TOTALINVESTOR

Saturday, June 26, 2010

5 housing and financial stories showing profound weakness in the economy

Unfortunately the storyline regarding housing is all too predictable. For California, once the vice grips tightened around the option ARM and Alt-A universe in 2007 and 2008, the housing market in the state collapsed like a piñata in the subsequent years. Now, all the mainstream analysts are “shocked” that new home sales have fallen into the abyss. Thing are so bad, that new home sales on a seasonally adjusted basis fell to a record low level and Census data goes back to 1963. When we chart this as you will see, this is a historic fall. Yet this is all expected. The removal of the federal tax credit and pent up demand moved forward caused a bear market bounce for housing. All it took was one month worth of data to crush the entire idea that the housing market was somehow supporting itself. (more)

Obama Strategy for G-20 in Ottawa: Push Euro Down, Drive Renminbi Up, Attack Germany, and Keep Toxic Derivatives in Charge of the World Economy

Business Week - 28 June - 4 July 2010

Each issue of BusinessWeek features in-depth perspectives on the financial markets, industries, trends, technology and people guiding the economy. Draw upon Business Week's timely incisive analysis to help you make better decisions about your career, your business, and your personal investments.

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The Coming U.S. Real Estate Crash

This week headlines across the United States screamed that new home sales in the U.S. had declined to the lowest level since the U.S. government began keeping track in 1963. But in the news stories covering this data in the mainstream media, they were always very careful to give their readers lots of reasons why things are going to "get back to normal" very soon. But the truth is that is simply not going to happen. Right now the United States is heading for another real estate crash. The only thing that has been holding it back was the huge bribe (called a tax credit) that the U.S. government was giving people to buy houses. Now that the tax credit has expired, there is no artificial incentive to buy homes and the real estate market has fallen through the floor. Unfortunately, there is every indication that things are going to get even worse. Read on to find out why.... (more)

Lawmakers agree on Wall Street's biggest overhaul since 1930s

Congressional negotiators Friday approved the most sweeping overhaul of U.S. financial regulation since the Great Depression, reshaping oversight of Wall Street and some of its most opaque concoctions.

Lawmakers from the House and Senate worked through the night in a 20-hour session to reach deals on two of their most far-reaching and contentious proposals -- a ban on proprietary trading by banks and new oversight of the derivatives market. This month, they’ve also agreed on measures to wind down big firms whose collapse might shake markets, to keep tabs on hedge funds and to make it easier for investors to sue credit raters.

“This is going to be a very strong bill, and stronger than almost everybody predicted that it could be and that I, frankly, thought it would be,” House Financial Services Committee Chairman Barney Frank, a Massachusetts Democrat, told reporters June 23 as lawmakers prepared for the final round of talks. (more)