Brace for $1 Trillion Writedown of `Yertle the Turtle' Debt Be it ever so devalued, $1 trillion is a lot of dough. That's roughly on a par with the Russian economy. More than double the market value of Exxon Mobil Corp. About nine times the combined wealth of Warren Buffett and Bill Gates. Yet $1 trillion is the amount of defaults and writedowns Americans will likely witness before they emerge at the far side of the bursting credit bubble, estimates Charles R. Morris in his shrewd primer, ``The Trillion Dollar Meltdown.'' That calculation assumes an orderly unwinding, which he doesn't expect. ``The sad truth,'' he writes, ``is that subprime is just the first big boulder in an avalanche of asset writedowns that will rattle on through much of 2008.''
As Jobs Vanish and Prices Rise, Food Stamp Use Nears Record Driven by a painful mix of layoffs and rising food and fuel prices, the number of Americans receiving food stamps is projected to reach 28 million in the coming year, the highest level since the aid program began in the 1960s. The number of recipients, who must have near-poverty incomes to qualify for benefits averaging $100 a month per family member, has fluctuated over the years along with economic conditions, eligibility rules, enlistment drives and natural disasters like Hurricane Katrina, which led to a spike in the South. But recent rises in many states appear to be resulting mainly from the economic slowdown, officials and experts say, as well as inflation in prices of basic goods that leave more families feeling pinched. Citing expected growth in unemployment, the Congressional Budget Office this month projected a continued increase in the monthly number of recipients in the next fiscal year, starting Oct. 1 — to 28 million, up from 27.8 million in 2008, and 26.5 million in 2007.
Paulson calls for total regulatory revamp U.S. Treasury Secretary Henry Paulson is calling for extensive, wide-ranging reforms to the way the government regulates financial markets, including proposals to give the Federal Reserve more power and create new bodies to monitor mortgages and other transactions. Paulson is slated to formally present the Treasury Department's new plan in a speech scheduled for Monday morning. Among the many items in the plan is a proposal to make the Fed "responsible for overall issues of financial market stability," according to the executive summary. Paulson's recommendations come on the heels of the Fed and Treasury's dramatic bailout of Bear Stearns Cos
Fed eyes Nordic-style nationalisation of US banks The US Federal Reserve is examining the Nordic bank nationalisations of the 1990s as a possible interim solution to the US financial crisis. The Fed has been criticised for its rescue of Bear Stearns, which critics say has degenerated into a taxpayer gift to rich bankers. A senior official at one of the Scandinavian central banks told The Daily Telegraph that Fed strategists had stepped up contacts to learn how Norway, Sweden and Finland managed their traumatic crisis from 1991 to 1993, which brought the region's economy to its knees. It is understood that Fed vice-chairman Don Kohn remains very concerned by the depth of the US crisis and is eyeing the Nordic approach for contingency options.
Chaos on Wall Street The big banks' fear of big losses is threatening to bring down the entire system, with dire consequences for all of us. Here's what's going on, and what we can do about it. What in the world is going on here? Why is Washington spending billions to bail out Wall Street titans while leaving struggling homeowners to fend for themselves? Why are the Federal Reserve and the Treasury acting as if they're afraid the world may come to an end, while the stock market seems much less concerned? And finally, what does all this mean to those of us who aren't financial professionals? Okay, take a few breaths, pour yourself a beverage of your choice, and I'll tell you what's happening - and what I think is going to happen. Although I expect these problems will resolve themselves without a catastrophic meltdown, I'll also tell you why I'm more nervous about the world financial system now than I've ever been in my 40 years of covering business and markets.
Truck drivers’ strike picks up speed When my story from last week about plans for a truckers’ strike appeared Monday on the high-traffic Drudge Report Web site, the calls and e-mails poured in.I heard from CNN in Atlanta as well as small-time radio stations across the nation. I hung up the phone after listening to a dozen new messages and had four more come in during the few minutes I was tying up the line. The potential impact of this thing is tremendous, and people are beginning to notice. The call for a drivers’ shutdown started small — with an owner/operator who hauls cattle in Missouri. The trucker, Dan Little, posted his plans to shut down on his Web site, and someone brought it to our attention at the Times.
Opec blames oil prices on floundering US currency THE president of Opec has predicted that the price of oil could stay as high as 110 a barrel for the rest of the year, spurred by investors seeking a hedge against the weakening US dollar. Chakib Khelil, president of the global oil cartel, who is also the Algerian Energy Minister, said: "There are big pressures on Opec — and some consuming nations would like to present Opec as being behind current high prices."But the truth is that the current prices are linked to US economic problems as well as to the value of the dollar."His comments came after the US urged Saudi Arabia to boost production in an attempt to ease the price of oil. There are hopes that a recession in America and moves by China to reduce economic growth will lead to a fall in demand for commodities such as oil and result, in turn, in falling oil prices.
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