Market News Feed: Worst New Home Sales in 13 Years
MSNBC: New Home Sales Fall into Bottomless Market
While existing home sales climbed last month, new home sales dropped 2 percent, the slowest sales pace since 1995, says the U.S. Commerce Department: Median home prices dropped to $244,100, down 3 percent from last year’s levels. This news falls on the heels of a recent S&P announcement that home prices have dropped 11 percent in 20 key markets over the past year. New York University Economist Nouriel Roubini says that declining home prices are driving down home values and squashing hope for millions of people. ”Already today, 8 million houses have negative equity. If home prices fall another 10 percent as expected, we’re going to see 16 million people with negative equity. It’s a big problem.”
Bloomberg.com: Taxpayers Stuck with Fed’s Bail-out Tab?
Even as the White House promises it wouldn’t jeopardize public funds in a bailout, taxpayers likely will foot the bill for the billions of dollars the Fed is spending to calm recent financial crises. If the past is used as a future indicator, the Fed is likely to loose a hefty slice of its investment in Bear Sterns mortgage securities. Also, the Fed’s efforts to push Fannie Mae and Freddie Mac into taking on more mortgage bonds reduces reserves while foreclosures and defaults continue to soar. Senate Finance Committee Chairman Max Baucus, a Montana Democrat, and Charles Grassley of Iowa, the committee’s ranking Republican, have issued a March 28 deadline for JP Morgan and the Fed to describe the assets involved in the Bear Sterns transaction. “Americans are being asked to back a brand-new kind of transaction, to the tune of tens of billions of dollars,” says Bacus. “It’s the Finance Committee’s responsibility to pin down just how the government decided to front $30 billion in taxpayer dollars for the Bear Stearns deal, and to monitor the changing terms of the sale.”
Bloomberg.com: Housing Market Losses Imperil State Revenues
The U.S. Commerce Department reports that approximately 200,000 newly constructed single-family homes are vacant, a record high since the count began in 1973. Partially completed developments harm more than homeowners and businesses; rising foreclosures and falling property values are projected to slash tax revenues by more than $6.6 billion in 10 states, including New York, California and Florida, according to U.S. Conference of Mayors. About 370,000 new homes currently are on the market because people who had contracted to buy them bolted from the deals, finds New York-based CreditSights Inc. Meanwhile, the Commerce Department reports that an additional 216,000 homes are under construction.
Marketwatch: At Enron’s Final Wake, Citi Antes Up for its Role in Scandal, Fraud
Citibank has has been having a tough time. Entangled with tanking stocks, a global financial business with at least $18 billion in bad mortgages last quarter, more projected losses and calls for an operational break-up … another hard hit came this week. More than six years after Enron crashed amid massive scandal and fraud, Citibank today paid $1.66 billion in cash to settle the last remaining claim related to its role in the disaster. And that’s just part of the story ….
Tags: , Citi, Citibank, CreditSights Inc., democrat, Enron, fraud, mortgage securities, negative equity, New York University, republican, S&P, scandal, Senate Finance Committee, senator, U.S. Commerce Department, U.S. Conference of Mayors