Tuesday, September 1, 2009

Quick Notes & Articles for the Day - September 1

ISM Rises Into Growth Range - The Institute for Supply Management reported Tuesday that the August ISM index rose above 50 for the first time since January 2008. The index handily beat expectations coming in at 52.9 versus estimates of 50.5. The July number was 48.9.

Pending Homes Sales Rise - The National Association of Realtors reported that pending sales of existing homes rose for 3.2% in July and 12% above July 2008. The sales have now risen for a record sixth month straight, and they have been boosted by lower prices and a home buyer tax credit. Pending homes sales in July rose in the South and West. (Note - The index is based on sales contracts of existing homes only. The NAR also reports on existing home sales once the home has actually been closed on which is usually a 4-8 week window.)

Bank of America Wants to Partially Repay Bailout - The Wall Street Journal has reported that Bank of America wants to repay part of the bailout money it received from the government. The first "repayment" would be the $20 billion it received in January to help as part of the acquisition of Merrill Lynch. On the government end, they would like Bank of America to pay between $300 - $500 million as a fee for the government's guarantee from January that would have shared some of the losses between BofA and the government.

According to the report, if BofA were to repay $20 billion, that would remove them from the list of "exceptional" aid recipients, a designation that brings more congressional scrutiny.


What Happened to the 'Depression'? - By Allan H. Meltzer - The Wall Street Journal - "Day after day, economists, politicians and journalists repeat the trope that the current recession is the worst since the Great Depression. Repetition may reinforce belief, but the comparison is greatly overstated and highly misleading. Anyone who knows even a bit about the Great Depression knows that this is false."

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