Some Decent Christmas Eve Economic News

Here are a few business news items for your review and immediate discard from your mind as you move onto much more joyous thoughts over the next few days.

• Core inflation slowed to 1.9% in November. The recent peak was 2.4% in July. Actually, this drop was somewhat on the positive side as the components didn’t show any dramatic deflationary activity. Link here to full report.
• Jobless claims for the week ending December 20th were up to 586,000 from 556,000 the prior week. The four week average, a much more reliable number, was 558,000 up from 544,250. Once again the press tag line on this is “the worst number since December 1982.” As I discussed last night with regard to home sales, this is misleading. The labor force was much smaller in 1982 so this number in no way represents the same amount of pain as was felt at that time. Link here for the full report.
• There are two reports on home prices that I picked up Wednesday. One makes no sense at all and the other offers some sunshine. First, Reutersis quoting Richard Bove, a good banking analyst, as saying that the recent boom in refinances portends higher home prices. Huh? No explanation for that statement is offered. I have to think they missed something in the translation. Second, Housing Wire on the other hand presents some evidence that the pace of decline in home prices is at least not accelerating. Some see this as a sign that housing prices may be forming some sort of floor. Grasping at straws perhaps but any port in a storm.
• Finally, as you probably know, refi applications are soaring. Applications were up 48% last week and up 126% from this time last year. There are some indications that the numbers are over stated as there appears to be a lot of duplicate applications in the pipeline. Moreover, Housing Wire has documented that this may be one of those situations where you need to be careful what you wish for. The mortgage industry is painfully short of people to handle the surge and the lack of warehouse credit facilities might make funding the loans very difficult.

That covers it. Actually, it wasn’t all bad. Let’s hope and pray that represents a trend.

Comments

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False Hope

2008 Dec 25 01:36 AM

[Steven Hansen]

tom, i don't know where that reuters article got its data......

"The Consumer Price Index for All Urban Consumers (CPI-U) decreased
1.9 percent in November, before seasonal adjustment, the Bureau of Labor
Statistics of the U.S. Department of Labor reported today."

www.bls.gov/news.relea...

tom, you may have to start being careful using reuters. they appear to outsourcing news to india. look where the articles where written. they are not referencing where they are getting their data which is what all good news services do. "Tenzin Pema in Bangalore; Editing by Himani Sarkar"

finally, Richard Bove on 30 march 2008 stated that the financial crisis was over. this guy is a pumper.

tom, i wish you and your family a merry christmas.

2008 Dec 25 02:27 AM

[Moon Kil Woong]

There is good news, the general population is going on a voluntary austerity program which translates into more savings which the US desperately needs. It may sound bad, but in the long run it is good. Just like taking medicine, it may not be sweet but it will make you better.

Don't buy the Fed's sugar water and alcohol please please spend every penny you have economic solution. You'll be left with a really nasty hangover.

Other good news is that Catapillar's management has chosen to cut as few people as possible and management voluntarily slashed their pay in half. That shows that there are some moral and fiscally responsible companies out there. That is also one of the reason's I own their stock (I am not recommending you do so in any way).

Despite the bad news about how terrible executives are, there are a great many good American companies and American managers who are doing a good and responsible job. I will not shed a tear when a bad company goes down because it leaves room for good American companies to replace them (they always do).

I'd say the other good news is that the Fed and Treasury can't do much worse than they already have been doing, but I am not sure if that is true.

2008 Dec 25 02:33 AM

[Tom Lindmark]

the hand,

Thanks for your comment. The difference in the two figures involves stripping out food and energy from the measurment Reuters quoted yesterday. Both the number you cite from the BLS and the Reuters number are correct.

2008 Dec 25 10:57 AM

[Jplout]

Thanks for the Great News!
I feel much better now. It makes me want to start buying more junk I don't need since everything is back to normal and uncle Barack and his crew will fix the economy in no time.

Keep drinking the Kool-aid.

Here is a dose of reality, true unemployment in FL is at 18%. Can they fix that in less that 5 years? I don't think so. By the end of the year 1/3 of the US households will have no credit since they' have been paying their Visas with their Master Cards, the reserves are dried out and unemployment is high. This administration will need to implement some sort of credit amnesty program SOON or 40% of the US will not be able to buy a N#2 pencil on credit. No buying, no economy, no recovery.
The new crew is adopting the old shock doctrine "OUR INFRASTRUCTURE IS COLLAPSING" we need to spend ONE BILLION fixing it. I heard that before with "WEAPONS OF MASS DESTRUCTION" This infrastructure spending largesse is going to be ripped right out of the Iraq reconstruction page. One Billion turns into 10 after a couple of big well connected companies getting huge no bid contracts generate some trickle down minimum wage jobs. Plus, where is the money coming from? We will have to pay it back some day. I got news from you, our infrastructure is not collapsing. We have some of the best infrastructure in the world. There is no silver bullet but if you keep your eyes open you will find some great opportunities.
"In the middle of difficulty lies opportunity" Albert Eistein.

Here is a movie of Stupid and his dog Barney on YouTube.

video.google.com/video...

Happy Holidays, the joke is on you.

2008 Dec 25 01:36 PM