Mortgage Rates in the U.S. Decline to a Record Low

Mortgage rates for fixed 30-year loans in the U.S. dropped to a record low amid signs that the housing market is beginning to emerge from the worst slump since the 1930s.

The rate fell to 4.71 percent for the week ended today, the lowest since mortgage buyer Freddie Mac began compiling the data in 1971. The average 15-year rate was 4.27 percent, the McLean, Virginia-based company said today in a statement.

“I don’t think they can go much lower,” said George Mokrzan, senior economist at Huntington National Bank in Columbus, Ohio. “I think frankly they’re at one of the lowest points they’re going to achieve for a long time.” (more)

Buying the Gold Price Breakout

Peter Grandich: We compared the gold market now to what it was like in the early 1980s....through the 50s, 60s, 70s the Dow Jones Industrial Average was trapped between 700 and 1000. By the early 1980s, equities became so out of favor that there was an infamous Business Week Magazine front page story that said equities are dead. They were not owned largely by the public.....[but then] the Dow broke through 1000 and stayed through 1000 and ran much higher....along the way many people in the early stages kept saying it's got to pullback, it's got to exhaust itself because they became so accustomed to it being in a trading range.

Peter Grandich: Gold had a major breakout above $1,000. We had called it and said it would go from a ceiling to a floor. My personal opinion is....I don't believe in my lifetime...we we'll see a price of three digits or less in gold again. If there is a correction to come, if there is a serious consolidation I don't think it will be much...[but] gold has somewhat been self correcting itself. It's has many intra-day corrections [where we] go lower, [where we] see the paper market at the Comex hit stops and suddenly within an hour or two it was heading back or surpassed the point where those sells came in. It was kind of like a self correction. (more)

FICO and the Credit Card Financial Prison: How a Three Digit Credit Score Reflects Consumerism and not Financial Independence.

Americans carry $900 billion in credit card debt. Approximately 75 percent of all those eligible for credit, those that are 18 years or older, have a credit rating score at any given time. This mysterious three digit score named a FICO Score is the basis for loans, interest rates, and should reflect your ability to manage debt. Yet this is one of those confusing public relation developed ideas that tries to water down the fact that going into debt is somehow good for average Americans. Not only is going into debt good, you now have a credit score that is supposed to be some kind of financial report card. (more)

Taibbi: Obama’s sellout to Wall Street creates ‘permanent bailout’

If passed as it is, the financial reform bill winding its way through Congress will create a "permanent bailout mechanism," and will give complete control over future bailouts to the White House, says columnist Matt Taibbi.

In a video preview of an upcoming Rolling Stone article, Taibbi explained how the Obama administration started selling out to Wall Street interests almost as soon as the 2008 election was over.

"The really big thing that's in these bills that's really, really scary is that it kind of outlines a permanent bailout mechanism," Taibbi said. "If it survives in the way that it was originally conceived, it's basically going to formalize an arrangement whereby the government is expected to bail out the top 20 to 25 largest financial companies. ... It will be entirely up to the White House to determine whether or not these companies are in trouble in the future, so there won't be any congressional role in deciding when and when not to give a bailout." (more)

Charting The Great World Trade Collapse

A new report by VoxEU provides some detailed perspectives on just how bad the collapse in world trade has been as a result of the last year's events. In a nutshell: the current Great Recession/Depression has plunged the world into an unprecedented collapse of global trade, with the resultant blowing of liquidity bubbles having been the only way for individual governments to respond to this massive loss of GDP. And while drops in world trade are nothing new, with a 5% drop in the 1982 and 2001 periods, as well as a more severe 11% contraction in the 1970s, the current plunge of over 15% YoY is truly unprecedented and demonstrates the fragile nature of "globalization." What the outcome of this fact will be, depends entirely on the traditional dynamo of world economic growth - the US consumer, and unfortunately he is still down for the count. (more)

As housing goes, so goes the economy

The fate of housing, and the economy, will be determined by whether falling prices can stimulate sales faster than they are causing foreclosures.

Since it bulks so large because of its direct and indirect effects, as housing goes, so usually goes the economy. And the way housing is going nowadays does not bode well for the nascent recovery.

The issues confronting housing are well known by now. They include humongous supplies, soaring joblessness, fearful families, devastated balance sheets -- and falling prices.

The last item is the silver lining in an otherwise darkened sky. Because median home prices have fallen more than 30% from their 2006 peaks, the average home is more affordable today than it has been since the halcyon days of the mid-1980s. (more)

Retailer Numbers Falling Hard

U.S. retailers from Macy's to Costco posted much weaker-than-expected sales for November as shoppers focused only on big bargains at the start of the key holiday selling season.

Some, like department store operator Macy's Inc, also forecast quarterly earnings below analysts' estimates.

The Thomson Reuters same-store sales index rose 0.5 percent, compared with Wall Street expectations for a 2.1 percent increase.

Out of 15 retailers that reported by early Thursday, 11 missed analyst estimates, including Costco Wholesale Corp, Children's Place, Walgreen Co and Hot Topic Inc, according to Thomson Reuters data. (more)