fast_money

Larry Levin's Nightly Newsletter

Green Shoots or Poison Ivy

Over
the prior several weeks the financial media has been quite happy
spinning bad news into good to keep the rally alive. Mr. Bernanke of
the Federal Reserve joined in with his comment that he is seeing "green
shoots of recovery" in his data. As you already know, most of it is
baloney. However, I wonder how Mr. Bernanke and his ilk are seeing
today's data - are they green shoots or poison ivy? Retail sales and
the housing market are nowhere near recovery as today's data shows.
Surprising
none but the "green shoots" crowd, retail sales dropped in April for a
second month which further points toward rising unemployment prompting
the average Joe to conserve cash. Specifically, the Commerce
Department said retail sales fell .4% in April. Moreover, it revised
March's poor data to a -1.3% drop that was larger than previously
estimated. The drop in retail sales was said to be led by falling
demand at electronics, furniture, clothing and grocery stores.
RealtyTrac
reported today that foreclosure filings in April rose to another
record, affecting one in every 374 housing units, and bank
repossessions in particular may spike in the next few months. The
report went on to say that foreclosure filings, defined as default
notices, auction-sale notices, and bank repossessions were reported on
342,038 properties in April, up less than 1% from March but up 32% from
April 2008.
Umm, I thought the bottom in housing was in? I can swear I heard that over and over again in the financial media.
"Much
of this activity is at the initial stages of foreclosure, the default
and auction stages, while bank repossessions were down on a monthly and
annual basis to their lowest level since March 2008," Chief Executive
James J. Saccacio said in a statement. "This suggests that many
lenders and servicers are beginning foreclosure proceedings on
delinquent loans that had been delayed by legislative and industry
moratoria."
Perhaps the worst is yet to come?

Trade well and follow the trend, not the so-called experts.

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