Daily Digest

Daily Digest 2/9 - 'New Normal' In Housing Market, Copper Thieves Raiding Vacant Homes, Worldwide Food Prices Jump

Wednesday, February 9, 2011, 11:43 AM
  • Fed's Lockhart Says U.S. Inflation Still Too Low
  • Moody’s Says Debt Restructuring Risk Has Risen on Euro Periphery
  • Homeowners Face 'New Normal' In Housing Bust
  • City Needs Millions More To Raze Nuisance Housing
  • Arkansas Senate OKs Doubling Vehicle-title Fees
  • Gold Bars Run Short In Emirates As Price Retreats
  • Road Workers Furloughed as Pothole Problem Worsens, Report Says
  • Detroit Offers Cops Abandoned City Homes for $1,000
  • Vacant Homes Targeted By Copper Thieves
  • California Higher Education Leaders Warn Of Further Tuition Increases
  • Electric-Car Owners Might Face $100 State Fee
  • Sara Lee and J.M. Smucker Raising Prices
  • What To Make Of Rising Food Prices
  • Nigeria: Food Prices - Stakeholders Warn On Looming Hunger
  • Cost of Feeding World's Poor Leaps
  • India Cotton Seen Hitting Life High On Thin Supply
  • Kenya Coffee Hits New High At $1,022/bag
  • Iraqi Flour Prices Triple On Wheat Import Shortages
  • Netanyahu Calls Meeting On Price Hikes To Prevent Strike

Follow our steps to prepare for a world after peak oil, such as how to store & filter water

Economy

Fed's Lockhart Says U.S. Inflation Still Too Low

U.S. inflation is still below the central bank's comfort levels and price rises for individual goods or services does not signal broader price pressures are around the corner, a top Federal Reserve policymaker said on Tuesday.

Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said the central bank cannot address rises in the cost of living, but needs to ensure prices overall remain stable. Lockhart said he expects core inflation to rise gradually, to within the Fed's informal 2 percent target range by 2013.

Moody’s Says Debt Restructuring Risk Has Risen on Euro Periphery

The risk of debt restructuring in the euro region’s peripheral countries has increased in the past year, Dietmar Hornung of Moody’s Investors Service said.

“Our assessment for risks of restructuring has increased in the last 12 months,” Hornung, a Frankfurt-based analyst with Moody’s, told a conference in Budapest today. “At the end for a sovereign to default or not to default is the result of a cost- benefit analysis, whether it’s beneficial to default or to service the debt.”

Homeowners Face 'New Normal' In Housing Bust (California)

The median home price, $116,000, is down 68% from its peak in 2006. Three of five homeowners with a mortgage here owe more on their loans than their houses are worth, compared with about one in five nationally....In Los Banos, the grass is now cut in city parks every 15 days. It used to be cut weekly. Vacant houses dot nearly every neighborhood. New roads end in cul-de-sacs surrounded by vacant lots. A weather-beaten billboard announces a 35,000-square-foot retail center that is "coming soon" but never has. "This was, right here, all going to be industry," says Tommy Jones, Los Banos' former mayor, as he points to a goat pasture.

City Needs Millions More To Raze Nuisance Housing (Dayton)

The program money, which is expected to dry up after 2014, amounts to the demolition of only about 1,500 structures. Housing officials estimate they will need an additional $20 million to $30 million in funds — money the city does not have — to deal with the remaining vacant housing stock.

There are currently plans to demolish 500 of the 1,732 properties on the city’s nuisance list in 2011. So far this year, 27 residential structures have come down, along with four garages. The process to demolish a property can take a year or more and costs an average of $13,800.

Arkansas Senate OKs Doubling Vehicle-title Fees

The Senate voted 27-7 on Tuesday for the fee increase, which is expected to raise an additional $4.6 million for the pension system. The proposal would double car-title and title-replacement fees from $1 to $2 and would increase title-application fees from $4 to $8.

Republican Sen. Michael Lamoureux of Russellville says the fee increases are needed to keep the financially struggling pension system solvent.

Gold Bars Run Short In Emirates As Price Retreats

The dip in the price of gold spurred sales of the precious metal in the UAE last month, leading to shortages of small bars, retailers say. The gold spot price slipped from US$1,412.63 a troy ounce at the end of December to $1,314.82 on January 28.

That whetted the appetites of gold buyers, and sales of jewellery and bars in the UAE grew by as much as 25 per cent last month compared with January last year, said Tushar Patni, the owner of Ajanta Jewellers in Abu Dhabi.

Road Workers Furloughed as Pothole Problem Worsens, Report Says (Manhattan)

The time it takes the Department of Transportation to fix potholes has nearly tripled, from an average of 2.1 days to 6.1 days, since 2007 due in part to furloughs for the city's road repairers, the News said.

Roughly 600 road repairers are being forced to take a day off every two weeks during the first quarter of 2011, under a deal that is expected to save the department $1 million, according to the paper.

Follow our steps to prepare for a world after peak oil, such as how to store & filter water

Detroit Offers Cops Abandoned City Homes for $1,000

Mayor Dave Bing is offering renovated homes in Detroit for as little as $1,000 to city police officers who live in the suburbs under a plan aimed at improving neighborhoods and safety.

The city will tap federal stimulus funds to repair up to 200 abandoned houses in the Boston-Edison and Indian Village neighborhoods, Bing said during a news conference Monday.

Vacant Homes Targeted By Copper Thieves (MS)

If you're trying to sell your home, police have a warning for you: There's a good chance you could be targeted by copper thieves. Hancock County Sheriff's deputies tell WLOX News vacant homes are being broken into at an alarming rate, and what's being stolen is copper. The Deer Park Community in Northwest Hancock County is just one of the areas being terrorized by copper thieves, leaving their victims lives in financial turmoil.

"This is the third time they broke in , but this is the worst of the worst," Rocha said. "I don't have the money to fix this, so I don't know what I'm going to do." Her neighbor's house was hit a few months ago. "They stole the copper wiring out of my house, my air conditioner, my heating unit, my stove, my refrigerator, and busted out all my walls out trying to get it," Mark Yesso said.

California Higher Education Leaders Warn Of Further Tuition Increases

California's public higher education leaders warned Monday that additional tuition increases could be in store this fall if legislators or voters reject Gov. Jerry Brown's plan to extend several recent tax hikes. And even if the tax proposal is approved, the educators said, they expect some academic programs to be eliminated next year.

Energy

Electric-Car Owners Might Face $100 State Fee (Washington)

Under the legislation, electric-car owners would pay a special $100 fee each year when registering their vehicles. It's a matter of fairness, said Senate Transportation Committee Chairwoman Mary Margaret Haugen, D-Camano Island.

Environment

Sara Lee and J.M. Smucker Raising Prices

Sara Lee said it’s planning more price increases for its food and coffee as agricultural commodities are trading far above year-ago levels in the futures market.

Also Tuesday, J.M. Smucker said it’s lifting list prices by 10% on its Folgers and Dunkin Donut coffees sold at grocery stores. This comes on top of the 13% increase Smucker enacted in 2010.

What To Make Of Rising Food Prices (Smart Money)

The increased commodity costs have contributed to the overthrow of the Tunisian government and civil unrest in Ghana, Algeria, Pakistan, Yemen and elsewhere. In India, people have taken to the streets in protest over rising onion prices. In China, apple prices have jumped 50% in the past year.

With the turmoil in Tunisia and Egypt, some believe that governments in troubled neighborhoods may start snapping up more food to try and ensure supplies for their disgruntled masses, which could add even more to food price pressures. In sum, while precious metals and energy tend to dominate headlines, agricultural commodities may be even more strongly positioned to gain ground in this season of political uncertainty.

Nigeria: Food Prices - Stakeholders Warn On Looming Hunger

Stakeholders in the agriculture industry have warned Nigeria to brace up for a food emergency as World food prices surged to a new historic peak in January, for the seventh consecutive month, according to the updated FAO Food Price Index, a commodity basket that regularly tracks monthly changes in global food prices.

The Index averaged 231 points in January and was up 3.4 percent from December 2010. This is the highest level (both in real and nominal terms) since FAO started measuring food prices in 1990.

Cost of Feeding World's Poor Leaps

Wheat purchases, which account for 39% of supplies, cost 59% more last year as the organization struggled to feed people displaced by devastating floods in Pakistan. The average cost of a metric ton of wheat rose to $246 in 2010 compared with $218 a year earlier.

India Cotton Seen Hitting Life High On Thin Supply

Indian cotton prices are likely to hit a fresh lifetime high this week, tracking a rally overseas and as in local demand surpasses lower-than-expected arrivals, dealers said. "Local mills and exporters were aggressively buying to fulfil their requirements, but arrivals were low. They were not improving despite record high prices," said a senior official at Gujarat State Co-operative Cotton Federation Ltd.

Kenya Coffee Hits New High At $1,022/bag

Kenya's benchmark AA coffee grade fetched a new all-time high of $1,022 per 50 kg on Tuesday, reflecting a trend of soaring commodity prices due to political upheavals in north Africa.

Iraqi Flour Prices Triple On Wheat Import Shortages

Iraq’s flour prices have tripled over the last two months because of shortages in imported wheat supplies, threatening to push up food prices that have already stirred protests in some poorer parts of the country.

Iraq is one of the world’s largest wheat importers and much of the government’s budget is spent on a food ration program that supplies 60 percent of Iraqis. Merchants and traders said prices had spiked as officials had been unable to supply flour. “When there is no flour in food rations for a month, market prices go up as people need this important staple and will continue to buy it,” said Mustafa Kadhim, 30, a flour merchant in the main wholesale market in eastern Baghdad.

Turkey Faces Specter Of Slaughtering Milk Cows

Turkish Agriculture Credit Cooperatives Central Union (TTKKMB) General Director Bedrettin Yıldırım has said a shortage of livestock in Turkey, which drives meat prices up, is pushing milk producers to slaughter their milk cows, leading to decreased calf production.

Speaking to Today's Zaman, Yıldırım noted that the livestock sector in Turkey is facing the threat of decreasing milk production, as rising meat prices and falling milk prices force farmers to slaughter their milk cows.

Netanyahu Calls Meeting On Price Hikes To Prevent Strike (Israel)

Prime Minister Binyamin Netanyahu on Tuesday called a meeting for Wednesday morning in hopes of preventing a general strike in protest of rising prices of staple items such as bread, water and fuel.



On Monday, the Bank of Israel announced that it expected a sharp increase in prices of property in Israel to be as high as 14 percent compared to two years ago. In addition, the cost of fuel has risen by roughly 13% in recent months, bread by 10% and water by up to 134%.

11 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4147
Re: Daily Digest 2/9 - 'New Normal' In Housing Market, ...

Skip ahead to 25 1/2 minutes into this, where they talk about our real national debt being at $20.7 trillion after adding in Freddie, Fannie...etc. They then talk about gold.

"(Reuters) - U.S. unemployment remains too high for policymakers' comfort despite signs of strength in the economic recovery, Federal Reserve Chairman Ben Bernanke said on Wednesday."

"Bernanke said inflation remains quite low in the United States, a tough message to deliver amid headlines of rising food and commodity costs across the globe.

He also said expectations of future inflation had remained "stable," suggesting little worry a inflationary psychology was building despite rising gasoline costs.

"Inflation is expected to persist below the levels that Federal Reserve policymakers have judged to be consistent" with their mandate, Bernanke repeated."

................2A) A few more Bernanke headlines posted at Marketwatch

Bernanke: Higher bond yields a sign of optimism 10:59a

Bernanke not concerned with rising Treasury yields

Bernanke: Inflation is not a problem in U.S. 10:37a

Bernanke: QE2 impact on money supply temporary 10:36a

Bernanke: Fed is not monetizing federal debt 10:35a

Bernanke: Fed firmly committed to price stability

 

  • Other news, headlines and opinion:

Moody's warns on Japan debt, urges fiscal reform

IMF Official Warns Japan Banks Facing Multiple Risks

Anglo Irish Bank Chairman: Irish Banks Need Another €50 Billion!

Lawmakers Face $7.1 Billion Pension Deficit (Hawaii)

Stimulus gives Mass. $7B, but funds drying up

City furloughs worsened pension crisis, report finds (Chicago)

As Huge Deficit Looms, Caltrain CEO Paid $400000

Foreclosures ramp up as 30% of mortgages are underwater

Egyptian Unrest Throws Deficit Goals Off Course as Yields Rise

Mayors stress dire straits of New York's cities

U.S. Corn Surplus Cut on Higher Ethanol Output; Smaller World Crop Is Seen

`Heavy Lifting' to Come as China Leaves Deposit Rate Below Inflation Pace

Foreclosure Inventories are 7.8 Times above Normal and Rising

rjs's picture
rjs
Status: Gold Member (Offline)
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Posts: 445
Re: Fed's Lockhart Says U.S. Inflation Still Too Low

"Lockhart said he expects core inflation to rise gradually, to within the Fed's informal 2 percent target range by 2013. While headline inflation has picked up in the United States, core inflation has held near a five-decade low."

translation: the reason people think runaway inflation is already here is because they spend too much of their income on eating, gasoline and heating...they should be spending more on entertainment, furniture, electronics and new cars...

Doug's picture
Doug
Status: Diamond Member (Offline)
Joined: Oct 1 2008
Posts: 3159
Re: Fed's Lockhart Says U.S. Inflation Still Too Low
rjs wrote:

"Lockhart said he expects core inflation to rise gradually, to within the Fed's informal 2 percent target range by 2013. While headline inflation has picked up in the United States, core inflation has held near a five-decade low."

translation: the reason people think runaway inflation is already here is because they spend too much of their income on eating, gasoline and heating...they should be spending more on entertainment, furniture, electronics and new cars...

And just as important, they should be borrowing the money to buy that stuff.Money mouthYell

Doug

TechGuy's picture
TechGuy
Status: Gold Member (Offline)
Joined: Oct 13 2008
Posts: 415
Re: Fed's Lockhart Says U.S. Inflation Still Too Low

translation: the reason people think runaway inflation is already here is because they spend too much of their income on eating, gasoline and heating...they should be spending more on entertainment, furniture, electronics and new cars...

 

 Its likely to get worse, as food and energy costs sap desposible income, which leaves them with even less money to by on entertainment, Furniture, electronics, etc.  With high employment rates there wages will remain flat to declining, all the while food and energy prices continue to rise.

The correct solution is to let interest rates rise, dictated by the market. This would cull speculation and cause commodity prices to fall. Higher rates in the US would cause global interest rates to follow. Consumers would have more money to pay for non-discretionary items, and permit wages to rise over time.

The more the Fed forces down interest rates, the worse the asymettical prices will become. Non Discretionary items will continue to rise, and Discretionary items will fall in prices as more consumer income  is used to pay for non-discretionay items.

 

 

 

 

LogansRun's picture
LogansRun
Status: Diamond Member (Offline)
Joined: Mar 18 2009
Posts: 1444
Indirect Bidders: $17B / Direct Bidders: $118k

I would also like to know from someone smarter than me, what this means.

The take down is where the true story is: after Indirect interest in yesterday's 3 Year bond plunged to a multi-year low, today nothing could be further from the truth as the Indirect Take down was an all time high 71.3%, with foreign central banks taking down $17 billion of the $24 billion total. And maybe even more curious was that for the first time in over 2 years, the Direct Bidders were virtually non-existent, taking down a tiny $118K of the $24 million or about 0.5%.

http://www.zerohedge.com/article/stunning-10-year-auction-closes-indirect-bidders-coming-all-time-high-directs-disappear

joemanc's picture
joemanc
Status: Martenson Brigade Member (Offline)
Joined: Aug 16 2008
Posts: 834
Chris on FSN

Didn't see this posted anywhere...good listen.

Nate's picture
Nate
Status: Platinum Member (Offline)
Joined: May 6 2009
Posts: 590
Re: Chris on FSN

I listened to Chris on FSN last night.  After listening to 100's of interviews on FSN over the years, Chris is clearly at the top of the class.  It is also clear that Jim Puplava has a ton of respect for Chris. 

Southerner's picture
Southerner
Status: Bronze Member (Offline)
Joined: Sep 7 2009
Posts: 36
Re: Daily Digest 2/9 - 'New Normal' In Housing Market, ...

LR,

I was hoping the same thing when I read that story on ZeroHedge.

LogansRun's picture
LogansRun
Status: Diamond Member (Offline)
Joined: Mar 18 2009
Posts: 1444
Re: Daily Digest 2/9 - 'New Normal' In Housing Market, ...

I would think this is a big deal but....maybe not.  I'm too damn sick to care at this point though so......Mono of all damn things!  Seriously!  Kissing disease at my age!  ugh.

CM?  Any thoughts on this?  Please!?!?

Southerner wrote:

LR,

I was hoping the same thing when I read that story on ZeroHedge.

idoctor's picture
idoctor
Status: Diamond Member (Offline)
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Posts: 1731
Re: Daily Digest 2/9 - 'New Normal' In Housing Market, ...

britinbe's picture
britinbe
Status: Gold Member (Offline)
Joined: Dec 28 2008
Posts: 381
Re: Daily Digest 2/9 - 'New Normal' In Housing Market, ...

http://online.wsj.com/article/SB10001424052748704858404576134342184410396.html

With Axel Weber's departure from the German Central Bank and the knock on departure from the ECB, i guess this means the ECB is gonna print...........

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