How Are the Green Shoots Doing? Well . . . .

Back in early May, we gave an overview of the stock market and the economy. We left open the question at the end whether some signs of life in the economy – so called "green shoots" of spring – marked the beginnings of recovery. Some six weeks later, we still have no conclusive evidence. But here are some factors.

Jobs, Spending and Housing Are Not as Weak
Retail store sales seem to have turned upward. After notable weakness in March and April, the May figures picked up by 0.5%, a quite respectable one-month gain. Most of it was higher gas station sales owing to the higher prices we've begun to suffer again, but even aside from that, other stores showed net gains. Not big, but encouraging.

Employment was still down in May, but that report surprised with the smallest decline since last September; while jobs still fell by 345,000, they had declined an average of 605,000 each of the prior seven months. It feels odd to express pleasure over 345,000 jobs lost, but we'll take what we get here. Construction and service sector job losses moderated, with retailing actually increasing the number of its employees, one of the few non-government sectors to do that.

Housing activity has stopped falling. New construction "starts" on one-family homes, that is, ground-breakings, increased for three consecutive months through May. Sales of these houses were still weak through April (latest known today; more data due later this week) but are up from a January low. The levels of these starts and sales, at 350,000-400,000, remain near record lows for the 50-some years the U.S. Census Bureau has collected these data; a healthy volume of starts has been about 1.5 million. Extraordinarily low mortgage rates, below 5%, gave some hope that activity might pick up. Historically, a recovery in housing has been one of the main forces pulling up the entire economy. But then, around June 1, mortgage rates rose sharply, surpassing 5% for the first time since early March and reaching 5.59%, the highest since last Thanksgiving. Last week, they retreated a bit, but such a sudden upshift is troublesome if the fragile sector is to develop a full-blown recovery.

But Higher Mortgage Rates and Gas Prices Raise Concern
So we've identified two concerns as we ruminate on the economy's fortunes: higher mortgage rates and higher gasoline prices. Both of these can act like weeds among the green shoots, choking them off just when they might be developing into nice plants. Fortunately the very latest moves in both show some easing; besides last week's easing in mortgage rates, gasoline prices were flat to down very slightly. And food prices remain moderate. The grain and meat prices that were so high and distressing at this time last year have largely given way; chicken is an exception, but beef, pork and even turkey prices are considerably lower now. This helps offset the pressure on tight consumer incomes from the recent surge in gasoline.

So compared with our last assessment, we're probably mildly more optimistic that outright recovery can come soon. Our hesitation seems to be joined by stock market investors, who push stock values higher, but then get nervous and push them back down. This happened yesterday with a 200-point drop in the Dow Jones average. One reason the press cited for the drop was a downgrading of the world outlook by the World Bank. That highlights an important aspect of the likely pattern of news going forward. The economy and the markets are in fact much improved over their chaotic states last fall. But bad news about the repercussions of this entire meltdown scenario will continue for some time. In our view, a poorer outlook for developing countries, while sad, is still to be expected in this chain of events. Further, and closer to home, we are likely for many months to have bad news about jobs and unemployment. Traditionally, companies wait quite a while after sales begin to turn up to commit to a larger workforce. In this age of instant information, we will be impatient to have better news right away, but don't fret. If the economy's improving trend is sustained, that will come in due course, but not next month or the month after that.

Uncle Sam Giveth and Uncle Sam Taketh Away
Two other issues. We've repeatedly promised further comments on the auto industry, especially in the wake of General Motors' bankruptcy filing three weeks ago. Prospects for these companies depend crucially on auto sales themselves. These were up in May from April, but at 9.9 million vehicles, they remain more than 30% below a year ago. Still this was the best level since December, and a recent statement from the CEO of GM indicates that company is experiencing firm sales in June as well. This is significant, since it means their customers are not scared off by the bankruptcy proceeding and have faith that the company will be around for awhile to service and maintain the cars. The General Motors reorganization plan appears to take better care of "secured" creditors than Chrysler's did, but these are both unprecedented situations and taxpayers, of course, will have a majority interest in GM.

Which brings us to a final topic, the role of the federal government in current business and financial markets. The upturn in mortgage rates we talked about earlier stems in part from an upturn in U.S. Treasury rates that began back in the winter. Yields on 10-year Treasury notes have risen from 2.27% in mid-January to 3.63% today. Some argue that these rates have risen because of expectations of higher inflation; this view has some validity. But the cause is simpler, we think: in the last six months, the Treasury has issued more than $900 billion in new bonds and notes. With tax receipts weakened by the economy and spending increased by stimulus efforts, that's about twice as much debt issuance as the volumes that had prevailed for several years through last September. This topic is one that will take at least a whole article itself, but its importance for the moment is that since mortgage rates tend to follow Treasuries, the government's "stimulus" has come with a higher cost for new housing credit. We don't think it will totally undo the relief that mortgage and housing markets have already seen, but it doesn't help. And it's one more reason we're still skeptical about the strength of any recovery in the months ahead.

Credit Card Debt

It seems every week or so, just as we get going on a certain topic for Ways of the World, a new event occurs that upstages our current discussion. This time, of course, it's the General Motors bankruptcy. We had seen this coming, as we wrote here some time ago, and we do want to talk about it with you. But for today, we'll stick to our current program: some commentary on consumer borrowing and a little on the new law.

Americans had a total of $945 billion in credit card debt at the end of March, according to Federal Reserve data. Other government information tells that there were about 130 million households in the country at that time. These figures divide out to an average credit card debt per household of just over $7,200. A different Fed survey of consumer finances that covers 2007 indicates that half of the households who have a credit card had at least $3,000 in balances then. The constant publicity and recent legislation regarding credit cards suggests that this debt must still be growing, evidently without bound.

But this is not so. In the last six months, the total amount of credit card debt has started to go down. That is, people really are paying off more than they're adding in new charges. The graph below shows clearly that an unprecedented contraction in credit card debt is occurring.

In fact people are apparently constraining quite considerably their use of credit cards for new purchases. The Fed data also show that the rate of finance charges added to balances increased markedly in the first quarter this year to 13% from 12% in the prior quarter. So people's debt paydowns are large enough and their new charges small enough that their total balances are falling despite the higher interest costs.

Indeed, total consumer spending has been falling, an unusual development in and of itself. People have historically tended to keep expanding their outlays, even during recessions. They just increase spending more slowly then. But this second graph shows the striking difference now – and one big reason for it: the lower outlays for gasoline in recent months. Gasoline is one item we think people tend to charge heavily to credit cards, so this could be a factor in the reduced debt. But as we are all painfully aware, gasoline prices have tilted back up once again in the last couple of months, subsequent to the periods covered by our data here. So we will have to see what happens to the spending and borrowing figures yet to be published.

About those higher interest costs. There are probably several reasons they have gone up. This specific measure is the actual finance charges as a percent of the outstanding balances. One factor we can cite is higher delinquencies, eliciting more late fees on top of the interest. The delinquency rate for the first quarter (Q1) is 6.50%, up from 5.66% in Q4 and the highest ever in the 18-year history of this information; this means that people are more than 30 days behind making even a minimum payment on 6.5% of their outstandings. A second issue is probably higher interest rates; banks may be thought to profiteer in setting their rates, and indeed the new federal legislation addresses such a perceived strategy. On the banks' behalf, though, we would point out that risk is much higher now, so higher rates are not surprising and can even be seen prudent. And third, from a political viewpoint, the banks may well have wanted to raise their rates in anticipation of just such restrictions on them as were enacted last month. More rate hikes and other actions may come in the months ahead, before the various features of the law become effective.

The new law, the Credit CARD Act of 2009*, signed by President Obama on May 22, will help make the setting of credit card lending terms a less abrupt and more orderly process, requiring 45 days' notice for a change in terms, for instance. At the same time, we think a couple of the features are actually too hard on the banks. The banks probably set themselves up for the stricture against raising rates on outstanding balances. This is a popular item among consumers and likely reflects the often substantial hikes the banks forced on them; one example we saw was an increase from 12% to 24%. In contrast, floating interest rates on mortgages don't get doubled; many have a ceiling of 2% on each increase. Banks might well have followed such a more measured strategy with credit cards too. But we believe the banks deserve to be able to do something about the rates. In a mortgage or a car loan, there's a maturity date. The bank knows when to expect its money back – and it is the bank's money that we have spent up front – but in a credit card situation, the bank doesn't really know how long the customer will take to repay. So there's an added element of risk here that's not present with other kinds of loans.

And we're therefore even more concerned about the new rule prohibiting the banks from raising rates when the customer defaults on some other debt. This "no cross default" provision hardly seems reasonable to us, even if the customer is current on the credit card bill. Clearly, the customer carries more risk if they're missing other payments. But, yes, raising this rate would make the customer's life harder.

So none of this is as simple as it looks. These parts of the law would look to make high credit limits less profitable for banks, so they might well cut limits more. And we'd surmise that they will exercise greater scrutiny before granting credit to someone with spotty records elsewhere. Maybe they should have done that to begin with, but a good number of people are likely to be unhappy at getting rejected for a card in the first place or for an application for a higher limit. Maybe in the end, that would actually be to people's benefit.

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*Credit Card Accountability, Responsibility, and Disclosure Act" – Credit CARD. Here's the White House Fact Sheet on the law: http://www.whitehouse.gov/the_press_office/Fact-Sheet-Reforms-to-Protect-American-Credit-Card-Holders/

And we also call your attention to an informative consumer website: http://www.creditcards.com/, which has rate quotes and other helps. It's the kind of catalog of credit card information that http://www.bankrate.com/ is for savings.

By coincidence, Debbie Loeb posted another helpful credit card site on Hodgepodge the same day as our original post here. See http://www.cardratings.com/. Thanks, Debbie!

Links to More of the Debt Turmoil of the Day

We're working on an article about credit card debt and the new law, and we hope to finish it "soon". In the meantime:

Last week, we told you about Edmund Andrews, a New York Times economics reporter who has managed to get himself in substantial financial woe with a too-big mortgage and unmanageable credit card debt. His Times article that we directed you to is an excerpt from a whole book, which has just been published. Reviews of it say the same thing we did about the article: it's really tough to read about this mess, but you should. The book, Busted: Life Inside the Great Mortgage Meltdown, is available from Amazon and other booksellers. Besides Andrews' personal story, chapters tell about the less-than-honorable lenders he borrowed through, so there's a broader and deeper picture of the whole sordid affair. And royalties from the book can help pay Andrews' bills.

A blogger on AOL's WalletPop has interviewed Andrews, and that is worth your time too. Tom Barlow asks hard questions, which Andrews doesn't try to sidestep. http://www.walletpop.com/blog/2009/05/26/busted-how-a-new-york-times-reporter-fell-into-the-subprime-tra/

Finally, lest you think we have no sense of humor at all, we call your attention to Debbie Loeb's Hodgepodge item from Friday, the video of "Worst $lide $tory". From Newsday's Walt Handelsman, it is a great take-off on the currently hot Broadway ticket, recast for today's economy. Do enjoy it! Animation: Recession Sing-A-Long

The Stock Market: Less Bad, Not Yet "Good"

In the following article, we talk about hints of improvement in stocks and in the economy. These are important recent developments. At the same time, we also want to call your attention to an important article that appeared in Sunday's New York Times, titled "My Personal Credit Crisis", by Edmund Andrews. Andrews is the Times reporter who covers, of all beats, the Federal Reserve. He became trapped in the same mortgage and credit mess himself that he had been describing in his very own cautionary articles. It's a hard story to read, but you should – and so should any young people you know. See how easily this happened in Andrews's household, so maybe you can help keep it from happening in yours. http://www.nytimes.com/2009/05/17/magazine/17foreclosure-t.html?hpw.

More, today, the Senate passed a bill reforming credit card regulations, and the President announced new gas mileage standards that will be set by auto make and model. We'll give you a take on these in the next week or so – along with other recent government interventions.

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Ways of the World last discussed the stock market on March 9. We wondered then, along with two well-known business publications we cited, whether stocks would fall precipitously further or only a little further. The specific question was whether the Dow Jones Industrial Average, then at about 6450, would fall as low as 5000. As it turned out, that very day was the low in the various stock market indexes, which have since risen about 30% in a massive rally; the Dow is now just above 8500. How could this be?

The upturn in stocks suggests that investors believe the economy will turn around in the foreseeable future. It says nothing about exactly when, nor how strong any rebound might be. The evidence we have so far is sketchy, and some could accuse investors of grasping at straws. Actually the current metaphor, popularized by the Fed Chairman when he appeared on CBS 60 Minutes in March, is "green shoots": hints at favorable forces that may evolve into vigorous new plants or might instead fail to set down roots and so wither away.

Companies and Consumers Recuperate
The most significant determinant of stock prices is company profits. During several months at the end of last year, the companies making up the major Dow Jones and Standard & Poor's indexes suffered outright losses. This was the case for the Dow components in August, September and October, and for the S&P 500 group during the fourth quarter (Q4). These negative results, particularly for the S&P companies, were reported with the financial statements issued during the first quarter of this year (Q1), and stock prices came under severe downward pressure. It seemed that all the bad, panic-stricken news of last autumn might be repeated. But then, subsequent reports showed some improvement. Even if business didn't get much better, companies that had taken huge write-offs in Q4 didn't have to suffer those adjustments again, so their bottom lines were not so bad. Huge cost-cutting efforts also paid off, and businesses reduced their inventories, saving them further expenses.

There were hints of improved business, too, though. Consumer spending (that's the shopping you and I do) increased in Q1 after falling in both Q3 and Q4. Those declines had made the weakest consumer spending performance since the 1980 recession. And there is little assurance that the early 2009 rise will be sustained; indeed, it occurred in January and February, while March and April saw some backtracking. Even so, stock analysts seem more confident in recommending consumer goods and retailing industry stocks at present. In Monday's stock trading, for example, Lowe's, the home improvement centers, reported declining profits in Q1 from a year ago, but the decline was less severe than analysts had projected. So Lowe's stock rose smartly on the basis of this relatively positive development.

Hints of a Bottom in Housing
There are also signs that housing is reaching a bottom. Construction starts for single-family houses, though still historically low, have stopped falling, according to April data reported this morning. And the National Association of Home Builders reports that its members have shown a second month of modest gains in their survey of "sentiment" about the housing market. Low home prices and low interest rates are making for better market conditions for would-be buyers. However – there's always a "however" or an "on the other hand" – there remain huge inventories of unsold houses, which will likely limit much resurgence in construction activity. And construction of apartments, townhouses and other multifamily units was still down markedly in April. All of this building activity is at record lows in data that go back to 1959.

So the economic outlook is still murky. Companies are getting excesses worked out of the system, but renewed growth is another question altogether.

Stock Volatility Gauges Also Not as Bad – But Not Good
Finally, in assessing the stock market's condition, we have to lament that investors still have little confidence and that their valuations continue to move up and down widely and frequently. For instance, the Dow Jones average was up Monday, but it had alternated up and down moves every single day for the two prior weeks. It is true that last week the market absorbed a substantial amount of new supply; 30 companies raised $15.4 billion in new equity, following 20 companies the week before that raised $10.1 billion. It is no small matter that such a magnitude of equity investment funding is available, and in that light, the 5% decline in the price of an average share in the S&P 500 last week can be seen as quite modest. Still, prices remain unusually volatile. A standard gauge of volatility, the statistical measure called the "standard deviation" is running at about 8% of the S&P 500 price level, sharply higher than its average of 2.8% over last 37 years. So people seem still to have no firm conviction on the sustainable value of company shares.

In prior recessions, once stocks have moved ahead for more than about four months, the economy has tended to move into a recovery. Last week was the first such positive reading for the S&P 500 in this cycle. But we hesitate to call this a true signal because of the extreme volatility. As if trying to confound our analysis even more, another measure of volatility, the Chicago Board Options Exchange "VIX" index has improved of late, and today moved below 30 for the first time since last September 19, down from a peak of nearly 90 in late October. Its historical range has been 10 to 20. So this gauge is down, but not low. Is stability returning to markets – or not? Are we grasping at green shoots? Will they grow – or wither? Stay tuned.

Chrysler: A Discouraging Follow-Up

In our story below about Chrysler's debt and bankruptcy, we related that some lenders held back from signing onto a proposal to settle the outstanding debts for substantially less than their face value. We explained that they were disturbed by the dilution in their supposedly "secured credit" in this plan, even as a union organization was being promised a proportionately larger share in whatever proceeds there will be when Chrysler's assets are sold. In withholding their approval, these lenders took considerable heat from Washington policymakers, from talking heads and others.

As the days passed following the bankruptcy filing on April 30, these lenders began to back away from their backing away. In the end, by this past Friday, May 8, only three small money managers remained, and they too gave in to the proposal. As their numbers dwindled and the first bankruptcy court rulings started to come, it became apparent that they would not be able to increase the value of their returns. The prudent course became to stop fighting the plan, to stop throwing good legal fees after an evidently hopeless cause. So now, the reorganization will go through as planned and the company will be sold, in all probability to Fiat, the Italian automaker. Production at Chrysler plants, which has been suspended, will be able to resume and work will start toward a new small, high-gas-mileage car of Fiat design.

We want to reiterate our sentiment here in favor of those hold-out lenders. Assuming we can believe their public statements of the last 10 days, we see that they are not mean-spirited and greedy, out to cheat others or only in this for whatever bucks they can grab from everybody else. Back in 2007 and through the middle of last year, these firms made what markets there were in Chrysler's "distressed debt". They priced their participation in the company's borrowing on the basis of the words in the security agreements supposedly backing the bonds. But these terms have been abrogated. These investment funds, which took no taxpayer bailout, are themselves being cheated. Possibly everyone will interpret this event as a "special case", that people should have known that Chrysler would go down the tubes and anybody should be glad to get any of their money back. At the same time, these very factors were presumably at play in the way the dissenting firms' valued their original investments.

One of the goals of Ways of the World is to try to demystify Wall Street and business behavior. That's a tall order, especially at times like this, and it's hard to give this particular situation a realistic appraisal without resorting to harsh criticism of several parties here, including some very popular and highly placed political leaders. The dissolution of the group of dissenting lenders means that the principle of secured lending will not be hashed out in law courts at this time. This is unfortunate. Lack of transparency and complexity have already been big problems in the current financial meltdown, and at the least, we are missing an opportunity to get some clarity. The result is likely to be still more complexity – and higher borrowing costs – in the future as lenders try harder to ensure that "security" means something in the final resolution of financial transactions that go awry, that is, when the security itself actually matters.

The Chrysler Bankruptcy

Monday, the stock market rose more than 200 points, pushing one of the key indexes into positive territory for this year-to-date, as signs of life in the economy become more visible. We are anxious to tell you about these things. However, other events continue apace as well, including the U.S. auto companies' financial restructuring; Chrysler is in bankruptcy and General Motors could follow. As we've complained about before here, there's too much to talk to you about all at the same time!

There are so many reasons U.S. car companies are in trouble, we can't begin to count them. And they have several groups of stakeholders, complicating their efforts to adapt. What we want try to do here is explain why Chrysler has resorted to the bankruptcy court to sort out its issues. We are hardly experts in the complexity known as the auto industry, but we can highlight some of the main players and what's at stake.

Weak Car Sales, More Restrictive Financing
First and most fundamental, vehicle sales have fallen precipitously. In April, 9.3 million* cars and light trucks (mostly SUVs, some pick-ups) were sold in the U.S., almost 36% fewer than a year ago and about 45% off the average pace of the last 7 to 8 years. In fact, the first quarter of this year saw the lowest sales since the fourth quarter of 1981, more than 27 years ago.

We see little press these days about the impact of high fuel prices on vehicle demand; everyone seems to think that the credit crunch is mainly to blame. It surely plays a big part, but last summer's $4.00 gasoline hurt a lot too, as well as the continuing burden of cheap-but-still-expensive $2.00/gallon fuel. This is especially painful for auto companies whose product mix favors large SUVs, souped-up high-end sedans, vans and trucks. Read GM and Chrysler.

Financing is a second problem. The impact of the credit crunch can be seen in interest rates on auto loans. In April, loans from banks reached what is at least a 4-year high of 7.32% on a 48-month loan [we only have 4 years worth of these figures], and while rates at auto finance companies dropped in February [latest available official information], the previous couple of months they ran well above 8%. Other terms, including loan-to-value ratios and average amounts financed, have become less generous as well. So it's been more expensive for vehicle buyers to borrow. Dislocations in other parts of the financial markets have meant that the auto companies themselves have faced high rates meeting their day-to-day cash-and debt-management needs.

More Retirees than Workers
The third issue has nothing to do with making cars, but it's certainly part of the U.S. auto industry: worker pay and retiree benefits. The following graph shows the magnitude of the second aspect of this problem, the large and growing population of retirees and the large multiple they constitute of the current pool of active workers.**

The companies and the UAW have all been racing against time to find some sustainable way to manage retiree costs, especially for health care. The 2007 contract included reforms to contain these burgeoning costs. One has been some cost-sharing by the retirees, who now pay a small monthly premium plus some co-pays and deductibles. A further action has been the formation of a VEBA for each company, a "Voluntary Employee Beneficiary Association". Rather than handling the insurance themselves, the companies began in 2007 to make payments to their respective VEBAs, which are administered by the union. However, with falling revenues, the companies are all still strained in making these payments. In February and March, Ford negotiated with the union to make part of the payment in company stock in order to conserve its cash supply. Chrysler, too, wants to switch to this kind of arrangement, indeed putting a 55% ownership interest for its VEBA in its proposed new financial structure.

Which brings us to the fourth issue, a hybrid that amounts to a combination of the financing and health insurance problems. Chrysler was bought in mid-2007 by Cerberus Capital Management, a private equity firm. Associated with that transaction, it borrowed heavily by mortgaging some factories and other facilities and taking sizable loans, altogether totaling some $22 billion. It soon became evident that running the company, much less paying off the debt, would be increasingly difficult, leading up to the first set of government loans back in December. Times only became tougher, eliciting ever more strident calls for restructuring of financing and of the labor cost arrangement. Finally, ten days ago, April 26, the UAW and the Company announced they had reached an agreement on still more health-care changes by retirees – taking away dental and vision coverage, in particular – and other concessions. Staying out of bankruptcy court then depended on the creditors, the investors in the debt that is secured by those mortgages on the factory properties.

Auto Company Lenders Object to "Cramdown"
Some of these creditors, especially the banks that have received TARP monies from the government, acceded right away to the terms of an agreement. But some 20 other lenders balked. They were being offered only $2.25 billion for the $6.9 billion in debt they own. They contend that since they hold mortgages, their debt should get satisfied first and only then should any remaining funds be disbursed to the other lenders or to the workers. This would be the usual course of bankruptcy settlement. This is what their standing as "secured creditors" normally means. In this instance, since there are specific assets backing their bonds, those assets would be sold and the proceeds used first to pay their bonds. Then the workers and their health insurance fund could have access to what is left; they shouldn't have their share decided first, this argument goes.

Apparently, members of the Obama Administration are arguing that since taxpayer funds are involved, the government can try to persuade the parties (possibly with considerable pressure) to accept a non-traditional settlement. While trying to keep up the retirees' health insurance is a noble concept, accomplishing this by altering the terms of loans that are already in place could add an arbitrary element to the financial outcome. This would be a hazardous precedent to impose on the whole financial and legal system. Others in government have already dealt with similar concerns in another context. Last week, the Senate actually defeated a proposal that would call on bankruptcy judges to ease the terms of residential mortgages, a practice described as a mortgage "cramdown". If cramdowns were mandated or even encouraged, lenders would likely make the initial loan more costly as they would face the added uncertainty that the interest rate or other loan factor might be arbitrarily reduced. Oh, my. These things are never as easy as they look at first.

All this said, the third of the "Big 3", Ford Motor Company, seems to be limping through on its own. That surely deserves discussion here, and we will do so soon.

*These monthly sales figures are quoted at an "annual rate", which means that the amount is expressed as if it were sustained over an entire year. Much economic data is shown this way; then periods of varying lengths can be easily compared.

**The graph, showing 2007 numbers, comes from the blog of Mark Perry, a professor of management at the University of Michigan at Flint – right in the heart of auto country.

David Kellerman

The Geranium Farm has a very special feature called "Light a Prayer Candle". I use it often to offer prayers and thanksgivings and to join in the prayers that are already there. I swear, though this is a computer website, that love is there and can be felt palpably. It's very like entering a chapel.

So just now, I have left a prayer for the Family of David Kellerman, the acting Chief Financial Officer of Freddie Mac, who took his own life sometime early this past Wednesday. We've written here about Fannie Mae and Freddie Mac and how the government took them over back in September as they faced enormous losses in the mortgage debacle. Kellerman was named then to step out of the frying pan and into the fire of managing Freddie's finances through this tumultuous period. The firm not only has huge losses but faces multiple investigations, with many officials and actions being questioned by Congress and regulators.

Kellerman was a bright man, only 41, and his official portrait, widely published these last few days, shows a great smile, unusual in business photos. But it's known that he'd been working long hours and was feeling the tension and pressure in his transitional role. One of the harder spots to be in right now anywhere.

So we feel for his coworkers at Freddie Mac. And we especially feel for his family: his wife and 6-year-old daughter. Their hardship in coming days -- and months -- will be great. God be with all of these people. May Mr. Kellerman's death help others in these jobs everywhere put their own work in perspective and keep a grip on their own lives. It's only money. Help us all see through that cloud.

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We have some personal experience handling the suicide death of a loved one. We call your attention to the American Foundation for Suicide Prevention, http://www.afsp.org/, for information and support. And if you are in crisis yourself, or know someone who is, you can call their Hotline: 1-800-273-TALK (8255). There is also The Samaritans, who maintain a hotline for anyone in emotional distress who needs to talk; their New York City number is 212-673-3000 and they are in Boston and a number of other cities.