RTM Chow - Wednesday 8/8/2007 [Archive]

RossL

08-08-2007, 09:00 AM

dollar index recovering from that little dip below 80 on Monday morning. Ag and Au doing nicely this morning.

FoundingFathers

08-08-2007, 09:43 AM

Happy days are here again!

U.S. MBA's Mortgage Applications Index Rose 8.1% Last Week

By Shobhana Chandra

Aug. 8 (Bloomberg) -- Mortgage applications in the U.S. rose last week by the most since January, as cheaper borrowing costs encouraged more Americans to seek loans for home purchases and refinancing.

The Mortgage Bankers Association's index of applications to buy a home or refinance a loan jumped 8.1 percent to 656.5 from 607.1 the prior week. The group's gauge of demand for credit for home purchases gained 7.4 percent, while a measure of refinancing increased 9.1 percent.

A resilient labor market and lower home prices may support sales and eventually help reduce the glut of unsold properties, economists said. A report last week showed Americans signed more contracts to buy previously owned homes in June, a sign the weakness in the housing market may not get much worse.

``We're at the bottom right now in housing,'' said Mark Vitner, senior economist at Wachovia Corp. in Charlotte, North Carolina. ``The biggest declines are over.''

The mortgage rate for 30-year fixed loans fell to the lowest since early June, while rates also dropped for 15-year fixed and one-year adjustable loans.

The mortgage bankers' purchase index rose to 447.4 last week, the first increase in a month, from 416.6 the previous week, today's report showed. The refinancing index increased to 1881.1 last week, the highest in more than two months, from 1724.1. Both measures were higher than a year earlier.

The share of applications for refinancing rose to 39.9 percent from 39.4 percent the prior week. Adjustable-rate mortgages rose to 22.5 percent of all filings from 22.3 percent.

Rates Drop

The average rate on a 30-year fixed mortgage fell to 6.41 percent last week, the fourth consecutive decline, from 6.50 percent the prior week, the report showed. At last week's rate, monthly borrowing costs for each $100,000 of a loan would have been about $626, or $3 less than a year earlier.

Rising defaults by those with poor or limited credit history are throwing more homes back on the market, which means the housing slump will persist into 2008, some economists said.

American Home Mortgage Investment Corp. filed for bankruptcy this week, becoming the second-biggest residential lender in the U.S. to close down this year. Melville, New York- based American Home specialized in mortgages for people who fall just short of top credit scores.

Mortgage defaults will rise for at least a year, spreading beyond subprime borrowers to those with better credit, Friedman Billings Ramsey Group Inc., a real estate investment trust, forecast this week. Subprime defaults are already the highest in a decade, the Arlington, Virginia-based company said.

Federal Reserve

Federal Reserve policy makers yesterday held their interest-rate target at 5.25 percent for a ninth time and maintained that inflation is the biggest risk for the economy.

They also acknowledged that persistent declines in housing, stricter lending standards and volatile financial markets have raised concerns about growth ``somewhat,'' according to their statement. Still, they projected the economy would continue to expand.

Today's mortgage bankers' data showed the average rate on a 15-year fixed mortgage decreased to 6.16 percent last week, from 6.20 percent the prior week. The one-year adjustable mortgage rate fell to 5.69 percent from 5.73 percent.

The Mortgage Bankers Association's survey, compiled every week since 1990, covers about half of all U.S. retail residential mortgage originations.

To contact the reporter on this story: Shobhana Chandra in Washington at Schandra1@bloomberg.net

The Argent Dragon

08-08-2007, 10:21 AM

PM's up a tad.......

Base Metals : <TABLE cellSpacing=0 cellPadding=0 width=180 align=center bgColor=#ffffff border=0><TBODY><TR align=middle><TD class=marketopen align=middle>SPOT PRICE IS OPEN</TD></TR><TR align=middle><TD class=smallT align=right>Price: US$/lb </TD></TR></TBODY></TABLE><TABLE cellSpacing=0 cellPadding=0 width=180 align=center bgColor=#ffffff border=0 dwcopytype="CopyTableRow"><TBODY><TR align=right><TD align=middle background=/images/line_horiz.jpg colSpan=2>http://www.kitcometals.com/images/line_horiz.jpg</TD></TR><TR class=spot><TD class=menuB style="COLOR: #003399">Copper</TD><TD class=marketstime align=right>August 08,09:21</TD></TR></TBODY></TABLE><TABLE cellSpacing=0 cellPadding=0 width=180 align=center bgColor=#ffffff border=0 dwcopytype="CopyTableRow"><TBODY><TR class=spot><TD bgColor=#f1f1f1>Bid/Ask</TD><TD align=middle bgColor=#f1f1f1>3.6197</TD><TD align=middle bgColor=#f1f1f1>-</TD><TD align=middle bgColor=#f1f1f1>3.6242</TD></TR><TR class=spot><TD>Change</TD><TD style="COLOR: red" align=middle>-0.0355</TD><TD align=middle></TD><TD style="COLOR: red" align=middle>-0.97%</TD></TR><TR class=spot><TD bgColor=#f1f1f1>Low/High</TD><TD align=middle bgColor=#f1f1f1>3.5622</TD><TD align=middle bgColor=#f1f1f1>-</TD><TD align=middle bgColor=#f1f1f1>3.6643</TD></TR><TR align=right><TD class=menuB colSpan=4>http://www.kitcometals.com/images/arrow.jpgCharts (http://www.kitcometals.com/charts/Copper.html)</TD></TR></TBODY></TABLE><TABLE cellSpacing=0 cellPadding=0 width=180 align=center bgColor=#ffffff border=0 dwcopytype="CopyTableRow"><TBODY><TR align=right><TD align=middle background=/images/line_horiz.jpg colSpan=2>http://www.kitcometals.com/images/line_horiz.jpg</TD></TR><TR class=spot><TD class=menuB style="COLOR: #003399">Nickel</TD><TD class=marketstime align=right>August 08,09:19</TD></TR></TBODY></TABLE><TABLE cellSpacing=0 cellPadding=0 width=180 align=center bgColor=#ffffff border=0 dwcopytype="CopyTableRow"><TBODY><TR class=spot><TD bgColor=#f1f1f1>Bid/Ask</TD><TD align=middle bgColor=#f1f1f1>13.1625</TD><TD align=middle bgColor=#f1f1f1>-</TD><TD align=middle bgColor=#f1f1f1>13.2532</TD></TR><TR class=spot><TD>Change</TD><TD style="COLOR: red" align=middle>-0.5980</TD><TD align=middle></TD><TD style="COLOR: red" align=middle>-4.35%</TD></TR><TR class=spot><TD bgColor=#f1f1f1>Low/High</TD><TD align=middle bgColor=#f1f1f1>13.1625</TD><TD align=middle bgColor=#f1f1f1>-</TD><TD align=middle bgColor=#f1f1f1>13.8512</TD></TR><TR align=right><TD class=menuB colSpan=4>http://www.kitcometals.com/images/arrow.jpgCharts (http://www.kitcometals.com/charts/Nickel.html)</TD></TR></TBODY></TABLE><TABLE cellSpacing=0 cellPadding=0 width=180 align=center bgColor=#ffffff border=0 dwcopytype="CopyTableRow"><TBODY><TR align=right><TD align=middle background=/images/line_horiz.jpg colSpan=2>http://www.kitcometals.com/images/line_horiz.jpg</TD></TR><TR class=spot><TD class=menuB style="COLOR: #003399">Aluminum</TD><TD class=marketstime align=right>August 08,08:32</TD></TR></TBODY></TABLE><TABLE cellSpacing=0 cellPadding=0 width=180 align=center bgColor=#ffffff border=0 dwcopytype="CopyTableRow"><TBODY><TR class=spot><TD bgColor=#f1f1f1>Bid/Ask</TD><TD align=middle bgColor=#f1f1f1>1.1877</TD><TD align=middle bgColor=#f1f1f1>-</TD><TD align=middle bgColor=#f1f1f1>1.1899</TD></TR><TR class=spot><TD>Change</TD><TD style="COLOR: green" align=middle>+0.0059</TD><TD align=middle></TD><TD style="COLOR: green" align=middle>+0.50%</TD></TR><TR class=spot><TD bgColor=#f1f1f1>Low/High</TD><TD align=middle bgColor=#f1f1f1>1.1677</TD><TD align=middle bgColor=#f1f1f1>-</TD><TD align=middle bgColor=#f1f1f1>1.1899</TD></TR><TR align=right><TD class=menuB colSpan=4>http://www.kitcometals.com/images/arrow.jpgCharts (http://www.kitcometals.com/charts/Aluminum.html)</TD></TR></TBODY></TABLE><TABLE cellSpacing=0 cellPadding=0 width=180 align=center bgColor=#ffffff border=0 dwcopytype="CopyTableRow"><TBODY><TR align=right><TD align=middle background=/images/line_horiz.jpg colSpan=2>http://www.kitcometals.com/images/line_horiz.jpg</TD></TR><TR class=spot><TD class=menuB style="COLOR: #003399">Zinc</TD><TD class=marketstime align=right>August 08,09:19</TD></TR></TBODY></TABLE><TABLE cellSpacing=0 cellPadding=0 width=180 align=center bgColor=#ffffff border=0 dwcopytype="CopyTableRow"><TBODY><TR class=spot><TD bgColor=#f1f1f1>Bid/Ask</TD><TD align=middle bgColor=#f1f1f1>1.5751</TD><TD align=middle bgColor=#f1f1f1>-</TD><TD align=middle bgColor=#f1f1f1>1.5842</TD></TR><TR class=spot><TD>Change</TD><TD style="COLOR: red" align=middle>-0.0019</TD><TD align=middle></TD><TD style="COLOR: red" align=middle>-0.12%</TD></TR><TR class=spot><TD bgColor=#f1f1f1>Low/High</TD><TD align=middle bgColor=#f1f1f1>1.5430</TD><TD align=middle bgColor=#f1f1f1>-</TD><TD align=middle bgColor=#f1f1f1>1.5861</TD></TR><TR align=right><TD class=menuB colSpan=4>http://www.kitcometals.com/images/arrow.jpgCharts (http://www.kitcometals.com/charts/Zinc.html)</TD></TR></TBODY></TABLE><TABLE cellSpacing=0 cellPadding=0 width=180 align=center bgColor=#ffffff border=0 dwcopytype="CopyTableRow"><TBODY><TR align=right><TD align=middle background=/images/line_horiz.jpg colSpan=2>http://www.kitcometals.com/images/line_horiz.jpg</TD></TR><TR class=spot><TD class=menuB style="COLOR: #003399">Lead</TD><TD class=marketstime align=right>August 08,08:20</TD></TR></TBODY></TABLE><TABLE cellSpacing=0 cellPadding=0 width=180 align=center bgColor=#ffffff border=0 dwcopytype="CopyTableRow"><TBODY><TR class=spot><TD bgColor=#f1f1f1>Bid/Ask</TD><TD align=middle bgColor=#f1f1f1>1.4231</TD><TD align=middle bgColor=#f1f1f1>-</TD><TD align=middle bgColor=#f1f1f1>1.4254</TD></TR><TR class=spot><TD>Change</TD><TD style="COLOR: red" align=middle>-0.0222</TD><TD align=middle></TD><TD style="COLOR: red" align=middle>-1.53%</TD></TR><TR class=spot><TD bgColor=#f1f1f1>Low/High</TD><TD align=middle bgColor=#f1f1f1>1.4022</TD><TD align=middle bgColor=#f1f1f1>-</TD><TD align=middle bgColor=#f1f1f1>1.4544</TD></TR><TR align=right><TD class=menuB colSpan=4>http://www.kitcometals.com/images/arrow.jpgCharts (http://www.kitcometals.com/charts/Lead.html)</TD></TR></TBODY></TABLE><TABLE cellSpacing=0 cellPadding=0 width=180 align=center bgColor=#ffffff border=0 dwcopytype="CopyTableRow"><TBODY><TR align=right><TD align=middle background=/images/line_horiz.jpg colSpan=2>http://www.kitcometals.com/images/line_horiz.jpg</TD></TR><TR class=spot><TD class=menuB style="COLOR: #003399">Uranium</TD><TD class=marketstime noWrap align=right>Aug 06, 2007</TD></TR><TR class=spot><TD noWrap align=left bgColor=#f1f1f1>Ux U308 (http://www.uxc.com/) price:</TD><TD noWrap align=right bgColor=#f1f1f1>110.00 </TD></TR></TBODY></TABLE><TABLE cellSpacing=0 cellPadding=0 width=180 align=center bgColor=#ffffff border=0 dwcopytype="CopyTableRow"><TBODY><TR class=spot><TD noWrap align=left>Change from</TD><TD style="COLOR: #009933" align=right></TD></TR><TR class=spot><TD noWrap align=left>previous week</TD><TD style="COLOR: red" align=right>-10.00</TD></TR></TBODY></TABLE>

Uranium divin' down a bit........

Curtman

08-08-2007, 10:26 AM

Hope your all in your metals positions. You will get some discount on oil and gas shares before inventories break. They are expecting a build but I am not, even if there is energy will rally soon after the report.

HL AUY UXG GSS Should fly out of the gate for a quick scalp, I hsve positioned spreading 30k between that bunch as far as miners.

EXK MRB 5K each.

Energies I am still trying to fill I will post once acquired. Holding ABP GSX GPOR

all on the US side and all flippers.

The Argent Dragon

08-08-2007, 10:36 AM

Toll Brothers expects revenue drop

Homebuilder projects decrease of 21 percent amid sluggish market, gives no outlook for future.

August 8 2007: 7:49 AM EDT


NEW YORK (Reuters) -- Luxury home builder Toll Brothers Inc. said Wednesday that it expected to report a decline in quarterly home-building revenue as the U.S. housing crisis deepened.

The company said the number of signed contracts was down, and cancellation rates rose.

Big-ticket mortgage rates rise (http://money.cnn.com/2007/08/07/real_estate/jumbo_jam/index.htm)

Based on preliminary results, Toll Brothers said its home-building revenue had fallen 21 percent to about $1.21 billion in the third quarter ended on July 31. That was within the company's May forecast, which had called for $990 million to $1.28 billion.

"We are now in the twenty-third month of a down housing market," Chief Executive Robert Toll (http://money.cnn.com/quote/quote.html?symb=TOL&source=story_quote_link) (Charts (http://money.cnn.com/quote/chart/chart.html?symb=TOL&source=story_charts_link), Fortune 500 (http://money.cnn.com/magazines/fortune/fortune500/2007/snapshots/1435.html?source=story_f500_link)) said in a statement. "With the uncertainties roiling the mortgage markets right now, the pace of home sales could slow further until the credit markets settle down."

On the other hand, pent-up demand may be building among potential home buyers, since the U.S. economy and employment are still strong, and demographic trends are lending support, the Horsham, Pa.-based company said.

Toll said that under current market conditions, it was not comfortable giving an earnings outlook.

The company plans to report its third-quarter results on Aug. 22. Because of its fiscal calendar, Toll is the first major home builder to report a quarter that will contain July. Investors use it as an indicator of the performance of other home builders.

For more than a year, home construction has fallen sharply on weakening demand and rising interest rates. Problems in subprime mortgage lending - loans to those with sketchy credit histories - have made it even more difficult for potential buyers to get a mortgage and banks have restricted mortgages even to those with good credit.

Pending completion of an impairment analysis, Toll estimates its pretax write-down for operating communities, land and land options for the quarter at $125 million to $175 million.
The third-quarter backlog of homes on order fell 34 percent to about $3.67 billion from a year earlier.

Looking to indicators of future revenue results, Toll said net signed contracts were down 31 percent from a year earlier to $727.1 million.
The third-quarter cancellation rate was 23.8 percent compared with the prior quarter's rate of 18.9 percent.

http://money.cnn.com/2007/08/08/news/companies/bc.tollbrothers.preliminary.reut/index.htm?postversion=2007080807

Brio

08-08-2007, 10:40 AM

WTH is going on?

New Federal Reserve data (http://www.federalreserve.gov/releases/z1/current/z1r-2.pdf)show that state and local government debt has topped $2 trillion. At the end of first quarter 2007, state and local debt was $2.050 trillion, which is up 9.6 percent from first quarter 2006.
State and local debt growth has been explosive since 2001. In Table D.1 (see link), you can see that debt growth has soared in recent years, compared to the more moderate growth rates on the 1990s.
This is disturbing because current strong tax revenue growth in the states should be allowing governments to pay down debt in a prudent fashion before the next recession hits.
In Table D.3, you can see that state and local debt increased just 21 percent for the entire decade 1990-2000. Yet between 2000 and 2006, debt soared 68 percent.

http://www.cato-at-liberty.org/2007/07/30/state-debt-cracks-2-trillion/

DBcooper

08-08-2007, 10:43 AM

http://bp1.blogger.com/_wFWqWIH-WFU/RrhVxREKksI/AAAAAAAAB4Y/Z9BBjDgBS7U/s1600/111110chJG_w.jpg

DBcooper

08-08-2007, 10:46 AM

Home sellers not the only ones in pain

Realtors, construction workers, others have seen area jobs vanish.

By Dale Kasler - Bee Staff Writer

Last Updated 5:54 am PDT Monday, August 6, 2007
Story appeared in MAIN NEWS section, Page A1
Print (http://www.sacbee.com/103/v-print/story/310668.html) | E-Mail (http://www.sacbee.com/103/v-email/story/310668.html) | Comments (34) (http://www.sacbee.com/103/story/310668.html#comments_here)| Digg it (http://digg.com/submit?phase=2&url=http://www.sacbee.com/103/story/310668.html) | del.icio.us (http://del.icio.us/post)
http://media.sacbee.com/smedia/2007/08/05/20/87-1W6HOUSING.embedded.prod_affiliate.4.JPG Rich Muma, former president of Creighton Abrams Realtors and PLM Financial, stands in front of the office where he once employed 25 agents and others. Investing $300,000, he started the business at the peak of the real estate boom. Things went well, but by late 2005 he could tell that business was slowing, and he closed up shop in December. Sacramento Bee/Lezlie Sterling
See additional images (http://www.sacbee.com/103/story/310668.html#more_images)

At its peak, just a couple of years ago, Rich Muma's real estate and mortgage mini-empire employed 25 agents and other workers.
Today the office in Elk Grove is closed and the business consists of one employee: Muma, who's "doing an occasional deal" while trying to land somewhere stable.
"I've been trying to find other employment myself," said Muma, 62.
California's housing slump isn't just bad news for homeowners looking to sell. It's taking a worsening toll on those who depend on housing for their livelihoods -- from Realtors to construction workers -- and on the economy at large.
Sacramento unemployment jumped four-tenths of a percent in June to 5.2 percent, while the statewide unemployment rate held steady at 5.2 percent. Both rates were higher than a year ago and provided evidence that the economy, after holding its own for the past two years, is finally starting to feel the pressure from the housing downturn.
In the past year, the Sacramento region has lost 1,700 construction jobs and 900 financial services jobs.
Real estate and mortgage-lending employment in Sacramento are both down about 6 percent from a year ago.
The housing slowdown figured in the increase in national unemployment reported Friday, economists said. Fears about the mortgage business contributed heavily to the big sell-off in the stock market last week.
There are signs that housing's problems are bleeding into other industries.
Motor vehicle sales fell 7 percent in California in the first three months of 2007, according to the California Motor Car Dealers Association. Economists say a key reason is that homeowners are more reluctant to borrow against their equity to finance big-ticket purchases. So far, employment at car dealerships has declined only slightly, though.
As for the housing industry, executives say the market won't improve until late 2008 or sometime in 2009, putting additional pressure on the job market.
"I don't see a turnaround anytime soon," said Steve Benjamin, president of Production Framing Systems Inc. of Sacramento.
The company, which constructs frames for new homes, has cut employment by half in two years, to about 500 workers, he said.
The grim prognosis doesn't mean the sky is falling, however. The Sacramento job market is much healthier than during the last real estate downturn, when unemployment peaked at 9.3 percent in 1993.
"There's still a lot going on," said Judy Bennett, a Pulte Homes vice president in Sacramento who was laid off in June. She quickly found work in marketing for Oregon-based developer Sanderson Communities.
In the early 1990s, military base closures and other woes crippled Sacramento's housing market to the point that skilled construction workers fled to places like Las Vegas and Phoenix to find work, said David Lyons, labor market consultant at the state Employment Development Department.
What's different this time is continued strength in construction of retail, office and industrial space, Lyons said.
The billions of dollars in infrastructure bonds approved by California will provide additional oomph to the construction business over the next few years.
Although home-building skills don't always transfer into other forms of construction, nonresidential work is helping the job market for construction stay afloat.
"There's a lot of opportunity in the commercial sector and in public works -- that's picking up some of the slack," said Paul Cohen, spokesman for the Northern California Carpenters Regional Council.
Pacific Coast Building Products, a Rancho Cordova-based supplier of construction products across the western United States, eliminated 40 jobs when it closed a truss plant in Dixon last year. But employment is holding steady at 3,500 across the West, thanks to sales to the commercial sector.
"We're continuing to do a minor amount of layoffs but not substantial at this point in time," said David Lucchetti, company president.
The white-collar end of the business seems to be suffering more.

DBcooper

08-08-2007, 10:52 AM

Fannie, Freddie Aim to Ease Mortgage-Market Crunch
Firms Say Letting Them Buy More Loans May Help
By David S. Hilzenrath
Washington Post Staff Writer
Wednesday, August 8, 2007; Page D03
For Fannie Mae and Freddie Mac, the chronically embattled companies chartered by the government to make homeownership more attainable, the recent upheaval in the mortgage market presents financial and political opportunities.
After accounting scandals and allegations that Fannie Mae in particular was run largely for the enrichment of its executives, even some longtime allies in Congress have demanded the companies to do more for the public good.
As mortgage funding dries up, Fannie Mae and Freddie Mac are calling on regulators to loosen restrictions on their business so they can fill the breach. They want the freedom to buy more mortgages and mortgage-backed securities.
“Freddie and Fannie were created to bring liquidity, affordability and stability to the market. I think if there was ever a time when liquidity was needed, it’s now,” Sharon McHale, Freddie Mac spokeswoman, said yesterday.
Some mortgage-industry players are hoping Fannie Mae and Freddie Mac will come to the rescue. Others see them as exploiting the situation to pressure regulators. And some say giving the companies a bigger role could have risky consequences.
Bill Fleckenstein, president of Fleckenstein Capital, a hedge fund manager who is betting against credit-industry stocks, said the market is going through a correction in which securitized mortgages that fueled the housing boom are being marked to their real value.
“There’s going to be a shutdown in the housing market. And Fannie Mae and Freddie Mac are not going to be able to bail it out, nor should they,” Fleckenstein said. “If Fannie Mae and Freddie or somebody bails out the housing market, then you tell me why we don’t start up Gambler Mae so that any lottery ticket owner, any football bettor, any guy at the track, any stock operator who loses money can get bailed out, too.”
http://www.washingtonpost.com/wp-dyn/content/article/2007/08/07/AR2007080701924.html (http://www.washingtonpost.com/wp-dyn/content/article/2007/08/07/AR2007080701924.html)

Curtman

08-08-2007, 11:20 AM

Out of Hecla.

Will increase position in MVG

RossL

08-08-2007, 11:24 AM

dollar index heading down now

look out below :shocked_ma:

Scorpio

08-08-2007, 11:49 AM

As stated before, they would hold. Pretty simple call really as others are raising and they can't let the spread get too wide.

Fed Leaves Rate Steady; No Sign of Future Cut
Daniel Acker/Bloomberg News

Wall Street watched Tuesday's Federal Reserve announcement closely.

Published: August 8, 2007

WASHINGTON, Aug. 7 — The Federal Reserve kept its key interest rate unchanged on Tuesday and signaled that it still expected to avoid cutting short-term rates despite the recent tumult in credit markets and on Wall Street. The Fed suggested that it would change course only if economic conditions deteriorate badly in the weeks and months ahead.

In a statement announcing that the overnight lending rate it controls would remain unchanged at 5.25 percent, the Fed’s policy-setting Federal Open Market Committee did not drift significantly from its core message that inflation remains a greater risk to the economy than recession.

The central bank, however, softened its tone slightly by giving some recognition to worsening conditions in financial markets, by adding a new phrase to its statement saying that the risk of an economic downturn has “increased somewhat.”

“The Fed threw the markets a bone, commenting on recent market volatility and tighter credit conditions,” Steven A. Wood of Insight Economics wrote in a commentary. “However, they gave no hint that they would act anytime soon.”

On Wall Street, traders had difficulty sorting out the Fed’s message and by the end of the day still seemed convinced that the Fed was keeping the door open to a rate cut later this year. After falling sharply minutes after the statement was released around 2:15 p.m., stocks later rebounded, finishing trading modestly higher. The Standard & Poor’s 500 stock index gained 0.6 percent and the Dow Jones industrial average added almost 36 points to close at 13,504.30.

In the futures market, the odds of a rate cut by the end of this year were reduced somewhat but still remained greater than even. Many on Wall Street had hoped that the recent tightening in credit markets would prompt the Fed to more clearly signal a shift in its focus from concern about inflation toward a greater fear of an economic downturn.

But the Fed gave Wall Street something much less definitive.

“I think this means that the Fed isn’t preparing the market for a rate cut anytime soon,” said Tom Gallagher, a Fed analyst with the ISI Group in Washington, a financial research firm. “On the other hand, they set up a statement that they could use to justify a rate cut if things deteriorate faster than they now expect.”

The Fed statement noted that “financial markets have been volatile in recent weeks, credit conditions have become tighter for some households and businesses, and the housing correction is ongoing.”

“Nevertheless,” the statement continued, “the economy seems likely to continue to expand at a moderate pace over coming quarters, supported by solid growth in employment and incomes and a robust global economy.”

Analysts said that the Fed appeared to be saying that the recent volatility in the markets did not appear to be spreading much beyond Wall Street.

“They acknowledged that there is uncertainty in the markets, but that uncertainty remains a financial issue rather than a real economic issue,” said Jack Caffrey, an equity strategist with JPMorgan Private Bank. “And ultimately, they’re going to take their direction from the real economy.”

The stock market has been on edge in recent weeks as concern spread that tighter lending standards for everyone from large corporations to prospective home buyers could cause the economy to seize up. But the Fed saw that as unlikely to happen.

Ben S. Bernanke, the Fed chairman, told Congress three weeks ago that the central bank’s economic forecast for the year had become only slightly more pessimistic since February, despite the growing problems with housing.

Analysts said one reason for the Fed’s stance is that under Mr. Bernanke the central bank is more reluctant to bail out those suffering from financial losses than it was under his predecessor, Alan Greenspan, who was much more willing to ease credit in times of market uncertainty.

“Ben Bernanke is more standoffish,” said Drew Matus, an economist with Lehman Brothers. “He’s the guy sitting there watching the kids in the playground. And if there’s a fight, he’s going to stay out of it unless somebody’s going to get hurt. Greenspan was more like a doting parent.”

But the recent tightening in the credit markets poses the most significant challenge to policy makers since the Fed stopped raising rates in June 2006. In the last year, the central bank has been able to hold rates steady as economic growth moderated and it appeared that underlying inflation would soon slow to a pace of under 2 percent a year.

Now, however, policy makers appear to be facing a more jarring — and complicated — reality. The economy and the job market remain relatively healthy and the Fed’s preferred inflation gauge — the price index for personal consumption spending excluding food and energy — has come down to a 1.9 percent rate after running as high as 2.5 percent early this year. But the credit market tightening has significantly raised longer-term borrowing costs for consumers and businesses.

In addition to the challenge of conducting monetary policy, there is new evidence that the productivity advances of the past decade may be ebbing.

Productivity grew at a 1.8 percent rate in the second quarter, the Labor Department said on Tuesday, but the gains of previous years were revised downward. For the first quarter, worker productivity grew at a 0.7 percent rate, off from the earlier estimate of 1 percent, and the advance for all of 2006 was set at just 1 percent, the slowest since the surge in productivity began in the mid-1990s.

Greater worker productivity makes it easier to maintain strong economic growth without adding to inflation.

Analysts on Wall Street found themselves in the awkward position of looking forward to more trouble in the economy before the Fed might come to the rescue.

If economic conditions get much worse and the Fed is “more comfortable with the inflation outlook, that’s a catalyst for an eventual easing in monetary policy,” said Richard Berner, chief United States economist with Morgan Stanley. “But we’re not there yet.”

Vikas Bajaj contributed reporting from New York.

http://www.nytimes.com/2007/08/08/business/08fed.html?ex=1344225600&en=866910c93d428b61&ei=5089&partner=rssyahoo&emc=rss

DBcooper

08-08-2007, 11:51 AM

NNNNOOOOOOOOOOOOOOO!

http://bp2.blogger.com/_wFWqWIH-WFU/RrOSbxEKkMI/AAAAAAAAB0Y/uTSS9-04ADM/s1600/cramer125.jpg

The Argent Dragon

08-08-2007, 12:29 PM

Housing gets mixed outlook

Tougher lending standards to hold back pace of home sales, but prices will drop less sharply than previously expected, says the National Association of Realtors.

August 8 2007: 10:56 AM EDT

WASHINGTON (Reuters) -- The pace of U.S. home sales will fall further this year than earlier expected, but prices will drop less sharply than previously thought, a leading real estate trade association predicted Wednesday.

The National Association of Realtors trimmed its sales forecast for the sixth straight month but pared back its predicted drop in existing home values.

Existing-home sales should hit a pace of 6.04 million units this year, down from the 6.11 million units it predicted last month.

The housing slump: How deep is the pain? (http://money.cnn.com/2007/08/01/real_estate/subprime_fever_catching/index.htm)

That number is still above the 5.75 million-unit annual rate that the trade association reported for June. In a statement on Wednesday, the NAR's chief economist, Lawrence Yun, predicted "a modest upturn for existing-home sales toward the end of the year."

Prospective homeowners have faced tougher lending standards in recent months as investors have pulled funding from the once-hot mortgage finance market.

Yun said the recent disruptions "will hold back sales over the short term, but long-term fundamentals are favorable," particularly the growing U.S. population.

Homebuilder shares tumble on credit woes (http://money.cnn.com/2007/08/01/real_estate/homebuilders.reut/index.htm)

The national median sales price for existing homes should ease by 1.2 percent to $219,300 this year, the association concluded. Last month, the trade group said prices should slip 1.4 percent.

The median new-home price will probably fall 2.3 percent to $240,800 this year, the NAR said in its monthly economic outlook.

In a separate report Wednesday, mortgage applications rose for the first time in three weeks as interest rates fell sharply and demand surged. The Mortgage Bankers Association said mortgage applications rose to their highest level since early June. http://i.cnn.net/money/images/bug.gif (http://money.cnn.com/2007/08/08/news/economy/bc.usa.economy.housing.reut/index.htm?postversion=2007080810#TOP)

VIDEO on link >> http://money.cnn.com/2007/08/08/news/economy/bc.usa.economy.housing.reut/index.htm?postversion=2007080810

DBcooper

08-08-2007, 12:37 PM

Notice who that article is qouting?
The NAR and a mysteriuos large real estate firm?
Ofcourse its the bottom they have been saying that for months but they sure know now .

The Argent Dragon

08-08-2007, 12:54 PM

Notice who that article is qouting?
The NAR and a mysteriuos large real estate firm?
Ofcourse its the bottom they have been saying that for months but they sure know now .

I heard this morning on the RADIO that we have NOW hit bottom because of the Magazine Cover indicator. Apparently BUSINESS WEEK has the housing woes on its cover.............oh yeah - da bottom fer shure :haha:

The Argent Dragon

08-08-2007, 03:02 PM

And the party continues.......

<TABLE class=bctable cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR id=tablerow><TD class=titlerow colSpan=2>Dow Jones Industrial Average <TD></TD><TR vAlign=top><TD width=305><TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR id=quoterow1><TD class=quoteprice>13,638.02</TD><TD class=quotechange>+133.72 / +0.99%</TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE>

Mined Games

08-08-2007, 03:17 PM

Happy days are here again!

U.S. MBA's Mortgage Applications Index Rose 8.1% Last Week

By Shobhana Chandra

Aug. 8 (Bloomberg) -- Mortgage applications in the U.S. rose last week by the most since January, as cheaper borrowing costs encouraged more Americans to seek loans for home purchases and refinancing.

The Mortgage Bankers Association's index of applications to buy a home or refinance a loan jumped 8.1 percent to 656.5 from 607.1 the prior week. The group's gauge of demand for credit for home purchases gained 7.4 percent, while a measure of refinancing increased 9.1 percent.

A resilient labor market and lower home prices may support sales and eventually help reduce the glut of unsold properties, economists said. A report last week showed Americans signed more contracts to buy previously owned homes in June, a sign the weakness in the housing market may not get much worse.

``We're at the bottom right now in housing,'' said Mark Vitner, senior economist at Wachovia Corp. in Charlotte, North Carolina. ``The biggest declines are over.''

The mortgage rate for 30-year fixed loans fell to the lowest since early June, while rates also dropped for 15-year fixed and one-year adjustable loans.

The mortgage bankers' purchase index rose to 447.4 last week, the first increase in a month, from 416.6 the previous week, today's report showed. The refinancing index increased to 1881.1 last week, the highest in more than two months, from 1724.1. Both measures were higher than a year earlier.

The share of applications for refinancing rose to 39.9 percent from 39.4 percent the prior week. Adjustable-rate mortgages rose to 22.5 percent of all filings from 22.3 percent.

Rates Drop

The average rate on a 30-year fixed mortgage fell to 6.41 percent last week, the fourth consecutive decline, from 6.50 percent the prior week, the report showed. At last week's rate, monthly borrowing costs for each $100,000 of a loan would have been about $626, or $3 less than a year earlier.

Rising defaults by those with poor or limited credit history are throwing more homes back on the market, which means the housing slump will persist into 2008, some economists said.

American Home Mortgage Investment Corp. filed for bankruptcy this week, becoming the second-biggest residential lender in the U.S. to close down this year. Melville, New York- based American Home specialized in mortgages for people who fall just short of top credit scores.

Mortgage defaults will rise for at least a year, spreading beyond subprime borrowers to those with better credit, Friedman Billings Ramsey Group Inc., a real estate investment trust, forecast this week. Subprime defaults are already the highest in a decade, the Arlington, Virginia-based company said.

Federal Reserve

Federal Reserve policy makers yesterday held their interest-rate target at 5.25 percent for a ninth time and maintained that inflation is the biggest risk for the economy.

They also acknowledged that persistent declines in housing, stricter lending standards and volatile financial markets have raised concerns about growth ``somewhat,'' according to their statement. Still, they projected the economy would continue to expand.

Today's mortgage bankers' data showed the average rate on a 15-year fixed mortgage decreased to 6.16 percent last week, from 6.20 percent the prior week. The one-year adjustable mortgage rate fell to 5.69 percent from 5.73 percent.

The Mortgage Bankers Association's survey, compiled every week since 1990, covers about half of all U.S. retail residential mortgage originations.

To contact the reporter on this story: Shobhana Chandra in Washington at Schandra1@bloomberg.net

Not to rain on the parade of mortgage brokers or anything, but the reason why applications are up is because many are being rejected, forcing prospective buyers to apply to several different companies in order to get approval. Talk about a misleading statistic!

The Argent Dragon

08-08-2007, 05:26 PM

http://quote-web.aol.com/?s=$INDU&e=DJI&dur=999&type=mountain&hgl=1&vgl=1&vol=1&splits=1&div=0&w=520

Okay - the way I see it.......DOW starts to dump at 2:30 then outta nowhere the volume shoots through the roof to save and reverse the trend.

DOW closes at 150+ points which is an amazing 200+ point swing.

Who here bets it won't hold for tomorrow or am I reading it wrong ????

:no_ma:

I see another Triple-digit loss in the works........screw confidence - it's fake.