<p>I almost forgot:</p>
<p>June 5 (Bloomberg) – Richmond Federal Reserve Bank President Jeffrey
Lacker, challenging Chairman Ben S. Bernanke’s unprecedented actions
to stem a financial panic, warned that lending to securities firms
raises the risk of future tumult.</p>
<p>AP: NEW YORK - The equity Americans have in their most important asset
— their homes — has dropped to its lowest level since the end of World
War II.</p>
<p>Homeowners’ portion of equity slipped to 46.2 percent in the first
quarter from a revised 47.5 percent in the previous quarter. That was
the fifth quarter in a row below the 50 percent mark, the Federal
Reserve said Thursday.</p>
<p>The total dollar value of equity also fell for the fourth straight
quarter to $9.12 trillion from $9.52 trillion in the fourth quarter,
while Americans’ total mortgage debt rose to $10.6 trillion from
$10.53 trillion.</p>
<p>LA Times: The net worth of U.S. households fell in the first quarter,
the second straight decline, thanks to the double-whammy of sliding
home values and the plunge in stock prices, the Federal Reserve said
in a report today.</p>
<p>The central bank’s so-called flow of funds report estimated the net
worth of American households at $55.97 trillion as of March 31, down
$1.7 trillion from year-end. That was more than three times the
$530-billion drop in the fourth quarter.</p>
<p>NY Times: About 1 in 11 American mortgages were past due or in
foreclosure at the end of March, according to a report released on
Thursday, a figure that is rising fast as home prices fall and the job
market weakens.</p>
<p>The first three months of 2008 marked the worst quarter for American
homeowners in nearly three decades, according to the report, issued by
the Mortgage Bankers Association. The rate of new foreclosures and
past-due payments surged to their highest level since 1979, when the
group first started collecting the data.</p>
<p>Economists worry that a big loss of jobs in the coming months could
drive default rates much higher. The Labor Department will release its
report on the job market for May on Friday.</p>
<p>WASHINGTON (AP) – The foreclosure hammer is hitting ever
harder. People lost their homes at the highest rate on record in the
first three months of the year, and late payments soared to a new
high, too – an alarming sign that the housing crisis and its damage
to the national economy may only get worse.</p>
<p>Slumping home values are being blamed in large part for the rising
tide of foreclosures. Troubled borrowers are left owing more to the
bank than their homes are worth. They can’t sell without taking a huge
financial hit, so they just walk away.</p>
<p>Financial Times - Countries failed on Thursday to agree fresh policies
to tackle the food crisis even as the declaration of the UN summit
warned of high food prices “in the years to come”.</p>
<p>The summit, hosted by the UN’s Food and Agriculture Organisation, was
called to tackle food price rises that have triggered riots in 30
countries, but became embroiled in a bitter dispute over biofuels and
export restrictions.</p>
<p>Agricultural commodities rose on the news as traders saw no prospect
of change in U-turn on biofuels policies in the US or in the use of
foodstuff’s trade restrictions by key exporters. Bad weather has also
contributed to Thursday’s price rise.</p>
<p>Boston Globe - Record numbers of Americans are raiding their
retirement savings as the economy has soured, threatening their
long-term financial security to make their mortgage payments, pay
medical bills, and cope with rising food and fuel costs. more stories
like this</p>
<p>Three decades ago, individually controlled retirement plans like
401(k)s barely existed. Most Americans counted on a pension, with
funds contributed and managed by their employer, to provide for
retirement along with Social Security payments. But today, workers
have accumulated $3 trillion in 401(k) accounts - up from $1.6
trillion in 2002 - making them a tempting target for households
looking to get through tough times.</p>
<p>The three largest administrators of 401(k)s - Fidelity Investments,
CitiStreet, and Vanguard Group Inc. - report a growing number of early
withdrawals from the plans in the past year as saving for retirement
has taken a backseat to mortgage payments, medical bills, and rising
food and fuel costs.</p>
<p>Washington Post - Even though lower interest rates have made many
adjustable-rate mortgages more affordable, foreclosures continue to
reach new heights as more than 1 million homeowners face losing their
home, according to industry figures released yesterday.</p>
<p>That’s because what began as a mortgage crisis focused largely on
subprime borrowers has spread and is being fed by the slowing economy
it helped create. Borrowers once considered the most creditworthy have
been hamstrung by declining home prices, making it difficult to
refinance their home to dodge a financial crunch.</p>
<p>Business Week - The chances of the U.S. economy falling into a
recession are 95 percent, an economist said at a real estate
conference Thursday.</p>
<p>Kenneth Rosen, a professor of real estate and urban economics at the
University of California-Berkeley, put the chances of a deep recession
at 45 percent and a mild one at 50 percent. He only sees a 5 percent
chance that the economy will quickly recover.</p>
<p>“We’re on very fragile ground. All we need is one more bad thing to
happen, another event to take place,” to send the economy into a deep
recession, Rosen said during a panel at the National Association of
Real Estate Investment Trust’s REIT Week investor forum in New York.</p>
<p>Seattle Times - As housing sales tanked last winter, local real-estate
pros waited anxiously for the traditional spring sales surge to revive
the troubled industry.</p>
<p>But May sales numbers, released Thursday, reveal that the urge has
been more of a sputter — at least around Central Puget Sound.</p>
<p>Home prices remain soft, inventory remains high and interest rates are
relatively low — all of which point to a buyer’s market. With interest
rates at their highest levels since mid-March and likely to go up, it
would seem that buyers would get off the fence.</p>
<p>WSJ - It finally happened. One of the major credit-rating firms
stripped bond insurers MBIA Inc. and Ambac Financial Group Inc. of
their vital triple-A ratings.</p>
<p>Thursday, Standard & Poor’s dropped the bond insurers’ ratings to
double-A and warned of further downgrades, just one day after Moody’s
Investors Service warned that it would likely knock down the ratings
of the two companies.</p>
<p>Financial Times - European banks have now suffered considerably more
losses because of the credit crunch than their US rivals, even though
the turmoil was first triggered by problems in the US subprime
mortgage market.</p>
<p>Of the $387bn in credit losses that global banks have reported since
the start of 2007, $200bn was suffered by European groups and $166bn
by US banks, according to data from the Institute of International
Finance, a Washington-based banking group.</p>