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From The Daily Capitalist
A lot of data came in last week with conflicting indications.
In addition to the raw data I get (from the same sources as everyone else), I review reports from other economists and commentators as well. Some of them I know I will always disagree with, others I highly respect. While I like to keep track of conventional wisdom, I always read the data first and come to my own conclusions before I read what others think. It helps me stay "honest" if you will. Then if I've missed something, I can think it through a bit more.
The reason I am saying this is that one of the economists I respect is David Rosenberg at Gluskin Sheff. His last report (Friday, March 5) was so good that I'm going to quote from it quite a bit. It mirrors a lot of what I have been saying, and he says it quite well and we will all benefit from his analysis.
But first, here's a reprise of recent data:
Residential Real Estate:
"http://online.wsj.com/article/SB10001424052748704240004575085232728239148.html" in January from a month earlier to a seasonally adjusted annual rate of 309,000, the Commerce Department said Wednesday. The decline brought sales to their lowest level since the government began tracking the numbers in 1963. Sales were 6.1% lower than in January 2009. ...
The drop in sales in January triggered an increase in the backlog of unsold new homes on the market, pushing it up to the equivalent of what would normally be sold in 9.1 months versus eight months in December. And the abundance of homes on the market continued to bring prices down. The median sales price for new homes fell 2.4% to $203,500 in January, compared with a year ago.
Prices are the lowest since December, 2003.
The Case-Shiller Q4 report showed housing prices rising for the 7th straight month, although prices declined 2.5% YoY. But ... it has been "http://dailycapitalist.com/2010/02/23/its-supposed-to-work-part-ii-housing-consumer-confidence-and-banks/" for the last quarter.
Commercial Real Estate:
The amount of "http://www.costar.com/News/Article.aspx?id=4D5EC39F59954EE95D3CE32D9223B9C1&ref=100&iid=170&cid=F578F2A70D5F8ABD1C0D2C9284CE5597" assets on the books of the nation's banks and thrifts approached $60 billion as of year-end 2009. That is up from $52 billion just three months earlier, a 15% increase. ...
Loans on nonresidential income-producing properties that had been foreclosed on increased from $5.84 billion to $7.05 billion - a 21% increase. Loans on multifamily properties that had been foreclosed on increased from $1.44 billion to $1.75 billion - a 22% increase. Loans on nonresidential income-producing properties that were 90 days or more past due or were in nonaccrual status increased from $37.05 billion to $41.74 billion - a 13% increase. Loans on multifamily properties that were 90 days or more past due or were in nonaccrual status increased from $7.75 billion to $9.39 billion - a 21% increase.
Banks:
The FDIC has announced that they will "http://www.nytimes.com/2010/02/24/business/24fdic.html?ref=todayspaper&adxnnlx=1267017149-eZu6BqyY8guY8IRBJDdqcg&pagewanted=print" to cover another $20 billion in losses and may sell bonds to do it.
The Federal Deposit Insurance Corporation is bracing for a new wave of bank failures that could cost the agency many billions of dollars and further strain its finances.
With bank failures running at their highest level in nearly two decades, the F.D.I.C. is racing to keep up with rising losses to its insurance fund, which safeguards savers’ deposits. On Tuesday, the agency announced that it had placed 702 lenders on its list of “problem” banks, the highest number since 1993.
Credit remains very tight.
Total assets [i.e., loans] of insured institutions fell for a fourth consecutive quarter, declining by $137.2 billion (1.0 percent). During the year, total industry assets declined by a net $731.7 billion (5.3 percent), the largest percentage decline in a year since the inception of the FDIC [1942].
"http://dailycapitalist.com/wp-content/uploads/2010/03/Bank-Business-Loans-3-
A lot of data came in last week with conflicting indications.
In addition to the raw data I get (from the same sources as everyone else), I review reports from other economists and commentators as well. Some of them I know I will always disagree with, others I highly respect. While I like to keep track of conventional wisdom, I always read the data first and come to my own conclusions before I read what others think. It helps me stay "honest" if you will. Then if I've missed something, I can think it through a bit more.
The reason I am saying this is that one of the economists I respect is David Rosenberg at Gluskin Sheff. His last report (Friday, March 5) was so good that I'm going to quote from it quite a bit. It mirrors a lot of what I have been saying, and he says it quite well and we will all benefit from his analysis.
But first, here's a reprise of recent data:
Residential Real Estate:
"http://online.wsj.com/article/SB10001424052748704240004575085232728239148.html" in January from a month earlier to a seasonally adjusted annual rate of 309,000, the Commerce Department said Wednesday. The decline brought sales to their lowest level since the government began tracking the numbers in 1963. Sales were 6.1% lower than in January 2009. ...
The drop in sales in January triggered an increase in the backlog of unsold new homes on the market, pushing it up to the equivalent of what would normally be sold in 9.1 months versus eight months in December. And the abundance of homes on the market continued to bring prices down. The median sales price for new homes fell 2.4% to $203,500 in January, compared with a year ago.
Prices are the lowest since December, 2003.
The Case-Shiller Q4 report showed housing prices rising for the 7th straight month, although prices declined 2.5% YoY. But ... it has been "http://dailycapitalist.com/2010/02/23/its-supposed-to-work-part-ii-housing-consumer-confidence-and-banks/" for the last quarter.
Commercial Real Estate:
The amount of "http://www.costar.com/News/Article.aspx?id=4D5EC39F59954EE95D3CE32D9223B9C1&ref=100&iid=170&cid=F578F2A70D5F8ABD1C0D2C9284CE5597" assets on the books of the nation's banks and thrifts approached $60 billion as of year-end 2009. That is up from $52 billion just three months earlier, a 15% increase. ...
Loans on nonresidential income-producing properties that had been foreclosed on increased from $5.84 billion to $7.05 billion - a 21% increase. Loans on multifamily properties that had been foreclosed on increased from $1.44 billion to $1.75 billion - a 22% increase. Loans on nonresidential income-producing properties that were 90 days or more past due or were in nonaccrual status increased from $37.05 billion to $41.74 billion - a 13% increase. Loans on multifamily properties that were 90 days or more past due or were in nonaccrual status increased from $7.75 billion to $9.39 billion - a 21% increase.
Banks:
The FDIC has announced that they will "http://www.nytimes.com/2010/02/24/business/24fdic.html?ref=todayspaper&adxnnlx=1267017149-eZu6BqyY8guY8IRBJDdqcg&pagewanted=print" to cover another $20 billion in losses and may sell bonds to do it.
The Federal Deposit Insurance Corporation is bracing for a new wave of bank failures that could cost the agency many billions of dollars and further strain its finances.
With bank failures running at their highest level in nearly two decades, the F.D.I.C. is racing to keep up with rising losses to its insurance fund, which safeguards savers’ deposits. On Tuesday, the agency announced that it had placed 702 lenders on its list of “problem” banks, the highest number since 1993.
Credit remains very tight.
Total assets [i.e., loans] of insured institutions fell for a fourth consecutive quarter, declining by $137.2 billion (1.0 percent). During the year, total industry assets declined by a net $731.7 billion (5.3 percent), the largest percentage decline in a year since the inception of the FDIC [1942].
"http://dailycapitalist.com/wp-content/uploads/2010/03/Bank-Business-Loans-3-
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