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A tad more evidence consumption started moving sideways after year end?

Given the savings rate/budget deficit got through 5% this is not impossible.

(0% GDP growth still means rising unemployment as productivity continues to increase)

Consumer Spending and Tourism

Consumer spending remained very weak on balance, albeit with slight firming noted by many Districts, particularly compared with holiday-season sales that were very disappointing. About half of the Districts reported that consumer demand was softer than during recent reporting periods or fell significantly below levels twelve months earlier. However, compared with the preceding reporting period that included the holiday season, retail spending was described as “mixed” in the Boston and Richmond Districts, “nearly steady” in Philadelphia, and slightly improved in Cleveland and Dallas, while New York reported a reduced rate of decline compared with the “steep” pace in December. But San Francisco characterized retail sales as “anemic” and pointed to double-digit sales declines relative to twelve months earlier for many retail outlets. As reported by Richmond, Chicago, and San Francisco, discount chains fared much better than traditional department stores and specialized retailers, recording sales gains in many cases as consumers continued to switch away from discretionary spending and luxury items and toward basic necessities.

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Central bank liquidity swaps (13) $320,389 – $54,201

Looks like it’s working out as foreign banks find other ways to fund their USD liabilities?

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>   
>   On Thu, Mar 5, 2009 at 2:05 PM, EDWARD wrote:
>   
>   Though at 0.50% there’s not much more room to fall in any event and he is trying to
>   establish support for the new quantitative easing policy announced today.
>   

*KING SAYS WE’VE SEEN SUDDEN, SEVERE DOWNTURN ACROSS THE WORLD
*KING SAYS `WE’RE VERY CLOSE TO ZERO’
*KING SAYS BOE IS INJECTING MONEY DIRECTLY INTO THE ECONOMY

>   
>   This perhaps is ‘injecting money’ but only by narrow definitions of ‘money’ that do not
>   include the securities purchased by the BOE.
>   
>   They are simply buying financial assets, which is the exchange of one financial asset
>   (balances at the BOE) for another- securities held by the private sector.
>   
>   Net financial assets held by the private sector remain unchanged.
>   
>   While these purchases can put downward pressure on interest rates for the asset class and
>   maturity purchased, any ‘profits’ the BOE makes from interest earned on the securities it
>   buys vs its cost of funding represent interest income removed from the private sector.
>   
>   Note his interest in helping ‘savers’ which means higher rates:
>   

*KING SAYS KEY RATE IS AS LOW AS IT’S SENSIBLE TO GO
*KING SAYS HE’S KEEN TO GET BACK TO POSITION TO HELP SAVERS
*KING SAYS VERY UNLIKELY U.K. INTEREST RATES WILL GO ANY LOWER
*KING SAYS VERY UNLIKELY INTEREST RATES WILL GO ANY LOWER
*KING SAYS SAVERS SEEM TO BE SUFFERING THROUGH LOW RATES
*KING SAYS HE HAS ENORMOUS SYMPATHY FOR SAVERS

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Sub prime delinquencies still headed north.

Some of it attributable to government assistance that requires borrowers to be delinquent?

Also, while 20% is certainly a high delinquency rate, and includes several years with 2006 higher and others lower,
it is still substantially lower than markets seem to be discounting, as evidenced by the discounts on very senior AAA pieces.

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