Japan stepped up their purchases of United States Treasuries during October to $105 billion dollars, boosting their total holdings of United States Treasury Issues to $731 billion, more than 10 percent of the total market. Japan and China are typically the largest purchasers, by far, of United States Treasuries. Why do we care about this?… Read more

The United States unemployment rate rose from 9.8 percent in September to 10.2 percent in October, exceeding our forecast and the consensus forecast. We appear to be in-between everyone else and reality again. The data, either quarter-on-quarter or year-on-year, indicate ongoing job losses that are typical for a serious recession. We have said in the… Read more

Carry trade is the name of the strategy of going short in a low-interest rate currency such as the Japanese Yen or the U.S. dollar while going long in a high-interest rate currency such as the New Zealand dollar. Commentary about the carry trade has reached a high pitch. Professor Roubini asserts that it will… Read more

Recent United States economic indicators have provided mixed signals. Measures of GDP, industrial production, factory orders, and trade have been encouraging while homeownership rates, foreclosure rates, and bank charge-offs still remain discouragingly high. A manufacturing rebound would be a welcome boost to the still-ailing United States and World economies. However, the ongoing weaknesses in housing… Read more

The United States government reported that real Gross Domestic Product increased at a seasonally adjusted annualized rate of 3.5 percent in the third quarter. Improvements in Consumer Durables consumption, up 22.3 percent, and Residential Fixed Investment, up 23.4 percent, were the key components driving the increase. Both of these gains were in turn driven by… Read more

This recession and its accompanying financial crises started with large financial institutions making headlines with bad loans, liquidity problems, and in many cases insolvency. The driving factors at that point were the toxic residential-real-estate-based securities filtering their way through the financial system. Many large financial institutions were highly exposed to securitized packages of residential mortgages… Read more

I was reviewing new data from DataQuick Information Systems. There were 111,689 California Notices of Default (NODs) during the third quarter. While this is down from 124,562 in the second quarter, it is still an enormous number, see the chart below. Foreclosures rose from 45,667 to 50,013. There is massive heterogeneity across the state with… Read more

California’s jobs report, released Friday the 16th, showed that the California economy is still bumping along the bottom of a serious recession.  The various indicators, for the month of September, show only slight improvements over August.  There was a slight improvement in the seasonally adjusted unemployment rate from 12.3 percent to 12.2 percent.  There was… Read more

The Economic news is mostly negative today with Consumer Confidence dropping below the consensus forecast. MGIC, the nation’s third largest mortgage insurer, posted a third quarter $518 million loss after a record number of homeowners failed to meet their mortgage payments. Bank of America posted a $2.2 billion loss, although $400 million of that was… Read more

United States third quarter foreclosure rates rose substantially, 23 percent higher than last year, according to RealtyTrac Inc. Almost a million homes received a default, auction notice, or were repossessed by banks in 2009 quarter 3. About one in every 136 U.S. households received a filing, the highest since January 2005. Analysis by the Amherst… Read more