I’m just working off my laptop and I’m about 120 inches of screen space short so I’ll be brief (well brief for me anyway).
That was a very so-so day in the markets and very disappointing after Europe and Asia gave us such a nice head start but the Dow held up and there were no major technical breakdowns.
KBH had a technical breakdown in Q1 earnings, off 84% from last year but the CEO did refrain from using the word "suck", which is either smart or dishonest – we’ll know by June…
"We’re not ready to say that the markets have stabilized and prices have stopped eroding," Mr. Mezger said on a conference call with analysts. He said the difficult conditions "likely will continue for at least the remainder of 2007" — crimping quarterly and full-year results relative to last year’s levels. (does sound kind of sucky, doesn’t it?)
Speaking of which, I’m down in Washington and getting lots of good info but there’s something very, very fishy going on here as Roger Cole, the Fed’s Director of Banking Supervision and Regulation, told the Senate Banking Committee today that he didn’t see “spillover effects from the problems in the subprime market to traditional mortgage virtual portfolios….”
At the same time he is making his testimony, LoanCity of Santa Fe is shutting the doors on the last of their 12 offices, putting 300 people out of work. LoanCity did NOT make subprime loans!
The company says problems in subprime have made it difficult to get funding from banks to make new "prime" loans. “We didn’t have a big subprime explosion. That’s not what happened here,” said Rick Soukoulis, chairman and CEO. “But a tightening of credit did affect us. We just didn’t have the capital to withstand the continuing of the credit crunch.”
“The industry is shaking out because loan volumes are down and are likely to fall further,” said Mark Zandi, chief economist at Moody’s Economy.com. “The ENTIRE mortgage market is shrinking — prime and subprime.” As this trend has picked up, it makes it harder for the ENTIRE market to get credit at reasonable terms, he said. Move along folks… Nothing to see here…
This new mantle taken up by the Fed demands a better phrase than "Fiddling while Rome Burns." We need a way to describe blatant government manipulation of data and information, against all facts to the contrary, in order to bring popular opinion in-line with administration policies. How about "Mission Accomplished"?
The mission was certainly accomplished over at the NYMEX today as crude was jammed briefly back up to $62 per barrel. I’m still hoping this is a last harrah by the oil patch as the heat is really getting turned up in Washington (you don’t think I’m here for the cherry blossoms do you?).
Yesterday the House had a chat with Philip Cooney, former Chief of Staff at the White House Council on Environmental Quality, who acknowledged at a hearing that SOME of the changes he made to climate reports were "to align these communications with the administration’s stated policy" on climate change.
How many is some? 181 changes were made on the three administration reports under his tenure. And we had such high hopes for Mr Cooney as he was such a great lobbyist for the oil industry before our President tapped him to lead our nation’s fight for environmental quality. Thank goodness Mr. Cooney did not have to remain unemployed for long… As soon as he left the White House under a cloud of suspicion he was tapped by XOM to work for their public affairs group. Believe me, I wish I were joking about this stuff!
Al Gore has gotten the Dems all fired up down here (wait, I had to stop and pinch myself to see if I had actually written that sentence) and they are talking about stopping the war, subpeonaing Rove, and defying the President (who asked couldn’t we all just pretend that he didn’t fire US attorneys who wouldn’t blindly follow orders). Senate Judiciary Chairman Pat Leahy (D-Vt.) said: "I know he’s the decider for the White House — he’s not the decider for the United States Senate."
The Cost of Energy has a great article suggesting we can now measure political BS under the The Inhofe Scale, "which will be used to measure statements (but most definitely not the speakers who make them) that exhibit a noticeable and willing detachment from reality." In addition to yesterday’s outburst, this is in honor of the Senator’s (R – OK) entire body of work including the following:
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Inhofe repeated his view that man-made global warming is "the greatest hoax ever perpetrated on the American people," and he quarreled with a Bush administration proposal to list polar bears as a threatened species. "They’re overpopulated," he declared. "Don’t worry about it: The polar bear is fine." His staff handed out supporting documentation, including the claim that "MARS HAS GLOBAL WARMING DESPITE ABSENCE OF SUVs."
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In his own defense, the Senator did say: "I have been called — my kids are all aware of this — dumb, crazy man, science abuser, Holocaust denier, villain of the month, hate-filled, warmonger, Neanderthal, Genghis Khan and Attila the Hun. And I can just tell you that I wear some of those titles proudly." Again, I WISH I were making this stuff up!
Good night from Washington.
– Phil
