Equity Conversion Plan

Ignore the spin folks.  Existing home sales are down 31% from their peak in 2005 and nearly 16% from last year.  The 2% increase in May doesn’t really tell you much, except for the fact that maybe foreclosure sales are becoming more appealing to folks.

As Calculated Risk so astutely points out May marks the end of the spring season usually touted by Realtors as the time when folks get out and buy a home and all is right with the world.  The busy season if you will.  No such thing this year.

A graph from CR shows that we’ve found some stability in the home sales for the last couple of months (REO anyone?) while new home sales continue to tank.

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American Express announced intra-quarter guidance today saying that the company would be impacted by worse-than-expected credit conditions.  They expect their business to be impacted as economic activity slows and consumer late-pays and credit defaults on AMEX cards continue to mount.

From the Market Watch story:

“Business conditions continue to weaken in the U.S. and so far this month we have seen credit indicators deteriorate beyond our expectations,” Chief Executive Kenneth Chenault said in a statement.

“Today’s release indicated that the company would likely hold off on potential business building initiatives until business conditions improve,” the analyst wrote.

American Express has been hit by rising losses on its credit cards as the housing slump and slowing economic growth limit customers’ ability to repay debts.

Provisions for losses on American Express’s credit cards have risen over the past year to $1.15 billion from $783 million as the consumer credit market has weakened, Egan-Jones Ratings, a rating agency that’s paid by investors rather than issuers, noted.

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