Asian trade: Asian stocks rose for the first time in the last four days, helped by a newly announced plan to help the steaming rise of defaults on mortgages. In the same time, U.S. futures traded mixed, on a very weak momentum.
Mr. Obama announced a new plan designed to help homeowners stay in their homes. It is said that the plan would reach 9 million homeowners, and its final bill would reach $250 billion dollars. In addition, another 5 million people would be helped to get a refinance or a better deal for their mortgage. The announcement came shortly after a report showing that house constructions fell to the lowest level on record.
Up to now, this plan is the first that aims directly at one of the fundamental problems of the housing market: the rising wave of foreclosure, which puts additional pressure on the housing market, by increasing its supply side. On top of this, banks are also affected by foreclosures, because they would have to adjust their balance sheets again, writing down another few losses. If the default rate continues to rise, banks will eventually have to become real-estate agents.
Despite the positive news, U.S. markets closed mixed, after the latest Fed minutes show that the FOMC expects a “quite weak” period ahead, and the recovery date might be delayed. In addition, the Fed reduces its growth forecast to 0.5 percent to 1.3 percent, even though private estimates run much lower than this.
Tonight, the Nikkei gained 38.93 points (0.50%) to 7,572.37. The Australian S&P rose 51.60 points (1.51%) to 3,464.80.
Crude oil continues to decline, in-line with the demand side. Crude oil for March delivery fell $0.10 to $34.60.
Gold rose for the third consecutive day. Bullion for immediate delivery gained $1.30 to $979.20.