by Akiva at Mystical Paths
The American economy appears strong in many ways. Stores are stocking up for the holidays, seasonal workers are being hired. There are no major layoffs going on, no regional disasters affecting employment, no strikes or shipping woes. The mall is busy, the store parking lots full. (I know, I was fighting my way through them today.)
Further supporting this, Wal-Mart sales were up, and their stock went up on the news.
Yet, underlying statistics are getting downright scary. Foreclosure filings (since September 2006) are up 310% in Arizona, 422% in California, and 316% in Florida. Massive write downs are reported by Bank of America and Wachovia.
And, two news items have shocked me on Friday and Sunday:
Friday, "E-Trade Financial's stock plummeted 59 percent Monday after the company said its $3 billion portfolio of mortgage debt has lost more value than expected...Standard & Poor's cut its rating on E-Trade's credit...the brokerage's financial problems might jeopardize the safety of 3.7 million accounts." (Here and here.)
Sunday, "China Freezes Lending. Chinese authorities are slamming the brakes on bank lending, in their latest attempt to curb the runaway investment threatening to overheat what is soon to be the world's third-largest economy...a blanket edict to stop lending growth is unusual...Curbing lending by raising interest rates, as China has already done four times this year, would be more in keeping with Beijing's increasingly market-oriented approach to business. But the lending freeze shows how the slowing U.S. economy may be complicating Chinese policy making. Lower interest rates in the U.S. give Beijing less room to push up rates without creating a ripple effect." (Here.)
Things seem increasingly unstable, and that's worth noting.
Monday, November 19, 2007
// 11/19/2007 //