Another Sign Of Weakness "Breast Implants" Minyanville

I assume things are not looking good when the motherland of breast implants is witnessing a "drop off" in sales. I´m not sure if this "indicator" has a long history or track record but compared to the quality of other "official" numbers it wouldn´t surprise me if this indicator is a better barometer for things to come ;-)

Die Dinge müssen wirklich nicht zum Besten stehen wenn in dem Mutterland der Implate das Geschäft plötzlich wegbricht. Evtl. sollte sich mal einer die Mühe machen den Zusammenhang zwischen Rezessionen und Implantaten zu ergründen. Eine schlechtere Datenqualität und Aussagekraft als andere "offizielle" Statistiken ist eh kaum möglich.... ;-)

Five Things You Need to Know / Minyanville

Double Entendre Opportunity Mysteriously Escapes
In the latest sign that consumer spending is slowing, the Wall Street Journal reports that plastic surgeons are seeing the hint of a slowdown in demand for breast implants.

• Breast-implant maker Mentor Corp. (MNT) says its surgeon customers have noticed a drop in patient interest for the implants.
  
• Since last November when the Food and Drug Administration approved the return on silicone implants to the cosmetic market after a 14-year partial ban, Mentor's sales have been strong, the Journal said.
  
• But the company has detected some disturbing signs at the end of the third quarter. According to Mentor CEO Joshua Levine, some plastic surgeons are seeing a drop-off in patient consultations, which is "usually a little bit of a precursor to lighter surgical calendars maybe 45 to 60 days out."
  
• "This whole mortgage credit crisis is making people think twice," Dr. J. Peter Rubin, a Pittsburgh plastic surgeon told the Wall Street Journal.
  
• "It's something I've noticed and some colleagues have noticed as well."

Who Cares ? / Minyanville

Not a pretty picture. Especially the credit markets are not on a stairway to heaven.....Click on the headline to read the other 3 things you need to know.

Ein trübes Bild. Beosnders die Kombination im Kreditmarkt sieht nach einem in Stein gemeißelten Desaster aus. Klickt bitte auf die Überschrift um den kompletten Bericht zu lesen.

Who Cares? Part I
Jon Markman on the Minyanville Buzz and Banter this morning pointed out a Gallup Poll showing that the general public is more pessimistic about the future today than at any time in the last 15 years.
In a poll last week asking, "In general, are you satisfied or dissatisfied with the way things are going in the U.S. at this time?" a whopping 74% reported dissatisfaction, while only 24% reported satisfaction.

Who Cares? Part II

Question: Why is it lenders don't really seem to care about anything - subprime mortgage woes, potential derivatives dislocations, Bear Stearns?

Answer: Because of a seemingly endless supply of cheap money.

This is generally what is meant when someone says "excess liquidity."

What does such availability of money look like? How does it influence asset prices?

Consider the following from a recent Wall Street Journal Op-Ed piece written by Steven Rattner, managing principal of the private investment firm Quadrangle Group LLC: In 2006, a record 20.9% of new high-yield lending went to weak borrowers with at least one rating starting with a "C." So far this year, that figure is at 33%.

In recent months, lower credit bonds have traded at a smaller risk premium (as compared to U.S. Treasuries) than ever before in history, Rattner wrote.

America's general mood aside, it helps that "money" today is available in quantities, and at prices, never before seen in the modern-day history of financial markets.

Of course, as Rattner pointed out, a mere 0.8% of high-yield bonds defaulted last year, the lowest in modern times.

And so far this year there has been only three defaults.

By comparison, high-yield default rates have averaged 3.4% since 1970.

The result is a familiar cocktail: increased competition among lenders for business resulting in cheaper loans and increasingly relaxed lending standards.

Hmmm. Where have we tasted that combination before?