Markets stable prior to release of economic data
The markets in Europe are stable prior to the release of US employment data expected this morning, according to the Associated Press. The Dow closed up on Thursday 183 points at 11,123. The positive momentum was due primarily to news that the ECB, European Central Bank, would provide unlimited loans to the region's lenders through 2013, to protect against a Greek default.
30 Year Mortgage hits lowest point ever
Freddie Mac is now offering a 3.94% rate on a 30 year mortgage and a 3.26% rate on 15 year fixed mortgages, according to the Associated Press. The National Board of Economic Research indicates this is the lowest amount that it has on record historically, such records going back to the 1950s. Homeownership has dropped the greatest amount in the last decade since the Great Depression. Despite the low rates, borrowers continue to have a harder time qualifying for the mortgages.
Royal Bank of Scotland may need recap from British government
Moody's downgraded the Royal Bank of Scotland two notches on Friday along with the downgrades of 12 other British banks, according to the Financial Times. The European authority may be re-running its stress tests and imposing the sovereign debt analysis onto the results of these tests. It would cause many banks across the Eurozone and the UK to readjust market values and thus their capital ratios.
Senate postpones vote on Chinese currency
The Senate has postponed a final vote on potential sanctions against China due to its currency practices. The sanctions would raise tariffs on Chinese goods if the currency remains undervalued. Last year, according to the Associated Press, the US had a $273 billion trade deficit with China. The Alliance for American Manufacturing says that a 28% appreciation of the yuan would create 2.25 million US jobs and reduce the trade deficit by $190.5 billion. China indicates any tariffs would violate the World Trade Organization rules and start a trade war. Congress blames a lack of diplomacy by the State Department for the problem.
Government blunders fail to bail out homeowners
In a perfect example of government incompetence, HUD failed to pay out more than $500 million to homeowners facing foreclosure because it couldn't start taking applications for assistance until more than a year after the initiation of the Emergency Homeowners Loan Program was announced. The Program, which provided interest free forgivable $50,000 loans to assist homeowners facing foreclosure due to unemployment or underemployment, ended on September 30 having paid out just $432 million of its $1 billion. USA Today indicates that the 5 states that administered their own programs were able to disburse all of their funds but the 27 states that used HUD to administer the program were affected by the fact that HUD did not even begin to take applications for the program until June of this year.