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Re: Deflation ?
Old 09-08-2006, 08:25 PM   #41
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Re: Deflation ?

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Originally Posted by brewer12345
Actually, loan quality is uniformly good and defaults are well below historical averages. Can't say how long that will persist, though...
I admit I have been skimming the housing bubble blogs, which focus on the scary news. They report that early defaults are on the rise (like, people who never manage to even make the first payment), and that 90% of "stated income" loans turned out to overstate true income. On the other hand, banks have been selling off these loans more than they did in the past, so someone else (who? bond funds?) ends up holding the bag.
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Re: Deflation ?
Old 09-08-2006, 08:29 PM   #42
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Re: Deflation ?

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Originally Posted by bpp
I admit I have been skimming the housing bubble blogs, which focus on the scary news.* They report that early defaults are on the rise (like, people who never manage to even make the first payment), and that 90% of "stated income" loans turned out to overstate true income.* On the other hand, banks have been selling off these loans more than they did in the past, so someone else (who?* bond funds?) ends up holding the bag.*
Sure, stated income and subprime loans are starting to show some stress, but anything conforming and most prime jumbo mortgages are just fine.

As for who has the risk: banks have some. Mortgage REITs have a chunk. Bond funds, pension funds, life insurers, etc. have some. Hedge funds have some. Mortgages are some of the most thoroughly carved up assets in the securitization markets, so I suspect that the risk has been really widely spread around so that almost everyone will feel the pain, but few will be hurt seriously. But it is hard to tell.
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Re: Deflation ?
Old 09-08-2006, 08:42 PM   #43
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Re: Deflation ?

FYI: OECD is forecasting G7 growth at about 3%, ADB (asian development bank) is forecasting Asia growth at about 7% (both recent, Sept). while forecasts are only forecasts, these numbers certainly are not suggestive of any great reduction of aggregate demand on a global scale (nor is there any indication of such in any individual major economy). absent any substantial reduction of demand, deflation is not in the cards.

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Re: Deflation ?
Old 09-08-2006, 08:45 PM   #44
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Re: Deflation ?

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FYI: OECD is forecasting G7 growth at about 3%, ADB (asian development bank) is forecasting Asia growth at about 7% (both recent, Sept). while forecasts are only forecasts, these numbers certainly are not suggestive of any great reduction of aggregate demand on a global scale (nor is there any indication of such in any individual major economy).* absent any substantial reduction of demand, deflation is not in the cards.
Well, heck, you'll never sell any books or newsletters with that attitude. And if you don't scare 'em, people might actually think they can manage their own money!

I suspect that the Federal Reserve can buy enough printing presses for the Treasury to keep ahead of deflation by a comfortable margin...
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Re: Deflation ?
Old 09-08-2006, 08:58 PM   #45
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Re: Deflation ?

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I suspect that the Federal Reserve can buy enough printing presses for the Treasury to keep ahead of deflation by a comfortable margin...
... no printing presses, but what we do have working in our favour is that they would be (rightfully) more concerned about deflation (if that seemed imminent) than inflation. recall that it was concern about possible deflation that kept monetary policy so "generous".*
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Re: Deflation ?
Old 09-08-2006, 09:43 PM   #46
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Re: Deflation ?


Restaurants shave prices, plump menus

8/24/2006

By Bruce Horovitz, USA TODAY

Casual restaurants are no longer taking the national dining slump casually.

In the face of a meltdown in same-store sales and falling customer counts, some of the biggest names in casual dining from Outback Steakhouse to Applebee's to T.G.I. Friday's are taking serious actions to try to salvage 2006. Some are even chopping prices.

Excluding the weeks after 9/11, this is the toughest period the industry has faced in nearly a decade, says Richard Snead, CEO of Carlson Restaurants Worldwide, which owns Friday's.

"This is unprecedented," concurs Paul Avery, COO of OSI Restaurant Partners (OSI), whose brands include Outback. Beginning in November, Outback plans to cut prices across its menu, he says.



http://www.usatoday.com/money/indust...-actions_x.htm
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