Decline in home prices accelerates in March The pace of home price declines accelerated in March and there are no hints that the decline might be ending soon, economists said. Home prices in 20 major U.S. metropolitan areas have dropped a record 14.4% in the past year, Standard & Poor's said Tuesday. The 20-city Case-Shiller home price index fell 2.2% from February to March. This is the 16th consecutive decline in prices. And for 10 major cities, prices fell by 2.4% in March and by 15.3% for the past 12 months. S&P's Case-Shiller index tracks sales of the same homes over time, so it's not influenced by the mix of homes sold in a period. However, it closely tracks only 20 cities, many of which had participated in the housing bubble earlier in the decade.
Bank failures to surge in coming years By April, Gary Holloway was almost three years into retirement. He'd built a new home by a lake in Texas, bought a boat and was working on his golf game. While taking on some part-time work, Holloway also traveled for months across the U.S. with his wife, from Seattle to Washington D.C., catching up with old friends and family. That life of leisure abruptly changed about six weeks ago when Holloway got a phone call from his former employer, the Federal Deposit Insurance Corp., or FDIC, which regulates U.S. banks and insures deposits. Holloway, a 30-year FDIC veteran, had worked extensively with failed lenders in Houston during the savings and loan crisis in the late 1980s and early 1990s, when thousands of thrifts collapsed.
Banking's Miracles Of Lourdes: HSBC Calls For Higher Interest Rates The head of HSBC (HBC) had an epiphany. Unlike most bankers who constantly advocate lower interest rates, the head of Europe's largest firm thinks rates must go higher. Michael Geoghegan, CEO of HSBC, told Reuters that "Inflation is a long-term problem because there is no long-term will to solve it." He sees the solution as moving rates back up at central banks. The issue may be that trying to slow the economies in the US or Europe will not push down inflation. One theory, a theory with some sane adherents, posits that rising demand in Asia and flat or falling supply of food and crude worldwide make bringing down inflation though monetary policy difficult.
Some US farms outsourced to Mexico Antonio Martinez used to pay smugglers thousands of dollars each year to sneak him into the United States to manage farm crews. Now, the work comes to him. Supervising lettuce pickers in central Mexico, Martinez earns just half of the $1,100 a week he made in the U.S. But the job has its advantages, including working without fear of immigration raids. Martinez, now a legal employee of U.S.-owned VegPacker de Mexico, is exactly the kind of worker more American farm companies are seeking. Many have moved their fields to Mexico, where they can find qualified people, often with U.S. experience, who can't be deported. "Because I never moved my family to the U.S., I was always alone there," said Martinez, 45, who could never get a work permit, even after 16 years in agriculture in California and Arizona. "When I got the opportunity to be close to my family, doing similar work, I didn't even have to think about it."
Fed Keeps Watch on Wall St. -- From the Inside In the two months since the government rescue of Bear Stearns, the Federal Reserve has built on the fly a new system of monitoring investment banks, radically redefining the central bank's role overseeing Wall Street. New York Fed employees are working inside major investment banks every day, alongside the Securities and Exchange Commission staff members who are the firms' main regulators. The Fed employees are trying to gather information the central bank can use to make sure the billions of dollars it is lending the investment firms, through a special emergency loan program enacted in March, are not being put at undue risk. This new approach, which is still at a relatively small scale, offers a window into how the nation's system of regulating financial firms might evolve as policymakers sift through the financial wreckage of the past nine months.
Economist challenges government data Oakland economist John Williams doesn't seem like the kind of guy to pick fights with the government. He's slow moving and soft spoken, conservative in politics and personal habits, a pale and portly 59-year-old who favors Oxford shirts, Rep ties and sensible shoes. Williams is the sort who pays his taxes on time, waits when the signal says "Don't Walk" and snaps to attention when the national anthem is played. But don't be fooled. The New Jersey native is leading a one-man crusade to expose official economic data as grossly misleading at best and, at worst, a pack of lies. His Shadow Government Statistics Web site (shadowstats.com) has become a magnet for those convinced that official data put a happy-talk gloss on the nation's economy.
Buffett: US recession to become 'longer, deeper' The United States is already in a recession and it will be longer as well as deeper than many people expect, U.S. investor Warren Buffett said in an interview published in German magazine Der Spiegel on Saturday. He said the United States was "already in recession" and added: "Perhaps not in the sense that economists would define it" with two consecutive quarters of negative growth. "But the people are already feeling the effects," said Buffett, the world's richest man. "It will be deeper and last longer than many think." But he said that won't stop him from investing in selected companies and said he remained interested in well-managed German family-owned companies.
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