Shocking!

...but Henry Paulson said...

...but Ben Bernanke said...

...but President Bush said...

They didn't say a damn thing that wasn't a lie. There's nothing shocking here. It was, and should have been expected.


Jobless claims jump as housing market gets weaker
WASHINGTON (AP) -- Two cornerstones of the economy -- jobs and housing -- sank to new depths Thursday, with unemployment claims bolting higher and home prices recording one of their steepest drops on record.

The bleak reports underscored the self-reinforcing cycle hampering the economy: As home prices sink, foreclosures rise, banks feel pressure to shy away from lending and employers cut jobs.

The Labor Department said the number of newly laid-off people filing for unemployment benefits rose to 406,000 last week, a jump of a seasonally adjusted 34,000. The last time jobless claims were higher was after the Gulf Coast hurricanes in 2005.

The housing news wasn't any better: As sales of previously owned homes fell in June and a glut of unsold and foreclosed homes on the market, the value of Americans' biggest asset continued to sag.

The median price for a home sold in June was $215,100, a drop of more than 6 percent from a year earlier and the fifth-largest year-to-year price drop on record, the National Association of Realtors said. Sales of previously owned homes fell 2.6 percent, to an annualized rate of 4.86 million.

With companies laying off workers and new jobs increasingly hard to find, the ranks of new homebuyers could shrivel further, spelling even more trouble ahead for the housing market and the economy. Consumer spending, the very lifeblood of the economy, is further in jeopardy.

Rising mortgage rates are also adding to the headaches. Rates on 30-year mortgages zoomed to 6.63 percent this week, the highest in nearly a year, as worries about inflation and the financial shape of Fannie and Freddie gripped investors.
http://biz.yahoo.com/ap/080724/economy.html


Wall Street retreats following steeper-than-expected drop in home sales; financials decline
NEW YORK (AP) -- Wall Street abruptly ended an earnings-driven rally and closed sharply lower Thursday after a steeper-than-expected decline in existing home sales and worries about the financial sector chilled the market's recent optimism. The major indexes fell about 2 percent, including the Dow Jones industrial average, which lost more than 280 points.

Investors punished shares of homebuilders and financial companies Thursday because both sectors have struggled with the declining housing market.

Alan Lancz, director at investment research group LanczGlobal, said investors are concluding that while financials had been oversold in recent weeks and were due for a rebound, problems remain with tight credit and souring mortgage debt.

"You have the rally and you almost get the hangover now where you say 'You know, we're not out of the woods yet,'" he said.

Financial stocks declined again Thursday after rising sharply in the past week from their recent lows.

Washington Mutual Inc. fell 62 cents, or 13 percent, to $4.03 after dropping 20 percent Wednesday as concerns persisted about the company's mortgage portfolio. The nation's largest thrift this week posted a $3 billion loss due to increases in its loss reserves to cover souring loans in its mortgage holdings.

Other financials lost ground. Citigroup Inc. fell $2.06, or 9.8 percent, to $19.06, while Merrill Lynch & Co. fell $4.77, or 14 percent, to $29.04. Wachovia Corp. declined $1.96, or 11 percent, to $15.69.

Fannie Mae and Freddie Mac fell sharply after rallying earlier in the week on legislation speeding through Congress that would grant the Treasury Department power to extend the government-sponsored mortgage companies an unlimited line of credit and to buy an unspecified amount of their stock, if necessary. The companies together back or own $5 trillion in mortgages -- nearly half the nation's total.
http://biz.yahoo.com/ap/080724/wall_street.html


Washington Mutual stock down on credit concerns
NEW YORK (Reuters) - Washington Mutual Inc (WM.N: Quote, Profile, Research, Stock Buzz) shares fell more than 13 percent and the cost to insure its debt against default rose after an analyst said some creditors reduced their exposure to the largest U.S. savings and loan.

Citing the thrift's financial statements for the period ending June 30, Gimme Credit analyst Kathleen Shanley wrote that "many creditors have quietly been pulling funds" from the Seattle-based thrift.
http://www.reuters.com/article/hotStocksNews/idUSN2433366220080724


Rescue for Fannie, Freddie may cost trillion, senator says
A government rescue of Fannie Mae and Freddie Mac would require taxpayers to pay "way" more than the $25 billion estimated by the Congressional Budget Office, potentially as much as $1 trillion, U.S. Sen. Jim Bunning said.

Treasury Secretary Henry Paulson "hasn't told us the truth about this bill," Bunning, a Republican from Kentucky, said in an interview with Bloomberg Television today. "Why would you put in a backstop of unlimited amounts of money if you weren't going to need it?"

"What is good about this bill is the fact that maybe it shores up Fannie and Freddie for a temporary basis," Bunning said. "What it does not do is change the model of Fannie and Freddie. It does not give the regulators the power to make the changes needed in Freddie and Fannie to make them viable entities for the future. That is why I object."
http://gata.org/node/6444



Ford Posts Worst Quarterly Performance in Its History
DEARBORN, Mich. (AP) -- Ford Motor Co. posted the worst quarterly performance in its history Thursday, losing $8.67 billion in the second quarter.

The net loss includes $8.03 billion worth of write-offs because the sharp decline in U.S. truck and SUV sales has reduced the value of Ford's North American truck plants and Ford Motor Credit Co.'s lease portfolio. Even excluding those items, Ford lost 62 cents per share, worse than Wall Street expected. Twelve analysts surveyed by Thomson Financial, on average, expected a 27 cent loss per share.
I
ncluding the write-downs, Ford lost $3.88 per share in the April-June quarter, compared with net profit of $750 million, or 31 cents per share, in the same quarter a year ago.

The second-quarter loss surpassed Ford's previous record quarterly loss, $6.7 billion in the first quarter of 1992.

Second-quarter revenue was $38.6 billion, down $5.6 billion from the year-ago period. Analysts expected $34.6 billion.
http://biz.yahoo.com/ap/080724/earns_ford.html


U.S. House bid to sell oil from reserve fails
WASHINGTON, July 24 (Reuters) - The U.S. House of Representatives on Thursday failed to pass legislation intended to cool off gasoline prices by requiring the government to sell 70 million barrels of light sweet crude oil from the Strategic Petroleum Reserve, the national stockpile.

Democrats had pushed the legislation, hoping to lower surging oil prices by putting more of the reserve's light sweet crude, sought by refiners, on the market. Sweet crude is desirable because it has less sulphur and is more easily refined into gasoline, diesel fuel and other petroleum products.

The White House had threatened to veto the measure, arguing that Congress should work toward increasing domestic supply rather than tap into a strategic reserve.
http://uk.reuters.com/article/oilRpt/idUKN2450984320080724


Ron Paul discloses housing bailout bill's money and power grab
In a videotaped statement Wednesday, U.S. Rep. Ron Paul, R-Texas, disclosed some shocking details of the housing bailout legislation being rushed through Congress:

-- The two troubled federal mortgage agencies, Freddie Mac and Fannie Mae, will be given unlimited access to the U.S. Treasury without requiring any further approval from Congress.

-- The U.S. national debt ceiling will be raised by $800 billion, which suggests that the bailout is expected to cost a lot more than the country is being told.

-- All credit card transactions will have to be reported to the Internal Revenue Service, as if the country isn't under enough government surveillance already.
You can watch Paul's statement at GoldSeek here:
http://news.goldseek.com/RonPaul/1216879620.php