Late night Scooby snacks:
Germany says “not so fast” :
BERLIN -(Dow Jones)- The euro zone’s agreement Sunday about details on an aid plan for Greece must not be misunderstood as an actual decision to provide aid, but it does justify hopes that the country will be able to refinance its debt on its own, the German Finance Ministry said Sunday.
"This decision today was no decision on aid for Greece," Finance Ministry spokesman Michael Offer told Dow Jones Newswires. "But it was only about technical preconditions for aid by further specifying the decision of the heads of state and governments. We expect, we hope that Greece is now in a situation where it can continue to refinance itself on the capital markets, as previously."
[…] Offer said that if the aid plan were to be activated, this had to be preceded by a Greek request, followed by a separate decision process in which the heads of state and governments would "personally" and "unanimously" approve help, a recommendation by the European Commission and the European Central Bank for such aid as well as an assessment by the IMF, which would send a mission to Greece ahead of any aid package decision.
"There is a big step between what has happened today and what would happen if Greece would actually ask for this help," Offer said.[…] (Dow Jones)
Robert Shiller says “Don’t Bet the Farm on the Housing Recovery :
MUCH hope has been pinned on the recovery in home prices that began about a year ago. A long-lasting housing recovery might provide a balm to households, mortgage lenders and the entire United States economy. But will the recovery be sustained?
Alas, the evidence is equivocal at best.
The most obvious reason for hope is that, unlike stock prices, home prices tend to show a great deal of momentum. Correcting for seasonal effects, home prices as measured by the S.&P./Case-Shiller 10-City Home Price Index increased each month from June 1995 to April 2006, then decreased almost every month to May 2009. Since then, they have risen through January, the latest month for which data is available.
So, because home prices have been climbing of late, isn’t it plausible that they’ll keep doing so?
If only it were that simple.
Home price booms and busts do end, sometimes quite suddenly, as was the case for the boom of 1995 to 2006 and the bust of 2006 to 2009. Today, we need to worry about strong headwinds, as the government begins to withdraw its support of a still-troubled lending industry and as foreclosures are dumping millions of homes onto the market.
Consider some leading indicators. The National Association of Home Builders index of traffic of prospective home buyers measures the number of people who are just starting to think about buying. In the past, it has predicted market turning points: the index peaked in June 2005, 10 months before the 2006 peak in home prices, and bottomed in November 2008, six months before the 2009 bottom in prices.
The index’s current signals are negative. After peaking again in September 2009, it has been falling steadily, suggesting that home prices may have reached another downward turning point. […]
[…] THE question now is whether a strong case has been built for a new bull market since the home-price turning point in May 2009. Though there is no way to be precise, I don’t believe it has. […] (NY TIMES)
Earnings, Being Too Optimistic Carries Risk for Stocks
