Earthside Comments: The economic picture.
New home sales fall nine percent in one month ... things aren't getting better.
The second link is quite revealing -- from last week in an Australian newspaper. Take a look.
Link: U.S. November New-Home Sales Fall 9% | MarketWatch
Sales of new U.S. homes fell by a more-than-expected 9% in November to a seasonally adjusted annual rate of 647,000, the Commerce Department reported Friday. Economists surveyed by MarketWatch were expecting new home sales to drop to a seasonally adjusted annual rate of 710,000 in November. Meanwhile, October's sales rate was revised downward, to rise by 711,000, or 1.7%. They were previously estimated to have risen to a seasonally adjusted annual rate of 728,000. In the past year, sales of new U.S. homes are down 34.4% nationwide.
Link: Americans 'Walk' From Loans | David Hirst/The Age(Australia) - December 23, 2007
The Dow soared 200 points in a Christmas rush on Friday that belied emerging details that US banking, mortgage companies and credit rating faced collapse while the nation's mortgage insurance industry plunged into chaos.
Nearly 180,000 US local councils were placed on credit watch, with the credit agency Fitch releasing another $US5.3 billion in credit downgrades involving 27 mortgage companies. The news emerged on Friday night, when the nation's newspapers, even if they were following the story, would miss it.
That one company could downgrade 27 major financial institutions in one stroke is stunning, but it follows a swathe of credit downgrades that swept the US on Thursday and Friday.
There has been a major falling out between mortgage insurers, credit rating companies, banks and mortgage institutions, which believed their loans were insured, only to be stunned to find themselves booted into the mire that is American banking.
Chinese, Singaporean and Arab sovereign investment funds seem to offer the only salvation for the US banking system.
The depth of the housing crisis was underscored by the head of one of America's largest banks, Bank of America, the straight-speaking Kenneth Lewis, who warned of a completely new attitude by Americans to their homes amid fears that as many as 20 million householders may "walk" from them, further deepening the crisis. ...
... Perhaps most alarming is the credit standing of the major insurers of mortgage loans as Moody's, Standard & Poor's and Fitch Ratings slashed insurer ratings and placed the largest insurer under negative credit watch. The mortgage insurers, especially the giant MBIA, stand accused of further imperilling banks and mortgage companies by spending billions on risky CDOs (collateralised debt obligations) and even riskier "double" CDOs. ...Much More
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