The Great Debate

- Scott Malone is a Reuters correspondent in Boston.-

Judging by the 52 percent run-up up in the Standard & Poor’s home builders index over the past three months, investors have been eager to get their money back into the long-slumping U.S. housing sector.

Home buyers, not so much.

Finding that tax credits for first-time buyers and low mortgage interest rates are not enough to lure in buyers, Los Angeles-based KB Home this weekend will be tossing in another incentive: Come look at one of their model homes this weekend and get a free stuffed Disney character.

For those shoppers willing to make the jump from looking to buying (and financing through the company’s mortgage arm) the company will throw in a room decorated in their (or their child’s) favorite Disney theme.

Homebuilders in recent weeks have been sounding more confident that the three-year-long slump they have endured — which kicked off the worst downturn the United States has seen since the Great Depression — may be leveling off.

Lennar Corp chief executive Stuart Miller on Monday said the housing market was on the “road back to recovery,” even as his company reported a deeper quarterly loss.

- Laurence Copeland is a professor of finance at Cardiff University Business School. The opinions expressed are his own. -

Is the crisis over yet?

In the last 3 months, the Dow and the FTSE have each risen by about 25 percent, the Standard & Poor's 500 by a third. House prices appear to be stabilising in the UK. Stress-tested and backed by seemingly unlimited government funding, the banks are lending again (if only to each other), so that 1-month libor is down to only 0.3 percent.

In the Far East, the Chinese economy may be growing again, and even Japan may have pulled out of its nosedive. The oil price has recovered from its lows.

-- Neil Collins is a Reuters columnist. The views expressed are his own --

Standard & Poor's could have chosen a better day to kick the British economy, by placing the UK onto "negative outlook", the usual precursor to a downgrade of S&P's rating of an issuer's debt.

The move came minutes before the Debt Management Office closed its massive auction of 5 billion pounds of 2014 stock, and minutes after the release of figures showing the Public Sector Net Borrowing Requirement leaping to 8.5 billion pounds in April, a sum which not long ago would have been considered high for a whole year.

Economist Howard Archer at Global Insight immediately called the figure "dire, starting the new fiscal year off as it is highly likely to continue."