Residential Investment

Nightly Recap 3-26-2010

Posted by Investing Freak on March 26, 2010
General / Comments Off on Nightly Recap 3-26-2010

Market Summary:
DOW      +9.15 (10,850.36)
S&P        +0.86 (1,166.59)
Nasdaq  -2.28 (2,395.13)
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Disclaimer:
Open Positions:  SRS at 5.97
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Nightly News Links

US Economy:

Q4 GDP Revised down to 5.6% (from 5.9%) (Calculated Risk)
Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 5.6 percent in the fourth quarter of 2009 … Real personal consumption expenditures increased 1.6 percent in the fourth quarter. Note that PCE and Residential Investment (RI) – the two leading categories – were both revised down for Q4. This suggests that final demand was weaker in Q4 than in the previous two estimates.

Half of US Home Modifications Default Again (Bloomberg)
More than half of U.S. borrowers who received loan modifications on delinquent mortgages defaulted again after nine months, according to a federal report. The re-default rate of loans modified in the first quarter of 2009 was 51.5 percent by the end of the year, the Office of the Comptroller of the Currency and the Office of Thrift Supervision said in a joint report today. The figure, which measures payments at least 30 days late, climbed to 57.9 percent for changes made in the prior 12 months.

Treasury Planning Citi Stake Sale (New York Times)
The Treasury could unveil a preset trading plan next month for the sale of its 27 percent stake in Citigroup Inc, Bloomberg said on Thursday, citing people with direct knowledge of the matter. Citigroup shares rose 2.9 percent to close at $4.27 following the report, which soothed investor fears that the United States would dump large blocks of shares on the market.
The Treasury plan will lock the government into a schedule for selling its shares with the aim of eliminating any concerns that the sales are based on nonpublic information.

World Economy:

Greece is finally given their safety blanket (The Big Picture)
As has been hinted at for the past few days, Germany and France have agreed to involve the IMF in a joint backstop that will be there for Greece ONLY if they run into a funding crisis. Greece needs to raise about 20b euro’s by the end of May to meet upcoming maturities. ECB Pres Trichet who said he wanted to avoid using the IMF yesterday, said he was “extraordinarily happy that the government of the euro area found out a workable solution.” Greek debt is rallying, stocks are up 3% and the euro is higher.

Geopoltical Update: South Korean Ship Likely Hit By North Korean Torpedo, Emergency Security Meeting Held In Seoul (Zero Hedge)
Several South Korean sailors were killed and one of its naval ships with more than 100 aboard was sinking on Friday after possibly being hit by a North Korean torpedo, South Korean media reported. A South Korean vessel fired at an unidentified vessel towards the north and the South’s presidential Blue House was holding an emergency security meeting, Yonhap news agency said. South Korea’s YTN TV network said the government was investigating whether the sinking was due to a torpedo attack by the North. The network also quoted a government source saying it was unclear yet whether the incident was related to North Korea.

Goldman Joins Race for $10 Billion Polish Asset Sales (Bloomberg)
The Polish capital is luring international investment banks, including Goldman Sachs Group Inc., the world’s most profitable, as the government prepares record share offerings this year. The main lure is advisory work for the Polish government, which plans to sell stakes this year in its energy, insurance, chemical and phone companies to raise $10 billion to finance the widening budget deficit. The economy, the only one in the European Union to avoid a recession, and the Warsaw Stock Exchange, where the total value of listed companies has tripled since 2003, are also attractive, bankers said.
“It’s no wonder foreign banks are coming to Poland,”

Have a Good Night

-K

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