Thursday, August 6, 2009

SAR #9217

We need to grow up.

Beating the Odds: Goldman Sachs made more than $100 million in trading revenue on a record 46 separate days during the second quarter - that's 71% of the time. They made at least $50 million another 18% of the time. On only six days during the last three months did they lose money. Either the game is rigged, or they are the luckiest guys on the planet. Or both.

Say Ahhhh! : 26% of mortgagees (16 million) are underwater, up from 15% (10 million) a year ago . By 2011 it'll be 48% - 25 million more potential - or probable - defaults and foreclosures. Who are these folks? 41% of all prime borrowers (up from16% today), 46% prime jumbos (up from 29% now). Today 1 out of every 10 houses is worth 25% less than the mortgage. And 89% of Option-ARM's and 69% of subprime mortgages will be sunk by 2011. House prices will fall another 14%, for a total drop of 41% from the peak. Or so some say. Do you think we - through Fannie and Freddie - are going to lose more than a trillion on these?

Cliff Notes: Nissan, which is not one of the top ten beneficiaries of the Cash for Clunkers giveaway, sees the program as a temporary patch that will leave the industry worse off once it's over.

Myth Taken: The US touts itself as a nation of small business owners. But as a % of the population so employed, the US is far behind other developed nations in the percent of people working in small businesses.

Distinction: This is not a recession; recessions have ends, upturns, recoveries. This is the beginning of a resizing of the American economy, with lower levels of employment and consumption for much longer than you can imagine.

Check-Up: The 70% of the US economy that is consumer driven is actually driven by incomes, which dropped another $160 billion last month after falling $140 billion in June.

Gambling at Ricks! The FHA suspended its third-largest lender - Taylor Bean - for "possible fraud." Hard to imagine that they would stoop so low just to make millions. Hard to imagine they're in business much longer, either. And those who have loans pending from them are out of luck. Or in luck, because it's looking less and less like a good time to buy a house.

Foreign Aid: The top ten cars purchased with taxpayer money: 2 are Fords, 1 Dodge, 1 Chevy, 1 Hyundai, 2 Hondas and 3 Toyotas. Or US 4, them 6.

Rally 'Round: The WTO predicts global trade will fall more than 10% through 2009. How can the US have a bull market with world trade suffering more than in the Great Depression?

Good Day for War: The latest US missile defense test failed when the interceptor missile failed to launch. The test had been postponed several times due to bad weather. We have a gentleman's agreement with our enemies that they will only attack on clear, dry, warm days.

Buffett’s Betrayal: Turns out Warren Buffet makes money the old fashioned way, he gets it from government bailouts.

Jobless Recovery: More and more US companies are offshoring their jobs to save money and few plan to ever return the jobs to the US. And worse: 60% of those that have already sent jobs overseas have "aggressive plans" to ship more as quickly as possible. One Treasury plan or another probably gives them the money to do this.

Asked and Answered: "Will consumers ever revert to pre-recession spending levels?" No, and the longer the recession the more scared and scared the consumers will be.

Another One Bites the Dust: Genetic paleo-anthropology indicates that human numbers began to increase about 40,000 years ago - long before the onset of agriculture, which is generally credited with prompting the expansion of populations.

Porn O'Graph: Inflation adjusted Now and Then.


Tulsa Time said...

Never a good day for war, but always a good day to die! Is it any wonder they proposed to make the missle defense test secret? Even more absurd, there was a proposal to just not test and leave the question of functionality as one of the mysteries of life!!!


Steve said...

re: Foreign Aid (autos) - keep in mind that the badge on the grill often has little to do with where the materials and labor are from. And only somewhat to do with where the profits are going.

American taxes are used to subsidize cars purchased by Americans, that are made in America by Americans using lots of American parts and materials, and Americans can own equity and debt of the manufacturer. Under those conditions, I couldn't care less that Toyota is nominally Japanese.

Global corporations are stateless. Follow the money.

CKMichaelson said...

Steve - Of course you're right, but it's fun to feed the isolationist xenophobes once in a while...

mistah charley, ph.d. said...

Re the background of the so-called "missile defense" scam - I strongly recommend reading Daniel Ellsberg's "Hiroshima Day: America's Been Asleep at the Wheel for 64 Years"

you can see it at HuffPost

OSR said...

Ironically, while the outsourcing of American manufacturing jobs was being sold to the public as necessary, Toyota and Honda both set up shop in the US. And we know what happened when they went head to head with outsourcing companies like F and GM.