Week In Review - February 29, 2008 - Existing Home Sales Slip, Oil Over $100, Stagflation
- Home prices down nearly 4.6% from a year ago January levels
- Housing inventory rose 5.5 percent at the end of January to 4.19 million homes
- 10.3 month supply of homes available on the market
- Existing condominium and co-op sales fell 6.5 percent in January 2007
Plain and simple - Homes are selling, prices are steadily declining, on average it will take 10.3 months to sell your home and condo’s have the biggest impact from a sales perspective.
Source: National Associations of Realtors
Oil Over $100
This should not be a surprise, but Oil hit $103 today sending the markets into a tailspin. Although the market did not fall because of higher oil prices, the bears were looking at the weak economic numbers coming out all week and news of consumer inflation.
Federal Reserve Chief Ben Bernanke spoke to Congress this week about the state of the economy and that the fed is ready to lower rates yet again to hold back the possibility of a recession and overlook the threat of inflation. This scenario is an economists worst nightmare called which we started reporting on in last weeks review - Stagflation. Stagflation is defined as a negative economic climate where inflation is rampant. This is what we saw in the 70’s and early 80’s.
Report from Fox Business News
Fed Warns Congress About Bank FailuresBen Bernanke provided even more riveting testimony to congress stating that he is concerned that there are likely to be many banks running into insolvency issues. As he stated to Congress on Thursday, “There will probably be some bank failures.” What does this mean for you, are we back to the days of the Savings and Loan Crisis of the 80’s? Take your money out of the banks and put it under your mattress?No! The FDIC came out to defend the banking system with a report stating there are known issues, as reported by MarketWatch, but they can be managed.
Congress Attacks Ben Bernanke
Report from Fox Business News - Your Wold Cavuto
