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Originally posted by RetinoidReceptor
Goldman Sachs upgraded financials
Can anyone say, "Bond Market Dislocation"???
And Oil going up? In this economy? Hmmm...going to drive even more consumers into the woodwork...
The Federal Reserve announced on May 1 that it would launch a much-anticipated branch of the Term Asset-Back Securities Loan Facility, or TALF program, as early as this June to bolster commercial real-estate lending. The goal of the program is to boost lending and avoid borrower defaults, which have had a ruinous ripple-effect throughout the financial world for nearly two years.
The TALF, by some estimates, could generate up to $1 trillion in lending options for businesses and households. Fed chairman Bernanke warned politicians in March that there was a looming crisis in commercial lending, saying that the market for related securities had completely evaporated in mid-2008.
None of this addresses the real problem in the system. We bought too much real-estate on borrowed money. We leveraged ourselves too thin. We deregulated to the point that nobody really understood what was happening anymore. And we still have not solved the problem of losing jobs, wages, and long-term profits to overseas production facilities and foreign workers
According the Levy Institute’s econometric equation for the US economy:
Trade Deficit = Federal Deficit – Savings
Trade Surplus = Federal Surplus + Savings
What the equation means is the federal government has to run a deficit equal to or higher than the trade deficit to keep the economy in equilibrium.
Over the past twenty years, the US trade deficit amounted to nearly seven trillion dollars. That deficit was financed by the federal government running a net deficit and the US consumer borrowing and not saving. Consumers racked up six trillion dollars in debt in the first eight years of this decade.
The trade deficit is reducing U.S. GDP by $400 billion, annually, and significantly adding to the pain imposed by the unfolding recession. The negative effects of the trade deficit on GDP and employment overwhelm the potential positive effects of President Obama’s proposed stimulus spending. To finance the deficit of recent years, Americans have borrowed more than $6.5 trillion from foreign sources, including foreign governments, and the debt service comes to more than $1500 for each working American. The flood of dollars into foreign government hands has bloated sovereign wealth funds that are now buying significant shares of U.S. businesses and other property, and threaten to compromise the loyalties of U.S. businesses.
Over one in five American homeowners are currently faced with the prospect of owing more on their mortgages on their homes than they are worth, according to real estate Web site Zillow.com.
Currently, 21.8 percent of American homeowners are underwater on their mortgages. That represents more than 20 million homes.
Those facing negative equity in homes are the most likely to enter into foreclosure because selling their homes is nearly impossible without bringing cash to the table.
Some markets are in very serious trouble, with a majority of homeowners in those markets underwater on their mortgages. Those areas include Las Vegas where 67.2 percent of the homes there are underwater, Stockton, Calif. which has 51.1 percent of homeowners owing more on their mortgages than their home is worth and Modesto, Calif. where 50.8 percent of homes are facing negative equity.
Originally posted by marg6043
reply to post by stander
Then again can China and "traders" be that stupid, how can you invest in a nation that its economic view is nothing but build in lies, deceptions and dreams.
Weekly initial jobless claims not as bad as expected, continuing claims in-line with consensus forecast .
First quarter productivity increases more than expected, but unit labor costs rise above consensus prediction.
Retailers report same-store sales results that are generally better than expected.
Bank of America stock rose Wednesday after reports that the Charlotte, N.C.-based company would need to collect $34 billion in additional capital.