Solarbird (solarbird) wrote,
Solarbird
solarbird

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not so very briefly

Good morning. I was quite a bit more tied up on Thursday than I expected, sadly, but I wanted to post a couple of things.

Karl at Market Ticker talks about money being taken out of demand-deposit accounts at banks. Compare and contrast this to my post earlier about rising bond rates (meaning lower prices and fewer buyers) and the stock market action of the last month or so. Across the Curve has more to say than I did about the Treasury market. In one of those nasty, nasty contrarian moments, the US Treasury has issued a statement that it is "confident" about its ability to sell as many treasuries as it might need sell. You never say this unless you need to say this, which is never a good sign.

Wells Fargo has some scary numbers and Mish (writing for Minyanville) says that he sees some of their programmes as set up to loot Fannie Mae and Freddie Mac by rigging up more out-of-the-gate insolvent securities specifically for the purpose of handing them to those government bodies in exchange for T-bills.

The job news is all over the place; the weekly report was even worse than expected; you can get that on the radio. As always, Mish has deeper analysis describing how the numbers are worse than the headline would report. 626,000 is being reported as 30K higher than last week - but that's 30K higher than the upwardly-revised number from last week. This will will also be revised, very probably higher. And it turns out that about one quarter of those receiving unemployment benefits aren't being counted as receiving unemployment benefits, because they're on a six-month extension rather than primary. So the actual total is 6.5 million. You may not have seen IBM offering to move workers to India - if said workers will accept India pay rates. (Pointer from ysabel and technoshaman, iirc.)

Also, December factory orders were even worse than expected. Toyota lost US$1.81 billion in the last quarter, down from a $5.03 billion profit a year before, a swing of US$6.84B; it's projecting it will lose $4.94 billion this year. Panasonic is cutting 15,000 workers.

January sales numbers were terrible. Wal-mart was about the only exception.

Ireland's government is in trouble. Worse trouble, I mean. There's talk of large-scale industrial action. California's state-worker furlough programme is supported by a Superior Court Judge. Individual counties are starting to organise some sort of tax action, particularly in response to delayed tax refunds; Colusa County is refusing to send the state money due for 30 days. Mish (again) has a flotilla of currency news here that you might want to read, particularly w.r.t. the Ruble being in freefall, the Mexican Peso in trouble, and unwanted Yen strength in Japan. China is very, very cranky about India's import ban on toys. But despite all this, the Baltic Dry Index continues to make serious moves up - it's now at 1498, which is a historically reasonable number. Somebody is moving bulk dry material around again.

So-called AAA CDO tranches have broken out of their "bear flag" formation to the downside. Were that to play out as usual, that would result in a target price of about 18¢ on the dollar. But we aren't even at the previous lows, yet, so add salt. There's no similar breakout at this point in time in the commercial property risk spreads, though those are rising again.

My recent favourite hobby-horse, the M1 Money Multiplier - please go read the previous link if you don't know what that is - is down to 0.85. The National Post is anticipating a US dollar devaluation, but that's speculative. What isn't speculative is that we're at a point in post-war recessionary cycles where things should be starting to get better - that's really the basis of the 3Q2009 recovery scenario - and they aren't. But you know what I think of that thesis.

That's all I have time for now. Good luck, and enjoy the weekend.
Tags: economics
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