Important News - Nov. 07

By Daniel at 7 November, 2009, 4:03 pm

Fannie Mae…up to $200 billion needed

The Washington-based company, which posted $101.6 billion in losses over the previous eight quarters, has already tapped $44.9 billion from the $200 billion emergency lifeline. “They’re going to need that $200 billion in capital, if not more, when this thing’s all said and done,” said Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia

1) What our green shoots look like…….. from St. Louis Fed (Graphs…Updated)

A) DMANEMP, All Employees: Durable Goods Manufacturing

B) NDMANEMP, All Employees: Nondurable Goods Manufacturing

C) UEMP15OV, Civilians Unemployed - 15 Weeks & Over

D) UEMP15T26, Civilians Unemployed for 15-26 Weeks

E) UEMP27OV, Civilians Unemployed for 27 Weeks and Over

F) MANEMP, Employees on Nonfarm Payrolls: Manufacturing

G) UNEMPLOY, Unemployed

H) UEMPMEAN, Average (Mean) Duration of Unemployment

I) EMRATIO, Civilian Employment-Population Ratio

2) Sri Lanka buying gold ‘to diversify reserves’

“COLOMBO — Sri Lanka’s central bank on Saturday said it has been buying gold to diversify its reserves amid volatile currency markets, days after India announced it had purchased 200 tonnes of the precious metal.”

3) Cost to the FDIC was another $1.5 billion

“The failure of United Commercial Bank is expected to cost the federal deposit insurance fund an estimated $1.4 billion; the failure of the other four banks a combined $132.7 million.”

4) RBI may’ve sold US T-bills to buy gold

““This purchase suggests that the Indian monetary authorities are seeking to change the composition of their foreign reserve holdings, most likely diversifying away from US Treasury securities,” said Nikhilesh Bhattacharya, an economist with the research arm of ratings firm Moody’s in a report.”

5) China/commodities

“China is, probably, diversifying investments from US treasuries to more stable commodity assets. While central banks of many countries, including China are increasing investment in gold, China appears to be using its foreign currency reserves for acquiring a basket of high consumption commodities also, both as a hedge against inflation and also as a hedge against possible raw material scarcity in future.”

6) TreasuryDirect shows debt at $11.99 Trillion

11,990,561,444,829.48

7) Public Pensions Face Ugly Choices…Bankruptcy, taxpayer bailouts appear inevitable. (Forbes)

“States and municipalities are in deep financial trouble. Pension performance has faltered. Over a trillion dollars worth of municipal pension fund assets have been erased in the recent market meltdown. The average public pension plan is 35% under-funded, and things are getting worse.

A wave of municipal bankruptcies could well follow.”

Retirement plan participation slips in 2008, EBRI says

“The world economic crisis helped reduce U.S. employee participation in retirement plans in 2008 to 40.4% of all workers….”

“Aside from a slight uptick in 2003, the percentage of worker participation has declined steadily since 1999, when 60.4% of full-time, full-year wage and salary workers ages 21 to 64 were enrolled in a retirement plan.”

9) Nathan’s Economic Edge November Monetary Trends info

Take a look at the graph of P/E ratio for the S&P

10) Senator Proposes Legislation to Break Up Large Firms

“Nov. 6 (Bloomberg) — U.S. Senator Bernie Sanders unveiled legislation requiring Treasury Secretary Timothy Geithner to name banks whose collapse may shake the economy and break up the firms in a year, fueling efforts to end taxpayers bailouts.

“If an institution is too big to fail, it is too big to exist,” said Sanders, a Vermont independent.”

………In Timothy Geithner’s defense I would just like to say that there was a crisis. Hey, I know we weren’t really sure what to do about the “banking” crisis, so the “too big to fail” bailouts were at least a way to show that something was being done, even if these bailouts didn’t make much sense. A sense of security and well being is therefore more important than getting a logical solution to a difficult problem in some circumstances.

11) The FDIC has quietly declared war on community banking.

12) Obama to Sign $24B Economic Stimulus Bill

13) Over 80,000 empty buildings and lots in Detroit alone. Whew!!!

14) We can easily hit 10.5% next month.

15) Consumer Credit: Dreadful

Consumer credit decreased at an annual rate of 6 percent in the third quarter of 2009. Revolving credit decreased at an annual rate of 10 percent, and nonrevolving credit decreased at an annual rate of 3-3/4 percent. In September, consumer credit decreased at an annual rate of 7-1/4 percent.