Headlines...

NEW -> Contingent Buyer Assistance Program
The space coast newspaper has an article on Port Canaveral, which certainly isn't the biggist fish in the sea of ports. Traffic is down due to less lumber and cement being imported. Even the gambling cruises are down 2.2%.

They report your biggie ports are flat.

Just how long ahead of time are lumber and cement ordered? Got to be a lagging indicator. Somebody must think that construction is not going to recover in a long time.
 
got cash?

http://research.stlouisfed.org/fred2/series/BOGNONBR?cid=123

BOGNONBR_Max_630_378.png


Check out the last week at the bottom of the chart

http://www.federalreserve.gov/releases/h3/Current/

From http://research.stlouisfed.org/fred2/series/NFORBRES?cid=123

NFORBRES_Max_630_378.png
 
Financial markets still unsettled, Lockhart says

By Rex Nutting, MarketWatch

Last update: 12:47 p.m. EST Jan. 7, 2008

WASHINGTON (MarketWatch) -- The biggest danger to the U.S. economy right now is that financial markets could remain unsettled, said Atlanta Fed President Dennis Lockhart on Monday.

In remarks prepared for delivery in Atlanta, Lockhart delivered a "sober" message about the economic outlook, stressing the uncertainty about the outlook for both growth and inflation. Read the full text.

"The negatives in our economy may be gaining momentum," he said. Policymakers must respond "pragmatically."

Lockhart participates in discussions in the Federal Open Market Committee, but is not a voting member this year.

Lockhart said he expects "sluggish" growth in the first half of the year before a gradual improvement. He expects inflation to moderate in 2008, but said his forecast could be too optimistic.

"I'm troubled by the elevated level of inflation," he said.

"To a large extent, my outlook for this year's economic performance hinges on how financial markets deal with their problems," he said. "The coming weeks could be telling."

"The pivotal question -- the central uncertainty -- is the extent of current and future spillover from housing and financial markets to the general economy," Lockhart said. The effect of falling home prices on consumer spending and the impact of distressed credit markets on business investment will be the keys to the economy's performance in 2008, he said.

Lockhart urged financial firms to come to the confessional and disclose their potential losses.

"To restore market confidence, leading financial firms, I believe, must recognize and disclose losses based on unimpeachable valuation calculations, restore capital and liquidity ratios, and urgently execute the strenuous task of updating risk assessments of scores of counterparties," he said.

The imbalances in the housing, mortgage and credit markers may need "much of 2008 to play out," he said. But he was optimistic that markets would adjust.
 
America's inflated asset prices must fall

By Stephen Roach, chairman of Morgan Stanley Asia

http://news.yahoo.com/s/ft/20080107/bs_ft/fto010720081324550910;_ylt=Aowq_522SCo0vjzHOs.Lr5b2ULEF
 
Pending Sales of Existing U.S. Homes Fell in November (Update1)

http://www.bloomberg.com/apps/news?pid=20601087&sid=apXVernpcSqw&refer=home

Jan. 8 (Bloomberg) -- The number of Americans signing contracts to buy previously owned homes fell more than forecast in November, signaling further deterioration in housing.

The National Association of Realtors' index of pending home sales decreased 2.6 percent to 87.6, following a 3.7 percent gain in October that was larger than previously estimated, the group said today in Washington.

...

Tougher lending rules are adding to market woes. A third of planned home sales were canceled or delayed in September, October and November because of loan problems, according to the results of a survey of 2,416 real-estate agents issued yesterday.
 
The newest post on the Calculated Risk blog confirms what we've discussed about banks, and their fear of liquidity. Not only are they hoarding cash that they borrow from the FED, but they are keeping deposit rates high. The banks are neglecting their interest income in order to build up reserves. IMO, this confirms they are in survival mode.
 
Can any one explain to me why the the 10 Year Treasury jumped after the feds cut rates, but has since continued on its steady fall downwards?

I thought the effect would have been the opposite?

Anyway, I'm in the market for a new home and I don't want to catch the falling knife so I'd like to get the low rate and low price.

I found a new site that seems pretty cool for viewing property www.beekast.com. Its like the youtube of realestate. I think I found the house I want on it.
 
Investment professionals' "shortsightedness" led them to make fundamental errors that led to the mortgage crisis and credit meltdown, St. Louis Federal Reserve President William Poole said Wednesday.

Poole said five key mistakes were made, and professionals made four of them.

"I can understand the mistakes many financially naïve borrowers made but have a hard time understanding how so many investment professionals could have been so wrong," he said in the prepared text.

"Many observers point to greed, but I prefer a different explanation. Shortsightedness rather than greed explains actions that led to losses of tens of billions of dollars and the failure of many financial firms."

Poole's list of five key mistakes:

Borrowers took on mortgages they could not afford.

Mortgage brokers put too many people in unsuitable mortgages. They knew, for instance, that adjustable-rate mortgages probably wouldn't be right for many borrowers if interest rates rose as the market expected.

Investment banks jeopardized their reputations by securitizing mortgages without doing due diligence on the underlying assets, many of which were based on "inadequate or spurious information."

Rating agencies put their stamp of approval on securitized mortgages without considering whether AAA ratings could be maintained if house prices fell.

Investors scooped up those securities without doing adequate analysis first. "Investors too readily accepted the AAA ratings at face value," Poole said. "A reach for yield with inadequate attention to risk in another basic lesson that apparently cannot be relearned often enough.

>

"There are no new lessons here," he said. "The mistakes that brought us to this point have been made before."
 
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