Home Prices Creep Up Before Tax Credits Expire; Consumer Confidence Still in the Tank

AlterNet

Businessweek reports that home prices are creeping upwards and asks "Is the home price recovery real or being artificially supported by the $8,000 first-time home buyer's tax credit that's scheduled to expire at the end of November?"  Unsurprisingly, "The National Association of Realtors and the National Association of Home Builders are pressing for an extension of the tax credit into next year."

If there is finally a bottom in sight in housing, that may not be enough to mitigate the costs of bailing out the banking system borne by tax-payers. The New York Times reports that the Federal Reserve is seeking to recapitalize its funds:

Acknowledging that they had greatly underestimated the problems plaguing the nation’s banking system, federal officials proposed a plan on Tuesday to replenish the fund that protects bank depositors.

They also announced that the fund, which began the year with more than $34 billion on hand but has been battered by bank collapses, would fall into deficit this week.

The plan proposed by the Federal Deposit Insurance Corporation would, in effect, have the nation’s banks collectively lend money to the insurance fund by requiring them to prepay their annual assessments this year, which they would otherwise pay over the next two years.

The plan would raise $45 billion from the banks to replenish the fund, which is suffering severe problems both with its capital and liquidity.

Housing aside, Bloomberg reports: "Confidence among U.S. consumers unexpectedly fell in September as a rising unemployment rate weighed on households."

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