No End In Sight: More And More Bad News

ECONOMY

  • The Labor Department reported that jobless claims jumped by 32,000 to a seasonally adjusted 493,000 last week
  • The Commerce Department said that new orders to factories for big-ticket manufactured goods fell by 4.5 percent last month
  • The average price of a new home fell in August by 11.8 percent to $263,900, the biggest one-month drop on record. The median home price was down 5.5 percent to $221,900.
  • Bookings for transportation equipment dropped 8.9 percent, today’s report showed. Orders for commercial aircraft decreased 38 percent and those for automobiles fell 8.1 percent, the most since January 2007.

REACTIONS

  • German Finance Minister said the U.S. will lose its position as the world’s undisputed financial superpower
  • HSBC, Europe’s largest bank by market value, cut 1,100 jobs in its global banking and markets division as deepening financial crisis threatens to crimp earnings.
  • Washington Mutual Inc. may be seized by regulators later today and parts sold to JPMorgan Chase & Co. in what will rank among the biggest banking failures in U.S. history.
  • Lennar Corp., the second-largest U.S. homebuilder, this week reported its sixth straight quarterly loss and said the government must take measures to boost home prices that are down by nearly a fifth from their 2006 peaks.
  • While GMAC’s auto lending is suffering from dwindling truck sales at GM, home foreclosures account for the majority of the company’s losses. Minneapolis-based ResCap, the 12th biggest U.S. subprime lender in 2006, has lost $7.2 billion in the past seven quarters, compared with a $4.4 billion deficit for the company as a whole. With $65 billion in assets, ResCap is less than half the size of the global auto business, which has $169 billion in assets, according to GMAC.
  • GE cuts profit forecast for year as loan and leasing business is hurt by market turmoil