All of the bullishness is just so much bull. Here are some “brown shoots” for the bulls from just this week:
By Daniel at 18 July, 2009, 6:59 pm
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http://www.moneyweek.com/news-and-charts/economics/is-japans-recovery-faltering-12345.aspx
Excerpt:
Japanese machine orders just sank to a 22-year low…
If we are slipping into a Japan-style depression, as signalled perhaps by the swollen demand (and supply) for government debt worldwide, then recovery might take longer than almost anyone guesses.
Twenty years could be too soon, in fact. At least on the Japanese model.
Excerpt:
CIT might not be Goldman Sachs. It might not be seen as “systemically important.” But as Sandra Jones points out in the Los Angeles Times, CIT is a “major cog in making sure orders get paid for and delivered to stores. Without CIT, retail shipments for the crucial holiday shopping season could be in jeopardy, and could in turn set off a new wave of bankruptcies among retailers and vendors.”
http://market-ticker.org/archives/1225-FLASH-Mortage-Insurance-BOOM!.html
Excerpt:
This is REALLY BIG folks:
NEW YORK, July 16 (Reuters) - Mortgage insurer MGIC Investment Corp reported a wider quarterly loss and said it will stop writing new business as losses mount in the battered housing sector, sending its shares down 14 percent in premarket trade.
You basically cannot finance a home purchase with more than 80% LTV (loan to value) without private mortgage insurance - that is, insurance that covers the lender if you default and they take a loss.
MGIC (NYSE: MTG) is the largest issuer in this area. They said they will be “trying” to capitalize a new company to write this business, but their continuing losses - which, by the way, they said they thought they had under control last year after repeated flirtations with going under outright - has apparently forced this decision.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aXu5aUboayJY
Excerpt:
The falling value of holdings backed by the swaps may force AIG to post more collateral, pressuring the insurer’s liquidity and credit ratings in a repeat of the cycle that caused the firm’s near collapse in September, Citigroup Inc. analyst Joshua Shanker said last week. The insurer needed a U.S. bailout valued at $182.5 billion after handing over collateral on a different book of swaps backing U.S. subprime mortgages.
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And, finally, about bank deleveraging there apparently hasn’t been ANY according to the fedgov’s and the banks’ own on-book figures, here’s an audio file on that:
http://www.blogtalkradio.com/MarketTicker/2009/07/13/TBA
Winston Smith
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