Economics Update

We already knew that Japan was in a recession, but the updated data is worse than the initial data. The preliminary number was 0.1%, the prediction was 0.2%, and it came in at 0.5%.

Barry Ritholtz notes that the 4 Week T-Bill was paying 0%, down from 0.4%, and notes that the only reason to do this is if you expect that the next 4 week T-Bill will have a negative interest rate, i.e. that you pay the government money for the honor of lending them your money.

Turns out that he was a a little bit premature, because the 3 month T-Bills actually traded at negative interest rates, "If you invested $1 million in three-month bills at today’s negative discount rate of 0.01 percent, for a price of 100.002556, at maturity you would receive the par value for a loss of $25.56."

If you want to feel concerned note that this is the Lowest Rate Since 1929...1929....That year sounds familiar.

In the meantime, the Bank of Canada cut its key rate by 75 basis points to a 50-year low, because they are in recession too.

In real estate, the Pending Home Sales index fell, though not by much, and listing prices for homes have continued to fall.

Calculated Risk has a summary of the commercial real estate market, and it ain't pretty.

In energy, oil is down a bit, likely spooked by the complications on a bailout deal.

The dollar was mixed today, up a bit vs the Pound and Euro, and down a bit vs. the Yen.