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Things I'm not so thankful for - Record Economic Contraction

elixir's picture

Now that we're distracted by the upcoming holiday season, the real news breaks about where our economy is right now. In the toilet.

"Economists have said they believe the weakness in the July-through-September quarter is a harbinger of further weakness ahead. Growth in the current quarter is on track to fall at a 4% annual rate.
'As bad as the third quarter was, the fourth quarter will undoubtedly be worse,' economists at RBS Greenwich Capital wrote to clients.
Business and consumer activity ground to a halt between mid-September and mid-October. "

Apparently it's our fault...again...

"As with the initial estimate, the story behind the weakness in the third quarter was all about the sudden drop-off in consumer spending. Read full government report.
Consumer spending declined 3.7% in the third quarter, revised from a 3.1% decline. This is the first drop in consumer spending in 17 years and the largest in 28 years."

But, not to be outdone by the worst, biggest or most dangerous decline, the WSJ reports that home sales are at a, dare I say, historic low.

"For the third quarter, the national index posted a 16.6% decline in home prices from a year earlier, worse than the 15.1% drop posted in the second quarter.

The indexes showed prices in 10 major metropolitan areas fell 18.6% in September from a year earlier and 1.9% from August. The drop marks the 10-city index's 12th-straight monthly report of a record decline.

In 20 major metropolitan areas, home prices dropped 17.4% from the prior year, also a record, and 1.8% from August. None of the regions was able to stave off a decline from August to September.

For the sixth-straight month, no region was able to avoid a year-over-year price drop. Phoenix and Las Vegas again posted the largest drops, falling 31.9% and 31.3%, respectively. Miami, Los Angeles and San Diego didn't fare much better, with declines of 28.4%, 27.6% and 26.3%, respectively."

But this comment worries me, I don't want the corporations to be angry because you know who'll get the sharp end of their stick.

"Corporate profits kept retreating in the third quarter. Profits after taxes fell by 3.0% to $1.302 trillion, after sliding 0.4% in the second quarter and 7.7% during the first quarter. Year over year, profits were down 9.9%.'

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amberglow's picture
Submitted by amberglow on

it's not only our spending--the latest "bailout" of Citi drops it more in our laps than previous ones --

"The U.S. government’s emergency rescue of Citigroup Inc. offers a new model for bank bailouts: explicitly insuring against losses on toxic assets, with taxpayers footing the bill.

The Citigroup plan extends the federal commitment beyond the previous framework of capital injections from the Treasury and credit from the Federal Reserve. Now, the U.S. is a partner in the performance of $306 billion in real-estate loans and securities, sharing losses beyond $29 billion on what are likely to be some of Citigroup’s worst holdings.

“Everybody and his brother has got to have their hand out now,” said Eric Hovde, chief investment officer at Hovde Capital Advisors, which manages $1 billion in financial-services stocks. “The whole problem is so much bigger and deeper than the Fed and Treasury ever understood.”

Taxpayers are likely to be at greater risk from the new template, which may be used to help more companies as debt writedowns continue to climb, analysts said. ..." --