Economy

Americans' opinions of the auto industry are on the rise after hitting a record low last year, according to a business poll released Monday. 

Nearly 40 percent of those asked said they had a positive opinion of automakers, compared with 36 percent who view the industry negatively, a 15-point increase over last year, tying the largest one-year improvement in Gallup's 10-year history of measuring public opinion on major U.S. business industries.

Still, the ratings for automakers are still much less favorable than in 2001 to 2005, according to the poll.

The auto industry is still recovering — GM emerged from bankruptcy last summer and recently filed for an initial public offering — posting stronger financial results this year. 

Industry sources say the recent uptick in construction jobs will likely be fleeting since it is based on federal stimulus dollars that will soon dry up. 

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."
 http://bit.ly/aLj68i

INTERLUDE... NYT asks, "Can Smart Money Management Be Sexy?"

Answer: No.

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

President Obama this summer has repeatedly blamed George W. Bush for the nation’s economic woes.

House Ways and Means ranking member Dave Camp's (R-Mich.) report says only Alaska and North Dakota gained jobs.

Douglas Holtz-Eakin, the former director of the Congressional Budget Office and one-time economic advisor to Sen. John McCain (R-Ariz.) in his 2008 presidential bid, on Friday urged Congress to extend all of the Bush-era tax cuts slated to expire at the end of the year. 

The Business Roundtable on Thursday said recent indicators showing the economic recovery faltering should prompt Congress into expanding trade opportunities with other nations. 

Democratic National Committee Chairman Tim Kaine on Thursday predicted that the economy would rebound before the election in November.

Nearly one in three parents (32 percent) say the rough economy has forced their schools to cut back on education funding for their children, according to a new Gallup poll. 

For the second time in three days, President Obama criticized Republicans for holding up small-business legislation.