Posted by:
NuWire Investor @ 3:08 PM
From
Reuters:
“A separate Commerce Department report showed construction spending fell 0.8 percent as home building continued to wither. The drop was the biggest since July and it took construction spending down to a $1.158 trillion annual rate, the lowest in two years.
Rising delinquencies in the risky subprime mortgage market will likely prolong the deterioration.”
From
Financial Week:
“Private, non-residential construction, which includes office buildings and shopping malls, also showed significant weakness as it dropped by 0.5% in the quarter, its first decline in 13 months. Mr. Newport called that ‘an ominous sign [since the sector] had been on a roll, increasing 26 times in 27 months prior to October.’
Private, non-residential construction had been a bright spot this year for the industry, making up for some of the decline in residential spending and providing construction jobs, ‘but I think things have changed since August, as companies have found it hard to get financing for anything,’ Mr. Newport added.”
From
Forbes:
“’There will be more hefty declines to come,' warned Ian Shepherdson of High Frequency Economics. 'These numbers lag building permits, whose fall has re-accelerated in recent months.'”
Labels: economy, real estate
Posted by:
NuWire Investor @ 9:59 AM
From
The Wall Street Journal:
“The plan is being negotiated between regulators including the Treasury Department and a coalition of mortgage-related companies including
Citigroup Inc., Wells Fargo & Co., Washington Mutual Inc. and Countrywide Financial Corp. People familiar with the talks say the individual members have agreed to follow any agreement reached by the coalition, which is called the Hope Now Alliance.
Details of the plan, which could be announced as early as next week, are still being worked out. In general, the government and the coalition have largely agreed to extend the lower introductory rate on home loans for certain borrowers who will have trouble making payments once their mortgages increase.”
From
Conde Nast Portfolio:
“American Banker
reports that the plan being discussed among Bush administration officials and the financial institutions involves extending the introductory interest rates for five years on nondelinquent subprime hybrid adjustable-rate mortgages. Financial institutions have been pressing for a three-year time frame, American Banker says.”
From
Bloomberg:
“Paulson, who will address a housing conference on Dec. 3, presided over a one-hour gathering at the Treasury Department in Washington with federal regulators, bankers and lobbyists. Citigroup Inc., Wells Fargo & Co. and Washington Mutual Inc. executives attended, said a person present, who spoke on condition of anonymity.”
Labels: finance, real estate
Posted by:
NuWire Investor @ 2:59 PM
From
Reuters:
“Chavez vows to accelerate his revolution through a referendum on Sunday, when Venezuelans vote on constitutional changes that create new forms of ‘collective’ and ‘social’ property and formalize the economy as socialist.
The reforms would also allow Chavez to stay in power for as long as he keeps winning elections, and increase state powers to expropriate private property.”
From
The New York Times:
“Three days before a referendum that would vastly expand the powers of President
Hugo Chavez, this city’s streets were packed with tens of thousands of opponents to the change on Thursday, a sign that Venezuelans may be balking at placing so much authority in the hands of one man.
Even some of Mr. Chavez’s most fervent supporters are beginning to show signs of hesitation at supporting the constitutional changes he is promoting, including ending term limits for the president and greatly centralizing his authority.
New fissures are emerging among his once-cohesive supporters, pointing to the toughest test at the polls for Mr. Chavez in his nine-year presidency.”
From
USA Today:
“Even some longtime supporters say Chávez has gone too far in trying to cement his control over daily life. The government is ‘confiscating the rights of the people,’ says Ismael Garcia, a member of the National Assembly who helped Chávez regain power after an attempted coup in 2002 but now is campaigning against the referendum. ‘It's not democratic,’ Garcia says.
Chávez says the changes will allow him to implement a centralized socialist state better equipped to improve the lives of Venezuela's poor. The reforms would remove presidential term limits, cut the workday to six hours and make it easier for the state to seize private property. ‘Communal cities’ would be established under presidential control, which could allow Chávez to ignore elected local officials. The president also would be able to suspend civil rights in emergencies.”
Labels: international
Posted by:
NuWire Investor @ 9:15 AM
From
Bloomberg:
“U.S. home foreclosures almost doubled in October from a year earlier as subprime borrowers struggled to make higher payments on their adjustable-rate mortgages, according to data compiled by RealtyTrac Inc.
There were 224,451 foreclosure filings, including default notices, auction notices and bank repossessions, a 94 percent jump from October 2006 and a 2 percent increase from the previous month, RealtyTrac reported today. California had the most filings with 50,401 and Florida was second with 30,190. Nevada had the highest rate, one for every 154 households, more than triple the national average.
Bank repossessions increased 35 percent, providing ‘evidence that more homeowners who enter foreclosure are losing their homes,’ James Saccacio, chief executive officer of RealtyTrac, said in a statement.”
From
MSNBC:
“The number of defaults and foreclosures is expected to continue to rise as payments on adjustable mortgages rise to levels that some homeowners can’t afford. Roughly $1.5 trillion in adjustables are scheduled to reset over the next two years, according to figures compiled by Credit Suisse. Though rates on traditional adjustable mortgages rise and fall with market interest rates, many of those written during the last few years of the lending boom will automatically reset to higher payments after their two- or three-year ‘starter’ rates expire.”
From
Associated Press:
“While the number of filings is still up year-over-year, it has leveled off in the last two months after hitting a high for the year in August.
Efforts by lenders under pressure to modify loan terms for at-risk borrowers could explain the slower sequential increase in filings, but the trend is likely more a result of a lag in filings after interest rate changes on adjustable-rate mortgages, said Rick Sharga, RealtyTrac's vice president for marketing.”
Labels: real estate
Posted by:
NuWire Investor @ 10:48 AM
From
Reuters:
“’The increased turbulence of recent weeks partly reversed some of the improvement in market functioning over the late part of September and October,’ Kohn said. ‘Should the elevated turbulence persist, it would increase the possibility of further tightening in financial conditions for households and businesses.’
Kohn's remarks stood in sharp contrast to recent comments by Philadelphia Federal Reserve Bank President Charles Plosser, Chicago Fed President Charles Evans and Fed Governor Randall Kroszner, who had suggested as recently as Tuesday that the two rate cuts made since mid-September would be enough to buffer the economy from the housing slump and related market turmoil.”
From
Yahoo Finance:
“The market was elated after Fed Vice Chairman Donald Kohn told the Council on Foreign Relations that recent financial turbulence has reversed some of the improvement seen in markets in previous weeks, and could squeeze credit for households and businesses. He said tight financial conditions may merit "offsetting" policy from the central bank.
For investors, the possibility for lower rates seemed more compelling than persistent concerns about economic growth. The Fed, which reduced rates at its last two meetings to help calm the shaky markets, will hold its final rate-setting meeting of the year on Dec. 11.”
From
The Wall Street Journal:
“In remarks today,
Federal Reserve Vice Chairman Donald Kohn said that recent financial-market turbulence has undone some of the progress made in late September and in October, and repeated that ‘nimble’ monetary policy would be needed to address economic risks. Though Mr. Kohn isn't known as a hawk on inflation, his language, before the Council on Foreign Relations, suggests that more interest-rate cuts are a real possibility. Taken as such, the message would represent a rhetorical shift by the central bank -- or dissent among its tribe -- after remarks yesterday from two Fed speakers that emphasized inflationary risks, and the bank's statement with its most recent rate cut that called growth and inflation risks more or less balanced.”
Labels: economy
Posted by:
NuWire Investor @ 8:07 AM
From
The Wall Street Journal:
“The notion that the rest of the world has ‘decoupled’ from the U.S. came into vogue earlier this year, as overseas economies -- particularly emerging markets -- continued to post robust growth and Europe and Japan appeared to be enjoying a long-delayed upturn.
Policy makers joined the decoupling parade. In the spring, the IMF included a chapter in its April World Economic Outlook called ‘Decoupling the Train.’ The gist: The current weakness of the U.S. economy stems largely from housing woes -- and housing is less global than, say, computers and other parts of the U.S. economy. That is good news for the rest of the world.
But the U.S. is now flirting with something more severe than a mere slowdown. That -- along with rising oil prices and the specter of a global credit crunch -- is changing the picture.
Europe is showing signs of faltering, while Japan may be at risk of sliding back into recession. While developing economies like China are still on a steady boil, recent drops in their stock markets suggest investors are beginning to doubt their immunity to a U.S.-led slowdown.”
From
Reuters:
“Confident commentary about emerging markets' resilience to a U.S. recession is being replaced by nervous re-examination of the so-called 'decoupling theory'. November saw emerging equities lose 15 percent after rising 45 percent year-to-date.
Many subscribe to the theory that world economic growth will increasingly be led by emerging markets and will therefore not be too badly affected even by a full-blown U.S. recession. Rising emerging powerhouses, led by China and India, the argument goes, can pick up a lot of the slack.”
From
Seeking Alpha:
“As we look at different countries, they each have their thing (or things) that make them tick. During a U.S. event some of these places will hold up just fine.
The story in Vietnam seems like a candidate for ongoing health, a type of place I have previously described at being in its own world.
During the big bear market at the start of this decade, Australia was able to pull away and recover much faster than most other markets. That is the thing to this entire issue. There will be some markets that weather a U.S. downturn better than others. While this is obvious, it is also true.
Which countries will be the ones? I mentioned that Australia worked on the last go around. Norway not so much last time, but if oil stays high (above $80?) it might be a candidate. Norway obviously is a surplus country.”
Labels: economy, international, investments
Posted by:
NuWire Investor @ 3:51 PM
From
Money Week:
“If a country like Argentina builds a significant current account deficit, that deficit is dollar denominated whilst their currency is the peso. It’s just a matter of time before the peso collapses and the country is bankrupt. America is fortunate that their deficit is denominated in their own currency, which means they can just print more paper money. They have taken advantage of that privilege and behaved imprudently, not caring about the deficit because of the lack of risk it posed to them.
Oil producers and exporters such as China have chosen to manage their currencies to stay in line with the dollar and pile up their foreign exchange surpluses, in dollar denominated assets, particularly US government bonds. This process means inflating their own money supply.
Inflation in these countries has now become a serious issue and more likely than not will only be remedied by allowing their currencies to rise against the dollar to a more appropriate level.”
From
321Gold:
“Despite clear signs of surging prices in the U.S., the Fed took a major step in undermining its own credibility with its most recent forecast that inflation would remain below 2% for the next three years. As the forecast clearly paved the way for additional Fed rate cuts, Wall Street ignored its absurdity and heralded the announcement as legitimate good news. The celebration is likely infuriating foreign governments, who must be dumbstruck that the Fed can claim contained inflation at home while the declining dollar is fueling massive inflation problems around the world.
In order to maintain their pegs to the dollar, foreign central banks have been forced to print their own currencies to buy all the dollars accumulated by their exporters. This has resulted in upward pressure on consumer prices in their respective nations, with annual increases now reaching alarming rates. Bernanke's message of benign neglect means U.S. exported inflation will likely increase substantially in the years ahead, exacerbating the inflation problems for those nations now supporting the dollar.”
From
Rabble:
“Everybody who holds U.S. dollars or securities is losing money, and stands to lose more when, to fight recession, American interest rates go down again, and the U.S. dollar plunges even further.
The U.S. Treasury Department says it is pursuing a strong dollar policy, which no body believes. The U.S. Federal Reserve makes monetary policy to suit the domestic economy, not the overseas holders of U.S. dollars.
The U.S. policy response to the falling dollar has been to blame those countries, principally China, and other emerging economies, which have continued to peg their currencies to the U.S. dollar, rather than allow their currencies to rise…”
Labels: economy, international
Posted by:
NuWire Investor @ 7:19 AM
From
Bloomberg:
“The housing recession will drive down property values by $1.2 trillion next year and slash tax revenue by more than $6.6 billion, according to a report issued today by the U.S. Conference of Mayors. The 361 largest U.S. cities will experience a combined loss of $166 billion in economic growth, led by $10.4 billion in the New York-Northern New Jersey area, according to the study.
Most economists forecast the housing slump will persist and continue to be a drag on economic growth as tougher lending standards squeeze demand.”
From
The Atlanta Journal-Constitution:
“U.S. home prices fell 4.5 percent in the third quarter from a year earlier, the sharpest drop since Standard & Poor began its nationwide housing index in 1987, the research group said Tuesday.
S&P also reported that prices fell 1.7 percent from the previous quarter, the largest consecutive quarterly decline in the index's history.”
From
MarketWatch:
“Home prices fell in September in all 20 major cities covered by the Case-Shiller price index, even in cities that had been holding up before the August freeze in mortgage markets, Standard & Poor's reported.
‘There is no real positive news in today's data,’ said Robert Shiller, chief economist at MacroMarkets LLC, and the co-developer of the index.”
Labels: real estate
Posted by:
NuWire Investor @ 5:04 PM
From
AllAfrica.com:
“The next disaster awaiting the continent would come as a result of global warming, another product of the West. There is a consensus that the continent will be one of the worst hit. In its latest report, the Intergovernmental Panel on Climate Change (IPCC) noted that ‘Africa is one of the most vulnerable continents to climate change and climate variability, a situation aggravated by the interaction of 'multiple stresses', occurring at various levels, and low adaptive capacity.’ Scientists are forecasting a doom of acute food and water shortages, war, floods, etc. The most pathetic thing is both people and governments of Africa are neither prepared for it nor do they possess the adaptive capacity to endure the situation. ‘African farmers have developed several adaptation options to cope with current climate variability, but such adaptations may not be sufficient for future changes of climate’, the IPCC report said. Over 75% of Africans live on subsistence farming, something that will be impossible in most part of the continent when temperature rise reaches 20C by 2050.”
From
MSNBC:
“Scientists predict that all the glaciers in the tropical Andes will disappear by mid-century. The implications are dire not just for La Paz-El Alto but also for Quito, Ecuador, and Bogota, Colombia. More than 11 million people now live in the burgeoning cities, and El Alto alone is expanding at 5 percent a year.
The melting of the glaciers threatens not just drinking water but also crops and the hydroelectric plants on which these cities rely. The affected countries will need hundreds of millions of dollars to build reservoirs, shore up leaky distribution networks and construct gas or oil-fired plants — money they simply don't have.
‘We're the ones who've contributed the least to global warming and we're getting hit with the biggest bill,’ laments Edson Ramirez, a Bolivian hydrologist who coordinates U.N., French- and Japanese-sponsored projects to quantify the damage exacted on fragile Andes ecosystems by richer nations that use more fossil fuel and thus produce more greenhouse gas emissions.”
From
TimesOnline:
“A report issued yesterday by the Intergovernmental Panel on Climate Change (IPCC) described how a warming world would threaten billions of people with thirst and malnutrition, endanger more than half of wildlife species with extinction and initiate a melting of the Greenland ice cap that could raise global sea levels by more than 22ft.”
Labels: international
Posted by:
NuWire Investor @ 10:32 AM
From
The Wall Street Journal:
“In Granada Hills, Calif., Natalie Brandon is fighting to keep the three-bedroom ranch house she bought in 1985 for $105,000. Mrs. Brandon, 51, does medical billing for doctors; her husband is a dispatcher for a local gas utility. Last year, she got a $625,500 mortgage from Argent, now owned by Citigroup. Her 7.99% interest rate isn't set to rise until next June, but she already is behind on payments.
Over the past five years, she has refinanced her home five times, each time taking out cash and paying prepayment penalties. Last year, all she had to do to refinance was state that she and her husband earned a combined $100,000. She says she used the proceeds to pay off $30,000 owed on her white Lexus.”
From the
San Francisco Chronicle:
“Jarvis, 34, refinanced her mortgage three times, most recently to invest in a car-repair business. She planned on refinancing that adjustable-rate mortgage before the rate went up, but the real estate market soured. The value of her home dropped. Her business foundered. And her monthly payment jumped to $5,000 in August, from $3,600.”
From
Visalia Times-Delta:
“Adjustable-rate mortgages to subprime borrowers accounted for about 44 percent of all new foreclosures in the second quarter of this year, according to the Mortgage Bankers Association. Many subprime borrowers also refinanced their homes to pay off credit card debt or pay for costly remodeling projects.
‘One of the things we're seeing is people who have no equity in their property,’ said Jill Perry, who works for Consumer Credit Affiliates, a nonprofit that offers housing counseling in northern Nevada. ‘They've used their house as their ATM.’”
Labels: real estate
Posted by:
NuWire Investor @ 3:50 PM
From
National Real Estate Investor:
“Demand appears to be cooling. During the third quarter, office demand registered 22.6 million sq. ft. down 16% from the 26.8 million sq. ft. of net absorption posted in the second quarter.
‘But demand is expected to fall off a cliff in the fourth quarter [due to] the slowing economy most notably,’ reports PPR, which is calling for a paltry 15.2 million sq. ft. of office absorption this quarter.”
From
The Wall Street Journal:
“The report found that the value of commercial property declined 1.2% in September from the previous month. Particularly hard hit were apartments in the West and office property in most states other than California.
The report is an early sign that the commercial-property sector is being dragged down by the growing reluctance of lenders to extend credit for anything related to real estate, which in turn could create a new drag on the economy and additional problems for investors. Declining commercial-property values could lead to an increase in default rates on commercial real-estate loans and on commercial mortgage-backed securities.”
From
The Chicago Tribune:
“'This is the first full month of data since the acceleration of the liquidity crisis, and we saw a downturn in prices as the economy slowed, the availability of capital decreased and the cost of capital increased,’ said Sally Gordon, a senior vice president at Moody's Investors Service.
Over the next year, ‘we'll see a net decline in values,’ Gordon said.
But prices are coming off a high point that will provide a cushion if the downturn continues.
Therefore, Gordon added, ‘We are not saying that commercial real estate will be the next subprime,’ referring to mortgages given to those with a weak credit history.”
Labels: real estate
Posted by:
NuWire Investor @ 8:45 AM
From
Forbes:
“The yen continued to climb, reaching its highest level against the dollar for more than two years as sub-prime worries weighed on equity markets, causing investors to pull out of the risky carry trade.
Equity markets in Asia fell sharply overnight, and European bourses followed them down prompted by fears of slowing US economic growth, and record oil prices. This gave the yen a huge boost as it dented the carry trade -- a risky strategy where they sell the low-yielding yen to invest in high-yielding ones elsewhere.”
From
Reuters:
“'There's an overwhelming sense of malaise in the market, which fears the U.S. economy is slowing considerably and the Fed will have to cut rates in December,’ said Boris Schlossberg, senior strategist at DailyFX.com in New York. ‘That's driving prices into the ground and will lead to further reductions in yen carry trades.’”
From
Bloomburg:
“'Credit concerns are hammering the Dow and we've headed down with the stocks,' said Alex Sinton, senior currency dealer at ANZ National Bank Ltd. in Wellington. 'People are cutting carry' trades.”
Labels: investments
Posted by:
NuWire Investor @ 3:55 PM
From
Contra Costa Times:
“The bill, passed Thursday evening by a 291-127 vote, garnered support from 64 House Republicans. No Democrats were opposed.
Many other Republicans, though, echoed banking industry criticisms, calling the bill an overreaction to the mortgage market's woes and warning of a flood of lawsuits if it becomes law.
They also said the mortgage market has already pulled back from lax lending practices common during the tail end of the housing boom.
‘Have no doubt, this bill will limit credit availability and options for thousands of Americans who want to grab their share of the American dream of homeownership,’ Kieran Quinn, chairman of the Mortgage Bankers Association, said in a statement. The American Bankers Association said it has ‘serious concerns’ with the bill, arguing that it would add more regulations for banks.”
From
The Wall Street Journal:
“Rep. Frank's bill creates a national registry for mortgage brokers and bank employees who originate mortgages. The bill stops loan originators who get in trouble with authorities in one state from setting up shop in another. It also sets standards for states to apply in licensing mortgage brokers. In addition, the measure makes investment firms that create mortgage securities liable if they fail to take reasonable steps to ensure that the loans they acquire comply with the law.
Trade groups for home lenders opposed the bill, arguing that it is too vague and exposes lenders to bigger legal risks. They also are unhappy because the bill doesn't set a national standard that would pre-empt states from passing their own tougher legislation.”
From
CQ Politics:
“Still, the lending industry, many Republicans and the White House have concerns about the bill. They argue that increased federal oversight could hurt borrowers if it further dries up already tight credit. Critics also say the industry would be forced to deal with a patchwork of state-by-state regulations because the bill would not pre-empt tougher state mortgage laws.
On Wednesday, the White House said in a statement of administration policy that the measure would ‘unduly restrict access to credit for potential homebuyers and reduce refinancing opportunities for current homeowners.’”
Labels: finance, real estate
Posted by:
NuWire Investor @ 7:39 AM
From
The Wall Street Journal:
“For many years, oil-rich Persian Gulf states have pegged their currencies to the dollar. Now that link is stoking a bad bout of inflation in their red-hot economies and putting policy makers in a dilemma: Break the dollar peg and risk undermining the U.S. currency, or keep it and face growing local discontent.
The dollar peg has ‘served the economy...very well in the past,’ said Sultan Nasser al-Suweidi, the governor of the United Arab Emirates' central bank, last week. ‘However, we have reached a crossroads.’”
From
Gulf Daily News:
“UAE policymakers kept up pressure for a review of Gulf dollar pegs yesterday and currencies rallied across the oil-exporting region on a signal that Saudi Arabia may be willing to discuss reform.
The Saudi riyal hit a 21-year high and investors bet on an appreciation of 2.4 per cent in a year after a source familiar with Saudi policy said the kingdom could consider its first revaluation since 1986.”
From the
International Herald Tribune:
“Merrill Lynch predicts that either the United Arab Emirates or Qatar will cut their dollar peg within six months. Standard Chartered says the six Gulf Cooperation Council nations need to raise the value of their currencies 20 percent. And currency traders are betting that Saudi Arabia will sever its 21-year link to the dollar, according to data compiled by Bloomberg.
‘The dollar peg is doomed,’ said Jim Rogers, chairman of Rogers Holdings in New York and a former partner of the hedge fund manager George Soros.”
Labels: economy, investments
Posted by:
NuWire Investor @ 4:29 PM
From
Bloomburg:
“Federal Reserve policy makers won't cut their benchmark interest rate on Dec. 11, spurring a sell-off in U.S. stocks and a rebound in the dollar, according to Bear Stearns & Co.
Central bankers signaled in their Oct. 31 policy statement that the Fed `is most likely done cutting rates for the time being,’ Bear Stearns Chief Investment Strategist Jonathan Golub wrote in a research note today. Surging commodity prices and a weak U.S. currency will prompt the Fed to keep its rate target for overnight loans between banks at 4.5 percent to contain inflation, Golub wrote.”
From
The Wall Street Journal:
“A Federal Reserve official sent one of the clearest signals yet the central bank isn't inclined to cut rates further, even when stocks sink and economic data turn sour.
‘The current stance of monetary policy should help the economy get through the rough patch during the next year, with growth then likely to return to its longer-run sustainable rate,’ Fed Governor Randall Kroszner said in prepared remarks before the Institute of International Finance in New York.”
From
MSNBC:
“However, Vincent Reinhart, a fellow at the American Enterprise Institute, says investors may be misreading the Bernanke Fed. Mr Reinhart says the Bernanke Fed has taken a ‘principled decision’ not to talk directly about the likely path of interest rates.
Investors may be misinterpreting the lack of an explicit challenge to market expectations in a speech or leak to a newspaper as a sign that Mr Bernanke is happy with them, he says.
Yet it is also possible that the Fed itself is not being clear enough about its message, perhaps because between meetings there is not a single Fed position.”
Labels: economy, finance
Posted by:
NuWire Investor @ 11:21 AM
From the
Palm Beach Post:
“Looks like the hype didn't help, however. Not even The Donald could surmount the relentless downward slide in real estate. ‘The market in West Palm Beach is not exactly great-looking,’ Trump said.
It's not great-looking in Fort Lauderdale, either. Earlier this month, Trump suspended a condo hotel known as Trump Las Olas Beach Resort, citing a weak condo market. (Related has canceled a condo project, too, in Las Vegas.)
The bottom line for Trump Tower: Sales have not hit the mark set by Trump and Perez.”
From
The Arizona Republic:
“In recent years, Trump has lent his name, and in some cases his own money, to at least 20 projects in the U.S. and another half dozen abroad, including buildings in Dubai of the United Arab Emirates and Seoul, South Korea. While in some cities such projects are doing fine, others face slow sales, project delays and cancellations - and irate buyers.
In Tampa, buyers who placed deposits of $200,000 to $1.2 million on units in the 52-story Trump Tower Tampa are fuming. Nearly three years after the $260 million skyscraper was started, construction has stopped.”
From
The Tampa Tribune:
“Construction of the $300 million Trump Tower in downtown Tampa was announced with much fanfare in early 2005, but the developer, Tampa-based SimDag LLC, has been unable to obtain financing. The project is mired in liens and lawsuits, including one from Donald Trump, who sold rights to his name for the tower.”
Labels: real estate
Posted by:
NuWire Investor @ 9:50 AM
From
Bend Weekly News:
"’Why should someone who lives in South Dakota be able to buy a 10,000-acre ranch for the same amount of money and get that subsidized, but I can't buy a 1,000-square-foot, three-bedroom, one-bath (home) in the (San Francisco) Bay Area?’ asked Colleen Badagliacco, president of the California Association of Realtors.
Sen. Charles Schumer, D-N.Y., is trying to revive the moribund Senate effort to force an increase in the loan limit. He would like to raise it as high as $625,500 in high-cost areas for one year as well as increase the size of the Fannie Mae and Freddie Mac mortgage portfolios.”
From
Forbes:
“Federal Reserve Board Chairman Ben Bernanke today reiterated that Congress should be careful when considering whether to raise the non-conforming loan limit on mortgages that securitizers Fannie Mae and Freddie Mac can purchase.
Testifying before the House-Senate Joint Economic Committee, Bernanke indicated he does not support raising the loan limit, now at 417,000 usd, and said if this step is taken, it should only be temporary.”
From
The Dallas Morning News:
“Fannie Mae is pushing federal regulators and lawmakers to allow it to provide funding for more and higher price loans to help overcome the credit crunch.
The Federal Housing Administration, which provides government-backed insurance for home loans, is also seeking federal approval to modernize and provide more financing.”
Labels: finance, real estate
Posted by:
NuWire Investor @ 4:01 PM
From the
Wall Street Journal:
“In France, a work stoppage by transport and power workers to protest changes to pension regimes sliced output at French utility Electricité de France SA by around 8,000 megawatts -- roughly 10% of the country's nuclear capacity -- and paralyzed transport routes.
Meanwhile, Germany's government said it fears its continuing rail strike could have a deep impact on the country's economy if it doesn't end soon. Chancellor Angela Merkel's administration is calling on state-owned railway Deutsche Bahn AG and the striking train drivers' union GDL to return to the negotiating table, government spokesman Thomas Steg said at a news conference.”
From
AFP:
“Millions of French commuters were left stranded or forced to drive to work and the disruption looked set to continue after unions at the state rail company and the Paris metro operator voted to extend the strike until Friday.
Just 150 of the usual 700 high-speed trains were running and those commuter trains that did operate were packed with commuters and tempers flared. Roads into major French cities were choked with traffic.
Neighbouring Germany had to contend with the biggest strike in the history of its rail system as passenger train drivers joined freight drivers already on strike since Wednesday, heavily disrupting Europe's biggest economy.
Only two-thirds of long-distance trains were running, most of them high-speed trains, and fewer than half of all commuter services were operating.”
From
Guardian Unlimited:
“With the train drivers threatening new strikes this week to back their claim for higher wages after the 2-1/2 day walkout to Saturday that was called the most damaging in Germany ever, Glos and Tiefensee warned the strikes were harmful to the economy. ‘We need a quick agreement once and for all,’ Glos told the Bild am Sonntag newspaper. The robust economic upturn is already being burdened by the high oil price and a strong euro. In an environment like this, a strike that hampers freight transport is poisonous for the overall economy.
‘Both sides need to be reminded about their responsibilities to the overall German economy and to consumers,’ he added.”
Labels: economy, international
Posted by:
NuWire Investor @ 9:29 AM
From the
Wall Street Journal:
“There is a loud effort by the Bush administration to cajole the industry into moving beyond case-by-case efforts and to enlist nonprofit groups to reach out to suspicious homeowners. With more vigor and specificity than others (enough to make some officials uneasy), the FDIC's Ms. Bair has urged the industry to extend the two- or three-year initial interest rate permanently for homeowners who are current and whose income indicates they can pay at that rate.
‘Public cajoling was needed to bring more pressure to bear, and we decided to come out with a specific example of how to do it,’ she explains. She says three of 10 top mortgage services are quietly doing what she suggested, although she won't name them.”
From
Smart Money:
“So when Countrywide Financial, the U.S.'s largest mortgage lender, announced on Tuesday that it was launching a program aimed at helping cash-strapped homeowners by canceling rate resets or modifying their loans, you could almost hear a collective sigh of relief.
After all, lenders are facing a glut of foreclosures, so it's no surprise that they're warming up to the idea of helping delinquent borrowers by, for example, restructuring a mortgage so the homeowner can catch up on missed payments. However, the actual act of a lender like Countrywide reaching out to people who have yet to miss a payment — but are likely to do so because of a pending rate reset — is something new.”
From
CNN Money:
“Some of the workouts would allow borrowers to make larger monthly payments until they catch up. For those deeper in trouble, modifications may include higher payments over the full term of the loan. Others could have their loan refinanced into a low cost, fixed-rate NACA loan, which recently carried a reasonable 5.25 percent interest rate.
Another, powerful, solution is loan restructuring. That could mean freezing an ARM interest rate at its initial level for several years.”
Labels: finance, real estate
Posted by:
NuWire Investor @ 4:59 PM
From
The Wall Street Journal:
“Stephen Jen, Morgan Stanley's chief currency economist, says the U.S. currency has gotten ‘grossly undervalued.’ His forecasting model takes into account interest rates, productivity growth, budget deficits and a host of other factors. It's telling him the buck is about 25% lower than it should be against the euro and 21% undervalued against the pound, though it might have further to fall against the yen.”
From
China View:
“’We have a strong dollar policy, and it's important for the world to know that,’ he said as the dollar hit record low against other currencies. ‘We also believe it's important for the market to set the value of the dollar relative to other currencies.’
Bush also pointed to strong economic growth, low inflation and low unemployment as factors that should help boost the dollar.”
From
CBS News:
“Portfolio manager Stephen Shipman noted recently that the amount of high-powered money being created by the Fed is actually lower today than it was in May, a situation one would think would equate with a strong greenback. Yet despite this fact, the dollar almost daily tests new all-time lows with no end in sight. What to do? Though Treasury secretary Henry Paulson is on record saying markets should set the dollar’s value, this form of ‘benign neglect’ seems a bit wanting given the dollar’s direction. Faced with a falling pound in the 1980s, Margaret Thatcher’s Chancellor of the Exchequer Nigel Lawson communicated to the markets his desire for an exchange rate of one pound to three deutschemarks. The markets matched his desires almost instantaneously. While it’s unrealistic to assume Paulson will seek a direct currency link with the euro, a strongly worded communiqué from the secretary that makes plain his unhappiness with the dollar’s fall will at least give traders a story to support resumed dollar buying. It also could present a way out of what could be a painful inflationary episode.”
Labels: economy, investments
Posted by:
NuWire Investor @ 11:47 AM
From
Bloomberg:
“Copper jumped 6.1 percent in New York, the most in 16 months, after an earthquake hit Chile, the world's largest producer of the metal.
The 7.7 magnitude quake struck in Chile's northern desert, the U.S. Geological Survey said on its Web site. Chile's state- owned Codelco, the world's biggest copper company, and Freeport- McMoRan Copper & Gold Inc., the second largest, said some mines were restarting after a loss of power.
`You've seen a huge price jump after the earthquake news,’ said Eric Wittenauer, an industrial-metals analyst at A.G. Edwards & Sons Inc. in St. Louis. ‘This brings into question the supplies from the area and what kind of supply growth we'll be able to see in the region.’”
From
Reuters:
“The quakes hit an area of many large copper mines. Chile is the biggest copper producer in the world, providing more than a third of annual supplies of the red metal.”
From
FXStreet:
“The uncertainty surrounding the earthquake in Chile was high among copper futures traders immediately after wire service reported the event, said an analyst. He added that markets tend to "over-react" to such events, as traders always initially fear the worst-case outcome to such events. The midday Wednesday reports that operations at Codelco were back to normal should calm the copper market, said the analyst.”
Labels: international, investments
Posted by:
NuWire Investor @ 5:14 PM
From
Reuters:
“But Doug Dewitt, a real estate broker contracted to work with several lenders on the valuation and disposal of foreclosed properties, said nearly 70 percent of the sales or closings at the Club over the last 18 months were questionable.
That works out to more than 200 possibly shady deals in a single building, he said.
The dubious transactions all fit a pattern that Theobald said should trigger ‘bells and whistles’ for law enforcement anywhere -- time and time again properties that failed to sell for months when listed at around $450,000 were pulled from the market and then suddenly sold for more than $800,000.
Florida leads the nation when it comes to mortgage fraud, according to the Virginia-based Mortgage Asset Research Institute, a group that works closely with the U.S. Mortgage Bankers Association.”
From
South Florida Business Journal:
“The U.S. Attorney for the Southern District of Florida said investor Hugo Rodriguez, 52; Ronald Gordan Lichte, a 65-year-old mortgage broker; and his loan processor, Connie Marie Cullifer, 58, worked a scheme where Rodriguez would locate luxury condominiums and residential properties that were available for purchase, and Rodriguez and Lichte would then recruit and pay straw buyers and use their names, credit histories and signatures on mortgage loan documents to obtain financing to purchase the properties. John C. Kelley, 67, of Tampa, was also charged for allegedly acting as a straw buyer.”
From
Miami Herald:
“Mayor Carlos Alvarez's Mortgage Fraud Task Force met Wednesday to discuss progress in the war on real estate fraud in South Florida, including draft legislation that would protect innocent homeowners from artificially high property taxes and the wiles of predatory lenders.”
Labels: finance, real estate
Posted by:
NuWire Investor @ 8:21 AM
From
Reuters:
“Gold fell more than 3.5 percent to a one-week low on Monday as sliding oil prices and a rising dollar prompted investors to cash in on bullion's recent lightning rally to 28-year highs.
Dealers also pointed to some influence from a ripple of risk aversion that ran through equity and foreign exchange markets with a knock-on effect on gold prices.”
From the
Associated Press:
“Sanchez said he expects more volatility of this magnitude in the months ahead, with gold likely to see $20 to $30 swings more frequently, as investors wrestle with uncertainty. The commodities markets have been buffeted in recent months by the looming threat of inflation on the one hand and, on the other, the concern that economic growth in the U.S. is slowing.”
From
CNNMoney:
“Commodities like gold tend to benefit from volatility in the financial sector since they are perceived as a safe-haven investment. Conversely, if the economy shows signs of improvement, gold prices fall as investors favor more high-risk, high-return investments…”
“…Sanchez added that he expects gold to continue its upward trend, since the financial markets remain volatile. ‘We're not out of the woods yet,’ he said.
Fluctuations in the currency market, high energy prices, geopolitical concerns, credit market turmoil and fears of inflation will continue to support gold prices, Sanchez said.”
From the
Los Angeles Times:
“Adjusted for inflation, the metal is far from the old peak. It would have to rise to about $2,200 in today's dollars to match it, according to the World Gold Council, a mining-industry-funded group.
Gold has been in a mostly steady uptrend since 2000, when it sold for about $275 an ounce at year's end. Its advance has coincided with a boom in commodity prices in general, as demand for raw materials has soared in burgeoning economies such as China and India.”
Labels: investments
Posted by:
NuWire Investor @ 3:50 PM
From
Reuters:
"’The housing situation that we got in is unique in history because there was an investor psychology that developed that was stronger than we have ever seen before,’ Shiller said. ‘We have seen housing bubbles many times in history, but they have been much more local than this one.’
Areas most vulnerable to home depreciation are those that rose the most during the market's heyday, plus those at the center of the crisis in the subprime mortgage market, Shiller said. California and Florida are high on this list.”
From
Inman News:
“Despite the tough times in housing, the economy continues to grow, and that will make the recovery in housing happen much sooner.”
From
Realty Times:
“’To argue that home values will continue to decline and never recover, somebody has to make a convincing case that it will cost less to build a new home five years from now than it does today -- and that's just not going to happen,’ said Catalde. ‘Despite today's housing slowdown, the cost of land, labor and materials required to build new homes continues to go up.’”
Labels: real estate
Posted by:
NuWire Investor @ 8:29 AM
From the Associated Press:
“It could be the kindest cut of all. Look at the prices of homes getting sold, and the property market's decline seems no worse than a rough day in the stock market. Look at the number of unsold homes, and you realize there's a world of financial pain out there…”
“…Despite all this, sellers are loath to cut their asking price, which is the reason prices have barely budged -- so far.”
From The Dallas Morning News:
“The National Association of Homebuilders says more than 70 percent of builders offer incentives.
‘The longer this environment of price concessions continues, the more buyer psychology shifts to expecting price concessions from all sellers,’ he said.”
From The Philadelphia Inquirer:
“Williams said one local builder was offering ‘loads of incentives’ but had reached an agreement with its most recent buyers that it would not drop prices.
‘This is one of the moral and ethical questions we, as builders, deal with,’ said Marshal Granor, a principal in Granor Price Homes in Horsham. ‘We've sat in sales offices over the years and decided to offer a cut-down version at a lower price.’”
Labels: real estate
Posted by:
NuWire Investor @ 3:43 PM
From
The Associated Press:
“Rates on 30-year mortgages fell for the third straight week, dropping to the lowest level in five months.
Freddie Mac, the mortgage company, reported Thursday that 30-year, fixed-rate mortgages dipped to 6.24 percent this week, down from 6.26 percent last week.
It was the third straight weekly decline after rates hit 6.40 percent. Analysts attributed the decreases to mounting evidence that the economy is starting to slow.”
From
MarketWatch:
“’With mortgage rates remaining low, approximately 38% of applications were for refinance transactions in the third quarter, down from 42% in the second quarter of this year. According to Freddie Mac's third quarter cash-out refinance report, approximately 87% of refinanced loans were for loan amounts that were 5% or more higher than the original balances,’ he said.”
From
Reuters:
“Short-term mortgage rates experienced more pronounced declines following the U.S. Federal Reserve's cut of the benchmark federal funds rate by a quarter-percentage point to 4.5 percent last week.”
Labels: finance, real estate
Posted by:
NuWire Investor @ 12:19 PM
From
The New York Times:
“Ben S. Bernanke, chairman of the Federal Reserve, told Congress on Thursday that the economy was going to get worse before it got better, a message that received a chilly reception from both Wall Street and politicians.”
From
The Telegraph:
“Mr Bernanke, speaking before the joint economic committee of Congress, said while the most recent economic date suggested a resilient economy, growth will slow into next year as the US housing crisis intensifies.
He said in the week since the Fed cut US base rates by 25 basis points: ‘the few data releases that have become available have continued to suggest that the overall economy remained resilient in recent months.’ However, he said, ‘financial market volatility and strains have persisted. Incoming information on the performance of mortgage-related assets has intensified investors' concerns about credit market developments and the implications of the downturn in the housing market for economic.’”
From
Forbes:
“The U.S. economy is in for a rough winter and a better spring, Federal Reserve Chairman Ben Bernanke told congress today.
The moderate 3.9% gross domestic product growth rate of the economy in the third quarter will slow in the months ahead, amid turmoil in the housing and credit markets and rising energy prices.”
Labels: economy
Posted by:
NuWire Investor @ 8:38 AM
From
The New York Times:
“Mr. Haupt is one of thousands of Americans who jumped into the raging housing market of the last decade, which was heralded in stories of neighbors’ windfalls and reality television shows like ‘Flip That House,’ ‘Flip This House’ and ‘Flipping Out.’
Driving past his empty house recently, Mr. Haupt considered how things had crashed so fast.
‘I feel like, yes, I overextended myself, he said. ‘But when do you know not to overextend yourself? If I had a crystal ball, I never would have built my house. But when do you know? That’s why we’re speculators.’”
From the
Associated Press:
“The problems become self-perpetuating. Researchers say that each foreclosure chips away at neighbors' property values. But foreclosures here compound a larger problem.
Builders continue adding homes to the market at reduced prices. Investors are trying to sell. Lenders are seeking buyers for foreclosures. Homeowners whose financial troubles might be solved by selling can't compete, real estate agents say.
‘Sometimes the neighbors don't like you so much because you're one of the reasons the values are declining,’ says Kim Gordon, a real estate agent specializing in foreclosures who is listing two homes in the neighborhood. ‘But everyone has got their part in it. The homeowners overextended themselves.’”
From the
Detroit Free Press:
“’It is only when the tide goes out that you learn who's been swimming naked.’
Buffett, probably the world's most successful investor, was talking about overextended plungers in a receding market... “
Labels: real estate
Posted by:
NuWire Investor @ 2:15 PM
From
Reuters:
“For Panama, the influx of wealthy Venezuelans has helped fuel a real estate boom that has been a big factor in the economy's growth rate this year of more than 9 percent.
Real estate salesman Jorge Blaisdell is selling 500 houses on the outskirts of Panama City that will go for between $300,000 and $800,000, and have been advertised extensively in Venezuela.
‘Some 80 percent of our clients are foreigners, and 75 percent are Venezuelan,’ Blaisdell said. ‘They are looking for a plan B.’”
From
CBS News:
“The number of Venezuelans leaving is hard to nail down. According to the U.S. Embassy in Caracas, the number of nonimmigrant visa cards has risen from 70,366 in 2003 to 109,586 last year. But many Venezuelans are opting for other countries, as U.S. immigration laws have tightened in the wake of 9/11. Nearby Panama, with a similar climate and political and economic stability, is a popular alternative.”
From
Mercopress:
“The profile of Venezuelans searching for information to leave the country has changed drastically in the last six years from single men and women to whole families and parents with adolescents who fear for the future of their children, according to Bermudez. ‘Uncertainty about the future and physical insecurity, because of ballooning crime are the main causes’. They are mostly middle and high class Venezuelans.”
Labels: international
Posted by:
NuWire Investor @ 8:12 AM
From the Wall Street Journal:
“If crude oil prices stay at current levels, U.S. consumer price inflation could hit a 16-year high of 5% by the end of the year, an analysis by London-based Capital Economics has concluded…”
“Inflation at that level, if sustained, could be both a wallop to consumer purchasing power, and a warning light to the Federal Reserve which has signaled it is paying more attention than usual to the inflationary implications of energy.”
From MSNBC:
“A number of regional Fed presidents feel particularly strongly about inflation risk. They acquiesced in the initial 50 basis point cut, but signalled serious reservations about the latest rate cut.
The October 31 Fed statement says ‘recent increases in energy and commodity prices, among other factors, may put renewed upward pressure on inflation’.”
Also from MSNBC:
“’The Fed is caught between a rock and a hard place as the dollar weakens and the economy faces headwinds from higher oil prices and financials tightening credit standards,’ said Gerald Lucas, at Deutsche Bank…”
“…’It puts the Fed in the box over cutting rates,’ said Marc Pado, chief market strategist at Cantor Fitzgerald. ‘How do you cut rates to save the financials when the dollar is getting killed? That's the crux of the whole matter.’”
From Forbes:
“… Warsh sees equally-real inflation threats. The recent readings have been 'favourable,' he said but the higher prices of crude oil and other commodities 'will likely put upward pressure on overall inflation in the short run.'”
Labels: economy, finance
Posted by:
NuWire Investor @ 2:40 PM
From
Reuters:
“Precious metals soared on Wednesday, supported by a tumbling dollar and record oil prices, with gold nearing its all-time peak, platinum setting a record and silver touching its highest level in 27 years.”
From
Forbes:
“Meanwhile, risk aversion in the equity markets, as fears the US subprime problems will slow growth, sparked a rush towards safer assets such as gold.
'As long as the financial markets remain fragile and investors risk averse, gold prices will be a beneficiary,' said HSBC analyst James Steel.”
From
The Chicago Tribune:
“Gold is a classic investment for those who want to protect their wealth, and gold enthusiasts say there is more incentive to do so now because the declining value of the dollar erodes buying power…”
“…'The falling dollar is the very definition of inflation,' said Chip Hanlon, president of Delta Global Advisors Inc. in Huntington Beach, Calif. 'A weak dollar makes the cost of living for all of us go higher and gold is the best hedge against that.'"
From
TheStreet.com:
“There still seems to be no end in sight for the rally that has propelled the cost for one ounce of gold up more than 30% since the beginning of the year, with most of the action coming since the subprime problem got ugly this summer.”
Labels: investments
Posted by:
NuWire Investor @ 12:26 PM
From
The Wall Street Journal:
“Opponents said the legislation would make it harder for borrowers to obtain a house and increase the cost of credit. But supporters said the problems in the mortgage-finance system allowed excesses and abuses to hurt homeowners. They said lenders were able to exploit a patchwork of state and federal laws to trap borrowers in unaffordable loans using questionable underwriting practices.”
From
Forbes:
“But the bill has a dark side: It could prevent people who would normally qualify for mortgages from getting one. How many? It's unknown. In addition, the legislation, if passed, may drastically increase the number of lawsuits surrounding the subprime mortgage industry if borrowers somehow prove lenders steered them into loans they couldn't repay.”
From
Mortgage News Daily:
“HR3915, which is strongly opposed by some segments of the lending community, sets minimum standards for loans including a reasonable assumption that the borrower will be able to repay the loan. It also mandates a mechanism for licensing mortgage brokers who are not appropriately regulated by the states or by agencies such as the Comptroller of the Currency. The bill also proposes liabilities for those who securitize potentially risky loans.”
From
ConsumerAffairs.com:
“Rep. Brad Miller (D-NC), one of the bill's co-authors along with Rep. Mel Watt (D-NC) and Committee chairman Barney Frank (D-MA), said the measure would ‘be the most significant consumer legislation in more than a dozen years.’‘Thousands of middle-class homeowners could be saved from foreclosures should the bill become law,’ Miller said.”
Labels: finance
Posted by:
NuWire Investor @ 8:23 AM
