Posts filed under “Think Tank”

Bulls get more giddy and bears go into further hibernation

Stock market bullishness has reached a new high in this run from the March lows as measured by the weekly II survey of newsletter writers. Bulls rose to 51.6 from 48.3 last week and that is the highest since Dec ’07 while Bears fell to 19.8 from 23.1, the lowest since Oct ’07. This contrarian indicator in no way marks an imminent change in direction as the bulls can be right for a period of time as they typically are in bull market moves. The August German IFO business confidence figure rose to the highest since Sept ’08 and was 1.5 points more than consensus but European stocks traded lower after its release as maybe a sign of good data being already discounted. German bunds rallied in spite of the number and US Treasuries are following sending the 10 yr bond yield to the lowest level since July 13th. ABC confidence rose to a 3 month high, up by 1 point on the week. The MBA said refi’s rose to an 11 week high and purchases rose to a 7 week high. July Durable goods and New Home sales data are the key numbers of the day and the US Treasury auctions of 5 yr’s today.

Category: MacroNotes

Stocks Shout “Recovery!”; What Do Other Markets Say?

Good Evening: U.S. stocks rose once again on Tuesday, halting its latest losing streak at one. What was interesting about today’s rather modest closing gains is that, given the news flow, they could have been quite a bit better. Ben Bernanke was reappointed to his position as Fed Chairman, home prices actually rose a tad…Read More

Category: Markets, Think Tank

Seasonality of Home Prices

To highlight the seasonality of housing and its impact on pricing where the spring is the busiest of the year, the S&P/Case Shiller Index, which does not seasonally adjust its m/o/m pricing, has shown its best performance in Q2 in every year except one going back to ’01. ’09 is of course not complete but…Read More

Category: MacroNotes

Bloomberg Lawsuit

Bloomberg Lawsuit Judgment

Category: Legal, Think Tank

Consumer Confidence

August Consumer Confidence from the Conference Board was a better than expected 54.1 vs the consensus of 47.9 and up from 47.4 in July. It’s the highest since May which at the time was the most since Aug ’08. Almost all of the improvement was in the Expectations component which rose about 10 points while…Read More

Category: MacroNotes

S&P/Case Shiller Home Price Index

The June S&P/CaseShiller 20 city Home Price Index fell 15.44% y/o/y, better than the expected fall of 16.4%. The index rose 1.4% m/o/m, the 2nd month in a row of m/o/m gains. From the record high, prices are down by 31.3%, off the high to low drop of 32.6% at the low in April. Every…Read More

Category: MacroNotes

It all comes down to home prices

When home prices stop going down, the worst of the credit crisis will have ended as banks can confidently quantify their exposure, investors can feel comfortable with taking on certain risk, many homeowners will stop the drowning on their mortgage, home buyers won’t have lower prices to wait for and the important wealth effect can…Read More

Category: MacroNotes

Bernanke!

Bernanke! August 24, 2009 Markets will like the removal of uncertainty now that President Obama has committed to Fed Chairman Bernanke’s reappointment. Confirmation by the US Senate is expected without much difficulty. History shows that uncertainty is the enemy of markets. Much speculation about Bernanke and a possible Summers succession has swirled in market analysis…Read More

Category: Think Tank

To be sure, this may be much ado about nothing and Goldman shares rallied sharply early Monday, before fading in the afternoon with the broader market. Still, if nothing else, this “trading huddle” story is another black eye for the white shoe firm, whose summer of discontent has so far featured:

  • Matt Taibbi’s blistering “vampire squid” feature in Rolling Stone.
  • Rumors of Goldman front-running the market via high-frequency trading software after one of its former developers was arrested for allegedly trying to steal is proprietary trading code.
  • A New York Times story detailing former Goldman CEO Hank Paulson’s numerous calls to current CEO Lloyd Blankfein last fall, when Paulson was Treasury Secretary and Goldman was one of many firms in line for government largess.

Category: Think Tank, Video

Zombie Dance Party: Q2 Update and Stress Test Preliminaries

Earlier today we announced the preliminary Q2 stress test results for all US banks.  Gretchen Morgenson gave us great ink yesterday in the NY Times:  “What the Stress Didn’t Predict.”

The preliminaries are of interest because they exclude the large banks and thus give you a regional/community bank view. In Q2 2009 the preliminary bank safety and soundness ratings calculated by the IRA Bank Monitor using the data from the FDIC indicate a dramatic climb in the stress in the US banking industry, up 23% to 6.87 in Q2 2009 (1995=1) vs. the preliminary Stress Index value of 5.57 in Q1 2009.   The rate of change in the preliminary Bank Stress Index was lower than in the previous quarter, but the absolute stress test score is at record levels.  The final industry aggregate average Bank Stress Index calculated by IRA was 1.8 at the end of Q4 2008 and 2.36 as of Q1 2009, illustrating the degree of subsidies flowing into the larger banks, as discussed below.

IRA’s unique automated system enables us to gather and process CALL reports in real time, as they become available on the FDIC CDR web facility.  This facility cuts several weeks off the wait time for the public to access FDIC data, but some of the largest banks are still not released until the FDIC releases its own analysis of the quarterly data, roughly 60 days after the quarter close.  Since the largest banks and/or the FDIC deliberately hold back the release of certain bank CALL reports until just prior to the press conference, the sample of CALL reports available via the FDIC CDR facility just prior to the FDIC press conference allows us to view the rest of the US banking industry “ex-big bank.”

Q2 2009 “Ex-Big Bank”:  Less Worse Than Previous Quarter, But Still Climbing

Prior to the FDIC press conference in Q1 2009, IRA for the first time calculated a preliminary Banking Stress Index rating for the industry using the bank CALL reports that were available on the FDIC web site about 50 days after the quarter close.   This preliminary Bank Stress Index rating included over 7,000 institutions, but excluded the largest banks and therefore provided a perspective on the rest of the industry.
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Category: Markets, Think Tank