Some Good News And Some Not So Good News

I am tired of being all doom and gloom. The markets and data call for doom and gloom, but at some point you need to start looking for those small points of light. So before I get all gloomy again, here is some good news:

Credit Improving

This is a good sign. Some credit indicators are showing that lending is easing and rates for the less than stellar borrowers are normalizing. I personally was a bit shocked by this given the difficulties of the financial companies as of late, but here it is. The A2/P2 spread has gone from records way down to 1.29. Still high by historical standards but significantly better than the 5.86 spread after Thanksgiving. What, you ask, is the A2/P2 spread? It is the difference between borrowing rates for low and high 30 day non-financial commercial paper, that's what. Hey, I didn't know what it was six months ago either. In any event, it represents that non-stellar, though still respectable, borrows are getting credit at more realistic rates, which is crictical at the moment. Again, this is surprising to me given the past week - and this data was as of yesterday - but it could be due in part to governments exerting pressure on lending institutions to provide them with stats on their lending activities in order to get more government support. Who knows? Either way, this is good news.

Another bit of good news is Apple reporting record profits. Obviously this runs against the headwind of Jobs medical leave, but someone still making record profits is a good thing.

And Now For the Not So Good, And There Is A Lot Of It!

Oh where oh where do I begin. There is so much here, and I am tired, so I will just provide basics on most of this.

Microsoft

When a company like Microsoft misses predictions - still very profitable mind you - people take notice. And notice they did. Microsoft hit a decade plus low today, down 12%. No one (except perhaps Apple) is immune.

http://www.calculatedriskblog.com/2009/01/microsoft-cuts-jobs-sees-lower-revenues.html

Samsung

Posted its first, yes its first, quarterly loss. Need I say more.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aHXDodmmqlcM&refer=home

Japan

Their slump continues and their market is down three weeks in a row. Need I say more.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aryHlSvStHC4&refer=home

Rail Freight Down Significantly

Need I say more.

http://www.calculatedriskblog.com/2009/01/rail-freight-traffic-off-sharply-in.html

Weekly Unemployment Claims Rise

I hate to say this, but need I say more.

http://www.calculatedriskblog.com/2009/01/weekly-unemployment-claims-increase.html

Housing Starts at a New Record Low

Need I freakin say any more. (I actually consider this good news as we are now racing toward a housing bottom, which we need desperately to find, but most consider this bad news).

http://www.calculatedriskblog.com/2009/01/housing-starts-at-all-time-low.html

Architecture Billings Still Near Record Lows

Here, perhaps, I need to say a bit more. Architecture billing trends tend to lead trends commercial real estate by at least six months to a year. You need to design it before you build it. Some of this may change with Obama's infrastructure spending, as some architects are connected to these projects, but this continues to spell doom and gloom for commercial real estate ("CRE") in 2009. Specifically for CRE construction, not sales, leases or otherwise. For existing CRE, the fact that construction is at a halt is a good thing as we have too much supply and not nearly the demand. Our economy, in my opinion, is shifting to a lower spending level, so we need less commercial space. Overall, perhaps a good thing we are no longer building malls and buildings we do not need. Still, however, this will be a stress to those who build them.

http://www.aia.org/release_012109_abi

There is more, a lot more, but you get the picture.

Disclosures: None