March 31 10:34 AM

Are Americans Already Back to Their Old Ways?Financial-Planning reports: While 63% of Americans said they were concerned about the overall state of financial markets in 2009, just 45% said they were concerned in 2010. Nervousness and fear about retirement dropped from 55% who were nervous or afraid last year to just 40% this year. American’s concern about having enough money to retire has fallen from 56% in 2009 to 51% this year, the same as in early 2008, the study found.“The number of people who reported being concerned about issues such as day-to-day expenses, education costs, paying off credit cards, and saving for big ticket purchases didn’t just decline – each category hit a four-year low.”Which leads us to this morning’s personal consumption and expenditure report. To the NY Times:
 
Housing and the Paradox of Credit Credit Bubbles, Equity and Demand  – There is an unresolvable paradox at the heart of the government’s desperate attempts to keep housing prices from falling any lower: the government must either reinflate housing values or at least maintain them at current levels, lest owners and lenders lose all their capital/collateral.  But keeping house prices artifically inflated to save owners and lenders who borrowed/lent during the bubble means that prices will remain unaffordable to qualified buyers (i.e. those who actually meet prudent lending standards, not government giveaway programs like the FHA 3% down payment, the $8,000 tax credit, etc.) Without organic demand (demand from truly qualified buyers), then there is nothing to keep prices artifically high; over-supply and limited demand lead to lower prices.
 

Think Tank: FinReg edition – Since the blog — and Washington — is shifting focus from health-care reform to financial-regulation reform, this week’s Think Tank is something of a primer. As it happens, all the links are to reports put out by the Roosevelt Institute, because it has been publishing the best introductory articles by far. For anyone who has the time and the inclination to really get up to speed, download the whole of the ‘Make Markets Be Markets‘ report (pdf). For those who want selections, here are my favorites:

  • 1) Mike Konczal writes up Financial Reform 101. Anyone who doesn’t feel up to speed on FinReg should start here.
  • 2) Richard Scott Carnell explains that "in banking, the debacle was above all a regulatory failure."
  • 3) Elizabeth Warren makes the case for a Consumer Financial Protection Agency.
  • 4) Raj Date argues that it’s time to get ride of Fannie and Freddie.
  • 5) Rob Johnson lays out what it will take to end the ‘Too Big to Fail’ threat.

  The Wall St. Lobby’s Flip-flop – If you need any more reason to distrust Wall Street’s lobbying armada, which has spent millions to undercut a new financial reform bill, then look no further than an op-ed from Elizabeth Warren, the staunch consumer advocate and bailout watchdog, published today. In it, Warren highlights the utter hypocrisy of the banking lobby’s aim to neuter, if not outright kill, a new, independent consumer financial protection agency. Among the banking lobby’s top talking points for fighting this consumer agency is that it would separate what’s called "safety and soundness" regulation consumer protection measures, like cracking down on predatory lenders, usurious interest rates, and unfair credit card penalties.

  Home prices inch up, but analysts fear rebound is fading… Home prices rose modestly in January, according to a closely watched index released Tuesday, but some housing industry analysts remain concerned about the sustainability of the housing sector rebound.  Home prices in 20 cities tracked by the Standard & Poor’s/Case-Shiller home price index rose 0.3 percent on a seasonally adjusted basis in January compared with December. That was the eighth consecutive monthly increase in the index. Compared with the same period a year earlier, prices were down 0.7 percent.

 
  Obama Signs Overhaul of Student Loan Program – NYTimes – President Obama signed legislation on Tuesday to expand college access for millions of young Americans by revamping the federal student loan program in what he called “one of the most significant investments in higher education since the G.I. Bill.” Mr. Obama went to a community college where the wife of his vice president teaches to draw attention to the student loan overhaul attached to the final piece of health care legislation that passed last week. In signing the bill, Mr. Obama put the final touches on his health care program but used the occasion to highlight the education provisions.
 
The net energy of pre-industrial agriculture – Following on from yesterday’s discussion, I want to make a point that seems like it must have been made before, but I cannot quickly find a good discussion of it.  That is that the net energy of pre-industrial agriculture, taken as a whole energy-gathering system, must have been low, with EROEI probably on the order of 1.1-1.6 depending on place and time. Prior to the industrial revolution, the main source of primary energy in society was biological – agriculture and forestry, with a significant assist from water mills.  The biological energy was used to feed horses (used themselves in ploughing, but also in transportation), as well as agricultural workers.  The water-mills were primarily used to mill flour (ie also used in agricultural production, for the most part).
 
Saudi’s Al-Naimi ’Hopes’ Oil Stays in $70-$80 Per Barrel range  (Bloomberg) — Saudi Arabian Oil Minister Ali al- Naimi said he “hopes” prices remain in the $70-a-barrel to $80-a-barrel range, signaling the world’s largest producer may be willing to boost output if crude accelerates further. The country could boost production by as much as 4.5 million barrels a day and is “waiting” for demand to rise after increasing capacity to 12.5 million barrels, Al-Naimi told reporters yesterday in Cancun, Mexico. Prices in the $70-to $80- range are “as close to perfect as possible,” he said, adding today that he “hopes” prices remain in that range.
 

Alan Schram: Where Did Inflation Go? – For those concerned about incipient inflation resulting from the gargantuan monetary expansion we had over the past 18 months and the budget deficits we are still running, the lack of inflation is confounding. One explanation is that the Consumer Price Index is inaccurate and misleading. For example, a third of the consumer price index is Owners’ Equivalent Rent, an artificial addition put into the CPI in 1980. In the go-go years of housing, real estate prices were up much more than the Owners Equivalent Rent, and the actual cost of living went up by about 7%. The CPI did not reflect that. Remove housing costs from the CPI, and inflation is back. In January the CPI was up 5.8% on an annualized basis, excluding owners-equivalent rent.

 
U.S.-Bound Boxes Pile Up in Asia as Lines Avoid Adding Ships – A capacity crunch on transpacific routes has disrupted deliveries of Asian and U.S. exports, prompting a probe by U.S. regulators. Container lines have cut trips and imposed higher rates on customers, or shippers, after slumping trade and an excess supply of vessels caused industrywide losses of about $20 billion last year, according to Drewry Shipping Consultants Ltd. “With the economy recovering, we have been seeing a lot of containers that didn’t make it out on time because there wasn’t enough space on ships,”
 
 ATA Truck Tonnage Index Fell 0.5 Percent in February The American Trucking Associations’ advance seasonally adjusted (SA) For-Hire Truck Tonnage Index decreased 0.5 percent in February, following a revised 1.9 percent increase in January. The latest drop put the SA index at 108.5 (2000=100), down from 109.1 in January.  The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 97.6 in February, down 0.8 percent from the previous month.   Compared with February 2009, SA tonnage increased 2.6 percent, which was the third consecutive year-over-year gain.  For the first two months of 2010, SA tonnage was up 3.5 percent compared with the same period last year.  For all of 2009, the tonnage index contracted 8.7 percent, which was the largest annual decrease since 1982.

 

 
Shiller: 50-50 Chance For A Double Dip In Housing Market…Bloomberg TV video: Robert Shiller said there is a "50-50" chance that a double-dip will occur in the housing market.
 
 

 

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