Wall Street Economist: Recession to End at Mid Year-JP Morgan Chief

buy now or be priced out FOR EVER

the guy who didnt see the crash coming is now predicting the revival!! he must be right!

Commentary for Monday: The regulators will announce the results of the bank stress tests on Thursday May 7. This could potentially be a major market moving development depending on how the results are presented and what they say. For example, we do not know if the authorities will announce which institutions may be deficient of capital. We are worried that if the names of firms that need to raise money are made public, it could make the capital raising process more difficult as private market investors would likely step away from the market for fear of possible government dilution should the necessary capital raise fall short of the initial stress test results. Conceivably, the authorities have not settled on what they are going to announce-indeed, the release of the stress test results has already been delayed a few times-so speculation in the press may mount before Thursday. This means financial markets may remain vulnerable to the newswires.

Away from the stress test results, the financial market will have to contend with record Treasury supply. There are auctions of $36 billion in 3-year notes on Tuesday followed by $22 billion in 10-year notes on Wednesday and $15 billion in 30-year bonds on Thursday. The Fed will conduct another buyback on Monday, purchasing securities in the 7- to 10-year sector. It will be interesting to see if the Fed doubles the size of its projected purchases, currently around $5 billion. This would either signal to the market the Fed is going to double its intention to buy $300 billion in Treasuries by Q3 2009 or that at least it is speeding up its intended purchases in order to bring the yield on the 10-year note substantially lower. Disappointment over the Fed not increasing its Treasury purchase plan has caused yields on the 10-year note to rise roughly 20 bps to around 3.20% since the FOMC meeting. We discuss this in more detail in the current US Economics/Strategy Weekly.

Regarding the April employment report, it is released this Friday and we expect to see a 650k decline. Jobless claims have edged about 20k lower on a 4-week moving average basis to 637k at present, but claims during the employment survey week were essentially unchanged relative to March, holding near 650k. The continued record rise in continuing claims strongly suggests to us the unemployment rate will increase a good deal more. We are looking for a 0.5% increase in the rate to 9.0%, the highest reading since September 1983. The increase in the unemployment rate is very troubling to us, because it is occurring in an environment of rapidly declining labor costs. Wages and salaries have declined five months in a row, and the Q1 employment cost index advanced a measly 0.3% or just 2.1% year over year, both record low growth rates.

SteveF, you are clearly a cheerleader, why don't you go on the record.

Manhattan prices, up or down from here?

Inventory, up or down from here?

Also, where are prices now relative to the peak?

when it ends, what will it look like? how about a year later?

did anyone else read the contents of the jpmorgan downgrade of the six banks? the one where they discussed the continuing and to continue problems including significant future declines in housing prices and problems with those and other loans? i can't find it, but maybe they didn't cc the big guy on that one.

steveF has a dozen studios he bought at the height of the market to flip, can't get rid of them & can't rent them out to cover his costs, so if you noticed it's raining today, he did his rain dance.

Apparently he didn't watch the mayor's budget speech this afternoon.

SteveF is not a cheerleader he is a player. Up and Down. My condo studios comps have been flat for the past year. But that is b/c no one was doing anything as transaction volume is down 60-70%. So the sooner buyers get off the sidelines(like you guys) we won't have true numbers. But that is just a timing thing. Buyers will be back, sooner rather than later, and in droves.

Just as soon as they finish collecting their unemployment checks.

I'm sorry, but.... steveF is a PLAYER?

"My condo studios comps have been flat for the past year."

Oh really? Why don't you post them for us to see?

"But that is b/c no one was doing anything as transaction volume is down 60-70%."

So you've concluded that your comps are unchanged based on no volume? How is that possible?

"So the sooner buyers get off the sidelines(like you guys) we won't have true numbers."

What?

"But that is just a timing thing."

Real estate cannot be "timed" - it is not a liquid asset, and cycles are very long.

"Buyers will be back, sooner rather than later, and in droves."

In about 20 years, which is slightly longer than it took property prices to recover in the last boom: 14 years from 1984 to 1998. That boom wasn't nearly as crazy as this one, though.

Anytime you see sliver buildings go up - RUN!

Man about you ponce like a cat, don't u do anything else besides SE? anyhow ya i'm an investor a player, something confusing about that?

Yes.

If the buyers aren't coming back for 20 years, stevejhx, why are you hanging around this website? Seems like you could save a lot of time and start looking in 18 years and be ahead of the curve.

steveF, you missed my "i don't do anything" post yesterday or the day before, I take it?

aboutready, the picture of yourself you present to the world is not a healthy one. And it looks like your husband stays away from home, days and nights.

stakan, you are so wrong, but it's always nice when people decide to attack the mental health of people they don't know. the husband just got home at 6:30, as is typical and as is consistent with what i've mentioned. he has six weeks of vacation a year, and does two weeks of marketing in Europe as well, so we travel eight weeks most years. I have been married for around 20 years, and I still adore that man. Maybe that isn't healthy by NYC standards?

are you spunky? back in the day he used to question my mental health as well. I wonder how he's doing, delightful fellow that he was. Actually there were others more heinous.

Got to go, the east village restaurant scene is calling me.

I'll go on record and say "prices in Manhattan will continue to fall for at least a year"

ar: No, I'm not spunky. It's just glaring that you post and post and post ...and post, 24/7, and when not posting, digging up some obscure and elaborate articles... for what? Why? Why so verbose, loquacious and talkative, all at once?

last i looked it was a free country, sort of. what's your real beef? this is a place for people to post -- anything and everything. who elected you sheriff? no one.

This IS a place for people to post. Exactly. That's why I post...

no doubt you have a point...what is it?

stakan, so what?

why do I post? well, you'd have to look at where I am posting. i am an unapologetic populist, which may not resonate so well with some of the avaricious assholes out there. i am educating myself in terms of macroeconomics, which hasn't been so popular in recent years for obvious reasons, and i support people generally regardless of whether i think their life plans follow my negative trajectory, understanding as i do that my feelings may not be the ones that resonate with someone who would really love to sell or to buy a home. if you present an open-ended question, such as is it a great time to buy, i'll likely be negative. under other circumstances you'll find me to be quite supportie, sometimes even positive.

and beyond that, why do you care why i post? my articles kick ass over the general shit that's posted, and i post them not because they're obscure but because they have some real perspective. FEEL FREE TO IGNORE MY POSTS AND READ CNBC WITH STEVEF.

aboutready, what would the world do without you! And what would you do without public anonymous boards!

AR, I like your posts.

dwell, thanks. thebelltollsforthy, i'd read alot more and engage in more inner discussion. the world would be fine.

stakan, nice use of the synonomous adjectives.

Aboutready, I think you add a lot to this board. Keep on posting!

i agree with stakan.. AR while sometime informative, comes across very often as pretentious, know-it-all...

if we're voting on AR, I vote yes...please continue.