Hey gang, not sure where to post this, hope you don't mind, Robert. I just wanted to wish you all a very Happy Thanksgiving. Go enjoy that turkey, be it the bird variety or the tofu kind.
the Commerce Department reported Wednesday that sales of new homes fell an estimated 5.3% in October to a seasonally adjusted annual rate of 433,000, the lowest level since 1991.
The real news on these economic indicators is that economists seemingly consistently under estimated the declines.
Now to the meat of these indicators: the price of homes. Prices have declined 7% from one year ago, to a median price of $218,000.
Let's see, the mortgage calculator would give a rough monthly payment of $1500 dollars.
What kind of salary does one need to afford a $1500 dollar house payment?
Trillions. Literally trillions of taxpayer money is now pouring to financial institutions. Today the Federal Reserve added $800 Billion more. The United States has now pledged $8.5 Trillion dollars to the financial crisis. To put that in perspective, one could have paid off, in their entirety, every house being foreclosed on for $320 billion dollars, the supposed root cause of the financial crisis. The entire home mortgages liabilities in the United States are $10.6 Trillion dollars
So, why is the United States pledging money worth 60% of the entire United States GDP?
Long-dated Treasuries rallied with the 30-year bond jumping more than 3 points
The cost to insure against $10 million of debt issued by the U.S. government jumped to 47.5 basis points or $47,500 per year for five years, according to credit data company CMA DataVision. This compared with 43.5 basis points or $43,500 late Monday.
Credit default swaps insuring $10 million of U.S. Treasuries edged up to a record 50.0 basis points or $50,000 a year for 10 years
Earlier, before these latest expenditures, CNBC wrote a story that the U.S. might lose it's AAA credit rating.
GDP has been revised downward to 0.5% for Q3, 2008. From the BEA:
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 0.5 percent in the third quarter of 2008, (that is, from the second quarter to the third quarter), according to preliminary estimates released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 2.8 percent.
Looks like they are still blaming Hurricane Ike. The details on what were the contributing factors is in the link. One thing to note is this includes government spending increases.
Noted is this is the fastest rate of GDP decline in 28 years.
Housing prices declined a whopping 17.5% from one year ago.
It's pouring money. Today the Federal Reserve committed $800 Billion more:
The Federal Reserve took two new steps to unfreeze credit for homebuyers, consumers and small businesses, committing up to $800 billion.
The central bank will purchase as much as $600 billion in debt issued or backed by government-chartered housing-finance companies. It will also set up a program of $200 billion to support consumer and small-business loans, the Fed said in statements today in Washington.
$200B is partially aimed at credit card debt. They want consumers to use more credit cards.
Great! Nothing on predatory lending, excessive fees...
yet another $800 Billion, just like that.
Greetings folks, first day of the workweek, and welcome to another edition of Manufacturing Monday. I had planned to put this out earlier in the day, but had to deal with a turkey situation (hint: dogs); plus other holiday-related madness. So anyways, we got some good stuff for you today. First on our highlighted list is a story on GM's board. Then we got two industrial-esc jobs updates, first on coal then in green-collar world. Finally, I want to finish off today's edition with something special, a music video! No...not me singing, but a reader sent it to me and thought you should all see it. So a shout out to Amber for bringing this to my attention, you rock! And with that we go to...the Numbers!
It is becoming abundantly clear that Barack Obama is going to pursue the same centrist pro-Wall Street policies as did Bill Clinton, and Clinton's big money contributors.
Dylan Ratigan, the host of "Fast Money," is one of the few voices of taxpayer outrage on CNBC. Today he interviewed Obama economic advisor Laura Tyson. Keep yourself away from objects that you might be able to hurl at your computer screen, because it will be hard to restrain yourself.
Here's the link
[If someone knows how to embed the video, feel free to do so or let me know how]
A few "highlights":
- It's not appropriate to think of this as coming out of the taxpayer's hide.
- The interests of Wall Street and Main Street are one (Main Street should be glad we are bailing out Wall Street)
- This isn't a bailout, it's an effort to "restore normalcy"
The U.S. government is prepared to lend more than $7.76 trillion on behalf of American taxpayers, or half the value of everything produced in the nation last year, to rescue the financial system since the credit markets seized up 15 months ago.
So to whom is all of that money going? The Federal Reserve still won't tell!
They have already given $2.8 trillion dollars.
This blog title Shock and Awe took the words right out of my mouth on how incredible this is.
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