February 12, 2008
It’s not all bad . . . yet
Amid all the recession talk, we often lose this point: “Most corporations are still making a lot of money,” says Ben Steverman in BusinessWeek.com. As we near the end of the fourth-quarter earnings season, “the results look terrible” at first glance; but when you look more closely, “earnings have held up well,” outside of the financial sector. Stocks have tumbled, of course, as investors focus on the bad earnings reports, but executives very likely “are accentuating the negative” to set low expectations. The wild card in an otherwise promising year is the length and depth of the credit crisis. Too bad we can’t “simply wave aside the financial sector’s woes.”
Shopping in the foreclosure market
With foreclosures expected to quadruple this year, you’d think it’s “an especially good time to get a deal on a foreclosed home at an auction,” say Kelly Evans and Sara Murray in The Wall Street Journal. “It isn’t.” You’re bidding against “savvy local investors,” and prices aren’t very good on steeply mortgaged homes. But if you’re a “determined buyer,” you have other options. One is to research homes in preforeclosure and make the owner an offer. Many “first-time buyers are likely to do better with bank-owned properties” that didn’t sell at auction. Either way, you’ll get a better deal—and you’ll get to inspect the house first.