Posts Tagged price
Retail gasoline prices match 2010 high
Posted by Tetyana Matychak in Budget on March 10th, 2010
Motorists are well down the road to higher pump prices as warmer weather and the driving season approaches.
Average retail gasoline prices, continuing a surge that started last month, have now matched their 2010 high on the way to prices that many analysts believe will top $3 per gallon this spring.
The nationwide average retail gasoline price rose 0.6 cents Monday to $2.753 per gallon, virtually identical to the high water mark of $2.7583 reached on Jan. 14, according to auto club AAA, Wright Express and Oil Price Information Service.
Prices have risen 9.2 cents in the last month and are now 80.6 cents higher than levels of a year ago.
The Energy Information Administration, which is among those predicting $3 gallon gas this spring, will release figures on nationwide retail gasoline prices later Monday. Read the rest of this entry »
Low Rates Needed for ‘Some Time’
Posted by Tetyana Matychak in Banks on March 9th, 2010
Federal Reserve Bank of Chicago President Charles Evans said low interest rates are likely to be needed “for some time” as high unemployment lingers and inflation stays below his goal.
“With the unemployment rate at 9.7 percent and inflation significantly under my benchmark for price stability, there is no conflict between our policy goals,” Evans said in the text of a speech in Arlington, Virginia. Weakness in the job market, including long-term unemployment, means that “This accommodation will likely be appropriate for some time.”
Fed Chairman Ben S. Bernanke said last month the U.S. economy is in a “nascent” recovery that still requires low interest rates to encourage demand by consumers and businesses once federal stimulus fades. At the same time, policy makers are winding down emergency programs and laying plans for an eventual reduction of the Fed’s balance sheet to prevent an increase in inflation as the economy recovers.
The U.S. unemployment rate held at 9.7 percent in February and payrolls dropped 36,000, less than forecast, a sign that the labor market may be stabilizing after a recession that has eliminated 8.4 million jobs. The economy expanded at a 5.9 percent annual pace in the fourth quarter, the fastest rate in six years, the Commerce Department reported last month. Read the rest of this entry »
For Landlords, the Numbers Are Starting to Look Better
Posted by Tetyana Matychak in Investing on March 5th, 2010
Home prices are falling, rents are tumbling, and apartment vacancies are rising. So why are thousands of small investors becoming landlords?
Because real-estate prices have fallen much faster than rents, the math of buying a rental has actually improved substantially in most parts of the country. Money invested in an apartment complex today typically generates annual returns of 7% to 8% right off the bat, up from less than 6% at the peak of the housing bubble in 2006.
If your property appreciates in value or rents rise, you could end up with double-digit annualized returns when you sell it. But higher returns usually come with higher risks. If you overpay for a rental property or you buy in the wrong market at the wrong time, you can lose a lot of money.
In general, landlords should pick communities where real-estate prices and rents appear to have nearly bottomed out, and jobs are stabilizing. Some of the best deals are in places like Fort Worth, Texas, or Columbus, Ohio, where prices never went wild. Markets like Las Vegas and Phoenix, both plagued by overbuilding, and Detroit, hurt by auto-industry woes, still look dicey.
But other markets like San Francisco or Chicago can still be attractive for landlords who find the right neighborhoods. Fred Bertucci, 50 years old, has been investing in small apartment properties in the Chicago suburbs since 1990. In August, he and his business partner, Kevin Moriarty, 54, bought a six-unit apartment house out of foreclosure for $280,000. It brings in about $25,000 per year in net operating income, he says, or about a 9% yield on the dollars invested. That’s up from roughly a 5% yield several years ago when prices were higher, he says. Read the rest of this entry »
Housing Prices Fall at Slower Pace
Posted by Tetyana Matychak in Budget on February 25th, 2010
Home prices kept falling, but at a slower rate, at the end of last year as the housing market continued to stabilize.
The national S&P/Case-Shiller home-price index declined 2.5% in the fourth quarter, compared with the same period a year earlier, according to a report released Tuesday. The slight drop is a clear improvement from earlier in the recession. In the fourth quarter of 2008, for example, home prices fell 18.2% from the same period in 2007.
“Overall, this report suggests that the recent positive momentum in the U.S. housing market is gaining further traction and underscores that home prices are continuing to stabilize,” Millan Mulraine, a TD Securities analyst, wrote in a note to clients. “As such, we may only be a few months away before we see a monthly gain in national home prices.”
The month-to-month change in home prices for a composite index of 20 housing markets that S&P/Case-Shiller tracks showed that home prices rose 0.3% in December from the prior month, adjusted for normal seasonal variation. That measure of home prices also rose 0.3% in November.Prices fell in just five of the 20 markets included in the survey, remained flat in one and rose in the other 14. Read the rest of this entry »
China vows to keep “hot money” out of property market
Posted by Tetyana Matychak in Investing on February 12th, 2010
China vowed on Sunday not to let foreign speculative investment affect the property market, the latest expression of official concern that real-estate prices are racing ahead too fast.
The directive from the State Council, China’s cabinet, will serve as a guideline for local authorities and ministries, including the People’s Bank of China and the China Banking Regulatory Commission, to work out detailed policies.
“Relevant departments must enhance monitoring of loans and cross-border investment to prevent illegal inflows of capital into the property market and to avoid the impact of overseas hot money on China’s real-estate market,” the cabinet said.
It said the central bank and banking regulator should step up oversight and “window guidance” of mortgage lending.
About one-sixth of China’s nearly 10 trillion yuan ($1.5 trillion) in new loans last year flowed into the property sector.
Concerned that a property bubble could stir social and economic instability, Beijing has vowed to combat overly fast price increases, although its moves to date, such as restricting sales tax exemptions, have been relatively mild. Read the rest of this entry »
Iran budgets for $60 price for crude oil
Posted by Tetyana Matychak in Trading Markets on January 29th, 2010
Iran planned next year’s budget based on an oil price of $60 per barrel, nearly double the price from the last year, the official news agency reported on Sunday, indicating rising optimism over energy prices.
Last year, the parliament approved a budget based on $37.5 per barrel for the fiscal year ending in March, reflecting the steep drop in prices that severly impacted the economy. About 80 percent of Iran’s foreign revenue comes from oil exports.
Earlier on Sunday President Mahmoud Ahmadinejad submitted the budget to the Iranian parliament for approval, saying more money would be allocated to agriculture, education and research, as well as to the poor.
He did not give the size of the budget only saying there was “nothing complicated or untransparent” in it.
Iran’s parliament speaker Ali Larijani said the amount would be revealed later, according to IRNA. The budget requires approval of the parliament and a constitutional watchdog. Read the rest of this entry »
China takes new steps to curb bank lending
Posted by Tetyana Matychak in Banks on January 15th, 2010
China took new steps Tuesday to control bank lending, ordering institutions to set aside more reserves in a move to avert a surge in credit that Beijing worries might fuel inflation or asset price bubbles.
China’s nascent rebound from the global crisis was fueled by a flood of lending by state-owned banks last year. Bankers cut lending under government orders toward the end of 2009 but regulators worry credit might rebound this year.
The move indicates Beijing is confident growth can be sustained and has shifted focus to preventing financial excesses and economic overheating. The government is forecasting growth of 8.3 percent for 2009, up from a low of 6.1 percent for the first quarter of the year.
The central bank raised the amount of reserves that banks must hold by 0.5 percent to 15 percent of their deposits. Also Tuesday, the bank raised interest rates paid on one-year bills for the first time since August to absorb money from the market and cool credit growth.
“This series of moves by the central bank provides a clear sign that policymakers are following through on their pledge to guide credit in order to pre-empt rising inflation and avoid asset price bubbles,”said Jing Ulrich, chairwoman of China equities for J.P. Morgan, in a report. Read the rest of this entry »
Surprise! The Fed says don’t blame the Fed
Posted by Tetyana Matychak in Budget on January 4th, 2010
The Pope is considered to be infallible. Apparently, those who hold the title of Federal Reserve chairman want to be viewed that way as well.
Fed chair Ben Bernanke defends the decision by his predecessor Alan Greenspan to keep interest rates super low following the 2001 recession, saying that the Fed’s monetary policies were not the cause of the housing bubble.
In a speech Sunday, Bernanke said that it was the availability of exotic loans that allowed people who really couldn’t afford a home to get a mortgage that was the culprit, not the fact that rates were at then-historic lows.
By absolving the Maestro of any blame for the credit binge that led to the Great Recession, Bernanke also appears to be sending a strong message to Fed critics and the financial markets as well.
Rates, which have been stuck near zero since December 2008, are likely to stay there for some time — and Bernanke may be suggesting that this won’t lead to a repeat of last decade’s sins. Read the rest of this entry »
US Dollar Likely to Continue Upward Swing This Week
Posted by Tetyana Matychak in Currency on December 21st, 2009
The dollar is likely to extend gains in the upcoming week, continuing to draw support from growing signs of a stable U.S. recovery as well as a Federal Reserve plan to wind down most of its emergency lending early next year.
Both factors have pushed the market’s U.S. interest rate expectations forward despite pronouncements from the Fed that it will keep interest rates low for an extended period.
The rate futures market Friday has priced in at least one quarter-point rate increase by the beginning of the second half next year. A few months ago, futures traders had factored in Fed tightening late in 2010.
“We see the U.S. economy continuing to recover and monetary policy settings starting to move back to normal,” said Nick Bennenbroek, head of FX strategy at Wells Fargo in New York.
“Although our economics team does not expect actual rate tightening to take place until late in 2010, the withdrawal of non-conventional measures could start tipping the scales in the dollar’s favor,” he added. Read the rest of this entry »
Nobel Laureate: How to Get Out of the Financial Crisis
Posted by Tetyana Matychak in Budget, Favourites on December 18th, 2009
The amount of bad news over the past weeks has been bewildering for many people in the world. Stock markets have plunged, banks have stopped lending to one another, and central bankers and treasury secretaries appear daily on television looking worried. Many economists have warned that we are facing the worst economic crisis the world has seen since 1929. The only good news is that oil prices have finally started to come down.
While these times are scary and strange for many Americans, a number of people in other countries feel a sense of deja vu. Asia went through a similar crisis in the late 1990s, and various other countries (including Argentina, Turkey, Mexico, Norway, Sweden, Indonesia and South Korea) have suffered through banking crises, stock-market collapses and credit crunches.
Capitalism may be the best economic system that man has come up with, but no one ever said it would create stability. In fact, over the past 30 years, market economies have faced more than 100 crises. That is why I and many other economists believe that government regulation and oversight are an essential part of a functioning market economy. Without them, there will continue to be frequent severe economic crises in different parts of the world. The market on its own is not enough. Government must play a role.
It’s good news that Treasury Secretary Henry Paulson seems to finally be coming around to the idea that the U.S. government needs to help recapitalize our banks and should receive stakes in the banks that it bails out. But more must be done to prevent the crisis from spreading around the world. Here’s what it will take. Read the rest of this entry »
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