Archive for the ‘US economy’ Category
On the 18th of December 2013, the U.S. Federal Reserve finally announced it would begin to taper or wind down QE3 – an $85 billion a month shot in the arm to keep the economy afloat after the worst recession since the 1930s.
Starting in January 2014, the Fed will wind total purchases down a notch to $75 billion a month. Depending on how the economy reacts, the Fed will continue to cut in each meeting throughout the year. Fed chairman Ben Bernanke said “If we’re making progress in terms of inflation and continued job gains, then I imagine we’ll continue to do, probably at each meeting, a measured reduction” in purchases. However, if the economy slows, Bernanke says they will consider skipping a reduction in a meeting or two, or if the economy accelerates could taper a bit faster.
Reactions are mixed. Some believe the Fed will have difficulty removing the stimulus fast enough to prevent inflation, while many others believe the only reason there are signs of growth in the U.S. economy is due to the sheer size of QE3. Take it away, and the unsustainable, fragile economy will quickly falter.
Opinions also vary as to why the Fed has announced the taper. While some believe the U.S. economy is showing good progress. Others some warn QE3 has only served to create more asset bubbles – namely a stock and new housing bubble, but has done little to improve the broader economy and support job growth. And now the Fed needed to act decisively to prevent these bubbles getting much bigger.
The only thing for certain is after such a large and prolonged stimulus, the result to global stability of the tapering will be a wildcard this year – Anything could happen.
China Economic Growth Model “Unsustainable” – Deputy Finance Minister Wang Bao’an
The other global wildcard for 2014 is China and has far greater implications for Australia. Last year we raised the question if the second stage of the GFC would be made in China and if WMPs would replace CDOs as the buzz word in this crisis. (GFC2 – Will it be made in China? – June 30th 2013)
At the time, a credit freeze in China had caused the Shanghai Interbank Offered Rate (Shibor) – a measure of the cost of commercial banks to lend to each other, to surge. After a couple of days of abstaining, the People’s Bank of China (PBoC) was forced to intervene and inject liquidity into the market. Only two weeks prior, ratings agency Fitch warned China’s credit bubble was now unprecedented in modern world history.
In the days before Christmas, and not long after the Fed taper was announced, it was happening again with lending benchmark rates hitting the highest levels since the June crisis. Once again, the PBoC came to the rescue injecting 29 billion Yuan to provide short term relief. Minsheng Securities Macroeconomics analyst, Zhang Lei told the Global Times “The cash injection can only ease the problem in the short run, Banks will face tight liquidity until mid-2014, as an increasing number of financial instruments will be maturing in the first half of next year.”
The concern is a plethora of loans taken out by State owned Enterprises (SoEs) to fund public infrastructure and real estate investments, many empty or under utilised and with low returns – if at all. The projects are an attempt to keep economic growth chugging along, but at some stage the debt must be refinanced.
In an rare and unusual stand, China’s Deputy Finance Minister Wang Bao’an wrote an article in the latest issue of Qiushi, a bi-monthly political theory periodical of the Central Committee of the Communist Party of China saying China’s current economic growth model is “unsustainable.” He described the Chinese economy as “high input, high resource consumption, high pollution, high growth” with “low output, low efficiency, low profit, low tech”.
In a recent column for the Project Syndicate website, billionaire investor George Soros believes the biggest risk in the World Economy now is China – you can forget the USA. No doubt we will see more in this space as the year progresses.
Back home, trends are somewhat clearer barring any external shocks. The Australia Dollar is expected to continue falling this year resulting in broad price increases on imports. The RBA said it will be comfortable with 85 cents. One of the world’s largest investment firms, BlackRock, believes the dollar could fall to 80 cents this year (Aussie dollar headed for US80¢ with RBA to cut rates again, says BlackRock – SMH.) A crisis in China could push it below 80.
After an approximate 15 per cent fall since April, already we are starting to hear the odd whinge about petrol prices at $1.65 litre. Most Australian’s have taken the overpriced Australian dollar for granted without a second though – cheap petrol, cheap electronics, cheap apparel even cheap overseas holidays. The depreciating dollar is coming as a shock. It’s not so much of a case of prices are getting expensive, but a case that prices were abnormally cheap and are just returning to where they should have been had we not had a resource boom. In December, we quoted from Professor Ross Garnaut’s latest book – “No developed country has experienced as large a sustained appreciation in its real exchange rate as Australia has through the China resources boom,” “In turn, this means that no developed country has ever successfully worked through such a fall in the real exchange rate and associated contraction of incomes.”
The other shock will be income growth or rather the lack thereof. Treasury’s chief economist David Gruen told a conference in November last year, “Our estimates say that if we achieve productivity growth similar to its long run average, the next decade will see the slowest income growth in Australia for half a century by a lot.” This comes from an expected decline in Australia’s terms of trade and is consistent with views from the International Monetary Fund (IMF) and the Australian Productivity Commission. (Slowest living standards growth in ‘our lifetimes’ – SMH)
The Australian Bureau of Statistics (ABS) Wage Price Index for the September 2013 quarter reported an seasonally adjusted 0.5 per cent increase, the second lowest increase since the introduction of the Index in 1997. Over the year to September, wage growth was 2.7 per cent, the lowest annual rate since 2000 (Tech Wreck).
Late last year an Organisation for Economic Co-operation and Development (OECD) report (House prices, labour costs leave economy vulnerable: OECD – AFR) showed Australia had the largest appreciation in relative unit labour costs in the OECD effectively putting Australia at a competitive disadvantage to the world. This coupled with the high cost of living and constrained discretionary spending from Australia’s housing bubble (High housing costs make Australia’s economy uncompetitive – ABC) and household debt overhang is expected to see unemployment continue to accelerate this year.
All eyes will also be on the May budget after the Mid-Year Economic and Fiscal Outlook (MYEFO) showed a substantial deterioration in the domestic economy. During the boom years, Australia’s wealth was squandered on various tax relief’s. Cuts will now need to be made placing Australian households under even more pressure.
Finally, there seems little scope for double digit house price growth the experts are once again predicting (annual tradition around the holiday period). As per the Australian headline, House prices [are] at the mercy of the budget (outside of an external shock). In the article, Dr Andrew Wilson talks some sense, “Nothing will stop a housing market quicker than a declining business cycle and that’s certainly what we have the prospects for in NSW and Victoria,” “Rising unemployment will cause lower wage growth, which reduces the capacity of buyers to borrow.”
What are your predictions for 2014?
» Slowest living standards growth in ‘our lifetimes’ – The Sydney Morning Herald, 21st November 2013.
» Low wage growth, job fears hold inflation down – The Australian, 18th November 2013.
» Aussie dollar forecast to fall to 80 cents in 2014 – The ABC, 31st December 2013.
» U.S. and China: When the giants unwind Commentary: Withdrawal of stimulus could well cause a fresh crisis – Market Watch, 30th December 2013.
» Vice-minister calls for new economic growth model – China Daily, 3rd January 2014.
» China tries to deal with its mountain of debt – The Sydney Morning Herald, 30th December 2013.
» House price growth at mercy of budget – The Australian, 1st January 2014.
» China move calms credit concerns – The BBC, 24th December 2013.
Posted in Australian economy, Australian Housing, China, US economy | 15 Comments »
While the property lobby is saying it is never a better time to buy following a single data point showing rising house prices, a look at real house prices (corrected for inflation) raises a lot of concern:
Making the above statement in the United States, however, is much more convincing. After the U.S. housing bubble popped spectacularly in 2006, house prices are now only a few percentage points away from levels recorded prior to the boom. But with such a large bubble, there is a real possibility the U.S. could see the market over correct.
Earlier this week, Mike Shedlock of Mish’s Global Economic Trend Analysis wrote the following in a blog post titled, “Shades of 2006: That’s What Australia Housing Bubble Looks Like From US Perspective
The Australia housing market did not bust when it should of and the delay is going to be painful. The bigger the bubble, the bigger the crash, and the Australia bubble is bigger than we saw in the US.
On a timeline basis, Australia is about where the US was in 2006, essentially a state of denial.
Read more here
Posted in Australian Housing, US economy | 12 Comments »
Ask any real estate agent and they will tell you security is owning your own home!!.
Ask America’s Generation X and they are likely to tell you something very different.
The U.S. Federal Reserve Board’s Survey of Consumer Finances (SCF) for 2010 has reported what could be unprecedented levels of wealth destruction in the three short years between 2007 and 2010.
Median Family net worth across all age groups has fallen from $126,400 in 2007 to $77,300 USD in 2010, a fall of 38.8 per cent.
But it was families headed up by a person between the age of 35-44 that suffered the most destruction in household wealth. This group has seen median family net worth fall 54.4 per cent from $92,400 to $42,100 USD.
What did this cohort do so wrong?
As they started families, Generation X leveraged up into the housing market, towards or at the top of the bubble. When the bubble burst, they were left with mortgages on homes worth more than they paid for them.
Food for thought.
» Federal Reserve Bulletin, Changes in U.S. Family Finances from 2007 to 2010: Evidence from the Survey of Consumer Finances – U.S. Federal Reserve, June 2012.
Posted in US economy | 30 Comments »
A plan announced on Thursday to address the Eurozone debt crisis has bouyed markets around the world. But questions remain if it will go anywhere near fixing the problem.
Eurozone leaders have formed an agreement with private banks and insurers to accept a 50 percent loss on Greek’s bonds. Long term, the aim is to cut Greece’s debt to GDP ratio to 120 percent by 2020. Despite Greece not being able to service it’s initial debts, this is not called a default. It’s also deemed to be voluntary as to not trigger any credit events (CDS). Bloomberg reports there are $3.7 billion in debt insurance contracts on Greece.
To help stabilise economies in the Eurozone, and in fact most of the world, the European Financial Stability Facility (EFSF) will be ‘leveraged’ up to 1 trillion euros and many European banks recapitalised. It’s this term again, ‘leverage’ that has caused so much concern. Ironically, it is in part what caused the GFC. The EFSF was first created in May last year, but it’s feared the fund is to small to be of any real assistance, so the plan is to leverage it by 4 or 5 times.
It’s not yet known how the leverage will be performed. Klaus Regling, the CEO of the European Financial Stability Facility flew over to Beijing after the deal was sealed on Thursday to gauge China’s interest in becoming a potential investor for EFSF bonds or investing into a Special-Purpose Investment Vehicle (SPIV). China Daily writes :
He said his conversations with Chinese officials were partly aimed at getting their preference, in order to find the “right structure” that would appeal to potential investors, adding the leverage mechanism would be “simple” and “transparent”, just like home mortgage loans.
ECB President Jean-Claude Trichet has said the eurozone sovereign debt crisis is not over – “The crisis isn’t over, but after the decisions made this week, I’m nevertheless confident that the governments will succeed in restoring financial stability,”. Only time will tell.
» Euro zone to leverage EFSF by 4 times to 1 trln euros – sources – Reuters, Wednesday 26th October 2011.
» Euro bailout chief says talks with China ‘productive’ – China Daily, Sunday 30th October 2011.
Posted in Australian economy, UK economy, US economy | 6 Comments »
According to the Australian Associated Press, Harry Dent has arrived in Australia today to promote his new book, “The Great Crash Ahead: Strategies for a World Turned Upside Down.” Amazon suggests his book will be released on the 20th of September.
In promoting his book, Mr Dent has told AAP, he believes the world will enter a deeper downturn early to middle next year, originating from Europe and spreading to the U.S., China and eventually Australia. At the centre of the world wide debt crisis is, off course, Real Estate. This should sound quite familiar with readers here.
“People in places like Sydney or Tokyo or Miami say, ‘Hey, real estate can never go down here, we’re a great place, everyone wants to move here, there’s not much land for development’, and what I say is that is exactly the kind of place that bubbles,” Mr dent told the AAP.
He believes Australia’s house prices will return to levels seen in the late 1990′s and early 2000. With house prices in Australia at giddy heights, such a prediction can be hard to stomach. But it’s by no means far fetched. The United States has just done this as our readers will know from a post published early last month :
Now this is Australia’s housing market overlaid on the same graph. As our market grew just a teeny bit more thanks, in part, to Kevin’s First Home Vendors’ Boost in 2008, we had to rescale the graph :
Posted in Australian economy, Australian Housing, US economy | 20 Comments »
In 2005, America had a shortage of homes. Today, its banks are using bulldozers to get rid of the oversupply.
Bloomberg reports that the Bank of America has a glut of foreclosed homes that it can not sell. In June 1,679,125 were in some stage of foreclosure. Flooding the market with the surplus homes further depresses the market and scares of buyers who are waiting on the sidelines for the bottom of the market.
The banks are now donating homes and contributing funds to their demolition through the federal Neighborhood Stabilization Program, with the lender paying as much as $7,500 to have the homes demolished. Homes earmarked for demolition are believed to be in varying states of disrepair and with such a glut of properties on the market, there is no prospect of anyone buying them.
» BofA Donates Then Demolishes Houses to Cut Glut – Yahoo Finance, 27th July 2011.
Posted in US economy | 6 Comments »
According to the Zillow Home Value Index, the current housing crisis in the U.S. has surpassed that of the 25.9% decline observed during the Great Depression. The Index recorded a fall of 25.9% between 1928 and 1933. Since the peak of the U.S. bubble in June 2006, prices have now fallen 26%, with falls expected to continue for some time.
The November fall is the 53rd consecutive month of falling home prices. Prices have now been falling for 4 and a half years.
» Housing Market Slips Into Depression Territory – CNBC, 11th January 2011.
» Home Value Declines Surpass Those of Great Depression Zillow Blog, 11th January 2011.
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A surprise sharp decline in house prices in the United States has analysts calling the start of the double dip for the already depressed U.S. housing market. The S&P/Case Shiller home price index for a composite of 20 U.S. cites plunged 1.3 percent in the month of October, the biggest monthly decline since March 2009. Six cities recorded new all time lows.
David Blitzer chairman of the index committee at Standards and Poor’s said “There is no good news in October’s report. Home prices across the country continue to fall.” and “The double dip is almost here, as six cities set new lows for the period since the 2006 peaks,”
» U.S. house prices tumble in October – Market Watch, 28th December 2010.
Posted in US economy | 1 Comment »
OECD Chief Economist, Pier Carlo Padoan has said “Recent high-frequency indicators point to a slowdown in the pace of recovery of the world economy that is somewhat more pronounced than previously expected” and that policy makers may need to extend or bolster stimulus programs.
This comes as governments around the world wind down stimulus measures in a hope that a previous unsustainable economy can be corrected by simply throwing more money at it and without fixing the underlying problems.
For example, when the U.S. government removed a government tax credit supporting the housing market a couple of months ago, existing home sales fell a record 27.2% in July, to the lowest level in 15 years, while inventories surged to its highest level in a decade.
CNBC’s David Streitfeld writes :
Over the last 18 months, the administration has rolled out just about every program it could think of to prop up the ailing housing market, using tax credits, mortgage modification programs, low interest rates, government-backed loans and other assistance intended to keep values up and delinquent borrowers out of foreclosure. The goal was to stabilize the market until a resurgent economy created new households that demanded places to live.
Some economists are now wanting governments to stop wasting money and let the market crash. Anthony B. Sanders, from George Mason University says “Housing needs to go back to reasonable levels, If we keep trying to stimulate the market, that’s the definition of insanity.”
» Housing Woes Bring New Cry: Let Market Crash – CNBC, 6th September 2010.
» Global economic recovery is slowing, OECD warns – The Sydney Morning Herald, 9th September 2010.
» OECD Says Economy Slowdown `More Pronounced’ Than Anticipated – Bloomberg, 9th September 2010.
» World slowdown steeper than anticipated: OECD – Marketwatch, 9th September 2010.
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Real estate experts in the U.S. suggest houses are now a bad investment, indicating there is no law to say real estate will appreciate in value.
For a century prior to the great housing bubble that started in the 1990′s, house prices only appreciated in line with inflation. This ensured your great grand parents paid the some portion of their household income for housing, that your grandparents did, and that of the baby boomer generation. But then in the late 1990′s, something changed. The experts said real estate only goes up, some suggesting that house prices double every 7 to 10 years. With access to easy credit, this fueled one whopper of a housing bubble around the world.
Now that the bubble has burst, experts agree with Stan Humphries, chief economist for the real estate site Zillow saying house prices will only go up with inflation. “There is no iron law that real estate must appreciate, All those theories advanced during the boom about why housing is special — that more people are choosing to spend more on housing, that more people are moving to the coasts, that we were running out of usable land — didn’t hold up.”
Dean Baker, co-director of the Center for Economic and Policy Research says “People shouldn’t look at a home as a way to make money because it won’t”. He estimates it will take 20 years to recoup the $6 trillion USD of housing wealth lost since the start of the housing crash in 2005.
» Housing Fades as a Means to Build Wealth, Analysts Say – The New York Times, 22th August 2010.
» Now They Tell Us: Experts Say Housing Is A Lousy Investment And Always Will Be – Yahoo Finance, August 23, 2010.
Posted in US economy | 17 Comments »
The U.S. Commerce Department last night reported sales of new homes sunk 33 percent in May to the lowest level since records began in 1963.
The May collapse is also the biggest monthly drop on record and follows the end of federal tax credits used to prop up the unsustainable housing market.
» New-home sales plunge 33 pct with tax credits gone – Yahoo, 23rd July 2010.
Posted in US economy | 2 Comments »
The Financial Times has an interview with Jeremy Grantham, founder and chief strategist at GMO, on bubbles.
Mr Grantham has identified over 34 bubbles over the years based on the 40 year event based from price and volatility. At present 32 of the 34 bubbles have moved back to trend before the bubble existed, with the Japan asset bubble, Tech Wreck and more recently the U.S. housing bubble included in these. He says the U.S. housing bubble was a good example of an ideal bubble.
He says two bubbles remain in play at present. These are the Australian housing bubble and the U.K. housing bubble. He believes mortgage rates came down significantly to protect these two bubbles and now we have to wait and see what happens when interest rates rise. If they don’t come down to the trend line multiple of family income, it will be the first time in history that the bubble hasn’t broken. (I guess property speculators here, do say Australia is different and it won’t happen here!)
He also identifies potentially forming bubbles as commodities and emerging market equities. Commodities could come as another blow to Australia.
Watch the interview here – Apr-19-Jeremy-Grantham-on-bubbles.
Posted in Australian Housing, UK economy, US economy | 2 Comments »
The Housing Industry Association (HIA) has this week released a report showing Australia’s housing “shortage” will quadruple if we don’t act now and increase the number of homes being constructed.
The group has called for another 466,000 homes to be built by 2020, with the “shortage” currently at 109,000 homes. The report shows Australia’s population is likely to grow to 36 million by 2050, further straining affordability.
A severe housing shortage in Australia is said to put a floor under house prices, and used by the industry to dismiss any notion there is a housing bubble in Australia.
On the 9th February 2006 a similar article was ran in California :
The California Building Industry Association (CBIA) continues to express alarm over what it calls an ongoing housing crisis in Southern California.
Alan Nevin, the association’s chief economist, projected in a 2006 CBIA Housing Forecast that only 185,000 to 205,000 building permits will be granted this year, far short of the 240,000 new homes needed each year.
Southern California has been experiencing a massive population boom in recent years and it’s believed that 6 million new residents will be living in the region by 2020. The population increase, coupled with the housing shortage, has the CBIA worried that it will be increasingly difficult for first-time homebuyers to find a moderately priced unit.
“Los Angeles and Ventura counties are suffering from a housing crisis,” said Holly Schroeder, chief executive officer of the Building Industry Association Greater Los Angeles Ventura Chapter. “While we have seen increases in permitting, it still consistently falls far below the needs of our region. We have to find a way to take care of our own and provide housing to those that need it and want it.”
Yet, despite the shortage, this is what happened to Los Angeles’ House prices after the article was published :
Even the U.K. had a shortage of houses prior to their housing crash :
Shortage of homes over next 20 years threatens deepening housing crisis
19 March 2002
Britain is heading for a property shortage of more than a million homes by 2022 unless the current rate of housebuilding is dramatically increased, according to reports from the Joseph Rowntree Foundation (JRF). The evidence, being presented at the Foundation’s Centenary Housing Conference in London, reveals that the supply of housing is already falling behind demand faster than previously recognised.
» Housing shortage to quadruple: HIA – The Sydney Morning Herald, 19th March 2010.
» Construction industry says housing crisis has hit California – February 9, 2006.
» Shortage of homes over next 20 years threatens deepening housing crisis – March 19th, 2002.
Posted in US economy | 6 Comments »
According to a report from FirstAmerican CoreLogic, more than 11.3 million mortgage holders have negative equity – they owe more on their mortgage than what their home is worth. This represents almost 25% of all Americans with a mortgage.
Worst still, more than 10% of people with a mortgage owes 25% more than what their home is worth. Another 2.3 million only have 5% equity which could be soon wiped out if house prices continue to fall.
This can only be another blow to banks who are licking their wounds from the collapse of the U.S. Commercial Property Market.
» 11.3 million homeowners underwater on mortgage – Marketwatch, 23rd February 2010
Posted in US economy | 1 Comment »
The FDIC on Wednesday has indicated there are 702 banks on the FDIC trouble list which is in danger of defaulting. This is the highest level in 16 years.
Last year 140 banks failed in the US, with another 20 this year. The FDIC Chairwoman, Shella Bair says this pace is likely to quicken.
Commercial real estate loans have been the latest problem to hit US banks. On the 31st December 2009, almost $1.1 trillion in commercial loans and $211 billion in loans for apartments were held by U.S. banks. Collectively banks face $300 billion in losses on loans made for commercial property and development.
» Almost 10% of FDIC-insured banks “troubled” – Market Watch, 23rd February 2010.
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The U.S. government has removed the US $400 billion dollar cap and extended support to 2012 for Fannie Mae and Freddie Mac in preparation for the second wave. Fannie Mae and Freddie Mac together guarantee almost half of all mortgages in the USA.
The timing of the announcement, done during a no news period while everyone is celebrating Christmas and the unlimited nature has raised questions.
A journalist for the Canadian Press wrote “The government has handed its ATM card to beleaguered mortgage giants Fannie Mae and Freddie Mac.”
The U.S. government has so far provided Fannie Mae with $60 billion of tax payers money and Freddie Mac with $51 billion. This is only $111 billion from the $400 billion cap originally pledged in September 2008 and due to expire on the 31st December.
“The companies are nowhere close to using the $400 billion they had before, so why do this now?” said Bert Ely, a banking consultant in Alexandria, Va. “It’s possible we may see some horrendous numbers for the fourth quarter and, thus 2009, and Treasury wants to calm the markets.”
» US extends guarantees on Fannie, Freddie – AFP Business, 25th December 2009.
» Fannie Mae and Freddie Mac receive unlimited future funds to stay afloat – The Canadian Press, 25th December 2009.
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The price earnings ratio or PE is a gauge of a stock’s valuation. The higher the PE ratio the more overvalued a stock or share is.
Below is a chart of the average PE ratio for the S&P500 (an indice of 500 large cap stocks listed on the NYSE and the NASDAQ). Generally the PE ratio floats between 15 and 20.
In the lead up to the Great Depression in 1929, the PE ratio for peaked around 32. During tech wreck, a period where tech companies experienced dizzy share prices and actually had no earnings, the PE ratio peaked around 46.
Today, the PE ratio is 141. In the past months we have seen earnings fall through the floor, yet share prices have rallied in the opposite direction, only exaggerating the PE. (The dictionary definition of exaggerate is to “magnify beyond the limits of truth”)
This begs the question of when this irrational exuberance will end?
Next Wednesday, J.P. Morgan Chase will kick of the third quarter bank reporting season. While bank stocks have surged in the third quarter, there is concern about earnings that may be more negative than many investors expect.
“Third-quarter earnings for most banks, particularly the regional lenders, will be extraordinarily negative,” Richard Bove, an analyst at Rochdale Securities said. He expects 60% of banks will report losses.
“None of this bodes well for the third quarter,” Bove said. “Once the market is faced with the reality of how bad the earnings are, it will be interesting to see whether investors will be able to hold on to these stocks at these price levels.”
» October surprise from bank earnings? Some experts worry results may be much more negative than investors expect – Market Watch – 10th October 2009.
Posted in US economy | 4 Comments »
While U.S. unemployment has hit a 26 year high of 9.8%, spare a thought for young Americans aged between 16 and 24 who are not studying – more than half are unemployed.
The New York Times reports for this group, getting a job and moving out of the family home will take a quite a while, fueling little demand for housing and causing more strain to a recovering economy :
A study from the National Longitudinal Survey of Youth, a government database, said the damage to a new career by a recession can last 15 years. And if young Americans are not working and becoming productive members of society, they are less likely to make major purchases — from cars to homes — thus putting the US economy further behind the eight ball.
This can only add to the worries of a slow recovery stemming from the high level of household debt that needs to be paid back, before households can begin sustainably spending again.
» The dead end kids – New York Post, 27th September 2009.
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While economists were only expecting the lost of 180,000 jobs in the U.S., figures just released show in September 263,000 payroll jobs were axed, pushing U.S. unemployment up to a 26 year high of 9.8%.
» U.S. job losses accelerate to 263,000 in September – Market Watch, 2nd October 2009.
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House price data for the UK market compiled by Nationwide shows in the 12 months to February, shows house prices fell 17.6%. This, the 16th consecutive contraction is now the biggest fall since Nationwide started to collect data in 1952.
Meanwhile Standard and Poor’s have released the latest update to the S&P/Case-Shiller 20 city composite index which shows in the 12 months to December, house prices in the US fell a record 18.5%. From the peak of the US housing bubble in quarter 2 ’06, US house prices are now down 26.7%.
» British house prices in record fall – AAP, 26th February 2009.
» U.S. housing market bottom may be a year away: Case – Reuters, 26th February 2009.
Tags: Case-Shiller, Nationwide
Posted in UK economy, US economy | 3 Comments »