Housing Construction Rises in August

Housing Construction Rises in August

http://www.google.com/hostednews/ap/article/ALeqM5gqgh84xd8SadET8bbMATJ_cGAdoAD9AP2U3G0

The US housing industry appears to be recovering from its worst downturn in several decades. Housing Construction in the US rose to its highest level in nine months and was up by an annualized 1.5% to 598,000 units in August. The applications for building permits, a gauge of future construction activity, increased by 2.7% in August to an annualized rate of 579,000 units. The permits  for single family homes declined by 0.2% while that for multifamily units were up 15.8%. The August increase in housing construction was largely driven by the multi family units which increased by 25.3% after having fallen by 15.2% in July. The construction boost is largely driven by the federal tax credit for the first time home buyers.

New Credit Card Law Rules Become Effective

New Credit Card Law Rules Become Effective

http://www.bizjournals.com/pacific/stories/2009/08/17/daily48.html

Credit card users can now expect some better deals from the banks as the first phase of the new Credit Card Accountability, Responsibility and Disclosure Act of 2009. The new rules make it mandatory for the credit card companies to give consumers a warning of at least 45 days as against the current 15 days before increasing the interest rates. Again all statements need to be mailed 21 days before the due date as against the current norm of 14 days. Credit card users have been granted the option to cancel their accounts if they opt out of the interest rate hikes and pay off their remaining balances at old rates. Some more rules are likely to take effect in February and August, respectively. At  last some relief for the credit card consumers who are fed up of unexpected rate increases.

Not A Good Time For Schwarzenegger

Not A Good Time For Schwarzenegger

http://news.yahoo.com/s/ap/20090828/ap_on_bi_ge/as_japan_toyota;_ylt=Akfa0eJRTnMVwefbmznYeoiyBhIF;_ylu=X3oDMTJrbnFnYm03BGFzc2V0A2FwLzIwMDkwODI4L2FzX2phcGFuX3RveW90YQRjcG9zAzUEcG9zAzIEc2VjA3luX2hlYWRsaW5lX2xpc3QEc2xrA3RveW90YWNsb3Npbg–

On the one hand, California Governor, Arnold Schwarzenegger has scheduled a garage sale to raise some money to run his government. On the other hand, he and his state got the bad news that Toyota is shuttering its plant at Fremont. This plant which was a 50:50 joint venture with General Motors employed 4,600 people. It had been on notice ever since GM withdrew from the joint venture, but optimists had been hoping that Toyota would not shut down the facility.
While economists and the administration keep referring to indicators which show that the grip of the recession is loosening, the reality for those facing a lay off is quite different. For these 4,600 people, the nightmare is just beginning.

Goldman Sachs Expects Stimulus To Yield Results Later

Goldman Sachs Expects Stimulus To Yield Results Later

http://www.reuters.com/article/GCA-Economy/idUSTRE57461H20090805

A delay in spending the $787 million funds sanctioned under the US government’s stimulus plan has pushed forward the expected benefits from the program, according to a report by Goldman Sachs. The firm had earlier predicted that the stimulus plan’s impact on real Gross Domestic Product Growth will peak at 3.3% annualized rate in 3Q09. However, a slower than expected spending uptake has pushed the program’s benefits to subsequent quarters. The worsening employment and income scenario has highlighted the need to take up more measures and incentives aimed at improving the scenario. There is a possibility that spending is speeded up in the near future and brought in track with the original schedule, Goldman Sachs. The plan’s annualized impact on the real GDP growth in the fourth quarter of the current year is now expected to be 2%, up from the 1.1% projected earlier this year.

Survey Shows Slowdown In Lending By US Banks

Survey Shows Slowdown In Lending By US Banks

http://www.google.com/hostednews/afp/article/ALeqM5gnqXY1G5pP-DjiswezBPuNygUOGQ

A survey by the Wall Street Journal has revealed that the lending by the US banks has slowed down in the wake of the uncertain economic conditions. The total number of loans with the 15 large US banks has declined by 2.8% in the second quarter. The survey also reveals that of the loans sanctioned during April and May, more than 50% was due to refinancing of mortgages and renewal of credit to businesses. The percentage of fresh loans was very less. The 15 banks that include JP Morgan Chase, Banc of America, Citigroup and Fifth Third Bancorp hold 47% of federally insured deposits and received aid worth $182.5 billion under the TARP program. The total amount of dollars in the balance sheets of these banks declined from $4.3 trillion as on March 31 to $4.2 trillion as on June 30.

Toy Town Up To It!

Toy Town Up To It!

http://news.yahoo.com/s/ap/20090717/ap_on_bi_ge/us_earns_mattel

Mattel Inc. reported a 119% decline in sales for the quarter but an 82% increase in profits. These higher profits have come about as a result of cost cutting measures undertaken by the company.

I would like to believe that there will be some lasting effects of this current economic downturn. The first being the emergence of a more cost conscious, tight fisted American shopper who will not resort to credit as easily as he or she has done in the past. The second long term impact is likely to be a higher level of cost consciousness amongst all corporates. The days of free spending are over, and for many the only way to survive is through cutting costs.

US Dollar’s Importance Likely To Be Debated At G-8

US Dollar’s Importance Likely To Be Debated At G-8

http://topnews.us/content/26009-dollars-role-reserve-currency-likely-be-debated-g-8-summit

The US dollar has been the reserve currency for a long time, but its importance is being questioned by several leaders across the world. It is very likely that the topic will come up at the ensuing G-8 summit in Italy. Although China was one of the first countries moot the idea of identifying an alternative reserve currency, its leaders later said that the US dollar is likely to remain the reserve currency for a long time to come. Several other nations including France and Russia have followed it up with a call for a debate regarding the importance of the US dollar and improved coordination on foreign policy issues. Russian President, Dmitry Medvedev has called for the identification of regional reserve currencies while maintaning that there appears to be no alternative to the US dollar at present.

Existing Home Sales Rise In May, Prices Fall

Existing Home Sales Rise In May, Prices Fall

http://money.cnn.com/2009/06/23/real_estate/existing_home_sales/?postversion=2009062314

Declining home prices and a first time tax credit resulted in an increase in the existing home sales in the month of May. According to the data released by the National Association of Realtors, existing home sales increased by 2.4% in May to a seasonally adjusted annualized level of 4.77 million units. The increase was largely driven by the low mortgage rates and housing prices. The $8000 tax credit offered by the Obama administration to first time home buyers also boosted the home sales.  Meanwhile, the total housing inventories declined by 3.5% to 3.8 million existing homes available for sale. However, faulty valuations resulted in the stalling of several transactions and restricted the increase in the existing home sales during May.

Mortgage Rates Up

Mortgage Rates Up

http://news.yahoo.com/s/ap/20090604/ap_on_bi_ge/us_mortgage_rates

Rates on 30-year home loans moved above 5% for the first time in three months. What does this mean for the American housing industry? This segment is one which has suffered the most in the ongoing recession.

Just as there appeared to be renewed interest in home purchase, mortgage rates have moved upwards. As it is getting a home loan sanctioned has become very difficult in the current scenario. On top of that lenders are being more cautious about who they lend to and have tightened their criteria significantly. Attractive rates are available to only those with excellent credit scores.

Does this high rate mean that the sector will again drop just when it appears that it was clawing out of the deep hole it has been in for close to three years?

Credit Card Reform Bill Passes The House

Credit Card Reform Bill Passes The House

http://www.freep.com/article/20090521/NEWS15/905210660

The legislation that aims to restrict misuse by credit card companies and restrict their ability to raise rates on existing balances besides imposing new strict rules is likely to become a law soon. The proposal has been cleared by the House and now needs to be signed by the US President Barack Obama. A significant proposal included in the legislation calls is to give priority to payments pertaining to that portion of the credit card bill that carry the highest interest rate. Currently the credit card companies are allowed to force consumers to do exactly the opposite. The new legislation intends to impose stricter rules on issuance of credit cards to people below 21 besides making the terms and conditions clearer for the customers – a much needed step for restricting the abuse of credit cards.