Must-Know News - Jan. 08
By Daniel at 8 January, 2010, 1:25 pm
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“Idaho farmers sold $5.4 billion worth of products in 2009, down 17 percent from the year before. That’s the largest single-year decline in more than 40 years.
The University of Idaho released the report on Wednesday”
“The Treasury Department said Thursday it will sell $74 billion in notes and bonds and an additional $10 billion in Treasury-inflation protected securities next week. ”
“The Federal Reserve today reported on their weekly purchases of agency mortgage-backed securities (MBS). In the holiday shortened work week between December 31, 2009 and January 6, 2010, the Federal Reserve purchased $14.50 billion agency MBS. In those four days the Federal Reserve sold $2.50 billion (supported the roll market) for a net total of $12 billion purchases.
The goal of the Federal Reserve’s agency MBS program is to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally. Only fixed-rate agency MBS securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae are eligible assets for the program. The program includes, but is not limited to, 30-year, 20-year and 15-year securities of these issuers.”
“A veteran U.S. Federal Reserve official said Thursday the central bank shouldn’t wait long to tighten the stance of monetary policy in order to keep longer-run inflation pressure contained, in what appears to be a recovering economy.”
“”The ballooning federal deficit must be controlled and reduced,” because if it isn’t, “eventually, there will be pressure put on the Federal Reserve to keep interest rates artificially low as a means of providing the financing,” Hoenig said. And that would be a recipe for hyperinflation, he warned.”
“There are 920 football fields of available office space in Manhattan. More than 180 major buildings totaling $12.5 billion in value — from Columbus Tower at 1775 Broadway to the office tower 400 Madison Avenue — are in trouble, meaning in many cases they face foreclosure or bankruptcy, or have had problems making mortgage payments. Rents for commercial office space fell faster over the past two years than in any such period in the last half century.
“I have been in the business for 12 years. I have never seen it this bad,” Peter Von Der Ahe, vice president of investments for the brokerage Marcus & Millichap, said of New York City’s commercial real estate market.”
“Bankruptcy filings in Sacramento and the Central Valley soared to an all-time high in 2009, up nearly 50 percent from 2008’s totals, figures from the U.S. Bankruptcy Court in Sacramento showed Thursday.”
………6A) San Jose area bankruptcy filings at 20-year high
“Driven in large part by layoffs and the mortgage crisis, bankruptcy filings have doubled in the past two years, and are up 50 percent over last year, according to a Mercury News review of filings in U.S. Northern District Bankruptcy Court in San Jose. The court covers Santa Clara, Santa Cruz, Monterey and San Benito counties. ”
“Hotel foreclosures in California more than quadrupled last year as business travelers and vacationers cut spending and commercial real estate values plunged, forcing owners into default, according to a survey released today.
There were 62 foreclosures on hotels in the state last year, compared with 15 in 2008, Atlas Hospitality Group said.
Properties in default jumped almost six-fold to 307, said Atlas, which specializes in selling hotels.”
“China overtook the United States as the biggest auto market in 2009 and automakers should see more strong growth this year, an industry group reported Friday.”
“Illinois, the second-lowest-rated U.S. state, is seeking to attract overseas investors as it sells $3.47 billion in taxable bonds amid a warning from its comptroller that state finances are in a “downward slide.”
The debt offering will go toward an annual payment to the employee pension fund.”
Frequent reader, Joe, dug a little deeper in to the household survey and found that it is a “disaster.” Here are the numbers he found, they are astonishing:
Here are some year over year stats first:
In December 2008, there were 235.035 million working-age adults. In December 2009 there were 236.924 million, an increase of 1.889 million in a year. During the same period of time, the size of the labor force (those actually looking for/holding a job) decreased from 154.3 million to 152.6 million, a drop of about 1.7 million. This creates a gap of about 3.6 million people who are working-age but who either can’t or won’t find a job. About 3 million new jobs would need to be created just to be at the same employment/population percentage we were at a year ago. That would be break even. [about 250,000 per month]
Actually employed working-age adults dropped from 143.3 million in Dec of 2008 to 137.95 million in Dec 2009. A drop of 5.35 million working people in one year.
In month over month terms, things look pretty bad. The number of employed people dropped by 1.1 MILLION from November to December. The number of people who dropped out of the labor force (not looking for work any more) increased by 1 million.
Combine this with the stories yesterday about the colossal increase in number of people on emergency unemployment in the last month, and you have an employment mess on your hands.
Wow, Joe. More than 1 million dropped out of the work force in one month and amazingly they are able to hold the unemployment rate steady at 10%. Amazing what seasonal adjustments and changes to their procedures can accomplish at covering up.
Here’s John William’s chart, it will automatically update with the latest figures. Note that his rate is now just under 22%, but may have gone over once this updates:
“Jan. 8 (Bloomberg) — A record 1.81 million U.S. home loans backing the securities that roiled the global financial system were “nonperforming” last month, adding to threats to the housing market, according to Amherst Securities Group LP.
Mortgages at least 60 days delinquent in so-called non- agency securities equaled 32 percent of the total as of late December bond disclosures, up from 25 percent a year earlier, according to a report e-mailed yesterday by the Austin, Texas- based securities firm.
Soured mortgages ballooned last year even as new defaults eased as the Obama administration pushed loan servicers to assess homeowners for debt modifications and state moves slowed foreclosures, cutting liquidations of properties after borrowers stopped paying, according to Amherst. Higher seized-home sales as the government efforts mature may undermine a stabilization in housing after its worst slump since the 1930s.”
“WASHINGTON (Reuters) - Two prominent U.S. lawmakers on Friday called for Treasury Secretary Timothy Geithner to testify to help determine if the New York Federal Reserve Bank improperly influenced insurer AIG to withhold information on payments it made to banks after a government bailout.”
- 13) Civilians Unemployed for 27 Weeks and Over (Just updated)
Click on the link above and look at the graph!
“Latest Observations:
| Date | 2009-08 | 2009-09 | 2009-10 | 2009-11 | 2009-12 |
| Value | 5024 | 5447 | 5620 | 5901 | 6130″ |
Dennis Kucinich thinks the Dec 24th move to extend unlimited credit to Fannie and Freddie is a backdoor way to help banks. “That’s exactly what Treasury is doing,” says Dean Baker, co-director of the Center for Economic Policy Research in Washington.
- 15) Simon Johnson: We’re Setting Ourselves Up For A Big Catastrophe, ‘Crisis Is Just Beginning’ (VIDEO)
Simon Johnson, the MIT professor and economist who’s long been a strident critic of “too big to fail” institutions, appeared on CNBC this morning and predicted that the next phase of the financial crisis could be precipitated by banks exploiting emerging markets like China.
“We now have a financial system that is completely based on moral hazard,” Johnson said. “Crazy things happen when you have a financial system like that.”
- Saxplayer00o1
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