Monday, August 30, 2010
Friday, August 27, 2010
The economy turns out to be weaker than we thought, and the outlook for the rest of the year is now looking dimmer.
New figures issued Friday show the economy struggled this spring, growing at a meager 1.6 percent annual pace. The initial estimate was 2.4 percent, and even that was anemic. Analysts say the summer should be disappointing, too.
Shortly after the government's revision, Federal reserve chief Ben Bernanke said the Fed was ready to take additional steps to prevent a second recession, if the economy deteriorates further. But he stopped short of promising any action.
The Fed "will do all that it can to ensure continuation of the economic recovery," he said.
Umm.... okay... what?!... another "stimulus" bailout?... print more paper money?... drop interest rates close to zero like Japan did in the late 80s?... *sigh*
Thursday, August 26, 2010
The Dow Jows closed under 10,000 today.
Tuesday, August 24, 2010
"Sales of previously occupied homes plunged last month to the lowest level in 15 years, despite the lowest mortgage rates in decades and bargain prices in many areas.
July's sales fell by more than 27 percent to a seasonally adjusted annual rate of 3.83 million, the National Association of Realtors said Tuesday. It was the largest monthly drop on records dating back to 1968, and sharp declines were recorded in all regions of the country.
The plunge in home sales also magnified fears about the broader economy.
"The housing market is undermining the already faltering wider economic recovery," said Paul Dales, U.S. economist with Capital Economics. "With the increasingly inevitable double-dip in prices yet to come, things could yet get a lot worse."
Sales were particularly weak among homes in the lower- to mid-priced ranges. For example, in the Midwest, homes priced between $100,000 and $250,000 tumbled nearly 47 percent.
The weakness follows a strong spring, when now-expired government tax credits sparked sales, especially among first-time buyers of lower-priced homes.
The tax credits caused many of those buyers to speed up their home purchases. Sales have weakened since the credits expired on April 30.
As sales have slowed, the inventory of unsold homes on the market grew to nearly 4 million in July. That's a 12.5 month supply at the current sales pace, the highest level in more than a decade. It compares with a healthy level of about six months.
One reason the market is hurting is that buyers and sellers are in a standoff over prices. Many sellers are reluctant to lower their prices. And buyers are hesitating because they think home prices haven't bottomed out." [bold emphasis mine]