U.S. Debt Supercommittee Ready to Announce Failure
A debt-reduction committee with special powers that was supposed to dissolve congressional gridlock in Washington is instead on the brink of failure, setting the stage for $1.2 trillion in automatic spending cuts.
The 12-member bipartisan supercommittee likely will announce today that it can’t reach agreement on deficit savings, according to a Democratic aide. The aide, who wasn’t authorized to discuss internal matters publicly and requested not to be identified, said in an e-mail that it was highly unlikely that the committee’s talks could be salvaged.
Today is the deadline for the Congressional Budget Office to receive information for scoring a proposal in advance of the supercommittee’s Nov. 23 target date for reaching a deal. Republican Senate Minority Leader Mitch McConnell has declared over the past few months that failure is “not an option” for the panel, created in August after rancorous debate over raising the nation’s borrowing limit that plunged congressional approval ratings to lows of between 9 percent and 14 percent.
Both parties took to the airwaves yesterday to blame the other for the lack of an agreement, though they stopped short of saying the talks had failed. Democrats faulted Republicans for refusing to budge on an anti-tax pledge and Republicans accused Democrats of rejecting their latest offer to raise revenue along with spending cuts.
Low U.S. Birth Rate May Prolong Housing Slump
The number of births fell to an estimated 4 million last year, the fewest since 1999, according to National Center for Health Statistics data. American families -- whose finances have been hurt by high unemployment, falling home prices and low pay raises -- lack confidence to plan for “explosions in spending” required by a new child, says Peter Francese, a demographic- trends analyst in Exeter, New Hampshire, for the MetLife Mature Market Institute. U.S. births may not recover until 2013, he predicts.
Families in the child-bearing years “have been hit hard” by the recession, said Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, who estimates population for his economic forecasts. “Slower population growth will exacerbate the slowing in economic growth.”
Japanese Exports Decline as China Sees Prolonged Global Slowdown: Economy
Japanese exports dropped more than forecast in October, Singapore said its growth may slow to 1 percent next year and China signaled the global economy faces an extended slide.
The reports may raise pressure on policy makers in export- reliant Asia to implement further stimulus measures. A record of the Bank of Japan’s Oct. 27 meeting today showed one board member favored adding 10 trillion yen ($130 billion) in asset purchases, and Chinese Vice Premier Wang Qishan said his nation must adopt more “forward looking” and flexible monetary policy.
“Things are going to get worse before they get better,” said Vishnu Varathan, a Mizuho Corporate Bank Ltd. economist in Singapore. “Export growth will slow across Asia and we may see financial shocks coming through. Asian policy makers are going to become stimulatory all over again.”
Japan’s finance ministry reported today that shipments abroad fell 3.7 percent in October from a year before, the first drop in three months and an indication the nation’s rebound from the record March earthquake will slow. Singapore’s trade ministry said the nation’s gross domestic product may rise 1 percent to 3 percent in 2012, after a 5 percent gain this year, in a projection that didn’t incorporate a European recession.
U.S. Supercommittee Ready to Announce Failure
A debt-reduction committee with special powers that was supposed to dissolve congressional gridlock in Washington is instead on the brink of failure, setting the stage for $1.2 trillion in automatic spending cuts.
The 12-member bipartisan supercommittee likely will announce today that it can’t reach agreement on deficit savings, according to a Democratic aide. The aide, who wasn’t authorized to discuss internal matters publicly and requested not to be identified, said in an e-mail that it was highly unlikely that the committee’s talks could be salvaged.
Today is the deadline for the Congressional Budget Office to receive information for scoring a proposal in advance of the supercommittee’s Nov. 23 target date for reaching a deal. Republican Senate Minority Leader Mitch McConnell has declared over the past few months that failure is “not an option” for the panel, created in August after rancorous debate over raising the nation’s borrowing limit that plunged congressional approval ratings to lows of between 9 percent and 14 percent.
Both parties took to the airwaves yesterday to blame the other for the lack of an agreement, though they stopped short of saying the talks had failed. Democrats faulted Republicans for refusing to budge on an anti-tax pledge and Republicans accused Democrats of rejecting their latest offer to raise revenue along with spending cuts.
U.K. Home Sellers Cut Asking Prices Most in Year as Economic Growth Wanes
U.K. home sellers cut asking prices by the most in a year this month as the escalation of the euro- area debt crisis deterred buyers and increased uncertainty about the outlook for the economy, Rightmove Plc (RMV) said.
Average asking prices in England and Wales fell 3.1 percent from October to 232,144 pounds ($367,650), the biggest monthly drop since November 2010, the operator of Britain’s biggest property website said in a report published in London today. A separate British Retail Consortium study showed consumer visits to U.K. stores dropped in the quarter through October.
“Markets dislike uncertainty, and so do people who are deciding whether or not to enter the property market,” said Miles Shipside, commercial director of Rightmove. “Many would- be sellers are postponing their marketing until the new year, influenced by the current wall-to-wall media coverage of the Greeks and Italians attempting to get their own far-flung houses in order.”
U.K. consumer confidence fell to a record low in October as the unemployment outlook worsened and yields of Europe’s most indebted nations rose, heightening concern that Italy may follow Greece, Ireland and Portugal in needing a bailout. Bank of England Governor Mervyn King said last week that the U.K. economy faces a “markedly weaker” outlook amid persistent danger from the turmoil in the euro area.
Sales of Existing U.S. Homes Probably Declined in October for Second Month
Sales of previously owned homes in the U.S. probably fell in October for a second month as falling property values failed to sway buyers, economists said before a report today.
Purchases decreased 2.2 percent last month to a 4.8 million annual rate, according to the median forecast of 65 economists surveyed by Bloomberg News.
Unemployment hovering around 9 percent, falling appraisals and strict lending rules will probably keep hurting demand even after homes lost 32 percent of their value from the 2006 peak and mortgage rates sank to record lows. The end of a temporary halt on foreclosures stemming from faulty seizures may push more homes on the market and trigger even more price decreases.
“Most people recognize that prices are still coming their way, and there’s no great urgency to go out and buy,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York. “We’re still in the bottoming out process, so I wouldn’t expect to see big sustained gains any time soon.”
The National Association of Realtors’ data are due at 10 a.m. in Washington. Economists’ sales estimates ranged from 4.6 million to 5.05 million following September’s 4.91 million pace.
Housing, the industry that induced the recession, is still struggling to stabilize as home prices slump. The median value of an existing house fell 3.5 percent in September from a year earlier to $165,400, according to NAR data. The value plunged from a July 2006 record of $230,300 to a low of $156,100 in February.
Fatal Egypt Clashes Fuel Investor Concern
Mohammed Mohsen waded through the protesters in Tahrir Square yesterday as they fought with police in clashes that killed 11 people and injured dozens. Briefcase in hand and a surgical mask on his face against the tear gas, Mohsen wasn’t in the square to protest. He was trying to get to his job at a downtown Cairo medical lab.
“This paralyzes our lives,” he said, pointing to protesters, some wielding sticks, fleeing the gas. “People will see these images playing out on satellite channels. Then the investors who we’ve been pleading with to return will stay away.”
Egypt’s new protests ahead of Nov. 28 elections may squelch an economy already struggling to recover as tourists and foreign investors stay away following the February overthrow of President Hosni Mubarak. The vote is the first step in a drawn- out handover that may fuel more economic troubles as tensions rise between activists and the ruling military council.
Yuan Halts Two-Day Decline After Wen Pledges Further Exchange-Rate Reform
Yuan forwards fell by the most in more than a month on speculation capital outflows will take pressure off policy makers to speed up gains in the currency.
The yuan also declined as concern U.S. lawmakers won’t be able to reach agreement on cutting the budget deficit reduced demand for emerging-market assets. Yuan holdings at Chinese banks fell for the first time since December 2007, dropping a net 24.9 billion yuan ($3.9 billion) in October, according to a statement on the People’s Bank of China website today. Economists watch the numbers for signs of inflows or outflows of so-called hot money.
