Archive for February 2011
Home Equity
The fall in house prices and home equity have robbed fledging entreprenneurs of one of the most popular sources of funding; equity in their homes! This loss means fewer basement and garage start-ups in general and many fewer in the hardest hit states. As small business creates well over half of all new jobs our…
Read MoreFamilies in the Market
I am quite bullish on the multi-family area of the market where demand is strong and strengthening and vacancy rates are declining. The apartment space looks good but as the homeownership rate continues to fall, the improvement in MF is coming at the expense of the single-family sector. This is important to consider because household…
Read MoreNew Zealand Recession?
New Zealand’s finance minister is suggesting his country could be on the precipice of a recession later this year & a flood-induced Q1 contraction in Australia seems assured. Inflationary pressures are building in emerging markets. Thus the need for interest rate hikes and liquidity drainage is a key reason why the equity markets in India,…
Read MoreSellin’ Outside the USA
S&P 500 sales did quite well in Q4 — up 7.7% and ahead of estimates by a country mile. But, from what I see most growth in sales is coming from outside the USA! Here, revenues are growing at barely a 3% annual rate. The pace is around 20% for foreign-derived sources. The question is…
Read MoreMUNI BOND TRADE
The AA+/AAA 20-year muni bonds are trading above a 5% yield. That means more than 7% on a tax equivalent basis for top US earners!!!! There have been a grand total of 54 bond defaults in the past 4 decades and not one state default since the Depression. For those concerned over a wave of…
Read MoreHOUSEHOLD EMPLOYMENT
If you were to pick just 1 item out of yesterday’s jobs report that accurately depicts the labor market, given the inconsistent messages, it would be the Household employment # on a payroll and population adjusted basis. It came in at +153k in Jan; in line with the avg of the past 12 months. For…
Read MoreTOO BIG TO FAIL
Neil Barofsky, the Special IG for TARP put it well in his latest report: “perhaps TARP’s most significant legacy, the moral hazard and potentially disastrous consequences associated with the continued existence of financial institutions that are ‘too big to fail.’ While he’s right we may be on to “too big to save”. When banks get…
Read MoreISM REPORTS GROWTH!
The monthly Institute of Supply Management Report on Business (ISM) is a survey based index of more than 300 manufacturing firms that tracks 11 dimensions of activity across 18 Industries. Readings below 50 indicate recession. Value above 50 indicate growth. The index ranges from 0 to 100. The Jan ISM rose to 60.8 (it’s highest…
Read MoreMORE ON Q4 GDP
Q3 saw a boost to GDP due to inventories so the Q4 reversal must be seen in that light. Monday’s personal income & spending report gave details on how ’10 ended. Real personal consumer expenditure (PCE) spending rose 0.4% MoM in Dec but real personal disposable income was up only up 0.1%. How? Because consumers…
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