Thursday, August 7, 2008

Don't Read Between the Lines-U.S. Government

Please don't. Because if you actually take 3 seconds to explore the ridiculous numbers the government puts out, it could make you ill. Seriously ill. "According to the Zillow survey of homeowners, conducted by Harris Interactive, nearly two-thirds of U.S. homeowners think that the value of their own home has increased or remained stable over the last 12 months." That's right. But most of those surveyed also thought that their neighbors' property had decreased in value. What planet is this on? Even the numbers put out today, which have a mere 15% margin of error, revealed that home prices in the scant thriving areas of the U.S. such as Texas, are heading down. Mortgage rates have gone up, 40% of inventory is composed of foreclosures and bank-owned homes (not even including auction homes), and well, you now know about the adverse market delivery charge. Even yesterday, with Freddie Mac laying more tracks to the Treasury bailout room, had an uptick.

The veil has been lifted. Citi and BAC are being sued by no less than 12 plaintiffs. Having to buy back these ARS is not the same as CDOs, but another chink in the transparency of these companies.

Referencing a company I mentioned months ago prior to the dismal March employment numbers, Trimtabs offers a much more realistic estimate of job losses than the BLS by looking at data such as actual payrolls. As Igor Greenwold wrote, they thought the economy lost 169K jobs last month, not 51K. The government insists it's hiring practices keep unemployment in check. With cost-cutting moves such as that offered by the governator, why bother? How the hell are 200K people going to live on minimum wage in California?

AIG's continued demise is a boon to our GNW short. Hey, at least they're fessing up to some of their losses. Genworth is holding out on writing down over $3 billion in assets. That check will come due sooner than later.

1 comment:

Tiger Coach said...

Another couple days like this one and the SEC will ban shorting stocks all-together. Then again, we only ask that Wall Street come clean.

BIG WEEK starting Tuesday 8/11/2008 with economic data. Retail and consumer confidence numbers. Wednesday big with inventories and retail (date set for SEC ban to expire). Thursday is HUGE!!!