USA: Prices fell by 1,3 percent in October

photo By uzi978

A study carried out in 20 U.S. cities in the month of October showed that home prices decreased by 1.3 percent compared to September, and 0.8 percent year-over-year, a report released on Wednesday by S&P/Case-Shiller said.

While housing prices are still above their spring 2009 lows, six cities - Atlanta, Charlotte, Miami, Portland (OR), Seattle and Tampa - hit their lowest levels since home prices started to fall in 2006 and 2007, meaning that average home prices in those areas have fallen beyond the recent lows seen in most other markets in the spring of 2009.

In October, the annual growth rates moderated from their prior month's pace confirmed a clear deceleration in home price returns for the fifth consecutive month.


"The double-dip is almost here, as six cities set new lows for the period since the 2006 peaks," David M. Blitzer, Chairman of the Index Committee at S&P. "There is no good news in October's report. Home prices across the country continue to fall."

Over the past few months, trends have not changed. Blitzer explained the tax incentives are over and the national economy remained lackluster in October.

"Existing homes sales and housing starts have been reported for both October and November, and neither is giving any sense of optimism," Blitzer added "On a year-over-year basis, sales are down more than 25 percent and the months' supply of unsold homes is about 50 percent above where it was during the same months of last year."

In addition, housing starts are still hovering near 30-year lows. However, as of October, average home prices across the United States are back to the levels where they were in mid 2003.

According to the report, index levels of 68.86 in Detroit indicates that average home prices are more than 30 percent below their January 2000 values. Las Vegas, Cleveland and Atlanta are just about back to their 2000 levels, with October prints of 100.97, 102.20 and 103.30, respectively.

On a relative basis, Los Angeles, New York and Washington D.C. have fared best, retaining the most of their mid-2000 price appreciation. Each of these markets is more than 70 percent above their January 2000 levels, the study said.

ECB increases its capital

The European Central Bank (ECB) has decided to increase its subscribed capital by €5 billion, from €5.76 billion to €10.76 billion, with effect from 29 December 2010. This decision was taken by the Governing Council of the ECB in accordance with the Statute of the European System of Central Banks and the ECB, as well as the Council Regulation No 1009/2000 of 8 May 2000 that foresees an increase in the capital of the ECB by up to this amount.

This decision resulted from an assessment of the adequacy of statutory capital conducted in 2009. The capital increase was deemed appropriate in view of increased volatility in foreign exchange rates, interest rates and gold prices as well as credit risk. As the maximum size of the ECB’s provisions and reserves is equal to the level of its paid-up capital, this decision will allow the Governing Council to augment the provision by an amount equivalent to the capital increase, starting with the allocation of part of this year’s profits. From a longer-term perspective, the increase in capital – the first general one in 12 years – is also motivated by the need to provide an adequate capital base in a financial system that has grown considerably.

In order to smooth the transfer of capital to the ECB, the Governing Council decided that the euro area national central banks (NCBs) should pay their additional capital contributions of €3,489,575,000 in three equal annual instalments. Consequently, the current euro area NCBs will pay €1,163,191,667 as their first instalment on 29 December 2010. The remaining two instalments will be paid at the end of 2011 and 2012, respectively. Moreover, the minimal percentage of the subscribed capital, which the non-euro area NCBs are required to pay as a contribution to the operating costs of the ECB, will be reduced from 7.00% to 3.75%. The non-euro area NCBs consequently will make only minor adjustments to their capital shares, which will result in payments totalling €84,220 on 29 December 2010.

The relevant ECB decisions and legal instruments will be published in the Official Journal of the European Union and on the ECB’s website in due course.

	Subscribed capital as at 28 December 2010	Paid-up capital as at 28 December 2010	Subscribed capital as at 29 December 2010	Paid-up capital as at 29 December 2010
Nationale Bank van België/ Banque Nationale de Belgique	139,730,384.68	139,730,384.68	261,010,384.68	180,157,051.35
Deutsche Bundesbank	1,090,912,027.43	1,090,912,027.43	2,037,777,027.43	1,406,533,694.10
Central Bank of Ireland	63,983,566.24	63,983,566.24	119,518,566.24	82,495,232.91
Bank of Greece	113,191,059.06	113,191,059.06	211,436,059.06	145,939,392.39
Banco de España	478,364,575.51	478,364,575.51	893,564,575.51	616,764,575.51
Banque de France	819,233,899.48	819,233,899.48	1,530,293,899.48	1,056,253,899.48
Banca d’Italia	719,885,688.14	719,885,688.14	1,344,715,688.14	928,162,354.81
Central Bank of Cyprus	7,886,333.14	7,886,333.14	14,731,333.14	10,167,999.81
Banque centrale du Luxembourg	10,063,859.75	10,063,859.75	18,798,859.75	12,975,526.42
Central Bank of Malta	3,640,732.32	3,640,732.32	6,800,732.32	4,694,065.65
De Nederlandsche Bank	229,746,339.12	229,746,339.12	429,156,339.12	296,216,339.12
Oesterreichische Nationalbank	111,854,587.70	111,854,587.70	208,939,587.70	144,216,254.37
Banco de Portugal	100,834,459.65	100,834,459.65	188,354,459.65	130,007,792.98
Banka Slovenije	18,941,025.10	18,941,025.10	35,381,025.10	24,421,025.10
Národná banka Slovenska	39,944,363.76	39,944,363.76	74,614,363.76	51,501,030.43
Suomen Pankki – Finlands Bank	72,232,820.48	72,232,820.48	134,927,820.48	93,131,153.81
Subtotal for euro area NCBs 1	4,020,445,721.55	4,020,445,721.55	7,510,020,721.55	5,183,637,388.22
Българска народна банка (Bulgarian National Bank)	50,037,026.77	3,502,591.87	93,467,026.77	3,505,013.50
Česká národní banka	83,368,161.57	5,835,771.31	155,728,161.57	5,839,806.06
Danmarks Nationalbank	85,459,278.39	5,982,149.49	159,634,278.39	5,986,285.44
Eesti Pank	10,311,567.80	721,809.75	19,261,567.80	722,308.79
Latvijas Banka	16,342,970.87	1,144,007.96	30,527,970.87	1,144,798.91
Lietuvos bankas	24,517,336.63	1,716,213.56	45,797,336.63	1,717,400.12
Magyar Nemzeti Bank	79,819,599.69	5,587,371.98	149,099,599.69	5,591,234.99
Narodowy Bank Polski	282,006,977.72	19,740,488.44	526,776,977.72	19,754,136.66
Banca Naţională a României	141,971,278.46	9,937,989.49	265,196,278.46	9,944,860.44
Sveriges Riksbank	130,087,052.56	9,106,093.68	242,997,052.56	9,112,389.47
Bank of England	836,285,430.59	58,539,980.14	1,562,145,430.59	58,580,453.65
Subtotal for non-euro area NCBs 1	1,740,206,681.03	121,814,467.67	3,250,631,681.03	121,898,688.04
Total1	5,760,652,402.58	4,142,260,189.22	10,760,652,402.58	5,305,536,076.26

 1 Owing to rounding, subtotals and totals may not correspond to the sum of all figures shown.
source: ECB

Estonia adopts the euro

Estonians will start using the euro on 1 January 2011. Good advance planning and public information should make for a smooth changeover from the kroon.

Recent publicity campaigns have aimed to prevent confusion about the conversion rate - so that shoppers know how much they are spending and don't fall prey to dishonest traders.

In November, Estonians received leaflets with practical details and two handy reference cards - one with a kroon-euro conversion chart and the other explaining the anti-forgery features on the banknotes.

From 1 December, coin starter kits have been available from banks, so the public can get a feeling for the currency.

Meanwhile, back in August, retailers, financial institutions and local governments were invited to sign up to a fair pricing agreement, pledging them not to increase their prices without good cause after the changeover.

For the first two weeks of the changeover, Estonian kroons and euros will circulate alongside each other, after which the euro will become the sole legal tender. To help consumers, retailers began displaying prices in both currencies on 1 July 2010, and must continue to until 20 June 2011.

Government's Consumer Protection Board will monitor businesses and prices, and will make public any information about major violations of the rules.

Estonia joined the EU in 2004 and has fervently pursued economic reform, earning itself the nickname "Baltic tiger". The economy is highly flexible and, while not immune to the crisis, has shown its ability to operate and adjust under a fixed exchange rate for close to two decades.

But euro adoption is not the end of the road. As the 17th eurozone member, Estonia will be required to pursue policies on debt and budget deficits that support economic growth, job creation and a stable inflation rate.

Other recent additions to the euro area include Slovenia, which joined in 2007, Cyprus and Malta in 2008 and Slovakia in 2009.

source: www.europa.eu


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