Looks like we hit bottom, right brokers?

just yesterday bloomberg was spouting some silly nonsense on how housing starts were likely to be up, another "green shoot" shown to be the weed that it is.

Gloomers & doomers.

LOL, green shoot. Man, that is all BBG has been saying lately. This market (equity or other) will be flat-lined for some time to come. I figure I will be ready to buy in the next year, once we are closer to the "bottom".

I'm glad we saw fewer starts last month. We have a ton of property to sell first, some of which is in foreclosure. I don't think the market needs more housing starts to show improvement - we need strong sales of existing homes. New home starts would be good for the construction business and the general economy, but I don't see it helping the real estate market. The last thing we need is more inventory.
Tina
(Brooklyn broker)

exactly, tina. who in their right mind would cheer increased housing starts (other than builders and workers, of course)?

for fun compare the bbg headline news with the econoday reporting found on the economic calendar. cracks me up.

It's kinda weird though, Home Depot actually posted better than expected earnings...I guess that happened b/c they lowered estimates so much, that if someone bought a shovel it would have pushed them over the estimate.

Or maybe because they have have smart management who didn't over-leverage and saw this whole mess coming in 2007:
http://www.nytimes.com/2009/05/19/business/19depot.html

chunder, the bar was set so low this quarter for almost every corporation. still some couldn't jump over it.

Home Depot is also benefitting from the "nesting" urges that present during down times.

Home Depot also closed all of their Expo stores, so they cut out their most under-performing pieces. That was a good move, too.

I can see where Home Depot would be reasonably defensive in this environment as long as they've managed their business well ... people aren't traveling or trading up their homes but they easily could tackle those DIY projects that will improve their existsing home, that they are now spending more time in!

I do agree aboutalready, but sooner than later even people that are renovating their homes will postpone and companies like HD or Lowes will suffer greatly. TBH, I am in finance and read all the articles I can get my hands on, and what people don't understand is that this market will be in this dead zone for a long time to come and just because we ONLY lost 540k jobs as opposed to 640k jobs doesn't mean it is getting better. It just means that all of the jobs that could be cut have and any more will cause said business to close b/c they are running on skeleton crew. These are bad times (and not to be a doomsday guy) it will not get better any time soon.

sadly, chunder, i agree with you. one of my best friends was just informed that her job in academia will not exist for the next school year. she is a single mother of two children, one applying to college this year, in her late 40s. it's happening everywhere, and they're not just statistics and consumers, they're people.

Indeed aboutalready, I feel terrible for your friend, and anyone else who is in a similar predicament. All I can say is, don't pay off your credit cards (only pay the minimum) so that you can remain liquid and don't spend a lot on stupid isht. Be smart b/c rainy days are a commin' and they will be here for a while.

Its weird, b/c I still go to open houses, and I can't really figure out why. I mean, I am in no position to buy, and if I were, I still wouldn't b/c who the hell knows what is going to happen next month.

it's free entertainment and decent exercise.

LOL, very true.

chunder, this is what i truly fear:

http://www.ttnews.com/articles/basetemplate.aspx?storyid=21946

caterpillar is cutting hours at least in half for 985 of its employees at one of its plants, for up to six months. these people won't show up in the U3, which is about to become a very poor (even poorer than now) indicator of the employment situation.

“Caterpillar is making these decisions in order to best position the company for long-term success and competitiveness in the global market,” the company said in a statement.

"All I can say is, don't pay off your credit cards (only pay the minimum) so that you can remain liquid"

That doesn't sound right to me. Paying 20% interest rates does not help you remain liquid.

Justin,

maintaining "emergency" liquidity - i.e. keeping as much money on hand as possible is totally different from the type of personal finance that you engage in when times are good (or at least steady), and the big division between the two is the presence of income and certainty with respect to the income.

Chunder is saying that if you are out of a job and you are living off of savings, you need to stretch those savings as long as possible - by letting out as little money as possible (and therefore paying down the minimum on a credit card), in part because you cannot get any access to new credit with no income and in part because you have no certainty with respect to when you can stop the bleeding. It's a sheer emergency survival tactic, and a necessary thing for people to do when they're out of a job in a tough economy.

booyakasha, I agree it makes sense under these circumstances.

booyakasha, I couldn't have said it better myself, or actually I didn't and you did it right. It is totally a survival tactic and I would rather be liquid for the JIC scenario than have a low cc balance and no cash on hand. Another scary(impending doom)issue is when malls go out of business b/c retailers can no longer cover overhead due to anemic sales. Whether you call it a dead cat bounce or a green shoot or bear rally, it will only last so long and once again, give people a false sense of "things are getting better". They aren't.

aboutready, wow. I didn't even hear about that until now. So, this is just the first step in a few more to trim overhead. And by trim, i mean cut to the bear minimum and lay off as many people as possible.

underemployment is becoming rampant. the jobs that the unemployed do manage to find are usually of a lower quality and with lower pay than those they lost. employers are cutting hours, forcing furloughs, reducing benefits, left and right. and those who are employed under such conditions are hardly in a position to say screw it, i'll just find a different job.

There is also the situation of people actually giving up on searching for a job, and no longer getting benefits, that doesn't get included in the weekly unemployment numbers. Take those into account and we are already in the 11% unemployment range.

if you count marginally attached and underemployed workers, I believe we are at 16%.

aboutalready....UGH, I didn't even think about that. Great times.

ar: the data you linked should show up in hours worked on monthly employment report.

se10024, yes it will. but what i find interesting is that there have been escalating reports of such things to happen in the future. The Catepillar reductions don't start until August, for example, but employees are aware of them (that's a good thing). What I have to wonder, however, is how this will affect confidence levels and spending. These may be much more impacted than today's unemployment numbers would predict, because so many people know of future doom (employment, or future unemployment, rather, in the public sector would be another major source of this).

From a retail point of view, people aren't spending when the prices are deeply marked down (which cuts into their cash projections and operating income)so when they start to uptick, nobody will be buying. I mean stores like century 21 are doing well, exclusively b/c of foreign money.

Well, actually less home starts, and the article says PARTICULARLY condos and apartment starts and particularly in the NORTHEAST, would mean less new supply in coming years so in fact that would help landlords and sellers. In 2011 or 2012.

and what about the children?

http://www.fcd-us.org/resources/resources_show.htm?doc_id=906348

"This is the first-ever report on the impact of the current recession on the overall health, well-being and quality of life of America's children. It finds that the downturn will virtually undo all progress made in children's economic well-being since 1975. The significant decrease in this domain will also drag down the other domains of the CWI. The impact will be especially severe for low-income children of color."

CWI=Children's Well-Being Index

Ya know what really sucks, that low-income children of color (or people of color in general) always get the shaft and this is just an added bonus. To bad there isn't a stock for food banks or homeless shelters, cuz that is the kind of company that will thrive in the coming years.

they don't call them leading indicators for nothing...

If this is the good news, what kind of news does it have to be for a bull to call it bad?

nyc10022, this is terrible news, but since the markets have not been running on fundamentals for the last month, who the hell knows anymore what a bull would call bad. All I know is, this rally will end soon and abruptly

dk if this was posted on other threads but anyone who is thinking the rally is fake should read this first http://www.gmo.com/websitecontent/JGLetter_1Q09.pdf
the sheer amount of $$ spent is what's making this unprecedented.

as well as the lack of trading volume. money would be evaporating but for the government taking future taxpayer dollars and giving it away left and right to the financials. but at the end of the day, that p/e number will be fugly. the investors will be mighty frustrated. i know, maybe they can create another bubble to support that artificial wealth!!

Chunder, so many things have been disconnected from fundamentals recently. It isn't just the stock market.

http://baselinescenario.com/2009/05/18/liquidity-crisis-check/
"One way to look at the decline in interbank lending rates is that interbank lending has become safe again – because governments around the world have made it so abundantly clear that they will not let major banks default on their liabilities, no matter what happens. So what we have is interbank lending rates that are artificially suppressed by implicit government support." - James Kwak

ar: never underestimate the ability of government to inflate, and if anyone can do it bernanke is the man. in a context of rampant inflation stocks are not bearish (again this is saying nothing short term so we 'may' retest the lows)

Great reads. As for the banks, of course they have solvency issues. My good lord, we gave them how many hundreds of billions and they still need more. Then CC companies will need handouts etc etc. What happens when the remainder of the tarp funds are exhausted. I mean libor rate is at a 2month low which helped, but for how long?

I think the next thing to go will be the US currency being worth less than a sheet of toilette paper.

se10024, one of the reasons i'm so concerned is because they haven't managed much yet despite their efforts. cpi was up, but wholesale prices took a dive. labor costs, if one reads the stat properly, were hardly reassuring. they are trying like mad to inflate, but the holes just keep swallowing up cash. long term inflation is inevitable, although not necessarily in the classic wage/price manner.

that article is actually GOOD news. Less starts means less inventory. Why do people keep interpreting lower starts as bad news?

"that article is actually GOOD news. Less starts means less inventory. Why do people keep interpreting lower starts as bad news?"

Oh jesus.

Because the lower starts are a direct result of even fewer people buying than expected.

Trying to claim this is good news is like saying removing your hand from the fire after you got burned shows your strategy for the day was a good one.

Mitigating the damage doesn't undo the damage.

"that article is actually GOOD news"

Is he really this dumb or playing with us?

LOL, seriously alpine, you don't know why people are reacting to the bad news as people should? Well, at the surface more construction companies/home builders will go out of business, which means more out of work folks. Beneath that, you have the companies that supply equipment to construction companies/home builders which will start to shut down and lay off more people. Then, beneath that, you have more people defaulting on their own mortgages, b/c they have no job, b/c it was closed b/c of nobody building new homes. Is it starting to make sense now?

you know what? Scre you nyc10022. Less inventory is alsoways better. YOu obvivoulsy love a pathetic life. Hiding behind your keyboard being an ass hole all day long.... you really feel good about yourself, huh?

he is dumb

nyc10022. Not only does he think like a 5 year old, he actually types like one as well. Nice job alpine292

Im actively looking now, and i wish you all the best whether you're a buyer/seller/sunshiner/doom n gloomer. Whichever way you fall, coul nyc get worse? of course it good. Could it stablize of course it could. I guess you have to look at your own situation but im targeting new developments in my search and trying to pay under 800 a sq foot for a condo. That is my goal. One item also not mentioned regarding this discussion, is most co-ops ( i live in one now in murray hill) is they are pretty stringent. Even in the high times when me and my wife bought, the mortgage was a breeze but the co-op required us to pony up 50k to be held in escrow. So I think the stringency of some co-op boards (although intrusive as they might be) will cause less foreclosures in the city. Things could go either way but the reason why im a buyer here, is because for some of the developments im looking at (downtown) are down peak to trough square foot about 35%. can they go down another 40%. absolutely. but im going to be living there, and i really don't see rates (especially with Ben the money printer Bernanke) staying this low. So do the math, higher price lower rate, vs lower price higher rate. Make up your own mind and if it works for you go for it. If not, wait.

oh, so now we've resorted to bashing my typing. Very high class. Well pardon me, but some of us are not good typers.

So I bashed your typing did you forget what you wrote:

you know what? Scre you nyc10022. Less inventory is alsoways better. YOu obvivoulsy love a pathetic life. Hiding behind your keyboard being an ass hole all day long.... you really feel good about yourself, huh?

So you went after his life and called him and ass hole, but I called into question your ability to spell/type. Yea, I am the bad man....

You really need to take a look at this. From HousingWire, today. One third of homeowners now have family or friends living with them. I may set up the upstate house as a commune for unemployed friends.
This probably deserves its own thread.

http://www.housingwire.com/2009/05/19/one-in-four-homeowners-holds-an-empty-piggy-bank/

Fueling increased anxiety over potential job loss, one in four — or 24% of — homeowners don’t have any money in savings to cover living expenses should they lose their income, according to a Wells Fargo & Company (WFC: 25.79 -4.23%) quarterly survey.

The number of respondents indicating job loss as their top concern increased from 21% in fourth-quarter 2008 to 29% in the first quarter of 2009. Respondents also expressed a stronger desire to increase savings while reducing debt — and to do so quickly.

Amid the tightening economy, only 23% of survey participants actually managed to increase savings this quarter, but 37% say they paid down some debt, while 12% claim their debt was completely paid off in the past year.

Feeling the pinch, people continue to make lifestyle changes — in some cases drastic ones — in order to reduce expenses. Since last year, the survey found an astonishing one-third of homeowners now have family or friends living with them. 42% of homeowners are spending less on their children and 39% are budgeting more, while 41% are buying only necessities.

Adding to widespread angst, job losses continue to climb. Initial jobless claims rose last week by 32,000 to 637,000, according to the US Labor Department, and the total number of people collecting unemployment insurance surged to a record 6.56m.

When asked what would boost their confidence in the economy, one in four participants say an improvement in their personal situation is the top indicator. Meanwhile, homeowners are waiting for the economy to improve to make a major purchase: 30% say the first purchase they will make will be home improvement, 18% will buy an automobile while 13% say they will take a vacation.

Reports yesterday show signs that consumers are already investing in minor home improvement projects, as giant home improvement retailer Lowe’s (LOW: 20.14 +1.00%) reported better than expected earnings.

in some cultures, it is common for family members to all live in the same house.

Yes, Alpine, however that has not traditionally been the case HERE.

Alpine292, well, that solves it. That percentage is based off of culture, not the country shedding jobs like a dogs winter coat. Good to know.

aboutready - I think after today's thread I am going to get home, kiss my dog and drink a half of a bottle of something.

chunder, you should stay off the links to important economic news thread unless you're interested in consuming the entire bottle.

hopefully this too shall pass. but at what cost to how many people? and for what purpose did it have to happen this way?

about, I am working up to it, i promise....:)

I saw something on www.hulu.com about the mortgage crisis, and I have to tell you it made my efing blood boil. I believe it was called house of cards or something. I swear, some of the faces on these people just stuck with me. So sad and unnecessary.

http://www.hulu.com/watch/59026/cnbc-originals-house-of-cards

"you know what? Scre you nyc10022. Less inventory is alsoways better. YOu obvivoulsy love a pathetic life. Hiding behind your keyboard being an ass hole all day long.... you really feel good about yourself, huh?"

Keep it coming, alpine. There is still some grandma in peoria who doesn't know you're an idiot... yet.