Yesterday, Zillow (the online real estate valuation company) announced that 28% of all homes in the United States are “underwater”; which means that they owe more on their properties than they are worth. And that is assuming full valuation for properties. In order to sell, typically the seller receives at least 5% or more under “appraised” value; and then there are the closing costs of 4% plus real estate commissions. Consequently, probably 50% or more homes in the United States are “underwater”.
President Obama’s approval ratings are rising, due largely to the demise of Osama bin Laden. Additionally, the employment numbers announced on Friday appear attractive until one looks at the numbers carefully. The unemployment rate is stated at 9%. Then there are approximately 6 million permanently unemployed people; which then increases the unemployment rate to about 15%; then finally 2.3 million discouraged workers; bringing the real unemployment rate close to 18%; which is not good.
Last week, I was flipping channels and the first Republican Presidential debate was on Fox News, and Romney, Gingrich, Huckabee, Trump and others were not part of the debate. I watched about two minutes and remembered that I should have taken a nap, and then maybe an hour or so later I woke up. It was a real snoozer for me.
• The DJIA has been rising and on balance should continue to rise.
• Gold (and silver) have corrected down. Both gold and silver are snapping back, but my guess is by the end of the day today or certainly by the end of the day tomorrow both gold and silver will resume their declines.
• Interest rates have been falling on the 30 year Treasury to 4.3%.
• The dollar hit new lows and have risen some. This may be the bottom or we may have a bit more on the down side.
• Oil has also corrected and probably will stay in the $90 to $110 range for the short term.
• Real estate pricing was down over 8% according to Zillow; and should continue lower.
• The economy continues to look weak to me.
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