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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 March 25th, 2009

Geithner Plan

Posted by WARREN MOSLER on 25th March 2009


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This is what happens with a government that doesn’t know how the monetary system works and thinks it needs private capital participation:

Geithner Tempts Investors with Loans, 25% Returns

by James Sterngold

Mar 24 (Bloomberg) — The U.S. government’s plan to rid banks of toxic assets may attract investors with financing that helps generate returns as high as 25 percent. The Public-Private Investment Program would encourage the purchase from banks of certain securities backed by mortgages and other assets, as well as whole loans. Loans from the Federal Reserve and Federal Deposit Insurance Corp. debt guarantees will bring out the bidders.


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Posted in Articles | 7 Comments »

WSJ reports housing wrong

Posted by WARREN MOSLER on 25th March 2009


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Thanks, the negatively biased reporting continues as the evidence grows that the Obamaboom is underway.

The driving force is clear- the federal deficit seems to have gotten large (albeit the ugly way- falling revenues and rising transfer payments as output falls and unemployment rises) to again support incomes and spending.

This is how it most often happens with leadership that doesn’t understand how the monetary system works.

And analysts who don’t understand how the monetary system works will be late to anticipate the recovery as well, just as they initially failed to recognize that ‘monetary policy’ would be ineffective.

But no doubt the will cast whatever happens in terms of the monetary policy actions taken by the Fed and Treasury, rather than a result of the fiscal forces from the ‘automatic stabilizers.’

>   
>   On Wed, Mar 25, wrote:
>   
>   See excerpt from todays WSJ. See they say that average prices declined
>   month over month. Then look at the actual data. The mean or average
>   price actually went UP from 239K to 251K but they say “and prices
>   month over month fell too.
>   
>   They don’t even read the release. These numbers are confirmed on BB.
>   

New-Home Sales Rise as Prices Fall

by Jeff Bater

Mar 25 (WSJ) — The median price of a new home tumbled 18.1% to $200,900 in February from $245,300 in February 2008. The average price decreased 16.7% to $251,000 from $301,200 a year earlier. And prices month over month fell, too; in January 2009, the median price was $206,800 and the average was $239,100.


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Posted in Articles, Housing | 5 Comments »

Obama on a new world currency

Posted by WARREN MOSLER on 25th March 2009


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This is what you get from a president who doesn’t understand the monetary system. The strength of the dollar is off point:

Obama Defends Spending Plan, Tempers Criticism of Wall Street

by Julianna Goldman and Kim Chipman

Mar 25 (Bloomberg) — “I don’t believe that there’s a need for a global currency,” Obama, 47, said. “As far as confidence in the U.S. economy or the dollar, I would just point out that the dollar is extraordinarily strong right now.”

The main difficulty with a world currency is how the budget deficit (the only source of net savings of financial assets for that new currency) in that currency is managed. And with a world of leaders who don’t understand how currencies work, the odds of getting that anywhere near right are very long.


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Posted in Articles, Currencies, Obama | 5 Comments »

2009-03-25 USER

Posted by WARREN MOSLER on 25th March 2009


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MBA Mortgage Applications (Mar 20)

Survey n/a
Actual 32.2%
Prior 21.2%
Revised n/a

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MBA Purchasing Applications (Mar 20)

Survey n/a
Actual 267.80
Prior 257.10
Revised n/a

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MBA Refinancing Applications (Mar 20)

Survey n/a
Actual 6363.20
Prior 4497.60
Revised n/a

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Durable Goods Orders (Feb)

Survey -2.5%
Actual 3.4%
Prior -5.2%
Revised -7.3%

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Durable Goods Orders YoY (Feb)

Survey n/a
Actual -28.9%
Prior -27.9%
Revised n/a

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Durables Ex Defense MoM (Feb)

Survey n/a
Actual 1.7%
Prior -4.0%
Revised n/a

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Durables Ex Transportation MoM (Feb)

Survey -2.0%
Actual 3.9%
Prior -2.5%
Revised -5.9%

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Durable Goods ALLX (Feb)

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New Home Sales (Feb)

Survey 300K
Actual 337K
Prior 309K
Revised 322K

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New Home Sales Total for Sale (Feb)

Survey n/a
Actual 330.00
Prior 340.00
Revised n/a

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New Home Sales MoM (Feb)

Survey -2.9%
Actual 4.7%
Prior -10.2%
Revised -13.2%

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New Home Sales YoY (Feb)

Survey n/a
Actual -41.1%
Prior -46.1%
Revised n/a

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New Home Sales Median Price (Feb)

Survey n/a
Actual 200.90
Prior 206.80
Revised n/a

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New Home Sales TABLE 1 (Feb)

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New Home Sales TABLE 2 (Feb)


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Posted in Daily | No Comments »