Timmy
white swans need love too
- Joined
- 30 September 2007
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Bushman, check out the latest consumer credit figures from the US, showing an expansion.
Releveraging?
Deleveraging of the US consumer still has some way to go!
Bushman, check out the latest consumer credit figures from the US, showing an expansion.
Releveraging?
Using what as equity? Kidneys, heart, the family dog. Jeepers.
29% of all US houses are in negative equity territory, .
Australians spent $17.18 billion on their credit and charge cards, compared to $22.02 billion in December, according to the figures which are not seasonally adjusted.'
I don't know ... just reading the data ... & while
that means 71% have positive equity? Also, S&P500 made a new high last night, on this rally from the March 2009 lows, (just barely) ... so going to be equity built up there too. Not saying its all beer and skittles, but its not all bad news either.
stories like Dubai, Greece, US comm, property and the like will keep propping up in the next 1-3 years .... So there will be hiccups along the way.
Agree, the employment situation in the States is terrible ... but at least there have been signs of a slowing in the job losses ... which is a start. Long and bumpy road to come for the US economy ...But the US household will not be the saviour for some time with 10% unemployment
Whether this leads to an 'Imminent and Severe' correction depends what is under stress and not yet disclosed and the impact of this.
Deleveraging of the US consumer
Total U.S. household debt, including mortgages and credit-card balances, fell 1.7% in 2009 ...
The drop reflects the extent to which job losses and a moribund housing market are forcing people to default on mortgages and other obligations...
At the same time, the defaults are leaving many people with more cash to spend and save, jump-starting the financial rehabilitation, or "deleveraging," that economists see as a crucial prerequisite to robust growth.
Five Suggestions for Banking Reform
by Peter Atwater
Friday, March 26, 2010
First, as much as I admire Mr. Volcker and the noble intentions of the "Volcker Rule," I'm afraid that attempting to re-silo the financial services industry is akin to trying to unscramble an egg. In fact, with all due respect to the myriad of regulators currently in place, I think our existing silo'ed regulation contributed mightily to our crisis. How can it be that no single regulator had a full grasp of the "too entangled to fail" world of OTC derivatives along with the authority to deal with it?
Second, and at the risk of being bold, I believe the time has come to eliminate FDIC insurance. When the FDIC was created in the 1930s, it was intended to be a temporary solution. Today, it puts the US taxpayer on the hook for more than $7 trillion in bank liabilities. But as a consequence, depositor due diligence is non-existent. And putting Wall Street aside, this crisis has shown, even with specific oversight, hundreds of now-failed banks took excessive risk in their traditional banking businesses and their insured depositors neither cared nor were adversely impacted. Their risk was borne by the government, while they earned returns far in excess of comparable US Treasuries. If we're truly going to eliminate "moral hazard"/"too big to fail" we must eliminate deposit insurance in the process.
Third, we must demand that the rating agencies disregard "systemic support" when ascribing debt ratings. The fact that we still have some financial institutions receiving "uplifts" of as many as five ratings levels because of their systemic importance is unacceptable and I believe currently poses one of the greatest financial risks to our nation.
Fourth, we must repeal the "Levitt Rule." In good times, loan loss reserves must be built in anticipation of bad times. And, should FDIC deposit insurance not be repealed, as I recommend, fund premiums must also adopt a countercyclical methodology. That banks were releasing reserves and the FDIC was reducing/eliminating premiums at the top of the market defies basic logic.
Finally, our regulators must act courageously. This past week Moody's wrote:
" we believe that the benefits of a revamped regulatory regime will depend more upon how regulators implement and execute the law -- rather than depend on the words of the law itself -- because the proposed regulatory framework doesn't appear to be significantly different from what exists today."
I guess the issue with this thread is the title. It should be called the 'Risks to the Recovery' thread or some such title. Its not all bad news. But we need to deleverage and stories like Dubai, Greece, US comm, property and the like will keep propping up in the next 1-3 years given we are 1-2 years into this cycle.
That is the way credit busts have operated over time. So there will be hiccups along the way.
Whether this leads to an 'Imminent and Severe' correction depends what is under stress and not yet disclosed and the impact of this.
But the US household will not be the saviour for some time with 10% unemployment and 29% negative equity. So 'imminent and stratospheric' growth might also be some time off for the global economy.
Well it's a correction, and it looks severe, so off we go again.....
Where's all the permabulls gone?
But for the time being, I'm not quite sure this little bull run is over yet.
Well it's a correction, and it looks severe, so off we go again.....
Where's all the permabulls gone?
US market rockets 150+pts in last 1/2 hour of trading???
You win today's bottle of Champers, sir!!!
US market rockets 150+pts in last 1/2 hour of trading???
You win today's bottle of Champers, sir!!!
Yep, they are doing a good job of holding fundamentally hot air together and looks like the attemp to regulate the bad guys has not a hope of getting through the Senate. Then we could have a Presidential decree I suppose.
Anyhow, good luck with the charting but gravity pulls down hard.
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