Economics Update

Well, we have another expert on the economy saying that the so-called green shoots are not real, the Postmaster General of the United States, John Potter, is saying that mail volume continues to fall, and in these days of email, increasingly mail volume is driven by, and so is a a very good indicator of, the state of the mail order business.

On the other hand, the banks have continued loosening short term credit, with
the LIBOR dropping sharply again, indicating that bank to bank lending is getting healther, and the National Association of Homebuilder confidence index rose to 16 from 14, though with neutral being 50, this is a change from "end of the world bad" to "beins strapped in a chair and forced to watch the Ben Affleck Jennifer Lopez movie Gigli" bad.

It doesn't help that the situation for the GSEs, Fannie and Freddie, is looking increasingly dire, with further losses into the tens, if not hundreds of billions forecast, and one wonders if at some point, a decision is made to wind them down, which would eliminate much of the available financing available for mortgages in the US.

I would also note that, with the big banks concentrating on buying up other banks, the fact that the smaller US look to need an additional $24 billion in capital does not bode well for the finance needs for much of our economy.

While we're at it, let's note that the real estate crash is now firmly hitting the higher end of the market, as people purchase those homes as "trade ups," and they have run out of rubes people with sufficient equity in the old homes to do so.

And in the old standbys, energy and currency, rose by the most in a month, on concerns about Nigerian unrest, a fire at a refinery in Pennsylvania, and concerns about the start of the Summer driving season, while dollar rose on comments by the Japanese Finance Ministry that they needed to work to keep the Yen from appreciating too much.