Initial weekly unemployment claims increased to 429,000. While the DOL reports this is a increase of 9,000, last week was revised upward by 6,000, from 414,000 to 420,000. The 4 week moving average is 426,250. A weekly average above 400,000 does not indicate job growth and we now have a pattern of perpetual disaster for U.S. citizens trying to earn a living.
Q1 GDP 2011 came in at 1.9% for the third revision, one tenth of a percentage point higher than the second revision. Here is the original BEA GDP report.
New Orders in Durable Goods increased +1.9% for May 2011. April was significantly revised to -2.7% from -3.6%.
Core capital goods new orders increased +1.6%, after declining -0.8% last month. Core capital goods is an investment gauge for the bet the private sector is placing on America's future economic growth.
For all transportation equipment, new orders jumped +5.8%. Our volatile air-o-planes caused the increase, up 36.5%. Defense aircraft increased also, 5.5% and motor vehicles survived with a 0.6% increase.
We now have two increases in new orders for the last three months, with April being the plunge from hell.
Just unbelievable. Seems by hook or by crook Obama is doing exactly what his corporate donors demand he do. That's import more foreign workers to take American jobs.
New America Foundation's Barry Lynn & Philip Longman talk about monopolies, anti-trust and how that's killing job creation. One topic overlooked is massive consolidation. We've seen this many a time, large multinationals buy up the competition and then slash and burn the staff with massive layoffs and outsourcing. Right now we have AT&T buying T-Mobile and how many cannot find decent cell service for less than $100 a month?
Welcome to the weekly roundup of great articles, facts and figures. These are the weekly finds that made our eyes pop.
Since 1953, the Communist Party of China has used a series of five-year plans to guide China’s economic and social development. In its newly-adopted 12th Five-Year Plan China makes clear that it hopes to move up the manufacturing value chain by making explicit mention of Strategic Emerging Industries, which the Chinese government would like to see dominated by Chinese firms. These industries are: New-generation information technology, high-end equipment manufacturing, advanced materials, alternative-fuel cars, energy conservation and environmental protection, alternative energy, and biotechnology. China’s goal is to take the Strategic Emerging Industries from a current combined share of 3% of Chinese GDP to 8% by 2015 and 15% by 2020.
Anyone name America's 5 year plan? Beyond destroying the U.S. middle class and American workforce, can anyone even think of one? China, on the other hand, is methodically going about dominating a host of advanced technology industries and capturing our jobs in that process.
There hasn't been much in the way of justice for the average citizen for quite a while. Often, those accused of crimes cannot afford adequate representation and are subject to "let's make a deal justice." If you're unfortunate enough to be sued or party to a divorce proceeding, you soon learn that the court system is an entitlement program for attorneys, not a civilized means of settling disputes. (Image)
The last decade has been devastating for what many thought were inviolable fundamental rights. The Bush administration dismantled as much of the Constitution as time allowed including habeas corpus which prevents detention without a charge. Through a presidential directive, an even older legal tradition went by the way, the right to be indicted and tried before facing capital punishment. I am, of course, referring to President Obama's declared option to assassinate citizens of the United States identified as terrorists by anonymous bureaucrats.
Wondering why we have conflicting reports on the S&P Case-Shiller Housing Index? One financial press source is singing hallelujah while another is glum? Because S&P is using not seasonally adjusted data in their press release and other news outlets are using the seasonally adjusted data. Not seasonally adjusted, the composite-20 index increased 0.7%, but the seasonally adjusted composite-20 housing index decreased -0.1%.
Same situation for the composite-10 index. The not seasonally adjusted composite-10 increased 0.8% from March to April, but seasonally adjusted? That flat-lined, no change.
Originally published on The Agonist
The mountains look on Marathon - / And Marathon looks on the sea; / And musing there an hour alone, / I dreamed that Greece might yet be free. - Lord Byron
The Greek parliament voted to approve this week what might justly be titled “The Debt Enslavement Act of 2011”. Under this act, everyone in Greece gets to be a helot, and how bad could that be? It’s not like the old days. In ancient Greece the youth of Sparta participated every autumn in the Krypteia, a sort of military training exercise in which Spartans would hunt down and kill helots without fear of legal reprisal. The helots were Greeks too, just the wrong kind of Greeks – lower class, servile, tied to the land. Slaves, in effect.
Modern day slaves aren’t tied to the land anymore – they are tied to their bank. So are governments, for that matter. How often have you read in the past few weeks that unimaginable economic consequences await us if Greece defaults? Angela Merkel said so. So did Nicolas Sarkozy, and now the new IMF head, Christine Lagarde, has said that the Greek opposition party needs to unite with the majority Socialist party to approve new tough austerity measures for the country. If they do, the IMF, the European Union, and the European Central Bank will release the last tranche of a previously-agreed loan. These three noble institutions, called “the Troika” by the press, are basically telling Greece “We are going to default on our loan commitments to you if you don’t deliver even more cutbacks, tax increases, asset sales, and unemployment than you previously promised.” The Troika, no doubt, does not enjoy trafficking in pain and suffering on a national scale, but apparently it is the only collateral they can get. The irony is, if Greece agrees to deliver more collateral – maybe we should call it collateral damage – they don’t really get any money. It just passes through Greece straight to the banks.
The case was seeking damages for 1.5 million women. In 2001, Wal-Mart had only 14% of women in management and 80% of women in the lowest paid positions. Wal-Mart also allowed local managers to use their own discretion in hiring and promotion decisions. NPR:
When the case was filed 10 years ago, women held two-thirds of the lowest-level hourly jobs and only one-third of the management jobs; and that women were paid on average $1.16 less per hour than men in the same jobs, despite having more seniority and higher performance ratings.
A lower court previously ruled the case should encompass all women who work at all Walmart stores. SCOTUS used the phrase commonality and quoted statistics to claim because 1.5 million women didn't have the same common experience, magically 1.5 million women at Wal-Mart are not subject to systemic discrimination. From the actual ruling:
The National Association of Realtors released their existing home sales figures and give an May decrease of 3.8%, annualized rate, from April. Existing home sales are now 15.3% below what they were one year ago.
What do you have to do these days to get any sort of health care? One unemployed man found the answer, rob a bank and get arrested:
When you receive this a bank robbery will have been committed by me. This robbery is being committed by me for one dollar,” he wrote. “I am of sound mind but not so much sound body
He interviewed with the local press explaining why he took such desperate measures. The man was laid off from his job of 17 years. Then, he lost his health insurance. He tried to get help, from everywhere, but all he could get was food stamps. His health was deteriorating rapidly. Finally, he realized where he could get free health care, prison. He needed to get in, so he robbed a bank for one dollar.
Verone has been in jail for a week.
His $100,000 bond has been reduced to $2,000.
He doesn’t intend to pay it. His residence is now the Gaston County Jail.
He goes to breakfast and lunch each day but skips dinner. Dinner means nearly four hours in the general jail population, and Verone said he likes to minimize contact with other inmates.
He got his health care and how many others are committing felonies so they can get food, shelter and medical attention to save their lives?
If we cannot get universal single payer, perhaps all of America should behave as Verone did, so finally, we could all get some health care.
What's wrong with this picture?
The Money Party is a very small group of enterprises and individuals who control almost all of the money and power in the United States. They use their money and power to make more money and gain more power. It's not about Republicans versus Democrats. The Money Party is an equal opportunity employer. It has no permanent friends or enemies, just permanent interests. Democrats are as welcome as Republicans to this party. It’s all good when you’re on the take and the take is legal. Economic PopulistOf course in the long run we're all dead, so I guess that depends on what your definition of temporary is. While the Federal Reserve FOMC meeting claims the never ending economic malaise is temporary, they just downgraded the economy.
Right, the economy is just hitting a bump in the road, the sun will come out tomorrow, yet GDP was revised down and unemployment, inflation projections were revised up.
It's time for Plan B. The White House is about to be sold to the same people who bought it in 2008. The front page of today's New York Times says it all. President Obama is on the hunt for campaign cash and the Wall Street crowd represents his main target. After all, he and his "good friend Tim" (Geithner) delivered in the biggest way possible. Obama must be thinking that it's payback time! Pony up fellas.
This much is clear. There will be no federal prosecutions of Wall Street crooks for the 2008 financial collapse, no day of judgment for massive mortgage fraud before, during and after the housing bubble, and no representation for the people the in the White House, no matter who wins in 2012. Populist rhetoric will guarantee a place on the no-fly list for any who stray from the new party line.
The Times article resorts to irony right out of the gate:
"Mr. Obama, who enraged many financial industry executives a year and a half ago by labeling them “fat cats” and criticizing their bonuses, followed up the meeting with phone calls to those who could not attend." New York Times, June 13
Greece has been downgraded to CCC, a drop of three credit rating grades, by the almighty S&P credit ratings agency.
Greece had its credit rating cut three levels by Standard & Poor’s, which branded the nation with the world’s lowest debt grade and said a restructuring looks “increasingly likely.”
The move to CCC from B reflects “our view that there is a significantly higher likelihood of one or more defaults,” S&P said in a statement today. “Risks for the implementation of Greece’s EU/IMF borrowing program are rising, given Greece’s increased financing needs and ongoing internal political disagreements surrounding the policy conditions required.”
The problem now is soaring credit default swaps:
Credit-default swaps on Greece, Ireland and Portugal surged to records on concern European governments’ struggles to resolve the deficit crisis will threaten their ability to pay their debts.
Swaps on Greece jumped 47 basis points to an all-time high of 1,610 as of 5:30 p.m. in London after Standard & Poor’s downgraded the nation, according to CMA. Contracts on Ireland soared 27 basis points to 740, Portugal climbed 22 to 764 and the Markit iTraxx SovX Western Europe Index of swaps on 15 governments jumped 7 basis points to 218, approaching the record 221.75 set Jan. 10.
Remember those from the financial crisis? Credit default swaps are insurance policies, anyone can buy, which pay out when a nation defaults.
Greece loses, they win. The problem is those who issue CDSes will have to pay out. Remember AIG?
Retail Sales decreased -0.2% for May 2011 and are up 7.7% from the same time last year. April retail sales percentage change was +0.3%, revised downward. Autos dropped -3.2% in a month.
You know it's bad if the notorious deregulator, bad trade deal promoter, DLC Economist Larry Summers is calling the economy sick and halfway through a lost decade:
US is now halfway to a lost economic decade. In the past five years, our economy’s growth rate averaged less than one per cent a year, similar to Japan when its bubble burst. At the same time, the fraction of the population working has fallen from 63.1 per cent to 58.4 per cent, reducing the number of those in jobs by more than 10m.
Summers is right, if one takes the average GDP growth from 2006 to 2010, we have a whopping 0.96% GDP growth. We've also shown, in the unemployment report the employment participation rate is down the 1980's levels. Below are the number of payroll jobs since January 2001. That's over 11 years and we are down -1426 jobs.
The Wisconsin State Supreme Court just overthrew a ruling stopping the Republican assault on collective bargaining. It was a 4:3 decision and unions are livid.
Concerns about surging health care costs drove more than 150 people Thursday to hear Oregon's largest health insurer defend its request to raise premiums an average 22 percent.
In the Oregon Insurance Division's first public hearing for a rate request in more than 20 years, administrator Teresa Miller grilled the president of Regence BlueCross BlueShield of Oregon.
Then Laura Etherton, a health policy advocate for the Oregon State Public Interest Research Group, urged the division to reject the request.
"It is not justified, and it will only make matters worse," she said.
BlueCross sticks it to the self-employed or any other small business buying individual policies every year, with a never ending shrinking pool of customers, now down to 59,447. They used to cover over 100,000 in Oregon but clearly people are dropping out because they cannot afford the premiums. Even with health insurance, these individual policies do not provide enough coverage.
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This is what Grand Rapids Michigan had to say in response to Newsweek telling them they were a dying city.
How Stupid Can America Be? Pretty damn stupid according to a new report by the United States International Trade Commission. In 2009, the United States lost $48 billion dollars and 923,000 jobs due to brazen theft by China. Yet, companies routinely think the great answer is to manufacture in China, due to lower costs. How can getting your product and design ripped off, with a knock-off, at least 30% cheaper than your own product appearing on store shelves, help a company increase their profit margins?
Map Scaled to Global Shipping Container Traffic Origin, Source: WorldMapper
The United States Population has the largest percentage of foreign born since 1920, including 10.8 million illegal immigrants and the Supreme Court is taking 'em on. SCOTUS just ruled the lower courts must re-examine their ruling on Hazelton Pennsylvania's laws to verify renters and workers are there legally. This basically voids the earlier ruling against the city of Hazelton.
Austan Goolsbee, Obama's top economic adviser will step down. Couldn't have anything to do with that dismal jobs report now could it?
This leaves only Treasury Secretary Tim Geithner as the last remaining original Obama appointee. Of course G.E. is still there, although the offshore outsourcer left along with Larry Summers.
Larry Summers, former director of the White House National Economic Council, stepped down at the end of last year to return to his teaching job at Harvard University.
Christina Romer, his predecessor as CEA chair, left last August, also to return to academia, and Peter Orszag resigned as White House budget director last July.
While Goolsbee was better than others, unfortunately he stayed in denial on the trade deficit. He also denied the jobs crisis to the point of proclaiming this month as a bump in the road to recovery. Literally the BLS commissioner had to correct him as well as others echoing such feel good don't worry sentiment, indirectly. Sorry folks, the BLS says the pathetic jobs data is not due to weather. The jobs crisis is clearly not a blip, not a bump in the road.
Michael Collins
We can draw several clear conclusions from the indictment of John Edwards.
The case is a joke, quite literally. It mocks justice.
The cast of characters consists of people who should have recused themselves, rather than bringing a prosecution. This strange case has the faint odor of the nonstop assault on former Alabama governor, Don Siegelman.
Apparently the Department of Justice has a lot of time on its hands. How else could it pursue this transparent nonsense while failing to prosecute the perpetrators of the financial collapse?
Finally, the prosecution shows that those in control are not even pretending to acknowledge a rule of law.
JOLTS stands for Job Openings and Labor Turnover Survey. The April report shows there were 4.6 official unemployed people hunting for a job to every position available. There were only 2,972,000 job openings for April 2011 and a -4.8% drop from the previous month. Below is the graph of job openings per the official unemployed.
If one takes the official broader definition of unemployment, or U6, currently at 15.8%, the ratio becomes even worse, 8.2 unemployed people per each job opening.
A week ago we outlined here how and why Ben Bernanke lost a significant vote in the recent Fed Open Market Committee meeting. The vote was not so much to launch immediately QE3 when QE2 comes to an end this month; it was to keep Quantitative Easing as a tool in the Fed’s arsenal of monetary weapons. So far, the mainstream media have not yet realized how significant a shift this is in Fed policy, but other bloggers are beginning to notice, and so is the stock market. Yesterday Chairman Bernanke spoke at the International Monetary Conference in Atlanta, at which he made no mention of Quantitative Easing now or down the road sometime. The stock market certainly reacted to this omission; having traded noticeably higher during the day, the Dow Jones industrial average closed down 19 points, losing most of its ground in the last fifteen minutes of the session when Bernanke began speaking.
Here are some perceptive comments about the speech from Cullen Roche on his Pragmatic Capitalism website:
*His speech was certainly market moving and as reports of the speech hit the wires the equity markets began to reverse on fears that QE3 is off the table. But there was a more interesting tone in his speech today than we’ve seen in the past. The Chairman was exceptionally defensive. In fact, the entire speech is basically an explanation as to why QE2 did not hurt the economy (of course it did).
Initial weekly unemployment claims increased to 427,000, a 1,000 increase in a week. Additionally, last week was revised up to 426,000, from 422,000. The 4 week moving average is 424,000. A weekly average above 400,000 does not indicate job growth and we now have a pattern of initial unemployment insurance claims going backward, the wrong direction for jobs.
The April 2011 U.S. trade deficit decreased -$3.1 billion to $43.7 billion. This is a -6.7% monthly drop in the trade deficit and the largest since October 2010. Exports were the highest on record. Oil imports were the highest on record and the drop in imports from Japan also was the largest decrease on record. The tsunami hit Japan on March 11th.
The March 2011 monthly trade deficit was revised downward by -$1.4 billion to $46.8 billion. $26.1 billion of the April goods trade deficit is oil related, $4.2 billion less than 1 month ago, and 45.6% of the total goods trade deficit. Services have surplus of $14.4 billion and increased $0.2 billion last month.
The below graph shows the monthly percentage change in Japanese imports, not seasonally adjusted. Which is worse, a devastating earthquake, tsunami and corresponding nuclear disaster greater than Chernobyl, or the financial crisis? Amazing how close the two are in percentage drops. The April 2011 decline was -25.5%, and from the recession, the February 2009 drop was -21.5%.
Michael Collins
If you're in the retail business, it's all about packaging. If you're in wholesale, it's about volume. If you're Congressman Anthony Weiner, it's about the double game of liberal packaging without the throw weight to justify the image.
I managed to get through the last few days without much information on Weiner's Tweets. etc. As I exited the corporate media's fantasy land a few days ago, I saw a clip of Weiner with a shit eating grin on his face. He was trying to act like an “adult” (i.e., a pol like Cheney who lies without blinking).
Weiner asked that people not make more out if his situation than was actually there. I thought he's lying as I left the virtual world for some pressing business. Upon my return, I saw just enough to let me know that the congressman was the subject of the much discussed underwear shot heard round the world.
What difference does it make? None, really. It's just another distraction in the nonstop series of distractions fueled by corporate media in an attempt to keep us from the more vital issues. Why are there only four million more jobs today than there were in 2000? How are citizens supposed to stay healthy, even alive, when the cost of health care is through the roof? Is there any reason for those 80,000 United States troops in Afghanistan or the 700 overseas US military installations?
That dream has been replaced with strategic default on one's home, praying the onslaught of foreclosures allows you to live rent free for a long period in order to not be homeless. According to Fannie Mae, 27% of negative equity homeowners think it's ok to walk away from their mortgage. Who can blame them when only individuals consider the ethics and morality of a contract these days?
Tonight's movie is more a series and an acknowledgment. ABC News has been reporting on Made in America.
They have an entire website devoted to Made in America and they are discovering some myths that only Chinese goods are cheap enough.
Here are the first two video reports in their series.
New Orders in Durable Goods decreased -3.6% for April 2011, after last month's +4.4% increase, which was significantly revised. New orders dropped $7.1 billion to $189.9 billion in a month. That's not good news and the biggest drop since October 2010.
Core capital goods new orders decreased -2.6%, after increasing 5.4% last month. Core capital goods is an investment gauge for the bet the private sector is placing on America's future economic growth.
For all transportation equipment, new orders plunged -9.5%. While nondefense aircraft plunged -30%, motor vehicles, which is not nearly as volatile as aircraft, decreased -4.5%. Even when factoring out transportion, durable goods new orders declined -1.5%. We cannot blame air-o-planes this time.
New orders have declined three of the last three months. New orders in machinery, down -3.4%; computers, down -4.4%; communications equipment, down -3.4%; electrical, appliances, down -4.9%. We have across the board declines and generally, a dismal report.
Michael Collins
Paul Farrell of MarketWatch caused quite a stir with his recent article, Reagan insider [David Stockman]: GOP destroyed U.S. economy, Part 2, May 24. Farrell breaks some new ground in the strident critique of long standing policy trends and offers a highly functional description of the destructive personalities controlling Wall Street. This article describes the several high points of the Farrell-Stockman thesis, a frontal assault on the modern Republican Party. It also provides important cautions on key information absent from the Farrell-Stockman broadside. (Image: Art & Perception)
Farrell makes his case by using Stockman's July 2010 New York Times OpEd, Four Deformations of the Apocalypse, New York Times and his recent book, The Triumph of Politics: Why the Reagan Revolution Failed.
Q1 GDP 2011 came in at 1.8% for the second revision, same as the advance report. Here is the original BEA GDP report.
The decrease of Q1 GDP growth is once again, due to the never ending increasing trade deficit, a slow down in personal consumption and a drop in government spending.
Score one for Arizona. The Supreme Court gives States the right to close businesses who knowingly hire illegal workers.
Now in spite of the rhetoric one will hear from special interest groups, this is actually a huge win for U.S. labor and workers.
The US Supreme Court ruled Thursday that a state has the right to revoke the license of a business that knowingly employs illegal immigrants, in a case watched for implications on related judicial battles.
The top US court in a 5-3 decision upheld Arizona's 2007 law, saying the state was within its rights under a 1986 federal immigration reform measure.
Like it or not, flooding the U.S. labor market with illegal workers does undermine wages, and in this economy, does cause U.S. worker displacement.
The law "expressly reserves to the states the authority to impose sanctions on employers hiring unauthorized workers, through licensing and similar laws," Chief Justice John Roberts wrote.
"It uses the federal government's own definition of 'unauthorized alien,' it relies solely on the federal government's own determination of who is an unauthorized alien, and it requires Arizona employers to use the federal government's own system for checking employee status."
It was a 5-3 decision, with the left of the court dissenting. Business licenses can be revoked and at last, the Supreme court upheld the use of E-verify, an electronic database to verify social security numbers used by workers are valid and their own.
Welcome to the weekly roundup of great articles, facts and figures. These are the weekly finds that made our eyes pop.
The people of Spain are protesting over this never ending taking from the poor and giving to the rich, now with the IMF and austerity heading their way. It's getting violent.
Here are some pictures of the violence and why are the police causing 121 injuries? To clear the square over a soccer match:
The demonstrators, who call themselves los indignados -the indignant ones -began gathering on May 15, in a movement known variously as "M-15", "Spanish Revolution" or "Real Democracy Now," to register dissent at the country's economic crisis, which has pushed youth unemployment to 45 per cent. Inspired by the Arab Spring revolts, the protests swelled ahead of regional elections last Sunday, in which Prime Minister Jose Luis Rodriquez Zapatero's socialist party suffered a resounding defeat.
The annual change in gross national product (Graph, Turkish Review, January 2011) developed through Turkish management of the economy.
During the critical period that included the global recession, Turkey fared better than most industrial nations. (Trading Economics)
Negative growth hit Turkey in only three quarters, with a solid rebound starting in 2009. Forth quarter 2010 economic growth was 9.2%. Only China led Turkey during that time with 9.8% growth.
The International Monetary Fund (IMF) announced an end to its formal agreement with Turkey in 2010. In fact, the Turks ended IMF involvement with economic management in 2007 when they rejected IMF's "austerity" requirements for a stand by loan. Since that time, Turkey has paid off 75% of its IMF debt and managed the economy without IMF help.
Highlights - How they did it
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The Financial Times reported that French Finance minister Christine Lagarde was the leading candidate for Managing Director of the International Monetary Fund (IMF). She would replace Dominique Strauss-Kahn, now charged with sexual assault in New York City. (Images: Wiki Commons)
Christine Lagarde, France’s finance minister, has emerged as the leading contender to run the International Monetary Fund after being strongly endorsed by her German and British counterparts, eager to extend Europe’s 65-year grip on the global financial institution. Financial Times May 22
The New York Times is accusing banks of hoarding residential real estate they foreclosed upon, creating a glut of shadow inventory.
They own more than 872,000 homes as a result of the groundswell in foreclosures, almost twice as many as when the financial crisis began in 2007, according to RealtyTrac, a real estate data provider. In addition, they are in the process of foreclosing on an additional one million homes and are poised to take possession of several million more in the years ahead.
We all know the horror stories of banks foreclosing when people miss even just one mortgage payment, so why would banks be hording and stockpiling a massive housing inventory when excess inventory will only lower prices further?
The article reports banks can expect another $40 billion in losses due to depressed prices. The article goes onto blame a lack of staffing as the reason for the excess inventory of bank owned properties, yet buried is this:
Most of the major lenders outsourced almost every part of the process, be it sales or repairs. Some agents complain that lender-owned home listings are routinely out of date, that properties are overpriced by as much as 10 percent, and that lenders take days or longer to accept an offer.
Calculated Risk says RealtyTrac's inventory estimates are too high.
But with such great losses and a vicious cycle of lowering home values further, the real question is why banks have not helped home owners stay in their homes in the first place?
It took a while, but the financial markets are starting to realize that Quantitative Easing will end next month, possibly once and for all. The unprecedented amount of monetary stimulus being pumped into the global economy by the Federal Reserve will come to a sudden halt. Commodity markets have enjoyed a bubbly expansion since the QE2 program was announced, and they were the first to crumble when the Fed began removing the monetary supports. Stock markets are now slowly beginning to follow suit.
One reason the markets took the news sanguinely was because the Fed engineered it that way. After the May meeting of the Fed Open Market Committee, at which it was decided not to renew QE2 when it expires in June, Ben Bernanke gave a first-ever press conference by a Fed Chairman following an FOMC meeting. The media thought it was a masterful performance – which it was, but not for the reasons cited in the press. Bernanke made it sound as if the end of Quantitative Easing was the most natural thing in the world, and that all the voting members of the FOMC agreed with him. The fact is, the FOMC decision was a defeat for Bernanke and his allies, which included the two other officers of the FOMC, Janet Yellen (Vice Chair of the Fed Board) and William Dudley (NY Fed President). Dudley, just a week before the meeting, had gone public with his desire to have a QE3 program standing by, ready to aid a struggling economy.
In April, New Residential Single Family Home Sales increased 7.3% from March's 8.5% increase, or 301,000 homes, with a April annual sale rate of 323,000 new homes. This is a -23.1% drop from a year ago. In April 2010, new home sales were 420,000.
The April 2011 Residential construction report showed Housing starts dropped -10.6% from March 2011 to a level of 523,000. This is -23 9% below April 2010. We're back to April 2009 levels and this monthly drop was the biggest since 1984. March had a +12.9% increase in housing starts from February 2011.
Single family housing starts dropped -5.1% from March and is down -30.4% for the year. Single family housing is 75% of all residential housing starts. Housing of 5 or more units has a whopping -28.3% plunge for April, but is up 5.6% for the year.
Building permits, also dropped -4.0% to 574,000 and are down -12.8% from this time last year. Single family building permits dropped -1.8% from March and are at an all time low. Below is the St. Louis Federal Reserve FRED graph for Building permits. The graph shows building permits are not always a smooth line from month to month.
Michael Collins
Gretchen Morgenson of the New York Times just published one of the few feel good stories in months following the 2008 financial crisis. She describes a possible day of reckoning for the perpetrators of the 2008 crisis and much of the pain that has followed.
The newly elected New York attorney general, Eric Schneiderman (D), wants information from Goldman Sachs, Bank of America, and Morgan Stanley. Among other things, the information concerns mortgage pooling and bundling. This may well include information on collateralized debt obligations (CDO's) and mortgage backed securities (MBS). New York state officials told Morgenson:
"The New York attorney general has requested information and documents in recent weeks from three major Wall Street banks about their mortgage securities operations during the credit boom, indicating the existence of a new investigation into practices that contributed to billions in mortgage losses." New York Investigates Banks’ Role in Financial Crisis New York Times, May 16
The National Association of Realtors released their existing home sales figures and give an April decrease of 0.8%, annualized rate, from March's increase. Existing home sales are now 12.9% below what they were one year ago.
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