Housing slump may force Florida to make $2 billion in budget cutsTALLAHASSEE, Fla. – Aug. 28, 2007 – Facing the worst budget crunch since the 2001 terrorist attacks devastated Florida’s tourist economy, state legislators on Monday were told they might need to slash state spending by more than $2 billion over the next two years.Florida’s bleak housing market is the culprit, forcing a dramatic drop in state revenues collected through sales taxes and real estate transactions.This week legislators have begun the task of looking to slash $1.1 billion out of the $71 billion state budget that took effect on July 1. Those cuts will be finalized during a three-week special session set to begin on Sept. 18.It’s anticipated the Legislature will have to trim up to another $900 million next spring when it must put together the next state budget.Among the possible cuts in coming months are state spending on nursing home and hospital care for the poor. Also, university students could face higher tuition as soon as January and people who use state programs, such as parks, could be facing higher fees to make up some of the money.Senate committees will look to cut 4 percent in the major areas of state spending, such as education, social services and education, mostly through across-the-board cuts.“These cuts will be very tough, but our goal is to affect the least amount of people,” said Senate Ways and Means Chairwoman Lisa Carlton, R-Osprey.House leaders plan to target specific programs and are hoping to spare public schools from the brunt of the cutbacks, which could reach $700 million.“It’s all tough ... but we’ll make education a priority,” said House Budget Chief Ray Sansom, R-Destin. “There will be some reductions [in schools], but they will be reasonable, not drastic changes.”State spending has been buoyed in recent years by the state’s housing boom and hard-hitting back-to-back hurricane seasons in 2004 and 2005. The storms caused billions of dollars in damage, but also fueled a rebuilding effort that boosted sales tax collections by billions of extra dollars.“It’s either boom or bust,” said Sen. Gwen Margolis, D-Sunny Isles Beach.For the past few years it was hurricanes that “made the budget work,” Amy Baker, the state’s chief economist, told legislators on Monday. “But you can’t rely on that ... to bail you out again.”She said estimates that the state will be short $2 billion in recurring revenues from tax sources are “conservative.”And in the midst of this financial crisis, the state over the next three years is facing some big increases in ongoing programs, including another $2.4 billion for increased student enrollment and smaller class sizes in public schools, an increase of $1.6 billion for Medicaid expenses, $1 billion more for state employee benefits and salaries, and $800 million to build more prison beds and operate the corrections system.But Sansom voiced confidence the economic outlook will improve.“While it looks gloom and doom right now, I’m not sure it’s going to stay that way ... I think the real estate market is on the brink of breaking wide open if insurance and taxes become more affordable,” he said.Copyright © 2007 South Florida Sun-Sentinel, Linda Kleindienst. Distributed by McClatchy-Tribune Information Services.
Boca Raton Real Estate
Wednesday, August 29, 2007
Tuesday, August 28, 2007
Friday, August 24, 2007
Boca Raton Real Estate
Dow and S&P both up 2.3% for the week; Nasdaq scores weekly gain of 2.8%
NEW YORK (MarketWatch) -- Stocks ended sharply higher Friday, with the major indexes scoring weekly gains of more than 2%, after an unexpected rise in new home sales jump-started thinking that the worst of the subprime mess could be over and a recession avoided.
"The market is focused on the combination of economic numbers today, including durable goods and a surprisingly good housing number, as well as no other news coming out of the subprime area," said Paul Nolte, director of investments at Hinsdale Associates.
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NEW YORK (MarketWatch) -- Stocks ended sharply higher Friday, with the major indexes scoring weekly gains of more than 2%, after an unexpected rise in new home sales jump-started thinking that the worst of the subprime mess could be over and a recession avoided.
"The market is focused on the combination of economic numbers today, including durable goods and a surprisingly good housing number, as well as no other news coming out of the subprime area," said Paul Nolte, director of investments at Hinsdale Associates.
Boca Raton Real Estate
Tuesday, August 7, 2007
Interest rates may improve based on lower productivity
From Fidelity.com
U.S. stocks trim losses; turn mixed before Fed
12:02 p.m. 08/07/2007 By Leslie Wines
Provided by
Labor Department reports less-than-expected productivity in the spring
NEW YORK (MarketWatch) - Stock prices turned mixed Tuesday, shifting gears again, after the government reported increased labor costs and lower-than-forecast productivity in the last quarter and investors looked for calming words from the Fed.
"A lot of the volatility has to do with anticipation of what the Fed might or might not do," said Paul Mendelsohn, chief investment strategist at Windham Financial Services. "Labor costs are still running at the higher end here, that's something the Fed has to keep an eye on."
The Dow Jones Industrial Average was 10.8 points lower at 13,457.9, with half of its 30 components on the decline.
Boeing Co. was among the Dow's loss leaders, with its stock down 1.4%.
Automaker General Motors Corp. (GM) fronted the Dow's advancing stocks, gained 2.2% after GM said it completed the sale of its Allison Transmission commercial and military business to the Carlyle Group and Onex Corp. for about $5.6 billion.
The S&P 500 (SPX) was up 1.87 points at 1,469.54, while the Nasdaq Composite (COMP) was 2.06 points off at 2,545.92.
Trading volume showed 743.6 million shares exchanging hands at the New York Stock Exchange and 948.8 million shares trading on the Nasdaq stock market. Declining issues ran about even with advancers on both exchanges.
Financial factor
Shares of leading U.S. banks and brokerage firms were mixed, with the stock of insurer Assurant Inc. (AIZ) up 3.5% after analysts at Merrill Lynch upgraded Assurant to buy.
Bear Stearns Cos. (BSC) edged 0.2% higher after slipping earlier after Bloomberg News reported the company's decision to liquidate two bankrupt hedge funds in the Cayman Islands instead of New York might limit creditors' and investors' ability to get their money back.
Lehman Bros. analysts began coverage of private-equity and hedge fund Blackstone Group (BX), giving it an overweight rating. Blackstone's shares gained 1.8%.
Luminent Mortgage Capital Inc. (LUM) was cut to sell from neutral by UBS. Its stock was off 81%. The lender suspended its quarterly dividend and said it would explore options including a sale.
Fed factor
The highlight of Tuesday's session will be the 2:15 p.m. Eastern Fed rates decision. The central bank is widely expected to leave the key overnight rate at 5.25%.
But many investors suspect that recent problems in the credit markets will force the Fed to note concern about an economic slowdown in its policy statement. For many months the Fed's top worry has been inflation.
Such a change in stance could pave the way for a rate cut in coming months.
Sentiment is likely to be cautious before the statement comes out. "Anything is possible before the Fed because we won't know anything until we see the statement," said Peter Boockvar, equity strategist at Miller Tabak. "
"We need to see the statement to see whether they are more focused on inflation or whether they acknowledge the weakness in the economy and the potential impact of credit problems on the economy," Boockvar said.
The Labor Department reported that productivity in the second quarter rose 1.8%, below the 2.1% gain expected by economists polled by MarketWatch.
The wages and benefits component of the report suggested inflation may remain worrisome. The department said that unit labor costs - a key inflationary signal - rose at an annual rate of 2.1% in the second quarter. Economists had expected a 1.6% gain.
Other market moves
Treasury prices were mildly higher as the market awaited the Fed's interest rate decision, with the benchmark 10-year Treasury note up 1/32 at 98 5/32, yielding (TNX) 4.738%.
The dollar was mixed ahead of the Fed decision. In New York trade, the dollar was quoted at 118.59 yen, compared with 119.03 yen late Monday. The euro stood at $1.3761, compared with $1.3793.
"The dollar doesn't think the Fed is in a position to lower rates; the 10-year is pretty flat, so it's not giving us any clues," said Mendelsohn.
Gold futures edged lower, with Gold for December delivery off $2.50 at $680.80 an ounce on the New York Mercantile Exchange.
Crude oil fell sharply once again, weighed down by a weak opening in stocks as well as ongoing concern that an economic slowdown will lower energy demand. Crude oil for September delivery fell 70 cents, or 1%, at $71.36 a barrel on the New York Mercantile Exchange.
On Monday stocks staged a strong comeback, after suffering a rout at the end of last week when investors dumped shares on fears the credit crunch is spreading throughout the economy.
See Boca Raton Real Estate
U.S. stocks trim losses; turn mixed before Fed
12:02 p.m. 08/07/2007 By Leslie Wines
Provided by
Labor Department reports less-than-expected productivity in the spring
NEW YORK (MarketWatch) - Stock prices turned mixed Tuesday, shifting gears again, after the government reported increased labor costs and lower-than-forecast productivity in the last quarter and investors looked for calming words from the Fed.
"A lot of the volatility has to do with anticipation of what the Fed might or might not do," said Paul Mendelsohn, chief investment strategist at Windham Financial Services. "Labor costs are still running at the higher end here, that's something the Fed has to keep an eye on."
The Dow Jones Industrial Average was 10.8 points lower at 13,457.9, with half of its 30 components on the decline.
Boeing Co. was among the Dow's loss leaders, with its stock down 1.4%.
Automaker General Motors Corp. (GM) fronted the Dow's advancing stocks, gained 2.2% after GM said it completed the sale of its Allison Transmission commercial and military business to the Carlyle Group and Onex Corp. for about $5.6 billion.
The S&P 500 (SPX) was up 1.87 points at 1,469.54, while the Nasdaq Composite (COMP) was 2.06 points off at 2,545.92.
Trading volume showed 743.6 million shares exchanging hands at the New York Stock Exchange and 948.8 million shares trading on the Nasdaq stock market. Declining issues ran about even with advancers on both exchanges.
Financial factor
Shares of leading U.S. banks and brokerage firms were mixed, with the stock of insurer Assurant Inc. (AIZ) up 3.5% after analysts at Merrill Lynch upgraded Assurant to buy.
Bear Stearns Cos. (BSC) edged 0.2% higher after slipping earlier after Bloomberg News reported the company's decision to liquidate two bankrupt hedge funds in the Cayman Islands instead of New York might limit creditors' and investors' ability to get their money back.
Lehman Bros. analysts began coverage of private-equity and hedge fund Blackstone Group (BX), giving it an overweight rating. Blackstone's shares gained 1.8%.
Luminent Mortgage Capital Inc. (LUM) was cut to sell from neutral by UBS. Its stock was off 81%. The lender suspended its quarterly dividend and said it would explore options including a sale.
Fed factor
The highlight of Tuesday's session will be the 2:15 p.m. Eastern Fed rates decision. The central bank is widely expected to leave the key overnight rate at 5.25%.
But many investors suspect that recent problems in the credit markets will force the Fed to note concern about an economic slowdown in its policy statement. For many months the Fed's top worry has been inflation.
Such a change in stance could pave the way for a rate cut in coming months.
Sentiment is likely to be cautious before the statement comes out. "Anything is possible before the Fed because we won't know anything until we see the statement," said Peter Boockvar, equity strategist at Miller Tabak. "
"We need to see the statement to see whether they are more focused on inflation or whether they acknowledge the weakness in the economy and the potential impact of credit problems on the economy," Boockvar said.
The Labor Department reported that productivity in the second quarter rose 1.8%, below the 2.1% gain expected by economists polled by MarketWatch.
The wages and benefits component of the report suggested inflation may remain worrisome. The department said that unit labor costs - a key inflationary signal - rose at an annual rate of 2.1% in the second quarter. Economists had expected a 1.6% gain.
Other market moves
Treasury prices were mildly higher as the market awaited the Fed's interest rate decision, with the benchmark 10-year Treasury note up 1/32 at 98 5/32, yielding (TNX) 4.738%.
The dollar was mixed ahead of the Fed decision. In New York trade, the dollar was quoted at 118.59 yen, compared with 119.03 yen late Monday. The euro stood at $1.3761, compared with $1.3793.
"The dollar doesn't think the Fed is in a position to lower rates; the 10-year is pretty flat, so it's not giving us any clues," said Mendelsohn.
Gold futures edged lower, with Gold for December delivery off $2.50 at $680.80 an ounce on the New York Mercantile Exchange.
Crude oil fell sharply once again, weighed down by a weak opening in stocks as well as ongoing concern that an economic slowdown will lower energy demand. Crude oil for September delivery fell 70 cents, or 1%, at $71.36 a barrel on the New York Mercantile Exchange.
On Monday stocks staged a strong comeback, after suffering a rout at the end of last week when investors dumped shares on fears the credit crunch is spreading throughout the economy.
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