Sunday, August 14, 2005

Real Estate Strong Despite Higher Rates

"Rising interest rates are supposed to be an economic sedative, but the hyperactive real estate market has retained its vigor even as the prime lending rate has climbed to a nearly four-year high.

One of the biggest reasons for real estate's unusual behavior is that home mortgages are less expensive than they were 14 months ago when the Federal Reserve Board began to push up the short-term cost to borrow money.

That inflation-fighting effort has raised the prime rate from 4 percent in June 2004 to 6.5 percent today, making it more costly to buy cars, appliances and almost anything else on credit.

Meanwhile, home mortgages have remained a relative bargain. The average rate for a 30-year fixed-rate mortgage stood at 6.05 percent through Thursday, down from 6.41 percent during the first week of June 2004, according to HSH Associates, an industry research firm."

Real Estate Strong Despite Higher Rates

What do you think our trade deficit means or will mean for the economy?

The U.S. trade deficit widened more than forecast in June to $58.8 billion, as a strengthening economy prompted companies to import more expensive crude oil and a record amount of goods from China.

Sunday, July 10, 2005

A real estate boom where?

Natchez real estate is booming. If you don't know where that is, you're not alone. One broker says, "I closed out $8 million last year, the best year I've ever had. I'm working 12 to 14 hours a day and need another day in the week."

Many buyers are from, you guessed it, California, Florida or New Jersey.

Natchez real estate is on the move. Young families are opting for bigger houses; newcomers are buying downtown buildings and residences; commercial property is under development on the north and south sides of town.

Real estate isn't the only thing booming...

"Real estate prices are soaring, which means the real estate investment-seminar business is booming."

Getting rich in real estate is no easy matter

The new gold rush

Thousands seek to join real estate sales force
Mamta Popat / Arizona Daily Star

Realty schools' enrollment spikes as home sales soar


By Joseph Barrios

ARIZONA DAILY STAR

 In Tucson's modern-day gold rush, you don't sift dirt.
 
You sell it.
 
Local real estate schools and state officials say there's a boom in the number of people trying to get into the business. The number of licensed real estate agents in the state has jumped nearly 25 percent in the past year.
Thousands seek to join real estate sales force

 

Thursday, June 23, 2005

Low savings rate leaves Americans vulnerable

"According to the latest data, Americans save as little as 40 cents for every $100 of disposable income." My fears are when savings rates go up to normal, the economy will slow to bad levels- like a recession or worse. "Few economists believe that the savings rate will bounce back to its long-term average of 7.4 per cent. But even if Americans save at just half this rate they would need to set aside an additional $291bn a year which Capital Economics estimates might lead to a 1 per cent reduction in consumption growth for three years running." As usual, the asset bubble in real estate and stocks are part of the problem. "The appreciation of their houses and stock portfolios has been doing all the work for them, powering a $9,400bn increase in net household wealth over the past two years to $48,800bn." If only that weren't built on a real estate bubble!
Low savings rate leaves Americans vulnerable

Monday, June 20, 2005

Does everyone in the world have a shopping problem?

Thais on a shopping binge, credit headache awaits
I've never seen a story like this about the US lately. US household debt is 85% of GDP.
Chart Library

Creative financing boosts risks in US housing boom

Well, yeah. "The boom has led to fears that buyers and lenders may be squeezed by a sudden rise in interest rates or a drop in home prices."
"Creative financing" boosts risks in US housing boom

Sunday, June 19, 2005

"Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate"

"It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people.”
-Andrew W. Mellon

To Liquidate or to Inflate?

Imagine hearing those words from a Secretary of the Treasury today? Or a central banker? Doug Noland has a good look at an era of economic thinking long gone.

 

The History of Bubbles Spells Trouble Ahead

Bubbles cast long shadows after they burst

Ferdinand Lips interview

He is the author of Gold Wars.

Interview With Ferdinand Lips

Why Paper Money Represents Theft

Something to think about in this bubble economy.

Paper money works in the same manner as counterfeiting; only governments allow themselves the exclusive right to inflate the money supply. It still represents a morally lawless money because it is an artificial money, an unjust, unrighteous weight (really no weight at all). Inflation is the government creating spending power by “watering down” the money supply.

Saturday, June 18, 2005

U.S. trade deficit record in Q1

"The U.S. current account deficit hit a record $195.1 billion in the first quarter, the U.S. Commerce Department reported Friday."
CBC News

Thursday, June 16, 2005

Emerging markets become creditors

"EMERGING market countries are about to become net creditors in the global financial system for the first time since the asset class was created, data from Fitch Ratings shows.

Fitch says the central banks of China, India, Russia, Brazil, South Korea and Malaysia added among them another $US100 billion ($131billion) of reserves in the first quarter of this year."

It's a strange era when the richest nation in the world borrows money from some of the poorest!

"The credit milestone, expected by next year, coincides with a record current account deficit in the US, the world's richest country."
Emerging markets become creditors

Charge those fries

I hope people are paying off those purchasess! "n the first three months of this year, Americans charged $6.6 billion to pay for their burgers, fries and other fast food, according to CardWeb.com." I wonder if those charges are because people don't have a lot of money, or they just want to use their cards.
Want a fee with those fries?

U.S. accounting needs to improve

I'd say.

"The state of American accounting is much better than it was before the Enron scandal, the U.S. Securities and Exchange Commission said Wednesday in a report to Congress and President George W. Bush. But it still needs a lot of improvement."

U.S. accounting needs to improve

"It’s only when the tide goes out that you discover who’s been swimming naked."
-Warren Buffett