Daily Digest

Daily Digest 1/25 - Home Prices Declined, U.K. Economy Shrinks in Winter Freeze, CA & EPA Work on Auto Standards

Tuesday, January 25, 2011, 11:00 AM
  • The Great Debt Shift
  • Silver Coin Sales, ETF Outflows Show Divergence In Market
  • Home Prices in U.S. Declined 1.6% From Year Earlier
  • US Stocks Open Lower As Blue-Chip Earnings Weigh
  • January Consumer Confidence Jumps
  • U.K. Economy Unexpectedly Shrinks in Winter Freeze
  • California, EPA to Work on Joint Auto Standards

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Economy

The Great Debt Shift (pinecarr)



While this socialization of private debt has created deep citizen resentment, it remains to be seen whether political pressure is enough to hold back the tide. In the US, the forces of fiscal restraint appear to have the upper hand at present; but, this late in the game, it is far from certain that the newly elected fiscal hawks will be able to avert civil unrest and debt default. It is worth noting that the debt shift has offered some near-term benefits. Relieved of repayment anxiety, many companies have posted very promising earnings reports in recent months (one needs to only glance at Detroit). Despite continued demand weakness, these companies have worked hard to improve their balance sheets and raise operating margins. The resulting rally in share prices has given rise to a belief that recovery is at hand.

Silver Coin Sales, ETF Outflows Show Divergence In Market (doug)



So, investors need to eye the pace of coin sales, especially if ETF holdings continue to soften. “If the mint sales and exchange-traded product sales slow, as well, prices will fall dramatically because of the poor fundamentals. Investment demand is key,” Cooper said.
Coin Sales Mostly Retail-Based, ETFs Appeal To Broader Class Most market analysts said while the funds have both retail and institutional investors in them, coin sales are almost always retail-based. Because of that, trying to use one to infer what might happen in the other isn’t always realistic.

Home Prices in U.S. Declined 1.6% From Year Earlier



Mounting foreclosures will probably throw more properties on the market this year, further depressing prices, homeowners’ equity and construction. The lack of a sustained housing rebound and unemployment above 9 percent are among reasons theFederal Reserve may announce this week it’ll complete a second round of stimulus that will pump $600 billion into the economy by June.

US Stocks Open Lower As Blue-Chip Earnings Weigh



The Dow Jones Industrial Average fell 39 points, or 0.3%, to 11941, one day after the measure surged to within striking distance of the 12000 level. The Dow has not closed above 12000 since June 19, 2008. The Nasdaq Composite shed 0.4% to 2707. The Standard & Poor's 500-stock index declined 0.2% to 1288, weighed by its technology sector. Investors were treading warily Tuesday as the Federal Reserve's policy committee kicked off a two-day meeting and ahead of the president's State of the Union address, which begins at 9 p.m., EST. A rush of fourth-quarter earnings reports from Dow components and data showing declining home prices also weighed on the market.

January Consumer Confidence Jumps



A barometer of consumers’ expectations rose to 80.3 in January from 72.3 in December. Among respondents in January, 11.4% said they expect increased income in six months, compared with 9.9% who said so in December. Most expect the same income. Also, 16% expect more jobs, up from 14.2%, while most expect the same number.

U.K. Economy Unexpectedly Shrinks in Winter Freeze



The pound dropped after the report, which shows the U.K. recovery faded even before Prime Minister David Cameron's government increased sales tax to 20 percent this month, which may damp consumer demand this year. The data may reinforce calls for the Bank of England to hold off increasing its key interest rate to curb inflation. Governor Mervyn King, who leads the bank's divided policy committee, delivers his first public speech of the year later today.

Energy

California, EPA to Work on Joint Auto Standards



In an announcement Monday, the U.S. Environmental Protection Agency said California officials have scrapped their plans to issue state-specific standards in March. Instead, the EPA and California Air Resources Board will now issue standards jointly by Sept. 1. The news was applauded by auto makers, which said California is now more likely to issue the same greenhouse-gas standard as the federal government, thereby reducing the risk that the state would adopt more stringent standards than federal officials.

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

6 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4061
Re: Daily Digest 1/25 - Home Prices Declined, U.K. Economy ...

"(Reuters) - The New York Metropolitan Transportation Authority might have to raise subway and bus fares by approximately four-and-a-half times the last fare increase to cope with a jump in debt service that kicks in as soon as 2016, Bob Foran, the MTA's chief financial officer, said on Monday."

"RICHARD FISHER

Fisher, who took over the Federal Reserve Bank of Dallas in 2005, also has been an outspoken critic of the bond-buying program. The Fed has done enough to aid the economy, Fisher has said.

"I think we have reached our limit," he said this month. He also expressed concern that the Fed was, in effect, printing money to pay for trillion-dollar-plus federal budget deficits."

"Soaring oil and food prices are translating into dangerously high inflation in emerging economies, where there are already “signs of overheating in some countries via rapid credit growth or rising asset prices”, the IMF said in its World Economic Outlook update.

“In emerging economies, key risks relate to overheating, a rapid rise of inflation pressures, and the possibility of a hard landing,” the IMF said."

..................3A) Europe's stability fund needs more firepower - IMF

"Since reducing its target federal funds rate to near zero in December 2008, the central bank has used its balance sheet as a monetary policy tool. Its assets have tripled to $2.43 trillion from $873 billion in February 2008.

The committee may continue to describe credit as “tight” while acknowledging a pickup in growth in the fourth quarter to the fastest pace in three quarters, Gramley said."

"The timing is awful for the new D.C. mayor and chief lawmaker.

D.C. budget officials and elected leaders have been finessing or ducking questions about how big a budget deficit they really have to close in the wake of reports that the gap could widen again, to as much as $600 million.

The official estimates from the city’s chief financial office are expected in late February. On Feb. 10, city officials will visit Wall Street to reassure the money men on the city’s financial status, making current talk of an even-higher budget gap potentially embarrassing and costly to the city.

“We just haven’t any confirmation of $600 million,” said at-large D.C. Council member Michael A. Brown, before adding, “I don’t think it would be a shock to anyone. We knew [revenues] were trending downward.”"

 "LOS ANGELES (AP) -- Home prices are falling across most of America's largest cities, and average prices in eight major markets have hit their lowest point since the housing bust.

The Standard & Poor's/Case-Shiller 20-city home price index released Tuesday fell 1 percent in November from October. All but one city, San Diego, recorded monthly price declines.

Eight others sank to their lowest levels since prices peaked in 2006 and 2007: Atlanta, Charlotte, N.C., Las Vegas, Miami, Portland, Ore., Seattle, Tampa, Fla., and Detroit, which saw the largest drop at 2.7 percent from the previous month.

Millions of foreclosures are forcing prices down, and many people are holding off making purchases because they fear the market hasn't hit bottom yet. Many analysts expect home prices to keep falling through the first six months of this year."

..................6A) S&P Case-Shiller Index Points to Double-Dip in Home Prices

  • Other news, headlines and opinion:

Japanese pensions costing 10% of GDP

Heart Disease Treatment Cost to Triple to $818 Billion by 2030, Study Says

Moody's sees more Illinois challenges despite tax hike

US Postal Service to close 2000 locations, possible changes in Lynchburg/Roanoke

Spain Says Bank Shortfall Won't Exceed $27 Billion

Treasurer: Calif. Bankruptcy Senseless

Conn. gov calls state bankruptcy idea "crazy talk"

Illinois Confirms Inquiry by SEC and SEC probes statements on Illinois pension: report

County deficit to hit $82M (San Mateo, CA)

Los Angeles may cut more services due to budget shortfall

Lucas County officials fear 25% cut in state funds (Ohio)

Sonoma County considers cutting 500 jobs

Could Ohio's all-day kindergarten mandate be on way out?

Md. pension savings would not go into retirement fund

EPISD Superintendent Predicts 1000 Jobs Loss, Not 300+ (El Paso)

BRIC Inflation Threatens Priciest Consumer Stocks as Food Bills Increase

Treasury May Shrink Fed Borrowing by 98% as Debt Limit Bumps Into Ceiling

Japan eyes for vending machine gold (Video)

Average inflation during 2010-11 to jump up to 9 per cent: Finance Ministry (India)

rjs's picture
rjs
Status: Gold Member (Offline)
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Posts: 445
Re: Daily Digest 1/25 - Home Prices Declined, U.K. Economy ...

Keys to Today’s Rally - Panzner

grl's picture
grl
Status: Silver Member (Offline)
Joined: Nov 30 2008
Posts: 188
Re: Daily Digest 1/25 - Home Prices Declined, U.K. Economy ...

Judging by the essay, I think the essayist, Eric A., must also be a member of this community. He argues, much as Chris M. does, that we must take individual responsibility, build communities and take control of our own lives. And for those of you who live near Albion NY, I suppose you can join Eric in that effort. 

The Kubler-Ross Model: Denial, Acceptance and Renewal in America (guest essay) http://www.oftwominds.com/blogjan11/ericA-kubler-ross01-11.html

Also posted on ZH (if you like reading comments)

http://www.zerohedge.com/article/guest-post-kubler-ross-model-denial-acceptance-and-renewal-america

pinecarr's picture
pinecarr
Status: Diamond Member (Offline)
Joined: Apr 13 2008
Posts: 2237
Re: Daily Digest 1/25 - Home Prices Declined, U.K. Economy ...
grl wrote:

Judging by the essay, I think the essayist, Eric A., must also be a member of this community. He argues, much as Chris M. does, that we must take individual responsibility, build communities and take control of our own lives. And for those of you who live near Albion NY, I suppose you can join Eric in that effort. 

The Kubler-Ross Model: Denial, Acceptance and Renewal in America (guest essay) http://www.oftwominds.com/blogjan11/ericA-kubler-ross01-11.html 

  Great article, grl!  Thanks for pointing it out. 

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
guardia's picture
guardia
Status: Platinum Member (Offline)
Joined: Jul 26 2009
Posts: 592
Re: Daily Digest 1/25 - Home Prices Declined, U.K. Economy ...
pinecarr wrote:
grl wrote:

Judging by the essay, I think the essayist, Eric A., must also be a member of this community. He argues, much as Chris M. does, that we must take individual responsibility, build communities and take control of our own lives. And for those of you who live near Albion NY, I suppose you can join Eric in that effort. 

The Kubler-Ross Model: Denial, Acceptance and Renewal in America (guest essay) http://www.oftwominds.com/blogjan11/ericA-kubler-ross01-11.html 

  Great article, grl!  Thanks for pointing it out. 

Yes, very interesting article, thank you. By that measure, I'd say Japan is in the Depression stage Smile Even though the Anger stage has been very well muted due to the nature of Japanese culture IMO

Samuel

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