Beige Book: This is the elephant in the room - commercial collapse.

“Commercial real estate was described as “bleak” in Boston and “distressed” in Kansas City. Market conditions worsened in virtually all districts, with “rising vacancy rates, downward pressure on rents, and little, if any, new development.”

Banks in most regions said loan demand weakened, and credit standards tightened.”

This means that businesses are still in trouble and disappearing, not to mention that with these loans on their balance sheets banks will continue to hold onto their free money instead of lending. No new capital for business, no jobs, and increased taxes. The consumer has yet to see their financial bottom.

If I’ve understood correctly,
Jobs down
Commodity prices up / Consumer spending up
Manufacturing up
Commercial real estate down / residential real estate steady
Credit card balances up.

So, if I’ve understood correctly, businesses are going or will be going belly up on their real-estate. Manufacturers are trying to survive, so they are producing more goods with fewer people. People are trying to survive, so in tandem with the increased commodity prices, consumer spending is up. But people still have no jobs, so in order to survive (and stay in their house - commercial real estate steady) they are turning to their credit cards, hoping that they find a job before the credit card bill becomes due.

Is that about the thrust of it?

We’ve been down this road before…just a year ago…

Oh well. How can public do any better when our government is championing the same philosophy (Max out the nation’s “credit card” and hopes the economy comes back before the bill comes due)?

Just incredible. The Fed is doing every thing in their bag of tricks to hide the true state of the US economy. To listen to the media you’d think every one in the US just won the lottery.

The sad truth is the country is broke and our currency is in crisis as the Treasury cranks up the printing presses…. but yet the Beige Book says the economy is improving. A country based on a foundation of lies will not stand for long.

The United Nations has predicted a fragile world economic recovery next year from a two-year crisis and said the risk remained of a “double-dip” recession.The annual report, “World Economic Situation and Prospects 2010,” warned that the recovery was “far from robust” and could come to an abrupt halt if the packages, of about $US2.6 trillion over 2009 and 2010, were withdrawn too soon. The UN report cautioned that “the recovery is uneven and conditions for sustained growth remain fragile.” The rebound had been partly caused by firms restocking inventories rather than responding to stronger demand, it said.

- JRK

Related Posts:

• The beige books needs a closer reading:
• Expect bigger problems to hit in the CRE market.
• WSJ: “Bernanke Feared a Second Great Depression” By Sudeep Reddy
• This nonsense of playing with interest rates going up and down like a yoyo needs to be put to a stop.
• Tens of millions have been out of work for over a year now!!!

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