Fed officials sounding more downbeat

We heard from Atlanta Fed Bank President Lockhart yesterday – certainly seems more negative on the outlook – he said that he expects the economy to be exceptionally soft through mid-year with a muted second-half recovery. He cited many hurdles that will frustrate a meaningful rebound in coming quarters, and has turned his attention to the sagging fortunes of the commercial real estate market, defaults related to refinancing existing properties, problems in emerging markets and rising trade barriers.

California home sales surge again; prices slide again

The Dataquick data showed that once again, forced foreclosure sales triggered a 53% jump in SoCal home sales last month; prices meanwhile plunged 40% to a seven-year low.

Commercial real estate in disarray

A report by the National Association of Realtors showed that in 4Q, commercial real estate prices sagged 14.9% from a year ago – the weakest in 12 years.

May want to screen for refinancing risk

If you’re going to start loading up on corporate credit, you may want to screen for refinancing risk: Moody’s said yesterday that US companies have $26 billion of speculative-grade debt coming due this year, $44 billion in 2010 and $120 billion in 2011. The data go back 11 years, and refunding needs have never been this high.

Gold retains its allure

The yellow metal has hung in great even in the face of rising gold scrap coming to the market (+15 YoY) and reduced demand for jewelry (-5.5%). The reality is that gold is regarded as a hedge against both inflation and deflation, zero short-term interest rates, heightened protectionism and currency debasement. Global buying of gold bars and coins in 4Q reached 148.5 tons – an 811% surge from a year ago. Retail investing (304.2 tons) soared 400% – it’s this herd mentality that has our colleague, Rich Bernstein, a tad worried about a mania developing. But speculative fervor is not as evident as it was at the last test of $1,000 in 2007 – at that time, investment flows into ETFs were 150 tons versus 94.7 tons in the latest quarter.