After opening lower stocks advanced in late morning trade and enter the final hour mixed. The June TIC Report showed net foreign purchases of securities increased to 44.4 billion, more or less the trade deficit as foreigners continue to finance our debts. Treasury and Agency issues remained popular while stocks and corporates both slipped for a second month.
The NAHB Index fell to 13 in August, any number below 50 indicates that most builders believe market conditions are poor, continuing its sharp descent from the tax credit induced peak seen at the end of April. The NE fell particularly hard losing 6 points to 18 while the West fell 1 point to 8. Still the Index remains far above its record low of just 8 seen in January of 2009.
The 1st Quarter Senior Loan Officer Survey is out with mixed results. Business lending standards eased somewhat while residential lending standards were mixed. Moving to the demand side and business lending shows mixed results while demand for residential mortgages improved, probably due to the rush to take advantage of the expiring homebuyer tax credits. So will see what happens next quarter.
The NY Fed manufacturing survey increased 2 points in August, despite weak internal numbers, New Orders went negative for the first time in over a year following a 13 point decline. More evidence that the inventory cycle is petering out, which implies the economy is failing in its transition to self-sustaining demand side growth, no surprises there.
Bank #110 went to the receivers last Friday, Palos Bank and Trust Company, Palos Heights, IL. Costs to the FDIC Deposit Insurance Fund have hit 18.93 billion this year. Well above the 15.33 billion the FDIC had allocated for closures during all of 2010, and that’s including the pre-paid assessments.
The latest example of how perverted our housing policy has become, comes from the FHA who while tightening the rules and standards at the low end of the market has also decided to guarantee loans on multi-million dollar New York condos. Never mind the 160 billion and counting we have thrown down the rat hole that is Fannie Mae and Freddie Mac.
China looks set to pass Japan as the worlds #2 economy this year and current forecasts estimate that the Chinese will pass the US by 2027 to become the worlds largest economy. That said the effects of the assorted relevant bubbles and current credit crises could well render such forecasts meaningless.
Hi and welcome to The Profit Motive, I’m your host Caleb Lawrence. Once upon a time in America the media acted as the watchdog of the corporations and the state. In the modern era it’s all about ratings and profits, opinion has been substituted for news and frequently is presented as fact. 
