Eagle Eye Opener

Who’s Really behind the Home-Price Boom?; The Weaker the Better for World Markets: Dwindling Domestic Opportunities Push Spanish Business Worldwide

Who’s Really behind the Home-Price Boom? (YahooFinance)

For many “savvy” investors, it’s no secret that the Federal Reserve is the real force keeping the U.S. economy afloat, not a genuine rebirth in consumer spending…  But how many of those same “wizened” investors do you think know who — or what — is really behind the price spike in U.S. home sales? Not many, to be frank, know that Wall Street is pushing up home sale prices in formerly downtrodden markets such as Phoenix and Las Vegas. According to Suzanne Mistretta, an analyst at Fitch Ratings, “The growth is being propelled by institutional money… The question is how much the change in prices really reflects market demand?”  Unfortunately, we’ll find out sooner than we probably want to know. For when the big-moneyed buying glut ends, will the home market deflate like just another balloon?

The Weaker the Better, for World Markets that Is (Reuters)

Just when global markets looked to be getting a serious case of the jitters, along comes the U.S. economy to make everything just right… with its anemic performance. Both dollar and gold prices are recovering nicely from one-month lows as performance data from the Institute of Supply Management (ISM) reflected that U.S. factory activity fell to its lowest level since 209. Of course, the weakness was embraced with open arms by bourses worldwide as it prompts the Fed to keep its printing presses rolling. However, sometime soon, those presses will slow down and then stop. At that time, weaker will only be weaker.

Dwindling Domestic Opportunities Push Spanish Business Worldwide (Bloomberg)

In a completely novel approach, Spain actually may right its economic ship the “old-fashioned” way, by earning it… abroad. When the country’s housing, commercial real estate and banking sectors all collapsed in 2007, many small businesses suddenly found themselves with fistfuls of abandoned projects and contracts. While some business owners wailed, “Woe is me,” more it seems took the downturn as a personal challenge and set out to find business elsewhere in the world. Today, these modern-day conquistadores soon will claim victory over the country’s six-year recession. And they’ll do so thanks to the country’s record $291 billion worth of exports last year… and even bigger expectations this year. Who knew you could work your way out of an economic funk?

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