Empiric Student Property Share Discussion Threads

[briarberry] 14/1/2009 19:24

Some perspective on those numbers from Frank Barbara of FSO fame



Here in the US, the total of stimulus and bail out monies is already north of 7 trillion dollars in total commitments, with total spending already well beyond 3.50 trillion dollars. A while back, James Bianco of Bianco Research tried to put these figures in perspective by comparing the bail out costs in 2008/2009 to some of the bigger government expenditures of the last 200 years.

* Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion
* Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion
* Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion
* S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion
* Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion
* The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)
* Invasion of Iraq: Cost: $551b, Inflation Adjusted Cost: $597 billion
* Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion
* NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion

Totaling all of these past expenditures – combined and adjusting the values to today's dollars yields a total of around $3.92 Trillion dollars. The point here is that (and recalling that Obama will soon be proposing a spending package of at least another $700 billion) by the time this is over, the US will easily have spent a sum in excess of $4 Trillion dollars in bail out/stimulus monies – a total that will likely exceed the combined prior total of past major expenditures.

(jail not bail)

[briarberry] 14/1/2009 14:49

(stolen from the gold fred) Ben Banky begs for more bailout money for his big banking chums...


Headshok - 13 Jan'09 - 19:18 - 57509 of 57530

I watched the Bernanke speech at the LSE today - it's here for readers;



What struck me, other than a confident performance by a steady man, was this demand:

"The public in many countries is understandably concerned by the commitment of substantial government resources to aid the financial industry when other industries receive little or no assistance. This disparate treatment, unappealing as it is, appears unavoidable. Our economic system is critically dependent on the free flow of credit, and the consequences for the broader economy of financial instability are thus powerful and quickly felt. Indeed, the destructive effects of financial instability on jobs and growth are already evident worldwide. Responsible policymakers must therefore do what they can to communicate to their constituencies why financial stabilization is essential for economic recovery and is therefore in the broader public interest."

He goes on to indicate concern at the fiscal spending plans:

"In my view, however, fiscal actions are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system. History demonstrates conclusively that a modern economy cannot grow if its financial system is not operating effectively."

And then puts in a demand for further support:

Consequently, more capital injections and guarantees may become necessary to ensure stability and the normalization of credit markets. A continuing barrier to private investment in financial institutions is the large quantity of troubled, hard-to-value assets that remain on institutions' balance sheets. The presence of these assets significantly increases uncertainty about the underlying value of these institutions and may inhibit both new private investment and new lending.

In these three paragraphs exists a key message:

The control of public dissent (and possibly worse) is essential; we have to engender public support.

Keynsian stimulation is a panic measure not certain to succeed.

The Financial system is in a worse position than we can let on, and more public money needs to be released to bail-out the institutions.

He failed to add on to that last call "...institutions which have acted so dishonestly and greedily and brought the world economy to its knees."



(jail not bail)

[briarberry] 12/1/2009 15:51

The real unemployment rate jumped to 13.5% in December from 12.2%

U-6 Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers..

[briarberry] 09/1/2009 14:11

The U.S. economy lost 524,000 jobs in December, closing out the worst year for job losses since World War II, the Labor Department says.

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Payroll jobs have contracted every month in 2008 for a cumulative loss of 2.6 million this past year-the largest yearly drop since the end of World War II.

[briarberry] 09/1/2009 01:50

Bill Poole: The Fed is Now Expanding Its Balance Sheet by Printing Money

"The Fed is now expanding its balance sheet by printing money."

He was also visibly perturbed that the FOMC appears to no longer be stepping up to managing the money supply which is its mandate, but rather is allowing the Board of Governors to expand the money supply 'willy-nilly' with no eye to targets, just an uncoordinated roll out of special facilities.

[briarberry] 07/1/2009 13:43

ADP's estimate for December private payrolls, at -693,000

[briarberry] 07/1/2009 13:27

Obama Warns Trillion-Dollar Deficit Potential (+ plans to spent another $0.8 trillion)

WASHINGTON - President-elect Barack Obama on Tuesday braced Americans for the unparalleled prospect of "trillion-dollar deficits for years to come," a stark assessment of the budgetary outlook that he said would force his administration to impose tighter fiscal discipline on the government.

Mr. Obama sought to distinguish between the need to run what is likely to be record-setting deficits for several years and the necessity to begin bringing them down markedly in subsequent years. Even as he prepares a stimulus plan that is expected to total nearly $800 billion in new spending and tax cuts over the next two years, he said he would make sure the money was wisely spent, and he pledged to work with Congress to enact spending controls and efficiency measures throughout the federal budget.




The U.S. government will run a $1.2 trillion budget deficit in fiscal 2009, the Congressional Budget Office says, offering a stark assessment of the red ink facing the country and the incoming administration of President-elect Barack Obama.

[briarberry] 06/1/2009 19:04

The pending home sales index fell 4.0 percent in November pointing to deepening declines for the housing sector (October was revised downward to 85.7). Year-on-year rates are also showing accelerating deterioration, at -5.3 percent in November compared with -1.0 percent in October. Home sales data for December will be released at month end.

[briarberry] 04/1/2009 16:15

S& P Earnings: 1960-Current

[briarberry] 04/1/2009 15:43

Is the Fed plan working, will have to wait and see (if it does work it may just mean a bigger crash in the future)(and there are often spikes in the mortgage purchase index that mean nothing)...


You've seen what has happened recently as the Fed has gone into a good bit of hyper drive in terms of trying to financially engineer at least some type of stabilization in what continues to be a downhill journey for the asset class. They've allocated $600 billion to essentially buy agency debt (Fannie and Freddie paper) in the hopes of getting and keeping US conventional mortgage rates down. And so far that has indeed happened as post the establishment of this new Fed investment endeavor, conventional 30 year fixed mortgage rates dropped a good 100 basis points, plus or minus, in a matter of weeks. We'll spare you the graph, but in recent weeks we've seen new mortgage applications and refi apps spike meaningfully higher.

Mission accomplished by the Fed? We'll see, as we need to remember that a lot of folks with rate-locked in-process loans could only have taken advantage of these new lower mortgage rates by canceling the prior loan and writing a new one, probably with another mortgage vendor, which naturally would count as a "new" mortgage or refi app in recent data. Hence, there may be a bit of anomalistic higher counts in recent weeks due specifically to getting around prior rate lock issue, so we'll need to continue watching the data in the months ahead. Lastly, and you may know this already, China and a few foreign friends have been big sellers of government agency paper since the summer of this year. The $600 billion the Fed has already so generously provided is in part simply offsetting current foreign selling of US agency paper.

(lots of housing stats)

[briarberry] 02/1/2009 19:51

US manufacturing activity fell in December to a 28-year low, the latest figures from the Institute for Supply Management (ISM) have suggested.

New orders are at the lowest level since records began in January 1948.

[briarberry] 01/1/2009 00:31

In New York, the Dow Jones closed slightly up, but was down almost 34% for 2008, its worst year since 1931.

[briarberry] 31/12/2008 13:39

This might be why the Fed has to buy agency debt (agency debt = FNM + FRE mortgage debt)



The Federal Reserve's plan announced in November to buy up to $500 billion of mortgage-backed securities, and its pledge this month to expand those purchases if needed to lower mortgage rates, has already cut borrowing costs.

On Tuesday, the Fed said it would start buying in January and purchase up to a half trillion dollars of mortgage bonds within six months.

[briarberry] 30/12/2008 19:36

Home prices in 20 major U.S. cities drop a further 2.2% in October from September


NEW YORK (AP) -- Home prices dropped by the sharpest annual rate on record in October and there are no signs the housing pain is over, according to a closely watched index released Tuesday.

The Standard & Poor's/Case-Shiller 20-city housing index fell by a record 18 percent from October last year, the largest drop since its inception in 2000. The 10-city index tumbled 19.1 percent, its biggest decline in its 21-year history.

Both indices have recorded year-over-year declines for 22 straight months. Prices are at levels not seen since March 2004.




NEW YORK (AP) -- Consumer confidence hit an all-time low in December, dropping unexpectedly in the face of layoffs and deteriorating markets for housing, stocks and other investments.

[briarberry] 30/12/2008 16:10

Japan's economy will probably shrink at an annual 12.1 percent pace this quarter

Dec. 30 (Bloomberg) -- Japan's economy will probably shrink at an annual 12.1 percent pace this quarter, the sharpest drop since 1974, as exports collapse, Barclays Capital said.

Gross domestic product in the three months ending tomorrow will fall at almost three times the 4.1 percent rate previously predicted, said Kyohei Morita, chief Japan economist at Barclays in Tokyo, after reports last week showed industrial production and exports posted the biggest declines on record in November.

"Given the speed and the length of the contraction, this recession could be the most severe in the postwar era," Morita said. "We expect negative growth will continue for a fifth straight quarter to the April-June period of 2009."

[briarberry] 30/12/2008 13:09

more bad shopping reports

Heavy weather scuttled what was already a very poor December making for the worst holiday shopping season since 1970 according to ICSC-Goldman. ICSC's same-store tally for the Dec. 27 week fell 1.5 percent compared to the prior week and is down 1.8 percent year-on-year.

[briarberry] 26/12/2008 16:52

Dec. 26 (Bloomberg) Holiday Sales Tumble as U.S. Consumers Cut Spending...

The SpendingPulse data service calculates its sales estimates based on MasterCard Inc. network transactions and adjusts for cash, checks and other payment forms. MasterCard is the world's second-biggest credit-card company. Data include food purchases.

From Nov. 1 through Dec. 24, women's clothing sales dropped 23 percent and men's fell 14 percent, according to SpendingPulse.

Combined electronics and appliance sales tumbled 27 percent, with purchases over $1,000 suffering the most, according to SpendingPulse data. Luxury sales, including jewelry, plunged 35 percent, the data showed. Specific dollar figures aren't yet available, the service said.

[briarberry] 24/12/2008 13:43

Initial Claims 586K

jobless claims climbed to a 26-year high

[briarberry] 22/12/2008 17:11

Peak Oil for non-believers

[briarberry] 22/12/2008 13:58

global slow down...


Dec. 22 (Bloomberg) -- Japan's exports plunged the most on record in November as global demand for cars and electronics collapsed, signaling more factory shutdowns and job cuts are likely as the recession deepens.

Exports fell 26.7 percent from a year earlier, the Finance Ministry said today in Tokyo. That was more than the 22.3 percent decline estimated by economists and the sharpest since comparable data were made available in 1980.

Shipments to the U.S. slid an unprecedented 34 percent and sales to China slumped the most in 13 years, underscoring why the Bank of Japan lowered its key interest rate to 0.1 percent last week.

[briarberry] 16/12/2008 21:16

record low rates 0.0 to 0.25%

The Federal Reserve pulled out all the stops in its campaign to save the U.S. economy, slashing interest rates to just about zero and promising to try an array of new economic measures to stimulate spending.

Fed to extend meeting and meet again next week.

[briarberry] 16/12/2008 20:08

Record Home Price Slide in Southern California
Posted by: Chris Palmeri on December 16

According to research firm MDA DataQuick, the median home price fell a record breaking 35% in November versus the same month in 2007. The median price paid for all homes combined last month was $285,000, down 5% from October. Last month's median was the lowest since it was $298,000 in April 2003, which was the last time the median was below $300,000. November's median stood 43.6 percent below the peak $505,000 median reached in spring and summer of last year.

The median price has eroded consistently over the past 16 months as price depreciation swept the region, discounted foreclosures ballooned in inland markets and sales stagnated in higher-end neighborhoods. The latter have suffered from, among other things, a difficult financing environment for large mortgages.

[briarberry] 12/12/2008 12:16

Fanny paper - I keep wondering if this could be a sign of something serious ? Although US mortgage rates are falling, so Fed buying must be working at the moment...


FCBs dumped a massive amount of GSE paper this week, continuing a 10 week string of panic selling during which they have unloaded $148 billion of their GSE holdings. I had long warned that if the FCBs ever ended their subsidy of the US mortgage market, the financial system would collapse. When we look back we see that FCB holdings of GSE paper peaked the week of July 16, 2008. When they started to sell, the system in fact did begin to implode, forcing the Fed and Treasury to take multiple steps in a sheer panic attempt to reverse the meltdown of the Ponzi scheme. Their propping has done little other than to delay and shift the stresses around the system. Ultimately the US government has put itself at risk, and if its gambits fail, as seems likely, there will be no more backstops, no more propping. What will happen at that point, nobody knows.

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[briarberry] 10/12/2008 15:07

Fed Weighs Debt Sales of Its Own

By JON HILSENRATH and DAMIAN PALETTA

The Federal Reserve is considering issuing its own debt for the first time, a move that would give the central bank additional flexibility as it tries to stabilize rocky financial markets.

Government debt issuance is largely the province of the Treasury Department, and the Fed already can print as much money as it wants. But as the credit crisis drags on and the economy suffers from recession, Fed officials are looking broadly for new financial tools.

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At the core of the deliberations is the Fed's balance sheet, which has grown from less than $900 billion to more than $2 trillion since August as it backstops new markets like commercial paper, money-market funds, mortgage-backed securities and ailing companies

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...issuing debt could put the Fed at odds with the Treasury at a time when it is already issuing mountains of debt itself.