noworldsystem.com

US Headed for Housing Depression

Crikey
September 28, 2007

Official figures showed that the US economy grew at a strong 3.8% in the June quarter, before all the subprime turmoil hit in July and August, but the US housing slump continues to deepen.

Would it be too dramatic to call it a housing depression? Not after the latest figures released overnight.

American homebuilders are now holding more than 8 months supply of built but unsold houses on their books (and remember these are new and completed new homes: the figures for existing homes will be out in the next day or so).

And economists are now saying that the true extent of the slump in new homes is being understated in the official figures from the US Census Bureau. For example, the latest report does not take into account the rising level of cancellation rates or sales inducements that builders have reported in recent months.

According to the Census Bureau report, new homes sold at an annual pace of 795,000 in August, down 8% from the revised 867,000 sales level in July. It was the slowest pace of sales since June 2000 and was worse than all forecasts made ahead of the release of the report.

The Bureau’s report also showed the median price of a new home fell 7.4% from August 2006 to $US225,700, and the stockpile of new homes on the market rose to an 8.2 month supply. That fall in the median house price was the largest drop in the annual median price since 1970!

And according to a report in the Financial Times: “The US economy faces a 40 to 45 per cent risk of recession induced by the housing market downturn, the chief executive of Freddie Mac, one of the two quasi US Government sponsored mortgage insurers, has warned.”

And in London, the Telegraph reports that leading US investment bank, Goldman Sachs, has abandoned its ultra-bullish view of the world economy, warning of a likely recession in Japan and mounting risks that US property slump could spread to parts of Europe.

Goldman said in a report called, “The Global Economy Hits a Crunch”, that it was no longer sure that Asia and Europe would be able to make up for slowing US growth.

Gold Prices Surge As Dollar Falls to Low

AP
September 29, 2007

NEW YORK (AP) — Gold rose on Friday to the highest level since 1980 as the U.S. dollar scavenged new lows against the euro and oil prices headed near record territory.

Commodities were set to end the third quarter with substantial gains, despite a bumpy ride through August when concerns about the availability of credit roiled financial markets. Crude prices rose on Friday, while industrial metals and agriculture futures traded mixed.

Meanwhile, gold breached $750 an ounce as investors sought shelter in precious metals from the inflationary signs of rising oil prices and a weakening dollar. The dollar’s decline against the euro has been precipitous this week, as the greenback has slid to a fresh low for seven straight trading days. On Friday, the European currency purchased a record $1.4207.

There also were signs of strong gold demand from India this week, said Tom Pawlicki, an analyst with MF Global in Chicago. India, the world’s largest gold consumer, is in the midst of its wedding and festival season, a traditional time of gold-buying for gifts and investment. The country’s economy has been robust, and the Indian rupee has strengthened as a result.

December gold advanced $11.60 to $751.50 an ounce at midday on the New York Mercantile Exchange — the highest since an ounce fetched more than $850 in January 1980, according to Thomson Financial data. December silver jumped 32 cents to $13.965 an ounce.

Gold’s recent climb has been fast and sharp. Jon Nadler, senior analyst with Kitco Bullion Dealers, cautioned in a note to clients that gold “is also taking on some ominous and purely speculative features that may not see it correct in orderly fashion, or end too well.”

Oil prices headed for a strong finish to the quarter as crude extended the sharp gains a day earlier despite a general lack of fundamental, bullish news. The current supports for oil remain the dollar’s continued decline, a slight shortage of supply at a key delivery point in Cushing, Okla., and unrest in the oil-producing region of Nigeria, JPMorgan analysts said in a report.

A rise in speculative buying, typical at the month’s and quarter’s end, also helped prices rally, Pawlicki said.

Light, sweet crude for November delivery gained 42 cents to $83.30 on the Nymex, shy of the all-time peak $83.90 reached last week. Gasoline futures slipped 1.64 cents to $2.0775 a gallon.

Elsewhere, industrial metals traded in a narrowly mixed range. Nickel and zinc prices dipped about 1 percent on the London Metal Exchange. Copper edged higher in London and New York

In Chicago, corn and soybean futures gave back a portion of the huge gains made a day earlier, while wheat continued its rise. Strong export demand for U.S. agriculture products has prodded prices of soybeans to three-year highs and wheat to an-all time record. The wheat market, in particular, has been strained by shrinking global supplies, which has supported a rash of buying of U.S. grain.

December wheat rose 5 cents to $9.38 a bushel on the Chicago Board of Trade. Corn for December delivery fell 11.25 cents to $3.755 a bushel, and November soybeans dropped 10.5 cents to $9.985 a bushel.

Related News:

35K state workers get layoff notices
http://www.lsj.com/apps/pbcs.dll/arti….9290338/1001/news

As Prices Soar, U.S. Food Aid Buys Less
http://www.nytimes.com/2007/09/29/worl…f=slogin&oref=slogin

Freddie Mac chief warns of recession
http://www.ft.com/cms/s/0/8b86afc6-6d36-11dc-ab19-0000779fd2ac.html

Oil Prices Rise As Dollar Falls
http://biz.yahoo.com/ap/070928/oil_prices.html?.v=10

FDIC Shuts Down NetBank Due to Defaults
http://biz.yahoo.com/ap/070928/netbank_closure.html?.v=14

Gold Hits 28 Year High
http://ca.news.yahoo.com/s/reuters/0….ets_precious_col_25

EU’s Almunia Worried By Dollar’s Fall
http://www.reuters.com/article/ousiv/idUSL2843104120070928?sp=true

New-Home Sales Tumble to 7-Year Low
http://www.breitbart.com/article.ph….how_article=1

U.S. Government About to be Broke
http://www.cnn.com/2007/POLITICS/09/24/bush.budget/index.html

New-Home Sales Tumble to 7-Year Low
U.S. Government About to be Broke
Another New Low for Dollar
Six States Testing Pay As You Drive Program
Philadelphia Fed President Reduces Heat On Dollar
Suddenly, the British pound looks vulnerable
Banks Borrow 3.9B Euros From ECB
Financial Times: Chinese buy into conspiracy theory
U.S. Economy: Durable Goods Orders Declined in August
Alan Greenspan’s Role in US Dollar Collapse
Greenspan: Less Than 50/50 Chance Of Recession
Fed Projects a Four Year Long Recession
US economy kills American middle class
Ron Paul: The Money Has To Come From Somewhere
IMF: Global Financial Crisis To Be Long Lasting
U.S. Severe poverty rate at highest in three decades
Fall-out at the top reveals French finances in freefall
Home sales, prices continue to fall
Borrowers told to lie about wages
Northern Rock still lending ‘recklessly’
Dollar at lifetime low vs euro
Dollar Falls to Record Low Against Euro as U.S. Growth Falters
Taking Cues From Fed, Speculators Bid Up Oil
Premier Says France Bankrupt
Israel asks U.S. foreign aid be paid in EUROS
Northern Rock gets 2.9 bln stg
Greenspan Confronted By Activists, Flees From Angry Mob
Greenspan Admits Fed Is Above The Law
Ron Paul Slams Bernanke For Dollar Meltdown
Kissinger Admits Iran Attack Is About Oil
Bernanke panics by ‘launching a nuclear missile into the financial system’
Canadian Dollar at Parity with USD, Bernanke and Saudis Abuse US Dollar
$200 Dollar a Barrel Oil Is Bilderberg Plan To Destroy Middle Class
Oil hits high over $84
Abu Dhabi takes ownership stake in Carlyle Group
Gold hits 28-yr high as dollar touches record lows
Home Price Falls Hit 26% Of U.S. Homeowners
Greenspan: House Prices To Drop Much Lower
Jon Stewart to Alan Greenspan: Why Do We Need the Fed?
Recession Too Mild a Word
Canadian Dollar Trading At Parity With USD
Borse Dubai Gets Stake In Nasdaq
Federal Workers Owe Billions in Unpaid Taxes
UN Global Taxes Before U.S. Senate
Saudi Currency De-Peg To Dollar Inevitable
Inflation fears end rally, sending stocks down
Analyst: Mystery Trades Were Profit Scam For Fearmongers
Dollar hits new low against euro
US expert warns of fresh shocks
Northern Rock: ‘One in 10 chance of property crash’
Congress Asked To Lift Debt Ceiling
Zimbabwe Close To Economic Collapse
Home foreclosures triple in Hawaii
Bank of England doubles emergency loans available to British banks
Fears of dollar collapse as Saudis take fright
China’s Ultimatum: Let Us Invade Taiwan Or We’ll Dump The Dollar
Rogers: Fed Rate Cut Will Trigger Recession
Greenspan Working To Destroy US Economy
Alan Greenspan Defends Himself
Greenspan says euro could replace U.S. dollar as reserve currency of choice
EU Warns China Of Trade Imbalance
Oil hits new high over $82 after Fed rate cut
U.S. gold futures hit 28-year peak
Failed Lender Makes Grab for Employee Funds
Greenspan predicts falling house prices, rising inflation
Greenspan Says China Will Determine World Economic Fate in 2030
Alan Greenspan warns of UK house prices drop
Greenspan alert on US house prices
Credit turmoil set to benefit big banks
Northern Rock: ‘One in 10 chance of property crash’
Hopes of UK interest rate cut ‘before Christmas’ after FTSE rises follow Fed’s swoop to cut rates
Relief as Northern Rock shares up
Treasurys Fall Ahead of Fed Decision
Fed Announces Big Rate Cut
Subprime Fallout: More Companies Slammed
Prepare for prolonged turmoil, says US Treasury Secretary
Oil industry ‘sleepwalking into crisis’
Oil Trades Near Record on Speculation of Reduced U.S. Supplies
Mystery Trader To Collect On Financial Meltdown?
Ron Paul Sees Crisis Ahead For Country
Bankers Fear £12bn Run On Rock
Oil Trades Near Record on Speculation of Reduced U.S. Supplies
Oil industry ‘sleepwalking into crisis’
U.S. Banks Brace for Storm Surge as Dollar and Credit System Reel
“Business Expert” (?) Ann Coulter: It’s Good for Wall Street to Bomb Iran
Britons Withdraw Billions in Bank Run
Northern Rock besieged by savers
Pound slides, yen up on N. Rock jitters
New saver queues at Northern Rock
E*Trade Cuts Earnings Estimate 25% on Mortgage Losses
Fears Rise Over Online Banking
Stocks may rise on expected interest rate cut
Fears grow for British economy as panic over Northern Rock spreads
World’s banks hit for $30billion in credit crunch
Oil Hits $80 A Barrel For First Time
Senate panel okays $850 billion debt increase
Dollar’s retreat raises fear of collapse
Further signs of US economic pain
British Bank Rocked By Bank Run
Forecast: Housing woes pose risk of recession
Mortgage Lender’s Bankruptcy
US dollar hits record lows
Foreclosures gain on sales
American economy: R.I.P.
US Heads for Recession as Foreign Investors Rush for the Exit from US Dollar Holdings
Dollar Hits 15 Year Low
Gold Rallies Past $700
Greenspan: Turmoil Like 1998
Bad News Puts Political Glare Onto Economy
US economy loses jobs for first time in 4 years
ECB Injects €42.2BN Into Money Markets
Is China quietly dumping US Treasuries?
Markets Brace For Seismic September
Fed Injects 31.25 Billion Into Market
Credit Crisis Has Hallmarks of Classic Bank Run
U.S. at risk of recession from housing
Analysts Dismiss Suspicious “New 9/11? Trades
Credit Crisis Compared To 1930
Bank Warns Emergency Borrowers
Bush Unveils Mortgage Proposals
Congressman: Stock Market Will Eventually Collapse
Comptroller: U.S. Facing Economic Collapse
BIS Warns of Great Depression Dangers from Credit Spree
Market Crash Forecast Suggests New 9/11
U.S. Recession Risk Highest Since 9/11
Economy, credit worries drive Wall St down sharply
Fed Injects 17.25 Billion In Market
Foreclosures Up 93% In One Year
After Foreclosure A Big Tax Bill From The IRS
After Fed’s Rescue, Volatile Days Ahead
Warren Buffett Sees Opportunities In Chaos
Run On The Banks in Los Angeles
Zimbabwe Inflation Rate Hits 7600%
Yields On T-Bills Down Most In 2 Decades
Bruised investors suffer as market continues to swing
The Dow Plunges, FOX Reports Happy Economic News
World Stocks Plummet Yet Again
Economic Expert: We Are Already In An Engineered Recession
China is not the Problem
Heavy losses sweep world markets
Wall Street Pulls Off Late Comeback
Fed Poised To Dump More Money Into Market
Stock Market Brush Fire & Run On The Banks
Food prices rising in double digits
Existing Home Sales Fall In 41 States
Banks Add More Funds To Stabilize Markets
Economic Meltdown Favors The Elite
Central Banks Add Cash To Avert Crisis
China dollar attack would be ‘foolhardy’: Bush
Fed Adds $38 Bln in Funds, Most Since September 2001
The “Plunge Protection Team” Working Overtime to Save US Stock Market
China threatens ‘nuclear option’ of dollar sales
World stocks slide on fresh US credit concerns
Dow Plunges 387 On Subprime Fears
Credit Crunch In U.S. Upends Global Markets
American Home to Declare Bankruptcy, Employees Told by Managers
Mad Money Cramer: Bernanke, Wake Up
Wall Street shaken by late-day market surges