October 17th, 2012
11:22 AM ET

A surprising housing bright spot

By Fareed Zakaria

While all eyes have been on the presidential and vice presidential debates, arguably the most important piece of political news from last week may have slipped through the headlines. Announcing a record $5.7 billion profit for the third quarter, JP Morgan Chief Executive Officer Jamie Dimon sounded unexpectedly upbeat about the U.S. housing market:

"Importantly, we believe the housing market has turned the corner," he said in a statement. "In our Mortgage Banking business, we were encouraged that credit trends continued to modestly improve."

True, this did come with a caveat – the bank also expects to "see high default-related expense for a while longer."

But the surprisingly positive pronouncement is worth taking notice of because it comes from a guy who does not speak loosely. In fact, Dimon was so bullish that he suggested the Fed would likely raise interest rates sometime in 2013, despite the bank having said it will keep them near zero for the next few years.

This suggests to me that Dimon is expecting an upside surprise. With news today that home building also jumped to a four-year high last month, there seem now to be some welcome bits of good news amongst all the sound and fury that is the presidential campaign.

Topics: 2012 Election • Economy • United States

soundoff (15 Responses)
  1. mominomaha

    Bernanke is buying $40 Billion a month in Mortgage Backed Securities of questionable value, right? The only way this is a good thing is if you are a banker or you want the economy to look better until after the election. I admire your intelligence but sometimes am frustrated that we have no advocates willing to speak out when, for instance, seniors' savings are deteriorating because when the federal government owes trillions, and Bernanke must of necessity keep interest rates below inflation.
    Hard work, thrift and savings grow the economy but today's new bubble is student loans over $1 trillion and declining value of college degrees in workplace. Our kids are indentured servants to their loans, why not against the 13th amendment, and can't even be dropped by bankruptcy. We spend now because prices go up and we live on debt just like the banks. This cannot continue forever, though. States have balanced budget amendments because their lenders at some point demanded it. What happens we our lenders find a safer place for their investments?
    All of these issues are ignored in the debates as they were stolen from the people and managed by Debates commission making sure no alternatives exist vs the lesser of two evils/Glenn Greenwald http://t.co/GzWPl00A - Help up get some truth out there.. please.

    October 17, 2012 at 11:39 am | Reply
  2. QHorses

    Just proves to me that we the people keep on working for the good of the country while the politicians plunder the treasure chest. All the while extolling their minuscule social beliefs to all. Creating laws to stifle creativity and life experiences all the while shirking their duty to the whole of humanity. One people One Planet endless solutions. End the Wars Speak truth to Power

    October 17, 2012 at 11:48 am | Reply
    • mominomaha

      LBJ decided to 'help' Detroit by beginning his 'Model Cities' program there. Add decades of not just Democratic mayors but also an openly Communist mayor for 20 years and Detroit adults are 47% functionally illiterate while their city can't afford to maintain parks or open spaces. Detroit today looks every bit as burned out as USSR factory cities.
      And of course, other cities wanted the moolah of federal dollars so many dived into the morass following Detroit. Frederick Douglass heard his master tell his mistress not to teach him to read because he might not be satisfied being a slave anymore. When I read that almost 50% are functionally illiterate and in some cities like Buffalo, they spend over 20,000 per student, I'm beginning to smell a rat.

      October 17, 2012 at 12:03 pm | Reply
  3. carl


    October 17, 2012 at 12:28 pm | Reply
  4. carl

    Hi fareed: Because of poor computer skills, I could not locate your 10/7 tv program. I would like to point to the comment made by Dow's C.E.O. Andrew Iiveris who said in anger, that he is sick of this 3 to 4 year campaign cycle Wash.D.C. is always in. I couldn't agree more . A while ago i commented to your program that I believe we should go to a one 6yr. Pres. term, with a possible second 6yr term, but not consecutively. We will have a Pres. who will have his nose to the grind stone for a solid 6 years, free from campaigning and selling his soul to the devil, doing what he[ or she] thinks is right, rather then having his mind on what may hurt his chances of being re-elected. Also, important decisions won't be put off "till after the election", etc. No campaign funds should come from any individual person,or Pac's. Campaign funding should come off the top, paid in part by all 311 million of us to insure that the Pres. is not beholden to any one person or Pac. Also, despite my enjoying politics, I also believe it take up to much of our valuable time [just like sports]. When i'm on my death bed, i doubt if i'll be thinking about the Yankees, Giants, Gov. Romney or even Pres. Obama. .I hope you agree. You have the clout to to make a difference

    October 17, 2012 at 1:04 pm | Reply
    • mominomaha

      The League of Women Voters was replaced when they let Perot into the debates. He brought up real issues. The FEC was passed, according to Eugene McCarthy [D], because he had deep pocket Democrats against Viet Nam war funding him when he won a primary against LBJ, a [D] sitting president. All the campaign laws we have are for the establishment to keep control and the military industrial complex and the CIA to foment war around the globe, it seems. Even McCain won New Hampshire primary after visiting Munitions factory, not the University like Ron Paul.

      October 17, 2012 at 1:44 pm | Reply
  5. Raine

    Several people I've heard about who are relatives or friends of friends are in mortgages over their heads. They all bought their newly built homes in new developments for top dollar, now several years later are stuck wtih a high mortgage with some of them having lost their empoyment. For instance, a friends sister & her husband bought a house in Las Vegas for $450,000...a "standard" 3 bedroom, two & a half bath with swimming pook etc in what was then a new neighborhood. Hubby recently lost his job due to downsizing......now they can't afford their mortgage payments & have to sell this lovely home. So far three real estates now value their home for under $300,000. The same story with someone in New Jersey & on Long Island.......couples bought lovely homes for over $400,000....can't get $300,000 & the real estate taxes are murder.
    Builders keep buulding homes while for sale signs appear on almost every street in the nation. A freind's son in law was recently divorced & is hoping to be able tio "assume" the mortgage in his name only..got to see what happens.

    October 17, 2012 at 3:02 pm | Reply
  6. j. von hettlingen

    Indeed Fareed, it's good news for the administration. Still job figures are more important. Let's hope that Romney's mantra – the economy is still disappointing – wouldn't prevail.

    October 17, 2012 at 5:38 pm | Reply
  7. jerry

    Candy Crowley who was Planted in the 2nd Presidential Debate by the Left Wing Media namely CNN was Biased in Favor of President Obama. How can she be a Moderator of a Presidential Debate? This equates to Election Tampering which is a Federal Crime!

    October 17, 2012 at 6:17 pm | Reply
  8. ✠ RZ ✠

    Build 10 houses or 10 miles of road. Sure, it might give some a job for a while on borrowed money but chances are both will always be owned by the gov't or the bank. Furthermore, it's not likely that anyone will be getting up in the morning to take that road to a good paying job at a factory (that's a place where people actually make something real to sell, like they have in China). Better yet, just imagine if a country borrowed about trillion dollars every year to spend on fire works displays. Sure, it would be great for the fire works makers, and likely provide many with some spectacular shows, but in the end it's pretty much a real lousy return in terms of an investment of tax dollars.

    October 17, 2012 at 11:54 pm | Reply
  9. new jobless claims out today...up big...388,000

    last months were faulty...apparently california had a problem with new jobless claims being entered...california? the most liberal pro obama state all of a sudden has a problem reporting? are you kidding me? thats why the unemployment rate dropped the way it did last month....

    jack welch was right. something fishy IS going on.

    October 18, 2012 at 12:28 pm | Reply
  10. rightospeak

    Two minutes ago I wrote comments telling you that your Imperial News is no news at all-it is wrong. I do not want to spend more time rewriting telling you how naive the people in the media are.
    I do not like the fact that someone is manipulating my comments.

    October 21, 2012 at 12:41 pm | Reply
  11. rightospeak

    Since you removed my earlier comments,about 18 minutes ago I will be more blunt. Your article is naive propaganda that shows that you have no clue about the housing market. You disregard, like the rest of the Imperial Media simiple facts : the housing was a bubble partially created by people in Congress, most well paying jobs went to China-GLOBALISM does not work,it impoverishes the U.S.-so job creation is just empty talk.Open borders and destruction of economies through monopolism and IMF usury are destroying this nation,lower wages of Americans along with Work Visas. Endless wars draining our treasury are creating a level of debt beyong our capacity to pay. What will happen is not hard to figure , but you people in the media are blind or are paid to watch destruction of our country.

    October 21, 2012 at 12:59 pm | Reply
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