Stock Market Crash Expected In 2008 To Be Worse Than 1929

[Soldier4Christ]

How much commercial banks have already cut back on lending will be known in mid-April when most report earnings.

``All I know is the first-quarter reports are going to be pretty bad, and there's a lot more to come,'' said L. William Seidman, who was chairman of the FDIC from 1985 to 1991. ``Our experience was that if the economy got in trouble, it took at least a year for the banks to get into trouble.''

Fed Chairman Ben Bernanke described bank capital requirements in congressional testimony April 2 as ``the nub of the problem'' and said U.S. institutions had ``hunkered down'' and were lending less.

28,000 Securities

Falling below the required capital levels would also hinder banks' ability to take over other banks and raise deposit insurance rates, according to the FDIC and the Office of the Comptroller of the Currency.

``The important thing to remember about capital ratios is that they are minimums,'' said Ralph Sharpe, a lawyer at Venable LLP in Washington, who was director of the OCC's enforcement and compliance division from 1984 to 1994. ``In good times everybody looks good, but when the tide goes out, you see who is not wearing their bathing suit.''

Moody's Investors Service, Standard & Poor's and Fitch Ratings have lowered investment-grade ratings on more than 28,000 mortgage- and asset-backed securities since the first of the year. In March alone, more than $134 billion in such securities were downgraded enough to change risk weightings on bank balance sheets, according to data compiled by Bloomberg.

Risk Weighting

Some of the downgrades have been dramatic. S&P on April 1 slashed its rating on tranches of Citius II Funding Ltd. and Fox Trot CDO Ltd. by 14 levels to B from AAA and cut another tranche from Fox Trot CDO by 15 steps to CCC from AA.

Banks are required to put different risk weightings on assets ranging from government notes to mortgage securities to corporate bonds and cash. A $100 million mortgage-backed security with an AAA or AA rating counts as $20 million for the bank's risk-adjusted asset total. Securities with top credit ratings are considered most likely to be repaid and count for less risk.

If the same security's rating fell to BBB+ on Fitch's or S&P's scale, the risk weighting would rise to 100 percent, or the full $100 million, because of an increased likelihood of default. When ratings companies differ on the grade given to a mortgage-or asset-backed security, regulators use the lowest one.

All corporate bonds have a risk weighting of 100 percent, no matter what their rating, because of their perceived risks, while cash and government securities carry no weight.

Zero Risk

At the end of last year, Citigroup, for instance, owned $552 billion of securities weighted at zero risk and $523 billion at 20 percent. It also held $320 billion with risk weightings of 50 percent and $881 billion at 100 percent, according to data filed with the Federal Reserve.

To maintain the ratio of 10 percent when a $100 million AAA security is dropped to BBB, a bank's needed capital would rise to $10 million from $2 million. An institution can raise the $8 million by selling stock or preferred shares. The bank can also compensate by selling the security, or cutting back on other lending.

Regulators focus on two more measures in gauging the health of financial institutions. Well-capitalized banks must have Tier One capital, which excludes subordinated debt and some preferred shares, of at least 6 percent of risk-weighted assets. Additionally, Tier One capital can't fall below 5 percent of total tangible assets, not adjusted for risk and excluding goodwill, or the extra value of acquired assets.

Investment banks, such as Goldman Sachs and Morgan Stanley, both based in New York, have different regulatory requirements and aren't subject to the same minimums.

Tier One

To bolster their capital ratios, banks have been raising money for months, including a $19 billion initial public offering of Visa credit cards, which was owned by a bank group.

Citigroup has so far been the biggest seeker of capital, generating $30.4 billion through the sale of shares, preferred stock and bonds convertible into equity. Chief Financial Officer Gary Crittenden said in January that the program ``addresses this potential shortfall under multiple scenarios.''

A risk-based capital ratio lower than 10 percent automatically pulls a bank into a lower regulatory category, called ``adequately capitalized.'' By itself, that wouldn't set off runs on teller windows, said Isaac, the former FDIC chairman. Individual depositors will rely on FDIC insurance to protect their savings while larger business clients will examine the overall health of the bank, Isaac said.

``Bragging Rights'

``It does affect bragging rights,'' Isaac said. ``A lot of banks want to be able to say `we're well-capitalized by regulatory standards.''

Smaller banks, which own fewer mortgage-backed securities and do more direct real-estate lending, are already feeling the pain. Fremont General Corp., a former subprime mortgage lender, has until May 26 to generate new funds or find a buyer after it was deemed undercapitalized by regulators. Its total capital risk ratio was 9.21 percent.

National City is in talks to sell itself to KeyCorp, a rival bank that's also based in Cleveland.

The number of lenders on the FDIC's ``problem'' bank list rose to 76 on Dec. 31 from 50 a year earlier. In 1990, the total reached 1,500. Three FDIC-insured banks failed in 2007, the first since June 2004. The agency hired as many as 138 examiners for a division that manages shutdowns and liquidations of failed banks, agency spokesman Andrew Gray said.

[Soldier4Christ]

Warning: Trade deficit
may trigger depression
Economists: It's de-industrializing America,
leading nation toward 2nd-rate power status

America is selling its birthright not for a mess of pottage, but for a mess of Chinese junk, and the resulting "unsustainable" trade deficit is leading "to the collapse of the dollar, depression and conversion of the United States to a second-rate power," says a new book written by three generations of a family of economists.

"Not only will the United States feel the pain, but other countries will as well," write Raymond, Howard and Jesse Richman in "Trading Away Our Future." "Because other countries are dependent upon the U.S. dollar as a reserve currency and because they are dependent on exports to the United States to sustain their own economies, the eventual collapse of the dollar could wreak havoc on the economies of the whole world."

While some other economists have claimed there is no danger from a trade deficit that has reached nearly $60 billion, and some have even suggested they represent a blessing for Americans, the authors strongly disagree.

"A basic principle of economics is that there is no free lunch," they write. "Those who think that the Chinese, Japanese, Saudis, et al, are giving the United States a free lunch when they sell more than they buy are engaged in short term thinking that ignores huge long term costs."

The book is released at a time when more Americans are searching for answers about the stumbling state of the economy – with the dollar declining, foreclosures rising and credit tightening.

The Richmans tie the growing trade deficit to the "de-industrialization" of America.

"The financial flows that sustained these deficits did not go to expand the U.S. capital stock – they mostly financed consumption of foreign goods," they explain. "Japan and China and other Pacific Rim nations stole industry after industry from the United States. America's manufacturing investment declined so much that by 2004 and 2005, net investment in American manufacturing actually went into negative territory, meaning that U.S. manufacturers were not even investing enough to replace wearing out machinery and plants. The U.S. manufacturing workforce declined steadily, so that by 2007 over a fifth of the U.S. manufacturing jobs that would have existed given balanced trade had been lost. Those losing their manufacturing jobs often took less skilled jobs in the service sector, causing media wages to stagnate. In 2007, the United States was in a much weaker position to compete in world markets and the dollar had nowhere to go but down."

It's not just a lack of foresight by American policy makers that has created the problem, the authors write. It is also a conscious policy of some foreign countries to practice neo-mercantilism – with the U.S. as the target.

"Beginning in the late 1990s, China copied the policy that had converted Japan from a weak and backward economy to a world powerhouse," they say. "In recent years, more and more countries have been joining the bandwagon, with the United States as their primary target. They have been accumulating dollar assets in order to manipulate currency values and preserve the conditions that produce trade surpluses for them and trade deficits for us."

Adding to the problem, the authors write, was the emergence of a blind ideological commitment across the American political spectrum to "free trade" that really wasn't free at all.

"As advocates of free markets, we generally approve of relying on the free play of market forces to provide the highest level of welfare for Americans," they write. "But we discovered that free trade, normally beneficial, had become an ideology blinding the United States establishment from seeing key causes of the trade deficits and their disastrous consequences. The trade deficits are sustained by government policies, both U.S. government tax policies and foreign government mercantilist policies, not by the free play of market forces."

The authors believe the situation can still be reversed, preserving American dominance of the world economy.

"If not, then resolutely non-democratic China will dominate," they say. "The world's future is in the balance."

[Barbara]

Haitians storm presidential palace as food prices continue to soar

Associated Press April 9, 2008

PORT AU PRINCE, Haiti - Hungry Haitians stormed the presidential palace Tuesday to demand the resignation of President Rene Preval over soaring food prices, and U.N. peacekeepers chased them away with rubber bullets and tear gas.

Food prices which have risen 40 percent on average since mid 2007, are causing unrest around the world. But nowhere do they pose a greater threat to democracy than in Haiti, one of the owld's poorest countries where in the best of times most people struggle to fill their bellies.

"I think we have made progress in stabilizing the country, but that progress is extremely fragile, highly reversible, and made even more fragile by the current socio-economic environment," U.N. envoy Hedi Annabi said Tuesday after briefing the Security Council.

For months, Haitians have compared their hunger pains to "eating Clorox" because of the burning feeling in their stomachs. The most desperate have come to depend on a traditional hunger palliative of cookies made of dirt, vegetable oil and salt.

Riots broke out in the normally placid southern port of Les Cayes last week, quickly escalating as protesters tried to burn down a U.N. compound and leaving five people dead. The protests spread to other cities, and on Monday tens of thousands took to the streets of Port-au-Prince.

On Tuesday, demonstrators in the capital set fires, barricaded streets and looted stores, and a crowd tried to break down the gates of the presidential palace, demanding Preval's resignation.

"We are hungry!" the crowd shouted. "He must go!"

Preval, a soft-spoken leader backed by Washington, was at work in the palace during the protests, aides said. He has made no public statements since the riots began."

[Soldier4Christ]

Food costs rising fastest in 17 years
Analysts expect data this week to show situation getting worse

Steve Tarpin can bake a graham cracker crust in his sleep, but explaining why the price for his Key lime pies went from $20 to $25 required mastering a thornier topic: global economics.

He recently wrote a letter to his customers and posted it near the cash register listing the factors—dairy prices driven higher by conglomerates buying up milk supplies, heat waves in Europe and California, demand from emerging markets and the weak dollar.

The owner of Steve's Authentic Key Lime Pies in Brooklyn said he didn't want customers thinking he was "jacking up prices because I have a unique product."

"I have to justify it," he said.

The U.S. is wrestling with the worst food inflation in 17 years, and analysts expect new data due on Wednesday to show it's getting worse. That's putting the squeeze on poor families and forcing bakeries, bagel shops and delis to explain price increases to their customers.

U.S. food prices rose 4 percent in 2007, compared with an average 2.5 percent annual rise for the last 15 years, according to the U.S. Department of Agriculture. And the agency says 2008 could be worse, with a rise of as much as 4.5 percent.

Higher prices for food and energy are again expected to play a leading role in pushing the government's consumer price index higher for March.

Analysts are forecasting that Wednesday's Department of Labor report will show the Consumer Price Index rose at a 4 percent annual rate in the first three months of the year, up from last year's overall rise of 2.8 percent.

For the U.S. poor, any increase in food costs sets up an either-or equation: Give something up to pay for food.

"I was talking to people who make $9 an hour, talking about how they might save $5 a week," said Kathleen DiChiara, president and CEO of the Community FoodBank of New Jersey. "They really felt they couldn't. That was before. Now, they have to."

For some, that means adding an extra cup of water to their soup, watering down their milk, or giving their children soda because it's cheaper than milk, DiChiara said.

U.S. households still spend a smaller chunk of their expenses for foods than in any other country—7.2 percent in 2006, according to the USDA. By contrast, the figure was 22 percent in Poland and more than 40 percent in Egypt and Vietnam.

In Bangladesh, economists estimate 30 million of the country's 150 million people could be going hungry. Haiti's prime minister was ousted over the weekend following food riots there.

Still, the higher U.S. prices seem eye-popping after years of low inflation. Eggs cost 25 percent more in February than they did a year ago, according to the USDA. Milk and other dairy products jumped 13 percent, chicken and other poultry nearly 7 percent.

USDA economist Ephraim Leibtag explained the jumps in a recent presentation to the Food Marketing Institute, starting with the factors everyone knows about: sharply higher commodity costs for wheat, corn, soybeans and milk, plus higher energy and transportation costs.

The other reasons are more complex. Rapid economic growth in China and India has increased demand for meat there, and exports of U.S. products, such as corn, have set records as the weak dollar has made them cheaper. That's lowered the supply of corn available for sale in the U.S., raising prices here. Ethanol production has also diverted corn from dinner tables and into fuel tanks.

Soybean prices have gone up as farmers switched more of their acreage to corn. Drought in Australia has even affected the price of bread, as it led to tighter global wheat supplies.

The jump has left people in the food business to do their own explaining. Twin Cafe Caterers in lower Manhattan posted a letter on its deli cooler: "Due to the huge increase of the gas, the electricity, the water and all the other utilities, we had to raise the prices a little bit." It went on to say that all its food prices have risen, too.

Wonder Bagels, in Jersey City, N.J., posted a letter from its wheat supplier, A. Oliveri & Sons, saying the recent situation was unprecedented.

"The major mills across the country are using words like 'rationing' and 'shortages' if things continue," it said. "We will sweat out the summer together, hoping there will be some flour left to purchase at any price."

The letter called for an immediate halt to exports and a change in farm policy, "stop paying farmers NOT to grow crops." A new farm bill, stalled in Congress, would expand farm subsidies if it passes, however.

For some Americans, the resulting increases might be barely perceptible. The Cheesecake Factory raised prices by 1.5 percent at the end of February, Applebee's by 3 percent.

But for the poorest U.S. families, the higher costs may mean going hungry. A family of four is eligible for a maximum $542 a month in food stamps, which never lasted the whole month before, Food Bank of New Jersey's DiChiara said.

"Now food stamps go fewer and fewer days of the month," she said.

The Food Bank recently got a letter of its own from a key vendor. Its grim message: Sorry, but the prices they charge the Food Bank would be increasing 20 percent, due to food inflation.

[Soldier4Christ]

Retailing Chains Caught in a Wave of Bankruptcies

The consumer spending slump and tightening credit markets are unleashing a widening wave of bankruptcies in American retailing, prompting thousands of store closings that are expected to remake suburban malls and downtown shopping districts across the country.

Since last fall, eight mostly midsize chains — as diverse as the furniture store Levitz and the electronics seller Sharper Image — have filed for bankruptcy protection as they staggered under mounting debt and declining sales.

But the troubles are quickly spreading to bigger national companies, like Linens ‘n Things, the bedding and furniture retailer with 500 stores in 47 states. It may file for bankruptcy as early as this week, according to people briefed on the matter.

Even retailers that can avoid bankruptcy are shutting down stores to preserve cash through what could be a long economic downturn. Over the next year, Foot Locker said it would close 140 stores, Ann Taylor will start to shutter 117, and the jeweler Zales will close 100.

The surging cost of necessities has led to a national belt-tightening among consumers. Figures released on Monday showed that spending on food and gasoline is crowding out other purchases, leaving people with less to spend on furniture, clothing and electronics. Consequently, chains specializing in those goods are proving vulnerable.

Retailing is a business with big ups and downs during the year, and retailers rely heavily on borrowed money to finance their purchases of merchandise and even to meet payrolls during slow periods. Yet the nation’s banks, struggling with the growing mortgage crisis, have started to balk at extending new loans, effectively cutting up the retail industry’s collective credit cards.

“You have the makings of a wave of significant bankruptcies,” said Al Koch, who helped bring Kmart out of bankruptcy in 2003 as the company’s interim chief financial officer and works at a corporate turnaround firm called AlixPartners.

“For years, no deal was too ugly to finance,” he said. “But now, nobody will throw money at these companies.”

Because retailers rely on a broad network of suppliers, their bankruptcies are rippling across the economy. The cash-short chains are leaving behind tens of millions of dollars in unpaid bills to shipping companies, furniture manufacturers, mall owners and advertising agencies. Many are unlikely to be paid in full, spreading the economic pain.

When it filed for bankruptcy, Sharper Image owed $6.6 million to United Parcel Service. The furniture chain Levitz owed Sealy $1.4 million.

And it is not just large companies that are absorbing the losses. When Domain, the furniture retailer, filed for bankruptcy, it owed On Time Express, a 90-employee transportation and logistics company in Tempe, Ariz., about $30,000.

“We’ll be lucky to see pennies on the dollar, if we see anything,” said Ross Musil, the chief financial officer of On Time Express. “It’s a big loss.”

Most of the ailing companies have filed for reorganization, not liquidation, under the bankruptcy laws, including the furniture chain Wickes, the housewares seller Fortunoff, Harvey Electronics and the catalog retailer Lillian Vernon. But, in a contrast with previous recessions, many are unlikely to emerge from bankruptcy, lawyers and industry experts said.

Changes in the federal bankruptcy code in 2005 significantly tightened deadlines for ailing companies to restructure their businesses, offering them less leeway.

And the changes may force companies to pay suppliers before paying wages or honoring obligations to customers, like redeeming gift cards, said Sally Henry, a partner in the bankruptcy law practice at Skadden, Arps, Slate, Meagher & Flom and the author of several books on bankruptcy.

As a result, she said, “it’s no longer reorganization or even liquidation for these companies. In many cases, it’s evaporation.”

Several of the retailers that filed for Chapter 11 bankruptcy protection over the last eight months, like the furniture sellers Bombay, Levitz and Domain, have begun to wind down — closing stores, laying off workers and liquidating merchandise.

In most cases, the collapses stemmed from a combination of factors: flawed business strategies, a souring economy and banks’ unwillingness to issue cheap loans.

Bombay, a chain with 360 stores, was considered a success in the furniture world, after its sales surged from $393 million in 1999 to $596 million in 2003.

Then the chain decided to move most of its stores out of enclosed malls into open-air shopping centers. It started a children’s furniture business, called BombayKids. And it started carrying bigger items, like beds and upholstered couches, with higher prices than its regular furniture.

Consumers balked at the changes, hurting Bombay’s sales and profits at the same time that its expenses for the ambitious new strategies began to grow. The timing was unenviable: By early 2007, the housing market began to falter, so purchases of furniture slowed to a trickle.

The company was running out of money, but banks refused to lend more. “They did not want to take the chance that we might not repay the loans,” Elaine D. Crowley, the chief financial officer, said in an interview.

In September 2007, Bombay filed for bankruptcy protection. The highest bid for the company came from liquidation firms, who quickly dismembered the 33-year-old chain. Bombay, which once employed 3,608, now has 20 employees left. “It is very difficult and sad,” Ms. Crowley said.

The bankruptcies are putting a spotlight on a little-discussed facet of retailing: heavy debt.

Stores may appear to mint money by paying $2 for a T-shirt and charging $10 for it. But because shopping is based on weather patterns and fashion trends, retailers must pay for merchandise that may sit, unsold, on shelves for long periods.

So chains regularly borrow large sums to cover routine expenses, like wages and electricity bills. When sales are strong, as they typically are during the holiday season, the debts are repaid.

Fortunoff, a jewelry and home furnishing chain in the Northeast, relied on $90 million in loans to help operate its 23 stores, using merchandise as collateral.

But by early 2008, as the housing market struggled, the chain’s profits dropped, meaning its collateral was losing value and the amount it could borrow fell.

In better economic times, the banks might have granted Fortunoff a reprieve. But with a recession looming, they refused, forcing it to file for bankruptcy in February. In filings, the chain said it was “facing a liquidity crisis.” (Fortunoff was later sold to the owner of Lord & Taylor.)

Plenty of retailers remain on strong footing. Arnold H. Aronson, the former chief executive of Saks Fifth Avenue and a managing director at Kurt Salmon Associates, a retail consulting firm, said the credit tightness and consumer spending slowdown have only wiped out the “bottom tier” companies in retailing.

“This recession dealt the final blow to these chains,” he said. But several big-name chains are looking vulnerable. Linens ’n Things, which is owned by Apollo Management, a private equity firm, is considering a bankruptcy filing after years of poor performance and mounting debts, though it has additional options, people involved in the discussions said Monday.

Whether more chains file for bankruptcy or not, it will be hard to miss the impact of the industry’s troubles in the nation’s malls.

J. C. Penney, Lowe’s and Office Depot are scaling back or delaying expansion. Office Depot had planned to open 150 stores this year; now it will open 75.

The International Council of Shopping Centers, a trade group, estimates there will be 5,770 store closings in 2008, up 25 percent from 2007, when there were 4,603.

Charming Shoppes, which owns the women’s clothing retailers Lane Bryant and Fashion Bug, is closing at least 150 stores. Wilsons the Leather Experts will close 158. And Pacific Sunwear is shutting a 153-store chain called Demo.

Those decisions were made months ago, when it was unclear how long the downturn in consumer spending might last. If March was any indication, it is nowhere near over. Sales at stores open at least a year fell 0.5 percent, the worst performance in 13 years, according to the shopping council.

[Soldier4Christ]

Wholesale prices soar in March
Nearly triple expected rate as costs of energy, food both climbed rapidly

Inflation at the wholesale level soared in March at nearly triple the rate that had been forecast as energy prices kept rising and food costs posted a much bigger jump than anticipated.

The Labor Department reported Tuesday that wholesale prices rose by 1.1 percent last month, the largest increase since a 2.6 percent rise last November. The November gain in the Producer Price Index was the biggest one-month jump in 33 years.

Analysts had expected a much more moderate 0.4 percent rise in wholesale prices for the month. However, food costs, which had fallen by 0.5 percent in February, leapt by 1.2 percent last month, propelled upward by big gains in vegetables and beef and the biggest increase in rice prices in more than five years. Those were far higher increases in food prices than expected.

Core inflation, which excludes energy and food, was better behaved last month, rising by just 0.2 percent, down from a worrisome 0.5 percent rise in February.

But with the crude oil price rising to a record close of $113.79 per barrel on Tuesday, analysts said consumers should be braced for more bad inflation news to come.

"Wholesale prices are rising and the consumer should expect more shocks at the supermarket and the gas station," said Joel Naroff, chief economist at Naroff Economic Advisors.

The surge in energy and food costs is coming just as unemployment is rising and many economists believe the country has fallen into a recession, developments that have taken a toll on President Bush's approval ratings. Seven out of 10 Americans now disapprove of Bush's handling of the economy, an all-time high, according to the latest Washington Post-ABC News poll.

Democrats, hoping to win the White House in November, said the string of bad economic statistics showed how Americans were hurting.

"As the paychecks of middle class families get smaller and their homes lose value, their wallets are being further emptied by the skyrocketing everyday costs of gas and food," said Sen. Charles Schumer, D-N.Y.

For the past 12 months, wholesale prices are up by 6.9 percent and core inflation is up by 2.7 percent, the biggest year-over-year increase in nearly two years.

With the economy slowing and inflation rising, some analysts are concerned the country could be facing another bout of stagflation, the malady that last occurred in the 1970s when economic growth stagnated but inflation kept rising.

Such a development would put the Federal Reserve in a bind. The central bank has been cutting interest rates to combat the current slowdown, but if inflation pressures keep rising, it might be forced to stop cutting interest rates for fear that it would make inflation worse.

For March, energy prices jumped 2.9 percent, the biggest increase since November. The price of gasoline was up 1.3 percent while natural gas rose by 4.2 percent. Home heating oil shot up by 13.1 percent and diesel fuel, used to power the nation's trucking fleet, increased by 15.3 percent.

Outside of food and energy, the price of soap and detergent jumped 2 percent, the biggest gain in more than two years, while pet food increased by 1.3 percent.

However, the price of new cars dropped by 0.2 percent and the cost of light trucks was down 0.3 percent, indicating the struggles automakers face as a weak economy dampens demand.

The government will report on consumer prices Wednesday. Analysts said they still expect this report would show a moderate increase of 0.3 percent.

[Soldier4Christ]

US Foreclosure Filings Jump in March

Foreclosure Filings Against US Homeowners Soar 57 Percent in March; Bank Repossessions Surge

The onslaught of homes facing foreclosures has yet to ebb, a research report showed Tuesday, with bank repossessions skyrocketing last month as more troubled homeowners mailed in their keys and walked away.

And the worst isn't over: the wave of adjustable-rate loans resetting to higher rates will crest in May and June. And that's expected to push more homeowners into default and foreclosure in the third and fourth quarters of this year, according to RealtyTrac Inc. of Irvine, Calif.

"Once we're through that batch of loans, the worst will have been worked through the system," said Rick Sharga, RealtyTrac's vice president of marketing.

The number of U.S. homes receiving at least one foreclosure filing jumped 57 percent in March to 234,685, compared with 149,150 properties a year earlier. Filings include default notices, auction sale notices and bank repossessions.

The overall foreclosure rate is 5 percent higher than in February, which saw an unexpected month-to-month decline over January. March marked the 27th consecutive month of year-over-year increases in national foreclosure filings.

That meant one in every 538 households received a filing during the month. Forty-four percent were households that slipped into default for the first time and more than a fifth were homes banks took back.

Lenders took possession of homes at a sharply higher rate, up 129 percent over last year, as more homeowners relinquished their homes, said Sharga. Banks repossessed 51,393 properties nationwide, many of them without a public foreclosure auction.

"In a lot of cases, banks worked something out with the owner in advance and took back the keys and deed. For a homeowner, it's not as embarrassing and it's a little less of a blemish on their credit record compared to a foreclosure," Sharga said.

He estimates between 750,000 and 1 million bank-owned properties will hit the market this year, or about a quarter of the homes up for sale. In some areas, these properties will continue to slow sales and depress prices further.

Declining home prices and stricter lending requirements have exacerbated the foreclosure environment. Homeowners stuck in unmanageable mortgages aren't able to sell their homes or refinance into cheaper loans before their mortgage payments reset higher.

Nevada clocked in the worst foreclosure rate for the 15th straight month. Last month, one in every 139 households received a foreclosure-related notice, nearly four times the national rate. The number of properties with a filing increased 24 percent over February and 62 percent over the previous March.

California had the second-highest foreclosure rate in the country. One in every 204 California households received a foreclosure-related notice. The state had 64,711 properties facing foreclosure, the most of any state and more than double last year's total.

In Florida, 30,254 homes reported at least one filing, down nearly 7 percent from February, but up 112 percent from the year before.

Rounding out the states with the highest foreclosure rates were Arizona, Colorado, Georgia, Ohio, Michigan, Massachusetts and Maryland.

[Soldier4Christ]

National news media burying amazing oil breakthrough?
Man working to convert all that grows into fuel surprised by 'inattention'

It could potentially be one of the biggest energy breakthroughs in history – genetically manipulating bacteria to quickly convert anything that grows out of the Earth into oil. But the biggest names in the national media have thus far not provided any coverage of this possible solution to skyrocketing gas prices and Ameria's long-term energy security.

A WND story last month introduced to the nation a new technique where altered bacteria "rapidly digest" everything from grass clippings and wood chips, turning them into hydrocarbons for fuels such as gasoline and diesel. If done on a large scale, it could provide billions of barrels of renewable oil every year.

One reader, Joe Russo of Fairbanks, Alaska, called it "the biggest story we've seen in a decade, yet the cable and mainstream news networks haven't even picked up on it."

The apparent inattention comes as a big surprise to the agricultural researcher pioneering the process, J.C. Bell, the CEO of Bell Bio-Energy, Inc.

"We've been on several radio stations, but nothing really national," he said. "We haven't talked to anybody. Nobody's called us – nobody from the Associated Press or CNN or Fox News Channel, which kind of surprised us. We thought it would generate something."

Bell gave an overview of his plans today at the U.S. Defense Department's Worldwide Energy Conference & Trade Show in Arlington, Va., where more than 750 Air Force, Army, Navy, Marine, Coast Guard and federal organizations were represented.

"He was very well-received there," said Wesley Cox, owner of WCGA Radio, a news/talk station in St. Simons Island, Ga.

Cox complains, "The mainstream media has been ignoring systematically the facts about energy creation and use, and they've been doing it for years."

He thinks believability could be a factor when it comes to the lack of national coverage.

"It's a lot easier to not run a story than it is to run a story that's not proven yet."

Bell's bacterial discovery has already been published in two Georgia newspapers – the Tifton Gazette and the Macon Telegraph –  but neither report was picked up by the Associated Press, despite those papers being members of the news cooperative.

WND contacted the bureau chief at the AP's Atlanta office, who said, "I can't give you an answer as to why, because this is the first I've heard of it. We'll look into it and see what's going on."

Reporter Jana Cone, who documented Bell's claims for the Tifton paper, was also at a loss to explain why the AP neither picked up the story nor assigned its own writer.

"I have no explanation except people don't think it's possible," Cone said. "All of our stuff is available to them, and they pick up stories as they wish. If what [Bell] says is a fact, it could be absolutely huge."

Bell maintains with just 2 billion tons of biomass, his process can produce 5 billion barrels of oil each year naturally, with no negative impact on the environment.

"That's 5 billion barrels of oil that can be produced from just trash," he said.

Despite the national media's silence, Bell is moving forward with plans to make his process a reality.

"It's not even theory anymore," he told WND. "Now we're just engineering. We are within a very few days of announcing the location of our first pilot plant."

The process of converting biomass into energy is not in dispute scientifically.

"Yes it can be done, but you have to do it economically," said Dr. Art Robinson, a research professor of chemistry at the Oregon Institute of Science and Medicine who publishes the Access to Energy newsletter. "These other ways [of producing energy] work; the only question is if they're competitive in price. Any hydrocarbon under pressure and temperature can turn into oil."

Robinson added, "We only have two competitive ways of making energy at low costs: hydrocarbons [oil, gas, coal and methane clathrate] and nuclear, and both are demonized to the point that our country is in trouble."

For the third straight day today, oil prices settled at a record high, gushing to a record $115.07 a barrel at one point. Gasoline prices have also been surging along with crude. AAA reports gasoline prices hit a new record of $3.399, up more than a penny from the previous day's price of $3.386.

[Barbara]

WORLD BANK LEADER URGES ACTION ON FOOD

Associated Press

WASHINGTON - The president of the World Bank on sunday urged immediate action to deal with mounting food prices that have caused hunger and deadly violence in several countries.

Robert Zoelick said the international community has "to put our money where our mouth is" and act now to help hungry people. "It is as stark as that."

He rapidly called on gobernments to rapidly carry out commitments to provide the UN World Food Program with $500 million in emergency aid it needs by May 1.

He said the bank is granting an additional $10 million to Haiti for feeding programs, "and I understand others are looking to help."

"It is critical that governments confirm their commitments as soon as possile and others begin to commit," Zoellick said. Prices have only risen further since the WFP issued that appeal, so it is urgent that governments step up, he said.

After a meeting of the bank's policy-setting committee. Zoelick said that the fall of the government in Haiti over the weekend after a wave of deadly rioting underscores the importance of quick international action. A UN police officer was killed Saturday in Haiti's capital.

Zoellick said that international finance meetings are "often about talk," but he noted a "greater sense of intensity and focus" among ministers; now, he said they have to "translate it into greater action."

Zoellick said the bank was responding to needs in a mumber of other ountries with conditional cash transfer programs, providing food in workplaces and seeds for planting in the new season.

He said a rough analysis the bank estimates that a doubling of food prices in the past three years could potentially push people in low income countries deeper into poverty.

"This is not just a question of short term needs, as improtant as they are," Zoellick said. "This is about ensuring that future generations don't pay a prcie too."

Zoellick spoke as the bank and its sister institution, the International Monetary Fund, wound up two days of meetings that dealt with the financial crises roiling global markets andd rising food and energy prices.

The head of the IMF also sounded the alarm on food prices, warning that if they remain high there will be dire consequences for people in many developing countries, especially in Africa.

Dominique Strauss-Kahn said progress in recent years on development can be destroyed by rising food prices, which can lead to starvation and shake the stability of gobernments, even if they have nothing to do with the increase in food cost. "we are facing a huge problem," he said. Strauss-Kahn had said Saturday that the problem could also create trade imbalances that would impact major advanced ecomomies, "so it is not only a humanitarian question."

He said if the price spike continues, "Thousands, hundreds of thousands of people will be starving."


(.....In my own opinion these same hundreds of thousands of hungry people who are eating dirt to survive, will also be rioting and unseating 'innocent' governments. It seems 'famine' is rearing it's ugly head!)

[Shammu]

Wall St. braces for thousands of pink slips
Fri Apr 18, 2008 5:54pm EDT

NEW YORK (Reuters) - Citigroup Inc, Merrill Lynch & Co and Wachovia Corp this week announced 12,400 job cuts, and the number of pink slips is likely to rise as losses mount and the economy works its way out of its malaise.

So far this year, 36,000 job cuts have been announced in the U.S. financial services sector, according to job placement consultancy Challenger, Gray & Christmas, Inc. The figure does not include Citi's announcement on Friday to cut another 9,000 jobs.

Job losses will surge well beyond the current level, given that the latest data does not account for widely expected cuts among the 14,000 employees at Bear Stearns Cos following the investment bank's pending takeover by JPMorgan Chase & Co.

The cuts will have an oversized impact on New York City, whose fortunes are closely tied to Wall Street. Everything from Manhattan real estate prices to high-end restaurants and private car services could come under severe pressure, as highly paid investment bankers and traders face job losses.

The securities industry accounts for almost 35 percent of all salaries and wages in the city. Many bankers and brokers earn a base salary of $200,000 or more, and get even bigger bonuses.

"It is almost inevitable that we are going to see significant layoffs," said Octavio Marenzi of financial consulting firm Celent.

Citigroup's latest job cuts, as it posted a $5.11 billion quarterly loss on Friday after taking billions of dollars of write-downs related to mortgages and turmoil in the credit markets, follow its announcement in January to cut 4,200 jobs.

On Thursday, Merrill, the world's largest brokerage, announced $9.7 billion in write-downs, on top of $25 billion taken in the second half of last year.

Merrill said it planned to cut an additional 2,900 jobs. In the first quarter, Merrill slashed about 1,100 positions.

Wachovia, the fourth-largest U.S. bank, said this week it plans to eliminate 500 jobs from its corporate and investment banking division.

But as the wave of loan losses continues to grow in a slowing U.S. economy and still-tight credit conditions, Wall Street may be in for a rude awakening.

Global financial institutions have so far sustained well over $200 billion of write-downs and credit-related losses, with the ailing U.S. housing market a central catalyst.

Billionaire investor George Soros last week said global losses are likely to top $1 trillion from the subprime mortgage crisis, which he called the "worst financial crisis of our lifetime."

Already, Marenzi expects at least 100,000 job losses at U.S. commercial banks, or companies that lend or collect deposits. That figure could rise to between 150,000 and 200,000 in the next 12 to 18 months, he said.

"Banks have been reluctant to reduce headcount because they are waiting for a turnaround," Marenzi said. "I don't think we will see a huge uptick, and if anything, conditions are actually deteriorating, not improving," he added.

In 2007, the entire U.S. financial services sector, consisting mostly of commercial banks, announced a record 153,105 job cuts, according to Challenger, Gray & Christmas.

Job losses in London's financial district, the City, are likely to hit 40,000 due to fallout from the U.S. subprime mortgage crisis and global credit crunch, analysts at JPMorgan recently projected, doubling their previous estimates.

Wall St. braces for thousands of pink slips

[Barbara]

Have heard, DreamWeaver, there are plans for a One World Bank. Sounds like this may be the beginning.

[nChrist]

Sister Barbara,

I think that we are watching many things progress TOWARD Bible Prophecy. We should all know that it will be at GOD'S Appointed Time. Nothing will be able to slow or hasten that time. I, for one, think that time will be soon, and I anxiously await the GLORIOUS APPEARING OF OUR LORD AND SAVIOUR, JESUS CHRIST! Many sweet Christians will Love HIS APPEARANCE and are watching and waiting - READY!

Love In Christ,
Tom

1 Thessalonians 4:13-18 NASB
But we do not want you to be uninformed, brethren, about those who are asleep, so that you will not grieve as do the rest who have no hope. For if we believe that Jesus died and rose again, even so God will bring with Him those who have fallen asleep in Jesus. For this we say to you by the word of the Lord, that we who are alive and remain until the coming of the Lord, will not precede those who have fallen asleep. For the Lord Himself will descend from heaven with a shout, with the voice of the archangel and with the trumpet of God, and the dead in Christ will rise first. Then we who are alive and remain will be caught up together with them in the clouds to meet the Lord in the air, and so we shall always be with the Lord. Therefore comfort one another with these words.

1 Corinthians 15:50-58 NASB
Now I say this, brethren, that flesh and blood cannot inherit the kingdom of God; nor does the perishable inherit the imperishable. Behold, I tell you a mystery; we will not all sleep, but we will all be changed, in a moment, in the twinkling of an eye, at the last trumpet; for the trumpet will sound, and the dead will be raised imperishable, and we will be changed. For this perishable must put on the imperishable, and this mortal must put on immortality. But when this perishable will have put on the imperishable, and this mortal will have put on immortality, then will come about the saying that is written, "DEATH IS SWALLOWED UP in victory. "O DEATH, WHERE IS YOUR VICTORY? O  DEATH, WHERE IS YOUR STING?" The sting of death is sin, and the power of sin is the law; but thanks be to God, who gives us the victory through our Lord Jesus Christ. Therefore, my beloved brethren, be steadfast, immovable, always abounding in the work of the Lord, knowing that your toil is not in vain in the Lord.

[Barbara]

Amen, Brother Tom!!

I also believe it will be very soon. Things are changing so quickly and prophecy is being fulfilled to the 'T'.

I had a dream a long time ago, that I saw Jesus coming in the clouds, it was the greatest dream I ever had!!! I've been thinking alot about that dream lately but know it will be more glorious than anything my mind can imagine. I do believe we are coming to that time soon and can only anticipate the glory of it all !!

God Bless You - You are an encouragement!

Barbara

[Soldier4Christ]

Gas could hit $10 per gallon
Analysts see considerably more pain at pump than most drivers realize

Get ready for another economic shock of major proportions — a virtual doubling of prices at the gas pump to as much as $10 a gallon.

That's the message from a couple of analytical energy industry trackers, both of whom, based on the surging oil prices, see considerably more pain at the pump than most drivers realize.

Gasoline nationally is in an accelerated upswing, having jumped to $3.58 a gallon from $3.50 in just the past week. In some parts of the country, including New York City and the West Coast, gas is already sporting a price tag above $4 a gallon. There was a pray-in at a Chevron station in San Francisco on Friday led by a minister asking God for cheaper gas, and an Arco gas station in San Mateo, Calif., has already raised its price to a sky-high $4.62.

In Manhattan, at a Mobil gas station at York Avenue and East 61st Street, premium gas is now $4.03 a gallon. Two days ago, it was $3.96. Why such a high price? "Blame the people at STOPEC (he meant OPEC) and the oil companies," an attendant there told me.

These increases are taking place before the all-important summer driving season, signaling even higher prices ahead.

That's also the outlook of the Automobile Association of America. "As long as the price of crude oil stays above $100 a barrel, drivers will be forced to pay more and more at the gas pump," a AAA spokesman, Troy Green, said.

Oil recently hit an all-time high of nearly $120 a barrel, more than double its early 2007 price of about $50 a barrel. It closed Friday at $118.52.

The forecasts calling for a jump to between $7 and $10 a gallon are based on the view that the price of crude is on its way to $200 in two to three years.

Translating this price into dollars and cents at the gas pump, one of our forecasters, the chairman of Houston-based Dune Energy, Alan Gaines, sees gas rising to $7-$8 a gallon. The other, a commodities tracker at Weiss Research in Jupiter, Fla., Sean Brodrick, projects a range of $8 to $10 a gallon.

While $7-$10 a gallon would be ground-breaking in America, these prices would not be trendsetting internationally. For example, European drivers are already shelling out $9 a gallon (which includes a $2-a-gallon tax).

Canadians are also being hit with rising gas prices. They are paying the American-dollar equivalent of $4.92 a gallon, and they're being told to brace themselves for prices above $5.65 a gallon this summer.

Early last year, with a barrel of oil trading in the low $50s and gasoline nationally selling in a range of $2.30 to $2.50 a gallon, Mr. Gaines — in an impressive display of crystal ball gazing — accurately predicted oil was $100-bound and that gasoline would follow suit by reaching $4 a gallon.

His latest prediction of $200 oil is open to question, since it would undoubtedly create considerable global economic distress. Further, just about every energy expert I talk to cautions me to expect a sizable pullback in oil prices, maybe to between $50 and $70 a barrel, especially if there's a global economic slowdown.

While Mr. Gaines thinks there could be a temporary decline in the oil price, he's convinced an overall uptrend is unstoppable. In fact, he thinks his $200 forecast could be conservative, and that perhaps $250 could be reached. His reasoning: a combination of shrinking supply and increasing demand, especially from China, India, and America.

Mr. Brodrick's $200 oil forecast is largely predicated on a combination of pretty flat supply and rip-roaring demand. Other key catalysts include surging demand in China and India, where auto sales are booming, and major supply disruptions in Nigeria and also in Mexico, our second-largest source of oil imports, where oil production has fallen off a cliff.

More factors include the ever-present danger of additional supply disruptions from volatile countries in the Middle East that are not our allies, and the unwillingness of SUV-loving Americans to trim their unquenchable thirst for foreign oil. Likewise, for the first time, emerging markets this year will use more oil than America.

[Soldier4Christ]

Gas hits $3.60 a gallon, crude nears $120 on supply outages

Gas prices hit $3.60 a gallon and oil futures rose to their own new record near $120 a barrel on Monday as labor actions overseas threatened crude supplies. Oil prices later retreated to close up only slightly as the dollar stabilized against foreign currencies.

At the pump, the national average price Americans pay to gas up rose 0.4 cent overnight to a record $3.603 a gallon, according to a survey of stations by AAA and the Oil Price Information Service. While prices are 66 cents higher than a year ago, their rate of increase has slowed some since last week, when prices jumped more than 2 cents a day several times.

That could suggest that a price peak is near, analysts said.

"I've got to think we're close to the end on increases," said Michael Lynch, president of Strategic Energy & Economic Research Inc. in Cambridge, Mass.

However, Lynch thinks prices could rise another 10 cents to 15 cents before they reach that peak and begin falling.

Gas prices are rising in part because refiners are making the seasonal switch-over from making winter-grade gasoline to the more expensive, but less polluting, fuel they must sell during the summer. Supplies tend to fall while refiners are doing this as they try to sell off all of their winter gasoline.

But short supplies of a key ingredient used in the manufacture of summer grade gas have contributed to the increases, as has an intentional slowing of gasoline production by many refiners due to low profit margins on the fuel. Refiners have to buy the crude they turn into gasoline and other fuels, and crude prices have risen much faster over the past year than gas prices.

Light, sweet crude for June delivery rose to a record $119.93 a barrel in electronic trading on the New York Mercantile Exchange overnight on concerns about supply disruptions in the U.K. and Nigeria. Prices later retreated to settle up 23 cents at $118.75 a barrel after the dollar stabilized against the euro.

When the dollar holds its ground, commodities such as oil become less effective hedges against inflation. Many analysts believe oil's meteoric rise from around $65 a barrel a year ago is due in large part to a protracted decline in the value of the greenback.

Energy investors will be closely watching the Federal Reserve's decision Wednesday on interest rates; lower rates tend to weaken the dollar. If, as expected, the Fed lowers a key interest rate by another quarter percentage point and signals that it will temporarily hold off on any future rate cuts, the dollar could strengthen, and oil might fall.

"A quarter point cut could suggest ... we're getting to a point where the dollar might bottom out," Lynch said.

An unexpectedly large cut, or a suggestion that rates might be cut further, however, could fuel oil to new heights.

Meanwhile, labor actions that cut crude supplies from the North Sea and Nigeria supported prices Monday. BP PLC on Sunday shut down the Forties Pipeline System that carries more than 700,000 barrels of oil a day to the U.K. because of a 48-hour walkout by employees at a refinery in central Scotland.

"With the refinery being shut down, it will affect supplies from the North Sea, and that has a potentially significant impact," said David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney. "That comes at the same time that there's production disruptions from Nigeria, so the combined effect of those is the immediate factor that's put pressure on oil prices."

In Nigeria, workers at an ExxonMobil Corp. joint venture cut production by an unspecified amount to demand more pay. The company notified clients it may not be able to meet its contractual obligations to supply oil, but said some production was not affected. Militant attacks on oil infrastructure have also cut production of Nigeria's light, sweet crude, which is easily refined. After years of attacks, Nigeria's output is dropping and the country can produce only about 75 percent of its official capacity of 2.5 million barrels per day.

In other Nymex trading Monday, May gasoline futures fell 2.3 cents to settle at $3.0307 a gallon, and May heating oil futures fell 0.4 cent to settle at $3.2988 a gallon.