Empiric Student Property Share Discussion Threads

[briarberry] 07/12/2008 15:45

anon91611/26/2008 6:40:47 AM

And how will we service this $8.5 trillion dollar debt? History shows us that we will inflate our way out of this. We'll melt away our debt, our savings, and everything else. As bad credit is written off the books, we have deflation (as we have now). Once that is done look out for whopping inflation. Please don't get me started on how the bailout money was spent, a futile attempt to maintain the current broken system..... we need to retool the entire financial system. We have just witness the largest swindle of all time.

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[briarberry] 07/12/2008 15:02

Government bailout hits $8.5 trillion

Kathleen Pender - Wednesday, November 26, 2008

The federal government committed an additional $800 billion to two new loan programs on Tuesday, bringing its cumulative commitment to financial rescue initiatives to a staggering $8.5 trillion, according to Bloomberg News.

article
chart

[spob] 07/12/2008 07:58

From The Times

December 6, 2008

Economic clouds gather as Spain faces recession



Graham Keeley and Rory Watson

For years, it has been a staple of daytime television, alongside the inane chat, creaky old movies and decorating do's and don'ts - the "let's-go-live-in-the-sun" show, in which Stoke and Stoke Newington are swapped for, much more often than not, Spain.

But now it has an evil twin. You may have seen it. The we're-not-celebrities-but-please-get-us-out-of-here show, in which the dream has gone horribly wrong. And it is symptomatic of the wider malaise that has gripped what was once a land of boom and money.

After a decade in which per capita income doubled - and household debt tripled - the Spanish economic fiesta is well and truly over. More than 40,000 workers are losing their jobs each week, a far higher rate than elsewhere in Europe. Unemployment is at 2.99 million, a 12-year record of 12.8 per cent of the workforce and the highest unemployment rate in the eurozone.

And there is no respite in sight. According to Pedro Solbes, the Economy Minister: "There is a risk the unemployment rates will be worse next year."

Related Links
ECB hopes rate cut sparks economies
Spain heads for recession as economy shrinks

In November, the grim jobless figures were compounded by a further decline in the services sector as activity, new orders and employment plunged to a record low.

The Markit Purchasing Market Index, which covers service companies ranging from hotels to insurance brokers, dropped to 28.2 in November from 32.2 in October, the sharpest monthly decline since figures were first collected in 1999. The figure is drastically below the 50 level where growth begins.

And underpinning it all is the Spanish construction industry, which accounts for 9 per cent of GDP. It has collapsed. After those years of boom, more than 150 property companies have gone bust so far this year, going into administration as debts mounted and they were unable to pay back creditors.

Metrovacesa, one of Spain's biggest property companies, reached a debt-for-equity deal this week with six creditor banks, which will take a 54 per cent stake in the business.

In doing so, it became the second big property company to fall into the hands of its creditors this year, after Colonial suffered the same fate in April. Martinsa Fadesa, once one of the biggest real estate firms in Spain, went into adminstration in July.

According to Sergio Diaz Valverde, an economist at Caja Madrid: "What started in the construction sector has extended to the entire economy."

Thus, after more than a decade of the highest growth in the eurozone, Spain's GDP decreased by 0.2 per cent in the third quarter. By the end of the year, it is expected that Spain will officially be in recession.

José Luís Rodríguez Zapatero, the Prime Minister, has budgeted more than €50 billion (£43.5 billion) on stimulus measures to combat what analysts believe will be the country's worst recession in half a century.

The Government announced an €11 billion emergency spending package last month focused on public construction projects, as well as aid for tourism and car manufacturing.

With the country's largest companies struggling to pay their creditors, many are shedding jobs. Consumer confidence is dwindling, with house prices sinking by as much as 10 per cent in big cities such as Madrid and Barcelona.

Car sales, another key indicator of the health of the economy, halved last month. Many manufacturers, including Nissan, Ford and General Motors, are cutting jobs in an increasingly desperate effort to reduce costs.

Yet through the gathering clouds, some see sunlight. Alfredo Pastor, a macroeconomics specialist at the IESE Business School in Barcelona, is more optimistic than many. "I think we will see slow growth of between 0 and 0.1 per cent for the next two or three years," he said.

Moreover, the country's banking sector has not suffered the same fate as Britain's. There have been no Northern Rocks. Instead, the two main banks, Santander and BBVA, have - so far - remained largely untouched by the present global financial crisis.

The "big two" concentrated on commercial banking, rather than investment banking or derivatives, which have struck down institutions elsewhere.

More strict regulations, introduced by the Bank of Spain after Spain's last slump, also stopped most Spanish banks from lending recklessly.

Francisco González, the chief executive of BBVA, said: "We'll pass through a storm, there will be wounds - but those who emerge will be winners."

The 45 smaller savings banks, which are more closely involved with mortgages and hence more at risk from the housing slump, may be subject to mergers. Two in the Basque Country have already merged.

Even when Spain begins to emerge from the crisis, deep problems will remain. Productivity grew by an average of only 0.3 per cent a year between 1990 and 1997, according to figures from the Oorganisation for Economic Co-operation and Development. It estimated that between 1998 and 2006, total productivity fell by 0.2 per cent annually.

There are more than one million unsold new homes - enough for four to five years of sales at current levels - and bad loans that could triple to 9 per cent of outstanding debt by 2010, according to Credit Suisse.

Education levels are consistently low. One in three secondary pupils drops out. There has also been a brain-drain as the most talented Spaniards seek higher-paying jobs abroad.

According to Professor Pastor, all this indicates that if the country is to emerge from its slump, it must change: "Spain must improve to get away from its dependence on construction and tourism," he said.

"We must improve our education, productivity and learn how to keep our most talented people."

It must, in short, learn to rely far less on the things that attracted all those Britons to the Costas in the first place.

Chill wind blowing

2.99m The present total of unemployed in Spain

40,000 Number of people who are losing their jobs each week

12.8% Proportion of the workforce that is now idle

12 years since the situation was looking so bleak

Source: Spanish Economy Ministry

[briarberry] 05/12/2008 19:16

Ben Banky says bailout everyone...


The Fed chairman said the government had several options, all using public funds, that could reduce foreclosures.

One solution, said the Fed chairman, would be for the government to offer home loans at lower rates to problematic borrowers.

But he warned that such measures would require Congress to raise the federal debt ceiling.

[briarberry] 03/12/2008 19:47

Is the UK planning to print money, if so when ???


Secret plan to tackle threat of deflation

The solution here may involve selling less government debt to investors than is needed to fund the Treasury's deficit.

The remainder of the cash could be provided as a Bank of England loan, increasing the supply of money in the economy. There are some concerns this could fall foul of European Union law.

[briarberry] 03/12/2008 13:47

Dec 03 08:15 ADP Employment Nov -250K



Challenger's layoff count for November jumped to 181,671

[briarberry] 03/12/2008 13:02

GM ... in a more dire situation than previously thought. The company ... said it needs $4 billion immediately to stay afloat until the end of the year.




Chrysler LLC today reported total November 2008 U.S. sales of 85,260 units, down 10% versus October 2008 (94,530 units), and down 47% from the same month last year.

This compares to Ford off 31%, Honda off 32%, Toyota off 34%, and GM off 41%.

[briarberry] 03/12/2008 11:20

getting closer to possible monetization ??? although TNX is still falling as investors flee the (world) markets into US treasuries...


Hey! Where's My $10 Billion! Professional Edition Fed Report

by Lee Adler, Tuesday, December 2, 2008,

That question arose from the fact that that amount disappeared from the Fed's balance sheet last week in the line items covering loans to and equity investments in the broken AIG. The Fed's balance sheet as it pertains to custodial accounts for FCBs also makes clear why the Fed was forced to announce yesterday that it would begin acquiring $100 billion of GSE paper and $500 billion of MBS directly. FCBs forced the Fed's hand by pulling out of the mortgage securities market over the past 2 months. The end of 4 years of subsidy brought about the collapse of that market, just as predicted here in these pages. That left the Fed no choice but to step in on behalf of the American taxpayer and other future victims, as the bagholders of last resort.

There were many more interesting tidbits to be gleaned as I went through the Fed's balance sheet with a fine toothed comb. There were lots of tangles, split ends and frizz, but there were a few strands that stood out. One of which is that the Fed still does not appear to be monetizing to any significant extent. The question that remains to be answered is how they are going to fund the coming $600 billion balance sheet expansion in mortgage securities. Monetize, or otherwise?

(subscribers)

[briarberry] 25/11/2008 21:16

The US bailout bubble seems to be growing by the day, Citi, student loans, and even auto-makers might still get their bailout etc


The Federal Reserve Board on Tuesday announced the creation of the Term Asset-Backed Securities Loan Facility (TALF), a facility that will help market participants meet the credit needs of households and small businesses by supporting the issuance of asset-backed securities (ABS) collateralized by student loans, auto loans, credit card loans, and loans guaranteed by the Small Business Administration (SBA).



Is this new I thought they were already doing this ???


Federal Reserve announces it will initiate a program to purchase the direct obligations of housing-related government-sponsored enterprises and mortgage-backed securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae -Update-

The Federal Reserve announces that it will initiate a program to purchase the direct obligations of housing-related government-sponsored enterprises (GSEs)--Fannie Mae, Freddie Mac, and the Federal Home Loan Banks--and mortgage-backed securities backed by Fannie Mae (FNM), Freddie Mac (FRE), and Ginnie Mae. Spreads of rates on GSE debt and on GSE-guaranteed mortgages have widened appreciably of late. This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally. Purchases of up to $100 bln in GSE direct obligations under the program will be conducted with the Federal Reserve's primary dealers through a series of competitive auctions and will begin next week. Purchases of up to $500 billion in MBS will be conducted by asset managers selected via a competitive process with a goal of beginning these purchases before year-end. Purchases of both direct obligations and MBS are expected to take place over several quarters. Further information regarding the operational details of this program will be provided after consultation with market participants.

Fanny almost hit zero, up over 50% today

[briarberry] 25/11/2008 21:10

Looking at the NAR figs, America hasn't had much experience of year over year house price falls...


The median price of an existing single-family home at $183,300 (down 4.2% mom) in October is down 11.2% from a year ago – the largest drop on record (see chart 4). The inventory of unsold existing homes rose to a 10.2-months supply in October from a 10-month mark in September. The elevated level of inventories implies that additional price declines are nearly certain in the months ahead.

Chart 4 NAR Median Sales Price: Existing 1-Family Homes, United States %

% Change - Year to Year $

[briarberry] 30/10/2008 19:04

The Bailout Bubble - The BoE say it's $5 Trillion ($ not £s)...


Robert Peston 28 Oct 08

Today's tale is that we're careering into what looks like a pretty nasty global recession, which is causing capital to be withdrawn from all but the least risky economies, markets and business - and is mullering our wealth.

The number that stood out for me in the Bank of England's latest Financial Stability Report, which I would not recommend to those of a nervous disposition, is its estimate that £5,000bn has implicitly or explicitly been made available by central banks and governments since April 2008 to support wholesale funding by banks.

That is a genuinely big number. It's equivalent to about a sixth of the total annual economic output of the whole world.

It's the measure of the extent to which the private-sector banking industry has rather let us all down.

It also tells us something about the scale of the economic downturn we're facing.

[briarberry] 26/10/2008 19:57

there are a few people saying this, just hope they're wrong...


Nassim Nicholas Taleb - (Author of, The Black Swan - April 2007)

The REAL Maverick: Present Economy worse than Depression

10/21/08: PBS NEWS HOUR Interview with Nassim Nicholas Taleb, famous economist and author of "The Black Swan" and Dr. Mandelbrot, professor of Mathematics. Both say that the present economy more serious than the Great Depression, and the economy during the American Revolution.

[briarberry] 26/10/2008 18:26

Europe on the brink of currency crisis meltdown
The crisis in Hungary recalls the heady days of the UK's expulsion from the ERM.

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The latest data from the Bank for International Settlements shows that Western European banks hold almost all the exposure to the emerging market bubble, now busting with spectacular effect.

They account for three-quarters of the total $4.7 trillion £2.96 trillion) in cross-border bank loans to Eastern Europe, Latin America and emerging Asia extended during the global credit boom – a sum that vastly exceeds the scale of both the US sub-prime and Alt-A debacles.

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Amazingly, Spanish banks alone have lent $316bn to Latin America, almost twice the lending by all US banks combined ($172bn). Hence the growing doubts about the health of Spain's financial system – already under stress from its own property crash.

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A grain of comfort for British readers: UK banks have almost no exposure to the ex-Communist bloc, except in Poland – one of the less vulnerable states.

The threat to Britain lies in emerging Asia, where banks have lent $329bn, almost as much as the Americans and Japanese combined. Whether you realise it or not, your pension fund is sunk in Vietnamese bonds and loans to Indian steel magnates. Didn't they tell you?

[briarberry] 26/10/2008 16:26

Global slowdown - Eastern Europe...


Moves by Hungary, Ukraine and Belarus to seek emergency loans from the IMF have now set off a dangerous chain reaction across Eastern Europe.

Romania had to raise overnight interest rates to 900pc on Wednesday to stem capital flight, recalling the wild episodes of Europe's ERM crisis in 1992. The CDS spreads on Ukraine's debt have topped 2,800, signalling total revulsion by investors.


eastern Europe is now among those emerging market regions that look to be hit the worst by the intensifying global financial instability and ensuing economic slowdown. The resilience of eastern Europe is disappearing.

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The transport equipment sector now accounts for about 50% of exports and 10% of gross value-added in central Europe. However, this heavy reliance on the automotive sector may now be a key vulnerability.



Even China is starting to slow down a bit...

Beijing, where the number of residential properties sold during the weeklong national-day holiday earlier this month-usually a brisk period for sales-was down by 72% compared with the holiday in 2007.



The economic news from the euro area was scarcely better. An index of manufacturing industry based on a survey of purchasing managers slumped from 45.0 to 41.3, its lowest level since it began in 1997 (a reading below 50 is consistent with falling activity). The corresponding index for services fell to 46.9. "The euro area has entered a deep recessionary spiral", said Aurelio Maccario, an economist at UniCredit, an Italian bank.

[briarberry] 23/10/2008 16:42

Wachovia reported a $23.9 billion net loss for its third quarter, as the struggling bank took nearly $19 billion in goodwill impairment and $6.6 billion in charges related to potential losses on its troublesome mortgages.

[briarberry] 22/10/2008 00:40

Richard Russell - Dow Theory Letters - Oct 21, 2008

How big will the coming US deficit be? The official estimate is $700 billion. Forget it, the actual deficit will be between $1 trillion and $4 trillion, probably closer to $2 trillion.

In a $14 trillion economy, a $2 trillion deficit would mean that the deficit would be 14% of Gross Domestic Product.

In the past, 6% was considered a crisis percentage. In Europe the legal limit is a deficit of 3% as a percentage of GDP. Deficits of above 3% brought warnings (Italy) of a

[briarberry] 17/10/2008 22:16

good example of history repeating as pointed out on FSN...


Extacts from Franklin D. Roosevelt's First Inaugural Address - March 4th, 1933 - by 1933 the depression had reached its depth.

Values have shrunken to fantastic levels: taxes have risen, our ability to pay has fallen, government of all kinds is faced by serious curtailment of income, the means of exchange are frozen in the currents of trade, the withered leaves of industrial enterprise lie on every side, farmers find no markets for their produce, the savings of many years in thousands of families are gone.

More important, a host of unemployed citizens face the grim problem of existence, and an equally great number toil with little return. Only a foolish optimist can deny the dark realities of the moment.

Pactices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.

The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.

Happiness lies not in the mere possession of money, it lies in the joy of achievement, in the thrill of creative effort.

Finally, in our progress toward a resumption of work we require two safeguards against a return of the evils of the old order: there must be a strict supervision of all banking and credits and investments; there must be an end to speculation with other people's money, and there must be provision for an adequate but sound currency.

Franklin D. Roosevelt
March 4th, 1933




(as FSN says, what we learn from history is that people don't learn from history)

[briarberry] 17/10/2008 13:36

Housing starts fall 6% to 17-year low in September

Building permits fell 8.3% to 786,000, a 27-year low.

[briarberry] 15/10/2008 14:59

no end in sight for bailouts...


Oct. 15 (Bloomberg) -- The Federal Reserve may subsidize America's companies by purchasing their short-term debt at rates below those demanded by private investors in the $1.6 trillion commercial-paper market.

Fed officials yesterday set the yield they will pay for commercial paper at about 1.6 percentage points less than the average cost for financial companies, weekly central bank data show. Policy makers last week announced emergency plans to buy the securities after the market shrank to a three-year low.



(up nearly 2%)

[briarberry] 15/10/2008 02:17

The federal budget deficit soared to $454.8 billion in 2008 as a housing collapse and efforts to combat the economic slowdown pushed the tide of government red ink to the highest level in history.

The Bush administration said Tuesday the deficit for the budget year that ended Sept. 30 was more than double the $161.5 billion recorded in 2007.

It surpassed the previous record of $413 billion set in 2004. Economists predicted a far worse number next year as the costs of the government's rescue of the financial system and the economic hard times hit the nation's balance sheet.

Some analysts believe that next year's deficit could easily top $700 billion, giving the next president a formidable challenge.

[briarberry] 13/10/2008 23:37

another couple of trillion for the world bailout bubble...


PARIS (AP) -- Europe put $2.3 trillion on the line Monday to protect the continent's banks, a figure that dwarfs the Bush administration's $700 billion rescue program, in its most unified response yet to the global financial crisis after a stumbling start.

[briarberry] 10/10/2008 22:14

Lehman derivative auction, 8.7 cents on the dollar vs 9.5 cents expected.

(I'm amazed they're not worthless)

[briarberry] 10/10/2008 20:33

$459 billion already raised...


the Treasury deposited another $115 billion at the Fed, money raised from the blizzard of T-bill and note auctions. That raised the total of Treasury financing for the bailout transferred to the Fed to $459 billion in just 3 weeks. Apparently the wise men at the helm of government fail to see the connection between dumping this amount of Treasuries on the market in 3 weeks with the massive wave of liquidation in virtually all other forms of securities. Seems they never learned how to subtract.Meanwhile, the FCBs weren't absorbing anywhere near enough of the new Treasury supply to help the market, and they were dumping Agency paper. That's adding to the problem. Apparently, the subsidy game has come to an end as the FCBs have neither the willingness nor the wherewithal to continue to play.



well we'll see what happens...

[briarberry] 10/10/2008 19:45

The next bubble apppears to be the bailout bubble, ie government debt.

The bailout bubble must be trillions by now