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What we have seen is that contagion has gone global
—Jeffrey Frankel, Harvard University: WSJ
The Greek “rescue” package announced last weekend is dramatic, unprecedented and far from enough to stabilize the euro zone.
—Peter Boone & Simon Johnson: via NYT
It is going to be extremely difficult for some of the peripheral eurozone economies to escape without large-scale defaults on their massive private external debts, public external debts, or both.
—Kenneth Rogoff: via FT
Simply put, companies don’t pay for performance.
—Graef Crystal, former advisor to Coca-Cola and American Express, remarking on his recent study of executive compensation: via Bloomberg. On criticisms from former colleagues on having become a Judas, he said: “Maybe I was a hooker. But I’m hoping to end my life as a saint.”
We should be clear about this: economic theory never provided much support for these free-market views. Theories of imperfect and asymmetric information in markets had undermined every one of the ‘efficient market’ doctrines, even before they became fashionable in the Reagan-Thatcher era. Bruce Greenwald and I had explained that Adam Smith’s hand was not in fact invisible: it wasn’t there. Sanford Grossman and I had explained that if markets were as efficient in transmitting information as the free marketeers claimed, no one would have any incentive to gather and process it. Free marketeers, and the special interests that benefited from their doctrines, paid little attention to these inconvenient truths.
—Joseph Stiglitz: via London Review of Books
he most critical thing is for the Europeans to understand that when you allow a crisis to fester it morphs and it morphs into something much more difficult to control. First and foremost, the Europeans need to understand how urgent the situation is.
—Mohamed El-Erian, CEO and co-CIO of Pimco and a former IMF deputy director: via Bloomberg
The bond vigilantes are walking out on Greece, Spain, Portugal, the U.K. and Iceland. Unfortunately in the U.S., the bond-market vigilantes are not walking out…Eventually, the fiscal problems of the U.S. will also come to the fore. The risk of something serious happening in the U.S. in the next two or three years is going to be significant…no willingness in Washington to do anything.
—Nouriel Roubini, at the Milken Institute Global Conference in Beverly Hills: via Bloomberg
Greece will default on its national debt.
—Martin Feldstein: vie Project Syndicate
There’s another big leg down and the question is how long does it stay. You can’t have much of a rally when you’ve got this big overhang.
—Lew Ranieri, chairman of Ranieri Partners LLC, speaking at at the Milken Institute Global Conference in Beverly Hills: via Bloomberg
We’ve turned a corner with housing, though it’s hard to see any robustness. Prices could fall further, but as long as mortgage rates don’t jump and employment continues to improve, we should see housing play a key role in preventing a double-dip recession…There’s some light at the end of the real estate tunnel, but there are lots of things, like inventory, in the way.
Affordable home prices and the improving economy are doing more to lift sales than the tax credit. Consumers are becoming more confident about a major purchase such as a house. We’ll see a surge as buyers rush to close before the deadline, followed by a subsequent falloff. After that dip, we expect home sales to increase for the rest of the year.
—Dean Maki, chief US economist for Barclays Capital, NY: via Bloomberg
The big plunge is over, but significant strength is unlikely. There is still a huge excess of vacant houses.
—Jim O’Sullivan, chief economist at MF Global: via Bloomberg
Beginning last November, each report showed gains as fewer cities reported year-over-year declines than in the previous month; those gains ended with this report. Further, in six cities prices were at their lowest levels since the prices peaked three-to-four years ago. These data point to a risk that home prices could decline further before experiencing any sustained gains. While the year-over-year data continued to improve for 18 of the 20 MSAs and the two Composites, this simply confirms that the pace of decline is less severe than a year ago. It is too early to say that the housing market is recovering. Nineteen of the 20 MSAs and both Composites declined in February over January. Fourteen of the MSAs and both Composites have now fallen for at least four consecutive months. In addition, prices reached recent new lows for six cities inFebruary – Charlotte, Las Vegas, New York, Portland, Seattle and Tampa – sending a more cautionary message compared to the annual figures. While 14 MSAs and the two composites show improvementover their trough values reached in the spring 2009, we are not completely out of the woods. Existing and new home sales, inventories and housing starts all show tremendous improvement in their March statistics. The homebuyer tax credit, available until the end of April, is the likely cause for these encouraging numbers and this may also flow through to some of our home price data in the next few months. Amidst all the news, however, we should also pay heed to foreclosure activity, which have reached their highest level in at least the last five years. As these homes are put up for sales, we may seesome further dampening in home prices.
—David M.Blitzer, Chairman of the Index Committee at Standard & Poor’s: via S&P
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Feb. Jan. Dec. Nov. Oct. Sept. Aug.
2010 2010 2009 2009 2009 2009 2009
==========================================================================
-------------- US Composite-20 City Index -------------
Monthly NSA % -0.85% -0.42% -0.25% -0.24% -0.10% 0.38% 1.25%
3-Mth Annualized -5.91% -3.55% -2.30% 0.16% 6.29% 14.07% 18.93%
Yearly % 0.64% -0.73% -3.10% -5.35% -7.27% -9.22% -11.21%
Index Level 144.03 145.27 145.88 146.24 146.59 146.73 146.18
-------------- US Composite-10 City Index -------------
Monthly NSA % -0.64% -0.20% -0.18% -0.25% -0.06% 0.47% 1.37%
3-Mth Annualized -3.98% -2.45% -1.92% 0.66% 7.35% 15.28% 19.76%
Yearly % 1.43% -0.08% -2.44% -4.54% -6.40% -8.33% -10.50%
Index Level 156.82 157.83 158.14 158.42 158.81 158.91 158.16
==========================================================================
==============================================================
Current Previous 3-Mth YoY% Index
MoM% MoM% Annual% Change Level
==============================================================
US Composite-20 -0.85% -0.42% -5.91% 0.64% 144.03
--------------------------------------------------------------
San Francisco -0.71% -0.56% -5.62% 11.90% 134.67
San Diego 0.62% 0.42% 4.85% 7.55% 157.92
Los Angeles -0.67% 0.93% 5.04% 5.30% 171.82
Washington DC -0.52% -0.78% -5.89% 5.02% 176.49
Denver -0.84% -1.27% -11.19% 3.59% 124.54
Cleveland -2.13% -0.69% -13.81% 3.24% 100.93
Minneapolis -2.15% -0.88% -13.37% 2.99% 119.91
Dallas -1.76% -1.30% -14.83% 2.65% 115.24
Boston -1.04% -0.49% -6.44% 1.79% 151.44
Atlanta -1.29% -1.45% -12.64% -0.93% 105.66
Phoenix -1.48% -0.64% -6.45% -1.64% 110.11
Charlotte -0.99% -0.46% -8.39% -2.48% 116.09
Chicago -2.03% -1.69% -19.40% -3.01% 122.57
New York -0.44% -0.33% -5.70% -4.15% 170.46
Miami -0.54% -0.23% -4.12% -4.35% 147.52
==============================================================
Current Previous 3-Mth YoY% Index
MoM% MoM% Annual% Change Level
==============================================================
Portland -2.44% -1.77% -16.64% -4.77% 143.69
Detroit -1.84% -1.06% -11.03% -5.38% 70.50
Seattle -1.05% -1.66% -12.80% -5.63% 143.56
Tampa -1.19% -0.48% -8.64% -6.05% 136.54
Las Vegas -0.40% -0.54% -3.11% -14.62% 103.40
==============================================================
via Bloomberg
The stock market is incredibly inexpensive. I don’t know how the bears can argue against how well corporations are doing.
—Kevin Rendino, BlackRock, managing $11 billion: Bloomberg
We’re in a time period where the concerns we had in 2007 and 2008 have been taken care of or are past. If you’re waiting for a market pullback or individual stock pullbacks, you could be waiting a long time.
—Kenneth Fisher, $40b AUM: Bloomberg
The earnings story is very supportive of the market even after the rally over the last year. The recovery is real, it’s V-shaped and it’s got legs.
—Liz Ann Sonders, chief investment strategist at Charles Schwab: Bloomberg
Institutional investors stepped back to reassess their asset-allocation strategies. Institutional ‘re-risking’ activity slowed down and reallocations focused primarily on shifting from active to passive and from money-market funds to deposits.
—Laurence D. Fink, chairman and CEO of BlackRock: Bloomberg
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