Economic News

The Second Housing Crisis Is Here
As the collapse of the U.S. housing sector accelerated in 2008 and the precise nature of this supply-driven bubble became apparent, I laid out a very specific “blueprint” for putting a genuine “bottom” in this market.

The U.S. government needed to commit $1 trillion to $2 trillion to paying down the mortgage balances of U.S. homeowners in order to restore some badly needed equity for these homeowners, which in turn, would provide some stability to the U.S. housing market by eliminating most/all “underwater” mortgages, thus ending the incentive to “walk away” from these mortgages. (Source: Real Clear Markets) Click here to read the full article

Gold ends at a record high
Gold prices hit a record high settlement Thursday, driven by continued anxiety over the economy.

The flight to gold caused it to close at $1,248.20 per troy ounce, a gain of $18.20, or nearly 1.5%, from the prior day.
The prior record for a settlement, set June 8, was $1,246.50 an ounce.

Gold prices appeared to get a lift from weakness on Wall Street, as well as inflation fears, considering the sallow state of the euro. (Source: CNN Money) Click here to read the full article

Jobless claims and price data back low rates policy
Fears growth was slowing were heightened by news on Thursday that factory activity in June in the country’s Mid-Atlantic region braked to its slowest pace in 10 months.

Analysts had generally expected the recovery from the most painful recession since the 1930s to moderate in the second half of this year as a boost from a rebuilding of business inventories and massive stimulus from the government faded.

“We are seeing that now. It is slowing as the temporary lifts from the stimulus and inventories recede, but not something that is consistent with a contraction of the economy,” said Keith Hembre, chief economist at First American Funds in Minneapolis, Minnesota. (Source: Reuters) Click here to read the full article

U.S. May CPI falls 0.2% on lower gas prices
U.S. consumer prices decreased in May for the second straight month as gasoline prices fell, the Labor Department reported Thursday.

The consumer price index fell a seasonally adjusted 0.2% in May after a 0.1% decline in April, the government said. Energy prices fell 2.9%, food prices were flat and shelter prices rose 0.1%.

The core CPI — which excludes volatile food and energy prices in order to get a look at underlying inflation — rose 0.1%, just the second monthly increase this year.

The report matched economists’ expectations. (Source: Marketwatch) Click here to read the full article

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