Sales pace of new homes in July grew 2.4%, due to a large downward revision in sales from the previous month. Unadjusted monthly sales fall to 13-year low.
The government offered more discouraging news about the housing sector on Tuesday, reporting that new home sales rose slightly in July only after revising the previous month's number sharply lower.
Sales for July came in at a seasonally adjusted annual rate of 515,000, up 2.4% from 503,000 in the previous month, the Census Bureau reported. Last month, Census had put the June figure at 530,000.
The change marks the fourth of the past five reports that Census has slashed the previous month's number. The trend worries economists who say a hoped-for stabilization of the housing market remains elusive.
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Wednesday, August 27, 2008
Read his lips: Don't bank on bailouts, Bernanke warns
The great Wall Street bailout of 2008 keeps growing. For Bear Stearns, $30-billion (U.S.). Perhaps as much as $100-billion for Fannie Mae and Freddie Mac. Tens of billions of dollars in discounted short-term loans to investment banks. And lower interest rates for everyone.
So where will it all end? In a dark hole of moral hazard, unless the United States overhauls and strengthens its financial system, and that's according to one of the key architects of the bailout.
U.S. Federal Reserve Board chairman Ben Bernanke warned last week that the government's safety net for brokers, banks and mortgage lenders won't necessarily be there in the future. The rescue of Bear Stearns earlier this year was the exception, not the rule, he said, offering his fullest explanation yet of its year-long campaign to ease the credit crisis.
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So where will it all end? In a dark hole of moral hazard, unless the United States overhauls and strengthens its financial system, and that's according to one of the key architects of the bailout.
U.S. Federal Reserve Board chairman Ben Bernanke warned last week that the government's safety net for brokers, banks and mortgage lenders won't necessarily be there in the future. The rescue of Bear Stearns earlier this year was the exception, not the rule, he said, offering his fullest explanation yet of its year-long campaign to ease the credit crisis.
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Regulators step up action on U.S. banks: report
Federal regulators have raised the number of struggling U.S. banks they have effectively put on probation, forcing them to fix their problems to avoid potential failures, the Wall Street Journal said on Monday.
The two main U.S. bank regulators -- the Federal Reserve and the Office of the Comptroller of the Currency -- have issued more memorandums of understanding this year than they did for all of 2007, the Journal said, citing data obtained from regulators under Freedom of Information Act requests.
Banks don't have to disclose the memorandums, which are an early-warning system about troubled banks but are not meant to imply a bank is at risk of failing, the Journal said. They are often a precursor to more severe, publicly disclosed enforcement actions if conditions do not improve.
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The two main U.S. bank regulators -- the Federal Reserve and the Office of the Comptroller of the Currency -- have issued more memorandums of understanding this year than they did for all of 2007, the Journal said, citing data obtained from regulators under Freedom of Information Act requests.
Banks don't have to disclose the memorandums, which are an early-warning system about troubled banks but are not meant to imply a bank is at risk of failing, the Journal said. They are often a precursor to more severe, publicly disclosed enforcement actions if conditions do not improve.
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Japan Goes on Buying Spree, Shrugging Off '80s Bubble
Japanese companies are increasing overseas acquisitions, using their cash-hoards to snap up assets beaten down by the global credit crisis and economic slowdown.
The value of foreign purchases by Japanese companies this year has already topped 2007's total by 91 percent, according to data compiled by Bloomberg. That's the biggest gain among the world's 10 largest markets and contrasts with fewer deals in the U.S. and U.K., where credit is drying up after the subprime rout.
Takeovers by companies including TDK Corp. and Daiichi Sankyo Co. are putting Japan on course for its biggest buying spree since the 1980s bubble, when Japanese buyers overpaid for assets like New York City's Rockefeller Center and California's Pebble Beach Golf Links.
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The value of foreign purchases by Japanese companies this year has already topped 2007's total by 91 percent, according to data compiled by Bloomberg. That's the biggest gain among the world's 10 largest markets and contrasts with fewer deals in the U.S. and U.K., where credit is drying up after the subprime rout.
Takeovers by companies including TDK Corp. and Daiichi Sankyo Co. are putting Japan on course for its biggest buying spree since the 1980s bubble, when Japanese buyers overpaid for assets like New York City's Rockefeller Center and California's Pebble Beach Golf Links.
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Tuesday, August 19, 2008
Home building at 17-year low
Housing starts and permits both fall sharply in July to levels not seen since 1991 recession.
Home building fell sharply in July to a 17-year low, according to government readings released Tuesday that offered fresh signs that the battered real estate market has yet to hit bottom.
Housing starts plunged 11% to an annual rate of 965,000 from a revised 1.084 million pace in June, according to the Census Bureau report. Economists surveyed by Briefing.com had forecast starts would fall to a rate of 960,000.
Permits - often seen as a sign of builders' confidence in the housing market - tumbled 17% to an annual rate of 937,000 from a revised 1.138 million in June. Economists had forecast that permits would come in at 959,000.
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Home building fell sharply in July to a 17-year low, according to government readings released Tuesday that offered fresh signs that the battered real estate market has yet to hit bottom.
Housing starts plunged 11% to an annual rate of 965,000 from a revised 1.084 million pace in June, according to the Census Bureau report. Economists surveyed by Briefing.com had forecast starts would fall to a rate of 960,000.
Permits - often seen as a sign of builders' confidence in the housing market - tumbled 17% to an annual rate of 937,000 from a revised 1.138 million in June. Economists had forecast that permits would come in at 959,000.
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Stagflation? Or just stagnation?
The inflation figures for July were ugly. But oil prices have fallen and the dollar has strengthened in August. Too bad a global slowdown is the reason.
Two key reports in the past week show that inflation was running high in July. But August is offering relief.
Oil has fallen to about $112 a barrel, nearly 25% from its mid-July record high. Gas prices have declined for 33 consecutive days. After flirting with $1,000 an ounce last month, the price of gold is now below $800.
And the dollar? It's gained more than 8% against the euro in the past few weeks.
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Two key reports in the past week show that inflation was running high in July. But August is offering relief.
Oil has fallen to about $112 a barrel, nearly 25% from its mid-July record high. Gas prices have declined for 33 consecutive days. After flirting with $1,000 an ounce last month, the price of gold is now below $800.
And the dollar? It's gained more than 8% against the euro in the past few weeks.
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Wholesale prices rising at fastest pace since 1981
Wholesale inflation surged in July, leaving prices for the past year rising at the fastest pace in 27 years, according to government data released Tuesday.
The Labor Department reported that wholesale prices shot up 1.2 percent in July, pushed higher by rising costs for energy, motor vehicles and other products. The increase was more than twice the 0.5 percent gain that economists expected.
Core prices, which exclude food and energy, rose 0.7 percent. That increase was the biggest since November 2006 and more than triple the 0.2 percent rise in core prices that had been expected.
In other economic news, the Commerce Department reported that housing construction fell in July to the lowest pace in more than 17 years. Builders broke ground on 965,000 housing units at a seasonally adjusted annual rate last month — the weakest showing since March 1991 — as the housing industry continues to struggle with falling sales and rising mortgage foreclosures.
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The Labor Department reported that wholesale prices shot up 1.2 percent in July, pushed higher by rising costs for energy, motor vehicles and other products. The increase was more than twice the 0.5 percent gain that economists expected.
Core prices, which exclude food and energy, rose 0.7 percent. That increase was the biggest since November 2006 and more than triple the 0.2 percent rise in core prices that had been expected.
In other economic news, the Commerce Department reported that housing construction fell in July to the lowest pace in more than 17 years. Builders broke ground on 965,000 housing units at a seasonally adjusted annual rate last month — the weakest showing since March 1991 — as the housing industry continues to struggle with falling sales and rising mortgage foreclosures.
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