Currently, whenever an astronaut needs to speak to someone, a counselor is only a radio call away. Unfortunately, for voyages further out, this contact time starts to increase quite a bit, so researchers have started to look for substitute methods of counseling. I just hope the new counseling software has the Dr. Sbaitso voice. “Instead of asking astronauts to reflect on their feelings, Mark Hegel of Dartmouth Medical School has them create lists of concrete things that are bothering them and brainstorm about practical ways to solve them. At the end of the exercise, users fill out a form used to diagnose depression. Clinical tests of this approach, which has never been tried in a multimedia self-help format, will begin in a few months, using subjects recruited from the biomedical and engineering community in Boston.”

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Filed under: After the bell, Market matters, Amer Intl Group (AIG), Economic data, Politics, Housing

Trading this day was an obvious broad-based sell off in the equity markets. But looking for a main theme or a major culprit was not so easy as we are in the quietest non-Christmas week of the year. Existing home sales did post a modest rise, but the prices paid were worse and dropping still.

Below are today’s unofficial closing bell levels:
DJIA 11,386.25 (-241.81)
NASDAQ 2,365.59 (-49.12)
S&P 500 1,266.85 (-25.35)
52-WEEK LOWS
Top Analyst Calls

American International Group (NYSE: AIG) was a disaster this day following Fitch putting the insurance giant on review for possible downgrades to the bond ratings. Shares shut down over 5% at $18.78 on active volume at 45 million shares.

Gilat Satellite Networks Ltd. (NASDAQ: GILT) was the massive loser in merger-land today. The company missed earnings estimates and also was notified that the proposed buyer wasn’t going to honor the $11.40 price. Shares closed down over 7% at $8.01, but that was much better than the lows and indications of the day.

As politicians and Obama talked up the need for mortgage GSE’s (with an undefined structure), shares of Freddie Mac (NYSE: FRE) rose 17% to $3.29.

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Filed under: Forecasts, Good news, Consumer experience, Economic data, Housing, Recession

In the current housing market, it has been hard to find any sort of silver lining, but we do see a little positive news today, as existing home sales in July jumped more than expected, mainly due to lower home prices.

During July, sales of existing homes rose by 3.1%. This was well above the 1.6% that Wall Street was hoping to see, but analysts caution against assuming that this is a sign that the market has finally bottomed out. Despite beating Wall Street estimates, we still have to consider the fact that home sales were over 13% lower than the same period a year ago.

While we have the ability to view the July sales figures as promising, we must also take a minute to look at home inventories, and here the picture isn’t so rosy. Here we see that the number of unsold single family homes is running at all time highs. Currently the market is trying to deal with a total of 4.67 million unsold homes. This is the highest level that we’ve seen since 1968 when the National Association of Realtors started monitoring the data.

With inventories at all time highs, it would be hard to conclude that last month’s jump in sales is the signal of anything more than a choose number of investors gobbling up some reduced property, but still not the type of movement into real estate that is really going to begin to turn things around.

Let’s take a minute and look at home prices. We have said that lower prices have led to more than expected sales, but just how much have prices dropped over the past 12 months. According to today’s report, the average price for homes sold in July was $212,000. This is 7.1% lower than the average we saw last July, a pretty sizable decline to state the least.

Home prices, and housing inventories are both under pressure from the big rise in foreclosures that we’ve seen over the past year, and sadly, that is not something that is close to coming to an end anytime soon either. It is now predicted that by the end of next year, another 2.8 million U.S. households are going to be in trouble by the end of next year. As more and more people are unable to keep up with the mortgage payments, these homeowners are going to be forced to foreclose, turn over their homes, or sell their properties for a loss. The result will be even larger inventories and lower prices. Not a pretty picture.

What many of us are waiting for is to see just how low the market has to go before people are willing to jump back in and begin gobbling up the massive amounts of properties that are available out there. Today’s news is a positive sign, but we are going to need to see a few more months in a row of this sort of activity before I’m willing to believe that we’ve seen the bottom.

What are your thoughts on the housing market? Have we begun to see things start to turn around? Or can we expect more weakness in the months to come? Let us hear your thoughts on this current situation.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the on the web investment advisory service Investor’s Observer.

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Filed under: International markets, Other issues, Bad news, Housing

There are signs that banks and others are anticipating another round of credit write-offs. Banks are becoming more hesitant to lend on speculation credit losses will increase as the global economic slowdown deepens, Bloomberg News reported Monday.

For borrowing, banks are charging each other a 77-basis-point premium above what traders predict the U.S Federal Reserve’s daily, effective Federal Funds rate will average over the next three months, up from 24 basis points in January, Bloomberg News reported.

Banks concerned about potential write-offs, global slowdown

Economist Peter Dawson stated Monday two factors are driving the widening short-term lending spread.

“Rightly or mistakenly, there’s a suspicion that selected banks will announce another round of write-offs,” Dawson stated. “Second, banks are coming to grips with the reality of the global slowdown. The slowdown suggests reduced revenue for banks, which would further injured already strained balance sheets, and make banks more-reluctant to lend.”

In August 2007, banks began to hoard cash and pare-back lending after subprime mortgage defaults forced two Bear Stearns hedge funds to seek bankruptcy protection. A series of regional, mortgage asset-related write-offs followed, as the housing boom ended, first in the United Says, then in the United Kingdom. Mortgage-related credit losses now total more than $500 billion worldwide, Dawson stated.
Further, Dawson said the lending climate will improve “only after banks become confident in those they’re lending to. So long as banks believe some in their sector may be hiding losses, the bias will be toward pulling back lending activity, and that’s reflected in higher rates,” Dawson said, adding that it’s difficult to predict when the tighter lending conditions will end.

Economic Analysis: Restrictive lending will also make it harder for the U.S. economy to expand and accelerate from its slow growth / no growth status, and will also injured a recovery in the U.K. Moreover, the credit hurdle, combined with reduced disposable income due to high energy prices, takes a considerable amount of stimulus out the system, something policy makers will need to pay attention to, if the economic slump worsens.

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Filed under: Before the bell, Deals, Magazines, Apple Inc (AAPL), Citigroup Inc. (C), Advanced Micro Dev (AMD), Alcoa Inc (AA), Federal Natl Mtge (FNM), Amer Intl Group (AIG), Broadcom Corp’A’ (BRCM), Economic data, Rio Tinto plc ADS (RTP), Oil, Lehman Br Holdings (LEH), Housing, Federal Reserve

Stock futures were blended Monday morning, indicating stock would begin on a down note a week full of economic data. This morning, investors are focusing on rising oil prices and existing home sales data to be released at 10:00 a.m. EDT. Also, over the weekend, Federal Reserve Chairman Bernanke commented from the Fed’s yearly retreat, saying that problems in credit markets not yet over and are a threat to economy. Meanwhile, economists are saying inflation is catching up to the credit crisis as the major concern for the economy.

American International Group’s (NYSE: AIG) credit ratings may be downgraded by Fitch due to uncertainties over AIG’s exposure to mortgage backed securities. AIG was down 1.5% in after-hours Friday.

The Australian government approved Chinalco 14.99% stake in Rio Tinto’s (NYSE: RTP) but warned the Chinese firm against buying more shares without prior approval. Alcoa (NYSE: AA) backed the purchase. RTP shares were up over 1% in Australian trading.

Broadcom Corp. (NASDAQ: BRCM) will pay around $192.8 million in cash to acquire chipmaker Advanced Micro Devices Inc.’s (NYSE: AMD) digital Television business, the companies announced Monday.

Freddie Mac (NYSE: FRE) and Fannie Mae (NYSE: FNM) shares are continuing their slide in premarket trading this morning. Freddie is set to auction its three- and six-month bills. On Friday, both Freddie and Fannie had their preferred stock ratings and bank financial strength ratings downgraded by Moody’s Investors Service.

Meanwhile, Lehman Brothers (NYSE: LEH) shares are also trading lower in premarket after rumors of a takeover Friday caused the stock to surge. CEO Richard Fuld is facing an internal campaign to force him out by the end of the year, U.K.-based daily The Observer reported Sunday.

Citigroup Inc. (NYSE: C) plans to reorganize the capital markets business within its investment bank, The Wall Street Journal reported.

On Apple Inc. (NASDAQ: AAPL), read MarketWatch’s commentary about the iPhone’s recent launch in India: “Steep pricing and absence of 3G poses a major challenge to iPhone success, but usage of data and value-added services might take off.”

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Hugh Pickens writes “Kevin Kelly has an interesting post about an archive designed with an estimated lifespan of 2,000 -10,000 years to serve future generations as a modern Rosetta Stone. The Rosetta disk contains analog ‘human-readable’ scans of scripts, text, and diagrams using nickel deposited on an etched silicon disk and includes 15,000 microetched pages of language documentation in 1,500 different languages, including versions of Genesis 1-3, a universal list of the words common for each language, and pronunciation guides. Produced by the Long Now Foundation, the plan is to duplicate the disk promiscuously and distribute them around the world in nondescript locations so at least one will survive their 2,000-year lifespan. ‘This is one of the most fascinating objects on earth,’ states Oliver Wilke. ‘If we found one of these things 2,000 years ago, with all the languages of the time, it would be among our most priceless artifacts. I feel a high responsibility for preserving it for future generations.’”

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Kligat writes “Back in January, it was reported that the youngest planet ever to be discovered, about ten times the mass of Jupiter, was orbiting the eight- to ten-million-year-old star TW Hydrae. Now a Spanish research team has concluded that TW Hydrae b doesn’t exist, and that cold spots on the star’s surface actually produced the dip in brightness instead of a transiting planet. Not as cool as if a planet had actually been there, but refutations are science, too, right?”

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calmond writes with this excellent snippet from CNET News: “QinetiQ Group PLC claimed Sunday that its propeller-driven aircraft called Zephyr flew for 83 hours and 37 minutes non stop, more than doubling the official world record set by Northrop Grumman’s Global Hawk in 2001. The Zephyr is much different from the Global Hawk, which is about the size of a fighter and requires runway for taking off and landing. Zephyr, on the other hand, is an ultra-lightweight carbon-fiber aircraft that weighs less than 70lbs and is designed to launch by hand. The little aircraft flies on solar power generated by amorphous silicon arrays covering the aircraft’s paper-thin wings. It is powered day and night by rechargeable lithium-sulfur batteries that are recharged during the day using solar power.”

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Reader LM741N, pointing to a report released this month by California’s Office of Environmental Health Hazard Assessment, writes “Gallium Arsenide has now been listed as a carcinogen. Given the increasing usage of gallium arsenide, the main constituent in LEDs, and their recent championing as more efficient light sources in recent news stories and Slashdot, there may be significant environmental concerns as related to their disposal. Morover, workers in industries using the substance might be at risk of cancer as well.”

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