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Monthly Archives: February 2012

Putin assassination plot foiled

Moscow (CNN) — A plot to assassinate Russian Prime Minister Vladimir Putin has been foiled, Russia’s state-run Channel One TV reported Monday, less than a week before presidential elections that Putin is expected to win.

Citing unnamed sources, the report said a group of plotters was arrested in the Ukrainian city of Odessa in early January and, after weeks of questioning, confessed to planning to kill the Russian leader.

The TV report included what it said was a confession by Adam Osmayev, a fixer associated with the two men who were seized in Odessa.

“Our final goal was to come to Moscow and try to organize an attempt on Prime Minister Putin,” Osmayev said.

Putin promises military spending He said the plan involved using military-grade land mines to blow up vehicles.

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Poll: Obama leads GOP handily

Washington (CNN) – President Barack Obama holds double digit leads over the top two GOP presidential candidates, according to a new national survey.

A Politico/George Washington University Battleground Poll released Monday indicates Obama topping former Massachusetts Gov. Mitt Romney 53% to 43% in a hypothetical general election matchup, with the president leading former Sen. Rick Santorum of Pennsylvania 53% to 42%.

Matched up against a generic GOP opponent in the general election (an unnamed candidate who has not suffered negative attacks during the primary process), Obama has a five-point advantage (50%-45%), up from a dead heat back in November. It’s also telling that the president is at or above 50% in all three general election matchups.

A new national poll from USA Today/Gallup tells a different story. According to the survey, which was also released Monday, Obama and Romney are deadlocked at 47% in a hypothetical matchup, with Santorum holding a 49%-46% margin over the president.

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Breaking: Afghani’s value paper more than people, violence continues

Shocking, I know, but maybe we’ve just stumbled onto the real reason why that section of the world is such a gargantuan pile of shit.

KABUL, Afghanistan – A suicide car bomber rammed his vehicle into the gates of a NATO base and airport in eastern Afghanistan on Monday, triggering a blast that killed nine Afghans, officials said. The Taliban claimed the attack was revenge for U.S. troops burning copies of the Koran.

The bombing in the city of Jalalabad follows six days of deadly protests in the country over the disposal of Korans and other Islamic texts in a burn pit last week at a U.S. military base north of Kabul.

American officials have called the disposal of the books a mistake and have issued a series of apologies. Afghan President Hamid Karzai has urged calm, calling on his countrymen not to allow insurgents to capitalize on their indignation to spark violence.

About 40 people have been killed in protests and related attacks since the incident became known this past Tuesday, including four U.S. soldiers. NATO, France, Britain and the U.S. have pulled their advisers from Afghan ministries out of concern that the anti-foreigner anger might erupt again.

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Gas prices continue spitting in Central Banker’s eyes

Read here:

Gas prices in the U.S. are nearing the freak-out point–the level at which Americans go from grumbling about getting gouged to actually reducing their gas consumption and demanding that their elected representatives start doing something to help.

And the Republican Presidential candidates have jumped all over that, suggesting that today’s high prices are Barack Obama and the Democrats’ fault.

Meanwhile, the Obama Administration is trying to preempt the criticism, saying that there’s “no silver bullet” that is going to knock gas prices back down to $2 a gallon.

And there is almost certainly no silver bullet that is going to do that, short of a global economic depression.

Gas prices are rising, in part, because oil prices are rising, and oil prices are rising because of steady changes in supply and demand.

With the growth of China, India, and other developing markets, the demand for oil is outstripping new supply, so there’s nowhere for prices to go but up.

Obviously, new sources of supply will help, but it’s highly unlikely that they’ll take gas prices back down to the level that most Americans consider reasonable. Even analysts who think that today’s oil and gas prices are inflated by speculation now put the “fair price” of a barrel of oil at $75-$80, as compared to $20 a barrel a decade ago.

So, who’s to blame and what should be done?

Well, one entity that is to blame is the one doing everything it can to put the blame on someone else–the U.S. government. In the 40 years since the first oil crisis, in the early 1970s, Congress has done nothing to develop a comprehensive U.S. energy policy, one that would develop not only additional sources of oil but also leverage natural gas and renewable energy.

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BP trial delayed for settlement talks

LONDON/NEW ORLEANS (Reuters) – The trial to decide who should pay for the 2010 Gulf of Mexico oil spill has been delayed by a week, to allow BP Plc to try to cut a deal with tens of thousands of businesses and individuals affected by the disaster.

Less than 24 hours before the case was set to start in a New Orleans federal court, U.S. District Judge Carl Barbier pushed back the date to March 5 from February 27.

The delay allows further talks between BP and the Plaintiffs’ Steering Committee (PSC), which represents condominium owners, fishermen, hoteliers, restaurateurs and others who say their livelihoods were damaged by the April 20, 2010, explosion of the Deepwater Horizon drilling rig and subsequent oil spill.

Eleven people were killed, and 4.9 million barrels of oil spewed from the mile-deep Macondo oil well, in by far the worst offshore U.S. oil spill.

“BP and the PSC are working to reach agreement to fairly compensate people and businesses affected by the Deepwater Horizon accident and oil spill,” BP said in a statement.

The London-based oil company said there was no assurance that the talks would lead to a settlement.

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Najarian: Silver is the sweet spot

Read here:

By now it’s no secret that Silver has wildly outperformed the major indexes and it’s fully-precious big brother, Gold, so far in 2012. The question, naturally, is whether or not it’s too late to get on board.

In the attached clip Jon Najarian and I discuss how the “smart money” is playing silver and what it means for individual investors trading in the pits or at home via the wildly popular iShares Silver Trust etf (SLV).

In addition to the industrial function of silver making the metal a semi-appropriate way to play an economic recovery Najarian says the metal represents, “a cheaper way to play the flood into precious metals.” Regardless of silver’s 27% run year-to-date and positioning near heavy resistance at $35 an ounce, Najarian still “likes silver a lot.”

In no small part what the TradeMonster.com co-founder is seeing are notoriously short-term thinkers in the options pits buying the $35 calls out to June, a stunningly long view for the quick-trigger set.

Also supporting the notion of options players’ bullish stance on silver, at least according to Najarian, is the trading activity in a lesser known Proshares UltraShort Silver (ZSL) –a double-inverse trading vehicle designed to move $2 higher for every $1 drop in silver.

“If you thought silver was going to break (lower) people would start buying ZSL calls,” Najarian says.

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World Bank warns China of impending collapse

Read here:

The World Bank and a Chinese think tank have a stern warning for China’s government: transition to a freer market system, or else face an economic crisis.

The “China 2030” report, released by the World Bank on Monday, recommends China enact reforms promoting a freer economy. Those reforms include a major overhaul turning China’s powerful state-owned companies into commercial enterprises.

“China could postpone reforms and risk the possibility of an economic crisis in the future — or it could implement reforms proactively. Clearly, the latter approach is preferable,” the report said.

The report is compiled by the World Bank and the Development Research Center, a research group that reports directly to China’s State Council. It encourages China to promote innovation, competition and entrepreneurship as means of economic growth, rather than allowing growth to be primarily government engineered.

The world’s second-largest economy has been rising rapidly, averaging around 10% growth a year for the last three decades. Much of that momentum has come as China’s rural population moves into the cities and as the government has funded massive infrastructure projects and retained a powerful influence over the country’s biggest companies.

State-owned companies dominate China’s banking, energy, telecom, health care and technology sectors. Overall, they account for about 40% of the country’s gross domestic product, according to Andrew Szamosszegi and Cole Kyle, who have researched the topic for the U.S.-China Economic and Security Review Commission.

Their latest report to the commission puts it bluntly: The Chinese government has not “expressed an interest in becoming a bastion of free market capitalism.”

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Nat. Realtors: Pending home sales highest in two years

WASHINGTON (AP) — The number of Americans who signed contracts to buy homes rose in January to the highest level in nearly two years, supporting the view that the housing market is gradually coming back.

The National Association of Realtors said Monday that its index of sales agreements rose 2 percent last month to a reading of 97. That’s the highest reading since April 2010, the last month that buyers could qualify for a federal home-buying tax credit and the last time the reading was above 100.

A reading of 100 is considered healthy.

The Realtors’ group also released revised data for 2011. That lowered November’s initial 19-month high of 100.1 to 96.9. But contracts have been markedly up since the summer when some feared a second recession loomed.

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Buffet waxes poetic obfuscation

(Reuters) – Warren Buffett resisted pressure on Monday to identify his successor as chief executive officer of Berkshire Hathaway, saying the person who has been chosen does not even know it himself.

In his annual investor letter on Saturday, Buffett said Berkshire’s board had identified someone who will replace him as CEO when the 81-year-old investor eventually leaves the post.

But he did not identify that person in the letter, and in a CNBC interview on Monday, he rejected suggestions that he should. The public does not know who will be the next CEO of other major corporations, he said, and there is a disadvantage to having a “crown prince” in place.

“Well, we have four stocks that we have $45 billion invested in: American Express, Coca-Cola, Wells Fargo and IBM. Every one of those four companies … has changed management since we bought our shares. I didn’t have the faintest idea who the successor of management would be in any of those four, but we’ve put billions and billions of billions of dollars in there,” Buffett said in an interview from the printing plant of the Omaha World-Herald, the hometown newspaper he bought late last year.

Buffett would say very little about the successor, other than that he is someone the board has had in mind for years and that the person does not know. He also said the heir apparent was likely to come from the ranks of dozens of chief executive officers at Berkshire operating companies.

One person not on the list, though, is David Sokol. Once one of Buffett’s top lieutenants, and often assumed to be his heir apparent, Sokol left Berkshire last year amid a scandal over his stock trading while at the company.

The Sokol matter largely dropped from public attention in recent months, but Buffett said Monday that he assumed there is an ongoing investigation, as Berkshire has already paid more than $1.4 million in legal bills for Sokol.

Buffett added that securities regulators had not contacted him about the matter since last summer.

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Today’s Money Flows

                                                          (in millions) 
Google                         GOOG    NASD      605.75      +168.3       4.07 
SPDR S&P 500                   SPY     ARCA      136.11      +132.3       1.72 
Pfizer                         PFE     NYSE       20.99       +32.0       4.37 
PwrShrs QQQ Tr Series 1        QQQ     NASD       63.50       +24.4       1.79 
Salesforcecom                  CRM     NYSE      141.43       +14.8       1.49 
Intel                          INTC    NASD       26.57       +12.9       2.16 
IBM                            IBM     NYSE      196.36       +11.5       1.54 
ConocoPhillips                 COP     NYSE       76.15       +11.2       2.09 
Freeport McMoran               FCX     NYSE       43.12        +9.9       1.59 
UnitedHealth Group             UNH     NYSE       56.00        +9.7       2.55 
Disney                         DIS     NYSE       41.51        +9.2       2.44 
Kraft Foods                    KFT     NYSE       37.66        +9.2       3.80 
Petoleo Brasil A               PBR/A   NYSE       28.67        +9.2       2.43 
AT&T                           T       NYSE       30.35        +9.0       1.90 
Citigroup                      C       NYSE       32.07        +8.4       1.43 
Express Scripts                ESRX    NASD       54.63        +7.8       1.31 
Merck                          MRK     NYSE       37.96        +7.5       3.58 
Berkshire Hathaway B           BRK/B   NYSE       78.79        +7.4       1.50 
JPMorgan Chase                 JPM     NYSE       37.95        +6.9       1.55 
LinkedIn Cl A                  LNKD    NYSE       89.59        +6.9       2.13 

                                                          (in millions) 
Apple                          AAPL    NASD      518.59       -42.3       0.93 
Select Sector SPDR-Ind         XLI     ARCA       37.22       -41.7       0.10 
El Paso Corp                   EP      NYSE       27.30       -25.7       0.12 
Microsoft                      MSFT    NASD       31.16       -18.3       0.45 
Brclys 1-3 Yr Trsry Bd         SHY     ARCA       84.42       -15.5       0.08 
Broadcom                       BRCM    NASD       35.89       -15.5       0.43 
CurrencyShares AUD Tr          FXA     ARCA      107.09       -15.4       0.07 
ExxonMobil                     XOM     NYSE       87.13       -14.9       0.51 
Procter & Gamble               PG      NYSE       66.60       -14.4       0.61 
Hewlett-Packard                HPQ     NYSE       26.23       -12.3       0.48 
Agrium                         AGU     NYSE       82.94       -11.4       0.42 
Coca-Cola                      KO      NYSE       68.65       -10.9       0.33 
Apache Corp                    APA     NYSE      109.95       -10.1       0.53 
BP PLC                         BP      NYSE       47.94       -10.0       0.69 
McDonald's                     MCD     NYSE       99.97        -9.9       0.52 
Chevron                        CVX     NYSE      109.45        -9.9       0.69 
General Electric               GE      NYSE       19.05        -9.5       0.58 
iShrs Barclays TIPS Bond       TIP     ARCA      119.15        -9.5       0.20 
Transocean                     RIG     NYSE       52.60        -8.9       0.76 
Wells Fargo                    WFC     NYSE       30.10        -8.7       0.57

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Most Active Options trades

GLD        3/17/12        179.0000        4529            0.7500      dn 0.0900 
BP         3/17/12         46.0000         510            2.5500      up 0.4900 
BAC        3/17/12          5.5000         263            2.1900      dn 0.3000 
DNDN       3/2/12          14.0000         220            0.2100      dn 1.4900 
RIG        3/2/12          52.5000         210            1.5000      up 0.8500 
SVNT       6/16/12          3.0000         188            0.1000      dn 0.0300 
PFE        3/17/12         22.0000         186            0.0500      up 0.0000 
BAC        3/2/12           8.0000         160            0.0400      dn 0.0400 
AMZN       3/17/12        190.0000         154            0.9500      dn 0.1700 
AAPL       3/17/12        520.0000         138           11.9500      dn 1.6000 

BAC        3/17/12          8.0000         236            0.4600      up 0.1300 
GLD        3/17/12        170.0000         118            1.8200      up 0.0500 
AMGN       3/17/12         65.0000         102            0.6000      up 0.1900 
NFLX       3/17/12        120.0000         100           13.6000      up 2.7000 
S          5/19/12          2.5000          80            0.3300      up 0.0500 
HPQ        3/17/12         25.0000          71            0.2400      up 0.0500 
INTC       4/21/12         26.0000          62            0.6700      up 0.0200 
DNDN       3/17/12         12.0000          61            1.0100      up 0.5800 
BAC        4/21/12          6.0000          58            0.0900      up 0.0100 
UNH        4/21/12         60.0000          58            5.0500      up 0.1500 

 CALLS      PUTS           TOTAL 
24758    15627        40385
BAC        3/17/12          8.0000        4723            0.1700      dn 0.0500 
PZG        9/22/12          7.5000        4000            0.1500      up 0.0200 
INTC       3/2/12          27.0000        2204            0.1000      dn 0.0600 
XOM        4/21/12         90.0000        1784            0.9500      up 0.0900 
AAPL       3/2/12         520.0000        1608            5.7000      dn 2.0000 
BAC        3/2/12           8.0000        1540            0.0500      dn 0.0400 
AAPL       3/2/12         525.0000        1320            3.4500      dn 1.5500 
KMI        3/17/12         30.0000        1303            3.7000      up 0.5000 
GLD        3/17/12        179.0000        1283            0.7500      dn 0.0600 
C          3/2/12          32.0000        1274            0.5300      dn 0.2000 

BAC        3/17/12          8.0000        1667            0.4400      up 0.1100 
TLT        4/21/12        105.0000        1500            0.1900      dn 0.0500 
BAC        4/21/12          7.0000        1034            0.2400      up 0.0500 
FSLR       3/2/12          37.0000        1011            3.0500      up 0.4600 
NG         3/17/12          8.0000         958            0.1500      dn 0.0500 
TGT        4/21/12         52.5000         900            0.6700      up 0.0400 
TGT        4/21/12         48.0000         900            0.1500      up 0.0000 
GE         3/17/12         19.0000         893            0.3000      up 0.0600 
FXE        3/17/12        135.0000         800            2.5000      up 0.5700 
BAC        4/21/12          8.0000         766            0.6500      up 0.1100 

 CALLS      PUTS           TOTAL 
299223    285107        584330

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52 Week Highs and Lows


New Highs 29 

COMPANY                       SYMBOL      HIGH                VOLUME 
-------                       ------      ----                ------ 
Atlas Energy L.P.WI           ATLSw       24.50                  100 
Bankrate                      RATE        25.84               53,590 
BlRk MuHldg NY Qlty           MHN         16.11               14,887 
CommonWealth REIT Pfd E       CWHpE       25.64                4,395 
Cushing Royalty & Incm Fd     SRF         25.08                2,900 
DWS Global High Inco          LBF         8.14                   669 
DTF Tax-Free                  DTF         17.10                5,065 
EV National Municipal Opp     EOT         21.99                8,636 
Endurance Specialty 7.75%     ENHpA       26.99                1,428 
Endurance Spec Hldgs PfB      ENHpB       26.84                4,310 
Hospitality Prop Tr Pfd D     HPTpD       25.46                3,501 
Imperva                       IMPV        37.52               23,914 
Lions Gate Entertainment      LGF         14.46              733,974 
Lorillard Inc                 LO          130.17             160,556 
MarriottVacations             VAC         23.99              105,780 
Medco Health                  MHS         67.99            3,170,973 
Nuveen CA Muni Mkt            NCO         15.87                2,970 
Nuveen CA Quality Income      NUC         16.84                4,961 
ONEOK Partners                OKS         61.18               18,946 
Scana 7.70%Sers A             SCU         29.60                  144 
Sherwin-Williams              SHW         101.44             136,278 
Strat Htls & Resorts A        BEEpA       30.39                  300 
TJX Cos                       TJX         36.45              715,300 
Targa Resources               TRGP        46.62               20,018 
Tortoise P&Engy Infrstr       TPZ         26.30                  353 
TransDigm Group               TDG         121.48              64,026 
UnitedHealth Group            UNH         56.16              986,243 
Virtus Glbl MultiSector       VGI         20.04                  300 
Weis Markets                  WMK         44.85               48,860 

New Lows 4 

COMPANY                       SYMBOL      LOW                 VOLUME 
-------                       ------      ----                ------ 
AVG Technologies              AVG         12.77              102,930 
Alon Hldgs Blue Square        BSI         3.63                12,206 
Cellcom Israel                CEL         13.65              175,867 
RadioShack                    RSH         7.06               688,521


New Highs 26 

COMPANY                       SYMBOL      HIGH                VOLUME 
-------                       ------      ----                ------ 
AMC Networks A                AMCX        45.80               35,586 
Air Methods                   AIRM        92.35                9,892 
Alnylam Pharm                 ALNY        13.75              120,468 
Ameris Bancorp                ABCB        11.56               68,659 
Body Central                  BODY        29.38               21,127 
Calavo Growers                CVGW        29.27               63,117 
ChipMOS Techs Bermuda         IMOS        11.24               82,340 
Clean Energy Fuels            CLNE        19.00              457,372 
Coronado Biosciences          CNDO        8.00                25,021 
DDi                           DDIC        11.44               18,649 
Datawatch Corp                DWCH        12.47                9,612 
Delta Natural Gas Co          DGAS        37.45                2,450 
Deltek                        PROJ        10.97               87,016 
Discovery Laboratories        DSCO        3.70               567,256 
Guaranty Bancorp              GBNK        1.84                21,763 
iPass                         IPAS        2.26                26,336 
Mercantile Bank               MBWM        13.04                2,780 
Mesa Laboratories             MLAB        54.13                  520 
OSI Systems                   OSIS        58.58               81,137 
Orexigen Therapeutics         OREX        4.15             1,420,740 
TGC Inds                      TGE         9.63                62,756 
Ubiquiti Networks             UBNT        27.79               52,639 
Vangrd Intermed-Trm Cp Bd     VCIT        84.91               15,316 
Vanguard Long-Trm Crp Bd      VCLT        88.82                3,277 
Vanguard Shrt-Trm Crp Bnd     VCSH        79.32               24,695 
VIVUS                         VVUS        24.83            9,067,950 

New Lows 13 

COMPANY                       SYMBOL      LOW                 VOLUME 
-------                       ------      ----                ------ 
B Communications              BCOM        10.71                4,075 
ChemoCentryx                  CCXI        10.02                4,500 
Columbia Laboratories         CBRX        0.64             1,598,166 
CyberDefender                 CYDE        0.05               564,591 
Digital Generation            DGIT        10.21              115,408 
Electronic Arts               EA          16.61              841,465 
iSh Barclays GNMA Bd Fd       GNMA        49.96                  110 
iSh MSCI Emg Mkts Asia        EEMA        53.44                  130 
Orckit Comm                   ORCT        0.47                30,759 
Partner Comm Co               PTNR        7.52                61,411 
Sigma Designs                 SIGM        5.51                24,176 
TeleNav                       TNAV        6.99                84,112 
Telik                         TELK        0.12               189,270

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Consumer Debt Said to be Reaching Toxic Levels


“(New York Post) – More American households are falling back into the debt hole, this time without the safety net of home values to help bail them out, the New York Post reported Sunday.

Last year, total US consumer debt reached its highest point in a decade, according to a credit card industry observer.

“Now more than ever, families need to work at saving and paying off any outstanding debts,” said Howard Dvorkin, a certified public accountant and founder of the credit counseling service Consolidated Credit.

After a few months of reducing credit card debt levels, Dvorkin said, Americans are starting to return to their reliance on debt.

“People made some progress in reducing card debt earlier in the year, but in the last few months, as the stock market started to rise, they started to return to their old ways of charging things,” he explained.

In December 2011, the total consumer debt — which is the combination of non-revolving and revolving debt — rose by some 9.3 percent to $2.498 trillion, according to the latest Federal Reserve Board numbers.

Both revolving debt and non-revolving debt increased. Revolving debt, which is credit-card debt, went up by 4.1 percent. Non-revolving debt, which includes loans for cars and education, rose 11.8 percent, the central bank’s report said.

The trend — month to month, quarter to quarter and year to year — is rising steeply.

“Consumer credit increased at an annual rate of 7.5 percent in the fourth quarter. Revolving credit increased at an annual rate of 4.5 percent, and non-revolving credit increased 9 percent in December,” the Fed wrote in a note along with the latest monthly report, which also reviewed 2011.

These numbers, Dvorkin warns, mean that many middle-class Americans are taking big risks.

In a weak economy with high unemployment, Dvorkin noted, many people with big card balances become vulnerable to financial catastrophe.

Lewis J. Altfest, a Manhattan adviser who targets professional, high-income clients, devotes part of his practice to telling the well-heeled how to cut back on credit card debt.

“It’s still a big problem. Some people want to live life to the fullest even though they are using their cards too much,” Altfest explained. He said many clients last year tried to reduce card debt. But some “are falling back into their old ways.”

Indeed, last holiday season many consumers financed Black Friday trips to the mall and Cyber Monday online buying sprees by making purchases with plastic, Dvorkin contends.

“As the bills begin to roll in, consumers may find themselves unable to pay them off. It’s good to see an increase in consumer spending, but never is it worth going into debt,” according to Dvorkin.”

Read more: New York Post


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George Osborne: The U.K. Government ‘has run out of money’ and cannot afford debt-fuelled tax cuts or extra spending

“In a stark warning ahead of next month’s Budget, the Chancellor said there was little the Coalition could do to stimulate the economy.

Mr Osborne made it clear that due to the parlous state of the public finances the best hope for economic growth was to encourage businesses to flourish and hire more workers.

“The British Government has run out of money because all the money was spent in the good years,” the Chancellor said. “The money and the investment and the jobs need to come from the private sector.”

Read more

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U.S. Home Sales Rose 2% in January

By Alan Zibel and Eric Morath 
WASHINGTON (Dow Jones)–The number of U.S. home buyers who signed contracts to purchase previously owned homes grew in January to the highest level in 21 months as the housing market showed signs of recovery.
The National Association of Realtors’ seasonally adjusted index for pending sales of existing homes increased 2.0% on a monthly basis to 97.0. It was the highest reading since April 2010, when sales were getting a lift from federal tax credits. The results were 8.0% above the same month a year earlier.
Economists surveyed by Dow Jones Newswires had forecast that pending home sales would rise by 1.0% on a monthly basis from an originally reported December reading of 96.6. December’s figures were revised downward to a reading of 95.1.
“Given more favorable housing market conditions, the trend in contract activity implies we are on track for a more meaningful sales gain this year,” said Lawrence Yun, the Realtors’ chief economist.
The index tracks agreements to purchase homes. A sale is considered pending when the contract has been signed but the transaction hasn’t closed. Pending sales typically close within one or two months of signing.
The housing market has been one of the weakest parts of the U.S. economy, but recent economic data show it is starting to get back on track after a price collapse that began 5 1/2 years ago. Mortgage rates have been hovering around the lowest recorded levels, employers have stepped up hiring and economists’ forecasts have become less gloomy.
However, prices in many distressed markets have continued to fall due to a continuing flow of foreclosures. While the share of loans in foreclosure has remained elevated, the number of new borrowers falling behind on their mortgages has been falling.
Pending sales rose in two out of four U.S. regions in December. They rose 7.7% in the South and 7.6% in the Northeast, but fell 4.4% in the West and 3.8% in the Midwest.
-By Alan Zibel and Eric Morath, Dow Jones Newswires; 202-862-9263; [email protected]
(MORE TO FOLLOW) Dow Jones Newswires
February 27, 2012 10:00 ET (15:00 GMT)

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The White House Finally Acknowledges the Balance Sheet Recession

“Mike Konczal highlights an interesting point in the latest White House Economic Report:

The White House also looks to be on team balance sheet. See the latest Economic Report of the President(pages 110 to 114):

“The standard approach in economics has been to assume that households consume about the same fraction of the increase in their wealth each year, regardless of its source… The severity of losses experienced during the recession that began in December of 2007 in both national output and in labor markets makes these estimates appear too small…

A growing economics literature highlights the importance of household debt balances in influencing the severity of economic slumps… A series of empirical papers attempts to quantify the effect of such deleveraging on consumption (Mian and Sufi 2010; Mian, Rao, and Sufi 2011). These papers broadly suggest that the levered nature of household housing assets amplified the effect of pure wealth losses from the crash in housing prices.”

Read more

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