Spend. Spend. Spend. Consumer Spending is Up by Less Than Half a Percent. Congress and Banks Need to Roll Up Their Sleves and Fix the Credit Market.

MARKET SYNOPSIS

Buying our way out of the recession is easier said than done. A fear of inflation, unemployment, and banks is what are keeping Americans from spending. Instead theses fears have cause Americans to save more now than they have for the past 15 years. And it does not help that even though banks have received money from the government they still haven’t been much help to a lot of people. The strict guidelines prevents struggling Americans to get a loan, and only people with jobs, money, and good credit can get loans. And the market is seeing changes in investing patterns. Now investors are seeking to diversify their investments.

How to recover the housing market

One of the first key things that need to be dealt with, is banks need to work with borrowers. It is reported that banks are not working or facilitating to the borrowers needs. The housing market is vital to the overall health of the economy. Unfortunately there are too many signs indicating that the housing market will not start to recover any time soon. Also, banks are not lending out money to people, especially to those people that actually need it. Banks do not lend money base on who needs it, instead they lend money to people with a secure job, good credit, and have money on hand. In order to enable people to buy houses the credit market needs to be fixed. Another problem that affects the housing market is unemployment. Employees are in constant fear that anytime soon they will be losing there jobs. As a result, people are saving money and excluding any idea of buying a new home. So before the housing market can start recovering, unemployment needs to be dealt with. In addition, one must wonder how is it possible to owe more on your house than what it is worth. This discrepancy with the pricing of houses needs to be address and fixed. Another headache to deal with is short sales. Banks are looking at short sales as people trying to take advantage of the system. Short sale is a transaction made between the mortgage holder and a prospective buyer to purchase the house at lower price than the amount owed by the mortgage holder. Banks did agree to short sales if the prospective buyer is going to buy at a higher price than what is owed. Lastly on may 1^st new rules emerged to help appraise homes, called the Home Valuation Code of Conduct (HCVV). Critics have expressed their feeling on the HVCC, by calling it a ludicrous policy.  So the housing marking has a lot hills to overcome before it starts to recover.

From almighty dollar to just a dollar

The euro is catching up to the dollar. The euro is 10% percent lower of trading power than the value of the dollar.  And China is claiming that there super sovereign reserve will enable the yen to surpass the value of the dollar. However there is a lot of skepticism around that comment, China might be exaggerating their position. One of the things that are keeping the dollar in the forefront is the fact that the world is looking at U.S, to get us out of this financial mess. Another thing that helps the U.S dollar is that even though the U.S. is suffering a recession, so is the world, and in some parts of the world is suffering more than others. However one of the threats that the dollar is suffering is inflation, because government has spent a lot of money. On the contrary people feel that the dollar will make a comeback, because once unemployment is a problem of the past people will start spending again.

U.S. economy depends on the citizens spending habits.

A staggering 6.9% in personal savings during the month of May, getting as high as it was 15 years ago. However in May, consumer spending went up by .3 % it is reported that it is the first increase we seen in 3 months.  Another thing that is encouraging consumers to spend is confidence that the worse has passed. Congress and banks need to capitalize on this stimulus to create momentum. They need to figure out a way to get the credit market running efficiently and effectively. Also we need to fix the shortage of jobs and the shortage of wage growth. Consumer spending is stabilizing and the next thing that needs to be stabilized is the labor market. One of the markets that desperately need an increase of sales is the housing market because they account for more than half of the economy’s health.

The market and strategies

A lot of investors are seeking different strategies now that we are in the bear market. Some investors have started to buy securities overseas. Some investors are not trading. However the recent trend is diversifying investments. The strongest stocks are in different sectors, and investors are purchasing electronic stock, alongside with financing stocks and or health care stocks. Investors are acknowledging the slow road towards recovery. So instead they are looking for stability and long term returns.

MOST ACTIVE

TOP ADVANCERS

COMPANY	LAST SALE	CHANGE NET	VOLUME
FANMPRS	$1.29	.59     84.29%	2,672,493
FANMPRT	$1.25	.53     73.61%	430,266
CHBT	$16.35	5.87   56.01%	599,052
FANMPRM	$1.34	.44     48.89%	205,300
FANMPRL	$1.30	.40     49.44%	105,849

TOP LOSERS

COMPANY	LAST SALE	CHANGE NET	VOLUME
PRM	$1.80	.58   24.23%	1,017,098
NLS	$1.00	.28     21.88%	2,882,057
ITIC	$23.93	6.10   20.31%	8,721
FPFC	$2.94	.68     18.78%	1,715,596
PKOH	$3.24	.73     18.39%	629,346