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Friday, June 26, 2009

Great Recession Roundup — June 26, 2009

Items of Interest:

Bloomberg:
Surging U.S. Savings Rate Reduces Dependence on China -- Government data today showed that the household savings rate rose to 6.9 percent in May, the highest since December 1993, as personal spending increased less than incomes. The rate in April 2008 was zero.

Most of the rise in income in May was due to one-time government stimulus payments to seniors, said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts.

Americans’ newfound frugality is pinching airlines such as Chicago-based UAL Corp., which is cutting staff amid dwindling demand for leisure travel. Donations to charities dropped last year for the first time since 1987, and they’re in danger of declining further in 2009...

discussion:
David Goldman / Inner Workings:
The Rise in the Savings Rate Has Only Begun -- In a recent post entitled, “The Stealth Deterioration in Asset Quality,” I argued that the rise in the US savings rate had only begun. That implies falling consumption, a weak housing market, and an L-shaped recession as far as the eye can see...

Catherine Rampell / Economix:
Savings Rates Rising Toward Mediocrity
----
Jeff Cox / CNBC:
Five Reasons Housing Market Still Hasn't Recovered Yet -- What happened to the housing recovery?

Despite hopes that the market would begin showing signs of life this spring, the latest housing data suggests otherwise. Instead, the sector remains stubbornly moribund—trapped in a spiral of declining prices, increasing mortgage rates, unemployment and several unforeseen factors...
  1. Unemployment
  2. Credit Availability
  3. Price Pressures
  4. Appraisals
  5. Short Sales
related:
S. Fitch & M. Woolsey / Forbes: The Other Shoe Is Dropping in Real Estate
----
Home Valuation Code of Conduct and appraisals improperly using distressed sales as comps were causing contracts to fall out due to faulty valuationsTom Lindmark / Seeking Alpha:
Appraisals: The Latest Housing Battlefield Heats Up -- The National Association of Home Builders has joined the National Association of Realtors in the fight to roll back the Home Valuation Code of Conduct. Actually, I’m not sure they want to roll back the HVCC so much as they want to dictate the methodology that appraisers currently use to arrive at a value for a house. I’ll get back to that in a moment...

appraisals improperly using distressed sales as comps were causing contracts to fall out due to faulty valuations...
related:
Housing Wire:
Industry Players Bring the Heat over HVCC
----
Hummer Bummer

BBC:
China ‘to block’ Hummer takeover — A Chinese firm's bid to buy the gas-guzzling Hummer car brand will be blocked on environmental grounds, according to Chinese state radio. — Sichuan Tengzhong Heavy Industrial Machinery emerged as the surprise buyer for the brand earlier this year...
discussion:
Dave Schuler / Outside The Beltway: China to Block Hummer Acquisition?
----
John M. Broder / New York Times:
House Passes Bill to Address Threat of Climate Change — Overcoming deep divisions within its Democratic majority, the House passed legislation on Friday intended to address the threat of global warming and transform the way the United States produces and uses energy...
Alex Steffen / Worldchanging: U.S. House Acknowledges Planetary Atmosphere!
Josh Harkinson / MoJo Blog Posts: Climate Bill Passes the House
Kate Galbraith / Green Inc.: Climate Bill Passes House
John M. Broder / The Caucus: Obama Lobbies Lawmakers on Energy Bill
Steve J. / RADAMISTO: THE WORLD IS ENDING AGAIN!

related:
Nate Silver / FiveThirtyEight:
Cap-and-Trade, State-by-State — Regional considerations tend to loom larger in debates over environmental policy than in other sorts of affairs. Some states consume more energy than others. Some states have more carbon-intensive economies than others. Some states are more or less likely…

Alan Viard / The American: The Cap-and-Trade Giveaway
Investor's Business Daily: The Cap-and-Trade Bill is an Economic Disaster
Bradford Plumer / New Republic: Last-Minute Frenzy Before Climate Vote
Conor Clarke / Atlantic: What Waxman-Markey Will Do To The Economy
----
MarketWatch:
Four banks fail, bringing 2009 tally to 44 -- Four banks in Georgia, Minnesota and California were closed by regulators Friday, as the ongoing credit crisis continued to claim victims...
related:
Calculated Risk:
Bank Failures #43 & #44: MetroPacific Bank, Irvine, CA, Horizon Bank, Pine City, Minnesota
----
FT.com
Deflation dogs Japan with sharp fall in prices — Japan's consumer prices fell 1.1 per cent in the year to May, the steepest drop since records began in 1970, with slack household consumption increasingly blamed as the country's second bout of deflation deepens
----
Ron Lieber / NY Times:
Your Money: Et Tu, AARP? Good Guys Cut 401s, Too -- The AARP saving cash by cutting the match to its 401(k) plan is akin to the Teamsters hiring nonunion labor...
----

Calculated Risk

MishTalk - Mike Shedlock

Paul Krugman - NY Times

The Big Picture - Barry Ritholtz

naked capitalism - Yves Smith

Pragmatic Capitalism

Washington's Blog

Safe Haven

Paper Economy

The Daily Reckoning - Australia