Nightly Recap 4-7-2010
Market Summary:
DOW -72.47 (10,897.52)
S&P -6.99 (1,182.44)
Nasdaq -5.65 (2,431.16)
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Disclaimer:
Open Positions: SRS at 5.97
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Nightly News Links
US Economy:
Consumers Climb Out of Their Bunkers... (TheBigPicture)
As we have previously exhorted, the consumer is “not quite dead, yet.” Indeed, the data suggests that after falling into a state of frozen panic during the credit crisis, there are signs of pent up demand being satisfied slowly but surely. I will be the first to admit that the year over year comparisons are against absurdly low levels, but it is improvements nonetheless. A slow, painful recovery still awaits us...
Consumer Credit Contracts from January Bounce (Back to June 2007 Levels) (Econompic)
Consumer borrowing dropped in February, after increasing for the first time in a year during the previous month, according to a government report released Wednesday.
Total consumer credit fell a seasonally adjusted $11.5 billion in February,Economists predicted a decline in total borrowing of $0.7 billion in February. "February's decline reflects on the still dire state of the economy," said Yasmine Kamaruddin, an economic analyst at Wells Fargo.
"Even if we have seen retail sales and personal expenditure increase in past months, we haven't seen these gains translate into the use of credit because consumers faced with unemployment and slow wage and salary growth are still shying away from taking on credit," she added.
Strip Mall Vacancy Rate hits 10.8% Highest since 1991 (Calculated Risk)
Vacancies at shopping centers in the top 77 U.S. markets increased to 10.8% in the first quarter ... according to Reis.It is the highest vacancy rate since 1991, when vacancies reached 11%. Retail landlords continued to lower lease rates to attract tenants during the first quarter, revealing that optimism about a recovery in retail sales has yet to translate into gains for shopping-center owners.
AIG Goes Parabolic As Repo Desks And Prime Brokers Pull Borrow And Force Short Covering (ZeroHedge)
The "Same Manipulation Different Day" continues, as the powers that be run out of tricks to drive the market higher. Today: a well known and much abused trick to prevent market drops in desperate situations: forced covering in fins. This has culminated with a ridiculous move in AIG in the last 30 minutes of trading. And there you have it. From the administration to State Street, from there to the Prime Brokers and various Repo Desks, and from there straight to the market which jumps on a forced cover, which is supposed to indicate that the economy is hot, hot, hot.
BofA to increase Foreclosures significantly in 2010 (Calculated Risk)
Bank of America, which currently forecloses on 7,500 homes a month nationally, will increase that number to 45,000 homes per month by December of 2010. Bank of America is projecting a 600% increase in its already large number of monthly foreclosures. This isn't unsubstantiated rumor; this comes straight from one of the most powerful men in Bank of America's OREO department. It appears they have too many properties already.
Could Larry Summers Be Leaving?(Fund My Mutual Fund)
"I found the reason for the selloff - it appears Larry Summers is throwing a temper tantrum and took his finger off the "buy SPY futures" button at any sign of weakness.
Tim Geithner, not Summers, has emerged as Obama's key adviser on financial matters, and that Summers isn't happy about it. I think Summers is going to leave sooner rather than later, possibly before the mid-term elections, and if not then, soon afterward. Why? Because Summers is frustrated by his role, and his colleagues are clearly frustrated with him. Some of Summers's frustration no doubt stems from his wanting to be Treasury secretary. When that plum went to Geithner, Summers cast his eye on the Fed chairmanship and agreed to bide his time until Ben Bernanke's term ended. But Summers didn't get the Fed job either. Apparently that didn't sit well.... for more click on link above and it appears that Larry has left a comment as well (if thats the real Summers)
World Economy:
Greek Debt Hits New Fresh Record Of 410 Bps, National Bank Of Greece Tumbles As Greece Now Seeks Arab Money(Zero Hedge)
The whole world is fully aware that Greece is done, and now even the traditional long-term holders have thrown in the towel: the entire Greek curve has melted up more than our own S&P - Bloomberg now notes that even US accounts whose risk memory is non-existent, may not be willing buyers of Greek debt. Of course Greece can join the SEC in blaming the shorts, but that's an old tune. And the biggest and most supreme irony, bankingnews.gr reports that Greece is now seeking emergency capital from Abu Dhabi and other Arabic sources... As if they didn't have a Dubai of their own.
Vietnam Begins to Lure Business Away from China(Fund My Mutual Fund)
The communist nation drew 13.5 percent of the Association of Southeast Asian Nations’ foreign direct investment pool in 2008, up from 4.4 percent two years earlier, according to the 10-member group. And its allure may be rising, judging from a December survey by the American Chamber of Commerce in Shanghai. Vietnam is a preferred destination for businesses looking to relocate from China, Asia’s biggest investment recipient, the report said. Intel, the world’s biggest chipmaker, is scheduled to open a $1 billion testing facility in Ho Chi Minh City this year that will employ about 4,000 people. Samsung Electronics Co., the world’s second-biggest maker of mobile phones, opened a $1 billion factory in Vietnam six months ago. The number of foreign companies in China with plans to relocate plants inland or outside the country because of rising costs doubled last year.
Nightly Recap for April 6 doesn't exist because i only found 2 articles that struck me as important.
Have a Good Night
-K
