Saturday, May 8, 2010

After stocks plunge, search begins for cause = Are computers controlling the markets now?


[mEDITate-OR:
some body, and/or some "Thing" !!!
calculated wrongly..., once again...

To the extent that they are, they are telling U.S.
that The Computers were out of control.

Sounds nice, might be true.
But, like "securitizations"..., what, precisely, are they going to DO about it?

To think for a New York minute (sorry) that this is not bad for the economy far right now, is to put your head in one of the sand states, and arse upwardly mobile.

This, too, must be addressed.

-----------
After stocks plunge, search begins for cause
Computer programs exacerbate losses; Was there a ‘fat finger’ trade?
The gut-wrenching stock market plunge Thursday reflected growing worries about a widening financial crisis in Europe spinning out of control.
---------
Algorithms or human error to blame?
Are computers controlling the markets now?
Some say computer trading becoming too powerful, too fast
Wall Street's astounding, and immediate, tumble Thursday underscores how much of the Stock Market depends on machine and not man.
---------
The Computer Glitch Felt Round the World
---------
Video:
May 6: CNBC's Brian Shactman tells msnbc there must have been something that didn't go right in the system that would allow the U.S. stock market to have such a precipitous and quick fall today.
----------
Video: 
Duncan Niederauer, NYSE Euronext CEO discusses whether error really caused the market plunge today.
===========
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Mortgage rates sink to six-week low

[mEDITate-OR:
not see what we did FOR U.S. since 4th Q of 08.

IF you look at the sales numbers you KNOW that with the expiration of the New Home Buyer Credit, there will be an "adjustment", down.

This will mean that in the non-sand state - ie, not Cal, Nev, Fla & AZ - the only driver for home sales will be the low interest rate. And, that is true only if the rate remains low.

The FED has made it very clear that their rate will remain low as long as it takes to get the RE market to improve.

However, that low rate is having little to NO effect on home prices and REFI's in the sand states - they are simply too far underwater to refi.

That being true, what we have is the ying and the yang...
Ying = low interest rates going into the Spring buying season.
Yang = more foreclosures and short sales - a lot more.
AND lots of ARM resets
AND lost of sand states walkaway = "strategic defaults".

Was, is and will be VERY interesting.


-------------
Mortgage rates sink to six-week low
National average for a 30-year fixed loan is slips slightly to 5 percent
 
Rates for 30-year fixed mortgages have fallen to their lowest level in six weeks, Freddie Mac said Thursday.

-----------
Pending home sales rise 5.3 percent in March
Highest level since Oct. and a 21 percent rise from same month a year ago

The number of buyers who signed contracts to purchase homes surged more than expected in March, another sign that government incentives are propelling the housing market this spring.
==============
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REIT Gains Mask Trouble Commercial Landlords Face

[mEDIT-ate-OR:
not get squeezed when they do, as they will, even more than now...

Commercial RE problems are obvious, simply look at AZ strip malls.

And, look at the small bank FDIC takeovers...
almost all are now bcuz of commercial losses.

What this article tells U.S. is that REIT's are also very dependent on RE mortgages.

Last year, they brought in new investors to cover their losses.
This year they will either need a lot MORE new investors...
or their bank/lenders will have to "kick the can down the road"...

We WILL see this play out over the next 18+ months = the end of 2011.

------------
JGBellHimself 46 seconds ago

While this is a very good explanitory article, there are two things not fully explained:

First, over the last two years, from about July 08, many if not most REITs were unable to borrow anything, let alone, enough, to cover their declining income and RE losses. Not being able to borrow, what they did was issue new units - and that diluted their ownership, both those already in and those now buying in. To payout the same amount per unit is now much more expensive.

Second, what was not mentioned here, but is often elsewhere, are the staggering number of commercial 5yr to 10yr RE mortages held by REITs that MUST be re-financed over the next 18 months. This is said to be over 75% of ALL of the commercial RE loans. What we NEED to know is how many of those mandatory refi's are held by REITs. Bcuz, IF they cannot find any new replacement financing, and as of now they cannot, they will either have to get their lender/bank to "kick the can" forward, or forfeit their equity interests, OR sell more unit/shares!

The Bad News is that their lender/banks NEED to extricate their invested funds, to cover their other losses. The Good News is that their lender/banks do NOT what to foreclose on them, and have to show THAT loss on their balance sheets. And, of course, they do not WANT to "own" & have to run the property. Not a pretty picture.
---------
REIT Gains Mask Trouble Commercial Landlords Face
=============
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Friday, May 7, 2010

Temp Jobs Still Rising, Though Not as Fast + Wages and Hours Are Up


[mEDITate-OR:
learn what the NYTimes point out to U.S. that is true...
whether you like it or not.

There are three charts that you DO need to see...

The first is similar to Jim's CR chart. But, we still need to see it.

The second shows U.S. the massive changes in part time employment. Both going into the current recession and now as we are working (pun?) our way out of it.

What the third article point out is that not only did "jobs" increase and temps...
but that both hours worked AND pay did as well.

That is very good news.

The third chart shows U.S. the standard "unemployment" graph.
however, what it does NOT show is the true level, nor the inverse - employment.

As others today have pointed out, the fact that there were jobs added...
was offset by the increase in those returning TO the labor market hoping to find a job..., any job.

------------
Comparing This Recession to Previous Ones: Job Changes

DESCRIPTIONSource: Bureau of Labor StatisticsHorizontal axis shows months. Vertical axis shows the ratio of that month’s nonfarm payrolls to the nonfarm payrolls at the start of recession. Note: Because employment is a lagging indicator, the dates for these employment trends are not exactly synchronized with National Bureau of Economic Research’s official business cycle dates.
-----------

temporary help services versus all nonfarm payrollsSource: Bureau of Labor Statistics
---------

Wages and Hours Are Up


DESCRIPTIONSource: Bureau of Labor Statistics
----------------
Economy Gains Impetus as U.S. Adds 290,000 Jobs
===========

Economix - Explaining the Science of Everyday Life

===========
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Starving the Beast

[mEDITate-OR:
simply LOVE "revisionist history"
especially when the revisionist is the one who originally made it.

Do what we say now, not what we did then.
{is that too far right of a paraphrase...}

The point:
all those tax cuts, not only did NOT reduce spending...
they caused massive tax increases to pay for the additional spending.

R theory:     If you cut off the sources of funds...
                  eventually they will HAVE to cut the spending, on something.
D theory:     If you increase spending on what people want...
                  they will demand that you increase somebodies taxes
                  to pay for their wants.

Both are far right, and far wrong.

In Vietnam we told the world:

"That it is necessary to destroy the villages, to save them."

Obviously that also applies to countries.

Many now believe that it is necessary to destroy U.S..., in order to save it.

Many others will ask:    "But, for whom..., just you?"

------------

Starving the Beast

-------------
Tax Cuts And 'Starving The Beast'
The most pernicious fiscal doctrine in history.
-----------
A New Social Contract, but Which One?
---------
The Bankruptcy Boys
=========
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Thursday, May 6, 2010

Step 1, 2 and 3 = RE interest rates should drop


[mEDITate-OR:
not see the Shiites running down hill...

Step One =
the yield on 10 year TBills drive/set the RE mortgage interest rates for U.S.

They dropped today..., a lot.

Step Two =

The drop in TBills this week will drop FMac's RE mortgage rates next week.

Step Three =

The increase in mortgage lending applications will occur the following week.

So...
If both reported apps are up, and rates are down..., now.
they SHOULD get better next week.

We - you and U.S. - will see what we see..., then.
  

-----------
Treasurys soar on 'panic buying spree'

10yearyield.png
-------------
Mortgage Rates Dip to Six Week Low
-----------


Mortgage Applications up This Week, Refinance Activity Down


=============
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House approves $6 billion 'cash for caulkers'

[mEDITate-OR:
see how good this would be, for all of U.S.
RE construction jobs, manufacturing jobs, transportation jobs...
not to think of all the "paper work" jobs...
{no, really, don't focus on that}

While this bill is not yet law, nor available...
it will drive small business sales and employment...

Great move, for everyone in the process...


-----------------
Jobs slowly returning on Main Street
http://money.cnn.com/2010/05/06/smallbusiness/main_street_jobs/index.htm
------------
House approves $6 billion 'cash for caulkers'
http://money.cnn.com/2010/05/06/news/economy/cash_for_caulkers/index.htm
===============
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Don't Buy Phoenix Real Estate! Really + Surprise, AZ Is A Sellers Market

[mEDITate-OR:
well, realize they just jossing widt chou...

But, the point is well taken.
Were ARE we in the RE cycle, and what should we expect in the next 3 to 5 to 10 years.

As you know, most if no all landlords build into their rental rates "annual inflation"...
which, of course, they believe means that THAT will be the annual increase in the value of their investment.

Rental increases based upon smoke n mirrors.

You simply MUST pay more..., to me..., so my property will be worth what we want it to be.

That was then, this is now.

Last month a national report on Apartment rental rates showed U.S.
that AZ rates had dropped more than any other part of U.S.

There are some very saddened, confused apartment owners "outed" [t]here...

----------
==========
Surprise AZ is a sellers market, but the sellers are either distressed or have the properties from distress.
market trends
=============
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April 2010 Greater Phoenix Home Sales Statistics + Short Sales


[mEDITate-OR:
miss out on some stunning new numbers being "outed" in Arid-zone-Ah...

Once again 
Phoenix Market Trends. Arter & Joanna Real Estate Team

provides U.S. with great charts & graphs about the Phoenix RE market.

First, they show U.S. how much larger the short sale sector of the RE market now is in AZ.

Short sales and pre-foreclosures are 40% of the active market now.  That's up from 28% last year.
It is now the dominant active player in the market.  REO's make up 13% of the active properties.
Look for this trend to continue especially for sold properties
where REO's are still the dominant player with 41% of the market share
compared to 22% for short sales.
While the share of foreclosed homes has been going down, the share of short sales is up. 

Note:
bcuz short sales are priced BETWEEN foreclosures and current RE market prices, and take time...
they are MUCH larger in listings than they are in "closed sales"...
there is a LOT more negotiations going on in that RE market segment 
and
because both the underwater loans and the unemployed loans now KNOW that there will be NO help coming...
both the short sales, as the first alternative..., and then "strategic defaults" as a second..., no pun intended...
are going to increase, dramatically, for the rest of this year.

Second, while the RE market in AZ is peaking...
that is caused by the home buyer credit more than anything else.

Third, the HBC is over..., gone, kapoot, fine', down the tubes...
but, look at the last chart and SEE it...

-------------
How is the short sale market in Phoenix for April 2010

phoenix short sales

----------
In April the market was exceptionally busy, as busy as any previous peak
and with a record number of pending homes awaiting to close.

2010 April home sales stats

=========
The tax credit is coming to an end and the market will be more open for investors to purchase properties.
influence of the government tax credit

================
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How Widespread Mortgage Fraud Toppled the U.S. Housing Market

[mEDITate-OR:
see a wonderfully written and researched set of articles about the RE mess.

-------
JGBHimself | 05/06/10 11:02 PM
First, permit me to complement you on your three part series. Exceptionally well done.
Second, permit me to concur in the prior comment that no woe-man is an island.
A few years ago a long time appraiser, and friend, who worked in the Olyberg, WA area refused to do any more appraisals for WAMU. Bcuz they demanded - along with the RE agent/broker, mortgage broker, escrow agent (yes, them too), builder/seller - that he deliver a value that supported the RE Earnest Money Agreement.
Now in AZ we too are finding that it was MUCH worse down here than back there. Larger, but not different.
Everybody was making so much money they not only did not want it to stop, they would do anything to close The Deal.
As the very old man said to the young woman: "Anything..., my dear?"
In RE for U.S. it WAS anything.
----------     Three (3) of Three (3)

How Widespread Mortgage Fraud Toppled the U.S. Housing Market

----------     Before the After
Investors Played a Key Role in Creating Housing Bubble
==========
Keith Jurow, Ph.D., is a former senior economic writer for the Holt Investment Advisory of Westport, Connecticut, where he researched and wrote semi-monthly articles on important topics of financial interest. During that time, he wrote extensively about different aspects of the housing market. After that, he partnered with a prominent New Haven attorney to develop an innovative home equity conversion program for retirees (sale and leaseback), which he marketed to real estate investors and seniors.
More recently, Keith has been researching and writing about the housing debacle with an eye for stories that are frequently ignored. For example, his article, Investors Played Key Role in Creating the Housing Bubble, provides an in-depth look at how investors and speculators fueled the bubble and helped to bring the housing market to its knees. During the week of February 22, 2010, it was posted on the website of Wall Street analyst Charles Payne. That same week, it was one of the main sources for Fox Business’ feature story about the foreclosure crisis in Chicago.
Keith is a graduate of Cornell University , received an M.A. and Ph.D. from the New School in Manhattan , and taught on the undergraduate level for 11 years
========== 
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Wednesday, May 5, 2010

PROMISES, PROMISES: Rich farmers get most cash


[mEDITate-OR:
find that not ALL of the pigs are equal...
that some are still deep in "the trough"...

While this is a very "charged" issue..., tis also very interesting.

You see, do you not, that "subsidizing" farmers is not all THAT different than "The Big Banks"

Both are a manipulation of "market forces".
Both are costing U.S. a ton of money.
And, we can't eat it.

Oh, we know, SOME of the food and cotton gets used.
but, far more of it never gets grown - they are paid NOT to grow it.

And, most of it we cannot buy..., like Cheese, we feed it to The kids.
Or, simply throw it away.
Not to Haiti, not to the poor, not to the hungry, we just dump it. 

The POINT is:
That this was supposed to have been changed, for the better.
And, it may not have been.

Note:
House Agriculture Chairman Collin Peterson, D-Minn.,
and former Senate Agriculture Chairman Tom Harkin, D-Iowa
the two lead negotiators of the 2008 farm bill
were unavailable for comment

Current Senate Agriculture Chairwoman Blanche Lincoln, D-Ark
is in the fight of her life for re-election.
------------

The last two articles are from:
"The Trouble Makers"
and
"The Apologist" from the Ag community.

----------
"The family farmers I represent have their extraordinary financial risks offset somewhat by a farm program that helps when production fails or when prices collapse," said Pomeroy, who serves on the agriculture panel.
----------
PROMISES, PROMISES: Rich farmers get most cash

The group's most recent database, released Wednesday
shows just 10 percent of farmers received 62 percent of federal farm payments in 2009
roughly the same amount as in 2007 and 2008, before the farm bill was enacted
--------------
Bloomberg
Most U.S. Farm Subsidies Go to 10% of Recipients
==========
SFGate
Crop subsidies found to help largest farms most
----------
EWG News Release
Despite Record Deficits and Anger Over Government Spending, Federal Commodity Crop Spending Continues Unabated
Heavily Subsidized Crop Insurance Program Rivals “Traditional” Subsidies
----------
Keeping the Process of a New Farm Bill in Perspective
=============
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Tuesday, May 4, 2010

How consumers rewrote the old recessionary rules

[mEDITate-OR:
not see that what looks like a change really IS a change...
for a change....

This first article is a very good analysis of how much has changed in this depression.

Not only is long term and permanently unemployed different...
but what we are doing with what money we have left is also.

This appears to be true for ALL of U.S...., not just, the rich and famous.

---------
How consumers rewrote the old recessionary rules
----------
Spending climbs for 6th straight month
---------
Consumer Spending in U.S. Rose by Most in Five Months
===============
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Even the bears aren't bearish enough on Spain's coming sovereign debt problem

[mEDITate-OR:
realize that visiting these countries might, not just, get affordable...
really soon.

What we ARE seeing is a massive loss in not only confidence...
but in "equity" - national, business and personal.

What was once upon a time only looking bad for U.S.
has turned into a REAL disaster all over the world.

Well..., not the BRICS..., yet.


--------------

Stocks slump on Greek fears

Stocks slump on European fears
------------
Even the bears aren't bearish enough
on Spain's coming sovereign debt problem

chart_unemployment_spain.top.gif
----------
Uncharted territory in Europe
---------
Debt roulette: Is Portugal next?

map_europe_employ2.jpg
==============
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Big Spenders: The Consumer Economy


[mEDITate-OR:
not see that "consumption" by U.S. consumers = jobs...
or not, as the case MAY be.

The problem is that we appear to not be spending like we did.

That means some very large "winners" and very large "losers".

As "They" asked U.S...:   "Who IS on first?" and "What is coming in second?"
{or something like that...}

------------
Big Spenders: The Consumer Economy

DESCRIPTION

-------------

Consumer Cutbacks: Temporary or Permanent?

INSERT DESCRIPTION
-----------

The Recession and the ‘Paradox of Thrift’

DESCRIPTION
=============
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Personal Bankruptcy Filings Up 15% Compared to April 2009

[mEDITate-OR:
file away the increase in BK filings...

THIS is very important.
But, WHERE these filings are taking place is almost more.

This was expected, due to the massive increase in pre-foreclosures, which told U.S. that things were getting worse, not better, in RE markets.

And, the "bottoming out" of unemployment - things were NOT getting better.

What we did was "survive" as long as we could looking, hoping, praying for a job.

With NO job growth, the ONLY way out for most of U.S. is this one.

------------
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Gulf oil spill: The Halliburton connection + Forget Offshore Drilling Until We Get Some Answers

[mEDITate-OR
not see how venal they really, REALLY were...

While the Halliburton/Chaney connection will get the most press...

YOU need to read about the cesspool of corruption in W's administration:

There’s something else we know, something that suggests an explanation for this sequence of events. After the Bush administration took office, the MMS became a cesspool of corruption and conflicts of interest. In September 2008, Earl Devaney, Interior’s Inspector General, delivered a report to Secretary Dirk Kempthorne that has to be read to be believed. One section, headlined “A Culture of Ethical Failure,” documented the belief among numerous MMS staff that they were “exempt from the rules that govern all other employees of the Federal Government.” They adopted a “private sector approach to essentially everything they did.” This included “opting themselves out of the Ethics in Government Act.” On at least 135 occasions, they accepted gifts and gratuities from oil and gas companies with whom they worked. One of the employees even had a lucrative consulting arrangement with a firm doing business with the government. And in a laconic sentence that speaks volumes, the IG reported: “When confronted by our investigators, none of the employees involved displayed remorse.”

----------
Forget Offshore Drilling Until We Get Some Answers
------

Gulf oil spill: The Halliburton connection

---------
Drilling Process Attracts Scrutiny in Rig Explosion
=============
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'Bush-ama' tax cuts: The $2.2 trillion decision = we're cruise'n for a bruse'n

[mEDITate-OR:
miss the economic theory debate...
or how DO we justify this...

Ok, so you've been married.
But, as any criminal (no pun intended) lawyer can tell you...
SOME things, and/or people, are simply non-defensible.

As the TV ad admonished U.S.

      "But..., it's gonna cost ya!"

IF the Obama admin continues the excessive shift of wealth TO the very rich
from all the rest of U.S.
he will have been worse for U.S. than W was.

W was a fool and not afraid to prove it..., in public.
O showed U.S. that he is not a fool.

Remember The Question....
are they...
     incredibly stupid...
     unbelievably incompetent...
     inexcusably venal
OR all three.

---------
'Bush-ama' tax cuts: The $2.2 trillion decision

chart_deficit.03.gif

chart_interest_debt.03.gif
============
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Cruising for a Correction? = Stocks slump on Greek fears


[mEDITate-OR:
not see in today's numbers from Wall Street what this means...

Whether the first article was "Cruise'n" toward publishing BEFORE the dow fell...
or not, is the spooky question.
It is one thing to predict the future...
and quite another for the future to do as you predict it will.

You will also want to read about the crisis in Europe !!
------------
Cruising for a Correction?

chart_lookahead_043010.top.gif
---------------
Stocks slump on Greek fears

chart_ws_index_nasdaq.03.png
=============
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Monday, May 3, 2010

The (sickly) return of housing

[mEDITate-OR:
miss a very interesting argument...
about "housing.

Don't miss this one..., and Enjoy!


===========
The (sickly) return of housing

http://money.cnn.com/2010/04/26/news/economy/housing_turns_corner.fortune/index.htm
==========
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Cost of Americans' Preferred Setting for Long Term Care is Rising Far Less than Other Options

[mEDITate-OR:
not like your "options"..., all that much...

Even after the Medical debate and law changes...

the MOST expensive part of medical care for U.S. is "Senior" care...
Medicare, Medicaid, and now drugs...

the most expensive part of Senior care...
are/is "end of life costs"...
from home health care that is not generally available...
to nursing home care that is, and very expensive...
to the costs of [y]our "LAST" hospital visit.

What this is telling U.S. is that with all the unemployment...
all the stock market losses...
all the home equity losses...
the COST of medical care STILL increased faster than inflation.

-------------
Report: Home health care costlier in AZ than nationally

The report also listed other comparisons:

Median annual rate for one-bedroom assisted living facility is $36,600 in Arizona and the Phoenix area, compared with $38,220 nationally.

Median annual rate for a private room at a nursing home is $79,840 in Arizona, $88,794 in Phoenix and $75,190 nationally.

Median for adult day care services is $20,150 statewide, $21,840 in Phoenix and $15,600 nationally.

----------------
Genworth's 7th Annual Cost of Care Survey
Finds that the Cost of Americans' Preferred Setting for Long Term Care is Rising Far Less than Other Options
Costs rise slower for in-home care than nursing homes or assisted living
------------------

Long-term care costs rising faster than inflation rate

===============



Arizona - State Median: Annual Care Costs in 2010

Nursing Home Care

Private room$79,840
Semi-private room$63,875

Assisted Living Facility

Private, one bedroom$36,600

Adult Day Heath Care

Adult day health care$20,150

Home Care

Home health aide$45,760
Homemaker services$43,472

------------------


Washington - State Median: Annual Care Costs in 2010

Nursing Home Care

Private room$86,461
Semi-private room$79,358

Assisted Living Facility

Private, one bedroom$47,850

Adult Day Heath Care

Adult day health care$15,600

Home Care

Home health aide$49,695
Homemaker services$45,760

-----------------


California - State Median: Annual Care Costs in 2010

Nursing Home Care

Private room$87,345
Semi-private room$73,000

Assisted Living Facility

Private, one bedroom$42,000

Adult Day Heath Care

Adult day health care$20,020

Home Care

Home health aide$46,904
Homemaker services$45,646

==========
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