Tuesday, July 2, 2013

Wednesday July 3 Housing and Economic stories


The Michigan GOP Has Just Made It Easier For Scrappers To Steal From You - (www.mfi-miami.com) Since the Great Recession began in 2008, the Detroit metropolitan area has become a haven for scrap metal collectors.  These men and women or “scrappers” who are usually laid-off autoworkers, drug addicts, high school dropouts flock to Detroit’s industrial ruins and plethora of abandoned office buildings, schools and homes and to lay claim on everything made of metal as if it were the California Gold Rush of 1849. Things that were once considered off limits like religious or historical items are now up for grabs. Thieves have stolen church bells and in one case thieves even stole what they thought was a bronze Jesus from a crucifix at the Church of the Messiah which was actually plaster colored to look like aged bronze. Scrappers are stealing manhole covers and exhuming coffins to steal the jewelry and the metal coffins of the dead. The situation is so bad and competition so fierce that scrappers are now stealing A/C units, furnaces and hot water heaters from homes in the suburbs while people are at work.  Thieves are stealing catalytic converters from Cadillacs and the minivans driven by soccer moms in posh suburban communities like Bloomfield Hills and Rochester.

IMF denounces US fiscal policy - (www.ft.com) The International Monetary Fund gave a downbeat assessment of the world’s largest economy and denounced the tightening of US fiscal policy as “excessively rapid and ill-designed”. Summing up its annual Article 4 consultation with the US, the IMF forecast growth of just 1.9 per cent this year, followed by 2.7 per cent in 2014. It said that overly rapid tightening of fiscal policy this year – including tax rises and $85bn in across-the-board, sequestration cuts to public spending – will knock between 1.25 and 1.75 percentage points off growth this year. “The IMF’s advice is to slow down but hurry up: meaning slow the fiscal adjustment this year – which would help sustain growth and job creation – but hurry up with putting in place a medium-term road map to restore long-run fiscal sustainability,” said Christine Lagarde, IMF managing director. The IMF’s comments suggest that the US could have had growth above 3 per cent this year had it kept fiscal policy on hold, highlighting the damage done when Congress resolved the “fiscal cliff” at the turn of the year.

Yen’s Slump Failing to Stem Exodus of Factories From Japan - (www.bloomberg.com) Japanese Prime Minister Shinzo Abe promises that Abenomics will revive the nation’s industrial might. For Takumi Tanaka at auto-parts maker Uchida Co., times are worse than after the 2011 earthquake. Tanaka, managing director of a company founded in 1955, whose 94 employees supply Honda Motor Co. (7267) with parts molds, is contending with higher costs after a 17 percent drop in the yen in the past nine months pushed up the price of imported energy and metals. At the same time, he’s under pressure from clients to build factories near their overseas plants. “We see very little benefit” from Abenomics, Tanaka said in an interview in Miyagi Prefecture, where two of the company’s three factories are located, close to the center of the earthquake that caused Japan’s worst nuclear disaster. “Even today, we are being asked to build plants in Vietnam, Thailand and Indonesia. There is little relief that manufacturing can stay in Japan.”

Freddie Mac: 30-year mortgage rate rises to 3.98%, 14-month high - (www.latimes.com) Are 30-year fixed-rate mortgages with interest rates beginning with a “3” soon to become something found only in the history books? That prospect appeared more likely Thursday, as Freddie Mac reported that the average rate that lenders were offering for a 30-year loan this week was 3.98%. That was up from 3.91% last week and from a record low of 3.31% in November. As recently as early May, the typical rate was 3.35%. Not since Freddie Mac’s survey of April 5 last year, when the rate also was 3.98%, has the reading been so high. The 30-year rate fell below 4% for the first time in October 2011 and has remained mostly below that landmark ever since. 

In a Shift, Interest Rates Are Rising - (www.nytimes.com) It has been a reliable fact of life for investors, corporations and ordinary borrowers: interest rates, for the most part, keep heading lower. But all of that may be about to change. For prospective homeowners, the cost of mortgages has been going up in recent weeks. Governments are also facing the prospect of higher borrowing costs down the road, and they are projecting increases to their debt burdens. Savers with money in bank accounts, on the other hand, have the prospect of finally earning more than a pittance on their deposits. The interest rate charged by lenders, often cited as the single most important factor behind economic decisions, has been steadily going down for most of the time since the early 1980s, and has fallen to historical lows since the financial crisis. Over the last few months, though, investors and banks have been demanding higher payments for their loans, pushing up interest rates and bond yields.





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