WASHINGTON, Dec. 22 (UPI) -- A U.S. official has been removed from his job after investigators found he allegedly allowed IndyMac Bancorp to portray a misleading picture of its finances.

WASHINGTON, Nov. 23 (UPI) -- The U.S. Office of Thrift Supervision is being blamed for what critics say was lax oversight of Countrywide Financial Corp.

NEW YORK, Sept. 26 (UPI) -- U.S. stock indexes fell Friday as investors watched a savings and loan, Washington Mutual, become the latest victim of financial distress.

Financials should continue its reign as tradersâ?? favorite reason to see better days ahead or, once more, prompt the turning of sentiment and prices for the worse.

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Filed under: Forecasts, Bad news, Merrill Lynch (MER), Federal Natl Mtge (FNM), Countrywide Financial (CFC), Economic data, IndyMac Bancorp (IMB), Lehman Br Holdings (LEH), Bear Stearns Cos (BSC), Housing, Recession

Confidence in the global economy fell in September, as concern mounted about the health of the U.S. economy and global financial system following the bankruptcy of Lehman Brothers and the near bankruptcy of AIG, which prompted a U.S. Federal Reserve intervention, a new survey indicated.

The Bloomberg Professional Global Confidence Index fell to 11.3 in September from 14.1 in August among U.S. respondents. The Western European index fell to 12.6 from 12.9. Readings below 50 indicate negative sentiment.

Economist Richard Felson, who did not participate in the Bloomberg survey of 3,000 Bloomberg Terminal users, told BloggingStocks Wednesday too many financial concerns and bankruptcies are occurring over a short period for business professionals to be positive.

"Countrywide, Bear Stearns, Indymac, Freddie, Fannie, Lehman, Merrill, and now AIG. Wow, that's an awful lot for any economic system to absorb in five years, let alone one year," Felson said. "Executives and other business professionals are justifiably concerned about credit access for business operations and about declining demand due to rising unemployment. The major U.S. economic metrics are not moving in a positive direction right now and the nation needs to correct that."

Continue reading Confidence in global economy falls on Lehman, AIG concerns

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Filed under: Forecasts, Bad news, Merrill Lynch (MER), Federal Natl Mtge (FNM), Countrywide Financial (CFC), Economic data, IndyMac Bancorp (IMB), Lehman Br Holdings (LEH), Bear Stearns Cos (BSC), Housing, Recession

Confidence in the global economy fell in September, as concern mounted about the health of the U.S. economy and global financial system following the bankruptcy of Lehman Brothers and the near bankruptcy of AIG, which prompted a U.S. Federal Reserve intervention, a new survey indicated.

The Bloomberg Professional Global Confidence Index fell to 11.3 in September from 14.1 in August among U.S. respondents. The Western European index fell to 12.6 from 12.9. Readings below 50 indicate negative sentiment.

Economist Richard Felson, who did not participate in the Bloomberg survey of 3,000 Bloomberg Terminal users, told BloggingStocks Wednesday too many financial concerns and bankruptcies are occurring over a short period for business professionals to be positive.

"Countrywide, Bear Stearns, Indymac, Freddie, Fannie, Lehman, Merrill, and now AIG. Wow, that's an awful lot for any economic system to absorb in five years, let alone one year," Felson said. "Executives and other business professionals are justifiably concerned about credit access for business operations and about declining demand due to rising unemployment. The major U.S. economic metrics are not moving in a positive direction right now and the nation needs to correct that."

What would turn sentiment around, in Felson's view? In addition to identifying a growth catalyst for the economy, Felson said the United States must find a way to stem the tide of declining home prices.

"Stabilizing the housing sector is a key. If we keep more people in their homes, fewer foreclosed homes will be added to the market, eventually decreasing the supply of homes for sale, which will stabilize home prices," Felson said. "With that in place, lower foreclosures will stop the drop in value of all these mortgage backed securities, which are at the heart of collateral calls that are driving many of these financial institutions into bankruptcy."

Felson recommend that the U.S. Government expand the Federal Housing Administration to refinance mortgages of distressed homeowners, and re-establishing the Resolution Trust Corporation to manage the flood of bad assets. The former will help median home prices recover, the latter "will enable the U.S. financial system to process, over time, the hundreds of billions of dollars of low-value securities," Felson said.

Economic Analysis: Stabilizing the housing sector appears to be the key to recovery, along with creating a growth catalyst for the economy. On the latter, economist Felson added that the new U.S. Congress and President should pass a second fiscal stimulus package for infrastructure projects of at least $100-125 billion to help get the U.S. economy on a growth track again.

This week, Congressional Democrats proposed a second fiscal stimulus package for $50 billion, but the measure was opposed by Congressional Republicans. Congress recesses next week, so no new fiscal action is expected prior to the November 4 election.

 

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