U.S. stock market frets over fragility of housing market

Looming expiration of tax credit for new home buyers another concern

By Kate Gibson, MarketWatch

The U.S. stock market's underlying worry about the state of the troubled housing industry took hold Thursday, with equities tumbling on an unexpected drop in the sale of existing homes last month.

The National Association of Realtors reported home resales fell 2.7% in August after four consecutive months of gains.

Investors had expected Thursday's report to illustrate the gradual improvement recently seen in residential real estate, looking for signs that the brighter picture was "not just driven by incentives given to first-time home buyers," said Art Hogan, chief market strategist at Jefferies & Co.

"We have to cross the bridge from an economy growing from government stimulus to an economy that is self-sustaining. If investors have one concern, that's it," Hogan said.

The $8,000 government subsidy for new home buyers expires Nov. 30.

The coming expiration of the tax credit was expected to bring some weakening in sales, as the incentive likely "pulled a portion of existing home sales forward into the summer months," Omar Sharif, an analyst at RBS Securities Inc., wrote in a research note.

"While we still hold to that idea, it is not clear if the August drop reflects that dynamic or simply a modest pullback following the largest percentage gain in resales since at least 1999," he added.

On Wall Street, energy shares led the losses as the major stock indexes erased early gains in the wake of the disappointing housing data.

The Dow Jones Industrial Average ($INDU) slipped 45.80 points, or 0.5%, to 9,702.75. The S&P 500 Index ($SPX) dropped 9.77 points, or 0.9%, to 1,051.1. The Nasdaq Composite (COMP) declined 26.27 points, or 1.2%, to 2,105.15.

On Friday, the economic data will include another report on housing, with new home sales expected to climb about 2% to a seasonally adjusted annual rate of 433,000 in August, which would mark the fifth straight increase and the highest level in a year.

Kate Gibson is a reporter for MarketWatch, based in New York.

Sick, Elderly Man Threatens Bank With Bomb for Money

An elderly man accused of robbing a San Diego bank, pleaded not guilty to felony charges saying he did it to acquire money to save his home.

Michael Casey Wilson, 69, was arrested after the Bank of America branch in North Park, Ca was robbed.

It is alleged that he handed the bank manager a four page note saying he had C-4 explosives in his briefcase and demanded that money be handed over to him.

According to authorities, he walked out of the bank with over $100,000 but was arrested around an hour and a half later a few blocks away on the porch of a house.

Wilson is said to be a man with severe medical problems including severe arthritis, sleep apnea, heart problems and emotional issues, and he was in need of $50,000 so he could keep himself and his 73-year-old wife in their home.

"I've never done a bad thing in my life," Wilson told a television reporter. "But you get desperate; I guess you throw all that ... out the window."

Wilson, at five feet, eight inches tall, walks with a cane and was using an oxygen tank when he appeared in court.

He pleaded not guilty to three counts of robbery and one count of falsely reporting a bomb in San Diego County Superior Court, and remains in jail in lieu of $50,000 bail.

Wilson said, "It was 50-50. Well, if I get caught, I get caught. I'm dying anyway, so what difference does it make."

Wilson has no prior criminal record according to prosecutors, but if convicted, Wilson could be sentenced to up to seven years and eight months in prison.


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Rates Remain Low

"Interest rates for fixed-rate mortgages eased for the third consecutive week and remained at 3-month lows," said Frank Nothaft, Freddie Mac vice president and chief economist.

"Interest rates for 30-year fixed-rate mortgages have averaged just above 5 percent through mid-September, which is roughly a percentage point below last year's average and suggests that 2009 may reach a record annual low since the survey began in 1971."

"Low mortgage rates are aiding new home construction. Housing starts for single family homes have increased consecutively over the five past months ending in July, although starts eased slightly in August. Moreover, homebuilder confidence improved for the third straight month in September, with all four regions showing positive gains, according the National Association of Home Builder's Housing Market Index."
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You are Being Brainwashed

This may sound crazy to you, but allow me to suggest the possibility that you have been totally brainwashed and you have unknowingly become your own worst enemy.

In fact, this is exactly what is happening to millions of people. And most likely, you are one of them. What I am talking about is the SUBLIMINAL and SUBCONSCIOUS programming you are getting - programming that is imprinted on your subconscious without your knowledge. I am not saying there is an organized conspiracy to program your mind. Some of the people that are spreading these negative messages don't even know they are doing it!

The problem is as you are exposed to these mind viruses, you are likely to be infected. Just as exposure to raw sewage can cause you to be infected with germs, microbes and other nasty things, prolonged exposure to the media will infect your mind with many nasty viruses. Society spends billions of dollars to protect us from biological and computer viruses. Yet a mind virus can be the most dangerous of all.

One of the best things you can do to prevent mind viruses is stop following the news. Don't watch TV, don't read newspapers or magazines that have the news in them. Why? Because they all make their money by selling fear, lack, scarcity and limitation. Bad news is what sells. Open the average newspaper and you will see that 90% or more of what you read is negative news. The percentage is about the same for radio and TV. 

Do you really believe it is important to find out how many houses burnt down, how many people were robbed or killed in your city, state or another country? Do you really need to be reminded of the economic situation every day? 

Being exposed to all this negativity creates a negative view of the world and negative thought patterns in your mind. When I tell people to skip the news, they invariably ask, "How willI know if there is a major world tragedy or natural disaster heading my way or terrorists striking near me?" Trust me. You will know about all the big stuff you need to know. Let's face it,the vast majority of your friends and neighbors follow the news so they can do the watching and reading for you. You still won't be able to escape it completely because most restaurants and shops now have the TV news on all day long.

So if something major happens, you will know about it. I haven't watched the news for the past several years. I don't read the newspaper either because I don't want or need to know about all the bad stuff. My life is about creating good stuff.

Read blogs like this one. Find positive news and information to fill your head with. Just imagine if everyone did this, people would buy things they need and the economy could repair itself. People would be more peaceable with one another. Eliminate the news media from your life for the next 30 days and see what I mean.

Paul

5 Ways to Stay Positive in Today's Market

1. Avoid toxic people. Who are the toxic people? Toxic people can be well-meaning people, but when they talk to you, they are coming from a negative attitude about money, finances, and especially about the current economy.

2. Avoid toxic work places. What is a toxic work place? A toxic company or workplace is where you worry about getting paid, you are not empowered to do your best and you feel helpless.

3. Avoid the media. Why? Remember that the intention of the media is to sell newspapers and magazines. The more they can paint a negative and fearful picture, the more their sales go up. Why subject yourself to negative spins on the economy when you can find just as much information to point to the positive?

4. Successful people do well in any market. Knowing that fact, none of us can continue to use the excuse about the market being bad. In fact, we know many people right now who in the last six months have doubled and tripled their incomes.

5. Remember that your success depends on your environment. The people or the company you're with needs to be supportive.

Today is the day . Make the changes and put yourself in a positive, healthy, wealthy environment.

Paul

Bank Take Over

Chicago's Corus Bank taken over by regulators; year's tally of bank failures now at 91.

Paul

Mortgage rates remained historically low

Mortgage rates remained historically low over the past two weeks, keeping housing very affordable, said Frank Nothaft, Freddie Mac vice president and chief economist.

As a result, mortgage applications leapt 17 percent over the week ending September 4, led by a 23 percent jump in refinancing demand, according the Mortgage Bankers Association. In fact, nearly three out of five applications were for refinancing current loans.

While the economy lost 216,000 jobs during August, it was the smallest monthly job loss since August 2008. This and the Federal Reserve's latest Beige Book suggest that the economy may be on the road to recovery. (I tend to believe we will have another crash before a true recovery.)

Based on information up through late August, most Federal Reserve Bank districts noted that their business contacts remained cautiously positive that economic activity was stabilizing in July and August. Two out of the 12 districts also indicated that local house prices were firming.

Paul

In the Markets

U.S. stocks open the week higher, while crude tops $70 and gold hits $1,000.


Paul

New Website & Blog

Welcome to my blog. Since I have redone my website, I am also redoing my blog.

Stay tuned for regular posting and updates.

Have a safe and fun weekend!