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Source:
International Herald Tribune
http://www.iht.com/multimedia/audioslideshow/2008/08/12/business/archive/index.html
Tags: 2008 http://www.iht.com/articles/2008/08/12/business/cr, U.S. credit system remains crippled a year after crisis
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof. —John Kenneth Galbraith
Retail Sales in Jan rose .4% headline m/o/m, .7% ex auto's, .6% ex auto's and gasoline and .7% at the core. The headline figure was less than expected while the rest were slightly better. But, with respect to non headline sales, because Dec figures were revised lower, taking the two months together were about in line with forecasts overall. Sales rose in electronics, building materials, food/beverages, clothing, sporting goods, dept stores and restaurant/bars and fell interestingly for online retailers, health/personal care, furniture and motor vehicle/parts. Bottom line, headline sales were below expectations due to the greater than expected fall m/o/m...
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August 18th, 2008 at 3:24 am
I’ll guess those Tiles won’t be darkened by Solar Panels anytime soon..That photo is a prime Example of the type of Asset-lite Assets we’ve been leveraging as ‘New Construction’
Sounds like a joke, though, one really can build a shelter that be net=zero to the Electricity Grid.
These old designs, as pictured, maximize, Energy Star appliances or not, Individual draws through, at least, one meter.
August 18th, 2008 at 6:31 am
Speaking of “subprime turmoil,” the estimable Dr. Nouriel Roubini has his mug on the NY Times website today, in connection with an article by Stephen Mihm titled “Dr. Doom.”
http://www.nytimes.com/2008/08/17/magazine/17pessimist-t.html
Not quite the “Time magazine cover curse.” But when bearish commentators start getting play in the popular press, it usually has contrarian implications.
I’m thinking of the 1980 analogy. That summer the WSJ stocks column spoke of the “surprising rally,” which nobody believed in. But after the new president got on board in 1981, the rally fizzled out and a second, deeper leg of recession unfolded. Rally now, crash later. Or vice versa.
~~~
BR: Jim, I featured this on Saturday — its a regular article, and its not even mentioned on the cover of the magazine section. Hence, it has no contrarian qualities . . .
http://bigpicture.typepad.com/comments/2008/08/nouriel-roubini.html
August 18th, 2008 at 8:21 am
Nice little summary, but I can’t get over the “looking back” sound of the piece. It is as if everything is over with no thought about going forward.
August 18th, 2008 at 8:35 am
The media continues to talk about the “subprime mortgage crisis” without any regard to all the other funny money on the books. Subprime was just the spark that started the fire. If our problems were limited to subprime, we could probably do as Bernanke suggested last year, and contain it.
I live in cushy Orange County, CA, and my neighborhood is littered with foreclosures and depressed home values. These were not “subprime” borrowers.
When the media talks about the “subprime crisis”, it’s their way of saying “those people”. Well, “those people” also live in Laguna Beach, Newport Beach, and Malibu.
August 18th, 2008 at 8:50 am
BizLinks and Open Comments | 8.18.08
Houston partnership planning a floating oil port for Texas Dems, GOP politicians both invest heavily in energy Export Boom Helps Farms, but Not American Factories — lower commodity prices an unreliable prop for an industrial power CEOs Launch W…
August 18th, 2008 at 9:03 am
The video also seems to ignore the part that other European countries played. From what I have seen the UK, Spain, Ireland all experienced overheated housing markets. The subprime crisis may have been the campfire that started the forest fire, but the global conditions made it an accident waiting to happen. I wonder why nobody ever looks for external/global causes.
August 18th, 2008 at 9:14 am
Somewhat related, the credit crunch has finally hit Houston developers. To date, Houston has considered itself immune because of oil and there has been a tremendous amount of building (I think overbuilding), both commercial and residential. Huge swaths of farmland have been converted to subdivision houses. This has provided an enormous number of jobs and the slowdown cannot but have an impact on the local economy. The drop in oil may provide a double whammy.
Builders hit by credit crunch as banks tighten cash flow
August 18th, 2008 at 9:36 am
Rob P:
You’re right in that the article, while accurately outlining the causes, seems to assume the worst is over.
Hussman’s market comment this morning is about as bearish as I’ve seen him in awhile and his thoughts about the strong dollar are just about what I’ve been thinking.
Something is About to Give
The accompanying article The suspected U.S. recession is increasingly confirmed by the data gives ths statistics and appears to agree with Barry’s comments that we are approaching the middle innings.
Barry: Do you have any comments on the dollar’s strength and commodities?
Do you think we could really hit a bottom in October? Past bear markets have not been opposed by the cheerleading, both official and unofficial (CNBC), and it seems that it may take longer for it to be acknowledged.
August 18th, 2008 at 10:50 am
SUBPRIME WAS JUST THE WARM-UP, “A” PAPER IMPLOSION WILL MAKE SUBPRIME LOOK LIKE A GOOD CREDIT TIME. AFTER THAT THERE ARE TRILLIONS OF OFF BALANCE BOOK INVESTMENTS. The “smart” banks and investment banks sold all the toxic subprime crap to our elderly’s pension funds, foreign governments and kept the “AAA” grade prime for themselves, WELL THEY MESSED UP REAL BAD, THAT CRAP IS AS BAD AS WHAT THEY THOUGHT THEY UNLOADED ON THE “POOR” PEOPLE. WORLD SAVINGS IS TAKING OUT WACHOVIA AND COUNTRYWIDE WILL TANK KENNY LEWIS AT BANK OF AMERICA………THIS IS VERY BAD………and we haven’t even got to the trillions off balance and we are still in the 4th inning.
August 18th, 2008 at 11:35 am
Mike in NOLa:
The Hussman article is pretty good. It does seem like we are all sitting around waiting for something to happen, and there is enormous complacency out there – I recently checked October options prices and was quite surprised. The importance of October is not just historical, this will be the Q3 earnings and we may see the impact of reduced earnings, forced redemptions and multiple contraction all pushing in the same direction.
Clearly many people have been taken in by the abrupt termination of the commodity spike and the current stock rally into believing that Bernanke and co are actually able to hold this tsunami back. Of course if you look at the credit markets you can see that water is coming in from all over the place, and Bernanke only has a small bucket left to bail with now that he has garbage cans full of toxic paper. Pretty soon someone is going to come to the window and be turned away, and then it is going to get ugly. Lehman? AIG? Your guess is as good as mine.
August 18th, 2008 at 12:06 pm
leftback:
I know it will make you feel good that I am well stocked with SRS, although it has only lost money so far. :)
August 18th, 2008 at 1:36 pm
Mike:
I know, I know. I am always early !! I try to ignore losses in the 3-5% area, but I agree this rally has been frustrating.
The rest of the world isn’t as quick to catch on as the readers of The Big Picture. But now that the NYT has belatedly discovered Nouriel Roubini, who knows??
Also still long SRS and Treasuries, mainly trading SKF. Looking at the VIX and the low volume in this rally it is hard not to think that the “big one” is out there, somewhere in the future……
August 18th, 2008 at 7:03 pm
Mike in Nola,
did you buy DUG yet or at all? I sold all my FXP today to buy more CHK.
August 18th, 2008 at 8:22 pm
It won’t be a contrary indicator until they call him Mr. Correct.
August 18th, 2008 at 11:12 pm
Ben:
Have had the DUG for way too long. Like leftback, I’m always way too early. Had to ride it down and back up again. In the money now, though not as good a pick as SMN was.
CHK? Do you mean Chesapeake Energy?
August 19th, 2008 at 12:12 am
earlier, at 03:24:04, I did wonder what the 3:54, in the bottom of the frame, was about..
Certainly, I meant no slight to the auteur of this piece.
now, seeing the other frames, Maybe we should ask why BBernanke’s ring is of Gold, much like the door frames and lettering of Merrill’s NYC HQ..Needless to say, if The Stumbling Herd’s Assets were of that which Ben made his ring of, much of this would have never even occurred.
Not to be taken as Gold Standard. Though, in accordance with the Assets produced via additional Leveraging..as photo above ex.