Charts in the Babson Style for the Week Ending 5 December

US Dollar Weekly Chart with Commitments of Traders

See the US Dollar Very Long Term Chart for context.

Euro/Yen and the US Equity Markets Bubble: A Monetary Phenomenon

Here is an interesting comparison which we believe has some validity in that the credit and asset bubble
was significantly a Yen and Dollar, and possibly a Renminbi, monetary phenomenon.

The broadly manipulated currency markets in a fiat regime are the tail wagging the dog of the world economy.

The ultimate question might be who, if anyone, is doing the wagging?

Just to keep it interesting, and to drive home the point that these relationships are rarely simple and straightforward,
this chart shows the sharp decline in the euro/dollar cross with the decline of US financial assets.
We think we have previously shown a tight correlation between US asset values held by European banks and the eurodollar.
There may also be some 'flight to home currency' phenomenon amongst US investors.

One in Ten US Mortgages Are in Trouble

This problem will not be resolved by making more credit (debt) available.

The sustainable resolution will come with an increased in median hourly wages, and a rising payroll number.

Programs that do not contribute to this end are temporary patches at best, designed to forestall default.

We need to carefully consider those things that must be reduced in size, and those things that are infrastructure necessary to the generation of jobs and real wages.


Bloomberg
Mortgage Delinquencies, Foreclosures Rise to Record
By Kathleen M. Howley

Dec. 5 (Bloomberg) -- One in 10 American homeowners fell behind on mortgage payments or were in foreclosure during the third quarter as the world’s largest economy shed jobs and real estate prices tumbled.

The share of mortgages 30 days or more overdue rose to a seasonally adjusted 6.99 percent while loans already in foreclosure rose to 2.97 percent, both all-time highs in a survey that goes back 29 years, the Mortgage Bankers Association said in a report today. The gain in delinquencies was driven by an increase of loans with payments 90 days or more overdue.

“Until we see a turnaround in the job situation, we’re not going to see these numbers improve,” said Jay Brinkmann, chief economist of the Washington-based bankers group, in an interview. “We’re seeing more loans build up in the 90-days bucket as lenders work to modify loans and states put in place programs that delay foreclosures.”

The U.S. economy has shed 1.91 million jobs this year, while falling home prices have made it difficult for people who can’t pay their mortgages to sell their property. Payrolls declined in each month of 2008 through November, the Labor Department said today in Washington.

New foreclosures fell to 1.07 percent from 1.08 percent in the second quarter as some states enacted laws to temporarily stop home repossessions and lenders increased efforts to modify the terms of loans, Brinkmann said...