Seriously, does everyone on the planet need to own a home ?
It appears QRM is too much for most would be home owners and the banks do not want to take any risk. Not even 5%.
Let’s face it; 20% is reasonable for a very large purchase. Do you really think anything less is a good idea ? It will only lead to trouble so why not keep the rule. Your never going to make the housing mess go away until society tightens its belt and until wages go higher.
Comments »No. Ticker 1-week Return Watchlist
1 UNG 9.64 Raw Commodities Index
2 BAL 9.32 Raw Commodities Index
3 SGG 3.79 Raw Commodities Index
4 JJU 3.15 Raw Commodities Index
5 FUE 2.24 Raw Commodities Index
6 PGM 2.14 Raw Commodities Index
7 PALL 1.92 Raw Commodities Index
8 CORN 1.79 Raw Commodities Index
9 GLD 0.86 Raw Commodities Index
10 LIT 0.85 Raw Commodities Index
11 KOL 0.31 Raw Commodities Index
12 USO 0.20 Raw Commodities Index
13 DBA -0.09 Raw Commodities Index
14 COW -0.29 Raw Commodities Index
15 JJC -0.76 Raw Commodities Index
16 UGA -1.28 Raw Commodities Index
17 JJN -1.64 Raw Commodities Index
18 JO -1.66 Raw Commodities Index
19 JJT -1.73 Raw Commodities Index
20 URA -2.95 Raw Commodities Index
21 LD -3.24 Raw Commodities Index
22 NIB -3.33 Raw Commodities Index
23 SLV -3.34 Raw Commodities Index
CVR Energy: Appaloosa discloses 8.26% stake, or ~7.1 mln shares, in 13G filings (denotes passive stake)
Briefing.com note: Appaloosa previously disclosed 1,556,374 stake as of 3/31. (INSID)
Fuqi Intl: NASDAQ confirms it will delist the common stock of Fuqi
Comments »“The treasury market is signalling another summer just like 2010, where bond yields fell, world equities gained, and everyone feared a double-dip, according to Citi.
Right now, bond yields are falling, and while stocks are selling off in the U.S., so far most of the world is holding up.”
Full article and chart
Comments »[youtube:http://www.youtube.com/watch?v=sRtuwCNSiBQ 450 300]
Comments »[youtube:http://www.youtube.com/watch?v=j3-04Og8Yfw 450 300]
Comments »“The European people’s trust in their governments has considerably declined, a survey conducted in five leading European Union states shows.
In April, German institute Friedrich Ebert carried out a phone survey using a sample of more than 5,000 adults from Germany, Britain, Spain, France and Poland.
According to the poll, only 6 percent of people in these countries have a great deal of confidence in their governments, while 46 percent of the participants said they did not trust their statesmen very much.
A total of 3 percent had no trust in their governments at all.
Analysts believe that the main reason for people’s lack of trust in their governments is the states’ inability to resolve economic crises and the repetitive scandals of politicians in these countries.
Popular protests have broken out in Britain, Greece and Spain against their governments’ economic policies.
In Italy, Prime Minister Silvio Berlusconi has had an extensive history of criminal allegations, including mafia involvement, corruption, and bribery of police officers, lawyers, and judges.
The Italians have so far staged several rallies against the beleaguered prime minister. ”
Comments »Funny thing; Moody’s comes out with a piece on the U.S. debt rating and the dollar sinks causing equities to go higher out of this morning’s rut.
[youtube:http://www.youtube.com/watch?v=CHo233RntO4&feature=related 450 300]
Comments »
“LONDON – A super-toxic bug is causing the frightening food poisoning outbreak in Europe that has sickened at least 1,600 people and killed 18, researchers and global health officials said Thursday.
The new E. coli strain that is believed to have contaminated salad vegetables was analyzed by Chinese and German scientists. It contains several genes that cause antibiotic resistance and is similar to a strain that causes serious diarrhea and is found in the Central African Republic, according to a statement from the Shenzhen, China-based laboratory, BGI. Those scientists were working together with the University Medical Center Hamburg-Eppendorf.
“This is a unique strain that has never been isolated from patients before,” Hilde Kruse, a food safety expert at the World Health Organization, told The Associated Press. The new strain has “various characteristics that make it more virulent and toxin-producing” than the many E. coli strains people naturally carry in their intestines.
Preliminary genetic sequencing suggests the strain is a never before seen combination of two different E. coli bacteria, with aggressive genes that could explain why the outbreak appears to be so massive and dangerous, the agency said.
However, Dr. Robert Tauxe, a foodborne disease expert at the U.S. Centers for Disease Control and Prevention, questioned whether the strain is entirely new and said it had previously caused a single case in Korea. He said genetic fingerprints may vary a little but that “this strain is rare enough that a lot of people haven’t heard of it….”
Comments »Essentially a debt raise would be similar to default and subject for review. It appears the only way to keep top rating is to not reach the debt limit and of course not default any any period of time…..
Comments »“Gautti Eggertson has an interesting post where he compares current economic conditions to those that prevailed leading up to the recession of 1937-1938. Here is his description of developments in 1937:
(1) Signs indicate that the recession is finally over. (2) Short-term interest rates have been close to zero for years but are now expected to rise. (3) Some are concerned about excessive inflation. (4) Inflation concerns are partly driven by a large expansion in the monetary base in recent years and by banks’ massive holding of excess reserves. (5) Furthermore, some are worried that the recent rally in commodity prices threatens to ignite an inflation spiral.
The Federal Reserve responded at this time by tightening monetary policy. Fiscal policy also was tightened. These policy moves turned what had been a robust recovery between 1933 and 1936 into the second recession of the Great Depression. As a result, a full economic recovery was postponed several more years.
Eggertson explains the surge in commodity prices was the galvanizing force then behind the concerns over inflation and, thus, the tightening of policy. Though these developments sound eerily similar to today’s environment, Eggertson is confident that Fed officials will not make the same mistake:
It is unlikely, however, that a modern economist put in the same position would respond to the commodity price rise in the same way… Fed economists today typically monitor various components of the CPI that are not influenced strongly by temporary supply disruptions. For example, one common measure tracked is “core CPI,” which excludes volatile food and energy prices from the overall CPI basket.
He then goes on to claim the Fed’s response in 2008 proves his point: ….”
Comments »“Economist Robert Reich says the U.S. economy is moving toward a double dip as it grapples with high unemployment, weak housing and a stalled recovery.
“Under normal circumstances, this would be the time for the federal government to take bold action to ward off a double dip,” Reich writes in The Financial Times.
“But these are not normal circumstances. America has been through a devastating recession that poked a giant hole in the federal budget,” wrote Reich, now a professor of public policy at the University of California at Berkeley.
.jpg.aspx?sitename=Newsmax&) |
| Robert Reich (Associated Press photo) |
The economy was supposed to be in bloom by late spring, but it is hardly growing at all, Reich notes. Expectations for second-quarter growth aren’t much better than the anemic 1.8 percent annualized rate of the first quarter, and that’s not nearly enough to reduce the ferociously high level of U.S. unemployment.
“The recovery has stalled,” Reich says. “It is unlikely that America will find itself back in recession but the possibility of a double dip cannot be dismissed.”
According to Reich, the problem is on the demand side of the ledger. …”
“Today’s data releases confirm that the US economy has undoubtedly hit another soft patch.
Mohamed El-Erian
CEO of PIMCO
It is not the only one.
Other economies are also slowing or contracting—some as a result of budget austerity (such as the UK and the struggling European peripheral economies) and others because they are tapping their monetary policy brakes to counter mounting inflationary pressures (China and other emerging economies).
With such broad-based economic slowing, and with unemployment stuck at very high levels and becoming more structural (and therefore protracted) in nature, market participants are asking whether the US authorities will again try to turbo-charge the economy. And with additional fiscal stimulus off the table due to deficit and debt concerns, the spotlight is fully on the Fed’s reaction function.
So, will there be a QE3 program—i.e., another round of asset purchases by the Fed that push valuations higher, make people feel wealthier and, thus, get them to spend on goods and services?….”
“Nouriel Roubini was on CNBC earlier, sparring with Mohamed El-Erian, providing a very indecisive prediction about the future of the US economy. The RGE economist who previously would say the depression is only just starting, is unwilling to commit to a prediction of a double dip for the US, and barely do so for Europe. His anticipation of sub 2% GDP growth in H2 is… higher than that of perpetually optimistic Goldman Sachs, which sees 1.5% H2 growth. So much for swinging for the fences. But when existing subscribers expect to a given set of data, it is quite understandable. It is, nonetheless, good to see that the Doctor read the ConvergEx report we posted some time agoindicating how the Fed, and everyone else calling for a projected reduction in unemployment, are pathological liars: “With 130.2 million people presently employed, that works out to an addition of 385,000 jobs in each month, May through December – and that’s just to reach 9.4%. The low-end Fed projection is 9.3%. Considering the economy added 290,000 jobs (more on this later) last month, 385,000 seems a touch ambitious to say the least.” And this does not include the atrocious May report, which means the economy has to add over 400k real private, non-census jobs a month. This is impossible. At least Roubini admits: “eventually even the US can’t outrun a trillion budget deficit for the next ten years.” To all speculators: good luck timing the turning point into the last crash. An oddly unsatisyfing clip, but the head to head between Roubini and El-Erian 5 minutes into the clip is amusing: Keynesian vs. non-Keynesian.”
“Greece agreed with its EU and IMF lenders to impose yet deeper austerity, a senior official said on Thursday, as unease grew in the ruling party that the government will try to speed the package through parliament undebated.
Athens has signed up to 6.4 billion euros in new measures to cut its 2011 budget deficit and aims to wrap up bailout talks with international inspectors by Friday, the senior government official told Reuters, asking not to be named.”
Comments »“SAN FRANCISCO (MarketWatch) — Goldman Sachs Group received a subpoena from the Manhattan District Attorney seeking information about the investment bank’s activities heading into the global financial crisis, according to a published report Thursday.
Bloomberg News reported the news Thursday, citing two unidentified people familiar with the matter.
Goldman shares fell 1.5% to $134.08 in morning action Thursday, leaving them down 20% so far this year. That’s the worst performance among the largest U.S. bank and brokerage firms including J.P. Morgan Chase JPM -0.67% , Bank of AmericaBAC +0.69% , Citigroup C +0.48% and Morgan Stanley MS -0.52% .
“We don’t comment on specific regulatory or legal issues, but subpoenas are a normal part of the information request process and, of course, when we receive them we cooperate fully,” GoldmanGS -1.38% spokesman David Wells said in an email to MarketWatch.”
Comments »“We believe Wednesday’s 2.3% sell-off feels of capitulation and confirms summer weakness would be “front-end loaded.” Thus, we now see the big call is “Summer of Cyclicals” (Buy them), with 4 reasons: #1: Cyclicals have underperformed Defensives by 1,160bp since 2/16/11, matching the 1,109bp underperformance seen in April-August 2010 (see Figure 1). #2: Cyclicals now trade at a 4% discount to Defensive (rel P/E), lower than the rel P/E as of August 2010 and well below long-term average of 114% (see Figure 3). #3: EASI/CESI is at oscillator low and economists cutting forecasts now. 4: Capitulation evident in bearish AAII reading—a quality contrarian Buy signal.”
Comments »“In a comment out today, Dick Bove predicts huge losses ahead for Bank of America:
It is now believed that BAC will lose an additional $32B in the next three years related to the housing crisis. Approximately, $9B of this money will be derived from its reserve. The remaining $23B will be charged to earnings at the rate of $2B per quarter for the next three years. It is likely that the bank will sell additional assets to soften the impact on capital. To determine BAC’s exposure to the housing market five sectors were isolated: the securities portfolio, trusts serviced by the bank, the loan portfolio, reps and warranties, and the bank’s servicing portfolio. The losses were then estimated based on the bank’s recent experience. The biggest risk in the securities portfolio appears to come from the government backed securities.
All that being said, he thinks it’s all priced in…..”
Comments »The spread between WTI and Brent is now over $15 or 15%, as tensions abroad keep Brent at a premium.
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