The Housing Bubble

October 5, 2012, 3:01 PM

Report: Shadow Inventory Looms Over New York, New Jersey
By Nick Timiraos

This summer, we looked at whether the much-ballyhooed “shadow inventory” of potential foreclosures would materialize.

New data from researchers at the New York Federal Reserve Bank provide some valuable insights. Their answer shows that bank-owned foreclosures are set to rise in the Northeast, particularly in New York and New Jersey.

Of course, the supply of bank-owned foreclosures depends largely on how quickly banks move loans that are already in foreclosure through the repossession process.

Researchers looked at three different scenarios for how long that will take. Right now, foreclosures take around two years on average, though that varies heavily by state, and that is up from around one year at the end of 2008.

The first scenario examines what happens to the supply of bank-owned inventory if foreclosure timelines lengthen at their current pace. The second looks at what would happen if timelines stabilize, while the third looks at what would happen if banks and courts quickly accelerated foreclosures.
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So I’ve been reading the blog from Japan the last 2 weeks. The ads are all Japanese stuff. I was amused to see an ad for realestate.co.jp and the headline for the ad was “Invest in Real Estate, High Returns, Low Risk!” Just gotta love it! By the way, thanks for keeping it entertaining, I’ve been babysitting for the grandson and the blog is my main grown up fun. Oops, gotta run, missing Kung Fu Panda, again!

I’ve been hammering on judicial/non-judicial states, and non-judicial states that begin to look judicial based on laws passed to slow things down.

I’ve also noted that if any of the judicial states allow foreclosures to happen faster, prices will get crushed.

My poster child for the third category is Nevada.

Well, I heard a pretty well-founded rumor yesterday that the wheels are in motion behind the scenes to repeal the law that turned Nevada quasi-judicial in the end of 2011. If the rumor is right, the repeal will happen next year.

If the law is repealed, there will be more distress hitting the market faster, and my guess would be that values are negatively impacted.

Obama’s November Surprise : The Federal Housing Administration is running out of money
National Review | 10/04/2012 | Dam Murphy

With the presidential race entering the homestretch, most of the political world is wondering: Will there be an “October surprise”? But this year the real surprise may come in November, when the American people learn about the need for a taxpayer-funded bailout of the Federal Housing Administration (FHA).

The FHA guarantees mortgages on loans made by FHA-approved lenders throughout the United States and insures mortgages on single-family homes. Traditionally, it has participated in a fairly small segment of the overall mortgage market. In 2006, the FHA’s market share was just 5 percent. But as credit availability tightened and underwriting standards became more exacting, the FHA’s share of the market exploded to 30 percent of all new mortgage loans. Why is this significant to taxpayers? Unlike the case with conventional loans, when an FHA borrower defaults on his mortgage, the American taxpayers have insured 100 percent of the value of the loan and will be forced to cover any losses on it.

The FHA’s increased market share has not been a good thing for taxpayers. One-sixth of all FHA loans were delinquent as of August 2012. This translates to over 1.2 million borrowers who have missed at least one payment. Even more ominously, 58 percent of the delinquent loans were “seriously delinquent,” which means that almost 10 percent of all FHA borrowers had missed three consecutive months of payments or are now in foreclosure.

These and other facts undermine reports that the housing market has finally turned a corner. Claims on defaulted single-family loans have been steadily rising over the past four quarters. What’s more, the FHA’s insurance fund paid $5.3 billion in claims in the third quarter of fiscal year 2012. As a result, the FHA’s cash flow has turned negative. Remember, you, the taxpayers, are ultimately the FHA’s insurance fund. You paid out $5.3 billion in claims this quarter, and you now have a negative cash flow. You and your housing fund are broke, and no one even bothered to tell you.

According to an estimate from the American Enterprise Institute, the FHA’s capital shortfall is $46 billion to $65 billion under its legally mandated 2 percent minimum capital requirements. Without a cash infusion, it will not be able to pay future claims as they come due. Consequently, the FHA will have to go hat in hand to Congress and ultimately the American taxpayers.

Good article on all the new taxes coming in a few months.

Talk about a time bomb about ready to go off.

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Housing and the Three Waves of the Tax Tsunami – The Biggest Increase in Taxes in American History
Confounded Interest | 09/23/2012

There has been numerous headwinds to a housing (and commercial real estate) recovery. One is doggedly slow economic growth. Another is doggedly high unemployment rates. But there is another headwind that is not talked about for housing and real estate in general: taxmageddon or the upcoming single largest tax increase in American history.

Simply put, housing consumption will be reduced in Federal taxes increase. But this is occurring just as housing is beginning to stabilize in many parts of the country. This will put downward pressure on home prices and new construction.

First Wave of Tax Tsunami: Expiration of 2001 and 2003 Tax Relief

Personal income tax rates will rise on January 1, 2013. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which the majority of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates. The full list of marginal rate hikes is below:

-The 10% bracket rises to a new and expanded 15%
-The 25% bracket rises to 28%
-The 28% bracket rises to 31%
-The 33% bracket rises to 36%
-The 35% bracket rises to 39.6%

Second Wave of Tax Tsunami: Obamacare Tax Hikes

There are twenty new or higher taxes in Obamacare. Some have already gone into effect (the tanning tax, the medicine cabinet tax, the HSA withdrawal tax, W-2 health insurance reporting, and the “economic substance doctrine”). Several more will go into effect on January 1, 2013. They include:

Third Wave of Tax Tsunami: The Alternative Minimum Tax and Employer Tax Hikes

When Americans prepare to file their tax returns in January of 2013, they’ll be in for a nasty surprise—the AMT won’t be held harmless, and many tax relief provisions will have expired. These tax increases will be in force for BOTH 2012 and 2013. The major items include:

The AMT will ensnare over 31 million families, up from 4 million last year. According to the left-leaning Tax Policy Center, Congress’ failure to index the AMT will lead to an explosion of AMT taxpaying families—rising from 4 million last year to 31 million. These families will have to calculate their tax burdens twice, and pay taxes at the higher level. The AMT was created in 1969 to ensnare a handful of taxpayers.

Between the expiration of the Bush tax cuts and the implementation of Obamacare taxes, American households will have LESS to spend on consumption and savings, and that includes housing. We can safely say that housing consumption will not increase when this tsunami hits.

OT: I happened across the following about a month ago, and find myself returning to it rather frequently. Affecting to say the least. Thought that several people here might like to see it as well:

http://www.youtube.com/watch?v=KKiBTSOWVZA

Value is just another word for nothing more to lose ..he he .

Here is my question:

If Dem also do what Repub do as a party as we saw in Obama’s 1st term, I think we as a country are screwed. What choice do the citizens really have? I don’t see how the parties differentaite at this point. Especially after the forst debate where Obama agreed to most of ROmneys stuff on economy and Soc Sec.

Are we really doomed as a country as we have sold our souls to the people who have information and are connected to the powerful.

Question:

Would the RE bubble around the world ever deflate? I don’t see them bursting in China, Canada, Australia, India, Singapore, HK and the list goes on and on.

Would annother 4 years of Obama promote their bubbles further and also try to reinflate ours here.

Very depressing as reality never comes to picture and we’ll have to deal with 4 more years of nonsense prices. World prices affect me because I hate to see people in Asia and India who just buy and wake up after a month to see there property has increased by 20%. Most people are using loans and Governments are using printed money to keep it up.

I also want easy money unlike others around the world. Indians got a 14% average pay raise this year. I haven’t seen a single dollar go up in my salry in the past 6 years. Has USA really lost it? We have inflation too.

And whatever you do, DO NOT buy housing right now.

The video, which went viral in Greece last month, shows about 40 burly men, led by Giorgos Germenis, a politician with the right-wing Golden Dawn party, marching through a night market in the town of Rafina demanding that dark-skinned merchants show permits.

Some do, and they are left alone. But the action quickly picks up as the men, wearing black T-shirts with the party’s name, destroy a stall with clubs and scatter the merchandise.

”We saw a few illegal immigrants selling their wares,” Germenis says in the video. ”We did what Golden Dawn has to do. And now we’re going to church to pay our respects to the Madonna.”

Read more: http://www.smh.com.au/world/greeces-dawn-of-darkness-20121006-275w1.html#ixzz28cjvRMvW

Everybody knows that one of my big premises is that we have been taken over by a big huge monster called the Miltary/Industrial Complex which includes the Banks and Wall Street and the elite . The Politicians are making decision that serve their needs and profit margins and Globalism is their playground ,

The problem is that if those entities are the” Masters” to this degree , Main street America is left in the dust and more welfare is needed rather than less and unemployment and low paying jobs and less benefits reduce the cash flow and revenue in this Country .

In addition, if prices are based on price fixing monopolies,or bubbles created ,or Fed policies , outsourcing rather than on wages/benefits of the majority population,than the Majority population is just reduced to being at the mercy of these forces . Suggestions of Austerity and giving up as well as reduction of share given by these powerful Entities is designed to serve the Miltary/Global Industrial complex ,not the majority population . This is the main factor that is taking away the freedoms and mobility of people because it becomes a stacked and rigged deck ,rather than a concept of Big Government
verses little Government being the culprit . The mindset of these Powerful forces is that Government is to serve them and if big goverment increases their profit margins in terms of Government paying for expenses that benefits them ,than fine ,just don’t ask more of them .

A example : Private medical Insurance Companies didn’t want to
give insurance to older people at a reasonable rate ,so Government had to step in and create Medicare at the expense of Government . This allowed the profit takers to increase their profits by putting the higher claim potentials on the Government ,while they took the gravy
while they increasingly started to get rid of people with pre-existing conditions . So ,this is a perfect example of how Insurance Companies
put risk on the Government while they just wanted the greater
profits .So Medicare was a loss supplement to the Insurance Companies so they had more profit .Big Pharma grew as a result of the cash cow of Medicare , and insurance profits went higher .

Another example is all the Government programs that stimulate business ,but Government ends of with the ill effects of that stimulus
and mal-investment . Government bails out the folly of the greedy
Bankers and Wall Street and their stupid Ponzi schemes and casino games based on a notion that the TBTF would fail ,and we can’t have that .But we have TBTF powerful Corporations these days ,not only Banks and Investment firms . So Government is used as a vehicle for malinvestment ,or socialize the losses in whatever form that takes .

Its clear those entities and business Government wants to shore up and we forget how much money has gone to off set loss ,and how much Justice was denied and law changed or adjusted to bail out the Culprits . Millions of bad paper was dumped on Freddie and Fannie
and our whole economy was contorted by money printing and low interest rates to rescue the BIG MONEY SCHEMES .

It’s almost laughable that the PR machine is suggesting anything that
puts the loss on the back of the people ,and Austerity is something
that the people suffer ,not the BIG GUYS and the systems that are enriching them. The evidence is where the wealth is going .

And now when money is tight and tax revenue is low ,its the Government and the people who are to pay ,certainly not Big Business because they are entitled to their profits that end up in their pockets .if Government can’t pay ,than take it out of the hide of the people and raise their taxes or leave them out in the cold, enrich them only .

So you have guys like Romney in essence suggesting that giving Business less regulation and power and benefits and tax relief
is the pathway to prosperty and this will create 12 million high paying jobs ,while he wants to maintain a high military budget and take away peoples entitlements and drop social programs because the 47% are bums . As if the increase in food stamps isn’t due to the loss of jobs ,or wages that support the cost of living .

The evidence show that the Powers that rule have gutted the job and
manufacturing base in the USA ,they ruined the financal markets by their fraudulent lending schemes and required bails out in the trillions,that the taxes are suppose to pay for ,and they have reduced wages and benefits for the majority by using Global low wages as
the leverage ,while they maintain faulty trade balances and tariffs .

They would like you to believe that those darn worker people are
flakes and to demanding and how dare they take anything but what
they want to give them ,which is little and toxic . They don’t care if people have health insurance ,jobs ,or social nets ,that doesn’t benefit them in their minds ,in spite of the people being the consumers of products . They just want to raise the price of products and how people get the money is their problem .

It all about rigged decks for greater profit margins for them and less power or Government funds directed to the people ,unless it benefits them .

Money is power and the workers getting more isn’t their gameplan .

A Government for the Corporations and by the Corporations is what is taking the power of the people away ,and Politic today is the lobby system serving the rich and powerful while they BS the people .

So attacking BIG BIRD as being the Culprit is just part of the never ending attempt to keep the real talking points not being talked about .

Computer question, folks. My computer has a new version of Java that it keeps wanting to install. Polly said something about a version of Java that might be virus-laden, so I’ve been refusing the install for a couple weeks. My internet has been pausing a bit and I wonder if that’s because it needs the Java update. How do I know if the version of Java I have is safe, and should I install it?

At least the sad news about declining San Diego incomes is offset by the happy news that San Diego real estate is going up again.

P.S. Our family’s income easily dropped by over 11% since the onset of the Great Recession, in nominal terms alone, and worse in real terms (e.g. factoring in a huge increase in gasoline prices and other essentials), as free lance opportunities which were readily available to me in the mid-2000s have dried up. Luckily we’ve never lived paycheck-to-paycheck, and didn’t make the mistake of buying a home before the housing bubble popped.

INCOMES DROP ACROSS MOST INDUSTRIES
Wage cuts, higher benefit premiums, lower pay for new workers contribute to fall in county
Written by Elizabeth Aguilera
12:01 a.m., Oct. 7, 2012
Updated 11:34 p.m. , Oct. 5, 2012

Workers’ inflation-adjusted earnings in most of the county’s largest industries were lower last year than in 2007, and the sectors that did not suffer declines saw only modest growth, according to the Center on Policy Initiatives in San Diego.

These findings among the region’s 15 biggest industries reflect the continued effects of the Great Recession and the slow economic recovery since then.

In analyzing U.S. Census Bureau data from the 2011 American Community Survey, the center also said lagging earnings contributed to the county’s 3 percent decline in median household income from 2010 through last year. The drop from 2007 through 2011 was 11.1 percent.
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Is the point of a short sale to give the lender the opportunity to cherry-pick the bid distribution?

Why not just require that all homes for sale be listed on the MLS, instead of legally allowing lenders to price discriminate?

SHORT SALES ON THE MOVE
Lenders and Freddie Mac offering expedited relief to distressed homeowners

Photo of
Written by Lily Leung
12:01 a.m., Oct. 7, 2012
Updated 11:16 p.m. , Oct. 5, 2012

San Diego County’s level of housing distress took a pivotal turn this year. Short sales, once rare deals in the real estate world, now make up a bigger share of the residential market compared with foreclosed homes that have been resold.

Short sales allow homeowners who can’t afford their mortgages to sell their homes for less than what they still owe, as long as the lender says OK. One in five homes resold in the county were short sales, based on August numbers from local real estate tracker DataQuick. Compare that with single-digit percentages seen while the housing bubble began to percolate in 2007.

Short sales are expected to become even more common and easier to close as Freddie Mac, which owns or guarantees a sizable chunk of mortgages in California, will make it easier for borrowers to complete them starting next month. Borrowers will see that the process is considerably shorter and that it will leave less of a financial black mark on their credit histories.

Already boosting the number of short sales is a $25 billion mortgage deal between the nation’s biggest banks and 49 states that settled foreclosure abuse allegations and was signed earlier this year. The agreement essentially forces banks to do more short sales and provide relief to borrowers on expedited terms. Some banks are even offering cash as incentives to get more people to short sell.

“Banks are really motivated to do short sales,” said Matt Battiata, who owns Del Mar-based Battiata Real Estate. “… Banks have decided and learned over the last several years that short sales are a much better way to mitigate loss.”

The end result appears to be good for the housing market.

The increase in short sales means a more dynamic real estate market, fewer losses for banks and increased chances that short sellers could buy homes again after a shorter hiatus.
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KENNETH HARNEY NATION’S HOUSING
STAKES HIGH IN LAME-DUCK CONGRESSIONAL SESSION
By Union-Tribune
12:01 a.m., Oct. 7, 2012
Updated 8:22 p.m. , Oct. 5, 2012

Though the news spotlight has been on the presidential debates and the Nov. 6 elections, a more pressing personal issue for large numbers of homeowners across the country involves the lame-duck congressional session scheduled to begin Nov. 13.

Along with the federal budget, billions in tax increases, draconian spending cuts and efforts to avoid the “fiscal cliff” looming Dec. 31, the lame-duck session is expected to answer what’s estimated to be a multibillion-dollar question for housing: Will Congress renew the mortgage debt forgiveness tax provisions for owners whose mortgage lenders agree to write off portions of their debt, either as part of loan modifications, foreclosures, short sales or deeds-in-lieu of foreclosure? Without an extension, borrowers who receive reductions in principal next year would be hit with federal income taxes at their regular marginal rates on the amounts forgiven.

The lame-duck session also will have to deal with a slew of other real estate-related issues including write-offs for mortgage insurance premiums, tax benefits for homeowners who install energy-saving improvements, tax credits for builders of energy-efficient new houses, and extension of current relief for middle-income taxpayers from the alternative minimum tax (AMT), among others.

While President Obama, Republican challenger Mitt Romney and most members of Congress have been campaigning, staffs of key House and Senate tax and finance committees — along with hordes of lobbyists — have been working out game plans for the lame-duck session.

One key piece of strategy: Could the Family and Business Tax Cut Certainty Act of 2012 — which passed the Senate Finance Committee in August and includes mortgage forgiveness relief and other housing-related tax extensions along with AMT relief, research and development tax credits and dozens of other targeted tax benefits — be treated as a stand-alone bill? If not, there’s a strong risk of it getting caught up in the much larger partisan fights over spending, the federal debt ceiling and the whole fiscal cliff debate.
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SAN DIEGO GAS PRICES BREAK RECORD REFINERY WOES ADD TO PAIN AT GAS PUMP
Written by Jonathan Horn
12:01 a.m., Oct. 7, 2012
Updated 7:23 p.m. , Oct. 6, 2012

There has never been this much pain at the pump.

Gas prices in San Diego County reached a record high Saturday, at $4.674 for a gallon of regular fuel, according to the AAA Daily Fuel Gauge Report.

At some stations, a gallon of gas costs more than $5. The previous record was $4.63 on June 19, 2008.

Gas prices jumped quickly during the week — including 19 cents overnight from Thursday to Friday — after Exxon Mobil’s Torrance refinery lost production because of a power outage. That outage was on top of other refinery problems in the state. Those events earlier in the week caused a spike in an already volatile market.

And it’s not going to let up just yet. Prices are expected to rise over the next few days even though the Torrance refinery has resumed operations. Relief could come next week, when prices are expected to stabilize.
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This proposal makes a hell of a lot more sense than the current special tax deduction for mortgage interest. If you want to provide Americans with a tax break, why not also give them the freedom to choose how to spend it?

The folly of dumping so much federal money into housing should be obvious to everyone by now; glad at least one of the two candidates is moving away from the policies which led to the epic housing crash.

Mitt Romney suggests cutting mortgage interest deduction on eve of presidential debate
Published: October 2, 2012 7:16 PM
By THE ASSOCIATED PRESS
Republican presidential candidate and former Massachusetts Gov. Mitt Romney, accompanied by Sen. Rob Portman, R-Ohio, shakes hands with a worker as he makes an unscheduled stop at a Chipotle restaurant in Denver. (Oct. 2, 2012)

DENVER - Offering deficit-cutting ideas before his first debate with President Barack Obama, Mitt Romney says he might be willing to reduce income tax deductions used by millions of families for home mortgage interest and health care costs.

He suggested the changes could be part of a plan that includes a 20 percent cut in tax rates across the board, continuation of upper income tax cuts that Obama wants to end and a comprehensive tax overhaul plan that the Republican presidential contender has so far declined to flesh out in detail. Romney says his overall plans would invigorate the slowly recovering U.S. economy.

Both Romney and Obama spent their time mostly in private on Tuesday, preparing for the debate, the president in Henderson, Nev., near Las Vegas, Romney already in Denver where the faceoff will take place Wednesday at 9 p.m. EDT. Neither held public campaign events, but Obama took a break from preparation to visit nearby Hoover Dam, and Romney picked up lunch at a Chipotle Mexican Grill near his hotel.

In an interview Monday night with Denver TV station KDVR, Romney said, “As an option you could say everybody’s going to get up to a $17,000 deduction. And you could use your charitable deduction, your home mortgage deduction, or others — your health care deduction, and you can fill that bucket, if you will, that $17,000 bucket that way. And higher income people might have a lower number.”
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Realtors are Psychics

Europe Seeks to Contain Spanish Troubles as Finance Chiefs Meet
By Patrick Donahue - Oct 7, 2012 3:01 PM PT

European officials will move to prevent Spain from dragging the single currency into a new round of convulsions this week as a series of high-level meetings aim to ease the three-year-old European debt crisis.

“It feels as if we are in for a month or so of Spanish trouble,” Erik Nielsen, London-based chief global economist at UniCredit SpA (UCG), wrote in a note yesterday. Nielsen cited the risk that Spain will wait too long to request financial assistance and that a rescue package will be badly designed.

A month after European Central Bank President Mario Draghi unveiled a plan to gain the upper hand through central-bank bond purchases, handing the burden of crisis resolution over to European governments, leaders have yet to agree on a blueprint for rescue conditions and centralized bank supervision.

Finance ministers from the 17-member euro area will discuss issues including Spain at 5 p.m. in Luxembourg; ministers from all 27 nations in the European Union will meet the next day. EU leaders gather for a summit in Brussels the following week on Oct. 18-19.
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With the Fed and QE3, Wall Street investors can rest assured: The stock market will always go up from here, no matter how terrible the earnings picture turns out.

ft dot com
October 7, 2012 5:03 pm
‘Worst US quarterly earnings since 2009’
By Anora Mahmudova and Michael Mackenzie in New York

The slowdown in the global economy and anaemic US recovery is expected to result in one of the worst US quarterly earnings seasons since late 2009.

Analysts expect earnings for the period ended September to decline, the first negative result after 11 consecutive quarters of gains.

Energy and materials companies are tipped to lead the downturn with the financial sector set to be one of the few bright spots.

Wall Street analysts expect third-quarter earnings per share for S&P 500 companies will fall 2.7 per cent versus the same quarter a year ago, according to FactSet. Just three months ago analysts had forecast growth of 1.9 per cent.

In the past three months, warnings from large companies about reduced full-year profits due to global economic weakness fuelled this pessimistic view.

FedEx and UPS, often seen as barometers for world economic health, cut their full-year guidance during their last earnings releases, citing the slowdown in global trade.

In August, talking to the Financial Times, the chief executive of Caterpillar, bellwether of the industrial economy, warned of the greater uncertainty about global growth, predicting it could take another five years before Europe’s economy begins to grow.

Jeff Kleintop, chief market strategist at LPL Financial, said: “We expect corporate profits will be negative and revenues soft, as the global slowdown and below average economic growth in the US has affected companies.”

The earnings season starts with Alcoa reporting on Tuesday, followed by JPMorgan and Wells Fargo on Friday.

However, downbeat earnings expectations are yet to weigh on the broad market with the S&P 500 up more than 16 per cent so far this year. Stock prices are being supported by the Federal Reserve buying large amounts of bonds, which lowers interest rates and boosts the attractiveness of riskier assets such as equities.

“If we see that the markets do not correct even after earnings disappoint and guidance gets worse, then it will be clear that fundamentals have given way to the Fed,” said Quincy Krosby, market strategist at Prudential Financial.
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Bloomberg News
Japan’s China Row May Spur GDP Fall This Quarter
By Andy Sharp on October 07, 2012

Japan’s territorial spat with China may cause the Japanese economy to contract this quarter and hasten a current account slide as exports decline and Chinese tourism to Japan drops off, according to a JPMorgan report.

The dispute will knock 0.8 percentage point off Japan’s gross domestic product in the October-December period, JPMorgan Securities Japan Co. economists Masaaki Kanno and Masamichi Adachi wrote in an e-mailed note yesterday. They now estimate fourth-quarter GDP will contract 0.8 percent from the previous quarter, compared with a previous estimate of no growth.

The squabble over islands claimed by Asia’s two largest economies imperils a $340 billion trade relationship ahead of China’s power transition and a possible general election in Japan this year. Carmakers are hardest hit, with Mazda Motor Corp. (7261) deliveries in China last month falling 35 percent.

“As its global role has increased, China has become much more important in Japan’s international trade,” Kanno and Adachi wrote. “While there remains a lot of uncertainty ahead and the risk of the dispute escalating cannot be ruled out, we assume that it will diminish in two quarters under the new governments in both countries.”

The worst diplomatic crisis between the two countries since 2005 may also accelerate a deterioration in Japan’s current account surplus, the JPMorgan economists said, predicting the excess could disappear before the end of 2014. This compares with its estimate in January that the nation would begin posting a deficit in the first quarter of 2015.

Exports Fall

Japan’s exports fell 5.8 percent in August from a year earlier, the third straight monthly decline, with shipments to China, its largest trading partner, dropping 9.9 percent and those to the European Union slumping 22.9 percent.
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Global DOWn

Oct. 7, 2012, 8:53 p.m. EDT
Asia stocks slip despite U.S. jobs data
By Sarah Turner, MarketWatch

SYDNEY (MarketWatch) — Asian stocks sagged early Monday, with commodity-related firms losing ground after a mixed finish on Wall Street Friday despite an upbeat U.S. nonfarm jobs report.

South Korea’s Kospi (KR:SEU -0.73%) slipped 0.4%, while Australia’s S&P/ASX 200 Index (AU:XJO -0.31%) traded down 0.1%.

Japanese markets were closed for a holiday on Monday, but mainland Chinese markets were set to reopen following a week-long closure for the Golden Week holidays.

Wall Street ended mixed on Friday after an early rally related to jobs data, which showed that 114,000 jobs were added to the U.S. economy in September and the jobless rate fell to 7.8% gave way to caution ahead of the start of earnings season.

Gold and other metals settled lower in New York on Friday after the U.S. jobs data dented expectations of more monetary easing measures. Read more on metals.

“Friday’s unexpectedly large fall in the U.S. unemployment rate — to a three-and-a-half year low of 7.8% — rattled Treasuries and gold, while providing a further fillip to the prices of riskier assets,” noted strategists at Capital Economics.
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Germany says Merkel visit to Athens does not mean aid for Greece
BERLIN | Sun Oct 7, 2012 1:25pm EDT

(Reuters) - German Finance Minister Wolfgang Schaeuble said on Sunday that Chancellor Angela Merkel’s trip to Greece this week did not mean the debt-stricken country would receive the next tranche of aid from its bailout.

“The chancellor will not discuss with Greece a matter which the troika must report on first,” Schaeuble told broadcaster ZDF in an interview, referring to the “troika” of the International Monetary Fund, European Commission and European Central Bank.

Greece is stuck in tough negotiations with “troika” inspectors over a new wave of budget cuts for the next two years, a condition for getting an installment of the 130 billion euro bailout that is keeping the country afloat.

“Greece must fulfill its obligations for the next tranche to be paid,” said Schaeuble.
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