We have seen the markets surpass the heaviest flow of second quarter earnings and the first signs of economic activity for the industrialized world for the same period last week. With this round of influential data; we would expect the markets to be in sync and on pace for a clear trend. Instead, there has been a divergence in some of the underlying markets with some asset classes (currencies being the most palpable example) halted at the very extremes of their respective ranges and trends.

This week there is another round of notable event risk across the global market place; but it certainly does not carry the same bravado as the data fundamental traders are working with last week. Nonetheless, the most notable events include the US-China talks in Washington; the US consumer Confidence report; the RBNZ rate decision; straggling earnings reports; and, of course, the advanced reading of second quarter US GDP. The pinnacle of market moving influence comes with the growth report (the US stands in as a proxy for global activity when it comes to growth); but this is a long time for a market to consolidate on the edge of such a tense stall in sentiment. It would not be a surprise to risk appetite overwhelm fundamental considerations this week and take charge on producing either a breakout or reversal.

US-China Meeting in Washington
Though it is unlikely to come to much in the way of market moving price action, Chinese officials are meeting with US Treasury Secretary Timothy Geithner and other policy makers in Washington to discuss among other things the health of the US economy and its assets. The US dollar could be an interesting topic as China has swayed back and forth on its official position through supporting the currency (as the yuan is loosely pegged to the greenback and China holds the largest reserves of Treasuries in the world) and calling for its replacement as the world???s reserve with a basket in its stead. Geithner and company will no doubt right any proposals of diversification off; but they will certainly take concerns over the United States??? health and deficits seriously ??? they are the country???s largest investor. Politics aside, look for assurances against protectionist policy and the Chinese ???unwavering??? support of the United States??? assets and its investment interest.

US Consumer Confidence
The US was arguably the source of the global economic and financial collapse back in the summer of 2007. Therefore, it follows that the same economy will be expected to lead the world out of its recent gloom. There has been a very consistent turn in expectations surrounding growth and investment activity; but speculation requires a benchmark in the form of cold-hard data. Among the most timely of indicators happens to be the various sentiment surveys offered for the many economies and sectors. The Conference Board???s consumer optimism report lags its University of Michigan counterpart; but debates over accuracy often times provide the former with a market moving impact even though it comes across the wires second. Compare the changes in present conditions and expectations figures. Employment, income and spending components further make this indicator more valuable than its early-release cousin.

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The housing market may be busier, but that doesn’t mean home values are set to rebound any time soon

If you’re selling your home, the good news is that you’re likelier to find a buyer now than in the last couple of years.

The bad news is you should be prepared to slash your asking price.

This summer, recent data show, real estate agents are busy and, spurred by low interest rates, falling home prices, a wide selection, and government incentives for first-time home buyers, home shoppers are becoming home buyers.

“What we’re seeing is a turn in the housing market,” says Gary Wolfer, chief economist with Univest Wealth Management (UVSP).

What we’re not seeing, however, is rising home prices. And that’s disturbing to the many Americans who have a large share of their wealth tied up in real estate.

Supply of Homes Rising Alongside Sales
Even as existing-home sales rose 7.2% in July, the total supply of existing homes on the market rose 7.3%, to more than 4 million. According to National Association of Realtors data, released Aug. 21, if home sales continue at this pace, it would take 9.4 months to sell off the supply.

The rise in supply is more than quenching the rising demand. The median existing-home price in July was $178,400, 15.1% below a year ago.

A better gauge of home prices arrives on Aug. 28, when the June S&P/Case-Shiller Home Price index is scheduled to be released. The May index, released a month ago, showed prices were down 17.1% from a year ago, but up 0.5% from April. Action Economics expects June’s index to dip slightly lower again.

Even if prices improve modestly, it may be difficult to stop the slide of home prices entirely for several more months, economists say.

“Clearly the downward pressure on home prices should ease as we go forward,” says First American Funds chief economist Keith Hembre. “But there is still going to be downward pressure.”

One problem is foreclosures and other forced sales of homes. The National Association of Realtors estimates 31% of sales were “distressed transactions” in July.

These sales add supply to an already crowded housing market, but also have a broader impact. Just a couple of foreclosure sales can hurt prices across an entire neighborhood, notes OppenheimerFunds (OPY) economist Brian Levitt.

Weak Job Market Threatens Recovery
Other trends are working against the housing market. Last month, U.S. nonfarm payrolls fell another 247,000, less than expected, and the unemployment rate fell from 9.5% to 9.4%. Job losses may be slowing, but layoffs haven’t stopped. For the week ended Aug. 15, initial jobless claims rose by 15,000 to 576,000.

These labor market statistics affect both supply and demand in the housing market.

The unemployed are at risk of losing their homes. “Today’s jobless claim could be tomorrow’s delinquency or foreclosure,” Levitt says.

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Canada’s S&P/TSX composite index climbed eight-tenths of a per cent over the four trading days ended August 7, 2009 as the nation’s benchmark extended its advance from its March 9 low to 43.6%. (The TSX was closed August 3 for the Civic Holiday.)

North American stocks solidified their weekly gains Friday after data from the U.S. Labour Department showed job losses in the world’s largest economy continued to moderate in July. U.S. employers shed 247,000 jobs in July as non-farm payrolls shrank at their slowest pace since August of 2008. Figures for May and June were also revised lower, indicating job losses for those months were not as severe as previously reported.

Canada’s Health Care, Industrials and Consumer Discretionary sectors led the TSX higher on the week, climbing 10.2%, 6.1% and 4.7%, respectively. The benchmark’s Materials and Information technology sectors also enjoyed solid weeks, as each sector rose better than 2%.

Pharmacy-benefits manager SXC Health Solutions Corp. led the Health Care sector higher. SXC surged by almost a third on the week after the company posted better-than-expected earnings and raised its financial targets for the 2009 fiscal year.

The benchmark’s banks, insurers and financial services providers struggled on the week, slipping 2.1%, after insurer Manulife Financial Corp. slashed its dividend.

News of accelerating job losses in Canada did little to deter Canadian investors Friday. Statscan figures show the nation’s employers shed 45,000 jobs last month. Most economists had expected employment to fall by 15,000. Conditions in the private sector remain especially tenuous, as last month’s private-sector losses were the worst since January.

South of the border, the S&P 500 index climbed 2.3% this week, touching a 10-month high and closing above the key 1,000 mark, as optimism on the outlook for the world’s largest economy rose and corporate earnings continued to surprise on the upside.

The benchmark’s Financials sector led the advance, rallying 10.4% on the week. Optimism surrounding American International Group Inc. (AIG) buoyed the sector this week as shares of the beleaguered insurer surged ahead of Friday’s release of quarterly results. In the end, AIG reported its first profit in seven quarters following six consecutive quarters of staggering losses.

As of Friday, results from 76% of the 424 companies on the S&P 500 that have reported second-quarter earnings have exceeded analysts’ expectations.

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Real estate markets across the world are suffering right now. Sellers can’t sell their homes, and buyers can’t get mortgages. For real estate agents, it’s a lot harder to earn a living now. Gone are the days of listing a home and expecting it to sell; it’s time to get creative to not just survive, but actually thrive in this economy.

What Is a Lease Option?
Lease options are a way to buy and sell homes without an immediate conventional mortgage. It gives buyers who can’t qualify for a mortgage right now the opportunity to get into a home right away while they improve their credit and build up a down payment while living in the home.

It gives sellers the ability to beat their competition–we know in this kinds of market, competition is huge. Sellers can reach a far greater pool of potential buyers. They will likely be able to sell their home quicker and for a better price. For some sellers, it may be the ONLY way they can sell their home in this real estate market.

How Does a Lease Option Work?
A lease option works like this: The buyer and seller agree to an option which gives the buyer the right to purchase the home during a set period of time. During this option period the buyer leases the home from the seller. By the end of the option the buyer must either purchase the home or forfeit their option fee. While the option is valid, the seller may not sell their home to anyone else.

Advantages for the Seller
Here are some of the advantages when selling on a lease option :
1. It allows you to beat the competition.
2. You can collect rent while the home would otherwise sit vacant.
3. You often receive a higher purchase price.
4. You can sell the home in a down market when otherwise it might not have been able to sell at all.
5. And it allows you to actually sell the home, instead of just renting it.

Advantages for the Buyer
Here are some of the advantages when buying on a lease option :
1.The buyers can get into a home now, even if they can’t currently qualify for a mortgage. (How many potential buyers have you turned away because they couldn’t qualify for a mortgage?)
2. They can improve their credit and build up a down payment, while they are already living in their future home.
3. They are not obligated to purchase the home at the end of the option if they decide: this home is not right for them, that home ownership is not for them, or if the real estate market changes significantly.

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In the present climate of easy credit it is easy to get in over your head with credit card debt. Many people do not realize how many Americans are living payday to payday getting deeper and deeper into the drowning pool of high interest revolving debt. With recent laws mandating higher minimum monthly payments and stricter bankruptcy laws there are those who may feel they have no options. A program tconsolidate debtmay be the answer for these people. If you are one of those online debt consolidating,debt consolidation program, debt program, debt, consolidation program
In the present climate of easy credit it is easy to get in over your head with credit card debt. Many people do not realize how many Americans are living payday to payday getting deeper and deeper into the drowning pool of high interest revolving debt. With recent laws mandating higher minimum monthly payments and stricter bankruptcy laws there are those who may feel they have no options. A program tconsolidate debtmay be the answer for these people. If you are one of those who is struggling with a staggering load of debt you may want to think about a program such as this.

There are two steps which will start you on the road to a debt consolidation program. First, gather all of your bills and make a list of the monthly payments you are making and the interest rates you are being charged. Second, access your credit report online. If you have not received a credit report during this calendar year you are entitled by law to a free report from each of the three credit reporting agencies. Your credit report will tell you how many times your payments have been late or missed. It will also give you contact information for all of the companies to whom you are making payments if you do not already have it. Combine the research from your bills and from your credit report to ascertain exactly how much you pay monthly, how much you owe and what your payment record is.

When you obtain your credit report, you should also purchase your credit (FICO) score which should be available from the same sources for a nominal fee.

Armed with this information contact several debt consolidation programs. Sources for such programs can be your banking institution, the yellow pages, the Internet, the Better Business Bureau and The Chamber of Commerce. If you know others who have had similar problems you might ask them for personal recommendations. Churches may also be a valuable resource for debt consolidation programs. Some religious organizations even operate such facilities.

Even though debt consolidation programs advertise themselves as services they are also money making concerns. Therefore, when deciding upon the one to use you should be wary of them as you would be when making any financial commitment. The purpose behind a debt consolidation program is to have the company deal with your creditors. Negotiating a reduction in your credit card interest rates, asking for reduced fees and longer repayment plans and other debt restructuring is a tedious process. It often requires a lot of cross mailings and telephone calls. Once you are in a debt consolidation program the company will take care of these matters for you. In order for the program to be successful overall you must make sure you choose a company that will deal fairly and competently with both you and your creditors.

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Bank of China has sent an internal document to its branches advising them to scale back lending for the rest of the year, becoming the latest major domestic bank to put a brake on lending, two sources at the bank said on Friday.

Concern that a possible tightening of bank lending could slow the economy had pushed China stock markets down earlier this week while the yen surged to a one-month high against the dollar on Friday, with traders citing worries about the potential for further weakness in Chinese shares.

Other sources at several Chinese banks also said new lending has slowed in recent months, confirming previous suggestions that they would act to avoid problems caused by easy credit, such as asset bubbles and non-performing loans.

In late July Chinese financial magazine Caijing reported that both Industrial & Commercial Bank of China and China Construction Bank have put a ceiling on new lending for the year.

The bi-monthly Caijing reported that with the new ceilings in place, ICBC has already lent 83 percent of its full-year new lending total, while CCB has lent 79 percent.

ICBC is aiming to grant full-year new loans of 1 trillion yuan, while CCB has set a goal for new loans of 900 billion, according to Caijing. The two banks issued new loans of 825.5 billion and 709 billion in the first half, respectively.

SLOWING THE FLOW
As China’s big banks slowly close the tap on new loans, bankers report longer waits for internal credit approvals, and increasing pressure on pricing due to limited liquidity.

“It takes more time to process credit approval from Beijing headquarters now, and the pricing for onshore deals has been heading north in recent months, particularly for U.S. dollar deals,” said a banker from one of the big four banks.

The same banker said that while Chinese banks could lend at a margin of 150 basis points over Libor for top-tier multi-national companies in the first half, that price had now spiked to over 200 basis points.

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One of the current reason many people are lockng into five year fixed term mortgages is the concern that interest rates will rise sharpely due to hyper inflation taking hold in the US. Here is an article that covers some information that has come out from the head of the US Federal Reserve. In t Ben Bernanke is very clear that there is a plan in place that will allow them to emove the stimulus from the economy and keep inflation in check.

Of course there are no guarantees but I feel that the governments in both the US and Canada are aware that it is important to keep inflation as low as possible and they will do everything possible to keep inflation in check.

Having said this I don’t think we can possible escape the current situation without some inflation but I also feel it will not be areturn to the 80′s where we have 12% plus inflation.

I am staring to lean back towards the variable rate mortgages as an option for those who could withstand an increase of interest rates of 3%. I’m not saying we will hit the 3% but it is best to estimate on the high side.

July 21 (Bloomberg) – Federal Reserve Chairman Ben S. Bernanke said while the economy is showing tentative signs of stabilization the central bank intends to maintain a “highly accommodative” monetary policy for “an extended period.”

“The pace of decline appears to have slowed significantly” Bernanke said today in semi-annual testimony before the House Financial Services Committee. At the same time, in light of the substantial economic slack and limited inflation pressures, monetary policy remains focused on fostering economic recovery he said.

Fed officials said in a report submitted as part of Bernanke’s testimony that policy will be tightened when the labor market improves, an economic recovery takes hold and pressures holding down inflation diminish. The comments follow a rally in stocks and a rebound in corporate earnings that have stoked speculation the worst recession in half a century is ending.

Bernanke, 55, defended the central bank’s actions to restore financial stability, urged lawmakers to lay plans for reining in the deficit, and warned Congress against impinging on the Fed’s independence in his testimony. Bernanke, responding to a question, said the Obama administration’s plan to make the Fed a systemic-risk regulator would be a modest reorientation of its authority, and he argued against the plan’s proposal to strip the Fed of consumer-protection role.

Unprecedented Actions
The Fed chief has countered the credit crisis with actions unprecedented in the central bank’s 95-year history, cutting the benchmark lending rate to as low as zero and flooding the banking system with cash. He today detailed how the Fed can reverse the stimulus when appropriate and expressed confidence it has tools to prevent any inflation surge.

Bonds rose and stocks reversed gains after Bernanke’s statement was released. The yield on the benchmark 10-year Treasury note fell to 3.46 percent at 11:56 a.m. in New York, from 3.61 percent late yesterday. The Standard & Poor’s 500 Index was down 0.4 percent at 946.94.

Some companies are beating analysts earnings estimates. Coca-Cola Co. reported adjusted second-quarter profit of 92 cents a share. Analysts surveyed by Bloomberg estimated 89 cents. Caterpillar Inc., the biggest maker of earth-moving equipment, said 2009 earnings before some items will be $1.15 to $2.25 a share. Analysts surveyed by Bloomberg had expected $1.12 on average.

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