On Cordray’s first day he has begun programs to supervise pay day lenders, student loans, and mortgage lenders.
Comments »Lowest mortgages rates ever fail to stimulate housing
Comments »WASHINGTON (AP) — 2012 looks to be another year of opportunity for the few who can afford to buy or refinance a home.
The average rate on the 30-year fixed mortgage fell to 3.91 percent this week, Freddie Mac said Thursday. That matches the record low reached two weeks ago.
The average on the 15-year fixed mortgage ticked down to 3.23 percent from 3.24 percent. That’s up from 3.21 percent two weeks, also a record low.
Mortgage rates are lower because they tend to track the yield on the 10-year Treasury note, which fell below 2 percent this week. They could fall even lower this year if the Fed launches another round of bond purchases, as some economists expect.
Still, cheap mortgage rates have done little too boost the depressed housing market. For eight straight weeks at the end of 2011, the average fixed mortgage rates hovered around 4 percent. Yet many Americans either can’t take advantage of the rates or have already done so.
High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many don’t want to sink money into a home that they fear could lose value over the next few years.
Previously occupied homes are selling just slightly ahead of 2010’s dismal pace. New-home sales in 2011 will likely be the worst year on records going back half a century.
Black Markets and Their Role in the World Economy
The Challenger Jobs Report Estimates a 31% Increase in job Cuts
U.S. Imports Rise the Most in Six Months
Service Industry Data Expands More Than Expected in the U.K.
Retail Sales Fall in Germany as Consumers Play it Safe With Savings
Germans kept a tight hold on savings sending retail sales down for a second month.
Comments »Mining May Be Your Next Job in the U.S.
Bill Gross speaks about the markets and his “new new normal”
Comments »Bill Gross is backing away from Pacific Investment Management Co.’s outlook for a “new normal” after lagging behind the majority of his peers during the biggest bond-market rally in nine years.
The period of muted growth in developed economies, high unemployment and “relatively orderly delevering” that Mohamed El-Erian, who shares the title of chief investment officer with Gross, coined in the aftermath of the 2008 financial crisis appears to be morphing into a world of credit and zero-bound interest-rate risk, said Gross, the founder of Pimco and manager of the world’s biggest bond fund.
“It’s as if the earth now has two moons instead of one and both are growing in size like a cancerous tumor that may threaten the financial tides, oceans and economic life as we have known it for the past half century,” Gross wrote in a monthly investment outlook posted on the Newport Beach, California-based company’s website today. “Welcome to 2012.”
Most developed economies have not, in fact, de-levered since 2008 and credit remains resilient because of the multitude of monetary stimulus packages being made available through central banks in the U.S. and Europe, Gross wrote. This risks leading to unraveling of financial markets if policy makers are unable to foster growth and inflation accelerates, he said.
China May Be Successfully Guiding a Soft Landing
Many tools left in the box for them to continue a “Sully” style landing of their economy…
Comments »Bill Gross Skips the New Year and Goes Right to Halloween
In a new address to clients Bill Gross get’s scary describing a new normal for the world…
Comments »NYC Apartment Sales Fall 12%
“Manhattan apartment sales fell 12 percent in the fourth quarter from a year earlier as Europe’s debt crisis and sluggish U.S. job growth dimmed buyer appetites.
Purchases of condominiums and co-ops declined to 2,011 from 2,295 in the fourth quarter of 2010, New York appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said in a joint report today. The median price of units that changed hands in the final three months of 2011 climbed 1.2 percent from a year earlier, to $855,000.
“Consumers paused to see how things play out with all the information that’s coming at them right now,” Jonathan Miller, president of Miller Samuel, said in an interview. “Europe, the impasse in Washington over economic policy, the stagnant nature of the economy — there’s a lot of conflicting economic news, and if you’re on the fence, maybe you wait a little bit.”
Comments »Three Cheers for PMI Data
BRIC PMI data has come in better than expected suggesting that a downturn may be stabilizing…
Comments »Gary Shilling Thinks U.S. Debt Will Push Us Into Recession
“Despite a recent spate of uplifting economic indicators, the U.S. economy will slide into a recession in 2012 and likely spend most of the year in it, says investor and author A. Gary Shilling.
While the country is showing some signs of improvement, decades of debt continue to weigh on the overall economy, which will need another year of de-leveraging before growth and normalcy can return.
Despite recent stronger economic data, the United States is likely to fall into a recession that will spread globally. The reason? “The U.S. has too much debt — and reducing it hurts growth,” Shilling writes in a Christian Science Monitory column.”
Comments »German unemployment higher in December, lowest average in 2 decades
Comments »MIXED EMPLOYMENT REPORT: Germany’s unemployment rate edged higher in December, but the average number of people unemployed last year in Europe’s biggest economy was the lowest for two decades.
THE MONTHLY DETAILS: The government said Tuesday that the unadjusted jobless rate rose to 6.6 percent last month from 6.4 percent in November. But the seasonally adjusted jobless rate dipped to 6.8 percent from 6.9 percent a month earlier.
THE ANNUAL RESULTS: The number of people out of work averaged 2.976 million for the full year, 263,000 fewer than in 2010 and the lowest overall figure since 1991. Last year’s average jobless rate was 7.1 percent, down from 7.7 percent in 2010. Andreas Rees, an economist at UniCredit in Munich, said the German labor market still has “substantial” momentum.
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Consumer spending facing slowdown, headwinds
This piece from the Times follows a report from Moody’s on the 22nd of December.
Comments »American consumers are running out of tricks.
As the weak economy has trudged on, they have leaned on credit cards to pay for holiday gifts, many bought at discounts. They are dipping into savings to cover spikes in gas, food and rent. They are substituting domestic vacations for international trips, squeezing more life out of their washing machines and refrigerators and switching to alternatives as meat prices have risen.
That leaves little room for a big increase in spending in 2012, economists say, a shaky foundation for the most important pillar of the American economy.
“The consumer is far from healthy,” said Steve Blitz, senior economist for ITG Investment Research.
Even the seemingly robust holiday shopping season is raising concern. After a strong start on Thanksgiving weekend, a pronounced lull followed, causing retailers to mark down products heavily in the week before Christmas. While final numbers for the season are not in, analysts say they are worried that retailers had to eat into profits to generate high revenues.
Consumer spending makes up 70 percent of the economy, so until it ignites, general growth is likely to be sluggish.
Macroeconomic Advisers, a forecasting company, projects growth of around 2 percent for the first half of this year, down from an estimate of 3.6 percent in the fourth quarter of 2011 and just 1.8 percent in the third quarter.
For consumers, the reasons for the sluggishness are clear: incomes are essentially flat, job growth is modest, and more than 40 percent of the new jobs in the last two years have been in low-paying sectors like retail and hospitality.
While consumer spending is not “going to collapse,” said Joel Prakken, senior managing director at Macroeconomic Advisers, “there are some headwinds there.”
Construction spending rose in November
Comments »WASHINGTON (AP) — Construction spending in the U.S. jumped in November as builders spent more on single-family homes, apartments and remodeling projects.
The Commerce Department said Tuesday that spending on construction projects rose 1.2 percent in November, following a revised 0.2 percent drop in October. The increase was the third in four months and the largest since a 2.2 percent rise in August.
The November increase pushed spending to a seasonally adjusted annual rate of $807.1 billion, still barely half the $1.5 trillion that economists consider healthy. Analysts say it could be four years before construction returns to health levels.
Home construction has begun a gradual rebound and likely added to the nation’s economic growth in 2011. The chief reason is apartments are being built almost twice as fast as two years ago. Renting is the only option for many people who have lost their jobs, their homes or both.
For November, private residential construction increased 2 percent in November to a seasonally adjusted $522.3 billion. It was the fifth consecutive gain.
Single-family construction rose 1.5 percent while multi-family construction including apartments rose 1.3 percent. The category that covers home remodeling rose 9.5 percent.
