The head of the European Union’s (EU) main bail-out fund has dismissed the possibility of a break up of the 16-nation eurozone.

Klaus Regling of the European Financial Stability Facility said it was “inconceivable that the euro fails”.

There has been speculation that some countries may be forced to give up the euro in light of the Irish debt crisis.

The currency has fallen by more than three cents against the dollar this week because of events in the Republic.

The US FED beige book is filled with negative news. It says that the US economy is now facing lot of uncertain times with many negative indicators, though the economy continues to be running a positive growth.
The unemployment continues to be high, and indications are that it would start continue climbing up in the coming months, as private sector would also be cutting down on manpower owing to uncertain times.
The housing sector is also not showing any signs of improvement and the seized homes are continuing to flood the market. With Europe set to see a drop in imports , the US export sector is also set to be heading for tough times.

Home constructions has been showing growth for the consecutive third month this March. The government had launched various programs and there were tax discounts in the new house purchase and then it got extended to already existing homes.

Year-on-year, housing sales have gone up 20.2% higher than the construction in March , previous year. Despite low tax rates and lower prices and mortgage rates, housing sectors were plunging down into loss with not able to attract buyers. The recession has left the economy with decreased consumer confidence.

With improvement in the labor market, the consumer confidence went high and people have started investing in real estate once again. With the added tax rebates and lower prices, people are going for investments in houses and properties. These indications show signs of recovery of the US economy.

Allowing the yuan to strengthen against the dollar would hurt the Chinese economy in the short-term, a senior Chinese official has told the BBC.

But Yi Xiaozhun, a vice-minister in the commerce ministry, said he expected the currency to rise in the longer-term.

He accused other countries of trying to force its appreciation now.

There has been speculation that China is preparing to allow the yuan to appreciate before President Hu Jintao arrives in Washington next week.

We have been hearing about home foreclosures in the recent past. Some of us may not know what this is all about. When we purchase a house, we may not have the entire money that the property is worth, with us. We might have some money and we might intend to take a loan for the rest of the money. The banks and financial institutions lend us loan to purchase a house from Wilmington NC real estate. They would fund upto 85% of the buying value of the house and the rest has to be paid by us as the initial amount. The financial institutions would check on our repayment eligibility and other criteria and may decide to give us loan. They do not pay us but pay the real estate agent directly on our behalf and get the property hypothecated to them.

Now, if we do not pay our repayment installments and default for more than 4 or 5 number of months, then the banks sends us notice two or three times and then sends legal notice if we still do not pay the amount. If there is no response from us and if we do not pay the loan, they would seize the property, sell the property in auction or otherwise, take whatever is due to them with interest and penalty and may give the balance, if any to us. That is called foreclosing the loan.

Dubai government would offer support to the tune of $9.5 billion to the debt laden state firms – Dubai World and Nakheel . This step has been welcoming but also adds a component of fear since some market analyst feel that the Dubai government is being too generous. More since just four months back, the Dubai government had announcement of $26 billion debt restructuring. The analyst also feel that the creditors of Dubai World and Nakheel should be in turn repaid to have a ripple effect in the economy.

Nakheel PJSC is a construction developer, who are doing the palm tree island projects in Dubai. They are owned by Dubai World. The support from the government would enable the company to repay its contractors and complete project. There will be restructuring in Nakheel and Dubai World and Nakheel would be completely owned by Dubai government after the restructuring in Dubai World. Nakheel’s top official said that the contractors and vendors of Nakheel would get 100 percent payment as per their claims.

The Home loan modification program launched by the Obama administration to avoid foreclosures of home loans due to defaulting has not got the intended benefits, says the watchdog, overseeing the $700 billion bank bailout.

The program awards cash incentives to mortgage owners if they modify the loan repayment installments, temporarily, of the defaulters who have defaulted for more than 60 days. The US government encouraged all the banks and financial institutions to participate in the program. The program was launched to avoid foreclosures of home loans and save the people from the crisis of losing their homes. Around 1.5 million homeowners have been benefited by the program. The program was funded with $75 million.

But the expert are of the opinion that the program does not have the intended effect. If the defaulters still default payment, foreclosures cannot be avoided. If the repayment gets back to normal rates, there will be still defaulters and the program has helped only in delaying foreclosures not preventing foreclosures.

Japan’s exports growth saw the highest in thirty years in February. It is a clear indication of the recovery of the economy of the country and also that the recovery would be sustained. Shipments to abroad increased by 43 percent over the last year. The trade surplus expanded the largest since 1982. The sales of the Komatsu Ltd. And Mitsubishi Electric Corporation have boosted due to the increase in export business in Japan.

Shipments have increased to Asia to 55.7 percent from the previous year. Mitsubishi Electric Corporation have forecasted a net income of 25 billion yen by the period ending March 31. Their earlier prediction was 20 billion yen loss. There has been a large demand from Asia for the maker of consumer electronics. Komatsu, the second largest maker of the dump trucks in the world, has expected the growth of sales in China to go up by 40 to 50 percent.

The exports to the US have also picked up showing a steady recovery of economy. The shipment surged to 50.4 percent in February, the highest since 1984. Sales to Europe increased 19.7 percent.

The Australian Central Bank was the first one to start raising the interest rates five months back. And till December 2009, it had raised the interest rates three times , each time by 25 basis points. And last month it skipped raising the interest rate giving hope that it may defer raising the rates for some more time.
But today, the Australian Central has once gain raised up the interest rates by another 25 basis points, taking the bank rate to 4%. The Australian economy depends on export of industrial raw materials like Iron ore and coking coal and all these have seen a big revival in demand. The Australian property prices also have been going up sharply in the last few months, due to which the Central bank has got into tightening act.

The US FED all of a sudden raised the bank discount rate by 25 basis points few days back. And that was a clear indication that the US FED will start raising the interest rates anytime. That is also a clear indication that the US FED is seeing brighter and steady recovery in the US economy over the coming months.
The action was enough to push all the foreign currencies to gain against the US dollar as there could be winding up of the low cost funds out of these markets in the coming months. Slow increase in the imports also augurs well for the US economy, as it would help in cutting down unwanted exports and look for more internal sourcing by the US customers and corporates.
Since the banking system is still flush with funds, people may still get housing loans around the 5% rate for some more time to come.