Today in the economy

[killersheep]

Feb 26.

UK - Nationwide HPI

Actual -1.80% |Forecast-1.20% |Previous-1.30%

The Nationwide HPI is an economic indicator that measures both the quantity and price statistics regarding the sales of newly built and existing homes..

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USA - Core durable goods orders

Actual-2.50% |Forecast-2.10% |Previous-3.90%

Derivative of Durable Goods Orders that omits the Transportation components. Orders for aircraft occur in periodic burst and can severely distort the underlying trend, so Currency traders tend to focus more on this indicator than the overall Durable Goods Orders.

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USA - New homes sales

Actual- |Forecast325.00K |Previous331.00K

Determines the annualized amount of new residential buildings that were sold during the last month. A rising trend has a positive effect on the nation's currency as the housing market is a leading gauge for the overall economy. New housing activity creates an economic ripple effect as home owners buy goods such as appliances and furniture for their homes, and builders buy raw materials and hire more employees to meet demand. A high level of housing activity signals that the construction industry is healthy and that consumers have the capital to make large investments.

[Kirkland Laing]

More record-breaking data today. Record low housing sales, record high housing stock, recoed number of consecutive months that durable goods orders fell. Coming tonight some quote art, featuring a quote by The Infallible One.

[Kel]

I just found out yesterday that I'm facing redundancy, well it says 'at risk' which really only means unless something drastic happens I've lost my bloody job. It's gonna be a struggle to find more work and I will probably end up earning a shitty wage somewhere because I always need money coming in.

Like many others I'm in the shit

[killersheep]

I just found an ETF that inverslely tracks consumer confidence, when consumer confidence goes down, it's value goes up. It's riding at $109 a share I wish I would have had it last december it paid out a $33 dividend per share

If anyone's interested in researching it (I am not advising you to buy or sell any securities) here's a link

SCC: Summary for ULTRASHORT CONSUMER - Yahoo! Finance

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2/27/09

USA - GDP

Actual-6.20%|Forecast-5.40%|Previous-3.80%

The gross domestic product measures the total market value of all final goods, thus serving as an indicator for national income and output.
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USA - Michigan sentiment

Actual56.30|Forecast56.00|Previous56.20

This survey, conducted by Michigan University, gathers consumer expectations concerning the economy thus reflecting the overall level of consumer confidence.

[VictorCharlie]

Kirk I know the short term would be horrible but if the Govt just allowed the Big Banks to fail (bankruptcy etc) wouldn't smaller banks pick up the slack? Am I wrong in thinking that there are plenty of smaller banks that are not full of toxic assets to would move quickly to fill the void? I wouldn't even call myself an economic novice but is seems that if there is a market someone would step up. I just really hate the idea of propping up failing industries and rewarding failure.

[killersheep]

Kirk I know the short term would be horrible but if the Govt just allowed the Big Banks to fail (bankruptcy etc) wouldn't smaller banks pick up the slack? Am I wrong in thinking that there are plenty of smaller banks that are not full of toxic assets to would move quickly to fill the void? I wouldn't even call myself an economic novice but is seems that if there is a market someone would step up. I just really hate the idea of propping up failing industries and rewarding failure.

Small banks cannot afford to loan to the level that the large chain banks were.

[Trainer Monkey]

Kirk I know the short term would be horrible but if the Govt just allowed the Big Banks to fail (bankruptcy etc) wouldn't smaller banks pick up the slack? Am I wrong in thinking that there are plenty of smaller banks that are not full of toxic assets to would move quickly to fill the void? I wouldn't even call myself an economic novice but is seems that if there is a market someone would step up. I just really hate the idea of propping up failing industries and rewarding failure.

They arent really rewarding failure right now,unlike Bush who wanted it no ties attached for the same bailout,Obama put a rider in that limits executive pay for banks asking for bailout money.
In other words,short of the execs being fire by the banks in question,their pay is being governed and if the banks wont themselves wont punish their own piss poor governance,Obama has put it in,that the government will,or no damned money.

[Kirkland Laing]

Kirk I know the short term would be horrible but if the Govt just allowed the Big Banks to fail (bankruptcy etc) wouldn't smaller banks pick up the slack? Am I wrong in thinking that there are plenty of smaller banks that are not full of toxic assets to would move quickly to fill the void? I wouldn't even call myself an economic novice but is seems that if there is a market someone would step up. I just really hate the idea of propping up failing industries and rewarding failure.

They arent really rewarding failure right now,unlike Bush who wanted it no ties attached for the same bailout,Obama put a rider in that limits executive pay for banks asking for bailout money.
In other words,short of the execs being fire by the banks in question,their pay is being governed and if the banks wont themselves wont punish their own piss poor governance,Obama has put it in,that the government will,or no damned money.

Salary is only a tiny fraction of total earnings for bank executives. It's just a cosmetic announcement, won't have any real effect on executive earnings. Unfortunately as far as the financial crisis goes the Obama administration looks like a Bush administration third term.

[Kirkland Laing]

Kirk I know the short term would be horrible but if the Govt just allowed the Big Banks to fail (bankruptcy etc) wouldn't smaller banks pick up the slack? Am I wrong in thinking that there are plenty of smaller banks that are not full of toxic assets to would move quickly to fill the void? I wouldn't even call myself an economic novice but is seems that if there is a market someone would step up. I just really hate the idea of propping up failing industries and rewarding failure.

The big banks have already failed which is why they're not lending anymore. But small banks are all under pressure too and even if they weren't don't have the kind of capital to make the size of loans required to supply the market with adequate credit. Small banks are currently failing at the rate of two a week and the government takes them over, wipes the shareholders out, converts the debt into equity and sells the equity (bank shares) to new investors. That's what they should do with big banks like Citi and BOE but they're not doing it unfortunately. They'll have to eventually so hopefully they're just slow-walking the country towards nationalisation, but right now it really looks like they're going to keep bailing the black hole out.

[CGM]

I just found an ETF that inverslely tracks consumer confidence, when consumer confidence goes down, it's value goes up. It's riding at $109 a share I wish I would have had it last december it paid out a $33 dividend per share

If anyone's interested in researching it (I am not advising you to buy or sell any securities) here's a link

SCC: Summary for ULTRASHORT CONSUMER - Yahoo! Finance
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huh? that is bizarre. Surely you don't mean it really does track consumer confidence. I could read up on it, but I'd rather hear you describe the mechanism by which an etf can inversely track consumer confidence. I mean, how can you have shares in that?

[killersheep]

I just found an ETF that inverslely tracks consumer confidence, when consumer confidence goes down, it's value goes up. It's riding at $109 a share I wish I would have had it last december it paid out a $33 dividend per share

If anyone's interested in researching it (I am not advising you to buy or sell any securities) here's a link

SCC: Summary for ULTRASHORT CONSUMER - Yahoo! Finance
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huh? that is bizarre. Surely you don't mean it really does track consumer confidence. I could read up on it, but I'd rather hear you describe the mechanism by which an etf can inversely track consumer confidence. I mean, how can you have shares in that?

It doesn't invest in consumer confidence, but it plays against consumer services things like food, vitamins, clothing and other perishables, of course a decrease in stock values (belief of value of ownership) of this nature has a direct correlation to consumer confidence. Consumer confidence is a measure of how much consumers plan to spend vs. save today and in the future. Since the fund shorts stocks of manufacturers, retailers and distributers of said items it is always betting that consumer confidence as well as demand is declining. The 207 companies this fund invests in are believed to be a good cross section of what the average consumer would be expected to spend their money in a given year, it's mostly average income things like Autozone, Bed, Bath and beyond, Chipotle, burger king, eBay and things like that.
This is a bear market security and is expected to do very well in bear markets, but extremely poorly in bull markets. Make sense?

Bottom line you can expect this fund to go up when consumer confidence goes down and down when consumer confidence goes up.

[CGM]

I just found an ETF that inverslely tracks consumer confidence, when consumer confidence goes down, it's value goes up. It's riding at $109 a share I wish I would have had it last december it paid out a $33 dividend per share

If anyone's interested in researching it (I am not advising you to buy or sell any securities) here's a link

SCC: Summary for ULTRASHORT CONSUMER - Yahoo! Finance
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.
.
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huh? that is bizarre. Surely you don't mean it really does track consumer confidence. I could read up on it, but I'd rather hear you describe the mechanism by which an etf can inversely track consumer confidence. I mean, how can you have shares in that?

It doesn't invest in consumer confidence, but it plays against consumer services things like food, vitamins, clothing and other perishables, of course a decrease in stock values (belief of value of ownership) of this nature has a direct correlation to consumer confidence. Consumer confidence is a measure of how much consumers plan to spend vs. save today and in the future. Since the fund shorts stocks of manufacturers, retailers and distributers of said items it is always betting that consumer confidence as well as demand is declining. The 207 companies this fund invests in are believed to be a good cross section of what the average consumer would be expected to spend their money in a given year, it's mostly average income things like Autozone, Bed, Bath and beyond, Chipotle, burger king, eBay and things like that.
This is a bear market security and is expected to do very well in bear markets, but extremely poorly in bull markets. Make sense?

Bottom line you can expect this fund to go up when consumer confidence goes down and down when consumer confidence goes up.

OK thanks, that helps. It explains the tracking but it does seem to imply that the demand for these perishables goes up when consumer confidence goes down, and it's not clear to me why this should happen, but I guess it happens.