HOUSING MARKET LOOMS LARGE THIS WEEK
Tuesday: Existing home sales data for July, by the National Association of Realtors
Wednesday: New home sales data for July, from the Census Bureau
Thursday: July mortgage delinquencies, by the Mortgage Bankers Association
And Friday: the Commerce Deparment is expected to revise downward last quarter's GDP
http://bit.ly/aMnRjA (via Calculated Risk)
DATA LOOKS BLEAK IN THE SHORT AND LONG TERM...
Housing slide threatens to drag economy into recession. Bloomberg: Economists predict Tuesday's report will show a 12.9 percent drop in new home sales from June to July. That would be the biggest monthly decline of 2010.
"Housing led the U.S. out of seven of the last eight recessions. This time, it may kill the recovery. Home sales collapsed after a federal tax credit for buyers expired in April. Since then, the manufacturing-led expansion, which began in the second half of 2009, has been waning, with jobless claims rising and factory orders falling." http://bit.ly/bHeYPL
Housing Fades as a Means to Build Wealth, Analysts Say. NYT, A1: "Housing will eventually recover from its great swoon. But many real estate experts now believe that home ownership will never again yield rewards like those enjoyed in the second half of the 20th century, when houses not only provided shelter but also a plump nest egg." http://nyti.ms/a6QWF6
Robert Samuelson calls for reform of Frannie and the mortgage deduction tax break, but not just yet. "In an ideal world, we would discard failed policies. We would trim or end the mortgage-interest tax deduction. We would curtail the GSEs' [government-sponsored enterprise] loans and guarantees (the promise to repay mortgages that default). The consequences need not be dire. ... The trouble is that the ideal solution may be temporarily undesirable. ... The irony is that, in failure, the GSEs have become more important than ever." http://bit.ly/dsoDat
Investors looking to Europe amid U.S. double-dip recession fears. Reuters: "Given a surprisingly robust economic performance, especially in Germany, investors are becoming more sanguine about the single currency region's sovereign debt troubles — once the biggest drag for investors in euro zone stocks and other assets. Concerns that the U.S. economy is slowing, or possibly returning to a recession, has affected other markets, as seen in Friday's fall in Asian and European stocks."
INTERLUDE... NYT asks, "Can Smart Money Management Be Sexy?"
A survey by ING Direct asked people what they would think of a blind date described as frugal. The results: "Just 3.7 percent answered 'sexy,' while 15 percent picked 'boring' and 27 percent chose 'stingy.' " http://nyti.ms/dmsjqe
Vice President Biden to tout Obama administration's economic relief efforts at a Chrysler plant in Toledo, Ohio, on Monday.
White House guidance: "At 3:00 PM EDT, the Vice President, Chair of the White House Middle Class Task Force, will deliver remarks about the success thus far of the Administration’s actions to strengthen the American auto industry. ...
"The Vice President will emphasize the role of the Administration’s investments in GM and Chrysler, as well as their suppliers, in helping these companies return to profitability, retain and hire workers, and keep plants open."
Biden will be joined by Ohio Democrats Gov. Ted Strickland, Sen. Sherrod Brown and Rep. Marcy Kaptur.
FREE-TRADE FIGHT: South Korean trade pact back on agenda. WaPo, A1: "... administration officials estimate the deal could mean more than $10 billion annually in increased U.S. exports to Seoul and tens of thousands of new U.S. jobs. ... U.S. opponents of the agreement argue it doesn't do enough to benefit American industry, even as it gives South Korean businesses greater rights in the United States...
"But the more fundamental dispute is over free trade itself. Presidents Bill Clinton and George W. Bush had aggressively promoted it. Yet the appeal of free trade has waned amid large U.S. trade deficits and concerns that more American manufacturing jobs will disappear overseas at a time when unemployment remains stuck near 10 percent." http://bit.ly/d02rcg
Meanwhile... China, facing rising labor costs, is looking to Southeast Asian countries for cheap workers. WSJ: http://bit.ly/aPKewV
Credit card rates up to 9-year high due in part to last year's credit card reforms. They're likely to climb higher. WSJ: http://bit.ly/aP23Kh