Fed Says Economy Perked Up From Depressed Levels

October 22, 2009

U.S. economic conditions stabilized or improved modestly in most parts of the country, according to a Federal Reserve report on Wednesday that suggested the economy was slowly clawing out of a recession.

In its “Beige Book” of anecdotal reports on the economy, the Fed noted improvement in two of the hardest hit areas — residential real estate and manufacturing.Recession

“Reports from the 12 Federal Reserve districts indicated either stabilization or modest improvements in many sectors since the last report, albeit often from depressed levels,” the Fed said in its report, which was prepared at the Federal Reserve Bank of Richmond based on information collected before October 13.

“Reports of gains in economic activity generally outnumber declines, but virtually every reference to improvement was qualified as either small or scattered.”

U.S. stocks stayed at higher levels after the report was released, while prices for government debt remained lower, as did the U.S. dollar.

Jennifer Lee, an economist with BMO Capital Markets, said the tone of the Fed’s report was “tentatively” more positive than the prior one, which was released on September 9.

“Not super-duper-jumping-up-and-down-with-great-excitement positive, but slightly more optimistic than seen in recent reports,” she said.

The central bank gave a grim assessment of commercial real estate, which is widely seen as one of the big remaining trouble spots for the still-struggling financial sector.

“The weakest sector was commercial real estate, with conditions described as either weak or deteriorating across all districts,” the Fed said.

A number of the regional Fed banks said businesses in their area did not expect commercial real estate to improve much, if at all in, in 2010.

“Tenants are demanding significant concessions — including space improvements and one- to two-year leasing commitments — along with low rental rates,” the Boston Fed reported.

Source: Reuters

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Written by djumper · Filed Under Real Estate Blog 

AP Poll: A Year Later, Worries Linger on Economy

September 16, 2009

WASHINGTON – One year after Wall Street teetered on the brink of collapse, seven out of 10 Americans lack confidence the federal government has taken safeguards to prevent another financial industry meltdown, according to a new Associated Press-GfK poll.

Even more — 80 percent — rate the condition of the economy as poor and a majority worry about their own ability to make ends meet. The pessimistic outlook sets the stage for President Barack Obama as he attempts to portray the financial sector as increasingly confident and stable and presses Congress to act on new banking regulations.

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The public sentiment also poses a challenge to central elements of Obama’s governing agenda. Half of those surveyed said deficit reduction should be a national priority over increased spending on health care, education or alternative energy.

“I know a lot of people who don’t have health care and really can’t afford it,” said Judy Purkey, a 57-year-old grandmother from Morristown, Tenn., who has raised four grandchildren and is living on disability payments. But she added: “The economy is so bad. You’ve heard the expression getting blood out of a turnip? — Well, that’s what’s going on.”

The president, in a CBS interview that aired Sunday on “60 Minutes,” acknowledged the public’s quandary.

“This is a very difficult economic environment. People are feeling anxious,” he said. “And I think it is absolutely fair to say that people started feeling some sticker shock.”

Still, Obama generally avoided public blame for the recession or the condition of the banking sector.

Only one out of five surveyed said Obama bore responsibility for the recession; 54 percent blamed former President George W. Bush and 19 percent blamed former President Bill Clinton.

Financial institutions, however, bore the brunt of the criticism — 79 percent of those surveyed said banks and lenders that made risky loans deserve quite a bit of the blame. Sixty-eight percent held the federal government responsible for not adequately regulating banks and 65 percent blamed borrowers who could not afford to repay loans.

In a glimmer of good news for the administration, 17 percent of those surveyed said the government’s massiveeconomic stimulus has improved the economy, a 10 percentage point increase over July. Nearly six out of 10, however, said they are not confident that $787 billion that Congress approved to lower taxes and inject spending into the economy will do any good.

The White House has been promoting the stimulus package as a job creator and job saver that has helped keep unemployment from rising above its current 9.7 percent level — the highest since 1983.

Michael Painter, a 38-year-old unemployed plumber from Orlando, Fla., said that while he believed that spending package would ultimately stimulate the economy, it had yet to help him or his laid-off wife and teenage daughter.

He said he approved of Obama’s job performance so far, but not Congress’. “The people in Congress need to quit bickering about party issues and start worrying about people issues.”

The Obama administration also has begun to portray the financial sector in more upbeat terms, eager to make the case that government interventions begun under then-President Bush and continued, altered or expanded under Obama have brought stability to the markets.

Obama plans to deliver a speech Monday — the anniversary of Lehman Brothers’ bankruptcy — to outline the administration’s achievements and press Congress to enact changes in bank regulations.

But the AP-GfK poll illustrates the difficulty he faces.

More Americans worry about facing big, unexpected medical expenses now than they did in July — up 7 percentage points to 68 percent among those polled. Likewise, more worry that the value of their stocks and retirement investments will drop — up 4 percentage points from July to 68 percent.

In October, then-President Bush pushed a $700 billion financial rescue package through Congress on the condition that only half could be spent without further congressional authority. Obama, upon becoming president in January, succeeded in getting the second amount released, despite growing apprehension among lawmakers about the wisdom of such a bailout.

Obama has repeatedly said that the rescue of the financial sector would be incomplete without a new regulatory regime that would prevent a recurrence of the crisis. Obama has sent the outlines of possible regulation to Congress. Key banking lawmakers in the House and Senate have promised Obama legislation by the end of the year, but there is vigorous debate over key elements of Obama’s plan, including a new consumer finance protection agency and the designation of the Federal Reserve as the main overseer of large institutions that could pose risks to the system.

The survey of 1,001 adults with cell and landline telephones was conducted from Sept. 3-8. It had a margin of sampling error of plus or minus 3.1 percentage points.

Source: Yahoo! News

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Written by djumper · Filed Under Real Estate Blog 

Foreclosure Filings Dip From July to August

September 10, 2009

MIAMI (AP) — The number of U.S. households threatened with losing their homes held steady last month, a sign that lenders’ efforts to help distressed borrowers may be having a gradual impact. But one month does not make a trend.

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More than 358,000 foreclosure-related filings were recorded in August, meaning one in 357 U.S. homes received a filing, RealtyTrac Inc. reported Thursday. That number, up 18 percent from a year ago, includes default notices, scheduled auctions and bank repossessions.

Mortgage companies are ramping up efforts to help troubled borrowers modify their loan payments to make them more affordable, data Wednesday showed. And RealtyTrac said bank repossessions dropped 13 percent from July.

The problem is the economy. The unemployment rate continues to rise, despite a new Federal Reserve survey that suggested the recession is over.

More than 138,000 households received a default notice in August. Another 144,113 received a notice scheduling the house for public auction.

“The August report demonstrates that there is still an ample supply of properties filling the foreclosure pipeline,” said James Saccacio, CEO of Irvine, Calif.-based RealtyTrac.

Despite an 8 percent monthly decline in foreclosure activity in August, Nevada had the nation’s highest foreclosure rate for the 32nd-straight month. Nearly 18,000 Nevada properties received a foreclosure filing, down 8 percent from July but an increase of more than half from August last year.

Florida, California, Arizona, Michigan, Idaho, Utah, Colorado, Georgia and Illinois completed the top 10 states for foreclosure filings.

Among cities with at least 200,000 people, Las Vegas had the highest foreclosure rate, followed by the California cities of Stockton, Merced, Riverside-San Bernardino-Ontario, Vallejo-Fairfield and Modesto.

Source: Yahoo! Finance

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Written by djumper · Filed Under Real Estate Blog 

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