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Walmart U.S. Retail sales down down down

Canadian retail sales for december down down down.

CHICAGO — Walmart Stores Inc posted its seventh consecutive quarterly drop in sales at existing U.S. stores, falling short of the company’s worst-case forecast.

The company said pricing and merchandising issues in the United States, where it has been losing customers to dollar stores, were deeper than expected and will take longer to fix.

The world’s largest retailer earned US$5.02-billion, or US$1.41 per share, in the fourth quarter ended on Jan. 31, up from US$4.82-billion, or US$1.26 per share, a year earlier.

More bad news boys anf girls.

More to come




Residential real-estate prices dropped in the 12 months to December by the most in a year, a sign the U.S. housing market is struggling even as the rest of the economy recovers.

The S&P/Case-Shiller index of home values in 20 cities fell 2.4%, the biggest year-over-year decrease since December 2009, the group said today in New York. The median forecast of economists surveyed by Bloomberg News projected a 2.3% decrease.

A predicted increase in foreclosures this year as banks resume seizures may depress home values further, prompting would-be buyers to hold off on purchases. Unemployment at 9% and declines in housing are among reasons the Federal Reserve has signaled it will proceed with its unconventional monetary stimulus.

“Home prices are still declining amid excess supply,” said Michelle Meyer, a senior economist at Bank of America Merrill Lynch Global Research in New York. “Although transactions have started to pickup, buyers are looking for very low prices. There is a backlog of distressed properties and it will flow into the market this year. We expect to see a gradual drop in prices.”

Stock-index futures held earlier losses after the report on concern over rising unrest in North Africa and the Middle East. The contract on the Standard & Poor’s 500 Index maturing in March fell 1.2% to 1,327 at 9:15 a.m. in New York. Treasury securities rose, sending the yield on the benchmark 10- year note down to 3.53% from 3.59% late yesterday.

Economists’ Forecasts

The median forecast was based on a survey of 23 economists surveyed. Estimates ranged from declines of 3.1% to 1.7%.

Nationally, prices decreased 4.1% in the fourth quarter from the same time in 2009 and were down 3.9% from the previous three months, the biggest quarter-to-quarter drop in almost two years. At 130.38, the index was just shy of the recession low of 129.2 reached in the first quarter of 2009.

Home prices in the top 20 cities fell 0.4% in December from the prior month after adjusting for seasonal variations, following a 0.6% November decrease. Unadjusted prices fell 1% from the prior month as 19 of the 20 cities showed declines.

The year-over-year gauge provides better indications of trends in prices, the group has said. The panel includes Karl Case and Robert Shiller, the economists who created the index.

Three-Month Average

The Case-Shiller gauge is based on a three-month average, which means the December data were influenced by transactions in November and October.

Eighteen of the 20 cities in the index showed a year-over- year decline, led by a 9.1% drop in Detroit.

“We ended 2010 with a weak report,” David Blitzer, chairman of the index committee at S&P, said in a statement. “Despite improvements in the overall economy, housing continues to drift lower and weaker.”

Washington showed the biggest year-over-year increase, with prices rising 4.1% in the 12 months to December.

Fed policy makers described the real estate market as “depressed” in a Jan. 26 statement following their policy meeting in Washington. The central bankers said falling home values continued to stymie the consumer spending that accounts for about 70% of the world’s largest economy.

More Foreclosures

The share of U.S. mortgages in the foreclosure process at the end of 2010 matched an all-time high, the Mortgage Bankers Association said last week, as lenders and servicers delayed home seizures to investigate charges of improper documentation.

At the end of last year about 15.7 million mortgaged single-family homes, or 27%, were worth less than the amount of loans outstanding, according to Zillow Inc., a Seattle-based real estate information company. It was the highest share in data going back to the first quarter of 2009.

Industry projections reinforce the concern about housing. The number of homes receiving a foreclosure notice will climb about 20% in 2011, reaching a peak for the housing crisis, said RealtyTrac Inc., an Irvine, California-based data seller.

“The issue is unemployment, fear and lack of confidence, and that’s what’s got to turn right now,” Ara Hovnanian, chief executive officer of New Jersey’s largest homebuilder, said Feb. 14 on Bloomberg Television’s “Surveillance Midday” with Tom Keene.

And a final nail in the ciffin.

Oil up almost 8dollars a barrel today.

Broke and broker.

Wa

New Home Sales Drop More Than Expected, Down 12.6%
Reuters | February 24, 2011 | 10:08 AM EST
New US single-family home sales fell more than expected in January, a government report showed on Thursday, pulled down by a plunge in activity in the West as a state homebuyer tax credit in California ended.

The Commerce Department said sales tumbled 12.6 percent to a seasonally adjusted 284,000 unit annual rate after a downwardly revised 325,000-unit pace in December.

Economists polled by Reuters had forecast new home sales sliding to a 310,000-unit pace last month from a previously reported 329,000 unit rate.

Compared to January last year sales were down 18.6 percent. Sales surged in December as buyers in California rushed to take advantage of the tax credit for new homes. Sales in the West plunged 36.5 percent after spiking 62.5 percent the prior month.

A glut of foreclosed houses on the market is putting pressure on new home sales, forcing builders to drastically scale back on construction projects. Analysts expect new home sales to remain depressed.

Data on Wednesday showed sales of previously owned homes were the highest in eight months in January, but were driven by a surge in purchases of distressed properties.

At Januarys sales pace, the supply of new homes on the market rose to 7.9 months worth from 7.0 months worth in December. There were 188,000 new homes available for sale last month, the lowest since December 1967.

By:  John Browne
Monday, February 28, 2011
Earlier this month, J.P. Morgan made an important announcement that received scant coverage in the media: the bank would now accept gold as collateral for loans. The move appears to have been well-timed, for in the ensuing weeks, the price of gold and silver climbed steeply, based largely on political turmoil in the Middle East. But why should Morgan’s decision be of interest to anyone outside the bank?

It can be argued that J.P. Morgan is the world’s premier major bank. As such, its decision to accept gold as collateral offers a rare glimpse into the very private financial decision-making of some of the largest and most sophisticated investors in the world, whether governments, corporations, or wealthy individuals.

By reopening its former gold vaults in New York, as well as new facilities in Far Eastern financial centers – which cater to investors who typically have larger gold reserves than Western counterparts – Morgan is telling the world that gold is gaining greater traction as a medium of exchange.

Given that a bank continually looks to provide services that its clients demand, the move suggests that a strategy has taken hold among the highest echelon of investors based on core holdings of precious metals.

Readers of this column know that Euro Pacific has long advised that defensive, long-term investors allocate a portion of their portfolios to precious metals. The reasons could not be more fundamental. Major central banks are in the midst of a campaign of prolonged currency debasement that transfers wealth from prudent individuals to socialist governments with massive debts. To help avoid this hidden tax is to hold savings in something other than fiat currencies.

Apparently, some important Morgan clients agree, and, as a result, many have assembled huge positions in gold – often counted in tons, not ounces. Given the size of these otherwise idle positions, it was perhaps only a matter of time before some holders looked to employ their gold as collateral for cash loans. It is logical to assume that some of the loan proceeds are being used to purchase attractive assets with good yields and upside potential. There is little evidence that holding gold as collateral causes any anxiety to risk managers at J.P. Morgan. Indeed, given the current monetary drift, a vault full of gold should offer far greater confidence than a vault full of paper.

For years, we have forecast stagflation, or a combination of serious inflation and economic depression, for the US. We have described how massive central bank cash infusions have created the conditions for runaway inflation. While the cash injections may have averted a corrective depression in the short-run, they have left a staggering debt cost for future generations.

In the meantime, the world continues to resist cooperation with the Fed's best laid plans. Flash revolutions in the Middle East threaten to disrupt world oil supplies and send gasoline prices higher. There is great concern that higher energy prices will sap what little vitality there is in the developed economies. Any renewed erosion of consumer confidence could herald a double-dip into depression, even the hint of which would convince Western governments to flood the world once again with more massive injections of paper.

This cycle can only end in catastrophe. Morgan’s embrace of gold is a solution for survival. The strategy is one that our readers know well.

As the world confronts one of the most critical periods of economic upheaval that it has ever seen, it is clear that our most influential economic stewards have absolutely no idea what they are doing. But, like kids with a new chemistry set, they are nevertheless unwilling to let that stand in the way of their experimental fun. As they pour an ever-growing number of volatile ingredients into their test tubes, we can either hope that they magically stumble on the secret formula to cure the world’s ills, or more pragmatically, we can try to prepare for the explosion that is likely to result.

Recent comments from current and former Federal Reserve Chairmen, and from the leaders of the European Central Bank, have starkly illustrated this stunning lack of understanding. In an extended interview on CNBC today, former Fed Chairman Alan Greenspan, once considered the sagest of all economic gurus, admitted that he had no idea whether the Fed’s current quantitative easing program will help or hurt the economy. The Maestro simply said that we must wait and see, and if positive economic indicators come, then we may begin considering the policy to be a success. That’s some serious insight.

In other words, after dedicating his life to the study of macroeconomics, Greenspan is left with no deep understanding of how the injection of trillions of dollars of printed money affects an economy. The chicken who plays tic-tac-toe in Chinatown could likely offer the same level of critical analysis. To paraphrase Nancy Pelosi: according to Greenspan, we have to conclude the policy to know if it works. Although I have never been thought of as an economic expert by anyone with actual access to power, permit me to offer a thought on the subject: printing money creates inflation, which weakens an economy. Unfortunately, this kind of common-sense thinking never seems to penetrate academic circles.   

Without fundamental understanding, all economists are left with is surface analysis of current data and an inclination to play probability and statistics. This is like a meteorologist opening the window, checking current conditions, and making predictions based on analysis of recent days. While this may be useful, it is no substitute for an understanding of atmospheric dynamics and climatology. In his interview, Greenspan essentially confirmed this bias for “open window” economics, saying that Ben Bernanke and Jean-Claude Trichet both follow the same models, but with different statistical sensitivities: Bernanke toward growth data and Trichet toward inflation data. In that sense, both are no better than Las Vegas odds-makers, with one putting his chips on inflation risk and the other betting on recession risk. 

This gambler's approach helps explain why economists fail to understand the obvious benefits of a strong currency. According to people like Bernanke, a weak currency is like an ace up the sleeve, a clever way to undercut the competition. The problem is either everyone does it and the game ends up swimming in aces, or Bernanke gets caught and other countries decided they don't want to play anymore (sell Treasuries).

Conventional warfare in this arena used to involve central bank buying and selling currency reserves in the open. But in the aftermath of the financial crisis, these timid measures were abandoned. In the last few years, the United States has upped the ante and brought out unconventional weaponry. The trillions of dollars printed by the Fed are the economic equivalent of carpet bombing. Initially our enemies responded in kind, and sought to devalue their currencies in lock step. They fought fire with fire and showered liquidity on their own economies. However, as the collateral damage mounted in the form of surging food and energy prices, they have begun sounding the general retreat.

In an interview on CNBC this week, James Bullard, the President of the Federal Reserve Bank of St. Louis, claimed that the Fed’s easy money policies were not responsible for inflation overseas, arguing that foreign central banks had a choice. They could have allowed their currencies to rise, which would have kept prices from rising in their internal markets. Instead, they chose to prevent their currencies from rising – thereby importing our inflation. In other words, they had to choose between exchange rate stability and price stability. Apparently, they couldn’t stand the heat, so they are getting out of the kitchen.

Bernanke’s recent testimony before Congress, in which he argued that the Fed can’t be blamed for rising commodity prices, will surely increase international unease. Yet still, as the issuer of the world’s reserve currency, the Fed is blazing a trail that other central banks feel compelled to follow. It is no coincidence that inflation is highest in those nations that maintain a peg against the dollar. But making this fundamental connection is beyond the ability of our statistician-in-chief.

Bernanke makes another fundamental error by blaming higher commodity prices on faster global growth. Growing economies produce more stuff, which keeps prices in check. However, if money supply grows faster than production, prices rise. So, the increased demand to which Bernanke refers is merely a function of more money, not faster growth.

In the end, we will overwhelm our competitors with a show of extreme force. By the time the Fed rolls out QE IV or QE V, the US will emerge as the undisputed winner of the currency war. To the victor goes the spoils, which, in this case, will be higher consumer prices and interest rates and lower standards of living. On the other hand, the losers will enjoy rising living standards, as their stronger currencies serve to lower prices and increase consumption. If that doesn’t make perfect sense, maybe we should run it by the chicken.


By Peter schiff

If they could blame tthis on japan they would

Housing Starts See Biggest Drop Since 1984
Reuters | March 16, 2011 | 08:45 AM EDT
U.S. housing starts posted their biggest decline in 27 years in February while building permits dropped to their lowest level on record, suggesting the beleaguered real estate sector has yet to rebound from its deepest slump in modern history.

Groundbreaking on new construction dropped 22.5 percent last month to an annual rate of 479,000 units, according to Commerce Department data released on Wednesday. This was just above a record low set in April 2009 and way below the estimates of economists, who had been looking for a smaller drop to 570,000.

January's figure was revised up to 618,000 units from 596,000. But that did not change the tenor of the report, which confirmed that the sector is failing to recover despite interest rates near record lows.

Building permits, a hint of future construction demand, fell to a record low of 517,000 units from a revised 563,000, and were down by about 20 percent from levels seen in February 2010.

Housing was at the epicenter of the financial crisis of 2007-2009.

One key impediment to the sector's recovery is a vast backlog of unsold inventory, while a shaky job market has also made consumers reluctant to embark on any major new financial commitments. Making matters worse, a glut of foreclosures, stalled in recent months by revelations of improper loan documentation, is depressing the market.i

And the beat goes on and on and on. When prrices fall to 1991 levels. Then ill call a bottom. Sadly we still have a long way to go.

WASHINGTON — Sales of previously owned U.S. homes fell unexpectedly sharply in February and prices fell to their lowest in nearly nine years, an industry group said on Monday.

The National Association of Realtors said sales fell 9.6% month over month to an annual rate of 4.88 million units, snapping three straight months of gains. The percentage decline was the largest since July.

Economists polled by Reuters had expected February sales to fall 4.0% to a 5.15 million-unit pace from the previously reported 5.36 million unit rate in January, which was revised slightly up to 5.40 million.

Compared with February last year, sales were down 2.8%.

The median home price dropped 5.2% in February from a year earlier to US$156,100, the lowest since April 2002.

US is on its way back! You are delusioned to think it is at its end!

I would hope for your sake the US does well or your investments here are as well like Tiger used to say DONE LIKE DINNER!

DATA SNAP: US Feb Housing Starts Plunge 22.5%
========================================================== U.S. Housing Starts Feb Jan ! Consensus: ! Total Starts: -22.5% +18.4%r ! -4.4% ! Single-Family: -11.8% +1.4%r ! Actual: ! ! -22.5% ! ========================================================== By Alan Zibel and Jeff Bater

WASHINGTON -(Dow Jones)- Home construction in the U.S. took the steepest monthly plunge in nearly 27 years in February and new building permits set a record low, an indication that the battered sector is a key source of weakness for the economy.

Construction of homes and apartments last month fell 22.5% from a month earlier to a seasonally adjusted annual rate of 479,000 from an upwardly revised 618,000 in January, the Commerce Department said Wednesday. It was the lowest level for housing starts since April 2009 and the largest monthly decline since March 1984.

Building permits, a gauge of future construction, fell 8.2% from a month earlier to an annual rate of 517,000. That was the lowest level in more than 40 years of record-keeping.

The results were well below analysts' forecasts. Economists surveyed by Dow Jones Newswires expected housing starts would fall by 4.4%. Permits had been projected to rise 1.2%.

The month's results were driven by a 46.1% decline in construction of multifamily homes with at least two units, a volatile part of the market. Single-family homes, which made up about 78% of all starts, also fell, sinking by 11.8% from a month earlier.

Compared with the same month a year earlier, overall new-home construction was down 20.5%.

Builders are remaining idle due to weak demand from buyers, some of whom have become nervous amid reports showing U.S. home prices have turned downward once again. Many buyers are choosing foreclosures and other previously owned homes rather than new ones, which tend to be more expensive.

Aside from low demand, builders have also had problems getting financing to start projects.

New-home construction last year peaked in April, but then fell sharply when tax incentives for first-time purchases expired. The full year of 2010 wound up being the worst year on record for the builders, with home sales down more than 14% from a year earlier.

The Commerce Department data showed that housing starts in February fell in all four U.S. regions, compared with a month earlier. They decreased 48.6% in the Midwest, 37.5% in the Northeast, 28.0% in the West and 6.3% in the South.

Housing starts in January rose 18.4% from a month earlier, revised from an originally reported 14.6% monthly increase.

Actual housing starts, without seasonal adjustments, fell to 32,700 in February from an upwardly revised 39,600 in January. Lumber and commodities markets watch those numbers closely to gauge demand.

The Commerce report can be found at http://www.census.gov/const/newresconst.pdf -By Alan Zibel, Dow Jones Newswires; 202 862 9263; alan.zibel@dowjones.com

(MORE TO FOLLOW) Dow Jones Newswires

Durable Goods Orders Plunge; Jobless Claims Edge Lower
Reuters | March 24, 2011 | 08:36 AM EDT
New U.S. claims for unemployment benefits fell as expected last week, with the four-week moving average dropping to it lowest level in more than 2-1/2 years, showing the labor market healing was becoming entrenched.

Also, new orders for long-lasting U.S. manufactured goods unexpectedly fell in February after a strong showing in January, a government report showed on Thursday, hinting at decelerating manufacturing activity.

The Commerce Department said durable goods orders fell 0.9 percent after an upwardly revised 3.6 percent increase in January. Economists polled by Reuters had expected a 1.1 percent increase after January's rise, which was initially reported at 2.7 percent.

Excluding transportation, durable goods orders fell 0.6 percent after a revised 3.0 percent fall in January. Economists had expected this category to rise 2.0 percent.

Initial claims for state unemployment benefits slipped 5,000 to a seasonally adjusted 382,000, the Labor Department said on Thursday.

Economists polled by Reuters had forecast claims falling to 383,000. The prior weeks figure was revised up to 387,000 from the previously reported 385,000.

The four-week moving average of unemployment claims—a better measure of underlying trends—dropped 1,500 to 385,250, the lowest since mid-July 2008 and holding below the 400,000 level for a fourth straight week.

A reading below 400,000 is generally associated with steady job growth, which until recently had eluded the economic recovery. Employers created 192,000 jobs in February, the most in nine months, after adding a paltry 63,000 new workers in January.

The Federal Reserve has acknowledged the improvement in labor market conditions and is generally expected to conclude its $600 billion government bond buying program at the end of June.

A Labor Department official said there was nothing unusual in the state-level data and described the report as clean.

The number of people still receiving benefits under regular state programs after an initial week of aid fell 2,000 to 3.72 million in the week ended March 12, the lowest level since September 2008.

The continuing claims data covered the week for the household survey from which the unemployment rate is derived.

The jobless rate dipped to 8.9 percent in February from 9.0 percent in January and has dropped 0.9 percentage point in the past three months.

Economists had expected so-called continuing claims to fall to 3.70 million from a previously reported 3.71 million.

The number of people on emergency unemployment benefits rose 85,712 to 3.63 million in the week ended March 5, the latest week for which data is available. A total of 8.77 million people were claiming unemployment benefits during that period under all programs.

So prices in the top twenty U.S. Markets were down 3.1% in January, year over year, and the slide is accelerating. Eleven of the top twenty hit new price lows on the index. Only San Diego and Washington, DC are showing annual improvements with San Diego just barely out of the red.

“Keeping with the trends set in late 2010, January brings us weakening home prices with no real hope in sight for the near future” says Standard and Poors' David M. Blitzer. "The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery. At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing."

[quote]So prices in the top twenty U.S. Markets were down 3.1% in January, year over year, and the slide is accelerating. Eleven of the top twenty hit new price lows on the index. Only San Diego and Washington, DC are showing annual improvements with San Diego just barely out of the red.[quote]

Opportunitities are always greater when your looking in the front view mirror, by the time you see them in the rear view mirror they have passed you. You see your always looking in the rear view mirror!!

Do you know that when you copy information off the NET NO ONE READS THE BULL!!!!

ORONTO — U.S. housing prices will continue to fall well into next year, continuing to put pressure on an American economy that is struggling to sustain its recovery.

That is the view from Paul Dales, senior U.S. economist with Capital Economics.

“Most analysts expect prices to stop falling by the second half of this year — we believe they’re wrong,” Mr. Dales said Monday at the Capital Economic’s annual conference in Toronto.

Mr. Dales said that the excess of foreclosed homes set to be sold this year and next will likely push down prices by 5% by the end of 2011.

“If we are wrong, it is because we’re being too optimistic rather than pessimistic.”

Mr. Dales said further downside could stem from a vicious circle that has the potential to develop in the U.S. housing market this year. Such a scenario would involve falling prices coinciding with rising defaults, ongoing foreclosed sales and subsequently, even further price drops.

If that happens, said Mr. Dales, housing prices could fall by up to 20% from current levels.

But it is not all doom and gloom for U.S. housing. Mr. Dales points out that housing prices are currently as undervalued as they were overvalued during their peak several years ago.

“Against incomes, at no point in the last 35 years has housing looked so undervalued,” he said.

On top of that, U.S. housing has become incredibly affordable. Interest on principal mortgage payments on a median priced home purchased with a 20% down payment was US$670 a month, or just 13% of the median annual income last year. That is nearly half of the US$1200, or 25% of household income, seen at the peak.

But even given the low value and affordability of U.S. homes, Mr. Dales said four obstacles still prevent prices from increasing in the short-term. Those include high unemployment, low credit scores and tighter credit conditions, widespread negative equity and a diminishing desire to own homes in wake of the housing collapse.

Negative equity in particular was a concern, given that about a quarter of all U.S. homeowners had mortgages that were worth more than their homes — leaving 11 million households in the U.S. underwater.

That leaves a large pool of potential foreclosed homes hanging over the market, something Mr. Dales points out could continue to add fuel to distressed home sales, which are keeping prices depressed.

“Forty per cent of all existing sales were distressed sales [last year], and this is particularly devastating for prices, as the bank is willing to offload the properties at any cost,” he said.

As for when there might be a light at the end of the tunnel, Mr. Dales looks to a 5-10 year time frame to when U.S. home prices could move back toward fair value.

“In answer to my original question, whether there is any light at the end of the U.S. housing market — there is, but unfortunately the moment, it still looks rather dim.”

Even the baseline scenario in places like Las Vegas and Miami is grim, where Case Shiller projects a [external] 21% decline in home prices from 2010 to 2012.

But in one scenario it could be worse.

[external] 6.7 million delinquent mortgages are waiting to flood the market around the country -- and with near-zero cure rates most of them will. Another [external] 2 million homes in foreclosure are being held off the market by banks.

[external] Economist Keith Jurow says distressed asset investors are ignoring this threat: "If you are an investor thinking of buying one or more properties in Miami-Dade County, for example, you need to know that 24.9% of all active first liens there were seriously distressed. This means that more than 91,000 properties are almost certainly going to be dumped onto the market. Will that exert downward pressure on prices? Absolutely."