{"id":197146,"date":"2008-02-27T18:00:00","date_gmt":"2008-02-27T23:00:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2008\/02\/27\/economics-update-513\/"},"modified":"2008-02-27T18:00:00","modified_gmt":"2008-02-27T23:00:00","slug":"economics-update-513","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2008\/02\/27\/economics-update-513\/","title":{"rendered":"Economics Update"},"content":{"rendered":"

The dollar has flirted with crossing the $1.50:\u20ac1.00 for months, and not that it has crossed the barrier, it’s continuing to weaken to new lows<\/a>, with it currently around $1.51:\u20ac1.00.<\/p>\n

Of course, it doesn’t help that Alan Greenspan is suggesting that the Gulf states drop their pegs to the dollar<\/a>. I guess that he’s shorting the dollar or something now that he is “retired”.<\/p>\n

On the bright side, the falling dollars is attracting overseas investors to US real estate<\/a>, as it is now cheaper to buy.<\/p>\n

In California, we have the California association of realtors reporting that new home sales are down<\/a> 29.8%, and median price is down 21.9%.<\/p>\n

Make no mistake this is a blood bath, and the numbers would be worse if they corrected for home size. The housing market is collapsing from the bottom up.<\/p>\n

It will get worse, Fannie Mae has posted a $3.6 billion q4 loss<\/a>, and I would expect something similar from Freddie, and we are still very early in the collapse of the housing bubble.<\/p>\n

We may very see the collapse of Fannie and Freddie in the next 3 or so years.<\/p>\n

This may explain why new home sales nation wide are at a 13 year low<\/a> and why Mortgage application volume is falling off a cliff<\/a>.<\/p>\n

It doesn’t help that mortgage rates are no longer following the Fed rates because of inflation fears.<\/p>\n

As the big sh^%pile continues to collapse, we are starting to see the inevitable lawsuits, with HSH Nordbank deciding to file suit against UBS<\/a>, alleging that, “UBS’s management of the portfolio has been in breach of its contractual obligations and fiduciary duties and that substitutions were made solely for the benefit of UBS”.<\/p>\n

We’ll be seeing a lot more of this.<\/p>\n

Testifying before Congress, Ben Bernanke is expressing concern about both inflation and recession<\/a>, aka “stagflation”, though the Fed is still shoveling money out the door, with another $30 billion auction of cash for garbage<\/a>.<\/p>\n

In the world of more real world finance, where people make money by making things, durable goods orders fall 5.3% last month<\/a>, but oil is down a bit after getting above $102 a barrel<\/a>.<\/p>\n

It’s under $100, for now, on expectation of a recession.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The dollar has flirted with crossing the $1.50:\u20ac1.00 for months, and not that it has crossed the barrier, it’s continuing to weaken to new lows, with it currently around $1.51:\u20ac1.00. Of course, it doesn’t help that Alan Greenspan is suggesting that the Gulf states drop their pegs to the dollar. I guess that he’s shorting …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1080,1004,1265,1088],"tags":[],"class_list":["post-197146","post","type-post","status-publish","format-standard","hentry","category-currency","category-finance","category-housing-crash","category-real-estate"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/197146"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=197146"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/197146\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=197146"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=197146"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=197146"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}