Daily Digest

Daily Digest - January 6

Wednesday, January 6, 2010, 11:01 AM
  • Contracts down: Is housing headed for double-dip?
  • Pump prices on pace to top 2009 high by weekend
  • GMAC Says Lender Will Post $5 Billion Quarterly Loss
  • Silicon Valley ‘Bloodbath’ Leaves Buildings Empty
  • Manhattan Apartment Prices Fall as Finance Jobs Lost
  • Fed may re-enter MBS market later in 2010
  • TrimTabs suggests government manipulated stocks
  • Medicaid Long-Term Care Spending Tops $106 Billion
  • Missouri revenue drops in December, more budget cuts coming
  • U.S. business bankruptcies rise 38% in 2009
  • Homelessness and cold weather have shelters at capacity
  • Unemployment spikes demand for Census jobs
  • Promise to Trim Deficit Is Growing Harder to Keep
  • US public pensions 'facing $2,000bn shortfall'
  • Over $26 billion borrowed by states for unemployment benefits
  • U.S. Budget Deficit May Exceed $1 Trillion for Years, Kos Says

Economy

Contracts down: Is housing headed for double-dip?

The number of people preparing to buy a home fell sharply in November, an unsettling new sign that the housing market may be headed for a "double-dip" downturn over the winter. The figures Tuesday came after a similarly discouraging report on new home sales, illustrating how heavily the housing market depends right now on government help.

Pump prices on pace to top 2009 high by weekend

The cost of filling up the car is rising in the wake of soaring crude and by this weekend, pump prices will race past the highs for all of 2009. Tracing the ascension of crude, up 14 percent since mid-December, energy prices across the board are catching up. On Tuesday, benchmark crude prices closed higher than they had on any day last year.

GMAC Says Lender Will Post $5 Billion Quarterly Loss

GMAC Inc., the auto and home lender bailed out by the U.S. government three times, said its combined fourth-quarter loss was about $5 billion as the company tried to stanch losses from mortgages....... The estimated quarterly loss was the fourth straight and may boost the full-year deficit above $10 billion for the Detroit-based firm, which is now majority owned by taxpayers.

Silicon Valley ‘Bloodbath’ Leaves Buildings Empty

Silicon Valley is beset by the biggest office property glut since the dot-com bust, leaving the U.S. technology hub with empty high-rises and office parks that make it impossible for landlords to sustain average rents. More than 43 million square feet (4 million square meters) -- the equivalent of 15 Empire State Buildings -- stood vacant at the end of the third quarter

Manhattan Apartment Prices Fall as Finance Jobs Lost

The median price slid 10 percent to $810,000 in the fourth quarter from a year earlier, New York appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said today. The median price hit $1.03 million at the top of the market in 2008.

Fed may re-enter MBS market later in 2010 - Market News

The Federal Reserve is discussing re-entering the mortgage-backed securities market later this year if its buying power is needed to hold down interest rates, Market News said on Tuesday in a story citing Fed officials. The $5 trillion agency mortgage-backed securities market may weaken when last year's biggest buyer, the Federal Reserve, ends its $1.25 trillion agency MBS purchasing program at the end of the first quarter of 2010. Fed officials, however, "are prepared to contemplate changes if need be,

TrimTabs suggests government manipulated stocks

The unusual circumstances that led the U.S. market to rally powerfully in 2009 might be explained by secret government moves to buy stocks, according to Charles Biderman, the founder and chief executive of TrimTabs, a research firm that tracks liquidity flows in the market.



"We cannot identify the source of the new money that pushed stock prices up so far so fast," Biderman said in a statement Tuesday. The source of approximately $600 billion net new cash necessary to lift the market's overall capitalization by $6 trillion last year could not be identified by TrimTabs, Biderman said. The money, he said, didn't come from traditional players such as companies, retail investors, foreign investors, hedge funds or pension funds.

Medicaid Long-Term Care Spending Tops $106 Billion

Long-term care represents 32.1 percent of total Medicaid spending according to a new report. As costs rise, the program is raising serious budget problems for numerous states......"State governments don't have the ability to print money and taxpayers are having to pay an ever-increasing cost for long-term care services," explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance. "If the trend continues, people can expect to see reduced services across the board as states are unable to sufficiently raise taxes to cover the increased cost."

Missouri revenue drops in December, more budget cuts coming

Missouri’s net general revenue collections for December dropped 22 percent to $615.2 million, down from $785.6 million in December 2008, new numbers show. Year-to-date net general revenue collections for fiscal 2010 declined 11 percent to $3.3 billion, down from $3.7 billion in fiscal 2009, State Budget Director Linda Luebbering said Tuesday.

U.S. business bankruptcies rise 38 pct in 2009

U.S. business bankruptcies rose 38 percent last year, to a record since bankruptcy laws were changed in 2005, according to a bankruptcy data firm on Tuesday. There were 89,402 bankruptcy filings by businesses last year, compared with 64,584 the previous year, according to data compiled from court filings by Automated Access to Court Electronic Records, which is part of Jupiter eSources LLC in Oklahoma City. That's the highest yearly figure since 2005 when a flood of businesses and consumers filed for bankruptcy before changes to the U.S. Bankruptcy Code that made it harder for consumers to erase their debts and for businesses to restructure without interference from creditors.

Homelessness and cold weather have shelters at capacity

Unemployment spikes demand for Census jobs

The U.S. Census Bureau Memphis has already received more than 7,500 applications for the 1,900 jobs it is expected to create for the 2010 Census. And that’s before the local Census Bureau holds an open house later this month to screen even more applicants, who are seeking part-time jobs that will pay between $12.75 and $20 per hour.

Promise to Trim Deficit Is Growing Harder to Keep

President Obama is making final decisions on his budget for next year and is still promising to outline a path to substantially lower federal deficits. But on nearly every front, that goal has gotten harder since his first budget a year ago. A deeper recession and slower recovery than the administration initially forecast have increased the tab for economic stimulus measures beyond the original $787 billion package, adding hundreds of billions of dollars for programs like unemployment relief and tax credits for homebuyers.

US public pensions 'facing $2,000bn shortfall'

The US public pension system faces a higher-than-expected shortfall of more than $2,000bn that will increase pressure on many states' strained finances and crimp economic growth, according to the chairman of New Jersey's pension fund. The estimate by Orin Kramer, chairman of New Jersey's investment council, will fuel investors' concerns over the deteriorating financial health of US states following the credit crisis and the recession. "State and local governments are correctly perceived to be in serious difficulty," Mr Kramer told the Financial Times. "If you factor in the reality of these unfunded promises, their deficits will rise exponentially."

Over $26 billion borrowed by states for unemployment benefits

At the end of 2009, the U.S. Department of Labor reported that the 25 states and one territory had borrowed more than $26.03 billion to fund their respective unemployment benefit programs. California borrowed $5.914 billion in 2009, the most of any other state. Mike Miller, with the U.S. Department of Labor division of fiscal and actuarial services, recently reported that payments from state unemployment trust funds will exceed revenues and interest income by $41 billion in fiscal year 2009 and $55.8 billion in fiscal year 2010

U.S. Budget Deficit May Exceed $1 Trillion for Years, Kos Says

The U.S. government will be plagued by record budget deficits for the foreseeable future, said Dino Kos, managing director at Portales Partners LLC in New York. “It’s hard to see anything happening in Washington,” Kos said today in an interview on Bloomberg Radio. “It seems without a crisis there’s not enough will” to trim the gap. In fiscal 2009, the budget deficit exceeded $1 trillion for the first time and “the risks are it will remain above $1 trillion for a very long time,” Kos said.

18 Comments

saxplayer00o1's picture
saxplayer00o1
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Re: Daily Digest - January 6

"Florida House Speaker Larry Cretul said Tuesday that state revenue projections haven't improved as hoped and that the state may be faced with a $2.6 billion funding shortfall for the next fiscal year."

"On December 24, the Senate passed a vote by a razor thin margin (with not a vote to spare) to raise the Federal debt ceiling from $12,104 billion to $12,394 billion. The actual debt ceiling increase took effect on December 28. And as the chart below shows, the Treasury's cash flow projections were spot on: 3 days later, and the debt subject to limit surged to $12,254, a jump of over $200 billion in 2 days, and a whopping $150 billion over the old debt ceiling. Three days is all the buffer the administration's reckless spending spree has afforded this country to avoid bankruptcy. Had one more Democratic vote dissented from the stopgap measure, the US would now be in technical default. There is just $140 billion left before the revised debt ceiling is breached. We hope for the country's sake that Bill refunding in January is massive, because as we already pointed out, on January 7th we expect another ~$130 of new Treasuries to be announced for auction by January 15th. And then there are two more weeks in January... Which is why the Treasury better be using that TARP money to pay down all it can, because if the general population understands how close this nation was to the fiscal brink, many more answers may be demanded out of the ruling party as to how it could allow things to get so out of hand. "

"The delinquency rate for loans underlying commercial mortgage-backed securities (CMBS) ballooned 500 percent in 2009, surpassing 6 percent in December for the first time, underscoring the rapid collapse of the U.S. commercial property market, according to real estate data provider Trepp.

The delinquency rate -- the percentage of loans 30 or more days delinquent -- among CMBS loans rose 0.42 percentage point in December to 6.07 percent. They began 2009 at 1.21 percent and the decade, before the U.S. commercial real estate boom, at 0.50 percent."

* U.S. strip mall vacancy hits 18-year high

"Vacancies at U.S. strip malls hit an 18-year high in the fourth quarter and the vacancy rate for large regional malls reached the highest in at least 10 years, according to real estate research firm Reis Inc.

Strip malls -- neighborhood and community shopping centers typically anchored by grocery or drug stores -- had a vacancy rate of 10.6 percent in the fourth quarter, surpassing the high set in 1991, Reis economist Ryan Severino said in a report released on Wednesday. The early 1990s is a period often referred to as the commercial real estate depression."

"Five retail centers in the Bay Area have belly-flopped into bankruptcy, listing at least $39 million in debts, an ominous sign that consumers may still be struggling and the credit squeeze isn't over.

The retail developments that are mired in Chapter 11 bankruptcy cases — all filed in December — include a proposed Asian-themed retail center in Fremont, a strip center in Newark, two retail centers in San Jose and a yet-to-be built retail, office and residential mixed-use complex in Santa Clara.

"We're just beginning to see some of the retail properties that were purchased three to five years ago running into trouble," said Greg Labarthe, a vice president with Grubb & Ellis, a commercial realty brokerage."

"The Social Security Trust Fund issued their November and December reports today. They also provided the payment data for January 2010. I think there is some significant information."

"There was a $100 billion surplus for the year. But compare that to the $190 Billion surplus in 2007. We have lost $90 Billion in just two years. But this number should be much higher than the 07 surplus. It was assumed that the Fund would have larger and larger surpluses for years to come. The 2008 Trustee Report (signed by then Chairman Hank Paulson) provided a set of Intermediate Assumptions for the Fund's surpluses looking forward. As you can see we missed the 2009 target of a $220b surplus by a cool $120 billion. As of 12/31/09 the funds assets are behind that 08 schedule by $155 billion."

 ...............6A) Social Security's Grim Milestone: Half a Year in the Red

JAG's picture
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Worldwide Cold not Seen Since 70s Ice Age Scare

Joe Bastardi, my favorite meteorologist (Aaron M. being #2 Laughing) tells it like it is. 

Worldwide Cold not Seen Since 70s Ice Age Scare

http://link.brightcove.com/services/player/bcpid25605842001?bctid=605710...

Damnthematrix's picture
Damnthematrix
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Re: Worldwide Cold not Seen Since 70s Ice Age Scare

Clearly JAG, we have all your heat...... 

Notable temperature extremes in 2009 include southern Australia's record-breaking heatwave during their summer months of January-February. January's heatwave brought numerous new temperature records across the region. Southern South Australia and most of Victoria experienced their highest maximum temperatures since 1939. However, unlike the southern states, Queensland and Northern Territory had their coolest January since 1984. A second heatwave impacted the area during early February. The second time around, extreme heat was accompanied by very dry conditions that contributed to the development of deadly wildfires. The wildfires claimed over 200 lives. Please see February 2009 U.S. Wildfire page for a Special Summary of Bushfire Activity in Southeastern Australia.

In Europe, bitter cold temperatures gripped the northern and eastern region at the beginning of January. Temperatures plummeted to -9.9 °C (14.2 °F) in Farnborough, Hampshire, the lowest temperature since January 1991. Meanwhile, the United Kingdom experienced its coolest winter since the winter of 1996-1997. The United Kingdom's mean temperature during winter 2008-2009 was 3.2 °C (37.8 °F).

Temperatures across Ontario, Canada, were well below average during the month of July, with an overall anomaly of 2.2 °C (4.0 °F) below average. Several locations experienced their lowest temperatures since 1992. Several locations set new monthly low mean temperatures for the month of July.

Australia and New Zealand had their warmest August since national temperature records began 60 and 155 years ago, respectively. The August 2009 average temperature for Australia was 2.47 °C (4.45 °F) above the 1961-1990 average, shattering the previous record by 0.98 °C (1.76 °F). The national August 2009 average temperature for New Zealand of 10.2°C (50.4 °F) was 1.7 °C (3.1 °F) above the August average. However, on October 2009 New Zealand experienced its coolest October since 1945.

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Damnthematrix
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Re: Worldwide Cold not Seen Since 70s Ice Age Scare

Health authorities in South Australia are preparing for an influx of people in the health system ahead of a forecast heatwave. Adelaide's maximum temperature tomorrow is expected to be 36 degrees Celsius, followed by 39 on Friday and 41 on Saturday, Sunday and Monday.

http://www.abc.net.au/news/stories/2010/01/06/2786867.htm?section=justin

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Re: Worldwide Cold not Seen Since 70s Ice Age Scare
Damnthematrix wrote:

Clearly JAG, we have all your heat...... 

Would you kindly send it back? I can't remember the last time it was this cold for this long.

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Re: Worldwide Cold not Seen Since 70s Ice Age Scare

JAG,

Quote:

Joe Bastardi, my favorite meteorologist (Aaron M. being #2 Laughing) tells it like it is.

I can't help but notice that the "equal and opposite" laws of physical movement seem to be alive and kicking... The Austral Summer is bringing record heat, the Boreal Winter, record cold... This is a prime example of how nature works, and why I'm more worried about the balancing act than runaway Heating or Cooling.

Cheers! =D

Aaron

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Re: Worldwide Cold not Seen Since 70s Ice Age Scare
Damnthematrix wrote:

Adelaide's maximum temperature tomorrow is expected to be 36 degrees Celsius, followed by 39 on Friday and 41 on Saturday, Sunday and Monday.

Change Adelaide to Virginia Beach, change Celsius to Farenheit and you feel our pain.

Okay, so what.  It's cold for Virginia Beach.  I saw my breath this morning...............

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Re: Worldwide Cold not Seen Since 70s Ice Age Scare
JAG wrote:

Joe Bastardi, my favorite meteorologist (Aaron M. being #2 Laughing) tells it like it is. 

Worldwide Cold not Seen Since 70s Ice Age Scare

http://link.brightcove.com/services/player/bcpid25605842001?bctid=605710...

 Inconvenient. 

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Re: Daily Digest - January 6

Damn nice day on Kauai today.  'bout 78 and sunny, 15' surf on the north shore.....Aloha, Steve

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Re: Worldwide Cold not Seen Since 70s Ice Age Scare
JAG wrote:

Joe Bastardi, my favorite meteorologist (Aaron M. being #2 Laughing) tells it like it is. 

Worldwide Cold not Seen Since 70s Ice Age Scare

http://link.brightcove.com/services/player/bcpid25605842001?bctid=605710...

I find that he makes a pretty good point for climate change :) See, changes in the 80s, 90s, oh back like the 70s in the 2000s, what next hey?

Sophistry is such an art, but it is also so transparent..

Samuel

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Re: Daily Digest - January 6

Worldwide Cold not Seen Since 70s Ice Age Scare

 

One of the things to remember is that there are many different cycles affecting our climate from orbital path, sunspot activity that has 11 year and 200 year cycles, Pacific and Altantic oscillations, volcanic acitivity, etc.  Is there any site that has compiled the various cycles to say where we are with respect to these various cycles?  (note:  East Anglia need not apply). 

For instance, approximately every 200 years there is a solar minimum that produced the Maunder Minimum or Little Ice Age. (Ref: http://en.wikipedia.org/wiki/Maunder_Minimum).  We may have started to enter such a period again.

The Pacific and Altantic Oscillation cycles have turned negative which spells a much colder regime in North America.

What effects will this all have?  People want to stay warm and cook their food ala " Three Days of the Condor"; a very perceptive movie.  Colder temps will mean more attempts to stay warm which means more fossil fuel and tree burning.  This should help to accelerate CO2 emissions and therefore acidify the ocean even more and maybe ameliorate "Global Warming".

We have houses that are over 300 years old in this country and even older in other parts of the world.  That means that houses built today could be around for that length of time and maybe longer.  Should we not institute a national or even global building codes that creates: 1)  Zero Energy Usage houses  2) Low maintenance (e.g. Stainless Steel roofs with no stand pipe protrusions but with tabs for mounting solar arrays, etc.), 3) Clean indoor air (e.g. 2/3 volume exchanges per hour), 4) solar equipped and "tuned" for the area in which the houses are to be erected?

I asked this of David Price (D: North Carolina) and he fumbled his response with something to the effect that there were a lot of forces in Congress that would oppose such a national housing code effort.  I mentioned "Peak Oil" in phrasing my argument to him.  Also, Robert Hirsch, in his DOE report, says that we need to start at least 20 years in advance of Peak Oil in order to institute those measures to ameliorate the effects of peak fossil fuel energy usage.  If his attitude is correct, then we need to write our opinions to our respective represnetatives.

There is a lot of dogma out there and I think we should be asking more questions and seeking answers then regurgitating slogans and mantras (ala Monty Python's "Life of Brian" where Brian was deified and followers held up gourds and sandals).  For instance,  I would love to see "Cap and Trade" audited.  I suspect there is another Enron hiding there.  We have seen too many corrupt practices of late.  If my suspicions are wrong, then we have something to be proud of.

If we plant trees as carbon credits but forests are decimated, what have we acheived?  Have we in effect lost carbon credits?

I believe in doing the right thing for the right reason with a firm footing in science and common sense.  Problem has been that the data has been cooked, protective agendas have been set, cabals have been established and financed, and sifting through all this has not been easy.  It takes time and persistence.

Peter

 

 

 

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dickey45
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Re: Daily Digest - January 6

Yep, climate change.  Not global warming.  "it all evens out".  Uh, huh.  Tell that to people all over the globe suffering right now.

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A. M.
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Re: Daily Digest - January 6

Peter,

You said:

Quote:

If we plant trees as carbon credits but forests are decimated, what have we acheived?  Have we in effect lost carbon credits?

Probably not.
First off, Decimated is probably a very negative assessment of what's happened to the forests; meaning reduced by 1/10th.
I strongly doubt that humans have, on any level, reduced our forest density by 1/10th. In addition, most timber outfits realize there is some wisdom in both thinning, and replanting second/third/fourth growth stands. So you're not really "losing" much here and now. 

That said, the real damage is basically already done. We've destroyed a lot of our old growth which was a vigorous testament to natures beauty and wisdom, and man's insatiable lust for growth.

The argument that losing trees is going increase the amount of CO2 is probably not going to be easy to substantiate, just thinking about the radicals without any data. I'd venture to say we have less of a CO2 processing problem than we do a CO2 Generating problem.

Population and population density are, beyond a doubt, much more alarming (to me) than logging. Nature has a way of rebounding with humility and ease. Humans? Not... really...

Now, the second and more important bit of business.
You said:

Quote:

The Pacific and Altantic Oscillation cycles have turned negative which spells a much colder regime in North America.

What exactly does this mean? "Turned Negative"?
It sounds like tricky language to me. The Oscillation (current) certainly hasn't changed, the aggregate temperatures haven't changed drastically, or any more than is assumed with diurnal and seasonal changes, though there may be some lower temperatures from ice melt dropping those numbers a little.

I'm interested in hearing what exactly this means.

Cheers!

Aaron

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Re: Daily Digest - January 6

 

 Another bit of 70's nostalgia in the UK.  Gas rationing for industry.

 http://www.guardian.co.uk/business/2010/jan/07/gas-rationing-national-grid-factories

 

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Ready
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Re: Daily Digest - January 6

One of the things I have never understood about the argument of the lumber industry removing trees causes a net positive CO2.

If I am a lumberjack and I fell a large tree and convert it into 2x4s for building and similar uses, and then plant new trees behind me to harvest in the future, aren't you a carbon negative? Aren't you actually removing carbon from the atmosphere and locking it up in walls of buildings and similar? The new trees continue the process?

This is obviously an oversimplification, but where am I going wrong here?

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JAG
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Clarification

My proclamation that Joe Bastardi was my favorite meteorologists is based on performance, not his views on climate change. When Bastardi forecasts a formation and/or path of a hurricane I listen because he is far and away more accurate than any other meteorologist that I have followed.

Why is he so accurate? I could speculate that it is because he eliminates the emotional noise of climate change from his observations. 

Feel free to debate your life away on your particular egocentric climate change position. I was not taking a position in either camp with my post, I was simply implying that those who are the best in their field, are the best because they don't waste their energy on the "drama-de-jour" of their field of study.

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Re: Daily Digest - January 6
Ready wrote:

One of the things I have never understood about the argument of the lumber industry removing trees causes a net positive CO2.

If I am a lumberjack and I fell a large tree and convert it into 2x4s for building and similar uses, and then plant new trees behind me to harvest in the future, aren't you a carbon negative? Aren't you actually removing carbon from the atmosphere and locking it up in walls of buildings and similar? The new trees continue the process?

This is obviously an oversimplification, but where am I going wrong here?

You probably have to take into account that a bigger tree can process more CO2 than a smaller one.. They take time to grow, to grow faster that is.. besides what nature does with dead trees is pile them at the bottom, making coal and oil in a few million years you know.. I don't think making them into houses or disposing of them into dumps would have any better results, but it's something one could research up for sure

Samuel

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