Archive - Aug 2009 - Story

• July durable goods ex-cash for clunkers up 0.8%, a decline from June. Also, the inventory pick up mirage continues being just that: inventories declined $2.7 billion or 0.8 percent to $314.1 billion. (US Census Bureau)
• Senator Edward Kennedy dies after battle with cancer (WSJ)
• Swiss response begins: Swiss private bank Wegelin announced it will stop doing business in the United States (Swissinfo, h/t William)
• AFP interviews the one-man regulator Harry Markopolos (AFP, h/t Eric)
• China to impose curbs on overcapacity in steel, cement (Bloomberg)

• Asian stocks gain on strong Chinese earnings, US Consumer report.
• Euro approaches 11-week high on signs global recession abating.
• Homebuilders buy land after 3 years of selling as US demand returns.
• Oil advances before report forecast to show that U.S. inventories declined
• South Korea Consumer confidence rises to 7-year high on state spending.
• US consumer confidence, Home prices exceed f'casts in sign of recovery.
• US deficit revised to a record of nearly $1.6 trillion for fiscal year ending Sept. 30.
• US Postal Srvcs offers buyouts to thousands of employees as it faces financial losses.

Westfield, the world's largest mall operator, announced results earlier today, which demonstrated substantially accelerating real estate writedowns, primarily in the US. For the six month period ended June 30, Westfield announced $2.5 billion in property revaluations, after posting $2.6 billion in comparable charges for the entire 2008 year period: the company is finally marking its asset book to something vaguely resembling reality.

Luckily, the man sees reason and is willing to recant his anti-fiatsco blasphemies, and repent at the one, the true, Church of St. Ben and The Martyred Dollar. The previously scheduled ritualistic lashing by the CNBC decabox has been indefinitely postponed.

"Whatever this chain of vague expressions may mean, if it is intended to suggest that Bank of America settled this case to curry favor with the SEC or to avoid retaliation by the SEC, the Court needs to know the specifics." - Judge Jed Rakoff

"The fundamental problem is that conflicted ratings have and are causing massive harm to investors and now, unfortunately, to the American taxpayer as well. The current credit crisis might cost taxpayers $23.7 trillion according to the TARP reviewer Neil Barofsky and inflated ratings are universally cited as one of the primary culprits in this collapse of the credit markets." - Sean Egan

"Dear SEC - continue abusing the public's increasingly declining patience with your lack of integrity and inability to prosecute those at fault for the current crisis at your own peril." - Tyler Durden

It is the esteemed Treasury Secretary's opinion, that anything that has to do with demystifying why the Fed is hell bent on destroying the US dollar, killing the middle class, and allowing Lloyd Blankfein to purchase Larry Ellison's yacht collection, is squarely in the "problematic for the country" camp. Never mind that more than half the country (in fact almost two-thirds) have indirectly voiced their support for HR 1207. But at least it is good to know where Geithner's allegiances lie, and even better to see how good at totally perverting facts (not just taxes) the SecTres is.

In a sign that the REIT market may surprisingly lose its invisible bid, the primary beneficiaries of the IPO pump and dump game, namely Merrill and Deutsche, have announced they are deferring their underwriting fees for REIT IPOs "after buyers balked at the deals" (one doubts Cohen & Steers is part of this group of balkers).

In a stark example of how it "should" be done, the recently terminated cash for clunkers subsidy for overleveraged US consumer to purchase Japanese cars, has allowed companies such as Toyota, Honda and Hyundai to push forward a significant amount of their sales, while relying less on the back end of their production curve. Indeed, as Detroit News recently reported, of the five majorbeneficiaries of Cash for Clunkers, 4 were Japanese cars, with Toyota representing 19.2% of all cars sold under the program. And now that they got their sales out of the door, they are winding down capacity.

Oddly, the dollar has taken the news of its imminent demise well... too well, judging by the massive diarrhea occurring in commodity land. In the meantime 170/70s sure aren't having a nice day.

• Yields 1.119% vs. Exp. 1.115%
• Bid-to-cover 2.68 vs. Avg. 2.86 (Prev. 2.75)
• Direct bids 49.4% vs. Avg. 47.66% (Prev. 33.01%)
• Allotted at high 92.32% (BBG)

An "anonymous and confidential" seller has bitten the bullet and is circulating a $268 million BWIC consisting of 84 loan tranches. The largest pieces in the BWIC include a $9.2 million Term B by Select Medical, $8.5 million TL from Cambium, $8.3 million TL from Envirosolutions, $7.8 million TL from Clientlogic, and a bunch of other CIT and GECC specials, including a $6.1 million TL by BCBG Max Azria. According to LCD News, total BWIC volume year to date has hit a paltry $3 billion, likely a function of loan values skyrocketing as a result of the continued parabolic high beta, garbage stock move in equities.

"[Bernanke] has acted to provide needed liquidity to the economy and has demonstrated that he is fully ready to reverse course when economic conditions dictate. President Obama’s decision to reappoint him now is one more example of his providing leadership the country, and the world, needs as well as addressing the economic situation he inherited. By nominating Chairman Bernanke he is giving an example of the right kind of bipartisanship." - Barney Frank

RealPoint has released their July CMBS delinquency report, and if one adds the surprising switch of $4.8 billion in GGP loans which amusingly were returned to current payment status,the July delinquency total has hit a total of over $30 billion - an all time record.

Someone get in touch with a medal for Michael for daring to say what every CNBC producer hates more than anything, the truth. Yet the market celebrates 7 more years of ceaseless asset bubble creation, debt monetization, and dollar destruction.

At least Hamptons real estate will be back to its bubble levels soon enough, as the US middle class completely disappears over the next 10 years.