Tuesday, March 11, 2008

Inman News - "Forecast: Perfect storm of financial problems, but no recession" (3-11-08)

"Despite the hard-hit housing market, with falling home prices, rising foreclosures, a subprime mortgage market meltdown and a credit crunch, Leamer's forecast for avoiding an economic recession is based upon a disconnect between housing and the overall labor market and a disconnect between the manufacturing and construction employment cycles."

NAHB
- "Builder Confidence In Condo Market Declines Again" (3-11-08)

"The Multifamily Condo Market Index (MCMI) ended 2007 on a low note, with the component of the index tracking builder confidence in current conditions standing at 18.8, down nearly 11 points from the same time a year ago, according to the National Association of Home Builders (NAHB)."

Bloomberg - "Moody's Cuts Revenue, Profit Forecast Amid Slump" (3-11-08)

"Moody's Corp., the world's second- largest credit-rating company, cut its 2008 forecast and said the slump in credit markets will go on longer than previously anticipated. Moody's dropped as much as 6.7 percent in New York Stock Exchange composite trading after Chief Executive Officer Raymond McDaniel said per-share profit will fall to $1.90 to $2, compared with a February forecast of $2.17 to $2.25. Revenue will decline in the mid-to-high teens, down from a previous estimate of 'low double digits,' McDaniel said."

Bloomberg - "Hedge Funds Reel From Margin Calls Even on Treasuries" (3-11-08)

"
The hedge-fund industry is reeling from its worst crisis in a decade as banks are now demanding more money pledged to support outstanding loans even when the investment is backed by the full faith and credit of the United States. Since Feb. 15, at least six hedge funds, totaling more than $5.4 billion, have been forced to liquidate or sell holdings because their lenders -- staggered by almost $190 billion of asset writedowns and credit losses caused by the collapse of the subprime-mortgage market -- raised borrowing rates by as much as 10-fold with new claims for extra collateral."

CNN - "Six months after the first rate cut" (3-11-08)

"Despite five interest rate cuts in the past six months, Wall Street has remained impervious to the Federal Reserve's wooing, with investors taking a 'thanks, but...' attitude to Ben Bernanke & Co.'s attempt to recharge the economy and stock market. Since September, the central bank has lowered its federal funds rate, a key overnight bank lending rate, to 3% from 5.25%. This included a 75 basis point emergency cut in January. There are 100 basis points in one percentage point."

Bloomberg - "U.S. States Revolt Against Muni Credit-Rating System" (3-11-08)

"T
he municipal bond market doesn't have enough to worry about with the bond insurers struggling to keep their AAA ratings, bond and closed-end fund share auctions failing, swaps and derivatives backfiring and a criminal investigation into the investment of proceeds business. No, that's not enough. Let's have a national debate on credit ratings, in particular about why the companies that rate municipal bonds see fit to grade most of them lower than corporations, although they almost never default."

USA Today - "401(k)s tapped to save homes" (3-11-08)

"
Struggling to save their homes from foreclosure, more Americans are raiding their 401(k) retirement accounts to pay their bills — and getting slammed with taxes and penalties in the process, according to retirement plan administrators."

Bloomberg - "Fed to Lend $200 Billion, Take on Mortgage Securities" (3-11-08)

"
The Federal Reserve, struggling to contain a crisis of confidence in credit markets, will for the first time lend Treasuries in exchange for debt that includes mortgage-backed securities. The Fed said in a statement in Washington it plans to make up to $200 billion available through weekly auctions. Officials told reporters on condition of anonymity that the program may be increased as needed. The Fed coordinated the effort with central banks in Europe and Canada, which plan to inject up to $45 billion into their banking systems."

The San Diego Union Tribune - "Experts' forecast sees no recession" (3-11-08)

"
UCLA's Anderson Forecast, which previously has been ahead of the curve in forecasting the downturn of the California housing market and the resulting decline in the economy, predicted yesterday that the state and nation would not fall into a recession."

Orange County Register - "
Construction worker shortage coming?" (3-11-08)

"It’s a hard to fathom this thesis when recent jobs data showed the U.S. construction worker unemployment rate at 11.4% for February, up from 10.4% the year before. (O.C.’s lost 11,700 construction jobs, or 10.6%, since its recent peak in September ‘06.)"

Real Estate Journal - "A Good Time to Buy a House If You Can Afford One" (3-11-08)

"For years rapidly rising prices kept many first-time home buyers out of the housing market. But as home values slide further downward and interest rates hover at relatively low levels, it may be time to start looking to buy that first house. That is, if you have a secure job, can afford higher down payments than were required a few years ago and can meet lenders' much stricter income and credit requirements."

Real Estate Journal - "No Money Down? You're Out of Luck" (3-11-08)

"Falling prices in many parts of the country have improved affordability for those interested in becoming homeowners for the first time, but financing the purchase has become a bigger challenge. Lenders, in general, are requiring larger down payments and higher credit scores, criteria that can trip up first-time buyers."

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