Economy accelerated on credit driven boom – existing home sales and consumer confidence manifests acceleration
Marla Guthrie
Dec. 28, 2006

The Fed is in a tight corner again. Existing home sales and consumer confidence manifests acceleration in economic growth. But there is one little problem, the growth is fueled by credit.

The Conference Board's index of consumer confidence rose to 109 this month, defying forecasts for a drop.

National Association of Realtors said sales of previously owned homes unexpectedly increased 0.6 percent in November.

National Association of Purchasing Management-Chicago reported that its gauge of business activity rebounded from the first contraction in more than three years.

All the news point to an accelerating growth. But the stock market sold off as the market finally came to realization, the increase in corporate profit will come with higher rates.

Economy accelerated on credit driven boom – existing home sales and consumer confidence manifests acceleration
Marla Guthrie
The Fed is in a tight corner again. Existing home sales and consumer confidence manifests acceleration in economic growth. But there is one little problem, the growth is fueled by credit.
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Toyota planning to buy Ford Motors?
Marla Guthrie
The troubles of Ford Motors are real. According to media reports, Ford's CEO met with Toyota's chairman last week in Japan, in a sign that Alan Mulally may be looking to the Japanese rival for answers to the U.S. auto maker's problems...
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Cancellations of purchase contracts in housing not counted by Government show massive slow down in hosing – ‘customers walking away’
Karen Gibson
In reality, th number of homes completed and waiting to be sold rose 51 percent to a record 169,000 in November from the same month last year.
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Stock markets gaining on increased hope in growth prospects and lower rates in 2007 – one of them is true – which one?
Fred Day
The indications are there that growth will falter but growth in US will far better than the rest of the world. The Euro zone, the Asia can suffer larger economic slow down while US may be headed for a slow growth environment.
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A jam in credit pipe as dollar interest rate 10-year swaps spread widened out by 2.75 basis points – lack of liquidity in 2007 can push stocks, gold and oil down
Marla Guthrie
The $69 trillion dollar interest rate 10-year swaps market is as deep as six times US GDP. It has become the life line of all fianncial systems including mortgage and bond market.
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Tax related huge Hedge Fund redemptions could be troubles for oil, stocks and metals in early January 2007
Karen Mehan
Hedge fund investments face massive redemption in January 2007 as tax break that lets their investors take generous expense deductions and write off management fees are under deep scrutiny.
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Financial services sector leading the way for lower Asian stock market
Arati Guha
The Bank of Japan indicated that there is not much reason to raise the rates in January 2007 in spite of accelerating inflation data and labor shortages.
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