The Center of the Universe

St Croix, United States Virgin Islands

MOSLER'S LAW: There is no financial crisis so deep that a sufficiently large tax cut or spending increase cannot deal with it.

Archive for July, 2008

2008-07-31 US Economic Releases

Posted by Sada Mosler on 31st July 2008


[Skip to the end]


GDP QoQ Annualized (2Q A)

Survey 2.3%
Actual 1.9%
Prior 1.0%
Revised 0.9%

Less than expected, and helped by a low deflator, but up nonetheless with government and exports leading the charge.

[top][end]

GDP Price Index (2Q A)

Survey 2.4%
Actual 1.1%
Prior 2.7%
Revised 2.6%

big drop in the headline deflator – need to wait for next quarter to see if it’s reversed.

[top][end]

GDP ALLX (2Q A)

From Cesar:

GDP:

  • grew 1.9% below expectations of 2.3%
  • rebates helped consumption grow 1.5% for 1.08% contribution to growth
  • net exports added 2.42% to growth
  • inventories were drag of 1.92%
  • residential investment was down -15.6% after declining 25.1% last month and the drag was “only” .62% after subtracting over 1% from GDP the last 3 quarters…
    housing drag on GDP will diminish as decline decelerates and housing shrinks as % of total GDP

[top][end]


Personal Consumption (2Q A)

Survey 1.7%
Actual 1.5%
Prior 1.1%
Revised 0.9%

Less than expected but turning up.

[top][end]

Core PCE QoQ (2Q A)

Survey 2.0%
Actual 2.1%
Prior 2.3%
Revised n/a

Worse than expected and still looks to be working its way higher over time.

[top][end]

Personal Consumption ALLX 1 (2Q A)

[top][end]

Personal Consumption ALLX 2 (2Q A)

[top][end]


Employment Cost Index (2Q)

Survey 0.7%
Actual 0.7%
Prior 0.7%
Revised n/a

As expected

Look to import prices as an indication of foreign employment costs of what we consume. They are rising rapidly.

[top][end]

Employment Cost Index ALLX (2Q)

[top][end]


Initial Jobless Claims (Jul 26)

Survey 393K
Actual 448K
Prior 406K
Revised 404K

Higher than expected, and indicate next month might be a tougher job environment.

4 week average approaching 400,000.

[top][end]

Continuing Jobless Claims (Jul 19)

Survey 3150K
Actual 3282K
Prior 3107K
Revised 3097K

Not looking good at all. No sign of retreat yet.

[top][end]

Jobless Claims ALLX (Jul 26)

From Cesar:
Initial and continuing claims:

jump to new cycle highs of 448k and 3,282k, respectively (no special factors noted)
the weakness in this real-time indicator seems to tell us more about current state of economy than today’s GDP reports or tomorrow’s payrolls…

[top][end]


Chicago Purchasing Manager (Jul)

Survey 49.0
Actual 50.8
Prior 49.6
Revised n/a

Higher than expected.

Prices paid remains very high.

[top][end]

Chicago Purchasing Manager ALLX (Jul)

[top][end]


NAPM-Milwaukee (Jul)

Survey 43.5
Actual 44.0
Prior 39.0
Revised n/a

Higher then expected.

Prices paid remain very high.

[top][end]

NAPM-Milwaukee ALLX (Jul)


[top]

Posted in Daily | 2 Comments »

2006: Warren B introduces economist Paul Davidson

Posted by Sada Mosler on 31st July 2008


Video: Post Keynesian Keynote Dinner- Warren Mosler 2006

Posted in Video | No Comments »

Re: Liquidity

Posted by Sada Mosler on 30th July 2008

>
>   European demand for $ funding has increased and surpassed the US demand
>

Pat, this is most problematic as it indicates the eurozone is strung out on $US debt.

At least the US banking system doesn’t have a problem with euro debt.

This compounds the systemic risk over there.

Warren

Posted in Currencies, Email | No Comments »

2008-07-30 US Economic Releases

Posted by Sada Mosler on 30th July 2008


[Skip to the end]


MBA Mortgage Applications (Jul 25)

Survey n/a
Actual -14.1%
Prior -6.2%
Revised n/a

Softening.

[top][end]

MBA Purchasing Index (Jul 25)

Survey n/a
Actual 309.5
Prior 335.6
Revised n/a

Now drifting lower,

Partially because banks are taking market share as mortgage bankers find it more difficult to sell in the secondary market.

[top][end]

MBA Refinancing Index (Jul 25)

Survey n/a
Actual 1074.4
Prior 1392.7
Revised n/a

[top][end]

MBA ALLX 1 (Jul 25)

[top][end]

MBA ALLX 2 (Jul 25)

[top][end]


ADP Employment Change (Jul)

Survey -60K
Actual 9K
Prior -79K
Revised -77K

Surprise to the upside.

If this happens with Friday’s payroll number markets will be even further confused.

[top][end]


ADP ALLX (Jul)


[top]

Posted in Daily | No Comments »

Fed Governor Mishkin on monetary policy

Posted by Sada Mosler on 29th July 2008


[Skip to the end]

In case there was any doubt things have changed.

from his July 28 speech:

Policymakers, academic economists, and the general public broadly agree that maintaining a low and stable inflation rate significantly benefits the economy. For example, low and predictable inflation simplifies the savings and retirement planning of households, facilitates firms’ production and investment decisions, and minimizes distortions that arise because the tax system is not completely indexed to inflation. Moreover, I interpret the available economic theory and empirical evidence as indicating that a long-run average inflation rate of about 2 percent, or perhaps a bit lower, is low enough to facilitate the everyday decisions of households and businesses while also alleviating the risk of debt deflation and other pitfalls of excessively low inflation.

The rationale for promoting maximum sustainable employment is also fairly obvious: Recessions weaken household income and business production, and unemployment hurts workers and their families.

No mention of lost real output. Must have been an oversight.

As I have outlined elsewhere, these two objectives are typically complementary and mutually reinforcing: that is, done properly, stabilizing inflation contributes to stabilizing economic activity around its sustainable level, and vice versa.

Hence the dual mandate is met by sustaining low and stable inflation rates.

Nevertheless, it’s important to note a fundamental difference between the objectives of price stability and maximum sustainable employment. On the one hand, the long-run average rate of inflation is solely determined by the actions of the Federal Reserve.

And they do believe that. They believe it’s all a function of the interest rates they select.

On the other hand, the level of maximum sustainable employment is not something that can be chosen by the Federal Reserve, because no central bank can control the level of real economic activity or employment over the longer run.

And they are not responsible for the level of economic activity, only the rate of inflation.

In fact, any attempt to use stimulative monetary policy to maintain employment above its long-run sustainable level would inevitably lead to an upward spiral of inflation with severe adverse consequences for household income and employment.


[top]

Posted in Fed, Inflation | No Comments »

Re: Fed study on TAF

Posted by Sada Mosler on 29th July 2008


[Skip to the end]

>    
>    On Tue, Jul 29, 2008 at 4:05 AM, Andrea wrote:
>    
>    In case you haven’t seen this yet: A Fed study that finds that
>    Taf has lowered Libor.
>    
>    http://www.newyorkfed.org/research/staff_reports/sr335.html
>    
>    

right, thanks, as if they needed to fund a study to figure that out!

It’s like doing a study that shows the repo rate goes down when the fed lowers its ‘stop’ on repo.

(Too bad they didn’t use this study to show they should set a rate for the TAF and let quantity float, instead of setting a quantity and having an auction.)

It’s this kind of expense that gives govt. a govt. spending negative connotation.

all the best!

warren


[top]

Posted in Credit, Email, Fed, TAF | No Comments »

2008-07-29 US Economic Releases

Posted by Sada Mosler on 29th July 2008


[Skip to the end]


ICSC-UBS Store Sales WoW (Jul 29)

Survey n/a
Actual 1.2%
Prior 0.1%
Revised n/a

[top][end]

ICSC-UBS Store Sales YoY (Jul 29)

Survey n/a
Actual 2.6%
Prior 2.5%
Revised n/a

Still inching higher.

[top][end]

Redbook Store Sales Weekly YoY (Jul 29)

Survey n/a
Actual 2.9%
Prior 2.6%
Revised n/a

No let up here yet either.

[top][end]

ICSC-UBS Redbook Comparison TABLE (Jul 29)

[top][end]


S&P-Case Shiller Home Price Index (May)

Survey n/a
Actual 168.54
Prior 169.85
Revised 170.00

[top][end]

S&P-CS Composite-20 YoY (May)

Survey -16.00%
Actual -15.78%
Prior -15.30%
Revised -15.22%

[top][end]

Case Shiller ALLX 1 (May)

[top][end]

Case Shiller ALLX 2 (May)

Still declining but the rate of decline is quickly diminishing,

In line with other housing indicators that are appear to have bottomed.

[top][end]


Consumer Confidence (Jul)

Survey 50.1
Actual 51.9
Prior 50.4
Revised 51.0

[top][end]

Consumer Confidence ALLX 1 (Jul)

[top][end]

Consumer Confidence ALLX 2 (Jul)

Survey -
Actual -
Prior -
Revised -

Karim writes:

  • Headline confidence rises from 51 to 51.9 (first gain since Dec)
  • Jobs Plentiful less jobs hard to get falls from -15.6 to -16.8 (new cycle low); with initial claims back above 400k now, payrolls on Friday have downside risk to -75k consensus. As important, increasing jobs hard to get is correlated to increasing duration of unemployment.
  • Plans to buy an auto fall to new cycle low of 5.0 from 5.1
  • Plans to buy a home increases from cycle low of 2.4 to 2.7
  • Plans to buy a major appliance fall to new cycle low of 27.7 from 28.3

[top][end]


ABC Consumer Confidence (Jul 27)

Survey -
Actual -
Prior -41
Revised -

[top][end]

ABC Consumer Confidence ALLX (Jul 27)


[top]

Posted in Daily | No Comments »

AP: Rising inflation hits German confidence

Posted by Sada Mosler on 28th July 2008

Rising inflation hits German confidence

by Matt Moore

Same theme: ‘inflation’ hurting buying plans.

Expectations theory says ‘inflation’ expectations will accelerate purchases.

Different kinds of ‘inflation’ at work…

Posted in Inflation | No Comments »

2008-07-28 UK News Highlights

Posted by Sada Mosler on 28th July 2008


[Skip to the end]

Highlights:

U.K. Hometrack House Prices Fall the Most Since 2001
Brown Says He Won’t Turn to ’70s Agenda After Defeat
Darling Considers Expanding Mortgage Bond-Swap Scheme, FT Says

 
 

U.K. Hometrack House Prices Fall the Most Since 2001

by Brian Swint

(Bloomberg) The average cost of a residential property in England and Wales slipped 4.4 % in July from a year earlier to 168,500 pounds ($336,000), Hometrack Ltd. said. Prices fell 1.2 % from June. “With no immediate end in sight to the current uncertainty, activity levels are likely to remain suppressed with prices remaining under pressure into the autumn,” said Richard Donnell, director of research at Hometrack. Prices “are now back to levels last seen in October 2006.” Demand for housing has declined 20 % in the past three months, Hometrack said.

Note how much higher prices are vs the US.

It’s another case of going up very fast and now working its way down towards a more historically normal trend line.

But as in the US, they never come down quite that far before turning up on a new path from a higher base as much of past ‘inflation’ remains indefinitely.


[top]

Posted in Housing, Inflation, UK | 4 Comments »

2008-07-25 Weekly Credit Graph Packet

Posted by Sada Mosler on 28th July 2008


[Skip to the end]

A touch higher last week, but still seems to be working its way lower.


IG On-the-run Spreads (Jul 25)

[top][end]

IG6 Spreads (Jul 25)

[top][end]

IG7 Spreads (Jul 25)

[top][end]

IG8 Spreads (Jul 25)

[top][end]

IG9 Spreads (Jul 25)


[top]

Posted in Credit | No Comments »

Nat gas

Posted by Sada Mosler on 25th July 2008


[Skip to the end]

It was deregulated back in the 1970s, which brought out vast supplies causing utilities to substitute gas for oil and eventually break OPEC.

I don’t see that kind of supply response lurking today.

The Natural Gas Policy Act of 1978

In November of 1978, at the peak of the natural gas supply shortages, Congress enacted legislation known as the Natural Gas Policy Act (NGPA), as part of broader legislation known as the National Energy Act (NEA). Realizing that those price controls that had been put in place to protect consumers from potential monopoly pricing had now come full circle to hurt consumers in the form of natural gas shortages, the federal government sought through the NGPA to revise the federal regulation of the sale of natural gas. Essentially, this act had three main goals:

  • Creating a single national natural gas market
  • Equalizing supply with demand
  • Allowing market forces to establish the wellhead price of natural gas


[top]

Posted in Currencies, Oil | No Comments »

A surge of a different type

Posted by Sada Mosler on 25th July 2008


[Skip to the end]

Government spending kicking in with 2007 spending that was delayed to 2008:

Topical article: The GOP’s December Surprise by James K. Galbraith

Durable Goods Orders Rise Unexpectedly

by Michael M. Grynbaum

A separate report showed that orders for big-ticket items rose last month, beating economists’ expectations. A surge in export orders and *investment in military-related products* sent durable goods orders up 0.8 percent in June from a revised 0.1 percent in May, the Commerce Department said. Excluding orders for military-related goods, orders were up only 0.1 percent.


[top]

Posted in Articles, USA | 2 Comments »

Japan CPI

Posted by Sada Mosler on 25th July 2008


[Skip to the end]

from Dave:

Japan core CPI last night came out at 1.9% as expected

Petrol products were up +23.9% y/y

Non fresh food products were up +3.5% y/y

Core-Core CPI (ex energy and ex fresh food) rose +0.1% vs -0.1% in the previous month indicating some signs of higher energy and food prices filtering through the economy to other products and services

Price pressures continue to grow at the corporate level (see graph of Corporate Services Price Index CSPI and Corporate Goods Price Index CGPI)

Expectations from many dealers and BOJ’s Mizuno is that CPI could reach as high as 2.5% by the fall


[top]

Posted in Japan | No Comments »

CNBC: Housing bottom story

Posted by Sada Mosler on 25th July 2008


[Skip to the end]

His monetary analysis is ridiculous but we agree on this point:

The Media Are Missing the Housing Bottom

by Larry Kudlow

Media reports painted a pessimistic picture of today’s release on existing home sales, which fell 15 percent from a year ago and recorded higher inventories. But inside the report was an awful lot of very good new news, which appear to be pointing to a bottom in the housing problem; in fact, maybe the tiniest beginnings of a recovery.

For example, the median existing home price has increased four consecutive months and is up 10 percent since February. Yes, it’s down 6 percent over the past year. But the monthly numbers show a gradual rebound. Actually, this median home price is $215,000 in June, compared to $196,000 last winter.

And there’s more. One of the hardest hit regions is the West, including California, Arizona, and Nevada. The other two bad states are Florida and Michigan. However, existing home sales in the western region are up four straight months, and are 17 percent above the low in October. At the same time, prices in the West have increased three straight months.

Meanwhile, overall national existing home sales are basically stabilizing at just under five million. And in the first and second quarters of 2008, these sales dropped slightly by 3 percent in each case, which is a whole lot better than the roughly 30 percent sales drops of the prior three quarters.

It’s a pity the mainstream media keeps searching for more and more pessimism. The reality is a possible upturn in the housing trend, and at the very least we are getting a bottom. Stocks sold off 165 points largely on media reports of terrible home sales and prices. But I am hoping the market comes to its senses and realizes the data are a whole lot better.

related content
Senate Set to Vote Saturday On Housing Rescue Bill
Existing Home Sales: A Look At Numbers That Weren’t There

And on top of all that, just as housing may be on the mend, Congress is about to ratify a huge FHA-based bailout that could total $42 billion. Congressional solons are putting up $300 billion to refinance and insure distressed loans through the Federal Housing Administration. But this dubious government agency, with a whole history of bad portfolio management, may wind up taking in the very worst loans on the books.


[top]

Posted in Articles, Housing | No Comments »

Reinhart got it right

Posted by Sada Mosler on 25th July 2008


[Skip to the end]

I hadn’t noticed this back then, but Vince got it right: The Fed purchased the $30 billion of securities from JPM/Bear Stearns, with JPM agreeing that if there were any net losses it would be responsible for the first $1 billion.

It’s very odd that the Fed would call this a non-recourse loan, as they cut a better deal than that.

Unlike a non-recourse loan, if the securities turn out to be profitable, the Fed gets those funds.

So why would the Fed use language that implies the transaction was worse for the Fed than it actually was?

Perhaps there was a legal or some other restriction that prevented the Fed from purchasing the securities?

Seem there is a lot more to the story than has been revealed?

Press Release
Summary of Terms and Conditions Regarding the JPMorgan Chase Facility


March 24, 2008

The Federal Reserve Bank of New York (“New York Fed”) has agreed to lend $29 billion in connection with the acquisition of The Bear Stearns Companies Inc. by JPMorgan Chase & Co.

The loan will be against a portfolio of $30 billion in assets of Bear Stearns, based on the value of the portfolio as marked to market by Bear Stearns on March 14, 2008.

JPMorgan Chase has agreed to provide $1 billion in funding in the form of a note that will be subordinated to the Federal Reserve note. The JPMorgan Chase note will be the first to absorb losses, if any, on the liquidation of the portfolio of assets.

The New York Fed loan and the JPMorgan Chase subordinated note will be made to a Delaware limited liability company (“LLC”) established for the purpose of holding the Bear Stearns assets. Using a single entity (the LLC) will ease administration of the portfolio and will remove constraints on the money manager that might arise from retaining the assets on the books of Bear Stearns.

The loan from the New York Fed and the subordinated note from JPMorgan Chase will each be for a term of 10 years, renewable by the New York Fed.

The rate due on the loan from the New York Fed is the primary credit rate, which currently is 2.5 percent and fluctuates with the discount rate. The rate on the subordinated note from JPMorgan Chase is the primary credit rate plus 450* basis points (currently, a total of 7 percent).

BlackRock Financial Management Inc. has been retained by the New York Fed to manage and liquidate the assets.

The Federal Reserve loan is being provided under the authority granted by section 13(3) of the Federal Reserve Act. The Board authorized the New York Fed to enter into this loan and made the findings required by section 13(3) at a meeting on Sunday, March 16, 2008.

Repayment of the loans will begin on the second anniversary of the loan, unless the Reserve Bank determines to begin payments earlier. Payments from the liquidation of the assets in the LLC will be made in the following order (each category must be fully paid before proceeding to the next lower category):

  • to pay the necessary operating expenses of the LLC incurred in managing and liquidating the assets as of the repayment date;
  • to repay the entire $29 billion principal due to the New York Fed;
  • to pay all interest due to the New York Fed on its loan;
  • to repay the entire $1 billion subordinated note due to JPMorgan Chase;
  • to pay all interest due to JPMorgan Chase on its subordinated note;
  • to pay any other non-operating expenses of the LLC, if any.

Any remaining funds resulting from the liquidation of the assets will be paid to the New York Fed.


Where No Fed Has Gone Before

Why the Federal Reserve’s ‘loan’ for the Bear Stearns deal looks like an investment—and faces serious scrutiny


March 26, 2008

by Peter Coy

The Federal Reserve has stretched its mandate up, down, and sideways to prevent a financial market deluge. Now it appears to be stretching the English language a bit as well. What the Fed is calling a $29 billion “loan” to help finance JPMorgan Chase’s (JPM) purchase of Bear Stearns (BSC) looks much more like a $29 billion investment in securities owned by Bear. Although the Fed insists that it isn’t technically buying any assets, in practical terms it’s doing exactly that. All this adds up to a big and unacknowledged step up in the central bank’s financial intervention with Wall Street investment banks.

The Fed, of course, is the only part of government with the speed, power, and flexibility to arrest a bout of market panic. By rapidly intervening in mid-March to keep Bear from filing for bankruptcy, it may well have prevented a series of cascading failures that could have severely damaged the financial system and the economy. Many economists and analysts are happy that the Fed stepped into the breach. Nevertheless, now that things have quieted down a bit, the Fed is likely to face some tough questions about the precise nature of its actions as well as the legal justification for them.

The second-guessing has already begun. On Mar. 26, Senate Banking, Housing, and Urban Affairs Chairman Christopher Dodd (D-Conn.) announced an Apr. 3 hearing to explore the “unprecedented arrangement” between the Fed, JPMorgan, and Bear. Top officials from the Fed and other regulators, as well as Bear Stearns CEO Alan Schwartz and JPMorgan CEO Jamie Dimon, will likely be grilled about the details.

“That Looks Like Equity”
Meanwhile, Treasury Secretary Henry Paulson gave the Fed a gentle prod on Mar. 26 in a speech to the Chamber of Commerce. While saying he fully supported the Fed’s recent actions, Paulson stressed that “the process for obtaining funds by nonbanks must continue to be as transparent as possible.” He also urged the Fed to continue to work with other agencies to get the information necessary for “making informed lending decisions.”

So far, few people have focused on what exactly the Fed is getting in exchange for supplying $29 billion to JPMorgan Chase. That’s a bit surprising because whatever the deal is, it’s far from a standard loan. The strangest twist is that even though the money goes to JPMorgan, that firm isn’t the borrower. So the Fed can’t demand repayment from JPMorgan if the Bear assets turn out to be worth less than promised.

What’s also odd is that if there’s money left after loans are paid off, the Fed gets to keep the residual value for itself. That’s what one would expect if the Fed were buying the assets, not just treating them as collateral for a loan. Vincent R. Reinhart, a former director of the Fed’s Division of Monetary Affairs and now a resident scholar at the American Enterprise Institute, said in an interview on Mar. 26: “The New York Fed is the residual claimant. That doesn’t look to me like a loan. That looks like equity.”


[top]

Posted in Articles, Fed | No Comments »

PI: Pension bill regarding commodities watered down

Posted by Sada Mosler on 25th July 2008


[Skip to the end]

Looks like they buckled quickly to get the rest of the bill through ASAP.

Pension fund provisions out of House bill

by Doug Halonen

A bill in the House Agriculture Committee that would deal with commodity speculation was dramatically revised today to delete provisions in a previous draft that would have barred pension funds from investing in agricultural and energy commodities and engaging in equity and interest rate swaps, a committee aide said.

“(The) pension provisions are out of the bill,” the aide, who asked not to be identified, wrote in an e-mail response to a P&I Daily inquiry. The aide could not say why the provisions were removed.

Pension industry advocates said that the threat of the bans — included in the draft bill that was being circulated Wednesday — was met by significant opposition from pension fund representatives.

The draft and the revised bill were both sponsored by Rep. Collin Peterson, D-Minn. The committee will vote on the bill this afternoon, according to the committee.

“It’s going to be a pretty innocuous bill,” said one pension industry lobbyist, who asked not to be identified by name. “We’re not sweating it for sure.”


[top]

Posted in Pension, USA | No Comments »

2008-07-25 US Economic Releases

Posted by Sada Mosler on 25th July 2008


[Skip to the end]


Durable Goods Orders MoM (Jun)

Survey -0.3%
Actual 0.8%
Prior 0.0%
Revised 0.1%

Better than expected, partially because fiscal and government is kicking in harder than expected.

[top][end]

Durable Goods Orders YoY (Jun)

Survey n/a
Actual -1.3%
Prior -2.7%
Revised n/a

Still has turned up in a meaningful way, but moving away from recession levels.

When car sales normalize we’ll see a further boost.

[top][end]

Durables Ex Transportation (Jun)

Survey -0.2%
Actual 2.0%
Prior -0.8%
Revised -0.5%

Headline numbers being held down by car sales.

[top][end]

Durable Goods Orders ALLX (Jun)

Durables better than expected, likely due to companies taking advantage of new accelerated depreciation allowance

  • Capital goods orders ex-defense and aircraft up 1.4%
  • Defense orders up 30% in past 2mths, so production/shipments likely to improve for some manufacturers in coming months
  • Small appliances up as well. Seems some rebate checks went for down payments on appliances and home improvements.

    Electronics and consumer goods down.

    [top][end]


    U of Michigan Confidence (Jul F)

    Survey 56.4
    Actual 61.2
    Prior 56.6
    Revised n/a

    Better than expected and a possible bottom from a very low level.

    [top][end]

    U of Michigan Confidence ALLX (Jul F)

    Gas prices ‘stabilizing’ likely lead to the modest improvement in the Michigan survey and the ebbing of inflation expectations:

    • Headline confidence rose from 56.6 to 61.2

    Don’t underestimate the fiscal package!

    • 5-10yr inflation expectations fell from 3.4% to 3.2%

    One year steady at 5.1%.

    [top][end]

    Inflation Expectations 1yr Forward (Jul F)

    Survey n/a
    Actual 5.1%
    Prior 5.1%
    Revised n/a

    Two months over 5% is very troubling for the Fed. They see this as a direct cause of inflation.

    [top][end]

    Inflation Expectations 5yr Forward (Jul F)

    Survey n/a
    Actual 3.2%
    Prior 3.4%
    Revised n/a

    Down some but still way too high.

    The Fed wants this back to their long term target of something under 2.5%.

    [top][end]


    New Home Sales (Jun)

    Survey 503K
    Actual 530K
    Prior 512K
    Revised 533K

    Better than expected and last month revised up as well.

    [top][end]

    New Home Sales – Total for Sale (Jun)

    Survey n/a
    Actual 425K
    Prior 448K
    Revised n/a

    Sales can quickly be stifled by dwindling actual inventories.

    [top][end]

    New Home Sales MoM (Jun)

    Survey -1.8%
    Actual -0.6%
    Prior -2.5%
    Revised -1.7%

    Better than expected and from an upwardly revised May number.

    [top][end]

    New Home Sales YoY (Jun)

    Survey n/a
    Actual -33.2%
    Prior -37.8%
    Revised n/a

    [top][end]

    New Home Sales Median Price (Jun)

    Survey n/a
    Actual 230.9
    Prior 227.7
    Revised n/a

    The decline may be about over.

    Median prices are already rising from the lows.

    Watch for a shortage of new homes.

    [top][end]

    New Home Sales TABLE 1 (Jun)

    The three month average has turned higher.

    [top][end]

    New Home Sales TABLE 2 (Jun)

    • New home sales down 0.6% m/m and prices down 2% y/y

    But higher than expected at 530,000, and down from May because May was revised up to 533,000 from 512,000.

    Also, inventories down and prices up, and prices getting very close to being up year over year:

    New home sales fall but stronger than expected

    by Mark Felsenthal

    Sales of newly constructed U.S. single-family homes were stronger than expected in June, falling 0.6 percent to a 530,000 annual pace, a government report showed on Friday, providing a glimmer of hope for the beaten-down housing market.

    Economists polled by Reuters were expecting sales to slow to a 500,000 seasonally adjusted annual sales rate from a previously reported 512,000 pace in May. May’s sales rate was revised up to 533,000, the Commerce Department said.

    The inventory of homes available for sale shrank 5.3 percent to 426,000, the lowest since December 2004. The June sales pace put the supply of homes available for sale at 10 months’ worth.

    The median sales price rose to $230,900 from $227,700 from May, but was down 2 percent from a year earlier, the government said.


    [top]

Posted in Daily | 6 Comments »

Reuters: SemGroup

Posted by Sada Mosler on 24th July 2008


[Skip to the end]

Looks like it was a likely substantial contributor to the last run up and the subsequent quick sell off. ‘Demand destruction’ isn’t yet anywhere near enough to dislodge the Saudis from setting price as swing producer:

REFILE-SemGroup a small factor in oil price drop -experts

by Matthew Robinson and Robert Campbell

(Reuters) SemGroup’s collapse from the 12th biggest U.S. private firm into bankruptcy was only a small factor in the $23 per barrel drop from oil’s record high over the past two weeks, energy experts said on Thursday.

The Tulsa-based company declared bankruptcy this week after racking up $2.4 billion in losses shorting crude oil futures on the New York Mercantile Exchange, including a $290 million loss owed to SemGroup by a trading firm affiliated with former Chief Executive and co-founder Thomas Kivisto.


[top]

Posted in Articles, Oil | No Comments »

Reuters: House rejects selling 10% of SPR

Posted by Sada Mosler on 24th July 2008


[Skip to the end]

Just saw that the house just rejected this.

Looks like it was one more reason for technical weakness in crude, along with the vote to limit speculation and the oil storage company’s futures and cash market issues and bankruptcy.

White House threatens veto on bill to sell govt oil

by Tabassum Zakaria

(Reuters) The White House on Thursday threatened to veto legislation that would require the government to sell 10 percent of the oil in the nation’s emergency petroleum stockpile.

The House of Representatives was expected to vote on the bill later on Thursday. Democrats hope the legislation will lower oil prices by putting on the market more of the Strategic Petroleum Reserve’s light, sweet crude that is sought by refiners.

“Drawing down our emergency oil reserve in the absence of a severe energy disruption is counter to the purpose of the SPR, and offers the nation a quick fix instead of much needed long-term, responsible energy solutions,” the White House said in a statement.

The bill would require the government to sell 10 percent of the emergency stockpile’s oil, or 70 million barrels, in the open market. About 40 percent of the stockpile’s oil is light sweet crude.


[top]

Posted in Oil, USA | No Comments »

2008-07-24 US Economic Releases

Posted by Sada Mosler on 24th July 2008


[Skip to the end]


Initial Jobless Claims (Jul 19)

Survey 380K
Actual 406K
Prior 366K
Revised 372K

4 week moving average up a few thousand and drifting higher.

[top][end]

Initial Jobless Claims – 4 Week Moving Average (Jul 18)

Survey n/a
Actual 382.5
Prior 378.0
Revised n/a

[top][end]

Continuing Jobless Claims (Jul 12)

Survey 3160K
Actual 3107K
Prior 3122K
Revised 3116K

But these are now coming down some.

[top][end]


Existing Home Sales (Jun)

Survey 4.94M
Actual 4.86M
Prior 4.99M
Revised n/a

Less than expected, and bumping along the bottom as foreclosures dominate.

[top][end]

Existing Home Sales MoM (Jun)

Survey -1.0%
Actual -2.6%
Prior 2.0%
Revised n/a

[top][end]

Existing Home Sales YoY (Jun)

Survey n/a
Actual -15.9%
Prior -17.5%
Revised n/a

Still falling but not quite as fast.

[top][end]

Existing Home Sales – Median Price (Jun)

Survey n/a
Actual 215.1
Prior 207.9
Revised n/a

[top][end]

Existing Home Sales – Inventory (Jun)

Survey n/a
Actual 4.490
Prior 4.482
Revised n/a

Foreclosers addind to inventories.

[top][end]

Existing Home Sales ALLX (Jun)

Median prices up in all regions.

[top][end]

Existing Home Sales ALLX cont (Jun)


[top]

Posted in Daily | No Comments »