US Economy and Home Prices

NEW YORK, Sept 30 — US house prices rose for a third month in July, but consumer confidence fell unexpectedly in September as the worst job market in 26 years fuelled worries about personal finances, private reports showed yesterday.

The data indicates the economic rebound is still in its early days following the worst recession in decades, and it could be a long time before consumers contribute to growth.

Despite improvements elsewhere in the economy and a roaring stock market rally since March, the weakness of the consumer sector bodes ill for the year-end, traditionally a period of heavy shopping and spending.

“Companies haven’t started to hire yet, which is going to weigh on confidence,” said Sean Simko, fixed income portfolio manager at SEI in Oaks, Pennsylvania.

“Offsetting that is the positive move in the equity market. But in the end, as individuals feel under pressure from the labour market, you will have confidence lower than where it needs to be to bolster the economy.”

Consumers’ job prospects might not improve anytime soon, judging by the plans of senior managers. US chief executives are not ready to step up hiring or capital spending, according to a Business Roundtable survey.

It said 40 per cent expect to cut US jobs over the next six months, compared with 13 per cent who expect to add them.

Stocks were lower after turning negative following the weaker-than-expected consumer confidence report. US government bonds, which are investors’ favorite safe haven during weak economic times, pared early losses.

CONFIDENCE GAME

The Conference Board, an industry group, said its index of consumer attitudes fell to 53.1 in September, versus a revised 54.5 in August and expectations of a rise to 57.0.

Reflecting Americans’ worries about employment prospects, the Conference Board’s index measuring jobs “hard to get” rose to 47.0 from 44.3.

At the other end of the scale, the gauge of “jobs plentiful” fell to 3.4 from 4.3. That was the lowest since February 1983 and ties in with Labor Department data showing the US unemployment rate was at a 26-year high of 9.7 per cent in August.

“While not as pessimistic as earlier this year, consumers remain quite apprehensive about the short-term outlook and their incomes,” said Lynn Franco, director of the Conference Board Consumer Research Center.

“With the holiday season quickly approaching, this is not very encouraging news.”

The poor outlook overall led consumers to evaluate their present situation as the worst since March. The present situation gauge fell to 22.7 from 25.4.

In a bit of good news for the Federal Reserve, which has pumped easy money into the financial system in an effort to revive the economy, one-year inflation expectations fell to 5.2 per cent from 5.4 per cent in August.

September’s inflation expectations were the lowest since October 2007. Some investors have worried that the Fed’s recovery efforts will ultimately spark inflation.

IN THE HOUSE

The S&P/Case-Shiller composite index of house prices in 20 metropolitan areas rose 1.6 per cent in July from June, more than triple the estimate of a 0.5 per cent rise found in a Reuters poll. This index rose 1.4 per cent the previous month.

The 10-city index gained 1.7 per cent in July after a 1.4 per cent rise in June.

Housing was at the epicenter of the financial crisis that pushed last year’s mild recession into deep a downturn, and massive foreclosures have heaped pressure on consumers.

“These figures continue to support an indication of stabilization in national real estate values, but we do need to be cautious in coming months to assess whether the housing market will weather the expiration of the Federal First-Time Buyer’s Tax Credit in November, anticipated higher unemployment rates and a possible increase in foreclosures,” David Blitzer, chairman of the index committee at S&P, said in a statement.

A first-time buyer credit of US$8,000 (RM27,962), which ends November 30, has jump-started housing activity this year. But there are concerns about the impact when this incentive disappears.

The monthly price increases helped slow the annual rates of decline but home prices were still down 12.8 per cent in the 10-city index and 13.3 per cent lower in the 20-city index.

Meanwhile, Fannie Mae, the largest provider of funding for US home mortgages, said delinquencies on loans it guarantees accelerated. — Reuters

Fancy Seeing Miyabi in an Indonesian Movie?

So what do you know, megastar Japanese porn star Miyabi is coming by to Indonesia to act in a comedy. The clerics are almost in arms!

Read on, this could be fun!

The Straits Times reported on Sept 29 that filmmakers in Indonesia are adamant on this.

Muslim leaders have blasted plans to bring in erotic film megastar Maria Ozawa, 23, popularly known as Miyabi, to play herself in the upcoming film, Menculik Miyabi (Kidnapping Miyabi).

But Maxima Productions general manager Adi Sudiadi said the firm would stick to plans to include Ozawa in the film, which tells the story of a group of university students who accidentally kidnap the starlet.

“We guarantee that Miyabi won’t be playing in a porn film here. We will bring her here not as a porn star, but purely for a comedy,” Sudiadi said. “Miyabi is well-known to Indonesians. We are expecting her to attract a lot of audience here."

“We are also trying to fix Miyabi’s image by showing she can do more than a porn star,” he said, adding that no final agreement had been reached with Ozawa to act in the film.

Indonesian Council of Ulema chairman Amidhan slammed the choice of Ozawa — who has gained notoriety in Japan’s porn industry, thanks to her Canadian-Japanese looks — as a threat to the moral health of the country’s youth. “Even if the film isn’t pornographic, it is very dangerous for our young people, particularly if they become fans of this porn actress and become curious enough to watch her films,” he said. “We have to be firm and not let rubbish into our country. This is about Indonesia’s reputation as the world’s most populous Muslim country”’

Nearly 90 per cent of Indonesia’s 234 million people are Muslim.

Indonesia’s Parliament earlier this month passed a controversial film law that imposes tighter controls on content, including violence and sex.

Will these tighter legal fetters torpedo Maxima Productions'great Miyabi dreams?