This is a podcast of a whole Armstrong & Getty show "contemplating the ins & outs of walking away from your mortgage."
The specific focus is on people who "could afford" to keep paying, but it just "seems stupid" because the houses are so far underwater.
This will be another smoking hole in bank balance sheets!
In California [pdf]:
Retail sales were down $962 million (-7.3%), corporate taxes slipped by $795 million (-17.4%), and income taxes were $946 million lower (-4.3%) than last year’s totals on December 31.
U.S. consumers fell further behind in paying off credit cards last month In December, an index that tracks repayment of outstanding card balances recorded its sharpest one-month drop on record, dropping to about 16 percent from more than 18 percent the previous month, Fitch said.
Late payments on home-equity lines of credit rose to a record in the third quarter Delinquencies on home-equity lines of credit, known as HELOCs, rose to 1.15 percent from July through September from 1.08 percent in the previous period, the group said today in its consumer credit delinquency bulletin. Home-equity loan delinquencies rose to 2.63 percent
Oil services layoffs:
Schlumberger, meanwhile, said it plans to lay off about 1,000 workers in North America, or about 5% of its work force in the region. ... Halliburton Corp., Schlumberger's largest rival, also said Thursday that it will cut jobs but provided no details.
Alcoa:
Acknowledging that earlier cost-cutting moves are insufficient due to the sustained economic downturn, aluminum maker Alcoa Inc. announced deeper work-force cuts, more plant closures and a 50% reduction in capital expenditures.
BofA Lewis expects results to be below expectations: WSJ
Toyota orders 11-day output halt as sales slump
A sweeping suspension of domestic production is almost unprecedented. In 1993, Toyota halted output for one day as a strong yen hammered sales.
[New York] state's unemployment insurance claims systems crashed today after more than 10,000 people were calling it every hour.
O'bama:
Potentially we've got trillion-dollar deficits for years to come, even with the economic recovery that we are working on.
A year ago on January 30, 2008, I declared "Victory for Bears." I said:
What have looked like "panics" in February [2007], August [2007], and last week have been prices beginning to approach reasonable levels only to have bull market conditioning cause people to buy the dips.
That was right. Now we are in a bear market rally that has caused amnesia and so people have forgotten that the economy is terminal.
California
If they're sensible, over the next few weeks legislators will find enough flexibility to finish their work on a solution the state desperately needs. Otherwise, state Controller John Chiang said that he will have to start paying California's bills with IOUs in February.
Arizona
November sales tax collections were down (13.3)% compared to November 2007
November individual income tax collections were down (14.8)% compared to November 2007
The job market in Arizona continues to weaken... a decline of (3.1)%, the largest year-over-year reduction of the Arizona work force since July 1975.
No Capitulation Yet
The same Wall Street strategists who told investors to buy stocks in the worst year since 1937 are even more bullish than a year ago, predicting the Standard & Poor’s 500 Index will rise 17 percent.
rich writes:
I don't think that a year from now anyone will be saying that: 1) the recession is over; or 2) the U.S. led the way out. The U.S. economy just keeps digging itself deeper into a hole. All the stupidity and false optimism is a leading indicator of nightmares.
O'bama proclaims:
America's economy as "very sick" and has said that the situation was worsening
Politicians are paid liars, and the president does not say the economy is very sick unless it is actually swirling the drain.
The current projections are for $42.26 for 2009. That makes the forward P/E 22. That doesn't look like value at all, when the historical average is closer to 15.
I own MPG puts:
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