Wednesday, December 26, 2007

SAR #7360

Stand Up: Fred Thompson opines that illegal immigrants speaking "sickening" Spanish are the blame for the mortgage crisis. If they only had learned enough English to understand the mortgage papers they were signing we wouldn't have this problem. Fred thinks English should be the national language, even in Tennessee. Might be wrong to combine 'Fred' and 'thinks'.

She Loves Me Not: Iraq has asked the Russians to bid on the construction of a pipeline from Kirkuk to Banyas, Syria. Halliburton is not amused.

In the Good Times; Other than brief periods when a thunderstorm or ice storm disrupts service, we completely forget that as recently as the 1930's electricity was a newfangled thing. Getting used to comfort and convenience was much easier than getting used to its absence will be.

Details : There's an industrial boom in China and elsewhere. Leads to a boom in mining. Lead to a boom in big equipment to do the big mining. The missing nail here is tires. Not normal tires. Big 'uns, 12ft high, 5 ton things, without which those house-sized trucks don't haul 100 tons of ore at a time. Bridgestone, biggest maker of the biggest tires says the current tire shortage will last another 3 years.

New Term: Seems that Commercial Real Estate (CRE) credit woes mimic housing with a 6 month lag. So CRE is now in serious paralysis; sales down 50%, prices dropping, deals falling apart. Banks have been stuck for $65 billion so far. Construction down, defaults up. Same old same old.

Pick a Number: Property values are falling, fewer new housing units being built. What's a city to do? Raise the tax rate? Cut public services? Raise taxes and cut public services? But in a recession with falling incomes, shouldn't we cut property taxes? No easy solutions. I suspect higher tax rates and fewer services will be the norm.

Elevator: S&P reports the year-to-year fall in house prices was 6.7% in October, higher than the 6.4% at the top of the 1991 recession. Month to month it showed a 1.4% decline - about 17% on an annual basis. Looks like a buying opportunity!

Tinker to Evers to. . . : After adjusting for inflation, retail sales increased zip this Selling Season. Profits will take the hit. Big move downscale from Macy's neighborhood to the Walmart/Cosco area. Downhill from profits to earnings to stock prices. Double play.

On average: Annually we each use about 540 gallons/car; at about $3 a gallon that's $1600. About 230 hours working at Walmart but only 80 hours if you make $40 K a year. Pain is relative.



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