Financial Markets
The Debt Ceiling Debate continues to take center stage, and investors continue to sell stocks until a deal is made. The Dow dropped over 500 points this week, landing at 12,143. Another blow to stocks was the GDP (Gross Domestic Product) reading of 1.3% for the 2nd quarter of 2011. Forecasters expected growth of 1.9%. That wasn’t the worst of the report. The report also revised 1st quarter GDP that was reported at 1.9% to .4%! (Not sure how that even happens…Did someone not use their abacus correctly the first time?)…A recession is defined as negative growth in GDP for 2 straight quarters and the US economy is getting dangerously close to this. So you will hear about fears of a double dip recession in the upcoming weeks as a result of this report.
Mortgage rates improved primarily because of a move the US Treasury made, that essentially bought an extra two weeks. They set up a contingency plan that would pay investors of US Debt on time regardless if Congress passes a budget by Tuesday. This indicates that the bond market is not yet concerned that a deal won’t get done.
Southern Nevada Real Estate and Economy
A great article that supports that home prices in Nevada have over-corrected according to Mark Boud, a California-based real estate economist. Something that I have said to many of my clients, just as prices didn’t make sense in 2006, they don’t make sense today. Below is the link to the article in its entirety, actually twice because both papers covered the story. Mark stated that the market is undervalued by as much as 45%.
The Desert Express high-speed rail from Las Vegas to Victorville has passed all but one minor hurdle….a 4 billion dollar loan from the government…Below is an article with more details.
