Nov. 28-29, 2009

Stocks sold off sharply in light trading on Friday, following suit with European and Asian markets after Dubai said it may not be able to repay $60 billion in corporate debt by a Dec. 14 deadline. Middle Eastern markets were closed due to a religious holiday. Subject to any weekend announcements of a bailout among Middle Eastern families and governments, international currency markets could be roiled again Monday, and there could be a broad-based move of assets into the safety of U.S. treasuries.

While the DJIA lost about 154 points on Friday, the 10-year Treasury was being bought, pushing down its yield to 3.21%.

Reports of Black Friday and holiday spending will also be grabbing headlines next week. Anecdotal evidence from retailers, such as Wal-Mart where a reported 1,000 people were in line early Friday at a California store, is leaning toward an upbeat message and numbers.

In anecdotal evidence closer to home, a manager at T.J. Maxx in Cool Springs recently told me that sales were up for comparable days in 2008. For example, for the second Saturday in November, this year’s take was $48,000 versus $35,000 for the second Saturday of November 2008.

The Labor Department will post initial jobless claims next week, while unemployment hangs at around 10.2%. Short-term information about unemployment “topping off” and thus supplying prospective fuel for the consumer-driven economy may not reflect the depth of the full unemployment picture, however, as the duration of unemployment is lengthening.

For example, those Americans unemployed for 27 weeks or more has trended from 22.1% in October 2008 to 36.5% presently. Also, widespread part-time unemployment may be masking the bigger view. The percentage of full-time unemployed is almost one per cent higher at 11.1%. (This data and analysis from http://seekingalpha.com/article/175556-u-s-unemployment-from-bad-to-worse?source=yahoo.)

Dubai World, the investment arm of the Middle Eastern state of Dubai, on Wednesday asked creditors to defer at least $60 billion in debt repayments for six months with some reports putting the number as high as $100 billion. Its apparent inability to make good on its debt was reminiscent of the Lehman Brothers failure that further froze the credit markets and pushed the stock market into a downward spiral in 2008.

Among massive projects, Dubai World developed the world’s largest shopping mall, complete with indoor ski slope; Dubai Land to compete with Disney World, and four man-made islands, three in the shape of palm trees with million-dollar beachfront homes and another island shaped like a world map. All but one of those islands are vacant. They are building the world’s tallest building, which has yet to open.

Existing home sales reported by the National Association of Realtors surged in October, driven in part by the Nov. 30 deadline for the $8,000 Recovery Act credit to first-time buyers. That deadline has now been extended to April 30, 2010, and move-up buyers are now included in the windfall with a buying incentive of up to $6,500. Please call me for additional information about your best strategy for taking advantage of these buying incentives.

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...by Gary Moore

Cell: 615-579-8658 Toll-free fax: 866-321-6513

"Regardless of the dollar price involved, one ounce of gold would purchase a good-quality man's suit at the conclusion of the Revolutionary War, the Civil War, the presidency of Franklin Roosevelt, and today."

- Peter A. Burshre

Visit my real estate website:

http://www.RealCarte.com

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http://www.BrentwoodHomeLoan.com

(0% points, 1% origination, subject to program and lock period. Market Update informs on market trends and is not a quote for a unique borrower.)

Posted by Gary Moore on November 28th, 2009 1:00 PMPost a Comment (0)

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