Ambrose Evans-Pritchard issues global stock and credit crash alert......... - Page 3 - Mercedes-Benz Forum

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post #21 of 28 (permalink) Old 06-24-2008, 02:35 AM Thread Starter
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Originally Posted by mlfun View Post
When everyone says the stock mkt is going to take a dump,...
----------------------------------------------------------------------

Bloomberg.com: Worldwide
Recession Will Drag U.S. Stocks Lower, Merrill Says (Update1)

By Lynn Thomasson

June 23 (Bloomberg) -- U.S. stock prices have further to fall because consumer spending is ``hobbled'' and record food and energy prices point to a worse-than-average economic recession, Merrill Lynch & Co. said.

The Standard & Poor's 500 Index has never tumbled to a low within the first three months of a contraction, said Brian Belski, Merrill's U.S. sector strategist. The 19-month low reached on March 10 was about 2 1/2 months into the current recession, according to David Rosenberg, Merrill's chief North American economist.

``This is not your average recession,'' New York-based Belski wrote in a report today. ``We would urge caution for investors attempting to call the bottom in the current environment.''


Increasing writedowns and dividend cuts from U.S. financial companies and record prices for oil, coal, fertilizer and rice signal that the U.S. economy is shrinking for the first time since 2001, Belski said. Gasoline prices have climbed to more than $4 a gallon nationwide after oil futures reached a high of $139.89 on June 16. The world's biggest banks and securities firms have lost almost $400 billion from asset writedowns and credit market declines tied to the U.S. subprime mortgage market collapse.

``Given that our economy has always relied heavily upon the consumer, we find it hard to believe that this will be an `average' recession when it appears that the consumer continues to weaken,'' Belski said.

The strategist said investors should ``not be fooled'' by the S&P 500's 12 percent gain between March 10 and May 19 because the advance doesn't indicate a turnaround in the economy. The stock benchmark has fallen 7.5 percent in the past five weeks.

The S&P 500 rose 0.3 percent to 1,321.58 at 1:52 p.m. in New York.

To contact the reporter on this story: Lynn Thomasson in New York at lthomasson@bloomberg.net.


Attention: JayHawk Attention JayHawk Clean up on paragraph 3 clean up on paragraph 3.............
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post #22 of 28 (permalink) Old 06-24-2008, 06:44 AM Thread Starter
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The screws are tightening.......

Card Issuers Get Personal to Check Credit

When it comes to staying in good graces with your credit-card company, having an unsullied credit record might not be enough.

Lenders have long relied on consumers' credit scores to decide whether to approve card applications and how much credit to extend and at what interest rate. Now, as financial firms face rising losses because of the weakening economy, some big card issuers are digging deeper into their customers' personal lives. They are scrutinizing where cardholders live, for example, and what line of work they are in.

Card-industry executives say the heightened focus is directed especially at residents of states hit hardest by the housing slump, such as California, Florida and Nevada. Cardholders who work in struggling industries like construction and finance also are feeling a tighter squeeze, with their credit lines suddenly reduced sharply even if they always paid their bills on time and in full. Other consumers are bumping up against myriad other restrictions.

Michael Shortt, who owns a television-production company in Savannah, Ga., says American Express Co. slashed the credit lines on three of the six AmEx cards that he uses for his business, even though he routinely pays them off every month. Two of the credit lines shrank to $1,000 from $6,000, and the third was reduced to $36,000 from $42,000.

When he called the New York company's customer-service department, Mr. Shortt says he was told that his available credit declined because he hadn't supplied information about his company to Dun & Bradstreet Corp., which provides credit data on small businesses. On Saturday, Mr. Shortt got a letter from AmEx notifying him that his $36,000 credit line was being cut to $4,300. He cut that card up Wednesday, he says.

"Of all the people that [AmEx] would want to mess with, why would it be a customer who pays their bills on time and spends a great deal of money?" says Mr. Shortt, who says he has accumulated 780,000 rewards points through his American Express cards. He says he gets calls from Dun & Bradstreet, but he doesn't feel comfortable providing information about his business, especially over the telephone. A Dun & Bradstreet spokesman couldn't be reached to comment.

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Card-Issuers-Get-Personal-to-Check-Credit: Personal Finance News from Yahoo! Finance
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post #23 of 28 (permalink) Old 06-24-2008, 06:49 AM
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^ Cash is still king. Will always be king. Lots of credit cards out there. Amex is a bunch of fuckers. This isn't a new practice for them. Usually when they're experiencing internal issues, they turn customers into their whipping posts.
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post #24 of 28 (permalink) Old 06-24-2008, 08:14 AM Thread Starter
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S&P/Case-Shiller Home Prices Fell 15.3% in April

June 24 (Bloomberg) -- Home prices in 20 U.S. metropolitan areas fell in April by the most on record, signaling the housing recession is far from over, a private survey showed today.

The S&P/Case-Shiller home-price index dropped 15.3 percent from a year earlier, less than forecast, after a 14.3 percent decline in March. The gauge has fallen every month since January 2007. The group began keeping year-over-year records in 2001.

Mortgage defaults and foreclosures are adding to the glut of properties on the market, while stricter loan rules are making it more difficult for prospective buyers to get financing. The prolonged real-estate slump, along with higher fuel prices and a shrinking job market, is taking a toll on consumers and the economy.

``There's such an excess of inventories that we certainly expect to see more price declines,'' said James O'Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut. ``The economy is still weakening and housing still looks pretty weak.''

Home prices decreased 1.4 percent in April from a month earlier after a 2.2 percent decline in March, the report showed. The figures aren't adjusted for seasonal effects, so economists prefer to focus on year-over-year changes instead of month to month.

The index was forecast to fall 16 percent from a year earlier, after a previously reported 14.4 percent drop in the 12 months ended in March, according to the median forecast of 23 economists surveyed by Bloomberg News. Estimates ranged from declines of 15.4 percent to 17 percent.

Declines Widespread

All of the 20 cities in the index showed a year-over-year decrease in prices for April, led by a 27 percent drop in both Las Vegas and Miami. Charlotte, North Carolina, showed a decline for the first time.

One bright spot in the report was that more cities showed a gain in prices in April compared with the previous month. Houses in eight areas rose in value, compared with just two in March. Month-over-month gains were led by Cleveland and Dallas.

``There might be some regional pockets of improvement, but on an annual basis the overall numbers continue to decline,'' David Blitzer, chairman of the index committee at S&P, said in a statement.

Reports this week may reinforce the dim outlook for housing. Combined sales of new and existing homes in May probably were the third-lowest on record, according to the Bloomberg survey median.

Sales May Fall

New-home sales probably fell, approaching March's 17-year low, a report from the Commerce Department tomorrow may show. The National Association of Realtors may report the following day that purchases of existing houses, which account for 85 percent of the market, rose last month from a record low.

Rising borrowing costs aren't helping. Fannie Mae, the largest mortgage buyer, last week cut its forecast for new and existing home sales this year as 30-year fixed mortgage rates jumped to an eight-month high.

Banks repossessed twice as many homes in May as they did a year ago and foreclosure filings rose 48 percent, according to RealtyTrac Inc., a real estate database in Irvine, California.

Homebuilders are reeling. Standard Pacific Corp., an Irvine, California-based homebuilder, last week said new home orders for April and May fell 12 percent from a year earlier, citing ``difficult housing conditions'' in most of its markets.

Robert Shiller, chief economist at MacroMarkets LLC and a professor at Yale University, and Karl Case, an economics professor at Wellesley College, created the home-price index based on research from the 1980s.

The S&P/Case-Shiller index and another by the Office of Federal Housing Enterprise Oversight track the same home over time and more accurately reflect price trends, economists said.

OFHEO's measure for April is due at 10 a.m. today.

The gauges from the Commerce Department and the Realtors group can be influenced by changes in the types of homes sold. Higher sales of cheaper homes relative to more-expensive properties will bias the figures down.

Bloomberg.com: Worldwide
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post #25 of 28 (permalink) Old 06-24-2008, 08:26 AM Thread Starter
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post #26 of 28 (permalink) Old 06-25-2008, 03:07 AM Thread Starter
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Faster Inflation May Unleash `Financial Tsunami': Chart of Day

June 24 (Bloomberg) -- Rising consumer prices will leave more U.S. consumers unable to pay their debts and may lead to a ``financial tsunami,'' according to Bennet Sedacca, president of money manager Atlantic Advisors LLC in Winter Park, Florida.

``Whether it is anecdotal or statistical evidence, I see inflation everywhere, and this is where the financial tsunami cometh,'' Sedacca wrote in a report published yesterday. ``A battered, over-indebted consumer, if forced to retrench, could create even more problems for the banking system as loan delinquencies would begin to rise even further. All sorts of delinquencies are rising. This is now a systemic issue.''

The four-part chart of the day shows how U.S. householders are struggling to pay their home loans. The top white chart shows the surge in delinquencies on all mortgages, while the yellow one measures foreclosures. The green chart tracks delinquencies on subprime adjustable-rate mortgages, and the purple one shows subprime mortgages that are 60 days behind on their payments.

Sedacca wrote that current financial-market conditions remind him of ``someone standing on a lonely beach, armed with only a small bucket, trying to stop a rare tsunami that hits the shores. It is how I feel about our markets and the tools being utilized by the Federal Reserve, the European Central Bank and other regulatory bodies. They are overmatched for what they are facing and, worse yet, they helped create the mess in the first place by being far too easy with money and debt creation.''

Bloomberg.com: Worldwide
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post #27 of 28 (permalink) Old 06-25-2008, 09:01 AM Thread Starter
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Move along Move along Folks, no jobs to see here, gone to India...........

OC Register to outsource some editing to India

An Indian company will take over copy editing duties for some stories published in The Orange County Register and will handle page layout for a community newspaper at the company that owns the Pulitzer Prize-winning daily, the newspaper confirmed Tuesday.

Orange County Register Communications Inc. will begin a one-month trial with Mindworks Global Media at the end of June, said John Fabris, a deputy editor at the Register.

Mindworks' Web site says the company is based outside New Delhi and provides "high-quality editorial and design services to global media firms ... using top-end journalistic and design talent in India."

Editors at Mindworks will work five shifts a week for one month, performing layout for the community paper and editing some stories in the flagship Register, Fabris said. Staffing at the company will not be affected, he said.

Fabris did not specify which community newspaper would be laid out by Indian designers.

"This is a small-scale test, which will not touch our local reporting or decision-making. Our own editors will oversee this work," Fabris said in an e-mail to The Associated Press. "In a time of rapid change at newspapers, we are exploring many ways to work efficiently while maintaining quality and improving local coverage."

The company declined to release the financial terms of the deal.

Orange County Register Communications has struggled in recent months with circulation declines. The Register recently dropped from the third-largest newspaper in California to the fifth-largest, behind the Los Angeles Times, San Francisco Chronicle, San Diego Union-Tribune and Sacramento Bee.

The company has been through three rounds of layoffs in the past year, most recently in April when up to 90 employees lost their jobs. Employees were also offered a voluntary severance program in 2006.

Orange County Register Communications is the umbrella brand for the Register newspaper, Web sites, magazines and other community publications.

Other newspapers also have outsourced some work to India. Mindworks began copyediting and design of a weekly community news section and other special advertising sections at The Miami Herald in January. A month earlier, the Sacramento Bee, also owned by the McClatchy Co., said it would outsource some of its advertising production work to India.

OC Register to outsource some editing to India
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post #28 of 28 (permalink) Old 06-25-2008, 09:32 AM Thread Starter
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American Express Says Late Payments Rising Faster Than Expected

June 25 (Bloomberg) -- American Express Co., the biggest U.S. credit-card company by purchases and cash advances, said customers are falling behind on their debt at a faster-than- anticipated pace, signaling the economy is worsening.

``Business conditions continue to weaken in the U.S. and so far this month we have seen credit indicators deteriorate beyond our expectations,'' Chief Executive Officer Kenneth Chenault said in a statement today announcing the company would receive as much as $1.8 billion in a settlement with competitor MasterCard Inc.

American Express and rivals Capital One Financial Corp. and Discover Financial Services have fallen more than 30 percent in the past 12 months in New York trading as the housing slump hurts consumers' ability to repay debt of all kinds. New York-based American Express adopted a ``cautious view'' for the year in January after cardholder spending slowed and delinquencies rose in December.

``If you look at the employment situation, clearly that's deteriorated, and consumer confidence is down as well,'' said Sanjay Sakhrani, an analyst with KBW Inc. in New York who has a ``market perform'' rating on the stock. ``Both play a key role in the credit-card industry.''

The U.S. lost jobs in May for a fifth month and the unemployment rate rose by the most in more than two decades. Payrolls fell by 49,000 after a 28,000 drop in April, the Labor Department said June 6. The jobless rate increased by half a point to 5.5 percent.

Consumer Confidence

Confidence among Americans dropped to the lowest level in 16 years, the Conference Board said yesterday. Consumers, whose spending accounts for more than two-thirds of gross domestic product, are being hurt by the housing slump, rising unemployment and higher food and fuel bills.

American Express declined 43 cents to $41.67 at 10:33 a.m. in New York Stock Exchange composite trading.

First-quarter loss provisions in the company's U.S. card business rose 52 percent to $881 million as net income declined 11 percent to $974 million.

MasterCard, which runs a network and doesn't extend loans to consumers, gained $13.36, or 4.8 percent, to $293.73. The company has climbed 81 percent over 12 months.

The legal accord is ``an overhang that's eliminated,'' said Sakhrani. ``The amount of the settlement is not ideal, but it's a manageable amount.'' MasterCard had net income of $446.9 million in the first quarter.

MasterCard will pay as much as $1.8 billion over three years to settle the complaint that it blocked banks from issuing American Express cards.

`A Cushion'

``The settlement was higher than we thought it would be,'' said Sakhrani. ``It's clearly a cushion'' for American Express against bad loans.

American Express sued competitors MasterCard and Visa Inc. in November 2004 after the U.S. Supreme Court ruled they violated antitrust laws by preventing member banks from offering rival cards. Citigroup Inc. and Bank of America Corp., the two biggest U.S. banks, later agreed to offer American Express services.

Visa settled in November for $2.25 billion.

Bloomberg.com: Worldwide
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