By Dees Stribling, Contributing Editor
The Greek parliament began debate Monday morning (Sunday evening in North America) on an austerity plan for the country that has very few friends outside of the holders of Greek debt, finance panjandrums in the European Union, and the likes of the IMF. All together, the Greek government is considering a collection of tax hikes and spending cuts that would amount to about 28 billion euros ($40 billion).
At stake in the immediate future is the next payment of the bailout to Greece from the European Union and IMF, which is about 12 billion euros. The current Greek government has a small majority to work with, and the opposition has come out against the new austerity measures, effectively thumbing their noses at parliamentary unity on the matter, and with an eye toward the next elections. Major votes on the austerity measures will be taken by parliament on Wednesday and Thursday.
But, to paraphrase Churchill, the vote won’t even be the end of the beginning, much less the beginning of the end. Greece might get its 12 billion euros now, but it’s going to need another 100 billion euros or so just to tread water until 2013. After that — hard to say. Sudden default anyway? Restructuring the debt in an orderly way? Leaving the euro-zone? After 2,500 years, Greece still puts on some compelling dramas.
Freddie Mac reports mortgage delinquencies down
Freddie Mac reported on Friday that the delinquency rate among single-family mortgages in its portfolio dropped slightly from 3.57 percent in April to 3.53 percent in May. The rate was 4.06 percent in May 2010.
The rate has, in fact, been edging down for six months in a row now. The GSE also reported that its single-family refinance-loan purchase volume in May was $13.3 billion, which was 58 percent of total mortgages purchases and issuance. That was a drop from $16.6 billion in April, which was 70 percent of the total.
Last week, Lender Processing Services released a report that strove to cast a wider net on mortgage problems, reporting that 7.96 percent of U.S. home loans were 30 days past due in May, down 0.1 percent from April. Also according to the company, there are about 4.2 million delinquent mortgages nationwide, with 1.9 million of those seriously so–that is, more than 90 days past due.
U.S. GDP growth anemic at 1.9 percent in first quarter
U.S. gross domestic product growth for the first quarter of 2011 now has a third and final revision for the records: a 1.9 percent annualized rate, up from an earlier revision of 1.8 percent, according to the U.S. Department of Commerce on Friday. That compares with fourth quarter 2010 U.S. GDP growth of 3.1 percent.
The deceleration of growth between the quarters stemmed from a jump in imports (even though exports jumped, too), as well as declines in public spending at all levels: local, state and federal. Consumption–including business and personal–remained about the same, though core personal expenditures were up a little.
Wall Street didn’t care much for that news or any other on Friday, with the Dow Jones Industrial Average dropping 115.42 points, or 0.96 percent. The S&P 500 lost 1.17 percent, and the Nasdaq was down 1.26 percent.