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    Daily Digest – August 12

    by Davos

    Wednesday, August 12, 2009, 2:46 PM

  • Casey Research Mentions Chris Martenson (H/T CapeSurvivor)
  • Deja vu? (Chart)
  • Watchdog Says Bad Assets Still Threaten Banks
  • Path to Freedom – Two Beers With Steve Podcast
  • Unemployment Benefits – More Math That Just Doesn’t Work/ More Data Hiding?
  • “Broke” Reviewed by Glenn Erickson
  • Employment/Population Rate x Number of Hours Worked/Week (Chart)
  • Wholesale Inventories: Marijuana Plants
  • Zillow: Underwater Mortgages May Reach 30%
  • Housing Mess in Not Over Yet – Bloomberg (Video on page)

Economy

Casey Research Mentions Chris Martenson (H/T CapeSurvivor)

Dan Ferris, editor of the Extreme Value letter, pointing me to an excellent bit of investigative research done by Chris Martenson, a blogger I have quoted here before.

What Chris discovered was that as soon as the primary dealers had snapped up the 7-year paper, they turned around and sold half of it to the Fed. This bit of monetary trickery, which was clearly planned in advance, accomplished two things. First, it created the impression that there was abundant demand even for longer-term Treasuries. And second, it obfuscated the fact that the Fed was being forced to step in to monetize the debt.

Deja Vu? (Chart)

Watchdog Says Bad Assets Still Threaten Banks

Congressional Oversight Panel warns that banks still hold many risky loans of uncertain value. If unemployment rises sharply or the commercial real estate market collapses – as many economists fear – the banking system could again lose its footing,

Episiode 16 – Path to Freedom, Two Beers With Steve Podcast

In Episode 16 we talk with Jules Dervaes of the Path to Freedom website, http://www.pathtofreedom.com/. Our discussion ranged from how Monsanto has gained control of Mother Nature’s seeds and have exploited them for profit, to discussions on self-sustainability and what Jules is doing in his own life to be self-dependent.

 Unemployment Benefits – More Math that Just Doesn’t Work/ More Data Hiding?

This article was meant to be a short follow up to Employment Situation in Chart Form – Damn, I knew I should have moved to New York and found a job on Wall Street! Didn’t quite turn out to be so short or simple 😉 Let’s see if I can, in one million words or less, describe what’s happening with the money behind the very simple (eyeroll) government unemployment system.

At least the concept is simple. Create a social safety net by charging taxes on employers and paying out benefits to those who lose their jobs. Hey, every now and then we all need a little human touch:

“Broke” Reviewed by Glenn Erickson

An astute video essay on the state of financial security these days in the good ol’ United States of Uncertainty, Broke: The New American Dream is a quality show made by Michael Covel, of TurtleTrader.com. The picture begins with Covel lecturing the camera from an empty office space high above the city streets, and proceeds through 85 minutes of somewhat meandering observations about the Shape of Things We Fear in the world of finance. Broke does a good job explaining the kinds of problems that brought on the crash of the economy in 2008, visiting Wall Street, various real estate experts and stock traders, hedge fund managers, reporters, magazine editors and Congressman Richard Baker. 

Employment/Population Rate x Number of Hours Worked/Week (Chart)

 Wholesale Inventories: Marijuana Plants

The green shoots are in fact marijuana plants and the media has been smoking them.

Month/over/month inventories down 1.7%, annual y/o/y down 10.8%.

Durables down 1.5%, annual down 10.4%.

I am especially interested in the internals of this report, particularly, paper goods as these are a good indicator of packaging demand, along with metals (industrial demand.)

Those numbers are just plain nasty: Paper was down 2.7% m/o/m while metals were down 6.2% m/o/m.

The sales numbers weren’t any better:

Sales. The U.S. Census Bureau announced today that June 2009 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $313.1 billion, up 0.4 percent (0.7%)* from the revised May level, but were down 21.0 percent (1.4%) from the June 2008 level.

Yowza.

Zillow: Underwater Mortgages May Reach 30%

More than 18.7 million homes, including foreclosures, residences for sale and vacation homes, stood vacant in the U.S. during the second quarter. That compared with 18.6 million a year earlier, the U.S. Census Bureau said July 24.”

If you prefer your housing  in bullet point format, this is lifted directly from the Zillow news release:

• U.S. Home values fell 12.1 percent year-over-year, marking the 10th consecutive quarter of declines

• Q2 was the first quarter where national declines are not growing.

• Total home sales fell 23.7 percent in June versus a year earlier. In the short term, total home sales rose 3.8 percent in June versus May.

• Negative equity: More than one-fifth (23 percent) of all owners of single family homes with mortgages owe more on a mortgage than their home is currently worth.

• Foreclosure re-sales made up 22 percent of all home sales in June.
Homes sold for loss: 29.2 percent of sellers sold homes in June for less than the previous purchase price.

Of course, you can believe the usual NAR releases/MSM articles that ignore seasonality if you want to put a happy face on it . .

Housing Mess in Not Over Yet – Bloomberg (Video on page)

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