Morning Briefs

Freddie Mac sees home prices falling further

When you tell people that house prices have further to fall, many think you are scaremongering. But now the industry people are saying the things we have told you.

Speaking to analysts on a conference call, CEO Richard Syron estimated that housing prices, from peak to trough, have dropped only a third as far as he thinks they're going to. The McLean, Va.-based company's expecting a peak-to-trough decline of 15% in all.

The declines are going to be more than 15% if CEO of Freddie Mac telling you about a 15% decline. As we have said, we have a long way to go before we bottom out.



Dollar Falls

The stock market was up by 3% yesterday on the fed news. But looking at the currency markets, you get the picture that most people don't think the move is going to succeed.

The dollar fell to $1.5504 per euro, weakes since Euro's 1999 debut! It went down to 102.32 Yen.

Euro gains were limited after Luxembourg Finance Minister Jean-Claude Juncker said he is ``very vigilant'' on the euro in current circumstances and that exchange rates should reflect fundamentals. He spoke to reporters in Brussels.

Looks like the foreign governments are holding the only thing holding the dollar as they are nervous about their own trade balance.

Forward contracts to buy United Arab Emirates dirhams rose the most in two weeks after Economy Minister Sultan Bin Saeed Al Mansouri said the dirham's dollar peg is ``contributing'' to record inflation.

The US is exporting inflation to world. This is our biggest export now. There are many of those who think a lower dollar is good for exports. While it may be good for exports, since commodities are priced in dollar, it is going to cost more to buy imports. Also, there are very few 100% export items (ie. totally made in America). Many exporters import materials. Again when the dollar goes lower, you are paying more for the import.