[Rhodes22-list] Economics

[TN Rhodey]

Brad, You have been to be busy being a cheer leader for Bush to notice our 
economy is unbalanced. I told you several months ago that the mortgage and 
home industry was "a house of cards and heading for huge correction". You 
responded and said your home values are fine in Memphis .....

The largest sub-prime lenders are in trouble and in the last 90 days some 30 
mortgage banks have closed or pulled out of sub-prime lending. The other 
shoe will drop when all the folks with low Interest Only payments, balloon 2 
nds, or ARMs have to refinance and find they can not because they owe more 
than the home is worth. They will be stuck with a rising payment they can no 
longer make. The common trend in home buying has been 100% financing. In the 
old days you needed to have 20% or so. Being upside down equity wise in a 
car is bad...evenworse when you are upside down in equity in you rhome. Many 
folks are upside down in equity in their home and 2 car payments. Like i 
said we are building anice house of cards.

Do a google search for "sub prime lending woes".

The leaders of companies like New Century maybe looking at jail time. This 
is tied into our overall economy in more ways than most understand.

Wally


>From: "Brad Haslett" <flybrad at gmail.com>
>Reply-To: The Rhodes 22 mail list <rhodes22-list at rhodes22.org>
>To: "The Rhodes 22 mail list" <rhodes22-list at rhodes22.org>
>Subject: [Rhodes22-list] Economics
>Date: Thu, 22 Mar 2007 08:48:18 -0500
>
>Hunker down boys and girls and protect your investments - the sky isn't
>falling but we're going to have a low ceiling for awhile.  Follow any
>benchmark you want but this is one of the best predictors out there. The
>understatement is "automotive and housing", that is a huge chunk of the
>economy and both are going through major corrections. Don't believe that
>last sentence, it's boilerplate "the world would be safe if it wasn't for
>those damn pilots" bullshit.  Brad
>
>--------------------------------
>
>    Slowing Economy Takes a Toll On FedEx's Quarterly Results
>------------------------------
>
>FedEx Corp. reported Wednesday that its earnings dropped 1.9% in the fiscal
>third quarter, stung by the slowing economy, lower fuel surcharges and
>severe winter weather.
>
>The package-delivery company, which is seen as a bellwether for the overall
>economy, also lowered its outlook for fiscal fourth-quarter earnings,
>tightening both ends of the forecast range by a nickel share. FedEx also
>said that, while its long-term goal remains 10% to 15% annual growth in
>earnings per share, growth during the coming fiscal year may fall short
>because of the sluggish economy and investments that FedEx expects to make
>in its business.
>
>"The U.S. economy grew at a lower rate than we expected in the third
>quarter, and we saw continued adjustments in the automotive and housing
>markets," FedEx Chairman, President and Chief Executive Fred Smith said in
>the press release. "I believe, however, this represents a healthy 
>transition
>for the economy as it phases into a more sustainable growth rate.
>
>"FedEx is in excellent position to take full advantage of global
>economic-growth trends and deliver overall outstanding financial results in
>the long run," Mr. Smith said.
>
>The Memphis, Tenn., company earned $420 million, or $1.35 a share, in the
>quarter ended Feb. 28, compared with $428 million, or $1.38 a share, a year
>earlier. Revenue rose 7% to $8.59 billion.
>
>The results, which marked the first profit decline for the delivery giant 
>in
>more than three years, were at the high end of the $1.20 to $1.35 a share
>forecast range the company set in December, when it reported second-quarter
>results. Earnings topped analysts' forecasts, while revenue missed
>expectations. Analysts polled by Thomson Financial expected, on average,
>earnings of $410.1 million, or $1.33 a share, on revenue of $8.7 billion.
>
>FedEx previously said the typical surge in holiday-related freight volumes
>was "a bit delayed," the latest sign that a slowdown starting in the summer
>and fall at many railroads and trucking companies may be spreading to
>package carriers that handle many shipments on the last leg of their
>journey.
>
>FedEx's average daily package volume in its express and ground businesses
>rose 4% in the latest quarter, compared with the year-earlier period, 
>helped
>by growth in international express.
>
>Revenue in the express business rose 3% to $5.52 billion, and revenue in 
>the
>ground business increased 12% to $1.52 billion. FedEx's freight revenue 
>rose
>30% to $1.1 billion. The Kinko's retail-shipping and office-supply 
>business,
>however, continued struggling, with revenue declining 3% to $485 million.
>
>FedEx expects to earn between $1.93 and $2.08 a share during the current
>quarter. Its prior guidance had been $1.98 to $2.13 a share. Analysts 
>polled
>by Thomson Financial expect, on average, for the company to earn $2.03 a
>share during the quarter.
>
>Excluding second-quarter costs associated with the new pilot labor contract
>at the FedEx Express segment, the company expects to earn between $6.70 and
>$6.85 a share for the year. Its prior guidance had been $6.60 to $6.90 a
>share.
>
>*Wall Street Journal*
>
>*3/21/2007*
>__________________________________________________
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_________________________________________________________________
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