Posts Tagged ‘New York Federal Reserve Bank’

THE MARKET IS FACING HEADWINDS

THE MARKET IS FACING HEADWINDS

Two businessmen kneeling on pavement, grabbing paper blowing in wind

Courtesy of Comstock Partners

(H/t Pragcap) 

The current market rally is not based on a self-sustained typical economic recovery, but on blind faith that the Fed can pull out a magic wand and cure everything with another round of quantitative easing (QE2).  As we pointed out last week, this a desperate attempt by the Fed to try non-conventional means to get the economy going again after a massive dose of conventional measures resulted in failure.  The members of the FOMC know this, but with further fiscal measures off the table, they are aware that they are the only game in town.  The Fed’s acknowledgement that the economy is in trouble is again highlighted by the latest Beige Book released yesterday.  The following are some excerpts from the report:

“National economic activity continued to rise, albeit at a modest pace..consumer spending was steady to up slightly, but consumers remained price-sensitive, and purchases were mostly limited to necessities and non-discretionary items..Housing markets remained weak..Most reports suggested overall home sales were sluggish or declining..Home inventories were elevated or rising..Conditions in the commercial real estate market were subdued, and construction was expected to remain weak.Reports suggested that rental rates continued to decline for most commercial property types..industry contacts appeared to believe that the commercial real estate and construction sectors would remain weak for some time..Hiring remained limited, with many firms reluctant to add to permanent payrolls, given economic softness..Future capital spending plans appeared to be limited”

So there you have an outline of the anemic economic picture in the Fed’s own words.  To be sure, they indicated some strong points as well.   But the weakness in consumer spending, housing, capital expenditures, commercial real estate and employment pretty much accounts for some 85% of the overall economy.

In addition some of the major problems that worried the market earlier have not really gone away.  The sovereign debt problems of the weaker EU nations have been papered over without being solved and are still lingering just beneath the surface.  The looming currency wars that were shoved down the road by the recent G-20 meeting are also a major threat to the global economy.

Furthermore the Chinese housing bubble previously highlighted by bearish investor Jim Chanos and others has now appeared on the front page of the New York Times.  A new district of the city of Ordos,…
continue reading


Tags: , , , , , , , , , , , , , , , ,




New York Fed Drowns Hope For Green Shoots In Commercial Real Estate

Courtesy of Tyler at ZH

New York Fed Drowns Hope For Green Shoots In Commercial Real Estate

Til Schuermann, VP of Financial Intermediation at the Federal Reserve Bank of New York, is testifying today on issues in Commercial Real Estate, and his prepared remarks essentially drown the prospect of green shoots in the context of CRE.

The same cannot be said for loan demand. The SLOOS reports that the net fraction of loan officers reporting weaker demand in April 2009 was 60% for C&I and 66% for CRE loans, a historical low for CRE demand. Weak demand bears emphasis, as it indicates that the observed slowdown in overall credit is partly due to firms’ reluctance to borrow, and not entirely to banks reluctance to lend [someone finally pointing out the obivious].

The combination of acute stresses in the financial markets, together with stresses on bank balance sheets, in the middle of the worst recession in a generation, should caution us from believing that recovery is just around the corner.

His full prepared testimony is provided below.

Testimony before the TARP Congressional Oversight Panel, Hearing on Commercial & Industrial and Commercial Real Estate Lending, New York City 

Members of the Panel, thank you for giving me the opportunity to discuss with you some of the recent trends in commercial lending, and especially the role banks have played and are playing in the provision of credit to this important sector. My name is Til Schuermann, and I am a vice president of the Federal Reserve Bank of New York. I wish to preface my remarks by noting that they do not reflect the official views of the Federal Reserve Bank of New York or any other component of the Federal Reserve System.

In early 2007, just before the crisis hit, U.S. commercial banks had $10 trillion of assets on their balance sheets. About 60% was composed of what we may think of as traditional banking assets in the form of loans and leases, and of that about $1.2 trillion or 20% was in the form of commercial & industrial (C&I) lending, and about $1.4 trillion or 24% in commercial real estate (CRE) lending, the topics of today’s hearing.1 Meanwhile, the sum total of assets at other important non-bank intermediaries


continue reading


Tags: , , , ,




 
 
 

Zero Hedge

Nearly Half Of US Consumers Report Their Incomes Don't Cover Their Expenses

Courtesy of ZeroHedge View original post here.

Low-income consumers are struggling to make ends meet despite the "greatest economy ever," and if a recession strikes or the employment cycle continues to decelerate -- this could mean the average American with insurmountable debts will likely fall behind on their debt servicing payments, according to a UBS report, first reported by Bloomberg

UBS analyst Matthew Mish wrote in a recent report that 4...



more from Tyler

The Technical Traders

Indexes Struggle and TRAN suggests a possible top

Courtesy of Technical Traders

Nearing the end of October, traders are usually a bit more cautious about the markets than at other times of the year. History has proven that October can be a month full of surprises.  It appears in 2019 is no different. Right now, the markets are still range bound and appear to be waiting for some news or other information to push the markets outside of the defined range.

We still have at least one more trading week to go in October, yet the US markets just don’t want to move away from this 25,000 to 27,000 range for the Dow Industrials. In fact, since early 2019, we have traded within a fairly moderate price range of about 3200 points on the YM – a rotation...



more from Tech. Traders

Phil's Favorites

Arrogance destroyed the World Trade Organisation. What replaces it will be even worse

 

Arrogance destroyed the World Trade Organisation. What replaces it will be even worse

As the public face of globalism, the WTO mobilised protesters. It’ll be replaced by the law of the jungle. fuzheado/Flikr, CC BY-SA

Courtesy of John Quiggin, The University of Queensland

In line with his usual practice, Australia’s Prime Minister Scott Morrison has backed Donald Trump over the World Trade Organisation, criticising of China’s status in it as a “developing country”.

Critics of the int...



more from Ilene

Kimble Charting Solutions

Apple Bullish Breakout Suggesting Tech Follows In Its Path?

Courtesy of Chris Kimble

Is Apple sending a bullish message to the overall Tech market? Sure could be

Apple (AAPL) is working on a breakout above last year’s highs at (1), after creating a series of higher lows over the past year.

Tech ETF QQQ has been a similar-looking pattern to Apple over the past few months, as it is near old highs while creating higher lows.

Is Apple’s upside breakout suggesting that QQQ will follow in its footsteps and breakout?

Str...



more from Kimble C.S.

Insider Scoop

How Much Litigation Risk Is Priced Into Johnson & Johnson?

Courtesy of Benzinga

Johnson & Johnson (NYSE: JNJ) just can't seem to shake its talcum powder problems.

On Friday, Johnson & Johnson recalled 33,000 bottles of baby powder after a bottle purchased online by the FDA tested positive to asbestos.

Last year, a jury awarded a group ...



http://www.insidercow.com/ more from Insider

Digital Currencies

Five hurdles blockchain faces to revolutionise banking

 

Five hurdles blockchain faces to revolutionise banking

Shutterstock

Courtesy of Markos Zachariadis, Warwick Business School, University of Warwick

Blockchain is touted as the next step in the digital revolution, a technology that will change every industry from music to wast...



more from Bitcoin

Chart School

Gold Stocks Review

Courtesy of Read the Ticker

Gold stocks are swinging back forth between the range, and a break out swing higher is due. Gold stocks are holding a near perfect Wyckoff accumulation pattern. All should get ready to play this sector. Yet we must recognize that gold stocks are a one of the most crazy rides at the stock market fair, so play very carefully.

More from RTT Tv







GDX PnF chart from within the video

Click for popup. Clear your browser cache if image is not showing.




Important channels around the HUI.
...

more from Chart School

Lee's Free Thinking

Look Out Bears! Fed New QE Now Up to $165 Billion

Courtesy of Lee Adler

I have been warning for months that the Fed would need new QE to counter the impact of massive waves of Treasury supply. I thought that that would come later, rather than sooner. Sorry folks, wrong about that. The NY Fed announced another round of new TOMO (Temporary Open Market Operations) today.

In addition to the $75 billion in overnight repos that the Fed issued and has been rolling over since Tuesday, next week the Fed will issue another $90 billion. They’ll come in the form of three $30 billion, 14 day repos to be offered next week.

That brings the new Fed QE to a total of $165 billion. Even in the worst days of the financial crisis, I can’t remember the Fed ballooning its balance sheet by $165 bi...



more from Lee

Biotech

The Big Pharma Takeover of Medical Cannabis

Reminder: We are available to chat with Members, comments are found below each post.

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



more from Biotech

Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

more from M.T.M.

Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



more from Our Members

Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

...

more from Promotions





About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>