social Security is going into deficit, which means instead of buying Treasuries they will be a net seller.

China may report a trade deficit in Q1

(ObamaCare and its full-ten-year cost of $2.4T)

[briarberry] 04/4/2010 23:07

Nonfarm Payrolls + 162,000 (headline number)

- 81,000 CES Net Birth/Death Model
- 48,000 Census hiring (minimum)

= 33,000 jobs (realistically)

[briarberry] 01/4/2010 16:32

Treasury to sell $82 bln in debt next week

[briarberry] 31/3/2010 22:43

The housing figures should look good for April as buyers try to beat the deadline...


No more extensions of tax credit for first-time home buyers

The provision that puts up to $8,000 in buyers' pockets won't be renewed a third time, industry leaders and lawmakers say.

As it stands now, buyers who meet the income eligibility requirements have until midnight April 30, 2010, to ink a deal and must close by midnight June 30 to qualify.

[briarberry] 31/3/2010 22:16

Fannie Mae reported today that the rate of serious delinquencies - at least 90 days behind - for conventional loans in its single-family guarantee business increased to 5.52% in January, up from 5.38% in December - and up from 2.77% in January 2009.

(was under 1% in 2007)

[briarberry] 31/3/2010 21:46

The jobs numbers should look good for a while, over a million extra workers in total...


The Census Bureau hasn't published any hiring statistics that I have seen, but the consensus among economists is that they have hired 100,000 workers in March. They could have hired quite a lot more of the planned 1.2 million total, but the army of door-knockers isn't scheduled to hit the streets until May, though they will likely go on the payroll for training well before then.

[briarberry] 31/3/2010 15:12

Labor Department report - Fridays jobs number...

the government hired 100,000 census takers in March, which even though temporary will show up as new jobs.

[briarberry] 30/3/2010 16:12

UK - July 14, 1998 was the day Gordon Brown turned from Iron Chancellor to misguided Santa Claus

By 1997, public spending stood at £322 billion. After Mr Brown's 1998 Comprehensive Spending Review, it was projected that it might almost double, over 10 years, to more than £600 billion. So it turned out.
...
And now we begin to see the consequences. As public spending rises this year to £661 billion, more than a quarter of it is having to be borrowed, giving us a larger public sector deficit than Greece, the country having to be bailed out by the IMF.
...
the public sector has become so grotesquely swollen by Mr Brown's 10-year spending spree that it accounts for 52 per cent of our economy, up from 36 per cent in just a decade. This leaves the other 48 per cent to foot a barely imaginable bill, still hurtling up with every week that passes – at a time when the private sector is steadily shrinking with each new tax and regulation laid upon it.
...
Our manufacturing sector has already declined in the 12 years since Labour came to power from 20 per cent of our economy to 11 per cent.

[briarberry] 30/3/2010 13:04

State Debt Woes Grow Too Big to Camouflage

California, New York and other states are showing many of the same signs of debt overload that recently took Greece to the brink - budgets that will not balance, accounting that masks debt, the use of derivatives to plug holes, and armies of retired public workers who are counting on benefits that are proving harder and harder to pay.

...
Professor Rogoff, who has spent most of his career studying global debt crises, has combed through several centuries' worth of records with a fellow economist, Carmen M. Reinhart of the University of Maryland, looking for signs that a country was about to default.

One finding was that countries "can default on stunningly small amounts of debt," he said, perhaps just one-fourth of what stopped Greece in its tracks. "The fact that the states' debts aren't as big as Greece's doesn't mean it can't happen."

"When an accident is waiting to happen, it eventually does," the two economists wrote in their book, titled "" - the words often on the lips of policy makers just before a debt bomb exploded. "But the exact timing can be very difficult to guess, and a crisis that seems imminent can sometimes take years to ignite."
...

New Jersey and other states have used a whole bagful of tricks and gimmicks to make their budgets look balanced and to push debts into the future.

Some economists think the last straw for states and cities will be debt hidden in their pension obligations.

...
In Illinois, the state comptroller recently said the state was nearly $9 billion behind on its bills to vendors, which he called an "ongoing fiscal disaster." On Monday, Fitch Ratings downgraded several categories of Illinois's debt, citing the state's accounts payable backlog.



Illinois is financially the fifth largest US state with a 2008 GDP of approximately $633 Billion.

To put this in perspective, the 2008 GDP for the nation of Greece was approximately $357 Billion.

The largest state is California with $1.8 Trillion in 2008 GDP, roughly on a par with Russia, Spain, or Brazil

[briarberry] 30/3/2010 12:56

WASHINGTON (AP) -- Mounting losses from commercial real estate loans will continue to be a problem for the U.S. and especially smaller banks, but it can be managed, Treasury Secretary Timothy Geithner said Monday.

...
While losses on mortgage loans socked banks at the beginning of the 2008 financial crisis, it is commercial and development loans that have brought dramatic losses for banks in recent months.

Losses have mounted on loans for commercial projects like stores and office complexes, as buildings sit vacant and builders default. Many midsize and regional banks hold large concentrations of those loans.

U.S. banks face as much as $300 billion in losses on loans made for commercial property and development, according to the Congressional Oversight Panel, which monitors the government's efforts to stabilize the financial system.

Sheila Bair, the head of the Federal Deposit Insurance Corp., has said that losses on commercial real estate loans are expected to be the primary cause of bank failures this year, which are likely to exceed the 140 collapses in 2009.

[briarberry] 27/3/2010 21:04

Day Traders - over the longterm the odds of winning are about 1%...


The losers far outnumber the winners.

Exactly how far is clear from one of the most comprehensive looks at the subject in a yet-to-be-published study conducted in Taiwan. (The country is ideal for this kind of research because all trades go through one place, the Taiwan Stock Exchange, which is willing to share the information.) The authors sifted through tens of millions of trades, from 1992 to 2006, and found that 80 percent of active traders lost money.

"More importantly, we found that if you were to look at the past performance of these traders, only 1 percent of them could be called predictably profitable," says a co-author, Brad M. Barber, a finance professor at the University of California, Davis. Everyone else, it seems, was on a short-term winning streak. Even those who did modestly well found their that profits were wiped out, and then some, by transaction fees like commissions and taxes.

"It's not impossible to make money actively trading," Mr. Barber continues. "There are slivers of people out there who are quite good. And everyone thinks they will be in that group of 1 percent."



(Over the years, from the staff that I've spoken to at various fiancials, even though they never spell it out, I get the impression that most gamblers lose all their money. By gamblers I mean Joe and Joanna public who place lots of short term bets using leverage. Just like a nightout at the casino, they just enjoy a flutter).

[briarberry] 27/3/2010 19:18

A Bold U.S. Plan to Help Struggling Homeowners

The new measures, announced by financial policy makers at the White House on Friday, are among the boldest to date. They are aimed not only at the seven million households that are behind on their mortgages but, in a significant expansion of aid that proved immediately controversial, the 11 million that simply owe more on their homes than they are worth.

All told, the new measures are expected to cost about $50 billion.

[briarberry] 27/3/2010 10:51

March 27 (Bloomberg) -- China's banking regulator ordered lenders to take more care when making real-estate loans, widening efforts to prevent property speculators from causing asset bubbles and bad debt.

Banks should not lend to developers found by state agencies to have held land without building houses, the government said in a statement posted online yesterday evening. They should also stop approving new lines of credit to 78 government-controlled companies whose core business isn't property development if they use collateral other than construction projects already in progress, the statement said.

China's property prices rose 10.7 percent last month, the fastest pace in almost two years, fueling concern that record lending and inflows of capital from abroad are creating asset bubbles in the world's third-biggest economy. The government this month raised deposit requirements for buyers at land auctions to 20 percent of the minimum price to raise costs for developers. It also lifted banks' reserve requirements twice this year and re-imposed a tax on home sales.



China's local government...

March 13 (Bloomberg) -- China may be forced to bail out banks that made loans for local-government projects under the unprecedented stimulus program unleashed in 2008, according to Citigroup Inc. and Northwestern University's Victor Shih.


How to get a $295m loan from a Chinese bank:
1. Be a local government investment vehicle, or own one.

[briarberry] 26/3/2010 18:26

If China has a trade deficit then they will have no need to buy US Treasuries (A number of posters pointing this out)...


BEIJING - The country will probably see a "record trade deficit" in March thanks to surging imports, Minister of Commerce Chen Deming said on Sunday

A trade deficit in March - would be the first since May 2004.

[briarberry] 26/3/2010 17:34

Social Security to See Payout Exceed Pay-In This Year

The bursting of the real estate bubble and the ensuing recession have hurt jobs, home prices and now Social Security.

This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office.

[briarberry] 25/3/2010 23:45

UKs bailout/stimulus bubble projected to double by 2014-15...


Budget 2010: Labour is stealing from our children's future to buy votes

Yes, according to the Treasury's forecasts, the United Kingdom will nearly double its indebtedness from £776 billion (in 2009-10) to £1.4 trillion (in 2014-15). Even in Gordon Brown's devalued, debased and degraded system of accounting, that is still a poleaxing sum, equal to about one year's national output.

It gets worse, because this unprecedented and unimaginable debt projection is based on Alistair Darling's optimistic assumption that, from 2010-11, the UK's economic growth will bounce back to 3-3.5 per cent, well above long-term trend.