Financial News

[Cknolls]

Better than expected... http://finance.yahoo.com/news/Economic-gro...set=&ccode=

 

 

Until final revision comes out.

[Balta1701]

No doubt those things had a positive effect. But I disagree that the marketing aspect was the main problem with the stimulus. The biggest problem with it is that it was weighted far too heavily on a combination of short-term, non-sustainable jobs, and tax cuts that didn't target business growth. They went about it the wrong way, and were less effective than it could have been as a result.

And, I'd love to note/brag...what were the 2 arguments that a few Republicans made over and over in the debate? It should include more tax cuts, and it needed to be more short-term and get out the door faster with less looking towards the future.

 

The other big problem with the stimulus remains the state and local governments getting destroyed and basically counteracting the entire thing. Which of course, was another demand of the Maine Republicans.

[Balta1701]

A discussion of the Conservator's report on the GSE's.

The wave of housing price increases was kicked off by changes in private label securitization. These changes left Fannie and Freddie with a smaller market share and lower absolute level of securitizations. Fannie and Freddie attempted to adjust their basic business practices to stay competitive in bubble markets and among aggressive borrowers.

 

These adjustment left Fannie and Freddie exposed to a large decline in housing prices. This is exactly what happened and Fannie and Freddie reaped enormous losses because of their exposure.

 

Had Fannie and Freddie stuck to their traditional role of guaranteeing low value traditional loans rather than trying to stay competitive in bubble areas their losses would have been substantially less.

 

In short, attempting to subsidize the American dream for low and moderate income families may be a fundamentally bad policy. However, it does not appear to be either the origin of the housing bubble or the source of Fannie and Freddie’s trouble.

[Balta1701]

The Obama administration has not decided whether it should resurrect a popular tax credit for first-time homebuyers, Housing and Urban Development Secretary Shaun Donovan said on Sunday.

 

"It's too early to say whether the tax credit will be revived," Donovan said in an interview on CNN's "State of the Union" program. He said the administration would "do everything we can" to stabilize the shaky U.S. housing market.

Link

[HuskyCaucasian]

Link

I think they kind of have to reinstate the credit.

 

PS: I'm still a bit upset we didnt qualify for it when we bough our townhome earlier this year. Apparently my dad and I missed the fine print that you cant buy a house off of a family member and get the tax credit. (My parents owned the town home, and we had been renting it from them for a year before buying it)

Edited August 30, 2010 by Athomeboy_2000

[Balta1701]

I think they kind of have to reinstate the credit.

 

PS: I'm still a bit upset we didnt qualify for it when we bough our townhome earlier this year. Apparently my dad and I missed the fine print that you cant buy a house off of a family member and get the tax credit. (My parents owned the town home, and we had been renting it from them for a year before buying it)

Basically...it can never end.

[Balta1701]

So...the Obama administration today denied that there has been any talk of reinstating the housing tax credit.

 

Of course...the whole ridiculousness of this mess is...if I'm of the sorts who might be considering purchasing a first time house in the near future (true)...and I heard that there was any consideration of reinstating that credit...might I just not sit on my hands a little longer, let the market deteriorate further, and jump in once they decide it's gotten bad enough to bring back that credit?

[NorthSideSox72]

Pleasant surprise in housing. Contracts for sales of previously owned homes actually rose 5+% in July, AFTER the tax credit expired, versus expectations it would drop. That came out of nowhere.

 

Mortgage rates now hovering around 4.3% base. Wow.

 

[Rex Kickass]

Better numbers on unemployment. The number was still negative - loss of 54,000 jobs BUT the census accounts for over 100,000 of those job losses. Private payrolls did increase - although by a fairly anemic 67,000 jobs.

 

What is significant? The upward revisions for June and July. June numbers were revised to reflect 46,000 fewer job losses and July numbers reflect nearly 80,000 fewer job losses. Given that the bulk of these job losses came from government rolls, that seems like fairly OK news.

[NorthSideSox72]

Better numbers on unemployment. The number was still negative - loss of 54,000 jobs BUT the census accounts for over 100,000 of those job losses. Private payrolls did increase - although by a fairly anemic 67,000 jobs.

 

What is significant? The upward revisions for June and July. June numbers were revised to reflect 46,000 fewer job losses and July numbers reflect nearly 80,000 fewer job losses. Given that the bulk of these job losses came from government rolls, that seems like fairly OK news.

Its funny how schizophrenic the economy (or at least the news about the economy) has been. Last week was all doom and gloom, second dip possible, etc. This week we get surprise growth in housing sales, and multi-month surprise job growth.

 

This recession is just such an oddity. Jobs recovery started earlier than any other recent recession, but the gain rate has been slower.

 

[Balta1701]

Jobs recovery started earlier than any other recent recession

?

 

 

Basically, the only one that your statement is partially accurate about is the 2001 recession. And the reason the drop stalled and turned around is probably directly associated with the stimulus package.

[Rex Kickass]

?

 

 

Basically, the only one that your statement is partially accurate about is the 2001 recession. And the reason the drop stalled and turned around is probably directly associated with the stimulus package.

 

I think NSS is using a different metric. Rather than track from peak employment, hes using the technical end of recession to track peak employment. In which case, this actually has been the most robust jobs recovery since 1983.

[NorthSideSox72]

I think NSS is using a different metric. Rather than track from peak employment, hes using the technical end of recession to track peak employment. In which case, this actually has been the most robust jobs recovery since 1983.

Yes.

 

[Rex Kickass]

Yes.

 

Which when you think about it is a real condemnation of US economic policy of the last generation. Job growth in previous recessions were driven primarily by increased manufacturing jobs. The lack of a strong manufacturing sector over the last 20 years has really made it difficult for job growth to really grow.

[StrangeSox]

Why are earlier lines very jagged compared to more recent recessions? A lot less data points?

[StrangeSox]

Which when you think about it is a real condemnation of US economic policy of the last generation. Job growth in previous recessions were driven primarily by increased manufacturing jobs. The lack of a strong manufacturing sector over the last 20 years has really made it difficult for job growth to really grow.

 

Hasn't it transitioned more to technical and service industry jobs?

[Rex Kickass]

Why are earlier lines very jagged compared to more recent recessions? A lot less data points?

 

Combination of a smaller workforce and an economy that was more elastic when it came to job growth.

[NorthSideSox72]

Which when you think about it is a real condemnation of US economic policy of the last generation. Job growth in previous recessions were driven primarily by increased manufacturing jobs. The lack of a strong manufacturing sector over the last 20 years has really made it difficult for job growth to really grow.

 

 

Hasn't it transitioned more to technical and service industry jobs?

 

This is sort of missing something though. The 90's run-up was in fact industrial, in a sense - it was the computer and software boom. The US was a major front player, if not THE player, during that time. We have that opportunity again now, if we'd only seize it.

 

[StrangeSox]

I'd say computer and software fall squarely under technical as opposed to traditional iron & steel manufacturing plants. Those jobs typically require college degrees as opposed to factory work which used to provide the standard middle class living in this country.

 

 

 

 

On a different topic, I'm not at all surprised that Chrysler has had serious financial problems. I've been in a lot of rental cars this year. The GM's and Fords are ok. Toyotas aren't bad. Hondas are ok. But all three Chryslers have been cheap, uncomfortable, ugly piles of garbage. When the dashboard material makes a Pontiac look nice by comparison, you know you're doing something wrong.

Edited September 3, 2010 by StrangeSox

[NorthSideSox72]

I'd say computer and software fall squarely under technical as opposed to traditional iron & steel manufacturing plants.

 

 

 

 

On a different topic, I'm not at all surprised that Chrysler has had serious financial problems. I've been in a lot of rental cars this year. The GM's and Fords are ok. Toyotas aren't bad. Hondas are ok. But all three Chryslers have been cheap, uncomfortable, ugly piles of garbage. When the dashboard material makes a Pontiac look nice by comparison, you know you're doing something wrong.

That was my point on the computer age stuff - to me, that is manufacturing, though software is more technical. I was really getting at the idea that we need to look past iron and wood to see what manufacturing is.

 

As for Chrysler, I am shocked they have survived the recession at all. That company is just hanging on by a thread it seems, and I wonder who is actually buying their non-jeep brands at all. Apparently its rental car companies.

 

[Balta1701]

As for Chrysler, I am shocked they have survived the recession at all. That company is just hanging on by a thread it seems, and I wonder who is actually buying their non-jeep brands at all. Apparently its rental car companies.

They survived the recession in the same way that every single bank on Wall Street survived it; the government decided they couldn't let them fail, not because of anything they did correctly.

[NorthSideSox72]

They survived the recession in the same way that every single bank on Wall Street survived it; the government decided they couldn't let them fail, not because of anything they did correctly.

Yeah, but the government aid to Chrysler appeared to be less complete than for the banks. It was, well, we'll give you just enough to survive, but you have to show that you can grow from there. So far, no joy.

 

[Rex Kickass]

Yeah, but the government aid to Chrysler appeared to be less complete than for the banks. It was, well, we'll give you just enough to survive, but you have to show that you can grow from there. So far, no joy.

 

Actually Chrysler was the only month to month sales improvement in the industry for August, and apparently are operationally profitable. With incorporation of FIAT platforms, future development looks to be kinda exciting actually. Heard rumors of the Fiat 500 sold through Chrysler end of this year or next in the US which is kinda cool.

[Balta1701]

So, I see the big new thinking is a $50 billion bank for investment in bridges, roads, airports, and rails.

 

While I'll be the first to admit that's needed as a downpayment...that's not particularly exciting is it. Hell, if you're going to talk about infrastructure investment...why aren't the electrical grid and the water/sewer grids at least included on the list? They might be in more need than the others.

[NorthSideSox72]

So, I see the big new thinking is a $50 billion bank for investment in bridges, roads, airports, and rails.

 

While I'll be the first to admit that's needed as a downpayment...that's not particularly exciting is it. Hell, if you're going to talk about infrastructure investment...why aren't the electrical grid and the water/sewer grids at least included on the list? They might be in more need than the others.

Wrong path again.