[Rhodes22-list] Economics

Fri Mar 23 09:07:51 EDT 2007

Wally:

     What you have said is particularly true where house values are
overvalued in anticipation of increasing in value.  I suspect a big time
shake out coming.  However, you blame Bush.  Come on now, where were the
Democratic critics a couple of years past.

      Bush's stated intent was to allow anybody who really wanted a house to
be able to get one.  His ecomomics have helped that goal.  Now it is up to
them to keep them.

       Not all will.  However, I suspect many will.  The current default
rate in the sub prime market is quoted as 23%.  Truth is it will go up in a
recession.  Remember some of the creative sub par financiing was pure
speculation.

       There will be some creative ways to help prevent defaults, but that
does not answer your premise, why was the situation permitted.  It is a
general governance issue and legislators of both parties did not want to say
or do anything.

       What is more interesting to look at is the declining value of the
dollar.  They say inflation is under control.  However, what you get for the
dollar is less.  So the value of some of those homes under duress is not the
same value in dollars as a few years ago.  Hum.  Another way to hide facts.

       This is not a Bush issue, but the way the politicians and press hide
the truth.  If it were a liberal democrat in office, they would be looking
elsewere, and so would you.

Ed K
Greenville, SC, USA


TN Rhodey wrote:
> 
> 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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> 
> _________________________________________________________________
> 5.5%* 30 year fixed mortgage rate. Good credit refinance. Up to 5 free 
> quotes - *Terms 
> https://www2.nextag.com/goto.jsp?product=100000035&url=%2fst.jsp&tm=y&search=mortgage_text_links_88_h2a5d&s=4056&p=5117&disc=y&vers=910
> 
> __________________________________________________
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> 
> 

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