More Varying Effects On Main Street [Housing Tracker]

Seeking Alpha's Housing Tracker is a collection of housing-related excerpts from various sources, grouped by topic. Feel free to post any interesting links on the subject in the comments section below.

Quote of the Day

“Liquidity is like oxygen. Lack of it can cause serious damage in a very short time.” – Alan Gayle, senior investment strategist at $70 billion fund Ridgeworth Investments. (Bloomberg, Oct. 2)

Macro Effects Of The Housing Slump

Illegal Immigration Declines As U.S. Economy Falters.  “Washington think tank Pew Hispanic Center: The number of illegal immigrants entering the U.S. has slowed significantly the past few years… There were 11.9 million illegal immigrants in the U.S. as of March… A decline of 500,000 from [last year’s] estimate. However, the change was not statistically significant because of the large margins of error… Other researchers cite the nation's struggling economy and stepped up enforcement of immigration laws. Brookings Institution: “The decline in job prospects in construction, service and other low-skilled jobs are communicated through extended networks of would-be movers from Mexico and Latin America.” (AP via Yahoo! Oct. 2) 

Fed Considers Rate Cut as Recession Fears Mount. “A report on construction spending showed that commercial building activity slowed in August, adding to weakness in the residential sector. Global indicators of growth have also softened noticeably. Taken together, the risk of a severe recession -- known as a "tail risk" because its likelihood is small but its effect would be catastrophic -- has appeared to re-emerge in recent weeks. Earlier this year, Fed officials had believed such a threat had dissipated.” (WSJ, Oct. 2)

Libor Rises, Commercial Paper Slumps as Credit Freeze Deepens. “Companies with few or no ties to subprime home debt, such as Caterpillar Inc. (CAT) and General Electric Co. (GE), are having less trouble selling commercial paper, which typically matures in 270 days or less and is used to help pay for day-to-day expenses such as payroll and rent. Massachusetts canceled a sale of commercial paper this week, dipping into budget reserves to finance ongoing commitments, according to Treasurer Timothy Cahill.” (Bloomberg, Oct. 2)

Wall Street Bonuses To Shrink To 2003 Levels. “New York State Comptroller Thomas DiNapoli has estimated that this year’s reduction in Wall Street bonuses—a result of the recent turmoil in the financial services sector—could rival the 50% fall incurred after the terrorist attacks of September 11, 2001.” (Financial News, Oct. 1)

Small Businesses Frozen By Crisis. “Some small companies say they are no longer able to get loans from newly cautious banks as credit tightens across the country, and even those who do qualify are increasingly reluctant to borrow and expand, fearful of overextending themselves in the midst of the financial crisis… Small businesses in America — the 27 million companies employing fewer than 500 people and in most cases fewer than 20 people — account for half of the nation’s output. A downward swing, whether caused by expensive borrowing or pessimism, could weaken the economy and shrink employment. Small businesses employ 40% of the work force, the Census Bureau reports, and they outpace large companies in generating new jobs.” (NY Times, Oct. 1)

Help Wanted. “Cornell University and Select Leaders, a real-estate job Website study: The malaise in property development is finally spilling over into the job market, causing a drop in prospective hiring and severe dislocations… New York's national share of real-estate job postings from February to August fell to 11% from 17% in the same period in 2007. In August, New York employers posted just 11 real-estate finance jobs. By contrast, relatively healthy Texas now offers nearly as many property-job opportunities as New York -- a 10% national share -- but receives just 3% of all applicants. California remains the leader, with about 18% of all commercial real-estate job listings.” (WSJ, Oct. 1) 

Under Strain, Cities Are Cutting Back Projects. “In New York, a real estate boom has suddenly gone bust. Washington has shelved a planned bond offering to pay for terminal expansion and parking garages already under construction at Dulles and Reagan National Airports. Billings, Mont., is struggling to come up with $70 million more for a new emergency room. And Maine has been unable to raise $50M for highway repairs…Analysts said the dysfunction in the municipal bond markets appeared to signal the end of an era of relatively cheap money for governments and, probably, the start of an era of tough choices for communities.” (NY Times, Sept. 30)

Is Commercial Real Estate Next?  “Overall, real estate directly and indirectly generates economic activity equivalent to about 20% of GDP. It encompasses an estimated $20 trillion in owner-occupied housing, and approximately $5T in income-producing commercial property. It creates some nine million jobs and generates billions of dollars in federal, regional and local tax revenue. Local governments, especially, depend on this revenue (approximately 70 cents of every local budget dollar) to pay for public services such as education, road construction, law enforcement, and emergency planning and response.” (WSJ Op-Ed., Sept. 27)

Wall Street's Woes Worry Charities, Arts Groups. “Nonprofit administrators are watching… donors like Lehman Brothers, American International Group, Merrill Lynch and Bear Stearns change hands or go belly up… Citymeals-on-Wheels: Bear Stearns employees [donated] $500,000 to Citymeals each year -- generosity due partly to the firm's requirement that its 1,000 senior directors contribute 4% of their annual compensation to charity… At this time last fall, Lehman Brothers was pledging $10 million to Spelman College in Atlanta… Last year, the investment bank gave away $39M in the U.S., Europe and Asia… The Apollo Theater, which was one of the 87 cultural institutions supported by Lehman… couldn't comment on the remainder of the $1 million it had been slated to receive over four years.” (AP via Yahoo! Finance, Sept. 26)

                                               

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Comments

[helplessobs...:]

Thanks Judy.

2008 Oct 05 08:28 PM