David Frum of CNN explained that the crisis in Europe is a global problem and could lead to a serious recession in 2012. Frum suggests that as the largest trading partner of Europe, and them being our biggest investor, we should be ready to lend them money if they need us to, and it appears they do.
“If the Euro cracks up,” Frum wrote, “many European banks who hold Euro-denominated bonds will discover that their bonds have lost value. The bonds won’t fall to zero (hold on a second for the reason why not), but they will lose enough value to play havoc with the bondholders’ capital. The banks will then either have to seek government help or stop their lending to businesses and consumers or both.”
“The bank crisis will translate into a severe Europe-wide recession, just as the U.S. financial crisis of 2008 created a severe recession in 2009.” In trading the latter part of last week, the Dow Jones Index slid, as investors feared more serious problems from Europe.
The AP reported that German Chancellor Angela Merkel continued her stance that a quick fix was the wrong answer to the crisis. Merkel remains under pressure to agree to a huge influx of capital through bond buying and spreading of debt-liability. She maintains that it could ruin Europe’s competitiveness in the long run. She continued to promote growth-promoting measures like labor-market reforms, which will take longer but won’t cost money. “It will require patience,” Merkel said.
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MSNBC’s John W. Schoen wrote, “If the U.S. foreclosure crisis were a baseball game, we’d probably be in the bottom of the fourth inning.” This came after a report from the Mortgage Bankers Association that the pace of new home foreclosures edged up again in the third quarter. The MBA also reported that the number of mortgage holders falling behind eased some, with borrowers who have fallen three or more months behind on their payments dropping to about 3.5 percent of all mortgages, which is down from a peak of 5 percent in late 2009
“If you look at the pace of improvement, I think we’re three to four years away from the typical pattern of seriously delinquent loans,” said Michael Fratantoni, MBA’s vice president of research and economics. But as the market for existing homes continues to battle its self-inflicted demons, the homebuilder business is showing signs at last of coming back to life, Schoen reported. Single-family housing starts rose 3.9 percent, and building permits jumped 10.9 percent. (Many economists believe permits are a better barometer of housing market strength because they are less affected less by weather and signal a pickup in future construction.)
“This was a good report,” said Patrick Newport, an economist at IHS Global Insight. “It has supporting evidence that the single-family market is finally getting off the mat.”
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This from Elizabeth “Libby” Sheard, of the Little Rock Realtors Association:
Dear LRRA Members, Please be aware of a possible scam that has touched Little Rock offices. The link to a description to a scam like this that hit a Realtor in Florida is below. Please read and review and warn your offices about this. It is always a good idea when doing a deal of this nature that you use wire transfers or other forms of cash transfers that would transfer monies immediately and directly. Please read the link below for more information. http://www.sarasotahomesforsalenow.com/sarasota-real-estate-scam/
A note from an LRRA member:
This is definitely something to be aware of. This scam was attempted several times in Little Rock a couple of years ago. We were involved in one of them. Just as the one described, we received a counterfeit cashier’s check that was more than the earnest money. As I recall, the earnest money was supposed to be $10,000 and the cashier’s check payable to (name omitted) was for $110,000. They described it as an error and requested that we wire back the $100,000 difference. The “buyer” never even looked at the house. They presented the offer through a local agent that had never met them. That seems to be a common characteristic of this scam.
We would not wire back the difference until the cashier’s check cleared our account. Of course, the check was returned as fraudulent, and we notified the agents involved and the FBI. Although we didn’t fall for the scam, it was an inconvenience to the seller, the agents and to us. At that time there was a bulletin that the title insurance underwriters sent out to the agents warning us of this type of scam. Unfortunately, fraud notifications from our underwriters have become very common lately.