September 6th, 2008

WASHINGTON — Senior officials from the Bush administration and the Federal Reserve on Friday called in top executives of Fannie Mae and Freddie Mac, the mortgage finance giants, and told them that the government was preparing to place the two companies under federal control, officials and company executives briefed on the discussions said.

Federal Deposit Insurance Corp (FDIC) might have to borrow money from the Treasury Department to see it through an expected wave of bank failures, the Wall Street Journal reported.

The borrowing could be needed to cover short-term cash-flow pressures caused by reimbursing depositors immediately after the failure of a bank, the paper said.

The borrowed money would be repaid once the assets of that failed bank are sold.

Automakers plan to urge Congress to support funding up to $50 billion in low-interest loans over three years to help them modernize their assembly plants and develop next-generation fuel-efficient vehicles.

Industry officials said the loans, which are twice the amount authorized in last year's energy bill, are a top priority when Congress returns next month because of the declining fortunes of Detroit's automakers and tightening credit markets.

Aug. 25 (Bloomberg) -- JPMorgan Chase & Co., the second- biggest U.S. bank, said the value of a $1.2 billion investment in Freddie Mac and Fannie Mae shares has declined by half so far this quarter.

Housing building fell sharply in July to a 17-year low, a government report issued Tuesday showed.

Starts plunged 11% to an annual rate of 965,000 from a revised 1.084 million pace in June, according to the Census Bureau report. Economists surveyed by Briefing.com had forecast starts would fall to a rate of 960,000.

Permits - often seen as a sign of builders' confidence in the housing market - tumbled 17% to an annual rate of 937,000 from a revised 1.138 million in June. Economists had forecast that permits would come in at 959,000.

August 15th, 2008

WASHINGTON - The Postal Service had a net loss of more than a billion dollars in the third quarter of the fiscal year, the agency said Wednesday.

For the quarter ended June 30, the loss was $1.1 billion, which officials blamed on reduced mail volume in the slowed economy, coupled with rapidly rising transport costs because of high fuel prices.

The Labor Department reported Thursday that consumer prices rose by 0.8 percent last month, twice the 0.4 percent gain that economists had been expecting.

U.S. consumers continued to cut back on gasoline purchases in the first 6 months of 2008, reducing overall demand for oil products to its lowest level in 5 years, a trade group said Wednesday.

Americans drove 12.2 billion miles fewer, or 4.7% less, in June than they did during June 2007, according to a report released Wednesday from the U.S. Department of Transportation.

More homeowners than ever are selling at a loss, propelling the real estate market deeper into crisis.

In the 12 months that ended June 30, nearly 25% of all homes sold nationwide fetched less than sellers originally paid, according to real estate Web site Zillow.com.

While the nation's double-digit decline in home prices has been well documented, the new report underscores the economic force of those price declines. Homeowners are walking away with much less in their pocket when they sell. And that affects more than the real estate market.

Price declines are hurting a growing number of borrowers who bought since 2003, but none more than borrowers who bought at the peak of the nation’s housing frenzy in 2006, according to data released Tuesday morning by real estate website Zillow.com.