Economic News

U.S. Mortgage Delinquencies, Foreclosures Rise to 29-Year High. According to the Mortgage Banker's Association, new foreclosures rose to a seasonally adjusted 0.99 percent of all U.S. home loans, the total inventroy of homes in foreclosure increased to 2.47 percent and the delinquency rate, loans with one or more payments overdue, grew to 6.35 percent.
Rates on 30-year mortgages edged up last week to the highest level since March as investors worried about inflation threats. Freddie Mac reported Thursday that 30-year fixed-rate mortgages averaged 6.09 percent, compared with 6.08 percent the previous week. It was the highest mark for 30-year mortgages in 12 weeks since averaging 6.13 percent the week of March 16.

U.S. Payrolls -49K, Unemployment Rate Climbs to 5.5%, after payrolls fell 28,000 in April and 88,000 in March. The unemployment rate, which is calculated using a separate survey of households, jumped 0.5 percentage point to 5.5%, its highest level since October 2004.
Real-Estate Woes of Banks Mount: Lenders Dumping Bad Loans at Discount; Regulators See Losses Continuing. Federal regulators warned Thursday that banking-industry turmoil would continue as financial institutions come to terms with piles of bad loans they made to finance the construction of homes and condominiums, which in turn could lead to billions of dollars in fresh losses.

Household Net Worth Fell 2.9% in 1Q08, the Most in 5 Years. According to our Federal Reserve, stock-market losses and falling home values in the first three months of this year led to the largest quarterly drop in the net wealth of American households since 2002.
Standard & Poor's said the number of entities at risk of having their ratings cut hit a new record of in May as a "material slowdown" in housing and consumer activity amid still-tightening lending conditions continues to deteriorate credit quality.
Mortgage applications in the U.S. last week dropped to the lowest level in six years, reflecting less refinancing as interest rates jumped.
ReconTrust, a unit of Countrywide, filed a notice of default on a $4.8 million Countrywide loan backed by Ed McMahon's home, who is $644,000 in arrears.


Goldman, the most profitable securities dealer, and Lehman, the top-ranked bond research firm in Institutional Investor's annual survey for eight years, bet the economy is too weak to spark runaway inflation and an increase in the Federal Reserve's target interest-rate for overnight loans between banks. Though futures traded on the Chicago Board of Trade show a 67 percent chance policy makers will boost the fed funds rate by year-end, they haven't started to raise borrowing costs with growth below an annualized 2 percent rate since 1980. The capital markets are underestimating how sluggish the economy is going to be. Any tightening priced into the fed funds futures market is premature at this stage of the game.
Fed Chairman Ben S. Bernanke said in an address June 4 at Harvard University in Cambridge, Massachusetts, that data showing the public expects price increases to accelerate is a ``significant concern'' for the central bank.

The case for an increase became weaker on June 6, as the Labor Department said that the unemployment rate surged to 5.5 percent in May from 5 percent in April. The gain was the biggest since February 1986. The economy is not performing at a rate that even remotely suggests they should raise interest rates along the lines that the markets are implying.

The Only way we will get oil under control is to raise Intrest Rates. Protect the dollar.