Its travellin’ time, as most traders are en route back from where they were for Turkey day.
For those of you left behind, here’s a nice scorecard from the (free) WSJ re: the many firms that are blaming the subprime meltdown, housing slowdown and credit
crunch for weaker-than-expected results.
Here’s the WSJ chart
of
companies that have cautioned of an impact in recent months:
Source:
Subpar Earnings: Companies Blame Housing, Credit Problems for Weakness http://online.wsj.com/public/resources/documents/info-retro-subpar20070925.htm?&s=2&ps=false&a=up
Coming next, property causualty insurers. Obviously as home values decline, so too insured values. This plus “fire equity” mortgage withdrawls. Anyone interested in the phone number of Tony “the torch” please contact me for my referal rate at……..oh never mind!
were these company attributing the robustness of their earlier earnings on cheap available credit housing strength, and massive MEW????
I am unlike most observers, as I fully expect blow out sales this holiday. For a consumer led recession to happen, the consumer has to know they have to stop spending. Joe six pack still has access to all kinds of credit lines, and that $4000 plasma TV financed over 10 years is not that much on a per month basis. The sad thing is when you finance everything right down to your gas and groceries, you are commiting all your income now and all increases later on to servicing escalating debt. The consumer is priced to perfection in this way. While it is a dumb way to go through life, it does support high levels of consumption!
JJL give it a rest asshat !
Did JJL say anything that warranted the uncoveted “asshat” label? I don’t think so…
I agree it takes consumers a long time to notice their behavior is unsustainable and even longer to change. Is “now” their moment of awakening? JJL might be right.
No?
FYI, someone posted YOY container shipment figures a few days ago. So, even if holiday sales are higher, it’ll be thanks to dollar depreciation, IMO. But, in the nominal sense, JLL might be right.
Just defending his/her right to his/her opinion…
Three little piggies and the Big Bad Wolf: How many houses of brick were built in the last 13 years? Painfully few. Ignorance bought the straw houses; greed financed them; shrewd smarmy bright Ivies connived derivatives that disguised and atomized the underlying real estate assets.
Humpty Dumpty sat on a wall… and all the kings men… couldn’t put the pieces together again.
However can the CDOs SIVs & etc ever be valued? They can’t. Thus, virtually all will have to be written down.
Royal Bank of Scotland Group chief credit strategist Bob Janjuah put out a report estimating that the credit crunch will cause $250 billion to $500 billion of losses at banks and brokers around the world. (WSJ Nov 7)
Somebody tell me how it can be otherwise. And Janjuah is only talking about the financial institutions.
“Fasten your seatbelts. It’s going to be a bumpy night” and a long one.
Classic, picked this off a poster a Mish’s Blog
“Few economists expect a slump.”
Two economists were hiking in the wilderness. One unrolled a map, and after much study pointed into the distance: “See that mountain over there? That’s where we are!”
WOW!
Not sure what that guys problem is. I am just saying sales this year will still be good, as credit is still to easy. I don’t think that idea makes me a shill.
There is blowout day in the making in Asia.
http://finance.yahoo.com/intlindices?e=asia
Hold on to your shorts boys and gals! Pun intended…
Maybe it’s a reaction to a Bush clone going down in Australia? All Ordinaries up 2% right now.
Love your blog Barry,
If I might make a request, perhaps you can comment on the latest pronouncements of Nouriel Roubini:
http://www.rgemonitor.com/blog/roubini/227330
http://www.rgemonitor.com/blog/roubini/228668
He also argues we can forget about decoupling:
http://www.rgemonitor.com/blog/roubini/228535
I would be less afraid if he (and you) hadn’t already been right about everything so far (timing notwithstanding).
JJL, I would be in more agreement, if this was 2003 – 4 or five, because all my research/reading suggest that the consumer’s gas tank is quite close to empty – they have been over leveraging themselves for several years now, credit card defaults are up, not down.
It’s obvious why the market is selling off, with a 4% GDP the growth must be in some other companies, in other indexes.
Any one else think that it’s not that the Dollar is over-sold, or at least they have stopped throwing good money after bad, and the dollar is under-purchased.
That other countries are working on decoupling.
I’m fairly nervous that if the fed plays game of chicken with the dollar… we all could lose.