Wells sets aside $1.4 bln to cover loan losses Wells Fargo & Co., the second-largest U.S. mortgage lender, said late Tuesday that it would set aside $1.4 billion during the fourth quarter to cover higher losses on home-equity loans caused by deterioration in the real-estate market. The special reserve covers an $11.9 billion portfolio of loans that the bank originated or acquired through indirect sources such as mortgage brokers, it said. That portfolio will be sold off under the guidance of a dedicated management team, Wells added. "What is particularly disappointing about this incident is that observers of this company never expected Wells to be making these types of loans in the first place," Punk Ziegel analyst Dick Bove said Wednesday.
Rate policy must be nimble, Fed's Kohn says Federal Reserve monetary policy must be nimble, pragmatic and flexible in light of uncertainties over how renewed turmoil in financial markets will affect lending to consumers and businesses, according to Fed Vice-Chairman Donald Kohn. "Uncertainties about the economic outlook are unusually high right now. In my view, these uncertainties require flexible and pragmatic policymaking -- nimble is the adjective I used a few weeks ago," Kohn said in a Wednesday speech to the Council on Foreign Relations. Some Fed watchers believe that "nimble" policy would allow the U.S. central bank to cut rates when it next meets Dec. 11, despite the fact that Fed policymakers moved to a "neutral" stance on rates after their last meeting at the end of October.
Weakness in high-tech sinks durable orders in Oct. With demand for high-technology goods weakening, orders for U.S.-made durable goods fell for the third straight month in October, falling 0.4%, the Commerce Department reported Wednesday. The report was in line with the 0.5% drop expected by economists surveyed by MarketWatch. Durable-goods orders fell a revised 1.4% in September. The details of the report were worse than the headline number suggested, as orders for volatile defense capital goods rose 16.1%, led by demand for military ships. Military ships and planes are extremely expensive and orders tend to swing up and down month by month. Excluding defense goods, orders dropped 0.9%.
Selling the US by the dollar Precisely as I have been predicting since mid-August, foreign state-owned investment pools, sovereign wealth funds (SWVs), have now commenced the process of riding to the rescue of the poor, weakened, self-mutilated US financial system. I hate to be smug and tell you "I told you so." Ah, come on, who am I trying to kid? I absolutely love to be able to say that, just as much as the next boorish preening pundit. It was announced prior to the opening of trading on Tuesday that the Abu Dhabi Investment Authority, the world's largest SWF, was paying US$7.5 billion to buy a 4.9% stake in Citigroup, the largest financial institution in the United States. Citigroup, facing what the markets fear may amount to a $30 billion or more hit on its capital base due to its problems with subprime mortgages
The Economics of Ron Paul Congressman Ron Paul has been working for decades to bring economics to the forefront of political life. In doing so, he has raised topics that nearly everyone else in public life wants buried. But isn't economics a dull topic, interesting only to Wall Street traders and government bureaucrats? Isn't it just about math and graphs Not in Ron's view. He has an intensity of passion for the discipline of economics that follows up on what Ludwig von Mises believed. Economics is the pith of material life. It is the core body of knowledge that seeks an explanation for all material phenomena as it is affected by human choice. Economics is as unavoidable in politics as gravity is in the natural world. It is a ubiquitous reality whether we speak about it openly or not.
Recession in the air as US house prices tumble US house prices have suffered their worst plunge for two decades as defaults on sub-prime mortgages have shattered homebuyers' confidence and battered lenders have withdrawn cheap loan deals.According to the key Standard & Poor's housing index, released yesterday, third-quarter US prices were down 4.5% on 2006 and were 1.7% lower than the second quarter of this year - the sharpest drop in the study's 21-year history. The figures, released on the same day as research revealing a collapse in consumer confidence, showed that a once patchy economic downturn has become a nationwide phenomenon. The investment bank Goldman Sachs warned yesterday that the chances of a recession had risen to between 40% and 45%.
Housing crunch's hardest-hit cities Because of foreclosures, metro areas across the United States will feel the squeeze of lost jobs, taxes and spending power in 2008, a new study reports.Rising foreclosures will lead to billions of dollars in lost economic activity next year in the nation's major metropolitan areas, according to a report compiled for the U.S. Conference of Mayors. The lost spending power, declines in tax collections and loss of jobs will have an impact of more than $10 billion in New York City, the report says. The report was released today ahead of a meeting of mayors from across the country in Detroit, where they hope to create policy recommendations to help address the nation's housing crisis.
- - - - - - - - - - - - - - - - Archived Page Link
- - - - - - - - - - - - - - - -
RSS
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/quotes_7a.gif)