Independent UK: Wall Street fears the worst as US housing sales continue to fall

[marmar]

Wall Street fears the worst as US housing sales continue to fall

By Simon Evans
Sunday, 24 August 2008



Wall Street will this week brace itself for further disappointing figures from the US housing arena when numbers for sales of existing and new homes are released on Monday and Tuesday.

After economic data last week showing the UK on the brink of recession, attention will be on the US, with minutes from the Federal Reserve's interest rate-setting committee and GDP numbers also due to be released.

Worse than expected figures are likely to rein in the US dollar, which has soared against the pound recently. Economists predict that sales of new homes in the US will have once again fallen back in July to around 525,000, a further fall from June.

On Friday, the Federal Reserve chairman, Ben Bernanke, gave a much-needed fillip to Wall Street when he claimed that the threat of inflation in the world's biggest economy had receded. A combination of lower growth, lower oil and commodity prices and a strong dollar had, he said, all contributed to reducing the threat of spiralling prices.

His comments came as speculation grew that the US Treasury, led by the Treasury Secretary, Hank Paulson, is set to bail out the failing mortgage giants Freddie Mac and Fannie Mae, with a further package that most believe to be quasi-nationalisation. The investment guru Warren Buffett said "the game was now over", since the government's blank cheque had encouraged riskier lending, meaning that investors in the groups were likely to lose all their money. .......(more)

The complete piece is at: http://www.independent.co.uk/news/business/news/wall-street-fears-the-worst-as-us-housing-sales-continue-to-fall-906778.html

[msongs]

1. evidently Bernanke/Paulson/Bush/McCain do not do their own grocery shopping nt