Supporting evidents that the world could face double-dip

[casper_m]

Home-buying applications sink to 13-year low-reuters

By Lynn Adler

NEW YORK (Reuters) - Demand for loans to purchase U.S. homes sunk to a 13-year low last week, and refinancing demand also slid despite near record-low mortgage rates, the Mortgage Bankers Association said on Wednesday.

Requests for loans to buy homes dropped 3.1 percent in the week ended July 9, after adjusting for the Independence Day holiday, to the lowest level since December 1996, the industry group said.

Refinancing applications fell 2.9 percent, and the mortgage market index that reflects total loan demand also fell 2.9 percent.

Average 30-year mortgage rates edged up 0.01 percentage point to 4.69 percent, but were near the record low of 4.61 percent set in March 2009, based on MBA records dating back to 1990.

Rock-bottom borrowing costs are helping borrowers with pristine credit to buy and those who still have equity in their homes to refinance.

But high unemployment and foreclosures remain major hurdles, and worries that prices could dip further are also keeping many potential buyers on the sidelines.

The April 30 expiration of homebuyer tax credits has also sapped summer purchasing activity. Buyers had raced to get in under the gun for the tax incentives this spring, and demand for loans to buy homes has fallen in nine out of the 10 weeks since the credit expired.

Refinancings accounted for 78.7 percent of all applications last week, the same as the prior week, the MBA said.

Talk has surfaced of a double-dip in U.S. housing, though most economists doubt a second leg down would be nearly as severe as the first.

"It's sort of a self-fulfilling prophecy, but if there's going to be a double-dip you might as well stay on the sidelines as opposed to coming in to buy," said Taylor Woods, president of Genpact Mortgage Services in Irvine, California, a unit of Genpact Limited (NYSE:G - News).

"With as much turmoil as there is around loans that need to be modified, short sales, foreclosures -- all of those signs really indicate to buyers and investors that there will be better prices come tomorrow," he said.

Prices have toppled about 30 percent, on average, from their peaks four years ago, according to Standard & Poor's/Case-Shiller indexes. Most estimates are for additional single-digit declines.

"If there's one part of the economy that might suffer some sort of a double-dip it might come out of the housing market," said Cam Albright, economic research director and portfolio manager at Wilmington Trust Investment Management in Wilmington, Delaware.

Housing economists look for the autumn months to tell the story once the ripple effects of the expired tax incentives are in the past.

"There's been an awful lot of demand shifted forward by the first-time homebuyers credit," Albright said. "Once we get into the fall, maybe even sooner, some of that will begin to smooth out."

Fears grow as millions lose U.S. jobless benefits-reuters

By Nick Carey

CINCINNATI (Reuters) - Deborah Coleman lost her unemployment benefits in April, and now fears for millions of others if the Senate does not extend aid for the jobless.

"It's too late for me now," she said, fighting back tears at the Freestore Foodbank in the low-income Over-the-Rhine district near downtown Cincinnati. "But it will be terrible for the people who'll lose their benefits if Congress does nothing."

For nearly two years, Coleman says she has filed an average of 30 job applications a day, but remains jobless.

"People keep telling me there are jobs out there, but I haven't been able to find them."

Coleman, 58, a former manager at a telecommunications firm, said the only jobs she found were over the Ohio state line in Kentucky, but she cannot reach them because her car has been repossessed and there is no bus service to those areas.

After her $300 a week benefits ran out, Freestore Foodbank brokered emergency 90-day support in June for rent. Once that runs out, her future is uncertain.

"I've lost everything and I don't know what will happen to me," she said.

The recession -- the worst U.S. downturn since the 1930s -- has left some 8 million people like Coleman out of work.

Unemployment has remained stubbornly high at around 9.5 percent. According to the U.S. Bureau of Labor Statistics, in June 6.8 million people or 45.5 percent of the total are long-term unemployed, or jobless for 27 weeks or more.

Before the recession began in late 2007, the unemployed received benefits, usually a few hundred dollars a week, for 26 weeks or around six months after losing their jobs.

Under the federal/state programs, which are administered by state governments and partly funded by taxes on business, only full-time workers are eligible for benefits. Within federal guidelines, benefits and eligibility vary from state to state.

As the downturn left more Americans out of work for longer periods, Congress voted to provide funding to extend benefits to as long as 99 weeks in some areas.

Some critics say this adds to the country's large fiscal deficit, and may even discourage job-seeking.

FOOD BANKS FEAR STRAIN

An attempt to pass another extension has become bogged down in partisan political bickering in the Senate. Relief agencies fear that failure to extend benefits will strain their resources and may worsen the U.S. housing crisis.

"This will put a great deal of stress and strain on our organization, which has already been working hard," said Vicki Escarra, chief executive of Feeding America, which has a network of more than 200 food banks. In the year ended June 30, Feeding America distributed 3 billion pounds (1.36 billion kg) of food, a 50 percent increase over the past two years.

The benefits debate has pitted the majority of Democrats against most Republicans and some conservative Democrats.

When the House of Representatives passed a $34 billion benefit extension on July 1, 11 fiscally conservative Democrats voted against it. The Senate may take up the issue again in mid-July, but Republicans like Senator Tom Coburn have argued any extension must be paid for with cuts elsewhere.

"Even then he (Coburn) is not sure if that's a good idea," said John Hart, a spokesman for the Oklahoma senator. "The longer the unemployed have benefits, the less incentive there is to find a job."

Most economists argue that cutting benefits could slow recovery, describing benefits as direct economic stimulus because almost every penny of it gets spent. In a June 28 client note, Goldman Sachs said if all additional U.S. stimulus spending expires, it could slow the economy up to 1.5 percentage points from the fourth quarter 2010 to the second quarter of 2011.

The note added that extending unemployment benefits and a $400 tax credit would "substantially mitigate" that impact.

3 MILLION CUT OFF IN TWO MONTHS

During the Senate impasse, from the week ended June 5 to the week ended July 10, more than 2.1 million Americans lost their benefits. Another million will join them by July 31.

In Ohio alone, where unemployment stood at 10.7 percent in May, more than 83,000 people lost their benefits in June.

Sister Barbara Busch, executive director of non-profit housing group Working in Neighborhoods in Cincinnati, 65 percent of the people who come seeking help with their mortgages are unemployed or underemployed.

"I fear once the benefits run out, I suspect we'll see a new wave of foreclosures," she said. "I just hope I'm wrong."

Ohio is a bellwether U.S. state in elections. The state's Democratic attorney general Richard Cordray said blocking extending jobless benefits was politically motivated ahead of the midterm elections in November.

"If people lose their benefits they will blame the congressional majority and the administration," he said. "As unappetizing as it is, that would appear to be the strategy."

Senator Coburn's spokesman Hart said suggestions the Republicans were playing partisan politics were "ludicrous."

"The Democrats say that because they want to avoid making the hard decisions," he said.

Alonzo Allen, 55, a former aid agency worker in Cincinnati whose benefits will run out in September, spends two days a week volunteering at the food bank in Over-the-Rhine and the other three looking for work. He said he worries about the one-bedroom apartment he rents and how he will feed his dog Ginger, who is the "only family I have."

"If the benefits stop, I'll be out on the street and I'll lose all my furniture," he said. "That's going to be tough."

[casper_m]

ถ้าภาค consumption ของ U.S. และ Europe ยังไม่ดีขึ้น แล้วประเทศที่พึ่งพาการส่งออกอย่าง บ้านเราหรือแม้แต่จีน จะไปไหวหรอ

แล้วผลจาการประชุม G-20 ที่ว่า จะไม่กระตุ้นเศรษฐกิจแล้ว แล้วอะไรล่ะ ที่จะเป็นตัวขับเครื่องเศรษฐกิจไปข้างหน้า

[casper_m]

บทความนี้น่าสนใจผมเลยอยากเอามาให้ดู เกี๋ยวกับ Export ของ East Asia Countries

เดี๋ยวถ้าสภาสหรัฐ ตัดสินใจยังไงกับการกระตุ้นเศรษฐกิจ เดี๋ยวผมจะมาลงใหม่ แต่นะตอนนี้ปีหน้าไม่น่าจะดี

แต่มีโอกาสที่สภาจะผ่าน เพราะปลายปีสหรัฐ มีการเลือกตั้ง เลยอาจจะต้องเอาใจคะแนนเสียงซะหน่อย

ถ้าคิดว่ากระทู้นี้ไม่มีประโยชน์อย่างไร ก็ลบได้เลยนะครับ

East Asian exports slowing down
GLOBAL TRENDS By MARTIN KHOR

As doubts increase about the global recovery, a re-thinking of the economic growth strategies of China and other East Asian developing countries is needed, says a new South Centre paper.

AS the global economic crisis evolves, China and other East Asian developing countries will be profoundly affected as their growth strategies will no longer be able to serve them as before. Changes in economic policies and strategies that rely less on exports to the West will thus be required in China, and even more so in the other Asian countries.

This is the conclusion of a new Research Paper by the South Centre, “Export Dependence and Sustai­nability of Growth in China and the East Asian Production Network”, authored by its special economic adviser and chief economist Yilmaz Akyuz.

According to the paper, the crisis exposed the high dependence of China and other East Asian countries on exports for their growth.

This makes these countries economically vulnerable as prospects for global economic recovery have become more gloomy, with growth likely to weaken considerably in Europe and with American consumers reducing their spending.

Using new methods of calculation, the paper shows that China has been much more deeply dependent on exports for its growth than previously estimated. It is estimated that exports contribute about 50% of China’s recent pre-crisis growth.

This high export dependence makes China more vulnerable than normally perceived to the slowdown in the US and Europe. In the medium term

China will not be able to return to reliance on exports to maintain its pre-crisis growth of 10% or more.

If its exports expand at the moderate rate of 10% a year instead of the 24% to 30% in 2002-2006, its growth may barely reach 7%. Returning to a path of 10% growth requires raising domestic consumption much faster.

In recent years, the share of consumption in GDP has gone down from 55% in late 1990s to 36% in 2008. The paper found that a major cause of under-consumption in China is the low share of household income in GDP, as wage increases lagged behind productivity increases. As a result, the share of wages in GDP fell to about 40% at present from 50% to 55% in the 1990s.

The paper makes the following suggestions in the way forward for China:

> In view of bleak export prospects, a return to trend growth in China crucially depends on a sizeable increase in the share of household income in GDP and a corresponding decline in corporate profits, savings and investment.

This calls for a higher share of wages in value-added and significantly greater government transfers to households, particularly in rural areas where incomes remain depressed.

> There should be greater public spending on social infrastructure in health, housing and education. These can be financed by dividend payments by state-owned enterprises.

> A shift from export-led to consumption-led growth would also require significant industrial restructuring.

According to the paper, the slowdown in global growth may impact other developing countries in East Asia more seriously than China because they are even more export dependent, and their exports not only to the West but also to China will be affected.

In Indonesia, South Korea, Taiwan and Thailand, exports contributed over 60% to growth, compared to 40% to 50% in China. The export dependence of Malaysia, Singapore and Vietnam is even higher. Their indirect exposure through China to a slowdown in exports to the US and the EU can thus be as important than their direct exposure.

China’s assembly-manufactured exports depend a lot on inputs from other Asian countries. For every $100 worth of processing exports of China to the US and EU, about $35 to $40 go to East Asian developing countries and $20 to $25 to China. Thus a slowdown of Chinese exports to the US and EU can have a strong impact on these countries.

Further, while China is a major importer from these countries, it is not a major market for them since an important part of Chinese imports are destined to be exported to advanced economies rather than being used internally.

The paper shows that domestic consumption and investment in China generate proportionately much less demand for imports from East Asian countries than its exports to the US and the EU.

Consequently, a shift by China from export-led to a consumption-led growth and a shift by the US in the opposite direction would result in a significant slowdown of their combined imports from East Asian developing countries.

A $100 increase in Chinese consumption raises imports by less than $10 while a $100 decline in US consumption reduces imports by some $25. In other words, at its current pattern of domestic spending, the Chinese market is not a good substitute for the US and EU markets for the other East Asian countries..

To become a regional locomotive, China would need to raise not only its domestic consumption as a proportion of GDP, but also its import content and, in particular, its imports of final goods from the region.

Moreover, the other Asian countries will need industrial restructuring even if there is a rapid increase in domestic consumption and its import content in China. The same problem would also be encountered in reducing dependence on exports by shifting to domestic markets.

The paper also notes that a main reason for excessive reliance on exports is under-investment. In several economies, including Malaysia, Singapore, the Philippines, Taiwan and Indonesia, investment rates have been hovering around 20% of GDP in recent years, less than half the rate in China.

Recent investment rates are too low to generate a rapid growth of either productive capacity or effective demand.

Thus, a great deal of re-thinking of future growth strategies is needed – both for China and the other East Asian countries as the uncertainty of a global recovery continues.

[mprandy]

ได้อ่านแล้วโล่งใจหน่อย

คิดว่า Chocolate fountain double-dip .. อันนี้ยอมไม่ได้

(ป.ล. กลับเข้าเรื่อง ... ขอบคุณเจ้าของกระทู้สำหรับข้อมูล ... อ่านแล้วก็ยังโล่งใจอยู่ดี)

[madam]

ขอบคุณค่ะ อ่านเพลินเลย

[casper_m]

ผมรอคนตอบผมอยู่ขอบคุณพี่ทั้งสองคนมากนะ

ผมแถมให้อีกอัน เป็นคำตอบของเรื่อง BDI ที่ผมถามเมื่อวานว่าสามารถเเป็น indicator ทางเศรษฐกิจได้หรือไม่ พี่ Mod เค้าย้ายผมไปห้องนักลงทุนหน้าใหม่ซะนั่น น่าน้อยใจจริงๆ

ถึงแม้ว่าอาจจะไม่ใช่อาจจะไม่ใช่บทสรุปที่ถูกต้องก็ได้ แต่ผมเชื่อในสิ่งที่ผมเห็น
บทความนี้เป็นอันสุดท้ายแล้ว

Why are people taking about the recession if it cannot happen. If the economy is doing well, everyone would keep quiet for sure.  

Baltic dries up

Jul 14th 2010, 16:11 by The Economist online

FOR most of the past two decades the main measure of shipping costs has been used as a guide to what is happening to world trade. So the fact that the Baltic Dry Index—which measures the rates charged for chartering the giant ships that carry coal, iron ore and grain—has fallen by almost 60% in its longest streak of consecutive declines for nine years (34 days running as of July 14th) has won attention.

Add in the fact that China’s imports of iron ore and coal fell in June by 6% and 8% respectively, and the Baltic Dry seems to be signalling trouble ahead. Melissa Kidd of Lombard Street Research notes that the decline in rates has been greatest for the biggest vessels, the sort used to carry iron ore and coal from Australia and Brazil to China, suggesting weaker demand in the world’s most vibrant big economy. Such ships cost $48,000 a day to charter in late May; they are now down to around $18,000 a day.

China’s steelmakers are certainly being squeezed. Measures to cool property markets have caused prices for construction steel to fall by 17% since mid-April. The price of hot-rolled coil steel used to make cars and domestic appliances has seen a similar decline. Meanwhile the price of the iron ore the steelmakers import as their core ingredient rose by nearly 50% in the first half of the year, squeezing margins. So steel mills could be running down their iron-ore stocks because they see demand falling and because they suspect that ore prices will fall later this year. Spot prices at Chinese ports have fallen in recent weeks, suggesting that destocking has begun.

There are growing doubts, however, about what the Baltic Dry is actually signalling. The confusion is whether the index is saying more about the supply of ships than the demand for their cargoes. The index spiked dramatically in 2008 as China’s imports of hard commodities soared at a time when the supply of ships was constrained and port congestion added to demand for capacity (see chart). The financial crisis soon set the index back on a steadier path but not before this period of dramatic growth in demand from China had prompted a surge of orders for bulk carriers, especially the very largest ones that are used on the China trade routes.

These ships take around three years to come onstream. Despite the cancellation of some orders the flow of new ships is now in full flow: in the first half of this year the global fleet increased by 23% as new vessels came into service at the rate of 16 a month. There are now 23 such vessels arriving each month, adding to oversupply.

Other freight indicators are less negative than the Baltic Dry. Container-shipping rates are holding pretty steady as companies decide to accept a lull in traffic rather than cut rates to stimulate demand. And according to the International Air Transport Association air freight is booming, up by 34% year-on-year in May. But air freight measures trade in high-value finished goods, whereas bulk ships reflect demand for the raw materials of which they are made. If there is more to its decline than supply-side distortions, the Baltic Dry could yet be a grim warning of what is to come.

[zz99]

การที่ G-20 จะไม่กระตุ้นเศรษฐกิจต่อไปก็อาจเป็นเพราะงบประมาณที่ตึงตัว แต่ที่ล่าสุด FED ออกมาปรับประมาณการณ์ GDP ปีนี้ลงเล็กน้อย แต่ไม่มีเพิ่มมาตรการกระตุ้นเศรษฐกิจอีก อีกมุมมองนึงคือ ความกังวลเรื่อง Double dip จะลดลง แต่ Asia มีโอกาสเกิด Decouple สูงครับ

[casper_m]

พี่ช่วยอธิบาย decouple ให้ผมฟังหน่อยได้มั้ยครับว่ามันหมายถึงอะไร ผมเรียน eco 101 ต้วเดียวเลยไม่รู็้

G-20 ออกมาบอกว่าจะไม่กระตุ้นแล้วนั้น เป็นเพราะว่าไม่มีเงิน อันนี้จริงครับเค้าใช้เงินมากเกินไป แล้วกลัวจะจ่ายไม่ไหว

แต่ถามว่าแล้วสภาพที่เป็นอยู่ที่ควรจะอัดเงินลงไปหรือป่าวนั้น ผมว่าถ้าไม่อัดเงินลงไปอีกผมกลัวมันจะฟุบนะสิ

อันนี้ Paul Krugman พูดถึง stimulus นะครับ

Paul Krugman Throws In Towel, Says We're Headed For Another Depression
Posted Jun 28, 2010 11:27am EDT by Henry Blodget in Recession, Banking, Politics
Related: udn, uup, ^dji, ^gspc, ^dji, gld

For the last several months, Princeton professor Paul Krugman has become increasingly agitated about what he feels is a disastrous mistake in the making -- a sudden global obsession with "austerity" that will lead to spending cuts in many nations in Europe and, possibly, the United States.

Krugman believes that this is exactly the same mistake we made in 1937, when the country was beginning to emerge from the Great Depression.  A sudden focus on austerity in 1937, it is widely believed, halted four years of strong growth and plunged the country back into recession, sending the unemployment rate soaring again.

In Krugman's view, the world should keep spending now, to offset the pain of the recession and high unemployment--and then start cutting back as soon as the economy is robustly healthy again.

Those concerned about the world's massive debt and deficits, however, have seized control of the public debate, and are scaring the world's governments into cutting back.

Which fate is worse?  It depends on your time frame.

Cutting back on spending now would almost certainly make the economy worse, at least for the short run.  Not cutting back on spending later, meanwhile (and Congress has shown no ability to curtail spending), will almost certainly keep us on a road to hell in a handbasket.

The White House's own budget projections show the deficit improving as a percent of GDP to about -4% by 2013.  After that, however, even the White House doesn't think things will get much better.  After a few years of bumping along at about -4%, the deficit will begin to soar at the end of the decade.  And thanks to the ballooning costs of Medicare, Medicaid, and Social Security--along with inflating interest payments from all the debt we're accumulating--the White House expects the deficit to soar to a staggering -62% of GDP by 2085.

What Krugman and his foes agree on is that that's no way to run a country.  And it's time we finally faced up to that.

In the meantime, we'll continue to fight about what to do in the near-term.  And Krugman thinks he has lost that war and we're headed for another Depression.

[casper_m]

ผมว่า อเมริกายังไงก็หนีไม่พ้นครับ แต่ว่าจะวันไหนเท่านั้น

ช่วยวันนี้วันหน้าก็อาจจะผ่อนหนักให้เป็นเบาได้ สุดท้ายพอหยุดช่วยก็โดนอยู่ดี

ผมว่าปีที่แล้วไม่ช่วยไว้ ผลคงเหมือน เมืองไทย ปี 1997 ไปแล้ว

Stephen Roach บอกไว้ว่า เศรษฐกิจอเมริการตอนนี้เหมือนคนไข้เพิ่งฟื้น ถ้าเกิด shock เล็กๆ คนไข้อาจจะฟุบลงไปได้

แต่ที่ผมไม่รู้คือ ถ้าเป็นอย่างนั้นจริง asia เราจะกระทบยังไง



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[zz99]

Decouple เป็นทฤษฎีที่ที่มุมมองว่าเศรษฐกิจเอเชียจะแข็งแกร่งและสามารถแยกตัวออกจากสหรัฐ ไม่ได้ผูกติดหรือพึ่งพามากเหมือนในอดีต ซึ่งตอนนี้ก็จะหันมามองที่ตลาดเกิดใหม่อย่างจีน และ อินเดีย กันมากขี้นเพื่อทดแทนครับ