{+++}Hi guys,this is my first “premium newsletter”, in actuality it’s a post just for you premium subscribers. I had thousands of weekly subscribers to the free newsletter which my Aweber service did a great job of aggregating, but of course not everyone has signed up for premium service so the most efficient and seamless way for me to do this will be via a weekend post, most likely on Sunday.You will be getting one every weekend.
I found out today that the guy I bought my house from and who was a pretty substantial Chrysler dealer gave back the keys to Chrysler, otherwise, if he hung around he may have been on the hook for about $5 million in inventory and another million in parts. Tough times, he had a great run but didn’t want to take the risk of the outcome which could be any day or any week now. Tough out there for sure.
The financials are fascinating in here and there are so many questions. Is all the bad news in these names? If so, aren’t they overextended in a big way? Is USB really worth $19 up from$8? STI $16 up from $6? WFC $21 up from $8. You get the picture. They came down hard so I’m not surprised that they are are catching vicious short squeezes in here, but valuation at some point has to become an issue doesn’t it? Not in bear market rallies it doesn’t, so although I think this sector is still “Death”, I will respect the trend for the time being. Futures are currently down about 100 points on Dow Jones, but that could be some early uneasiness from the Swine FluPandemic that is gathering some steam. May 4th is the date when we hear the real deal from Geithner on the banks so be prepared for a very whippy market between now and then.
All the major indexes were down slightly for the week with the exception of the NAZZY which posted a gain of 1.3%.
In economic news, existing home sales in March declined 3.0% to an annualized rate of 4.57 million units. According to the National Association of Realtors, distressed sales accounted for just over half of all transactions in March. First-time buyers were behind 53% of transactions. Notably, the median sales price increased 4.2% from February to $175,200, which is 12.4% below the year-ago level and slightly below the level seen in December.
New home sales for March were at a seasonally adjusted annual rate of 356,000, easily beating the the consensus estimate of 337,000. February sales, however, were revised up to 358,000 from an originally reported level of 337,000. Sales fell 0.6% +/- 19% from February. Median prices were down 3.5% from February to $201,400, which is down 12.2% from the year-ago period.
Though the housing market has the benefit of low interest rates and increased affordability, rising unemployment, steep levels of inventory and tighter credit conditions continue to act as a notable drag.
Now for some charts:
I will be updating these names on Twitter as always so tune in there. Here is a look at next week’s calendar. Also, we’ve installed Disqus on the blog which is a far superior comment system than the old blog. So get the conversation going and “talk amoung yourselves.”