Dollar Falls to Record Low Against Euro on Housing Slowdown Concern
July 10th, 2007Via: Bloomberg:
The dollar fell to a record against the euro and dropped the most since March versus the yen on speculation a slumping housing market will slow the U.S. economy.
The U.S. currency also sank against the Swiss franc, British pound and Danish krone after Standard & Poor’s warned it may cut ratings on $12 billion of bonds backed by subprime mortgages, diminishing the appeal of dollar-denominated assets. Futures contracts show traders expect the Federal Reserve to keep borrowing costs on hold through year-end.
Posted in Economy | Top Of Page
Supposedly, the Dow dropped 148 points today as well. Home Depot and Sears reported that their earnings were going to be about half of what they were supposed to be. Home owners no longer are crashing at these retail store gets to do home improvements when the value of homes has dropped.
Here we go.
Homeowners share of home equity is at the lowest aggregate level on record, averaging only a couple of percent of listed value. Compare this to roughly 70% in 1970, largely due to heavy borrowing against this equity over the last decade. Even a small drop in home prices at this point will leave MOST homeowners upside down, owing more than the home is worth, either locking them in place or, more likely, encouraging them to simply walk away from it.
US bankruptcies are also at their highest rate on record, despite the new rules intended to make this harder and less frequent. Look for millions of foreclosures and bankruptcies.
Read more:
“A Dangerous Combination: Rising Debt and Falling Housing Prices”
http://www.theledger.com/article/20070707/NEWS/707070320/1178
“Why is housing falling nationally when the economy is booming?”
http://www.itulip.com/forums/showthread.php=3fp=3d12115#post12115
Doesn’t a low dollar mean that EUropeans will be scheduling cheap vacations to the States and buying American made products? I seem to recall us doing the same thing when the Euro was low.