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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: maceng2 who wrote (43120)	12/20/2005 10:57:37 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Housing starts up 5.3% in November - Tuesday, December 20, 2005 3:16:33 PM afxpress.com WASHINGTON (AFX) - New construction of U.S. homes rebounded in November, the Commerce Department said Tuesday Construction of new homes rose 5.3% to a seasonally adjusted annual rate of 2.123 million units Economists surveyed by MarketWatch were looking for a smaller increase to about 2.02 million starts in November. October's housing starts were revised slightly higher to 2.02 million from 2.01 million. Building permits -- which foreshadow future activity -- increased 2.5% to 2.16 million annual units. "Housing once again shows its strength -- the zombie market that just won't die," said Robert Brusca, chief economist at FAO Economics in New York Starts of single-family homes rose 4.8% to a 1.81 million pace. Starts of multifamily homes sank 14.8% to 310,000 Bear Stearns economists said starts could rise further in December due to the high level of November permits activity. The government's housing data are subject to large sampling and other statistical errors. The government cautions that it can take up to five months for a new trend to be established in housing starts. In a separate report, the Labor Department said prices at the producer level had their largest decline in 31 months in November. "This morning's economic releases confirm that inflation remains muted as the November PPI came in down 0.7%," said John Wilson of Morgan Keegan. "Housing starts and building permits were also stronger than expected, indicating that reports of their demise may be premature."

To: maceng2 who wrote (43120)	12/20/2005 11:10:02 AM
From: mishedlo	Respond to of 116555

U.S. Nov. PPI has biggest drop in 31 months Tuesday, December 20, 2005 1:56:33 PM afxpress.com WASHINGTON (AFX) - U.S. prices of raw materials and other producers' inputs fell 0.7% in November, the Labor Department reported Tuesday. This is the largest monthly decline since April 2003. Excluding food and energy costs, the core PPI rose 0.1%. The PPI report was tamer than expected Economists were expecting the PPI to only fall 0.3% and the core rate to rise 0.2%. The PPI had increased 0.7% in October, while the core PPI had fallen 0.3% The PPI is now up 4.4% in the past 12 months, down from 5.9% last month. The core PPI has risen 1.7% in the past year, down from 1.9% last month Over the year, inflation is not much worse than last year. For the first 11 months of the year, the PPI is running at a 5.2% annual rate, compared with a 5.1% rate over the same period last year In fact, the core rate is lower than last year. Core prices have risen 1.8% over the first eleven months of the year, down from a 2.2% rate last year In November, futher back in the production cycle, crude goods prices fell 1.2% in November but were still up 21% year-on-year. But core crude good prices rose 5.4% in the month Prices for intermediate goods destined for further processing fell 1.2%, led by a 6.6% drop in energy prices, but were up 8.4% over the past 12 months The core intermediate PPI rose 0.5% in November Energy continued to be the story in November. Finished energy prices fell 4.0% in the month, also the largest decline since April 2003. Prices for home heating oil fell 15.5%, while liquefied petroleum gas prices fell 12.2% Auto prices fell 0.8%, the largest decline in four years. Food prices rose 0.5% as fresh citrus fruit prices jumped 35.2%, the biggest increase since January 1999

To: maceng2 who wrote (43120)	12/20/2005 11:12:42 AM
From: mishedlo	Respond to of 116555

UK´s Blair tells EU deputies that budget deal essential for enlargement UPDATE Tuesday, December 20, 2005 11:44:29 AM afxpress.com UK's Blair tells EU deputies that budget deal essential for enlargement UPDATE BRUSSELS (AFX) - UK Prime Minister Tony Blair told the European parliament that the EU budget deal secured in the early hours of Saturday morning is vital to the success of the bloc's enlargement "The purpose of the budget was to enable enlargement to be a success, and that is one of the reasons why it was so important that we secured the budget deal," Blair said He also stressed the importance of the longer-term reforms of the budget, including both the farm subsidy system defended by France and his own country's contested EU rebate He underlined the importance of the mid-term review of all spending required under the budget deal "I think this decision will in time be seen to be of critical importance," he said But Nigel Farage of the UK Independence Party accused Blair of selling out his country's interests, and being beaten by French president Jacques Chirac over attempts to reform farm subsidies "This budget deal is game, set and match for president Chirac," Farage said "He has outclassed and outplayed you at every turn," he said Blair said Farage and other eurosceptic deputies are living in the past "You sit with our country's flag. You do not represent our country's interests," he said. "This is the year 2005, not 1945. We're not fighting each other any more. These are our partners." European Commission president Jose Manuel Barroso said that while the budget deal fell short of his ambitions, he it "has the merit of avoiding paralysis, of getting Europe moving again" In principle, the parliament has the power to reject the 2007-2013 budget but is not expected to do so "They will not want to be held responsible for triggering a new crisis at this time and are almost certain to approve the budget," European Policy Centre director John Palmer said

To: maceng2 who wrote (43120)	12/20/2005 11:18:00 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Trio of surveys on UK mortgage lending signal property market recovery Tuesday, December 20, 2005 10:53:29 AM afxpress.com LONDON (AFX) - The trio of surveys of the UK property market out today signalled that a recovery is in place, but analysts remain sceptical whether the runaway gains of the past few years will be repeated In data out this morning, it emerged that mortgage lending levels in November were back at levels seen in the heady days of summer 2004 when the annual rate of house price gains was above 20 pct In its monthly survey, the Building Societies Association said seasonally adjusted gross advances rose by 3.9 bln stg in November, up on the previous month and the highest since August 2004. The British Bankers' Association, meanwhile, said net mortgage lending in November rose by 5.1 bln stg -- a level not seen since July last year. And rounding up the data, the Council of Mortgage Lenders found gross mortgage lending rose by 28.5 bln stg -- again the highest since July 2004. For most of 2005, house price gains slowed down to almost no growth at all. The big question is whether house price inflation is about to take off again Howard Archer at Global Insight thinks not He believes today's data indicate that the property market has stabilised, but added that it remains "highly doubtful that house prices will move markedly higher any time soon." This view was echoed by CML director general Michael Coogan "While it could be tempting to assume this strengthening will continue, our expectation for the coming year is of relatively subdued transactions levels, mortgage lending moderating a little from recent levels, and house prices rising by about 2 pct," he said Still, the increases in mortgage lending already appear to have boosted house prices with even the usually pessimistic Royal Institution of Chartered Surveyors survey showing its first house price gain in 15 months during November "Overall, this survey has been the most pessimistic on the housing market and in recent months it has come back into line with other housing indicators, which are pointing to low-single digit growth rates," said John Butler, economist at HSBC. "While the housing market looks like it has bounced from its lows, it is so far too early to proclaim that the downside risks have passed," he added On the plus side, employment remains high and interest rates were cut in August. However on the more negative side, house price-to-income ratios are still at record highs and the cost of servicing debt is around its highest level since 1991 "The valuations and servicing burden should prevent the housing market re-accelerating. Yet equally, without any additional trigger it is hard to see what could drive the market down," said Butler. BBA director of statistics summed up the data as signalling that the property market had bottomed out and that it is now being underpinned by steady demand For his part, Adrian Coles, Director-General of the Building Societies Association noted that the housing market has clearly recovered from the effects of the sharp increase in interest rates which peaked at 4.75 pct in August 2004 The benchmark interest rate stayed at 4.75 pct until August this year when it was lowered to 4.50 pct The Bank of England will be concerned whether the pick-up in mortgage lending will also lead to a rise in consumer spending. The link between the two is crucial But today's BBA data also showed that net credit card borrowing was weak in November, rising by just 125 mln stg compared with 459 mln stg in October and under the average of 146 mln stg over the past six months. "Ahead of the festive season, the picture of consumer spending and credit is mixed. The pick-up in retail sales is not yet being matched by stronger borrowing on credit cards or higher demand for personal loans," said David Dooks of the BBA