Housing Crash Deepens in 2008 as U.S. Realtors See Record Drop For U.S. homeowners, builders, bankers and realtors, the crash of 2007 will only get worse in 2008. Everyone from mortgage-finance company Fannie Mae to Lehman Brothers Holdings Inc. expects declines next year. Existing home sales will drop 12 percent and existing home prices will fall 4.5 percent, Washington-based Fannie Mae says. Lehman analysts estimate almost 1 million mortgage loans will default in 2008, up from about 300,000 this year.
Schultz sees an apocalypse now Commentary: Veteran editor declares 'A financial tsunami is upon us' The Fed flops and Wall Street is worried. But one letter veteran has been here before, not that it makes him any cheerier... Shultz's latest letter, just in, is absolutely apocalyptical: "A financial tsunami is upon us," he says, caused by lax credit and complications introduced by Wall Street's derivatives craze. Among other interesting ideas raised by Schultz in his intense, somewhat terrifying introduction: recession, possibly depression; bank failures; exchange controls; housing prices down by 50%; credit card company failures; money market fund dangers; tripling of U.S. jobless numbers; federal bail-outs for Fannie Mae.
Consumer inflation accelerates in Nov. Consumer prices rose 0.8% in November, led by higher prices for gasoline, the Labor Department reported Friday. This is the fastest pace of consumer inflation in more than two years. But energy wasn't the entire story. Prices of apparel, drugs, and airline fares also spiked. As a result, core inflation, which excludes food and energy prices, rose 0.3%, the biggest gain since January. The figures raise concern that inflationary pressures are increasing, and could limit the room for the Federal Reserve to cut interest rates to counter the expected economic slowing over the next few quarters.
Gas Prices Spur Consumer Inflation Surge in Gasoline Prices Pushes Consumer Inflation Higher While Industrial Production Rebounds Consumer inflation surged by the largest amount in more than two years in November, led by gasoline prices. The cost of clothing, airline tickets and prescription drugs also jumped.
Dollar Gains Most Since May 2005 Versus Euro as Inflation Rises The dollar strengthened the most against the euro since May 2005 after government reports showed U.S. consumer prices and industrial production increased more than forecast last month. The U.S. dollar gained against 15 out of the 16 most- actively traded currencies today as accelerating inflation prompts futures traders to reduce bets on how much the Federal Reserve will cut borrowing costs next year. The U.S. currency has risen 1.3 percent against the euro over the past five days, the biggest weekly increase since August.
ECB Gov.: 'Second Wave' of Credit Crisis Worse AMSTERDAM -- European Central Bank Governing Council member Nout Wellink said on Friday that the global credit crisis had now reached a "second wave," worse than the first. Greenspan: Odds for Recession 'Rising' WASHINGTON -- Former Federal Reserve Chairman Alan Greenspan says the odds the U.S. will fall into a recession are "clearly rising" and he believes economic growth is "getting close to stall speed." Greenspan, who ran the central bank for 18 1/2 years, until early 2006, offered his views on the economy in an interview on NPR News' Morning Edition that will air on Friday. Excerpts of the interview were released on Thursday.
One in 5 Homeowners See House Price Drop More than one in five U.S. homeowners expect their home to fall in value in the coming year, a Reuters-University of Michigan consumer survey said on Friday. The survey found 21 percent of the 1,168 surveyed see a fall in prices, with those heavily concentrated in areas that have already seen values decline, the survey's director Richard Curtin said in a statement.
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