April 2010

The foreclosure tsunami has struck

It's sometimes amusing to see how hard the media tries to spin bad news into good news. For instance, this article from ABC today.

(Reuters) - U.S. mortgage foreclosure filings dropped for a second straight month in February, and notched the smallest annual increase in four years as housing-rescue efforts contained activity, a report released on Thursday showed.

It sounds like good news, huh? There's just one problem: the foreclosures report that was released today concerned the whole first quarter, including March numbers.
Since when did the news media start preferring outdated data over recent data?

China GDP 11.9% for Q1 2010

So much for the claim currency manipulation has nothing to do with China's economy, it grew by an astounding 11.9% in Q1 2010 and exports jumped 29%. Bloomberg has more details.

Consumer prices rose 2.4 percent in March from a year earlier, today’s data showed, compared with 2.7 percent in February. Economists’ median estimate was 2.6 percent.

Industrial production climbed 18.1 percent in March, less than a 20.7 percent gain in the first two months, and retail sales increased 18 percent, today’s data showed. Car sales leapt 76 percent in the first quarter from a year earlier, with Mercedes-Benz (China) Ltd. reporting a doubling.

Small Business a Bunch of Doom & Gloomers

Wow, a new survey index result by the National Federation of Independent Businesses shows small businesses in the United States are a bunch of economic pessimists.

The National Federation of Independent Business Index of Small Business Optimism lost 1.2 points in March, falling to 86.8. The persistence of index readings below 90 is unprecedented in survey history.

Unprecedented. 18 consecutive months of readings below 90.

This doesn't bode well for job creation. Small Business is the job engine of America. To find out the percentages of jobs created by small businesses, read this analysis post from October 2009.

Is the IMF preparing for an approaching crisis?

The IMF has been making a lot of noise recently, but their biggest move almost managed to slip through completely unnoticed.

The Executive Board of the International Monetary Fund (IMF) today approved a ten-fold expansion of the Fund’s New Arrangements to Borrow (NAB) and the transformation of the Fund’s premier standing credit arrangement into a more flexible and effective tool of crisis management. The NAB will be increased by SDR 333.5 billion (about US$500 billion) to SDR 367.5 billion (about US$550 billion), representing a major increase in the resources available for the Fund’s lending to its members.

Trade Deficit for February 2010 - $39.7 billion

The Trade deficit increased $2.7 billion from last month to $39.7 billion. Exports increased $0.3 billion where imports increased $3.0 billion from January.

 

February exports of $143.2 billion and imports of $182.9 billion resulted in a goods and services deficit of $39.7 billion, up from $37.0 billion in January, revised. February exports were $0.3 billion more than January exports of $142.9 billion. February imports were $3.0 billion more than January imports of $179.8 billion.

Understanding Supply Side Capitalism

Part #2 of Understanding Capitalism and Socialism (Part 1)
by Joaquin

Now that Republicans are starting to talk about restoring Reaganomics, it is a good time to review Reaganomics; i.e., Supply Side Capitalism. This is number two of my technical essays about how the world works. Today we will explore how supply side economics will save the world. So let's get to it.

TARP costs revised to $89 billion

The Treasury revised the losses on TARP to $89 billion.

The March budget deficit was $65.4 billion.

The Wall Street Journal claims the TARP costs include Fannie Mae and Freddie Mac. That's simply not true, Fannie and Freddie received a separate, unlimited bail out. The last loss projection was $400 billion dollars. If one notices, Freddie Mac and Fannie Mae are woefully absent in any financial reform legislation as well.

In terms of the budget deficit, Mark Zandi of Moody's:

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