WASHINGTON (Reuters) – The co-chairmen of a U.S. congressional "super committee" on deficit reduction said on Wednesday they are discussing rules and a schedule of meetings for the 12-member panel, but offered no immediate details.
"Most of the committee members are reviewing the deficit reduction work that many others have engaged in over the past several years," said a joint statement from Democratic Senator Patty Murray and Republican Representative Jeb Hensarling.
The two are co-chairing the Joint Select Committee on Deficit Reduction established by Congress as part of a recent deal to raise the federal debt ceiling.
"We are engaging in serious discussions to determine what set of rules will govern the committee's operation, examining a schedule of potential meetings and exploring how to build a committee staff that will help us achieve success," they said.
(Reporting by Kevin Drawbaugh)
The past month wasn't exactly a confidence-booster for would-be home buyers and sellers.
They've witnessed a turbulent stock market, a downgrade of U.S. credit, a spreading European debt crisis and a U.S. economy that seems to be running in place.
And now many say they're even more hesitant — a retreat that could further delay a rebound in housing. It could hold back the overall economy, too.
"I have people who are just waiting and waiting, who just haven't pulled the trigger even though they have the down payment," said John Stearns, senior mortgage banker at American Fidelity Mortgage outside Milwaukee. "There's a lot of kicking tires. A lot of people saying they just won't do it."
Their unease explains why applications for home mortgages sank last week to a nearly 15-year low. What's more, sales of new homes fell more than expected in July — and analysts think the financial turmoil may be accelerating that slide this month.
"Buyers just don't want to commit to anything right now," said Joel Naroff of Pennsylvania-based Naroff Economic Advisors.
Interviews with more than three dozen agents, brokers and would-be buyers and sellers indicate that the heightened uncertainty in the financial markets and the economy has made people even more cautious than before.
• Eric Younan, a marketing professional at an accounting firm who was about to buy a home in July in Farmington Hills, Mich. Then along came August. "What really scared me is that I'm a single guy, and I don't want to have a mortgage by myself," Younan says. "The economy is taking a pounding, and my friends who are getting laid off are leaving the state. Prices are still falling. So I'd rather have money in the bank than money in a house."
• Fernando Maza, a security system programmer in Broward County, Fla., who was about to buy a second home, right before the stream of unnerving developments on the economy and the stock market. Now, he's less sure. "House prices could go down," he says. "There's so much inventory and not a lot of qualified buyers."
• Kurt Winiecki, a financial planner in Chicago who has been counseling a young couple on whether to buy or continue to rent. August made Winiecki's decision easier: He's telling them to rent. "What if they lose 20 percent of their equity and they can't sell the house? It's just too big a risk."
Even before the recent financial upheavals, the home market was being depressed by the economy's many problems: High unemployment. Stagnant pay. Rising health care expenses. High debt loads. A wave of foreclosures. Shrunken home equity.
And real estate agents were saying that more buyers were walking away at the last minute. In June, the latest month for which figures are available, about 16 percent of closings were canceled. That was the highest figure since record keeping started more than a year ago.
This year is on pace to be the worst for home sales in 14 years. Nationally, prices are at 2002 levels, and even lower in areas like Phoenix, Las Vegas and Tampa, Fla.
But the past few weeks' turmoil may be making everything worse. Homebuilder stocks, for instance, have been battered — even more than the stock market as a whole. As a group, they've shed nearly 23 percent, according to a Standard & Poor's analysis, compared with about 12 percent for the Dow Jones industrial average.
In normal times, today's record-low mortgage rates would energize buying. Yet while more people are refinancing, applications for new mortgages are stuck at 10-year lows, according to Inside Mortgage Finance.
Part of the problem is that many people can't buy even if they want to. More than 23 percent of homeowners owe more on their homes than they're worth. An additional 25 percent have less than 20 percent equity in their homes, according to Capital Economics.
That means that nearly half of homeowners couldn't qualify for a new mortgage because they couldn't produce a big enough down payment.
Add to that a chaotic stock market and a weak economy, and the belief is taking hold among many that now isn't the time to invest in the biggest purchase in most people's lives.
"There's a reassessment of risk across the planet," says Jonathan Miller of New York-based real estate consultancy Miller Samuel. "Volatility breeds uncertainty, and this is intimidating for consumers."
Consider the lack of interest in Eric Johannson's home. A pilot for cargo hauler Atlas Air, Johannson put his lakefront Houston home on the market in July 2010. He planned to upgrade to a home in Orlando, where his wife took a new job.
Yet despite the house's excellent condition, it has drawn not a single offer, even after the price was slashed to $249,000 — $100,000 less than what Johannson and his wife paid in 2008.
"If this economic situation drags out much longer, my wife just may have to quit her job and career" and move back to Houston, Johansson says.
NEW YORK (Reuters) – Gold dropped 4 percent on Wednesday as a sharp rise in U.S. durable goods orders and uncertainty ahead of Federal Reserve Chairman Ben Bernanke's speech to central bankers sparked bullion's biggest one-day drop in 2.5 years .
Selling spiraled out of control amid forced liquidation in U.S. gold futures by managed money, traders said.
Gold is now more than $150 below Tuesday's record of $1,911.46 an ounce driven by intense speculation the Federal Reserve may be planning another round of stimulus for the sluggish U.S. economy.
Analysts said it was time for gold investors to take money off the table after a safe-haven rally extended too far, too fast in recent weeks. Bullion rose as much as $400 since July.
"You have a commodity that retail investors, hedge funds and everybody were long, and the technical indicators showed it was overbought. It was just a matter of time before the market starts cracking," said Mihir Dange, COMEX gold options floor trader for Arbitrage LLC.
Spot gold was down 3.6 percent to $1,762.89 an ounce by 2:27 p.m. EDT, off its session low of $1,750.29.
Before Tuesday's 4-percent drop, it had surged nearly 9 percent.
U.S. gold futures for December delivery settled down $104 at $1,757.30 an ounce. That is the biggest price drop of COMEX continuous, front-month contract since January 22, 1980, when it tumbled almost $150, Reuters data showed.
Trading pace was hectic with volume already topping 410,000 lots, set to be one of the busiest sessions of the year.
Silver dropped 5.7 percent to $39.43 an ounce.
Gold was under pressure after data showed new orders for long-lasting U.S. manufactured goods rose in July, offering hope the ailing economy could dodge a second recession.
Analysts warned of a sharp correction from this month's rally was possible, especially if Friday's central bank meeting at Jackson Hole does not result in a Fed announcement of a third round of government bond buying, or quantitative easing, also known as QE3.
"The correction really should be taking place now, because of all the (bets) on the table," said Ashok Shah, chief investment officer at London & Capital.
"But the journey is not complete until Jackson Hole is done," Shah said, referring to an annual central bank conference in Jackson Hole, Wyoming starting on Thursday
CALL-PUT SPREAD NARROWS, MARGINS EYED
On the options front, the spread between the 25-day implied volatility of COMEX gold and that of put options has narrowed since Monday, a sign that gold option investors were turning bearish.
The CBOE gold volatility index is near at its highest since April 2009.
Investors also were watching for potential gold margin requirement hikes from the CME Group, after the Shanghai Gold Exchange and Hong Kong Mercantile Exchange had raised margins on some of gold contracts this month.
Holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell by nearly 25 tonnes on Tuesday, their biggest one-day outflow since January 25.
Among platinum group metals, platinum dropped 2.4 percent to $1,812.99 an ounce, and palladium was down 1.2 percent at $747.72 an ounce.
(Editing by David Gregorio, Marguerita Choy, and Bob Burgdorfer)