While the regime of Chimperator Bush (pictured at left as Marie Antoinnette) acts as if the US economy is fine, European cverage of U. S. economic issues is less optimistic. Here are some highlights from an article in the Guardian (http://business.guardian.co.uk/story/0,,2133878,00.html):Fresh concerns were raised yesterday over the fallout from the US sub-prime mortgage market, which a leading ratings agency described as a "dangerous cocktail" and a Bank of England deputy governor warned was not yet over.
Moody's Investor Service said the size of losses from the turmoil in the US housing market was still unknown. It said that until they could be quantified "the headline risk will probably test markets' nerves". It added that a relaxation of risk management and underwriting standards combined with the growth of little understood debt derivatives, many of them based on US sub-prime mortgages, had proved to be "a dangerous cocktail".
Meanwhile, the pound scaled a new 26-year high against the dollar of $2.0655 during early trading. The greenback also hit a record low against the euro of $1.3853.
Meanwhile, MSNBC has this headline: Existing home sales keep falling: Data show continued weakness in all sections of the U.S. Highlights of the article follow:
WASHINGTON - Sales of existing homes fell for a fourth straight month in June and even a small increase in home prices was not enough to lift the gloom surrounding the housing industry. The National Association of Realtors reported that sales of existing homes dropped by 3.8 percent in June to a seasonally adjusted annual rate of 5.75 million units, the slowest sales pace in 4½ years.
The decline in home sales was larger than had been expected and served to underscore the problems in housing, which is currently in the worst slump in 16 years.
Federal Reserve Chairman Ben Bernanke told Congress last week that he expected housing demand to stabilize and housing to be a less severe drag on growth in the coming months. However, private economists said the existing home sales report raised serious questions about that assessment. They noted that existing home sales were falling at an annual rate of 28 percent in the second quarter, the steepest plunge so far in the downturn. “Housing is contracting at an accelerating pace, taking out with a vengeance the brief stabilization at the turn of the year,” said Ian Shepherdson, chief economist at High Frequency Economics, a private forecasting firm.
The Dow Jones industrial average suffered a 226-point drop on Tuesday as Countrywide Financial, one of the nation’s mortgage lenders, reported a sharp drop in its second quarter profits, raising worries among investors that the housing slump could damage the overall economy by a greater extent than it already has.
The full article is here: http://www.msnbc.msn.com/id/19953440/ The delusions and denials of reality at the White House continue unabated on all fronts.
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