Major Market Movers: More Horror!!!
After a month's cycle of tries that can not be underestimated in attempts to disclose the most adequate resolution to the current housing distress and the accompanying mortgages defaults after a 50 basis point cut; the data today provided further proof that the slump in the sector awaits the verdict in next week's FOMC decision…
The Existing Home Sales figures for the month of September showed today a decline to an annualized rate of 5.04 million units exceeding the fall seen in the disastrous month of August which was revised to the downside to a fall of 4.3% to 5.48 million units while today's reading was a fall much larger than expectations shedding 8.0% despite optimist expectations of just a 4.5% drop.
More comprehension and proof to the lagging performance of the sector has been added today from the US economy and deepening the expectations of the recessionary phase; the false attempts to restrain new restrictions on further secured mortgages did not have bright benefits to credit markets nor to the housing sector, as the slowdown continues to be seen in lower revenues margin reported by banks and large financial institutions. The threat on confidence is definitely skyrocketing as lower appeal is being seen on purchasing houses in the United States even as prices are at low levels and after the Fed cut rates by half a percent.
The aftermath of the housing is that as we said the reported losses in the financial sector, the issued report by Merrill Lynch & Co. one of the world's largest institutions; as they reported their losses in the quarterly report as the losses of a two year low of $8.4 billion as a result to the crash seen in the housing market and correlated investments from asset backed securities and subprime mortgages.
It was evident last week that markets have increased their intensity and volatility starting form the American markets and spreading to the rest of the world, and that led investors to lack all faith in all directions, as they now are tarnished to find the answer where is the solution the safest answer of the most profitable of them all.
Last but not least the final call is to be seen next week, as a cut on interest rates is not the only to be seen and much more is to be seen followed…
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