Here’s what’s important in the business world this morning:
U.S. Home Prices: A measure of U.S. home prices jumped 4.6 percent in August compared to a year ago, the largest year-over-year increase in more than six years.
CoreLogic, a private real estate data provider, also says prices rose 0.3 percent in August from July. The sixth straight month of price gains, combined with rising home sales and increased builder confidence, point to a housing recovery that is becoming sustainable.
Other measures of home prices have increased. The Standard & Poor’s/Case Shiller index rose in July compared to a year ago, the second straight yearly increase after two years of declines. And an index compiled by a federal housing regulator has also reported annual increases.
EU: Europe’s banks should create a firewall between their traditional retail banking operations and more risky investment banking ones and force executives to personally take losses when their banks fail, a new expert report suggested Tuesday.
The most significant recommendation the report makes is that banks should separate their risky investment banking operations, like proprietary trading, from their more traditional retail operations, which lend to customers. The two entities could still be part of one big bank holding company but would have to separately meet the capital requirements, put in place to make sure banks have enough money to cover losses in tough times. In other words, the retail banking arm should never be used to prop up the investment arm if it makes bad trades, for instance.
The report also calls for increased surveillance of the banks and particularly of their management. It suggests that the executives should get some of their compensation in the form of “bail-in instruments.” That would make management personally on the hook to help rescue their struggling bank.
Oil: The price of oil remained supported Tuesday by a report showing a rebound in U.S. manufacturing for the first time in four months. Of course, as noted yesterday on TheBlaze, this report is can be easily misleading for anyone who wants to know about the true state of the U.S. economy.
By early afternoon in Europe, benchmark oil for November delivery was up 18 cents to $92.66 a barrel in electronic trading on the New York Mercantile Exchange.
The contract closed up 29 cents at $92.48 in New York on Monday after a report showed U.S. manufacturing grew in September for the first time in four months.
In London, Brent crude, used to price international varieties of oil, was down 8 cents to $112.11 on the ICE Futures exchange.
U.S. Futures: U.S. stock futures rose on that aforementioned U.S. manufacturing report and despite concerns about the economic outlook of both Greece and Spain.
Dow futures are up 47 points to 13,484. The broader S&P 500 futures are 8 points to 1,445. Nasdaq futures are up 13 points to 2,801.
The Associated Press contributed to this report.
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Rothbardian_in_the_Cleve
Oct. 2, 2012 at 12:33pmGee home prices are up? Thanks Helicopter Ben. When all else fails print money and inflate the asset class bubble. That worked out so well last time eh? Let’s see:
1. Nationalize the banks
2. Use the OCC and EEOC to strong arm them into making subprime loans again.
3. Manipulate interest rates
4. Create illusion of wealth to drive demand to asset class
5. Print money to buy all the garbage mortgage backed paper from Freddie and Fannie
6. Hold them on the balance sheet to now socialize the risks to all tax payers
7. Economy goes to crap and commodity prices soar and interest rates go up
8. People can’t afford their new houses and default
9. Economy shrinks more
10. Bankers get paid bonuses and commissions for originating the new junk assets
11. Those left standing get left with the tab
If only people understood economics and financial markets then Bernanke and his ilk would be in a jail cell or at the end of a rope. As such, collective ignorance allows us to be collectively sodomized. Just grin and bare it sheeple, you can take a shower when Ben’s done with you.
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Cemoto78
Oct. 2, 2012 at 10:04amAll the more reasons to replace the amateur in the white house with an adult who knows business and how to create jobs. Government, get out of the way.
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Cavallo
Oct. 2, 2012 at 10:52amThey won’t. Government creates the problem, the creates a “solution” to solve the problem they created but their solution will always make the problem worse, so more solutions are needed, or create different more pronounced problems that the government can then create varying solutions to those problems, creating more severe a problem or more problems to need solutions for. The public then cheers and clamors for more solutions, bigger solutions, and the government tells them they need more solutions to these problems that they created. We’re screwed.
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