SEARCH BLOG: DJIA and HOUSING
CNN reports that good news propelled the DJIA up 143 points on Friday.
- New home sales were up
- Durable goods orders were up
Recently I wrote that the Fed was unlikely to take quick action on the prime rate because the drop in the DJIA had to be looked at from a longer perspective. The Fed took actions to prop up financial institutions, but still feels the economy is going well enough... and inflation is still enough of a concern... to be cautious about lowering rates.
I'm not sure what might be causing the new home sales to be increasing elsewhere, especially in light of the increasing foreclosure rates. Perhaps it is the automobile-like incentives being heaped on new homes to try to move them. Big discounts, options thrown in for nothing, "we'll buy your old house from you, if you buy a new one from us."I'm glad to see the markets holding ground since I have significant investments. But I'm not yet convinced that the good news will hold sway. We've seen those seasonally adjusted annual rates for housing revised downward for May after they were published.
Besides, one should also point out that the July 2007 rate was 10% below July 2006. That might be reason to mute the cheering a little.Of course, it might just be a matter of perception rather than perspective.