unrealtY

Third-Quarter U.S. Economic Growth Revised Lower. Myvoiceoflife:
http://ping.fm/jQ7i6

Record High of U.S. Mortgage Delinquencies in Third Quarter.
Myvoiceoflife: http://ping.fm/uv7kW

Record High of U.S. Mortgage Delinquencies in Third Quarter

More homeowners than ever are having trouble making their monthly
mortgage payments, according to figures released Thursday. The figures
underlined the level of stress on a large segment of the country, a
situation that could put out the modest recovery in home prices over
the last few months and impede any economic rebound.

The overall third-quarter delinquency rate is the highest since the
association began keeping records in 1972. Nearly one in 10 homeowners
with mortgages was at least one payment behind in the third quarter,
the Mortgage Bankers Association said in its survey. It is up from
about one in 14 mortgage holders in the third quarter of 2008.

The combined percentage of those in foreclosure as well as delinquent
homeowners is 14.41 percent, or about one in seven mortgage holders.
Mortgages with problems are concentrated in four states: California,
Florida, Arizona and Nevada.

In the first stage of the housing collapse, defaults and foreclosures
were driven by subprime loans. As the subprime tide recedes,
high-quality prime loans with fixed rates make up the largest share of
new foreclosures. A third of the new foreclosures begun in the third
quarter were this type of loan, traditionally considered the safest.
Without jobs, borrowers usually cannot pay their mortgages.

In previous recessions, homeowners who lost their jobs could sell the
house and move somewhere with better prospects, or at least a cheaper
cost of living. This time around, many of the unemployed are finding
that the value of their property is less than they owe.

http://ping.fm/q6pE2

U.S. leading indicators rose for 7th consecutive in Oct

U.S. leading economic indicators index rose for the seventh
consecutive month in October, signaling the U.S. recovery is in place.
The leading indicators rose 0.3% in October after an un-revised 1%
gain in September, the Conference Board reported Thursday.

Six of the 10 indicators were positive. The index is up at a 10.2%
annual pace in the last six months. The index of coincident indicators
was unchanged in October after a 0.1% decline in September. The
coincident index has been essentially flat since June

http://myvoiceoflife.blogspot.com/2009/11/us-leading-indicators-rose-for-7th.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+myvoiceoflife+(myvoiceoflife)

Dollar faces alarming pressure

Investors around the world see the U.S. dollar as weaker than other
currencies because of U.S. interest rates near zero and huge budget
deficits. That prompts them to trade out of the dollar for riskier,
high-yielding assets in equity markets and other countries.

The expectation that interest rates are set to remain low in the U.S.
has been a key factor behind the weak dollar and buoyant commodity and
stock markets. Investors are betting that policy makers will do little
to undermine the strong support for stimulus policies that have done
much to fuel global markets and restore risk appetite. They sold the
American currency off earlier in the week by expectations that U.S.
interest rates will be left low for some time. While the dollar may be
gaining strength recently, concerns about the currency persist.

Federal Reserve Bank of Dallas President, Richard Fisher, said he is
aware that the Fed’s current stance of keeping interest rates low for
an extended period was denting the dollar but that he didn’t want to
do anything about it, pointing out inflation is likely to remain
subdued for some time. His comments echoed those of other Fed
officials who indicated interest rates are likely to remain low.

On the other hand, Treasury Secretary Timothy Geithner, said Wednesday
in Singapore that maintaining a strong dollar is very important for
the country’s economy and sustaining confidence in its financial
system.

Soaring budget deficits, which hit a record $1.4 trillion in fiscal
2009, have also weakened the dollar. The U.S. has borrowed enormously
to meet the U.S.’s day-to-day spending needs.

The dollar has declined 16 percent against a basket of six major
currencies from the highs set in March and is down more than 37
percent from a peak in 2001.

Developing countries worry that the sinking U.S. currency is making
their exports expensive and threatening their fledgling economic
recoveries. A lower dollar and China’s yuan, which is effectively
pegged to the dollar, make other countries’ goods relatively more
expensive.

While speculation that the dollar is facing sustained devaluation
cannot be ruled out, there are good reasons to expect a rally over the
next nine to twelve months if the weak dollar helps the U.S. recovery
picks up steam.

Positive commodity and stock markets

Investors are using weak dollar for what’s known as carry trade. That
means traders borrow cheaper dollars to make other investments such as
in emerging-market currencies, oil or equities. Pressure on dollar can
amplify as equity markets continue advancing and investors trade out
of the currency for higher returns elsewhere.

The dollar tends to lose value as a result of government stimulus
measures or better-than-expected economic reports as investors pursue
riskier, high-yielding assets in other countries.

The APEC finance ministers at the 21-member Asia-Pacific Economic
Cooperation summit in Singapore pledged to maintain government
stimulus measures as long as the private sector remains weak. That
will prompt a flood of money into developing countries. Many of these
countries offer higher interest rates on their securities than the
major economies do. But the resulting rise in the value of their
currencies makes their exports more expensive.

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