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Bad news for gold futures can mean good news for the economy. Gold prices have reached meteoric prices in the last few years as the economy took a tumble. However, recent prices now may show that trend reversing despite the chaos in Europe and some uncertainty in the market. In the last eight trading sessions, gold has taken a hit six times signaling to the upward trend that had gold bugs in a buying frenzy. Read the rest of this entry »

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November was a bad month for delinquent homeowners. A foreclosure listing put out by RealtyTrac Inc. shows that a record number of those homes are scheduled for auction since nine months ago. Unless the homeowner can find a way to become current, a new wave of foreclosures is about to hit the home sales market. A glut of foreclosed homes will have the effect of depressing prices in the areas affected, but it may eventually clear the foreclosure inventory which has been backed up since last October. Read the rest of this entry »

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When the Federal Reserve chairman Ben Bernanke speaks, people listen. So, sometimes it is best to say nothing at all. Unfortunately, even a slight hint of pessimism from the Federal Reserve can send markets tumbling. However, there is little to be optimistic about. Jobs may be having anemic growth, but it’s still a piece of good news mentioned to try to allay other worries investors have about the global economy. And, there’s plenty to worry about. To keep the markets from unraveling further, a meeting of the Federal Open Market Committee issued no changes to monetary policy in a strong 9-1 vote in favor of holding steady.

Uncertainty Ahead

What could go wrong? Plenty! While the Federal Reserve is generally cautious, they are being even more so recently. They acknowledge that the unemployment rate is still high and that the global economy is seeing even more risks, particularly with what is happening in Europe. While signs of recovery continue to show up in the United States economy, all hell is breaking loose in the European Union. This chaos can affect the demand for oil and other commodities if Europe cannot resolve its debt crisis. This will impact all other markets that do business with the European Union, and the United States is a big trading partner.

Stabilizing Fears

While the Federal Reserve is in the business of setting monetary policy, it often finds itself also in charge of allaying investor fears. This tight rope it must walk means that it can’t issue too many decisions to prop up an economy, especially if it doesn’t need it. Investors read these moves as a signal that the market is in decline and end up pulling out their money prematurely, causing more problems for the Federal Reserve. For now, the Federal Reserve promises to keep interest rates at record lows to spur lending and economic activity up until mid-2013.

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Western businesses may soon be dealing with a new man-made threat to their operations: protests. The Occupy Wall Street (OWS) protests are adopting new strategies to gain attention and re-energize their movement by attempting to block western ports. Ports are usually manned by unions and some unions are supporting the protests while others are not. Either way, if the OWS protesters succeed, businesses will have delays and obstacles in doing business this Monday, when multiple, simultaneous, protests are scheduled up and down the west coast ports. Read the rest of this entry »

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November may be an early Christmas present for automakers. Sales have shown strong signs of recovery since the recession began two years ago, rising 14 percent in November. Read the rest of this entry »

Businesses couldn’t ask for a better Christmas present, and it came only a day after Thanksgiving. Early store openings and heavily discounted promotions created a shopping frenzy that beat last year’s record. Read the rest of this entry »

Halloween is long gone, but dress up as a super committee and you can still have a chance at spooking others. Hopes pinned on the committee to be able to find some solutions to $15 trillion of U.S. debt came crashing down this Monday when the committee conceded defeat. Not soon afterwards the stock market plunged as investors worried if this was another symptom of a “do nothing” Congress that would rather see the country burn than to risk making a move that can be used by enemies in the 2012 elections. Mounting fears over the Eurozone also contributed to the drop in the stock market. Read the rest of this entry »

Christmas is the season of hope and this year’s fourth quarter reports are also putting businesses in a merry mood. Despite what is going on in Europe, the United States economy is in recovery. While no one is calling it a spectacular recovery, the data points to continued and steady growth. That positive perception is mounting amongst American businesses as report after report shows better news this year. Two specific reports recently released also indicate that consumers are becoming more optimistic and manufacturing, at least in the state of New York, is increasing. Read the rest of this entry »

Technology stocks have a long way to recover since their glory days, so it’s a huge surprise to find out Warren Buffett is taking a giant bite out of IBM. The investing genius typically avoids any companies that have to do with technology, politely suggesting he doesn’t understand them enough to invest in them. However, most people believe that Buffett simply doesn’t like technology stocks. That’s why Buffett’s purchase of $11 billion of IBM stock is such a shocker.

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It’s not just the water levels rising in Thailand, more and more Americans are finding themselves underwater as the housing market continues to sort itself out. Those owners that owe more on their homes than they are worth are known as holding “underwater” mortgages and that percentage seems to continue to rise as more houses enter the foreclosure process. In 2010, only about 23 percent of homes were estimated to be underwater. Now, that estimate appears to be nearing 30 percent of homes.

Personal Factors Affecting the Home Ownership Market

Homeownership rates have been declining as the perception of the experience of owning a home and its value has changed, also. In the past, homeownership has been viewed as a main ingredient of the American Dream. However, recent drops in values which caused homebuyers to suffer equity losses have impacted that perception heavily. Many homeowners who are underwater cannot refinance, sell, and sometimes can’t afford their mortgage payments either as they lose jobs. Instead of an economic boon, they are suffering economic hardship due to their home purchase. They then opt for a strategic default by allowing a foreclosure to take place so that they can unload a depreciating asset. In recent surveys on whether homeownership is still a part of the American dream, only 52 percent of Americans agreed. The rest saw it more of an American nightmare.

Economic Environment Bad for Housing

The unemployment rate has also impacted the homeownership market by providing fewer qualified buyers and impacting the income of those already holding mortgages. With an unemployment rate in the double digits in some states, and averaging at 9 percent, people are either unwilling to buy new houses or more willing to let go of houses that may never recover their equity. In some cities that had previously experienced a boom in home sale prices, those same cities, like Phoenix and Tampa, now have over 50 percent of homes underwater.

Some Good News

Despite all this, other surveys do indicate that homeownership will remain a part of the American dream. An online real estate portal, Trulia, did a survey and found that 70 percent of respondents still believe homeownership to be an integral part of the American dream. The rate of foreclosures is falling and many experts predict that home values are set to bottom out by 2012. However, it will take more than two years to clear out the inventory of foreclosed homes after that happens. Still, for the 23 percent of homeowners who are waiting for the market to improve to sell, that is good news. Also, the length of time a foreclosed home takes to go to market is an issue that may continue to impact how many low-priced foreclosed homes are on the market at any one time. As the economic indicators continue to improve, with a strengthening business sector, unemployment should eventually drop more. While the value of a home may never be perceived to be as stable as it once was, and people are now aware that prices fall as well as rise, homeownership continues to be a part of the American dream that is hard to let go of for good.