Economic Indicators

Just a few odds & ends I thought were worth reporting:

Both Lowes and Home Depot had better than expected quarters. This is a positive sign for the construction industry, as is the fact that builder sentiment was up for the second straight month according to the National Association of Home Builders, which attributed the gain in part to the $8,000 tax credit for many first-time buyers. (Source: WSJ, CNBC)

Although the above is favorable news and indicates a stabilization of the housing market in the near future (stabilization, not rebound), there are still a few shoes to drop, such as impending defaults on commercial real estate loans and the effect of those defaults on small to mid-sized banks. A Wall Street Journal study predicated on similar criteria as those used by the federal government for the large bank stress tests shows potential losses of $100 billion for 900 small to mid-size banks relating to commercial real estate loans. These losses would dwarf the losses from residential loans, anticipated to be approximately $49 billion for these same banks. (Source: WSJ)

In Jamie Dimon's conference call for JP Morgan today, he had harsh words for the TARP program relating to the lack of clarity as to the means by which the government will allow repayment. He also noted that it is possible we are seeing a bottom in the economic downturn. (Source: CNBC)

In short, a mixed bag...