Thursday, November 6, 2008

Big Day Tomorrow

The grand-daddy of economic numbers will be released @ 8:30 am: Non-farm Payrolls.

- September change was (159,000)

- The average of the last 3 months is (100,000)

- Based on the ADP number, estimate would be (143,000)

- Bloomberg survey of estimates: (200,000)

- My guess: (170,000)

Don't worry, I am not becoming optimistic.  I think the seasonal adjustments and trend will snap this number back before we see a really bad string of numbers.

In addition, Fannie Mae may be posting their 3rd quarter earnings report tomorrow.  A few things to focus on:

-    Level III Assets: $56.6 billion last quarter, comprised of mainly Alt-A & sub-prime

-    Loan Loss & Reserve: Provision of $5.35 billion in 2nd quarter, $1.48 billion in charge-offs

-    Deferred Tax Assets: This is my favorite.  Since they have been losing money, they have been counting their potential tax write-offs versus income as assets.  The problem is, they are not making money.  This accounted for $20.6 billion in assets last quarter, it might be written down by as much as $18 billion.  By the way, stockholder equity stood at only $41.2 billion last quarter.

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