Finance
Institutional Investment
Jul 29, 2009
On the heels of news Monday that new home sales were up a little, home prices inched up as well--at least, those measured by the Standard & Poor's/Case-Shiller Home Price Index in its raw form. In May, the index, which measures prices in 20 metropolitan areas, rose 0.5 percent over April, following a 0.6 percent drop the month from March to April. The movement is notable as the first time the index has moved up in three years.
It was a modest uptick, and also not seasonally adjusted. Adjust for the season--spring, after all, is traditionally when homebuyers get out there in force--and prices were actually down 0.16 percent. Still, that isn't very much of a decline. If annualized, it would be about 2 percent. Compare that to the 32 percent drop since the summer of 2006, at the peak of the bubble. In a statement, David Blitzer, chairman of the index committee S&P, said that "this could be an indication that home price declines are finally stabilizing."
It could also be transitory blip. There's still probably some downward pressure on home prices, especially as more jobs are lost and more foreclosures occur. No one is predicting a turn around of those critical indicators just yet.
Consumers aren't so sure about the direction of the economy, either. The Conference Board's Consumer Confidence Index took a dive this month, falling to 46.6 from 49.3 in June. Consumers clearly still have their eyes on those unemployment numbers, rather than any purported green shoots in the housing market.
Early in the 2000s, banks were opening branches as fast as saloons in a mining boomtown, but word of Bank of America's plan to close some of its branches--it has about 6,100 retail banks or so nationwide--means that the era of retail bank expansion is finally, completely dead. Not that banks have been expanding much in the last year or two, but the Bank of America move is definitely one large nail in a coffin that's already sealed up tight.
Just how many branches will close isn't clear. Initial reports pegged the closure at 10 percent of the current total, but later the bank said that it merely plans a "modest" reduction.
Las Vegas-based Station Casinos Inc. filed for bankruptcy on Tuesday after failing to come to some agreement with lenders on a plan for its $5.7 billion in debt. Currently the company owns or has an interest in 18 casinos, including the Palace Station Hotel & Casino, Boulder Station Hotel & Casino and the Texas Station Gambling Hall & Hotel, among others. They will operate normally for the time being.
The company's brands are probably better known in Las Vegas itself than to the traveling public, since the Station's niche is catering to people who live and work in town. Unfortunately for that niche, when fewer people travel to Vegas, they leave behind less money for the local economy. Locals, like visitors, have apparently cut back in their casino spending.
Wall Street meandered in negative territory most of the day on Tuesday and mostly ended a shade down. The Dow Jones Industrial Average lost 11.79 points, or 0.13 percent, while the S&P 500 was down 0.26 percent. The Nasdaq eked out a gain, up 0.39 percent.
On the heels of news Monday that new home sales were up a little, home prices inched up as well--at least, those measured by the Standard & Poor's/Case-Shiller Home Price Index in its raw form. In May, the index, which measures prices in 20 metropolitan areas, rose 0.5 percent over April, following a 0.6 percent drop the month from March to April. The movement is notable as the first time the index has moved up in three years.
It was a modest uptick, and also not seasonally adjusted. Adjust for the season--spring, after all, is traditionally when homebuyers get out there in force--and prices were actually down 0.16 percent. Still, that isn't very much of a decline. If annualized, it would be about 2 percent. Compare that to the 32 percent drop since the summer of 2006, at the peak of the bubble. In a statement, David Blitzer, chairman of the index committee S&P, said that "this could be an indication that home price declines are finally stabilizing."
It could also be transitory blip. There's still probably some downward pressure on home prices, especially as more jobs are lost and more foreclosures occur. No one is predicting a turn around of those critical indicators just yet.
Consumers aren't so sure about the direction of the economy, either. The Conference Board's Consumer Confidence Index took a dive this month, falling to 46.6 from 49.3 in June. Consumers clearly still have their eyes on those unemployment numbers, rather than any purported green shoots in the housing market.
Early in the 2000s, banks were opening branches as fast as saloons in a mining boomtown, but word of Bank of America's plan to close some of its branches--it has about 6,100 retail banks or so nationwide--means that the era of retail bank expansion is finally, completely dead. Not that banks have been expanding much in the last year or two, but the Bank of America move is definitely one large nail in a coffin that's already sealed up tight.
Just how many branches will close isn't clear. Initial reports pegged the closure at 10 percent of the current total, but later the bank said that it merely plans a "modest" reduction.
Las Vegas-based Station Casinos Inc. filed for bankruptcy on Tuesday after failing to come to some agreement with lenders on a plan for its $5.7 billion in debt. Currently the company owns or has an interest in 18 casinos, including the Palace Station Hotel & Casino, Boulder Station Hotel & Casino and the Texas Station Gambling Hall & Hotel, among others. They will operate normally for the time being.
The company's brands are probably better known in Las Vegas itself than to the traveling public, since the Station's niche is catering to people who live and work in town. Unfortunately for that niche, when fewer people travel to Vegas, they leave behind less money for the local economy. Locals, like visitors, have apparently cut back in their casino spending.
Wall Street meandered in negative territory most of the day on Tuesday and mostly ended a shade down. The Dow Jones Industrial Average lost 11.79 points, or 0.13 percent, while the S&P 500 was down 0.26 percent. The Nasdaq eked out a gain, up 0.39 percent.
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