The June Gloom here on the Central Coast of California is ever present, much like the European economic/fiscal crisis. No matter how well I sleep, I can count on waking up to both, which then makes even my morning cup of java less likely to perk me up. The good news is, even though I am slightly more dull because of both, I know the feeling will last only until the pall burns off, which it has always done and will continue to do.
American builders broke new ground on more single-family homes in May and requested more permits to build homes and apartments than they have in the past three and a half years. The Commerce Department also said April was much better for housing starts than first thought. The government revised up the figures to 744,000 — the fastest building pace since October 2008.
The above, for example, takes away my lackluster energy from the grey morning. I see those statistics and I think, “Despite Europe, the breathless media, and American business’ somewhat lethargic hiring, the American consumer is still buying big things, or at least planning on buying big things, such as all the parts and labor that go into building a home.”
Oracle soared $1.38, or 5 percent, to $28.50 after the software maker surprised investors with the early release of its fourth-quarter earnings. The results beat Wall Street’s forecasts, and the company said new software licenses increased sharply.
And when I read the above, the fog lifts a bit more as I realize that American business’ will have to pick up on the hiring because American business’ are still buying big things, such as enterprise software systems and other such digital necessities that allow for efficiency and growth. Companies might not be using much of that $2 trillion or so for hiring yet, but they will, if they expect to make anything or have anyone buy anything they make.
The European Central Bank, the only federal institution with the capacity to act swiftly and decisively, is also split between hawks and doves, with German-led hardliners publicly opposing further purchases of government bonds of debt-stricken nations. But its own economic outlook is darkening with the closely-watched ZEW index of analyst and investor sentiment falling at its fastest rate since October 1998, before the euro was launched.
And still, as the morning moves on, the light gets brighter, even if the fog is still present. The pressure on Germany and its hardline stance is increasing dramatically from all angles. This is a good thing. If nothing else, true politicians have a keen sense of survival, and as the hardliners in Germany become more isolated because of the peoples’ frustration with decelerating economic activity, the more they will be forced to the middle, which is where all great political compromise is formed, and it is the place where most often effective resolution is found.
Foreclosure starts grew in May on an annual basis for the first time since January 2010.
Yup, I look out my window and the gloom of June is still pressing the light flat, but just over there, through the oak branches, I see a bright spot, the light fighting back and the fog burning off just a bit more.
Home seizures plunged 18 percent from a year earlier, a sign that banks are turning to repossession alternatives.
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