This is a timeline of the events leading up to the market crash of 2008. It is a work in progress, as events continue to unfold.
Created by TerrranceDC on Sep 21, 2008
Last updated: 01/28/11 at 07:08 AM
The Federal Reserve said that it will begin paying interest on commercial banks' reserves and will expand its loan program to banks by billions of dollars, fresh steps to help ease a painful credit crisis. The $700 billion bailout law gives the Fed the power to pay interest on those reserves for the first time. The law accelerated the effective date to October of this year vs. in 2011.
http://www.ourfuture.org/news-headline/2008104106/fed-inject-billions-economy
As the presidential election season nears its climax, there is growing evidence that the country is slipping into the deepest recession in decades. The latest marker came when the government reported that employers shed 159,000 jobs in September, far more than expected. That was the worst one-month drop in more than five years and brings to 760,000 the number of jobs that have disappeared this year. Economists say the accelerating pace of job losses, combined with the most severe credit crisis since the Great Depression, make it increasingly likely that the government bureau that determines business cycles will eventually stamp "recession" on this one.
http://www.ourfuture.org/news-headline/2008104004/159000-jobs-lost
The number of out-of-work Americans filing new claims for unemployment insurance rose last week to a 7-year high, according to a government report released Thursday.
The Department of Labor said initial filings for state jobless benefits increased by 1,000 to a seasonally adjusted 497,000 in the week ended Sept. 27.
The consensus estimate of economists surveyed by Briefing.com was for a decline to 475,000. The prior week was revised up 1,000 to 496,000.
The number of people filing for jobless benefits is the highest since the 517,000 reported in the week ended Sept. 29, 2001, when unemployment soared in the wake of the Sept. 11 terrorist attacks. At this time last year, the figure stood at 324,000.
http://money.cnn.com/2008/10/02/news/economy/jobless_claims/index.htm
A measure of U.S. manufacturing activity contracted more than expected last month, hitting the lowest level since the aftermath of the Sept. 11 attacks, as new orders slowed dramatically. The Institute for Supply Management released a September reading of 43.5, the lowest since October 2001. The reading dropped from 49.9 in August, the largest one-month decline since January 1984, when it fell to 60.5 from 69.9. A reading above 50 signals growth. "The headline ISM has plunged into recession territory," said Ian Shepherdson, chief U.S. economist at High Frequency Economics. Economists had predicted a much stronger reading of 49.5, according to the consensus estimate of those surveyed by Thomson/IFR. The index has been hovering on what economists call "the boom-bust" line for most of the year.
http://www.ourfuture.org/news-headline/2008104001/manufacturing-index-shrinks
Job losses have been mounting, and the slowing economy and credit crunch is likely to take an even greater toll in the coming months.
Analysts on average forecast that the monthly employment report expected Friday will reveal that the economy shed 105,000 jobs in September - the largest monthly loss in five years. The economy already has lost 605,000 jobs this year.
Unemployment is expected to remain at a relatively high 6.1%.
What's more troubling is that hiring trends have deteriorated even further in recent weeks - and that won't be reflected in government statistics until later this year.
http://money.cnn.com/2008/10/01/news/economy/jobs_forecast/index.htm
The United States needs to act urgently to shield its economy from an escalating credit crisis and Europe must ready plans in case its problems worsen, the head of the International Monetary Fund said. "We're right at the moment where action is needed," the IMF managing director Dominique Strauss-Kahn told Reuters. "A non-perfect plan is better than no plan at all," he said of the $700 billion bank bailout plan rejected by the U.S. House of Representatives. Strauss-Kahn said restoring market confidence required the bailout plan to be passed quickly and for the U.S. public to understand what is at stake unless the economy starts to function properly again.
http://www.ourfuture.org/news-headline/2008104001/imf-chief-urges-bailout-action
Mortgage finance giants Fannie Mae and Freddie Mac have dismantled their powerful lobbying corps, removing two dozen people who made up one of Washington's most formidable advocacy teams. The departures came after the government announced that all lobbying by the companies would end while they are under federal control. Before they were taken over by the government, Fannie Mae and Freddie Mac spent millions of dollars a year on internal and outside lobbyists to keep politicians at bay, countering legislative efforts to regulate them more closely. Now, their chief emissary before Congress is the government agency that runs them — the Federal Housing Finance Agency.
http://www.ourfuture.org/news-headline/2008104001/fannie-freddie-break-lobbying-arms
The sale of Wachovia's banking business to Citigroup marked the second time in five days that a major U.S. bank was forced from existence in part by fleeing depositors, raising serious questions about the stability of other financial firms and the health of the banking system. The deal also continues the rapid consolidation of an industry that has long been kept fragmented as a matter of public policy but now is being encouraged by the government to conglomerate. In the latest rescue urged by federal regulators, Citigroup agreed to pay $2.16 billion for Wachovia, the nation's third-largest retail and commercial banking franchise. Wachovia was fast-growing and widely admired, run by Treasury Secretary Henry M. Paulson Jr.'s former deputy Robert Steel.
http://www.ourfuture.org/news-headline/2008094030/wachovia-folds
A bipartisan rebellion in the House killed a $700 billion rescue plan for the nation's financial system, sending global stock prices plunging, prompting fierce recriminations on the presidential campaign trail and dealing President Bush his worst legislative defeat. House Democratic and Republican leaders vowed to go back into negotiations to devise compromise legislation to stabilize the credit markets, but no talks were scheduled. After U.S. financial markets closed, with the Dow Jones industrial average down a one-day record of 778 points, or 7 percent, Treasury Secretary Henry M. Paulson Jr. tried to calm frazzled traders, assuring them that work on a market intervention would resume.
http://www.ourfuture.org/news-headline/2008094030/wall-street-bailout-rejected
The government probe into Fannie Mae and Freddie Mac widened as the mortgage giants disclosed they are under investigation by the Department of Justice and the Securities and Exchange Commission. The companies, which were seized by the government three weeks ago, said that the U.S. Attorney for the Southern District of New York and the SEC have opened investigations over accounting, disclosure and corporate governance matters relating to events dating to Jan. 1, 2007. A federal grand jury convened by the U.S. attorney issued subpoenas to the companies asking for documents, and the SEC directed the companies to preserve their records.
http://www.ourfuture.org/news-headline/2008094030/fannie-freddie-probe-widens
President Bush may be set to sign into law $25 billion in low-interest loans to help automakers and auto parts suppliers make fuel-efficient vehicles, but don't expect a rush of new hi-tech ultra-clean cars. Lower-tech solutions — smaller cars with more fuel-efficient engines — will be a more immediate priority, industry analysts predict. And the money will likely be used for immediate manufacturing needs rather than for deep research. According to the legislation, which is part of a massive spending bill that passed Congress, the funds must be used in the development or manufacturer of vehicles that are at least 25% more fuel efficient than an average vehicle of the same type already on the market.
http://www.ourfuture.org/news-headline/2008104001/automakers-get-25-billion
The number of people on food stamps has been increasing for months. In June, the figure was 28.6 million, according to the government. The only other time so many Americans have been on food stamps was in late 2005, when great numbers of people applied for emergency food stamps after Hurricanes Katrina and Rita.Experts said the rolls are increasing not only because of the slowing economy and sagging wages of low-skilled workers but also because federal and state governments are reaching more eligible people and keeping them in the program.
http://www.star-telegram.com/804/story/938148.html
The Securities and Exchange Commission failed in its oversight of investment bank Bear Stearns, ignoring that the company took excessive risks with mortgage-related securities before its demise, according to a report released by the agency's inspector general. In a review of the agency's supervision of investment banks, inspector general David Kotz said that the SEC had "numerous, potential red flags prior to Bear Stearns' collapse ... but did not take action to limit these risk factors." J.P. Morgan Chase bought Bear Stearns last March after initial emergency funding to keep it operating failed.
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/26/AR2008092603489.html
A day after the collapse of the nation's largest thrift, Washington Mutual, investors scurried from the stocks of Wachovia, National City and other banks with large portfolios of troubled loans, as concerns were rekindled that those banks have yet to acknowledge the full extent of their probable losses. The stock market's major indicators climbed modestly on hopes that Congress will approve a big-dollar bailout for the financial system. But that broader confidence did not extend to Wachovia, whose shares lost 27 percent of their value, or to National City, which was down nearly 26 percent. The combined declines erased about $10 billion in shareholder value.
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/26/AR2008092603807.html
The stratospheric pay packages of Wall Street executives have become a lightning rod issue as Congress shapes a $700 billion bailout for financial firms. The moves in Washington mirror the popular outcry — in constituent e-mail messages and postings in the blogosphere — over the prospect of Wall Street’s tarnished titans walking away with tens of millions of dollars a year while taxpayers pick up the bill. But Wall Street, its lobbyists and trade groups are waging a feverish lobbying campaign to try to fight compensation curbs. Pay restrictions, they say, would sap incentives to hard work and innovation, and hurt the financial sector and the American economy.
http://www.nytimes.com/2008/09/24/business/24pay.html
The Federal Reserve made it easier Monday for private equity firms and other types of investors to take minority stakes in banks, a move that could usher new capital infusions to cash-hungry banks and help them cope with credit stresses. The Fed issued policy guidance that said it will allow investors under certain circumstances to take up to a 33 percent equity stake in a bank without running into regulatory hurdles. The Fed's guidance would apply to all types of potential investors — such as private equity firms, hedge funds, sovereign wealth funds — that might be interested in taking a minority stake in a bank.
http://news.bbc.co.uk/2/hi/business/7630734.stm
Treasury Secretary Henry Paulson called for quick action on a $700 billion bailout bill but resisted Democratic calls to include further relief for homeowners. The rescue plan, as outlined in a three-page memo to Congress by Paulson, involves the government buying up billions of dollars in bad mortgage debt to relieve financial institutions and kick-start financial markets. The administration and Congress are negotiating the terms of a bill with the expectation it will pass by the end of the week.
http://www.usatoday.com/news/washington/2008-09-21-financial-rescue_N.htm
The Federal Reserve said Sunday it had granted a request by the country's last two major investment banks — Goldman Sachs and Morgan Stanley — to change their status to bank holding companies. The Fed announced that it had approved the request of the two investment banks. The change in status will allow them to create commercial banks that will be able to take deposits, bolstering the resources of both institutions. The change continued the biggest restructuring on Wall Street since the Great Depression.
http://ap.google.com/article/ALeqM5idahOLrJvn8clpQDKn9G7WqkzJEAD93BFT300
Initial claims for state jobless benefits rose by 10,000 in the latest week, reflecting claims filed by residents of Louisiana hit by Hurricane Gustav, the Labor Department said. Claims for the week ending Sept. 13 rose to 455,000, the highest since Aug. 2. Amid one of the worst financial crises in U.S. history, the number of continuing claims fell to 3.47 million, a drop of 55,000, for the week ending Sept. 6. But continuing claims remain relatively high: They have been above 3 million since mid-April. The four-week average of those claims stayed at close to a five-year high. In the latest week, the average rose by 29,750 to 3.46 million. The level of continuing claims indicates how difficult or easy it is to find a job.
http://www.marketwatch.com/news/story/story.aspx?guid=8624B909-E394-456C-9458-1B04E1BC227B
Fearing a financial crisis worldwide, the Federal Reserve reversed course and agreed to an $85 billion bailout that would give the government control of the troubled insurance giant American International Group. The decision, only two weeks after the Treasury took over the federally chartered mortgage finance companies Fannie Mae and Freddie Mac, is the most radical intervention in private business in the central bank’s history. The bailout is likely to prove controversial, because it effectively puts taxpayer money at risk while protecting bad investments made by A.I.G. and other institutions it does business with. What frightened Fed and Treasury officials was not simply the prospect of another giant corporate bankruptcy, but A.I.G.’s role as an enormous provider of esoteric financial insurance contracts to investors who bought complex debt securities.
http://www.nytimes.com/2008/09/17/business/17insure.html
In one of the most dramatic days in Wall Street’s history, Merrill Lynch agreed to sell itself to Bank of America for roughly $50 billion to avert a deepening financial crisis, while another prominent securities firm, Lehman Brothers, filed for bankruptcy protection and hurtled toward liquidation after it failed to find a buyer. The humbling moves, which reshape the landscape of American finance, mark the latest chapter in a tumultuous year in which once-proud financial institutions have been brought to their knees as a result of hundreds of billions of dollars in losses because of bad mortgage finance and real estate investments.
In one of the most dramatic days in Wall Streetâs history, Merrill Lynch agreed to sell itself to Bank of America for roughly $50 billion to avert a deepening financial crisis, while another prominent securities firm, Lehman Brothers, filed for bankruptcy protection and hurtled toward liquidation after it failed to find a buyer. The humbling moves, which reshape the landscape of American finance, mark the latest chapter in a tumultuous year in which once-proud financial institutions have been brought to their knees as a result of hundreds of billions of dollars in losses because of bad mortgage finance and real estate investments.
A sharp monthly rise in unemployment for women could be a sign that the economic slowdown has begun to hit working women with a force not seen in decades. When the unemployment rate for women went from 4.6 percent in July to 5.3 percent in August, it was the largest one-month spike in the jobless rate for women in more than 33 years. Black women were hit even harder, as their unemployment rate jumped 21 percent, from 7.5 percent in July to 9.1 percent in August. Among single mothers and women with families, unemployment climbed to 9.6 percent in August — the highest level in 15 years.
The stricken U.S. mortgage market is set to suffer further setbacks in the next two years as $96 billion of risky home loans sold with initial flexible payment options switch to more stringent terms. These will raise borrowers' monthly payments by about 60 percent. The changing terms could more than double the number of borrowers falling behind on so-called "option adjustable rate mortgages" issued between 2004 and 2007. This is according to research published by Fitch Ratings.
http://www.ft.com/cms/s/0/02222eda-7871-11dd-acc3-0000779fd18c.html
Consumers should brace for the biggest increase in food prices in nearly 20 years in 2008 and even more pain next year due to surging meat and produce prices, the Agriculture Department said. Food prices are forecast to rise by 5 percent to 6 percent this year, making it the largest annual increase since 1990. Just last month, USDA forecast food prices would climb between 4.5 percent and 5.5 percent in 2008. Prices are expected to rise by 4% to 5% in 2009, lead by red meat and poultry.
http://www.reuters.com/article/topNews/idUSN2045630520080820
Large mortgage insurers have reported $2.6 billion in losses so far this year, sparking concerns that rising foreclosure rates could force the industry into a money crunch and ultimately make the home-buying process even more difficult. These insurers make up a critical part of the mortgage industry, taking on the risk when borrowers make small down payments. Those losses have also dinged their relationships with mortgage-financing giants Fannie Mae and Freddie Mac, which the insurers depend on for business. If the industry loses its footing, it could transform the way consumers buy homes, either with a return to 20 percent down payments or a shift of even more of the market to the Federal Housing Administration.
http://www.washingtonpost.com/wp-dyn/content/article/2008/08/13/AR2008081303539.html
The number of newly laid off people signing up for jobless benefits climbed to its highest point in more than six years as companies cut back given the faltering economy. The Labor Department reported that new applications filed for unemployment insurance rose by a seasonally adjusted 7,000 to 455,000 for the week ending Aug. 2. The increase left claims at their highest level since late March 2002. A program to locate people eligible for jobless benefits played a role in the increase, a Labor Department analyst said. However, the analyst couldn't say how much of a role.
http://money.cnn.com/2008/08/07/news/economy/jobless_benefits.ap/index.htm
Freddie Mac posted its fourth consecutive quarterly loss, set plans to slash its common stock dividend and warned of more difficulty ahead amid the steepest U.S. housing market slump since the Great Depression. For the second quarter, McLean, Virginia-based Freddie Mac reported a loss of $821 million, or $1.63 cents per share, compared with a profit of $729 million, or 96 cents per share, a year earlier. It follows a $151 million loss in the first quarter and brings its cumulative loss over the past four quarters to more than $4.6 billion.
http://www.reuters.com/article/gc03/idUSWNAB525920080806
he U.S. unemployment rate rose in July to 5.7 percent, the highest level in more than four years, as employers shed workers for the seventh straight month, the government reported. The weakness of the economy, analysts said, was likely to continue at least through the November presidential election. The steady erosion in payrolls - 51,000 jobs disappeared last month — involved nearly every sector. Teenagers were particularly hit hard. Their unemployment rate, 20.3 percent, was the highest since 1992. The total number of jobs lost in the U.S. economy this year has risen to 463,000, even allowing for revisions in the May and June numbers.
http://www.iht.com/articles/2008/08/01/business/jobs.php
President Bush signed a massive housing bill intended to provide mortgage relief for 400,000 struggling homeowners and stabilize financial markets. Bush signed the bill without any fanfare or signing ceremony, affixing his signature to the measure he once threatened to veto. He was surrounded by top administration officials, including Treasury Secretary Henry Paulson and Housing Secretary Steve Preston. The measure, regarded as the most significant housing legislation in decades, lets homeowners who cannot afford their payments refinance into more affordable government-backed loans rather than losing their homes.
http://www.washingtonpost.com/wp-dyn/content/article/2008/07/30/AR2008073000742.html
Even as a huge bipartisan majority in the Senate voted to send a sprawling housing bill to the White House, economists, consumer advocates and other analysts said the legislation is unlikely to relieve the foreclosure crisis that is driving the nation toward recession. The Senate voted 72 to 13 to approve the bill, which seeks to halt the steepest slide in house prices in a generation, rescue hundreds of thousands of families from foreclosure and restore confidence in the nation's largest mortgage-finance firms. White House officials said President Bush is likely to sign it, despite his opposition to nearly $4 billion in aid to local communities. The measure grants the Treasury Department authority to extend an unlimited line of credit to Fannie Mae and Freddie Mac.
http://www.washingtonpost.com/wp-dyn/content/article/2008/07/26/AR2008072601071.html
The House approved far-reaching government assistance for the housing market, including broad authority for the Treasury Department to protect the nation's two largest mortgage finance companies and an aggressive plan to help troubled borrowers avoid foreclosure by refinancing their mortgages. The White House said President Bush would sign the measure despite his opposition to $4 billion in grants included in the bill for local governments to buy and refurbish foreclosed properties.
http://www.iht.com/articles/2008/07/24/business/24housing.php
The House passed a bill that authorizes the Treasury Dept. to extend Fannie Mae and Freddy Mac a lifeline without any of the conditions that the companies' critics had demanded. The House agreed to let the Treasury Department extend unlimited amounts of credit to Fannie and Freddie, and buy shares in the companies to bolster their capital bases. Treasury Secretary Henry Paulson — who argued that the unlimited line of credit and authorization to buy shares would discourage short sellers from mounting attacks on the companies — likened it to a bazooka that scares off enemies even if it—s never used.
http://www.businessweek.com/bwdaily/dnflash/content/jul2008/db20080723_593585.htm
Federal Reserve Chairman Ben Bernanke told the House Financial Services Committee that mortgage giants Fannie Mae and Freddie Mac are "adequately capitalized" and in "no danger of failing." The two companies hold or guarantee more than $5 trillion in mortgages — almost half of the nation's total. The Bush administration is asking Congress to temporarily increase lines of credit to Fannie and Freddie and to let the government buy their stock. The Fed has offered to let the companies draw emergency loans. The pledges of aid have raised concerns about the government's role in bailing out financial institutions while passing the risk on to taxpayers. The companies' shares have plunged as losses from their mortgage holdings threatened their financial survival.
http://www.huffingtonpost.com/huff-wires/20080716/bernanke/
Federal Reserve Chairman Ben Bernanke told Congress that troubled mortgage giants Fannie Mae and Freddie Mac are in "no danger of failing." The Fed chief made his remarks to the House Financial Services Committee, his second day on Capitol Hill where he briefed lawmakers on the problems plaguing the economy. Bernanke appeared amid a backdrop of fading confidence in the U.S. financial system and in the national economy.
http://www.huffingtonpost.com/huff-wires/20080716/bernanke/
The Securities and Exchange Commission said it is immediately opening a probe to prevent the spread of false information used to manipulate securities prices. SEC Chairman Christopher Cox said the investigation is aimed at "ensuring that investors continue to get reliable, accurate information about public companies in the marketplace." The investigation will be conducted by the SEC's Office of Compliance Inspections and Examinations as well as the Financial Industry Regulatory Authority and New York Stock Exchange Regulation Inc.
http://www.usatoday.com/money/economy/2008-07-13-sec-securities_N.htm
Federal regulators seize IndyMac Bank after it succumbs to the pressures of tighter credit, tumbling home prices and rising foreclosures. IndyMac is the largest thrift ever to fail in the U.S.
http://www.iht.com/articles/ap/2008/09/17/business/NA-US-Financial-Meltdown-Timeline.php
Shares of Fannie Mae and Freddie Mac continued a week of freefall on Wall Street, abruptly losing nearly half their value as investors ignored efforts by federal regulators to reassure about the financial health of the companies and focused instead on the risk that a federal bailout might wipe out the value of their stock. With the value of the companies' mortgage-related assets falling and the costs of borrowing on the rise, the Bush administration has begun studying what to do if either requires a federal bailout.
http://www.washingtonpost.com/wp-dyn/content/article/2008/07/11/AR2008071101221.html
The number of Americans losing their homes to foreclosure continued to soar in June, according to
RealtyTrac, an online marketer of foreclosed properties. Lenders repossessed 71,563 homes in June. A year ago, just 26,369 homes were taken back. During the first six months of 2008, 343,159 Americans lost their homes, up 136 percent from 145,696 recorded during the same period in 2007.
http://money.cnn.com/2008/07/10/real_estate/foreclosures_no_break/index.htm
The U.S. central bank has auctioned a further $75 billion of short-term loans to help the financial sector. The auction, the 15th since December, is part of the Fed's attempts to help banks through the credit crunch.
http://news.bbc.co.uk/2/hi/business/7483883.stm
In a sign of continuing trouble in the housing market, mortgage delinquency rates doubled over a 12-month period at Fannie Mae and Freddie Mac, the two industry giants reported yesterday. In April, 1.22 percent of the conventional home loans that Fannie Mae guarantees were past due by at least three months or were in foreclosure. That was up from 1.15 percent in March and about twice the rate recorded in April 2007. Freddie Mac said its delinquency rate was 0.81 percent in April, up from 0.77 percent in March. The rate was 0.4 in April of last year.
http://www.washingtonpost.com/wp-dyn/content/article/2008/06/25/AR2008062502889.html
With falling revenue from sales and income taxes, and property-tax declines looming, states, cities and towns have already laid off tens of thousands of government employees. Many expect more job cuts ahead as public officials struggle to balance their budgets. The American Federation of State, County and Municipal Employees, a public employees union, says about 45,000 government layoffs have been announced this year. The 2001 recession was tough for state and local governments because even after the economy started to pick up, job losses continued for nearly two years. But property tax revenues increased during that downturn as home prices and housing construction boomed. This local government budget crisis is likely to be more severe, according to experts, because the bust in home building and the decline in home prices will cut into property tax collections.
http://money.cnn.com/2008/06/23/news/economy/local_government_layoffs/index.htm
A key provision of the housing bill now awaiting action in the Senate -- and widely touted as offering a lifeline to distressed homeowners -- was initially suggested to Congress by lobbyists for major banks facing their own huge losses from the subprime mortgage crisis, according to congressional staff members and bank officials. Credit Suisse, a large investment bank heavily invested in mortgage-backed securities, proposed allowing hundreds of thousands of homeowners to refinance their mortgages with lower-cost government-insured loans, relieving financial institutions of the troubled debt.
After the bank proposed this to Congress in January, it became known as the "Credit Suisse plan" among congressional staffers and lobbyists. It later formed the basis of housing provisions in both the House and Senate.
http://www.washingtonpost.com/wp-dyn/content/article/2008/06/24/AR2008062401389_pf.html
The International Monetary Fund warned that the U.S. economy was likely to stagnate in the second half of 2008, pouring cold water on hopes that recovery could soon be under way. It said that continued economic weakness would result in inflation risk going down, not up, and urged the Federal Reserve to keep interest rates on hold for the time being. The statement challenges market expectations that rate increases will soon be required.
http://www.ft.com/cms/s/0/f6293980-3f2b-11dd-8fd9-0000779fd2ac.html
Two former managers at investment bank Bear Stearns have been charged with fraud related to two hedge funds which collapsed in June last year. Ralph Cioffi and Matthew Tannin, who managed the funds, were arrested in New York and later granted bail. It is alleged they knew of the funds' problems but did not disclose them to its investors, who lost a total of $1.4 billion. The two men pleaded not guilty at a Federal Court hearing in Brooklyn.
http://news.bbc.co.uk/2/hi/business/7463713.stm
Two former Bear Stearns hedge fund managers were arrested Thursday morning. They will be arraigned later Thursday on charges of securities fraud as part of a yearlong federal investigation into the mortgage crisis.Matthew Tannin and Ralph Cioffi are the highest-level Wall Street executives to be charged in connection with the mortgage crisis so far. Prosecutors allege the men told investors that two of their funds were in good shape, while privately telling colleagues they were worried about the funds' prospects.
http://www.npr.org/templates/story/story.php?storyId=91681040
Bolstering the performance of the health care system is one of the biggest challenges facing the country, the Federal Reserve chairman, Ben S. Bernanke, said. New medical technologies and treatments are allowing people to live healthier, longer and more productive lives. However, the aging of millions of baby boomers coupled with rapidly rising heath care costs are accounting for an ever-growing share of both personal and government budgets — strains that will become increasingly burdensome unless changes are made, the Fed chief said.
http://www.nytimes.com/2008/06/17/business/17fed.html
Just when the economy most needs the help of capable policymakers, America's central bank finds itself short-staffed. The predicament: Where the Federal Reserve is supposed to have seven members on its board of governors, it now has five. A recently announced retirement, moreover, means that by late summer the number is set to drop to four. Compared with things like the price of oil or subprime mortgages, this doesn't qualify as a crisis. But the Fed is the first line of defense against such threats – inflation and the financial fallout of house-price deflation.
http://www.csmonitor.com/2008/0617/p03s07-usec.html
The FBI says it has arrested 406 property market players as part of a crackdown on alleged mortgage frauds worth an estimated $1billion. The arrests include housing developers, estate agents and mortgage brokers. Reported mortgage fraud has soared in the past year, with the most common type being mis-statement of assets.
http://news.bbc.co.uk/2/hi/business/7464298.stm
Two government agencies report on home building and on wholesale prices at the same time, followed rapidly by a report from the Federal Reserve on industrial output. The three reports will be the highlights of an otherwise ho-hum week for economic news. See Economic Calendar.
http://www.marketwatch.com/news/story/housing-inflation-getting-worse-data/story.aspx?guid={2ED6E48E-A4C9-4C65-A1F5-4805CF3D24CC}
Amid growing public disquiet about the rising cost of food and fuel, U.S. regulators come under increasing pressure from Congress to seriously question the role investor activity is having in driving up commodity prices. The Commodity Futures and Trading Commission -- the main U.S. regulator -- convenes the inaugural meeting of its Energy Markets Advisory Committee. The meeting is the latest in a series of initiatives from the CFTC aimed at ensuring that energy and commodity derivative markets function without manipulation or abusive trading.
http://www.forbes.com/business/2008/06/11/speculation-investing-commodities-biz-cx_0612oxford.html
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