Recession watch: April

[innonimatu]

FASB relaxed rules on Fair Value. Thats pretty big.

And as a consequence the chairman of the Federal Home Loan Bank System reportedly resigned rather than endorse those bank's financial statements.

 

[kronic]

So America is pledging more regulation at the G20 summit and does the exact opposite of it at home? Yay.

 

[Godwynn]

WASHINGTON (AP) -- The nation's unemployment rate jumped to 8.5 percent in March, the highest since late 1983, as a wide range of employers eliminated a net total of 663,000 jobs.

The Labor Department's report is fresh evidence of the toll the recession has inflicted on America's workers and companies.

The latest tally of job losses was slightly higher than the 654,000 that economists expected. The rise in the unemployment rate matched expectations.

Yahoo! Finance

 

[Integral]

BLS release -

THE EMPLOYMENT SITUATION: MARCH 2009


Nonfarm payroll employment continued to decline sharply in March (-663,000),
and the unemployment rate rose from 8.1 to 8.5 percent, the Bureau of Labor
Statistics of the U.S. Department of Labor reported today. Since the recession
began in December 2007, 5.1 million jobs have been lost, with almost two-thirds
(3.3 million) of the decrease occurring in the last 5 months. In March, job
losses were large and widespread across the major industry sectors.

Unemployment (Household Survey Data)

In March, the number of unemployed persons increased by 694,000 to 13.2 mil-
lion, and the unemployment rate rose to 8.5 percent. Over the past 12 months,
the number of unemployed persons has grown by about 5.3 million, and the unem-
ployment rate has risen by 3.4 percentage points. Half of the increase in both
the number of unemployed and the unemployment rate occurred in the last 4 months.
(See table A-1.)

U3/U6 spread: 710 basis points
Nonfarm payroll employment: 133,019,000



ISM services -

March 2009 Non-Manufacturing ISM Report On Business®
NMI (Non-Manufacturing Index) at 40.8%

DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report's information reflects the entire United States, while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. The information compiled in this report is for the month of March 2009.

Business Activity Index at 44.1%
New Orders Index at 38.8%
Employment Index at 32.3%
Some Industries Expect to Benefit From Economic Stimulus Package

(Tempe, Arizona) — Economic activity in the non-manufacturing sector contracted in March, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business®.

The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee; and senior vice president — supply management for Hilton Hotels Corporation. "The NMI (Non-Manufacturing Index) registered 40.8 percent in March, 0.8 percentage point lower than the 41.6 percent registered in February, indicating contraction in the non-manufacturing sector for the sixth consecutive month at a slightly faster rate. The Non-Manufacturing Business Activity Index increased 3.9 percentage points to 44.1 percent. The New Orders Index decreased 1.9 percentage points to 38.8 percent, and the Employment Index decreased 5 percentage points to 32.3 percent. The Prices Index decreased 9 percentage points to 39.1 percent in March, indicating a faster decrease in prices from February. According to the NMI, one non-manufacturing industry reported growth in March. Respondents remain concerned about the negative economic outlook and rising unemployment. A special question was asked with regard to the Economic Stimulus Package, and eight of the 18 industries expect to derive some benefit from the stimulus." (See Special Questions section at the end of this release for more information.)

 

[amadeus]

So America is pledging more regulation at the G20 summit and does the exact opposite of it at home? Yay.

We're doing less regulation? Have you been following the news since January 21st?

 

[mrt144]

And as a consequence the chairman of the Federal Home Loan Bank System reportedly resigned rather than endorse those bank's financial statements.

They're not all bad, see?

 

[innonimatu]

They're not all bad, see?

All the more reason to finish the careers of the bad - before the others are all driven off in disgust!

 

[kronic]

We're doing less regulation? Have you been following the news since January 21st?

Sure. I also read post #15 in this thread. But it looks like Europe isn't far behind.

In other news, it seems as if the UK was preparing to ask for IMF support:

A senior Cabinet minister said, however, that the new fund would not be like the 1970s version and should not be seen as such. He said there would be nothing wrong if America or Britain used the facility.

He said: "Previously a country would only go if they were in a very bad state. It was a bit like going to accident and emergency to get urgent help.

"This new facility will not be like that. It is a bit more like getting wellbeing care or even like going to a spa to recuperate."

Sure. Full story: http://www.telegraph.co.uk/finance/...tain-should-not-fear-asking-for-IMF-cash.html

 

[Integral]

Textbook example of how not to structure an incentive set:

Tim Geithner warned on Sunday that the US government would consider ousting board members at American banks as a condition for giving the institutions “exceptional” assistance in the future

Source: FT

 

[Mise]

Ireland raised their taxes again, apparently at the behest of investors who now see Ireland's scarily rising debt as unsustainable and unrepayable, without rises in taxation. (The idea being that if Ireland's government gets its budget under control, demand for Irish gov't bonds would increase, reducing the cost of debt for the rest of Ireland too.)

 

[mrt144]

Textbook example of how not to structure an incentive set:



Source: FT

Geithner can't do anything right!

 

[JerichoHill]

Actually no, Geithner's done many things right. However, we're in the midst of a bad recession and random shocks continue to occur. It's not exactly an easy job. I'd like to see you try.

PS: I would NOT want Timmy's job

 

[Snorrius]

Actually no, Geithner's done many things right. However, we're in the midst of a bad recession

I wonder when people will make another step, and start talking about light depression...

 

[JerichoHill]

I wonder when people will make another step, and start talking about light depression...

Not going to get to depression status. A longer drawn our 79-81 recession seems to be our current trajectory

 

[amadeus]

I wonder when people will make another step, and start talking about light depression...

There's no "light depression," there's a depression... and the conditions for a depression are not yet in existence.

 

[Godwynn]

I think it was Krugman's blog about the time it will take to get unemployment back to where it was before the recession. He used the early 80's recession as an example.

 

[mrt144]

Actually no, Geithner's done many things right. However, we're in the midst of a bad recession and random shocks continue to occur. It's not exactly an easy job. I'd like to see you try.

PS: I would NOT want Timmy's job

I'd like to try. But I'm not a former Goldman Sachs employee so I don't have the connections or clout.

 

[Snorrius]

There's no "light depression," there's a depression... and the conditions for a depression are not yet in existence.

I was slightly sarcastic here. It is funny how mainstream "experts" and analysts are slowly changing their predictions from "light recession" to something more and more grim. And after all if someone was predicting "light recession", why we can not expect predictions about "light depression"?

 

[Theige]

Wells Fargo issued guidance today predicted a profit of $3 Billion for 1Q 2009. They will report their full results later this month.

Spoiler :

NEW YORK (CNNMoney.com) -- Wells Fargo delivered a much-needed bit of good news for the banking sector Thursday, saying it expected to book a better-than-expected profit of approximately $3 billion in the most recent quarter.

The announcement not only sent Wells Fargo (WFC, Fortune 500) stock 25% higher in midday trading, but boosted shares of many other big banks as investors bet that Wells' peers may also post results that exceed Wall Street's estimates. Bank of America (BAC, Fortune 500), which will report its results on April 20, gained 30%.

Originally slated to deliver its results later this month, the San Francisco-based Wells Fargo issued guidance for the first quarter, saying it expected to report a record profit of about $3 billion, or 55 cents per common share. Expectations are for the company to book a profit of 28 cents a share, according to Thomson Reuters.

"Our business momentum is strong, and we expect our operating margins to remain at the top of our peer group," Wells Fargo CEO John Stumpf said in a statement.

Wells Fargo attributed the strong results to healthy lending margins driven by lower interest rates, fewer additional costs related to its purchase of Wachovia and a boom in mortgage activity.

Mortgage applications surged during the quarter, with the company reporting $83 billion in applications during the month of March alone.

Their only quarterly loss was last quarter, losing $2.7 Billion.

Wells Fargo seems to be by far the healthiest of the big banks, being the only bank to maintain a AAA rating by the S&P and having profited $2.6 Billion for the full year 2008. Hopefully they aren't blowing smoke out of their ass, and the other big banks report positive results as well!

 

[Godwynn]

Deutsche Welle

German exports for the month of February have plummeted to their lowest level since 1950, following a similar decline in January. The drop means Europe's largest economy will contract more than expected.