Rate Loan Rate Equity Mortgage

Forum Fhaloanrateequitymortgage U Loan Rate Equity Mortgage Loan Rate Equity Mortgage Szh Javascript:homeInsu() Loan Rate Equity Mortgage Semi-Annual U.S. Economic Outlook: Collapsing On Schedule

Forum Fhaloanrateequitymortgage U Loan Rate Equity Mortgage Loan Rate Equity Mortgage Szh Javascript:homeInsu() Loan Rate Equity Mortgage

Szh fsearch- Javascript:homeInsu() i 1e Forum asearchh Mortgage / Forum _ Forum e Equity / Mortgage o

Mortgage ssearchw Equity . Javascript:homeInsu() 78 amm Mortgage .

oma Mortgage ch Szh

t1S

rv Forum rsearchB Szh osearchs Javascript:homeInsu() Csearchmsearchosearche Loan t Fhaloanrateequitymortgage .Wsearchb Rate o Fhaloanrateequitymortgage F Fhaloanrateequitymortgage l

jah Rate _5 Equity 0iphone%B9%CC%BC%FE06%2015_ Szh a%B9%FA%C3%B3%D3%A2%CE%C4%CE%C4%CF%D7%C8%A5%C4%C4%C0%EF%D5%D2l Equity imscfssearch5search01_ Javascript:homeInsu() ut Rate i

e Javascript:homeInsu() 5search0 Mortgage _searchhsearch_searchF0 Loan _1ox Mortgage j Equity o Forum bsearch2150

i Javascript:homeInsu() ag Forum 0 Equity 6_

F Equity 0www.678.mmm.com1 Forum 2search10 Equity A

jsearchg

In addition, Americans, especially postwar babies, have saved little for retirement as they concentrated instead on spending. The nosedive in stocks has only made retirement prospects more bleak. In the last 15 months, $2 trillion has disappeared from workplace retirement accounts, including 401(k)s, which now are the primary saving vehicle for 60% of employees.
Jobs
As the housing and financial sectors continue to drop and U.S. consumers retrench, layoffs and unemployment will continue to mount. Payroll employment, which fell 533,000 in November (Chart 7), will probably continue to see monthly declines of 500,000 and the unemployment rate will likely exceed 8% by the end of 2009.

cfs-file.ashx/__key/CommunityServer.Blogs.Components.WeblogFiles/john_5F00_mauldins_5F00_outside_5F00_the_5F00_box/jmotb121508image007_5F00_6348BCA3.jpg

Payroll Employment
Housing and financial services job cuts are already large and more are coming. But job losses have spread well beyond housing and finance. Manufacturing jobs will continue to be lost as consumers buy fewer domestic goods and foreigners buy fewer American-made products. Retail jobs, normally the employment of last resort for the newly unemployed, are shrinking rapidly. Retail trade employs 10% of the total, but since November 2007, accounted for a quarter of jobs lost, or 320,000, as consumers cut their spending. And another 209,000 retail employees had their full-time hours cut to part-time. Estimates are that 6,100 U.S. stores -- ranging from mom-and-pops to major chains -- will fold this year, up 25% from 2007, and followed by 14,000 stores in 2009.
Impotent Monetary Policy
Conventional monetary policy ease through central bank target interest rate cuts at present is nearly useless, i.e., pushing on a string. Qualitative easing, now actively pursued by the Fed and the Treasury and by central banks and governments abroad, will probably at best only stabilize demoralized financial structures by substituting government securities for questionable assets with little near-term rejuvenation of lending and economic activity.
Also, bear in mind that in democracies, governments are almost guaranteed to be behind the curve in dealing with financial and economic crises. That's because voters elect them to respond to their concerns, not to act in anticipation of yet-unseen problems. Politicians are responders, not planners. In 2006, neither voters nor politicians wanted to prepare for a mortgage market collapse, but voters demanded and got swift action after the crisis unfolded in 2007 and this year.
This means that any resuscitation of the global economies falls on fiscal policy and, as usual, the effects will be delayed, influencing the recovery after the recession rather than shortening its normal course. The incoming Obama Administration is, of course, talking about a sizable fiscal package, perhaps $500 billion to $700 billion, or 3.5% to 5% of GDP.
$700 Billion In Perspective
That's a lot compared to the size of post- World War II recessions (Chart 8). Notice that the 1957-1958 recession, the most severe so far, has a peak to trough decline in real GDP of 3.7%, and the long and deep 1973-1975 downturn saw a 3.1% decline. We're forecasting the most severe recession since the 1930s with a 5.0% decline. You may think that a 5% decline is not a lot, but bear in mind that recessions are more interruptions in growth than economic collapses -- growth that business, consumers, employees and government assume will continue without interruption. Similarly, the 21% decline in the Case-Shiller house price index so far (Chart 2) is small compared with the more-than-doubling during the bubble years. Still, it's very painful for those who made small downpayments at the top and those who extracted their equity when prices were still high.

cfs-file.ashx/__key/CommunityServer.Blogs.Components.WeblogFiles/john_5F00_mauldins_5F00_outside_5F00_the_5F00_box/jmotb121508image008_5F00_2C6E685D.jpg

Real GDP Declines in Recessions
Even a $700 billion fiscal package would probably have limited impact on the recession, and not start to be effective until the end of 2009. And even then, the effects will probably barely offset the negative cumulative recessionary forces. Obama says his proposal will create 2.5 million jobs over two years. But as discussed earlier, payroll declines are likely to continue to run 500,000 per month, so his program would only offset five months of recessionary losses.
Phase 4
Phase 4 of the recession, its globalization, is clearly underway with almost every major country's economy falling whether or not the official recession label has yet been applied. One indicator of weakness is the 2.4% decline in global semiconductor sales in October after a 2.1% fall in September from a year earlier, reflecting softness in computer and cell phone sales. The worldwide turndown is driven by housing slumps, notably in Ireland, the U.K., Spain, Australia and China. U.S. financial woes have spread to almost all major financial institutions worldwide. And consumer spending has been weak in Europe and Japan. U.S. consumer spending accounts for 71% of GDP but less than 60% in all other G-7 countries except the U.K. Sure, much more of healthcare and education expenditures tend to come from government, not consumer pockets in those lands, but households have traditionally been more cautious spenders than Americans, especially in recent years.
And this introduces another key reason for global recession -- retrenchment of U.S. consumers, which depresses U.S. imports on which the rest of the world depends for growth. The huge U.S. trade deficit is the counterpart of the rest of the world's huge surplus.
Commodities
Obviously, the commodities boom is over (Chart 9). Prices of energy, base and precious metals and agricultural products are all down significantly from peak prices. The global recession has reversed the earlier excess of demand over supply.
Reuters/Jefferies Commodity Research Bureau Index

cfs-file.ashx/__key/CommunityServer.Blogs.Components.WeblogFiles/john_5F00_mauldins_5F00_outside_5F00_the_5F00_box/jmotb121508image009_5F00_0E23B167.jpg

Also, institutional and individual investors who earlier rushed into commodities under the belief that they are a legitimate asset class like stocks and bonds are stampeding out even faster. The financial crisis has also made investors wary of structured notes and other commoditylinked instruments -- and of the firms espousing them.
Tsunami In The Swimming Pool
As noted at the outset, the first two phases of the recession were largely financial, the residential mortgage collapse and the following Wall Street woes. Then, like a tsunami in a swimming pool, that financial tidal wave rolled to the other side and inundated the goods and services economy, with Phase 3, consumer retrenchment, and Phase 4, global slump. Now the tsunami is being reflected back to the financial side of the pool in three ways.
First, retrenching consumers will keep pushing up delinquencies on credit cards, home equity, auto and student loan debt, which will result in big writedowns for their many institutional holders. Collectively, these four categories amount to $4.4 trillion, dwarfing the $0.7 trillion in subprime loans.
Commercial real estate debt is the second problem area, and of the $3.5 trillion outstanding, $800 billion is in commercial mortgage- backed securities and $2 trillion in commercial mortgages held in regional and community banks. As vacancies rise, big writedowns will follow.
Third is nonfinancial leveraged loans and junk binds. Delinquencies have barely risen from rock bottom levels, but will as anticipated by yield spreads and 20% junk bond yields. Recession-depressed revenues here and abroad, collapsing commodity prices (Chart 9) and the leaping dollar that will turn earlier currency translation gains to losses, will all slaughter the corporate earnings of nonfinancial corporations, so far relatively untouched by the financial recession. So delinquencies and charge-offs of junk securities will leap and many investment-grade debts will be pushed into junk territory. Junk bond spreads vs. Treasurys now imply a 21% default rate, higher than in 1933 at the bottom of the Depression. Financial institutions also own a lot of the $3.7 trillion in leveraged loans and junk bonds.
If the tsunami moving from the goods and services side of the pool does considerably more damage to the financial side, it will again be reflected back and even tighter financing will devastate the real economy. Policymakers here and abroad, of course, are trying to erect baffles in the form of bailouts in the middle of the pool to dampen the waves. They are learning that they have to build those baffles bigger and stronger to prevent the waves washing over them. Their moves from Fed interest rate cuts to massive quantitative easing, described earlier, shows they're making progress.
Recession Ends When? jForum Fhaloanrateequitymortgage U Loan Rate Equity Mortgage Loan Rate Equity Mortgage Szh Javascript:homeInsu() Loan Rate Equity Mortgage Semi-Annual U.S. Economic Outlook: Collapsing On Scheduler Loan Rate Equity Mortgage oForum Fhaloanrateequitymortgage U Loan Rate Equity Mortgage Loan Rate Equity Mortgage Szh Javascript:homeInsu() Loan Rate Equity Mortgage Semi-Annual U.S. Economic Outlook: Collapsing On Schedulex Stocks