Empiric Student Property Share Discussion Threads

[briarberry] 05/2/2007 18:40

US 4th Q GDP


Merrill Lynch North American economist David Rosenberg warned that the picture isn't quite as benign (improved growth and low inflation), as the market's initial reaction to the Fed's statement indicates.

He claims the drop in oil prices in the December quarter, which contributed to a decline in the U.S. trade deficit, added 1.6% to the fourth quarter GDP number. Without that drop in oil prices, fourth quarter GDP growth would have only been 1.9%, which is more in line with previous forecasts of a still slowing economy. Rosenberg also says that the lower energy costs in the December quarter helped consumer spending jump 4.4% in that quarter, but warns that so far this quarter oil prices are back to the upside. And winter has finally arrived in the U.S., so the upside reversal in natural gas prices has been even more dramatic than the increase in oil prices.

Rosenberg also notes that the biggest surge in government defense spending since the invasion of Iraq in 2003 took place in the December quarter, and added 0.7% to the reported GDP growth of 3.5%. He believes that aberration, and the end of the decline in oil prices, will result in a return to sickly GDP numbers going forward.

[briarberry] 04/2/2007 17:52

Feb. 1 (Bloomberg) -- Profitability at U.S. companies is shrinking as wages rise at the fastest pace in six years. That may make stock gains harder to come by, if history is any guide.

Net income for the 225 S&P 500 companies that reported fourth-quarter earnings increased by 9.5 percent, according to data compiled by Bloomberg. If the pace holds, it would be the first time since 2003 that profit increased by less than 10 percent, according to data compiled by Thomson Financial.

[briarberry] 04/2/2007 14:43

US Chapter 11 business bankruptcies

The low numbers of business bankruptcies, lows not seen since the early 1980s, may not be as healthy as Wall Street says. It's probably just another symptom of the credit bubble, and also due to the tightening of bankruptcy laws so more companies settle things out of court.

Junk bond buyers certainly seem to think that they're safe as credit spreads are at record lows


Companies are refinancing and refinancing, until they eat up all their assets--a strategy that keeps them out of bankruptcy for now, but that will promote more crashes in the future.




from the American Bankruptcy Institute - www.abiworld.org

A poll released by the Turnaround Management Association (TMA) on Thursday found that turnaround professionals are working differently given the unprecedented liquidity in the marketplace, the change in the bankruptcy law and the drop in companies seeking chapter 11 protection, Portfolio Media reported yesterday. More than 200 companies that specialize in turnaround, financial advisory and consulting services responded to the TMA 2006 Trend Watch Poll. Only 17 percent of respondents said that 50 percent or more of their work was done in court, which was down from 31 percent in 2005. Instead, the survey found that financial restructurings are increasingly handled out of the courtroom, with 41 percent of respondents spending half or more of their time that way, representing an increase from 28 percent in 2005. The poll found that an upward trend in engagements, staff size, and firm acquisition and consolidation activity in the past year suggests that the turnaround industry is retooling for a surge in restructuring, which is anticipated to happen by the end of 2007.

[briarberry] 04/2/2007 02:02

lots to read

Today's post wraps up the week with bullet points and new stories supporting several themes and theories expounded here of late.




We're Swimming In Liquidity, Aren't We?

[briarberry] 04/2/2007 01:49

economic numbers - yes it's all a confidence trick, consequences ?


Comments
Don't be such a pessimist. Redefining how one reports statistics is a valuable and proven method of improving the nation's economic welfare.

That's how we solved both the unemployment problem and the inflation problem. We simply changed the way we report the unemployment numbers, and now nobody complains about unemployment, even though if we reported it the old way, it would seem as bad as it was during some recessions.

And we changed the way we report inflation numbers, so that when the cost of a house triples in the space of a few years, we chant, "Horray! Prices have gone up, so that means that inflation has decreased!".

So if we simply change the method of reporting house prices to discard as outliers any houses whose prices have gone down, we can have an improved economy, rising property values, and we can all be happy.

Don't laugh. It works. No one notices.

Rising house prices decrease inflation. Rising house prices have always decreased inflation. Mmmm gin!

Posted by: thetruth | December 06, 2006 at 08:40 PM

[briarberry] 03/2/2007 22:00

Commodity hedge fund - Red Kite Management

Red Kite Management, a commodity hedge fund co-based in NYC and London, was rumored to be undergoing forced liquidation of copper, zinc and other base metal contracts

[briarberry] 03/2/2007 14:06

Gold, I'm not trading gold but it did cross my mind to buy a gold bar back in 2003, I did buy some options (long since sold)

property market problems could give rise to a deflationary scare, especially given the huge amount of money involved (-ve for gold)



but in the long run, any trouble should make people question the dollar as a long term store of value (+ve for gold)

[briarberry] 03/2/2007 13:51

Long-Term Capital Management (LTCM) documentary

Thanks to wall2wall for emailing me this video link (55mins - 200mb)

[briarberry] 03/2/2007 12:16

FSN - probably worth listening to every now and then

[briarberry] 03/2/2007 11:40

UK - Record numbers of people go bust

The number of people who were declared insolvent in England and Wales rose to a new record of 107,000 last year.

That was a 59% increase on the year before, when 67,500 people went bust.

Bankruptcies, in which debtors typically lose all their assets, rose last year by 34% in England and Wales to 62,900.

But although these still outnumbered IVAs, the number of people choosing an IVA as a route out of insolvency more than doubled to 44,300.

Banks such as HSBC and Northern Rock are now demanding a much higher level of prospective repayment before they will agree an IVA with a customer.

The industry standard is a repayment of 25p in the pound, but HSBC now asks for 40p in the pound.

According to the accountants KPMG, lenders such as High Street banks wrote off £1.4bn last year as a result of customers proposing IVAs.

Last year also saw a sharp rise in the number of repossession orders made against defaulting mortgage holders by county courts in England and Wales.

According to the Department for Constitutional Affairs, they went up to 91,200 - a rise of 29% from 2005.

Although roughly half of all orders end up being suspended, with no subsequent eviction, the sharp rise in repossession orders being made is another important indicator of financial stress.

They have now doubled in the past two years after being fairly constant in the earlier years of this decade.

Earlier this week it was revealed that 2006 saw a 65% rise in the number of homes actually being repossessed by lenders, albeit this is still at a historically very low level.

(chart in link)

[briarberry] 03/2/2007 11:33

US payroll employment, the model says they took off -175,000 jobs, so could be healthier than reported.




It won't help the credit bubble as that depends on, the home ATM & rates etc




home ATM, lending standards are rising, as lenders go bust

[briarberry] 31/1/2007 22:56

Vista, early opinion...

[briarberry] 31/1/2007 22:23

GOOG impressive earnings (more hope for investors?)...


Jan. 31 (Bloomberg) -- Google Inc., owner of the most-used Internet search engine, said fourth-quarter profit more than doubled as the company expanded its lead over Yahoo! Inc. and sold more advertising outside the U.S.

Net income rose to $1.03 billion, or $3.29 a share, from $372.2 million, or $1.22, a year earlier, Google said today in a statement. Sales excluding revenue passed on to partners rose to $2.23 billion, in line with the $2.2 billion estimated by 29 analysts in a Bloomberg survey.

[briarberry] 31/1/2007 22:15

credit bubble update

[briarberry] 31/1/2007 20:28

SPX starting a year end short

fake figures, fake rally (I hope)

GDP - an annualized 19.2 percent drop in residential investment


2006
I shorted the FTSE250 last year on year end contracts, first one got stopped out, although by June they were all in profit, the 1st one would have been too if I had kept it.

[briarberry] 29/1/2007 15:15

SPX - pure EW suggests one last up-swing to end the ending diagonal

short term moves are very difficult to predict especially at the end of a trend

I'm still betting it breaks down sooner or later. There should be some panic selling once the downturn in the property market starts to hurt the wider economy

sounds like there are too many tech shorts

SPX (EndofYear) going to start a long term short into this rally and just leave it for 6 months

[briarberry] 29/1/2007 12:22

SPX, QQQQ - yes I guess it would be strange if tech topped 4 years in a row in Jan, your guess is as good as mine...


The Q's have "appeared" to top yet again in early January. Just like 2004. And 2005. And 2006. Four years running.

Even the rallies into each Jan "top" have been consistent: Aug03-Jan04 (30%), Aug04-Jan05 (26%), Apr05-Jan06 (26%), Jul06-Jan07 (28%).

(link has charts)

[briarberry] 28/1/2007 23:21

Peak oil


Mexico's Oil Output Cools - FREE PREVIEW
By David Luhnow

MEXICO CITY -- Daily output at Mexico's biggest oil field tumbled by half a million barrels last year, according to figures released Friday by the Mexican government. The ongoing decline at the Cantarell field could pressure prices on the global oil market, complicate U.S. efforts to diversify its oil imports away from the Middle East, and threaten Mexico's financial stability.

The virtual collapse at Cantarell -- the world's second-biggest oil field in terms of output at the start of last year -- is unfolding much faster than projections from Mexico's state-run oil giant Petroleos Mexicanos, or Pemex. Cantarell's daily output ...





Local oil reserves are expected to last only nine years and eight months at current rates of production, according to precise calculations by experts, whereas in 2000 they were forecast to last 20 years and seven months. Besides, PEMEX is bankrupt.

PEMEX has debts greater than its total assets, is undertaking very little exploration, its extraction costs are rising steadily, and most of its revenues go straight into the state coffers to finance 36.1 percent of the national budget, twice the proportion that it contributed 20 years ago.

[briarberry] 27/1/2007 21:20

Florida property crash...


The Wall Street Journal. "Amid a continuing glut of homes for sale in most of the country, buyers should have plenty of choices and lots of bargaining power. In Miami-Dade, the number of existing condos on the market is enough to last 27 months at the current sales rate, says consultant Jack McCabe. The oversupply will grow, he says, as about 8,000 condos are expected to be completed this year and 12,000 in 2008."

"'It's going to get bloody down here,' Mr. McCabe says. He estimates that condo prices in Miami-Dade fell between 8 percent and 10 percent last year and will drop 20 percent in 2007. Eventually, he predicts, hedge funds and other investors will step in to buy surplus condos in bulk at huge discounts."

[briarberry] 27/1/2007 18:31

New Home Sales adjusted for 30% cancellations



The figures aren't adjusted for cancellations


Jan. 9 (Bloomberg) -- D.R. Horton Inc., the largest U.S. homebuilder. Order cancellations fell to 33 percent from 40 percent in the fourth quarter

[briarberry] 26/1/2007 14:32

Jan. 26 (Bloomberg) -- Money-supply growth in the euro region unexpectedly accelerated in December to the fastest pace in almost 17 years, increasing pressure on the European Central Bank to raise interest rates.

M3 money supply, which the ECB uses as a gauge of future inflation, rose 9.7 percent from a year earlier after gaining an annual 9.3 percent in November, the central bank said today. That's the highest growth rate since February 1990, according to ECB records.

[briarberry] 26/1/2007 12:12

SOX


Jan. 26 (Bloomberg) -- Asian stocks posted the biggest drop in two weeks after NEC Electronics Corp. said its third-quarter loss widened and Taiwan Semiconductor Manufacturing Co. had its first profit decline in five quarters.

The MSCI Asia-Pacific Information Technology Index dropped 1.6 percent, the biggest slide among the broader measure's 10 industry groups.

NEC Electronics, Japan's No. 3 maker of semiconductors, said third-quarter net loss widened to 5.8 billion yen ($48 million) from 2.56 billion yen a year earlier, because of rising costs for research and development and other expenses. The results were released yesterday after the close of trading. The stock fell 4.3 percent to 3,330 yen.

Taiwan Semiconductor, the world's largest custom-chip maker, dropped 4.2 percent to NT$68, the biggest decline since June 20.

Fourth-quarter profit fell 18 percent from a year earlier to NT$27.9 billion ($851 million) as sales growth slowed for Motorola Inc. cell phones and Texas Instruments Inc. handset components, the company said after the close of trading yesterday.





Jan. 26 (Bloomberg) -- Chartered Semiconductor Manufacturing Ltd., a supplier of chips used in the Xbox 360 and video iPod, posted the smallest profit in five quarters as customers used up stockpiles.

Fourth-quarter net income fell 76 percent to $6.4 million, or 2 cents per American depositary share, from $26.5 million, or 10 cents, a year earlier, Singapore-based Chartered said today. Sales dropped 7.7 percent to $339.1 million. Profit met analysts' estimates.

[briarberry] 26/1/2007 10:53

junk bonds etc


Edward Altman, is a New York University professor who in the 1960s created a widely used mathematical formula that measures the risk of bankruptcy. Altman predicts 2.50 percent of the $1.1 trillion junk bond market will default this year, up from 0.76 percent at the end of 2006. The rate will climb to 2.72 percent in 2008, he said last night at a Fixed-Income Analysts Society Inc. event in New York. Even with a "modest spike'' in defaults, "it's hard to see how this market is going to do well,'' Altman, 65, said. Some investors predict default rates will remain below 1 percent this year and "they have to say that'' to justify why they are buying bonds at such narrow yield spreads

[briarberry] 25/1/2007 21:41

MSFT earnings are OK despite the delay of Vista, if you include the, upgrade to Vista, coupons that they sold...


Vista Coupons

The holiday coupons let users upgrade to the new Windows Vista when it comes out. Customers who bought PCs with Office also received a coupon for Office 2007. Accounting rules require Microsoft to defer some of that revenue until it provides the upgrade or the coupon expires.

[briarberry] 25/1/2007 20:33

Comment by CarrieAnn
2007-01-25 10:17:12

"we're just witnessing the dawn of the "Mortgage Nightmare" and it's far reaching effects (systemic meltdown) fraud, failures, ARM resets, defaults, foreclosures,....get used to these words and terms used over and over again in tomorrow's headlines."

....don't forget layoffs!






If you can't sell em, burn em down, allegedly