The PPI, Producer Price Index, rose 0.5% in June. We won’t even report the core because it is just a big lie - an index without food or energy. The experts were wrong again, they predicted a rise of 0.2%; they are wrong 2/3’s of the time. Flipping a coin is more scientific. May’s PPI was up 0.2%.
Orange County, California foreclosures nearly doubled in June, rising from 35 in May to 65 in June. Overall, foreclosure activity including default warnings to delinquent homeowners rose 60% last month. The county had 639 new foreclosure filings last month, up from 399 in May. That includes 574 default notices issued to homeowners behind their monthly loan payments. LA County’s activity was up 15.7%, Riverside 25% and San Bernardino 11.7%.
Venture capital secured $11.2 billion for future investments during the second quarter. This is the biggest fundraising in five years. It totals $18 billion so far this year, a 41% increase from $12.8 billion at this juncture in 2005.
In the first solid sign that the housing market has turned south, home sales in Philadelphia, South Jersey and Delaware fell in the first six months of the year. Sales fell 4% and the number of days it took to sell a home on average soared 48% to 32 days. Prices in the Delaware Valley rose by 10.3%. The hardest hit was South Jersey, down 8%. The number of days on market for Pennsylvania homes rose 59% to 31 days, compared to 58% to 21 days for Delaware and 16% to 38 days in South Jersey. South Jersey house appreciation was 12.3% and Pennsylvania’s was 8.4%..
More than 50% of college students have at least one credit card that is billed to them and 25% of those students use credit cards to pay tuition. 55% were carrying a balance versus 38% who had not borrowed tuition on a card.
Another dirty little secret is many banks carry more real estate loans today than they did during the 1980’s real estate boom.
The SEC is ready to start filing charges against companies backdating stock options. Criminal investigations are also proceeding.
Output at factories, mines and utilities rose 0.8% in June as capacity use rose 82.4%, the highest rate since June 2000.
Due to the glut in unsold homes in Boston, realtors are trying to get clients to drop their prices. The hope is low prices will attract more prospective buyers, leading to faster sales. The new selling lingo is drama pricing, or energy pricing. They are drastic measures for difficult times. The median price in Massachusetts has declined 4% over the last year to $331,000 in May. It is a buyers market and it will stay that way for a long time.
May net foreign security purchases rose to $69.6 billion versus April’s $51.1 billion.
Hewlett-Packard has developed a miniature wireless data chip the size of a grain of rice that can be attached or embedded in almost any object to make available information and content new now found mostly on Web devices. It can be embedded in a sheet of paper or attached to surfaces. It can be used to store medical records on a hospital patient’s wristband, in audio-visual supplements to postcards and photos, preventing counterfeiting in the pharmaceutical industry, adding security to identity cards and passports and supplying additional information for printed documents. The chip has a 10 megabit-per-second data transfer rate, 10 times faster than Bluetooth wireless technology and comparable to W1-F1 speeds with storage capacity ranging from 256 kilobits to 4 megabits, etc.
AG Alberto Gonzales said that President Bush personally blocked Justice Department lawyers from pursing an internal probe of the warrantless eavesdropping program that monitors Americans’ international calls and e-mails. This is the state of US justice today. Our present leadership has taken on dictatorial proportions.
Home sales in Southern California dropped to the lowest level for June in the past seven years as higher borrowing costs discouraged buying. 29,237 new and existing homes were sold last month in Los Angeles, Riverside, San Diego, San Bernardino, Ventura and Orange Counties, down 17.5% from a year earlier. In Southern California, the median price for a home was a record $493,000 last month, up 1.6% from May and 6% from a year earlier. The typical monthly mortgage payment was $2,437 last month, up from $2,376 in May and $2,021 a year earlier. Adjusted for official inflation, current payments are about 8.4% higher than at the peak of the previous real estate cycle. If real inflation is applied that number increases to near 20%.
The pharmaceutical industry is beginning to reap a windfall from a surprisingly lucrative niche market, that is drugs for poor people. That will be $2 billion or more this year, as a result of the transfer of millions of low-income people into the new Medicare Part D drug program that went into effect in January. The cost of medication will be higher than what was paid under the federal-state Medicaid programs for the poor. 6.5 million low-income elderly people or younger disabled poor people were automatically transferred to Part D program for drug coverage. Instead of having a deal with Medicaid with the states, that must receive the lowest possible price by law, the drug markers now deal with commercial insurers. Antipsychotic drugs make up a large part of this financial windfall. About two million of the people transferred to Part D are disabled and younger than 65 and more than half of them have mental health problems. In the past, Medicaid was 80% to 90% of the total market for some high-end antipsychotic drugs.
The drug companies of course don’t want the public to know that our President and Congress have allowed them to rip the taxpayers off. As we explained when this program was in its formative stages, that it would cost us and profit drug companies by more than $1.2 trillion, are you now getting the message? This is theft on a colossal scale.