by Calculated Risk on 7/10/2009 02:52:00 PM

From Robert Reich: When Will The Recovery Begin? Never. (ht Bob Dobbs)

The so-called "green shoots" of recovery are turning brown in the scorching summer sun. In fact, the whole debate about when and how a recovery will begin is wrongly framed. On one side are the V-shapers who look back at prior recessions and conclude that the faster an economy drops ...

Unfortunately, V-shapers are looking back at the wrong recessions. ...

That's where the more sober U-shapers come in. They predict a more gradual recovery ...

Personally, I don't buy into either camp. In a recession this deep, recovery ... depends on consumers who, after all, are 70 percent of the U.S. economy. And this time consumers got really whacked. Until consumers start spending again, you can forget any recovery ...

Eventually consumers will replace cars and appliances and other stuff that wears out, but a recovery can't be built on replacements. Don't expect businesses to invest much more without lots of consumers hankering after lots of new stuff. And don't rely on exports. The global economy is contracting.

Eventually the economy will start growing again ... but I think the "recovery" will be very sluggish.

Reich suggests the only market for cars will be replacements - but the replacement level (based on scrappage rates) is in the 12 to 13 million range. And that would be a significant increase from the current 9.7 million annual sales rate. That is still well below the peak, but recovery is from the bottom of the cliff - and is not measured from the previous peak.

by Calculated Risk on 7/10/2009 01:07:00 PM

Yesterday I posted this information with an incorrect email address for Cathy. She can be reached at: stickelc@live.com

CR note: This is from Tanta's sister Cathy. For new readers, to find out about Tanta, please see Tanta: In Memoriam. Also see The Compleat UberNerd for some of her incredible articles. I really enjoy my Mortgage Pig sweatshirt! Thanks to everyone for your support, CR

The Last of the Mortgage Pig Wear

Thank you all for your orders – we raised $3,700 and hopefully you have something unique to help you remember Tanta.

We ended up with some extra completed items and we still have a few “Slap It” and “Holidays” transfers left for T-shirts (“Convexity” is sold out). I’m offering these outside of EBay – no additional charge for shipping in the continental US. Simply send an EMAIL to stickelc@live.com with your request and I’ll send back a confirmation. Then mail a check or money order along with shipping instructions and we’ll get the item out to you. The proceeds will be donated to the Ovarian Cancer Research Fund.

Again – thanks for your support and all of the kind words.

Cathy Stickelmaier

Completed Items:
Black Full-Zip, Hooded Sweatshirt w/Tanta Vive in Pink & White – Size XL - $40
Men’s White Polo Shirt – Size L - $32
White Long Sleeved T-Shirt with Slap-It Transfer – size L - $18
White Hooded Sweatshirt with Holidays Transfer – Size 2X - $30
White Hooded Sweatshirt with Holidays Transfer – Size XL - $30
(2) Short Sleeved T-Shirt with Holidays Transfer – size S - $15 each
(2) White Hooded Sweatshirt with Slap It Transfer – size L - $30 each

Transfer Items – made to order while transfers last:
White Long Sleeved T-Shirt with Slap It Transfer – Sizes S to 2XL - $18
White Short Sleeved T-Shirt with Slap It Transfer – Sizes S to 2XL - $15
White Long Sleeved T-Shirt with Holidays Transfer – Sizes S to 2XL - $18
White Short Sleeved T-Shirt with Holidays Transfer – Sizes S to 2XL - $15

by Calculated Risk on 7/10/2009 10:54:00 AM

SEC data guy brings us some interesting data on SEC filings with companies expressing: "Substantial Doubt"

Below is a graph that shows the total number of distinct entities filing a 10-K or 10-Q over time. It also shows the number of distinct entities expressing "substantial doubt" for the first time in one of those filings

Click on graph for larger image in new window.

Note: Left scale doesn't start at zero, and the right scale is a 4 quarter average.

These are just initial expressions of "substantial doubt".

On a cumulative basis, a stunning number of filers are expressing concerns (more to come on this). For details, see SEC data guy's post.

by Calculated Risk on 7/10/2009 10:06:00 AM

From MarketWatch: July UMichigan consumer sentiment falls to 64.6

U.S. consumer sentiment fell sharply in early July, according to a survey released Friday by the University of Michigan and Reuters. Sentiment fell to 64.6 from 70.8 in June.

Click on graph for larger image in new window.

Consumer sentiment is a coincident indicator - it tells you what you pretty much already know.

And it tells us right now that consumer sentiment is still very weak.

by Calculated Risk on 7/10/2009 08:53:00 AM

Here is the press conference at 9 AM ET:

From the NY Times: With Sale of Its Good Assets, G.M. Tries for a Fresh Start

General Motors completed a major step in its turnaround on Friday and closed the sale of its good assets to a new, government-backed carmaker....

G.M.’s sale of its desirable assets, including brands like Chevrolet, Cadillac and GMC, to the new company — now named Vehicle Acquisition Company but soon to be renamed the General Motors Company — is meant to shed decades of buckling liabilities. The federal government will hold nearly 61 percent of the new company ...

The new company will be much smaller, with brands like Saturn, Hummer, Opel and Pontiac in the process of being sold or closed.

That was fast!