Thursday, July 16, 2009

Required Reading: Thursday, July 16th 2009

BofA: Double Secret Probation – Calculated Risk

Weekly Unemployment Claims Decline Sharply – Calculated Risk

NOTE: The seasonally adjusted weekly claims numbers are being impacted by the layoffs in the automobile industry and other manufacturing sectors. Usually companies cut back production in the summer, and the numbers are adjusted for that pattern - but this year the companies cut back much earlier. This distortion is expected to last for another week or two.

Foreclosures in the Millions Midway through 2009 – RealtyTrac

A total of 1,905,723 foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 1,528,364 U.S. properties in the first six months of 2009, a 9 percent increase in total properties from the previous six months and a nearly 15 percent increase in total properties from the first six months of 2008, according to the latest RealtyTrac U.S. Foreclosure Market Report. The report also shows that 1.19 percent of all U.S. housing units (one in 84) received at least one foreclosure filing in the first half of the year.

CIT Group’s ‘Capital’ Was All Talk, No Trousers: Jonathan Weil – Bloomberg

Kansas City Car Dealer Offers An AK-47 With Each New Truck Purchase – Clusterstock

Peak to Trough Case Shiller and CAR Home Price Declines – Mish

Foreclosure Filings Hit Record 1.5 Million; One in Eight Americans Delinquent; Obama's Mortgage Rescues Create ‘Confusion’ – Mish

Foreclosure prevention programs are going to continue to fail as long as home prices are sinking and unemployment is rising. Attempts to manipulate the market and/or prevent foreclosures will merely create "perverse incentives that distort the housing market".
The only real solution is time and price. Homes have to fall to the point of affordability and people have to have jobs before any house is affordable. This should be obvious but given the number of failed programs it must not be.

Study finds more millionaires in Bay Area – The San Francisco Chronicle

The World Wealth Report, produced by Merrill and market research firm Claritas, found that the number of millionaire households across the nine-county Bay Area climbed to 136,120 last year, up 10.2 percent from 123,621 in 2007.

In fact, all three regions surveyed in the Golden State (Los Angeles, San Diego and San Francisco areas) increased in wealth last year, in sharp contrast to national and global trends, said Mike Riherd, senior vice president of investments in the Walnut Creek office of Merrill.

Henry Paulson testifies that Merrill Lynch sale helped stave off 'great peril' – The Los Angeles Times

World Bank warns of deflation spiral – Telegraph, Ambrose Evans-Pritchard

"Japan is already back in deflation, and it is here to stay. This year the economy will shrink by around 7pc, dramatically increasing the output gap and intensifying deflationary pressures. Cash earnings are down 3pc in the last year,"

The Bank of Japan downgraded its growth forecast, predicting that the economy will contract 3.4pc in the fiscal year to next March. This follows a catastrophic fall in output at a 14.2pc an annual rate in the first quarter, the worst ever recorded.

While industrial output has bounced over the summer, there are concerns that it may have been flattered by an "inventory rebound" as companies rebuild stocks.

Eurostat confirmed on Wednesday that the eurozone has slipped into deflation. Prices fell 0.1pc in June.