The US Census Bureau released August housing starts data this morning which showed a 598,000 (seasonally adjusted annualized rate) rate of starts. The August rate was 1.5% higher than July's 589,000 figure, but still 29.6% below the August 2008 rate of 849,000.

Specifically, I wanted to know the basics behind whatever accounting procedures took place at the FDIC in order to generate the headline "balance" of the Deposit Insurance Fund.

Blockbuster Inc. (BBI) currently suffers from a combination of those two factors, a predicament exacerbated by the emergence of aggressive competition to its core video rental business. This competition has intensified to the point that Blockbuster could be forced into either bankruptcy or irrelevancy within the next 12 to 18 months.

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Furthermore, over the same 28 year period, the total US jail and prison population has represented an increasingly larger percentage of the total US civilian population.

Regardless of whether the US economy has technically bottomed or not, the reality is that cities and States across the country are dealing with substantial budget gaps that will require difficult decisions. (The same is obviously true at the federal level, with the exception of the difficult decisions part; Washington tends to avoid those). The situation is unlikely to improve in 2010, as continued property reassessments will diminish the property tax base even further. That being said, the decision to privatize prison construction and operation should appear ever more attractive to States looking to save money.

Fortunately though, Marc Chandler has written a book that lays out an argument worthy of that precise description. In Making Sense of the Dollar: Exposing Dangerous Myths about Trade and Foreign Exchange, Mr. Chandler draws upon 20 years of global capital market experience to present an argument that systematically dispels popular misconceptions about the dollar, trade, deficits, and much more. If you prefer economic literature that dwells entirely in abstraction and theory based analysis, then this book may not be for you; Mr. Chandler focuses on real world situations and knowledge derived from his experience in the foreign exchange market. Making Sense of the Dollar identifies ten specific myths that are widely believed as true; three of these are:

How is this relevant to the employment situation? Adecco Group's euphemism of a business description - human resource services - is known colloquially as a temp agency.

Aside from the fact that Maguire's lenders are taking a bath on this one, this latest piece of news is a clear sign that commercial property is reaching a tipping point of sorts. Obviously, those REIT's whose assumptions were most favorable going into these deals are the ones getting burned right now. Maguire and many others examine a property from the front-end using a pro forma that includes future assumptions about market rents. Usually these assumptions end up as a linear, positive function; that is, rents are assumed to rise steadily and incrementally throughout the first 10 years of the building's life. The result is inevitably a model which indicates steadily higher levels of free cash flow, after paying for the building's management and dropping some maintenance dollars into the escrow of course. Obviously, the closer to the peak of the commercial real estate market a building was financed/modeled, the quicker it will approach the "danger zone". This is a term that I'm completely making up, but it refers to the point at which a commercial building's cash flow is insufficient to service its debt. This ends up being a function of the severity of declines in market rents, the viability/solvency of the individual lessee's, and the level of financing secured for the property relative to its value (LTV).

Procter and Gamble's results represent the most insightful window into consumer's spending proclivities, specifically with regards to those things that every household must purchase, i.e detergent and soap etc. Two months ago, I argued on SeekingAlpha that P&G's fiscal third quarter results were somewhat inflated due to lower interest expense and the Folgers divestiture, and that Q4 could bring with it some disappointing results. This position was generally derided by those with a myopic understanding of P&G and consumer behavior, who couldn't conceive of a weak quarter from a soap/detergent/diaper selling Company. As the chart above indicates however, P&G's sales weakened as the year went on; sales of baby care products were the only area that held up year to year, and Q4 ushered in an across the board decline in sales.

1. Mutual Bank (Harvey, IL)
2. First BankAmericano (Elizabeth, NJ)
3. Peoples Community Bank (West Chester, OH)
4. Integrity Bank (Jupiter, FL)
5. First State Bank of Altus (Altus, OK)

Despite the fact that JP Morgan (JPM) and Goldman Sachs (GS) continue to earn (?) healthy profits, the plight of the nation's small community banks appears substantially more imperiled.

The true health of the economy - broadly defined for the purposes of this article as the ability of the private sector to maintain capital expenditures, create jobs, and service its debt related obligations - has seen virtually no improvement, and in fact has continued to deteriorate throughout the current quarter. What is evident though, is that Government expenditures - a dollar amount that contributes to GDP in the same manner as private investment - have been propping up our largely wilted economy. From the Commerce Department's press release:

As previously disclosed in a Current Report on Form 8-K filed on June 29, 2009, Guaranty Financial Group Inc. (the “Company”) has been working on a plan to raise substantial capital for it and its wholly-owned subsidiary, Guaranty Bank (the “Bank”) through an open bank assistance transaction with the Federal Deposit Insurance Corporation (“FDIC”) and the Office of Thrift Supervision (“OTS”) and with private investors, including the Company’s current principal stockholders. On July 17, 2009, at the direction of OTS, the Bank filed an amended Thrift Financial Report (“TFR”) as of and for the three months ended March 31, 2009. This filing reflected substantial asset write downs as described below, which resulted in the Bank having negative capital reflected in the TFR as of that date.

On March 19, 2009, GE released an 88 page presentation that detailed GE Capital's commercial real estate, mortgage and consumer exposure. The segment's $81B commercial real estate holdings - split fairly evenly amongst debt and equity - are well diversified across all property types. In the debt arena, GE holds a first position lien in the majority of instances. When the Company assumes an equity position in a property, it does so primarily as the owner/operator without the use of any 3rd party debt. This is an extremely advantageous position to be in, as GE has the flexibility to manage its leases and cash flows without the burden of debt service. Yes, GE Capital will face further real estate related losses. However, the manner in which GE has typically financed its holdings should give it an edge over other traditional financial institutions.

To its credit, Intel has managed to operate efficiently throughout the recession, reporting a quarterly revenue decline of only 15.2% compared to the same quarter in 2008. They've also taken the EU fine in stride, booking the $1.45B charge for Q2 and moving on.

Andy Kessler wrote a rather frank op-ed in today's Wall Street Journal, at one point devoting an entire sentence to the phrase "dumb move" as he issued a critique of Fed/Treasury/Government behavior since the onset of the financial system's woes. Mr. Kessler asserts, rightly so we believe, that the recent stock market rally is the result of the Federal Reserve's $1Trillion increase to the monetary base. To illustrate his point, Mr. Kessler includes an intriguing chart, which plots the WSBASE (via St. Louis Fed) and the Dow Jones Industrial Average for the period January-July 2009. For the most part, the WSBASE represents the sum of currency in circulation, plus reserve balances held by Federal Reserve Banks. The theory goes that even though the majority of Fed activity has focused on the purchase of Treasuries and Mortgage Backed Securities, the stock market has served as the primary recipient of the newly created portion of the monetary base.

So enamored were we by Mr. Kessler's 6-month WSBASEv Dow chart that we couldn't help create a similar chart; ours however includes the entire available time series of WSBASE data, beginning in 1984. We chose to use the S&P 500 as the comparison index, simply because the Dow is a rather poorly constructed index that doesn't lend itself to long term comparisons. For accuracy and presentation's sake we went with the logarithmic scale.

Many parents, determined to shield their children from unpleasant aspects of the world, are able to construct a fantasy world for the child that is devoid of any true responsibility. The problem is, the wonderland will inevitably be crushed by some inescapable reality of life.

Generally, Google is criticized as having failed to make significant inroads in terms of market share for any of the lines of business it has pursued outside of search/ad revenue - its bread and butter.

As an alternative, it might make sense for investors to consider the Claymore/Beacon Global Timber Index ETF (CUT). The fund's fact sheet outlines the following criterion for a stock's inclusion in the underlying index: