Posts from ‘April, 2010’

First Quarter GDP registered +3.2% a decent preliminary figure it came in slightly below the 3.6% that was expected. Personal Consumption Spending increased 3.6% the largest increase in 3-years thanks to a drop in the savings rate. The inflation measuring Implicit Price Deflator increased .9% meaning that wages fell .5% during the 1st quarter on a real basis casting a shadow over the strength of personal consumption spending

The Chicago Fed National Activity Index continues to suggest that the recession is indeed over coming in at -.07 in March.

Goldman Sachs attempts to explain itself on Capitol Hill. Attempts that didn’t go very well, I guess its always difficult explaining an apparent lack of ethics and that profits come first and everything else takes a back seat including your clients.

Barofsky says the question of whether the New York Fed engaged in a coverup will result in some sort of action. “We’re either going to have criminal or civil charges against individuals or we’re going to have a report,” Barofsky says. “This is too important for us not to share our findings.”

Talking about lawyers who bring enforcement actions and the approval process of their superiors before said action sees the light of day. The former SEC attorney noted that during the Bush years enforcement actions rarely made it past the commissioners.

It should also be noted relative to asset bubbles, class does not matter, that when the price curve distorts by 3 standard of deviations or more. The normal price curve always overshoots on the way down prior to achieving equilibrium usually by 20-30% of the abnormal upward distortion.

The government seems to be finally getting on the trail and going after the miscreants that were instrumental in creating this fiasco. A Senate investigation into the Credit Ratings Agencies, Moody’s, Standard and Poors, Fitch’s etc. found that said ratings agencies happily sold themselves for a small fee of course slapping investment grade ratings willy-nilly on just about everything when in fact it was actually anything but investment grade.

Existing home sales increased 6.8% to 5.35 million units seasonally adjusted, months supply fell to 8 while the median price increased to $170,700. The usual spring bounce is underway influenced this year by the expiring Federal Tax Credit so it’s hard to draw any meaningful conclusions from the data.

Goldman Sachs Top 10 Excuses – David Letterman

The significance of impaired balance sheets (too much debt) and the resultant effect on loan demand should not be over looked this is classic credit bust. I have pointed this out repeatedly over the last few years, citing the Fed’s Senior Loan Officer Survey and other metrics.