Third World USA:

(How Small is Big?)

6 die from brain-eating amoeba in US lakes

09/29/2007 | 08:47 AM
PHOENIX - It sounds like science fiction but it's true: A killer amoeba living in lakes enters the body through the nose and attacks the brain where it feeds until you die.

Even though encounters with the microscopic bug are extraordinarily rare, it's killed six boys and young men this year. The spike in cases has health officials concerned, and they are predicting more cases in the future.

"This is definitely something we need to track," said Michael Beach, a specialist in recreational waterborne illnesses for the Centers for Disease Control and Prevention.

"This is a heat-loving amoeba. As water temperatures go up, it does better," Beach said. "In future decades, as temperatures rise, we'd expect to see more cases."

According to the CDC, the amoeba called Naegleria fowleri (nuh-GLEER-ee-uh FOWL'-erh-eye) killed 23 people in the United States, from 1995 to 2004. This year health officials noticed a spike with six cases ? three in Florida, two in Texas and one in Arizona. The CDC knows of only several hundred cases worldwide since its discovery in Australia in the 1960s.

In Arizona, David Evans said nobody knew his son, Aaron, was infected with the amoeba until after the 14-year-old died on Sept. 17. At first, the teen seemed to be suffering from nothing more than a headache. <http://www.gmanews.tv/story/62446/6-die-from-brain-eating-amoeba-in-US-lakes>

US High Court won't hear birth control case

10/01/2007 | 10:17 PM
WASHINGTON - The Supreme Court on Monday declined to enter a church-state dispute over whether some religious organizations can be forced to pay for workers' birth-control health insurance benefits, a growing trend in the states.

The court let stand a New York court ruling upholding a state law that forces religious-based social service agencies to subsidize contraceptives as part of prescription drug coverage they offer employees.

New York is one of 23 states that require employers that offer prescription benefits to employees to cover birth control pills as well, the groups say. The state enacted the Women's Health and Wellness Act in 2002 to require health plans to cover contraception and other services aimed at women, including mammography, cervical cancer screenings and bone density exams.

Catholic Charities and other religious groups argued New York's law violates their First Amendment right to practice their religion because it forces them to violate religious teachings that regard contraception as sinful.

"If the state can compel church entities to subsidize contraceptives in violation of their religious beliefs, it can compel them to subsidize abortions as well," the groups said in urging the court to take their case. "And if it can compel church entities to subsidize abortions, it can require hospitals owned by churches to provide them."

Other Catholic and Baptist organizations are part of the lawsuit. Seventh-Day Adventist and Orthodox Jewish groups signed onto a brief filed in support of Catholic Charities.

Three years ago the court rejected a challenge to a similar law in California. - AP  <http://www.gmanews.tv/story/62723/US-High-Court-wont-hear-birth-control-case>

US split over school race verdict

Opponents have criticised a US Supreme Court ruling that says race cannot be used as a factor in school entry. Democratic presidential candidates spoke out against the court's 5-4 judgement, with Senator Barack Obama describing it as "wrong-headed". But others backed the court, saying the social landscape in the US had changed since a landmark Supreme Court desegregation ruling in 1954. Estimates suggest one in 15 US school boards may now change entry policies. Thursday's narrow ruling was the first time since 2003 that the Supreme Court had ruled on the issue of race and education - one of the most emotive issues in the US. The make-up of the court has changed since then, with liberal judge Sandra Day O'Connor replaced by a more conservative justice, Samuel Alito. The new ruling struck down school entry policies in Seattle and in Louisville, Kentucky, following protests from white parents whose children had been denied entry to schools because they would have exceeded a quota of non-black pupils. Many US schools adopted so-called "affirmative action" programmes during the civil rights era as a means of desegregating racially-divided schools. They are no longer compulsory, but hundreds of school districts have kept them in place on a voluntary basis. <http://news.bbc.co.uk/2/hi/americas/6252206.stm>

US court admits Guantanamo cases

The US Supreme Court has agreed to hear an appeal by Guantanamo Bay detainees that they be allowed to challenge their confinement in federal courts. The move reverses the court's decision in April, when it refused to rule on whether the men had a right to take their cases to federal courts. This latest move is a blow to the US government, which wants the cases to be dealt with by military tribunals alone. Hundreds of men have been held without charge for years at Guantanamo Bay. The treatment of the men has been heavily criticised by international human rights bodies and foreign governments, including some allies of the US. Allegations of abuse have dogged the camp, many of whose inmates were captured in 2001 and 2002, in the early days of the "war on terror". <http://news.bbc.co.uk/2/hi/americas/6254526.stm>

Trial of David Hicks 'a charade'

The trial of Australian national David Hicks at Guantanamo Bay was a charade that served to corrode the rule of law, Australia's top legal body has said. The Law Council of Australia called government support for the US military tribunal process shameful. In a report on the issue, the council drew a parallel with the case of detained Indian doctor Mohamed Haneef. Both cases had an "Alice in Wonderland quality" to them, Law Council President Tim Bugg said.<http://news.bbc.co.uk/2/hi/asia-pacific/6913374.stm>

Murdoch wins control of Dow Jones

Wall Street Journal on newspaper stand

The WSJ: Required reading for the US business and political elites

Media tycoon Rupert Murdoch has won his battle to take over the American media giant Dow Jones, publisher of the Wall Street Journal (WSJ).
It is believed his News Corporation company has paid $5bn (£2.6bn) to secure the deal.
Correspondents say the widely respected WSJ is regarded as America's leading business newspaper.
Mr Murdoch overcame concerns that the editorial independence of the newspaper would be threatened under his control.
He agreed to set up an independent panel to oversee the hiring and firing of staff. <http://news.bbc.co.uk/2/hi/business/6923474.stm>

Giuliani's daughter 'backs Obama'

The daughter of Republican presidential hopeful Rudolph Giuliani has signalled her backing for Democrat Barack Obama, US media reports say.
According to her profile on social networking site Facebook, Giuliani's daughter Caroline, 17, was a "liberal", online magazine Slate reported.
In the listing, which was removed on Monday, she said she was a member of a Facebook group supporting Mr Obama.
Mr Giuliani declined to comment, only saying: "My daughter I love very much."
Relations have been strained between Mr Giuliani and his children Caroline and Andrew, after Mr Giuliani divorced their mother Donna Hanover and married his third wife, Judith Nathan.  <http://news.bbc.co.uk/2/hi/americas/6934381.stm>

World shares fall on credit fears

Markets have fallen sharply again in Friday trading, a day after markets in the US and Europe suffered heavy losses amid fears of a global credit crunch.

Billions of dollars were wiped off share values, affecting businesses and individual investors alike.

 <http://news.bbc.co.uk/2/hi/business/6939757.stm>

Huge payout in US stuttering case

Six US citizens who, as children, were used in an experiment that tried to induce stuttering have been awarded nearly $1m (£500,000) in compensation.

In 1939, the plaintiffs - all orphans in state care - were tormented for six months by Iowa University researchers.
The study was testing the theory that children develop speech impediments because of psychological pressure.  <http://news.bbc.co.uk/2/hi/americas/6952446.stm>

Shrewd lenders spark US mortgage chaos

By Joe Lynam
Business reporter, BBC News, Milwaukee, Wisconsin

Crippled by domestic violence and with no income, Peg at least still has her home. Now, though, even the very roof over her head is in jeopardy.

A divorcee from a white middle class family in suburban Milwaukee, Peg had run up large medical bills and was too proud to tell her own family that she was paying for everyday expenses with her credit card. Then a man called and offered to help consolidate her bills and pay off her credit card. <http://news.bbc.co.uk/2/hi/business/6960961.stm>

Big money's sway in US 2008 race

By Jane O'Brien
BBC News, Washington

The United States will hold its first billion dollar presidential election next year, heightening concerns about the influence of money in American politics.
In spite of attempts to reform finance laws and limit contributions, the 2008 race for the White House is already the costliest campaign in history.

Election watchdogs say that fundraisers are finding a way around the restrictions to collect unprecedented sums of money.

 <http://news.bbc.co.uk/2/hi/americas/6980589.stm>

US mortgage lender slashes jobs

The biggest mortgage lender in the United States, Countrywide Financial, says it is making big job cuts.
Countrywide's Chief Executive, Angelo Mozilo, said the company, based in California, was being forced to cut up to 12,000 jobs, one-fifth of its staff.
Mr Mozilo said the firm had been badly hit by the US house price slump and the increasing number of buyers who are defaulting on mortgage repayments.

The firm expects new mortgages to fall by 25% in 2008, compared with 2007.

<http://news.bbc.co.uk/2/hi/business/6984718.stm>

Greenspan points to market 'fear'

Current financial turmoil is identical to that seen in earlier stock market crashes, Alan Greenspan has warned.
The ex-Federal Reserve boss compared today's situation to the crash of 1987 and the fallout from the near-demise of Long-Term Capital Management in 1998.
Anxiety over a global credit squeeze triggered by the US housing slump was driven by "fear", he said in a speech.

"The human race has never found a way to confront bubbles," he said, alluding to booms suddenly grinding to a halt.

 <http://news.bbc.co.uk/2/hi/business/6983051.stm>

US family tries life without toilet paper

By Kim Ghattas, BBC News, New York

Isabella examines the compost worms

The Beavan family compost their food waste with worms

It is mid-afternoon in an airy, lower-Manhattan flat, on the ninth floor of a posh-looking building with a doorman.
It is a bit dark and there are no lights on. There is a strange quiet feel to the flat, perhaps due to the lack of any appliances - no fridge humming, no TV interference, even no air conditioning, though it is hot and humid outside.

Walk into the bathroom, and you will notice that there is no toilet paper, no bottles of shampoo or toiletries.

 <http://news.bbc.co.uk/2/hi/americas/7000991.stm>

Skilled immigrants suffer US limbo

By Brajesh Upadhyay, BBC News, Washington

When Pankaj Kakkar sang the American national anthem on the Capitol Hill lawns, Congressman Jim McDermott commented: "Son, you sing it better than me."

Unfortunately, this compliment does not take Mr Kakkar, a computer professional working for Google, any closer to the Green Card dream he has been chasing for the past 11 years.

Almost a million skilled immigrants like him from India, China, Pakistan and other countries are stuck in the backlog for employment-based permanent residency, more commonly known as the Green Card. <http://news.bbc.co.uk/2/hi/south_asia/7002296.stm>

Boy's death highlights US health debate

By Rajesh Mirchandani, BBC News, Washington

The US House of Representatives and Senate have passed legislation expanding health care to cover an additional four million children but President George W Bush is set to veto it.

Deamonte Driver

A tooth extraction might have saved Deamonte's life

Mr Bush says the bill takes the scheme far beyond its original remit of providing health insurance for children from low-income families. <http://news.bbc.co.uk/2/hi/americas/7018057.stm>

Bush veto for child health bill

US President George W Bush has vetoed a bill to expand a children's healthcare insurance scheme, after it was passed with a large majority in the Senate.

Mr Bush argues it takes the programme beyond its original purpose of insuring children from low-income families.
The vetoed bill proposed higher tobacco taxes to provide an extra $35bn (£17bn) to insure some 10 million children.

Children's health insurance is set to be a campaign issue in next year's elections, analysts say.

Eighteen Republican senators joined Democrats last week in passing the legislation by a 67-29 vote.
But the House of Representatives, which approved the bill by 265-159, was well short of the two-thirds majority needed to override a veto.
It is only the fourth time Mr Bush has used his veto power in the course of his presidency. <http://news.bbc.co.uk/2/hi/americas/7026454.stm>

Clinton stands out from the crowd

By James Coomarasamy, BBC News, Washington

Hillary Clinton was always going to be at the centre of the 2008 US presidential campaign.

Democratic presidential candidate Hillary Clinton

Hillary Clinton appears very comfortable in the limelight

As the first woman with a real chance of becoming America's commander-in-chief - and the first former first lady running for the White House - the historical possibilities of her candidacy have had little trouble catching the imagination, either in the US or abroad. But in recent weeks, a funny thing has happened. This already unique candidate has begun to stand out from the crowd even more.  <http://news.bbc.co.uk/2/hi/americas/7025528.stm>

Clinton's people chase the big bucks

Hillary Clinton is breaking records at raising funds for her campaign to be the next president of the USA. As the steamroller of her progress gathers speed, Democrats with career ambitions are getting on board. Justin Webb has been spending time with them... or trying to. <http://news.bbc.co.uk/2/hi/programmes/from_our_own_correspondent/7028619.stm>

Ohio student goes on gun rampag

A 14-year-old student has shot himself dead after going on a shooting spree at his school in the US city of Cleveland, Ohio, the city's mayor has said. <http://news.bbc.co.uk/2/hi/americas/7038532.stm>

Banks 'form $75bn sub-prime fund'

US For Sale sign

The US sub-prime mortgage sector has seen record defaults

Some of America's largest banks are expected to announce plans later to form a $75bn (£37bn) joint fund to invest in US sub-prime mortgage debt.

The banks, including Citigroup and JP Morgan, are seeking to boost confidence in the sector and prevent a further dip in the price of such investments.
The banks are said to fear more cuts in the price of sub-prime mortgage debt, which is hitting their balance sheets.
Higher mortgage rates have sparked record sub-prime home loan defaults.<http://news.bbc.co.uk/2/hi/business/7044525.stm>

Rove resignation marks end of era

By Jane O'Brien, BBC News, Washington

Karl Rove's resignation is not in itself a surprise - he discussed leaving his post as deputy chief of staff as early as last summer - and with George W Bush's presidency drawing to a close there was arguably little left for the political strategist to do.

But many White House watchers are wondering about the timing of his departure. <http://news.bbc.co.uk/2/hi/americas/6945028.stm>

Alabama's fierce death row battle

By Matt Wells, BBC News, Alabama

Alabama death row inmate Thomas Arthur

Thomas Arthur came within hours of being executed last month

If most politicians in Alabama had their way, Tommy Arthur would have been executed more than 20 years ago.
The 65-year-old, whose death sentence was overturned twice before a third jury convicted him in the early 1990s, is alive on the state's death row - but only just. Although no physical evidence placed him at the scene, he was convicted of shooting Troy Wicker in his bed after being paid $10,000 by the victim's wife, with whom he had had an affair. <http://news.bbc.co.uk/2/hi/americas/7045909.stm>

US dollar touches a new euro low

Euro coins on dollar note

The value of the dollar has been on a downward spiral

The US dollar tumbled to a new euro low in Asian trade as concerns over the state of the US economy deepened.

The euro traded as high as $1.4348, breaking its last record set on Friday when one euro bought $1.4319.
The sell-off was triggered on Friday by a profit warning from building equipment giant Caterpillar, prompting concerns over the slowing US economy.
But the dollar bounced back to trade at $1.4146 against the euro bloc's currency in afternoon trade in London.
The greenback also slipped to a six-week low againt the Japanese yen on Monday, touching 113.25 yen at one point, but gained against the British pound to trade at $2.0315 after initial falls.

The dollar could weaken further if the US Federal Reserve cuts interest rates again at its meeting at the end of the month, making the US currency less attractive for income seekers.

Meanwhile, the strong euro is a threat to exporters, such as Airbus owner EADS, and to the wider region's economy, which has just started to recover after years in the doldrums. <http://news.bbc.co.uk/2/hi/business/7055863.stm>

US woman guilty of 'womb theft'

Lisa Montgomery, convicted of the death of Bobbie Jo Stinnett (photo from time of her arrest in December 2004)

Defence lawyers had argued Montgomery was mentally ill

Jurors in the US state of Missouri have convicted a woman who strangled an expectant mother and cut the baby from her womb with a kitchen knife in 2004.

After four hours of deliberation, they rejected Lisa Montgomery's plea that she had been delusional when she killed Bobbie Jo Stinnett and stole the baby.
Prosecutors are seeking the death penalty for Montgomery, convicted of kidnapping resulting in death.
The baby, a girl, survived and was later returned to her father. <http://news.bbc.co.uk/2/hi/americas/7057499.stm>

Unravelling race relations in the US

By Stephanie Holmes, BBC News

When three hangman's nooses were suspended from a tree in a school playground in a small Louisiana town, it sparked a chain of events which has fuelled a furious debate over race, justice and symbolism in the US.

Protest in New York after a noose was found on a professor's door

The Jena noose incident spawned a series of copycat acts

The coils of knotted rope which swung in the shade of the tree recalled the nooses used to hang black men in collective lynchings carried out by white mobs in the southern states as recently as the 1940s.

The incident in the small town of Jena, which culminated in a group of black youths being charged with attempted second-degree murder for allegedly beating a white boy, has spawned a series of copycat acts.

Nooses have been hung on doors, pinned up in workplaces and slipped into letters.

New York's government is now considering criminalising any representation of the noose as a hate crime.
Some African-American analysts argue that the recurring use of the noose as an instrument of intimidation reveals deep and unresolved racial tensions in US society. <http://news.bbc.co.uk/2/hi/americas/7060518.stm>

US economy sees surprise growth

Shoppers in New York

US consumer spending grew in the third quarter

The US economy grew at its fastest rate in one-and-a-half years in the summer, official Commerce Department figures have surprisingly shown.
Despite the downturn in the US housing market, and the global credit squeeze from late August, the US economy grew 3.9% between July and September.
The increase was higher than the 3.8% rate in the previous quarter, with consumer spending up a resilient 3%.
However, analysts say the figures for October to December will be much worse.<http://news.bbc.co.uk/2/hi/business/7071181.stm>

Young US voters may get scoop in 2008

By Laura Smith-Spark, BBC News, Washington

Alexander Heffner and Andrew Mangino

Students have joined forces to launch an online national news site

With a year to go before the 2008 US presidential elections, young Americans are poised to mark their growing engagement in politics with an ambitious online news site.  The creators of Scoop08.com, which launches on 4 November, say it will be the first to harness the power of students across the US to follow the campaign.

"We noticed there was a void when it came to national, grassroots, student journalism that really could have an impact on issues of importance," said co-founder Alexander Heffner, 17.

Whether the venture sky-rockets or fizzles, its very existence reflects a social shift that candidates and major parties ignore at their peril.
Namely, America's young voters, traditionally seen as apathetic, are becoming more active voters - and there are more and more of them. <http://news.bbc.co.uk/2/hi/americas/7073664.stm>

Court challenge gives death row reprieve

By Adam Brookes
BBC News, Livingston, Texas

Heliberto Chi

Death row inmate Heliberto Chi was due to be executed on 3 October

Heliberto Chi is a rotund, quietly spoken man in his twenties. He has a shaved head, glasses, and a prison pallor.
His English is halting, spoken with the accent of his native Honduras.
Chi is incarcerated on death row in Livingston, Texas. In white prison garb, he sat in a tiny steel cage and talked for an hour from behind a thick glass screen.
He was convicted of murdering the owner of a clothing store during a robbery in 2001, and sentenced to death by lethal injection.

He was due to die on 3 October.

On the day before the sentence was to be carried out, Chi was returning to his cell from the exercise area, when another inmate shouted to him that he, Chi, had received a stay of execution.  "They told me I got a stay," he said. "So I went to the radio to listen, to be sure... When I heard it in the news I was very comfortable. I was like a boy again or something." Heliberto Chi is not alone in getting a last minute reprieve. Executions across America have all but halted while the US Supreme Court considers whether or not lethal injection is constitutional. <http://news.bbc.co.uk/2/hi/americas/7072223.stm>

Foreclosure wave sweeps America

By Steve Schifferes, BBC economics reporter, Cleveland, Ohio

two boarded up houses in Cleveland

Thousands of abandoned houses in Cleveland have been vandalized

A wave of foreclosures and evictions is about to sweep the United States in the wake of the sub-prime mortgage lending crisis.

This could destabilise the US housing market and may also lead to further turmoil in financial institutions, who collectively own $1 trillion (£480.6bn) worth of sub-prime debt.

Cleveland, Ohio, is an industrial city on the banks of Lake Erie in the US "rust belt".

It is the sub-prime capital of the United States. One in ten homes in the city is now vacant, and whole neighbourhoods have been blighted by foreclosed, vandalized and boarded-up homes.

Families all over the country continue to lose homes in record numbers, stripping families of their wealth and destroying entire neighbourhoods

Michael J Calhoun, Center for Responsible Lending

Many of these homes are now owned by the banks and investment pools owning the mortgages, and the company making the most foreclosures in Cleveland is Deutsche Bank Trust, which acts on behalf of such investment pools. Cleveland is facing a rising crime wave, and the cost of demolishing the vacant houses alone will cost the city $100m of its tax base.

According to Jim Rokakis, the County Treasurer for Cleveland's Cuyahoga County, "Wall Street strategies that made the cycle of no-money-down, no-questions-asked lending possible have sucked the life out of my city". <http://news.bbc.co.uk/2/hi/business/7070935.stm>

Republicans plot key Colorado fightback

By Jamie Coomarasamy
BBC Washington correspondent

The purple flags and signs have come down in Denver, as the city comes to terms with the Colorado Rockies' recent defeat in the baseball World Series.

Bill Ritter

Bill Ritter grabbed the governor's mansion from the Republicans

But purple is not just the Rockies' colour, it's increasingly becoming the political complexion of this south-western state: a mixture of Democratic blue and Republican red.

Colorado voted for the Republican candidate in nine of the past 10 presidential races, but in the most recent elections, Republicans have lost a US Senate seat, the governor's mansion and the state legislature. The GOP is on the defensive.

At a golf club in the foothills of the Rockies, I went to see how the party is plotting its fightback.

At an evening of the Mountain Republican Women's Club, candidates for next year's state and national elections were given the chance to make a pitch, to convince grass-roots activists that they can reverse the trend.

I found plenty of Reagan-esque optimism, but a fair helping of realism about the recent past. <http://news.bbc.co.uk/2/hi/americas/7079761.stm>

California sues US over car fumes

California is suing the US federal government over its failure to back the state's tough new anti-pollution laws regulating greenhouse gas emissions.

Two years ago, California passed legislation requiring car-makers to cut vehicle emissions by 30% by 2016.

But for the measure to take effect, the Environmental Protection Agency (EPA) must give its approval.
State governor Arnold Schwarzenegger said there was no legal basis for the EPA to stand in California's way.
An EPA spokeswoman said the agency planned to make a decision on the legislation by the end of December.
If the legal action is successful, 11 other US states have said they will follow California's lead on emissions levels, and five more are considering the move.  <http://news.bbc.co.uk/2/hi/americas/7086121.stm>

Housing meltdown hits US economy

By Steve Schifferes
Economics reporter, BBC News, Cleveland, Ohio

A glut of unsold homes is depressing US house prices

The sudden tightening of credit on high-risk sub-prime mortgages has led to a property price crash in the US, with devastating effects on the whole economy.

The unprecedented decline in US house prices may also lead to further pain for financial institutions, who collectively own more than $1 trillion worth of sub-prime debt. <http://news.bbc.co.uk/2/hi/business/7078492.stm>

Living as a veteran of the streets

One in four homeless people in the US is a military veteran, a report has found, even though veterans make up only 11% of the adult population. One former soldier told his story to the BBC's Vincent Dowd in Washington.

A homeless man in Washington DC (file picture)

A disproportionate number of the homeless are military veterans

Only a year ago, Ben Israel could have been forgiven for thinking nothing would ever go right with his life again.

He had been mainly homeless since his early 30s, living either on the streets of the richest nation in the world or in a selection of public shelters. Sometimes he lived in his car.

Ben was born on an army base in the US state of North Carolina, where his father was a soldier.

When he was 18 months old he swallowed - or maybe was given - furniture polish. He was in a coma for days.

He blames this for his occasionally hesitant speech and some of the problems he has had throughout life. "It caused me issues," he says simply.

Yet today you only need to spend a few minutes with him to recognise a keen intelligence too. <http://news.bbc.co.uk/2/hi/americas/7087267.stm>

A better life: Latino family in the US

By Matthew Price, BBC News, Arkansas

When you enter the quaint suburban home in the US state of Arkansas it feels like an all-American household.

The Soto family outside their home

The Soto family left Mexico for Arkansas in search of opportunities

The family dog, Coco, yaps at your heels. Family photographs adorn the walls.
Then you notice that the television is tuned to a satellite signal coming from south of the border.
To be fair the daughters - there are five of them - wear hipster jeans, and all speak English with developing American accents.
However, in the kitchen they are preparing to celebrate a Mexican religious holiday.

In Mexico it was more difficult to make our dreams come true

Roberto Soto

For years, Roberto Soto, the girls' father, worked in the US, spending only a few short weeks once in a while back home in Mexico with his family.
So they worked and saved, and six years ago got permission to move together to their new life in the US.
"We're stronger having come here," Mr Soto says.
"In Mexico you had to work so hard. Here it's easier to find opportunities. And in Mexico it was more difficult to make our dreams come true."  <http://news.bbc.co.uk/2/hi/americas/7084190.stm>

Carnage on Wall Street as loans go bad

By Steve Schifferes, Economics reporter, BBC News, New York

SUB-PRIME CRISIS SERIES

Foreclosures are spreading to areas like Los Angeles, depressing prices
Special reports from the USA
Next: What can be done?

US property crash deepens

Foreclosure wave sweeps US

The scale of the losses that will hit Wall Street banks could approach half a trillion dollars as large numbers of sub-prime home loans go bad.
And the carnage in the financial markets could cause a credit squeeze that will dampen economic growth for years to come.
The US sub-prime crisis is leading to a wave of foreclosures across the US that is having a devastating effect on the US housing market, and is likely to lead to the halving of the US economic growth rate in the next six months.
   
The reality is that most financial institutions have barely started to recognize the lower 'fair value' of their impaired securities
Professor Nouriel Roubini, New York University.

At the root of the problem is the breakdown of the new model of mortgage lending, when instead of giving mortgages directly to their customers, banks borrowed money from credit markets to fund a growing volume of mortgages. <http://news.bbc.co.uk/2/hi/business/7086909.stm>

Detroit's woes augur ill for US

By Adam Brookes, BBC News, Detroit

A car drives down a street in front of the GM headquarters in Detroit, Michigan

Detroit is feeling the effects of job losses and a US-wide credit crunch

Americans are worried that hard times lie ahead. But in Detroit, Michigan, they have already arrived, with a vengeance.

Michigan, by some calculations, has lost 400,000 jobs in the past seven years. That's in a state whose population is only 10 million.

Detroit is seeing unemployment running at nearly 8%, twice the national average.
The number of homes in the city "foreclosed" - or repossessed by mortgage lenders - is among the highest in the country.

The city's charities are getting busier, a sign of economic distress.

At Gleaners Community Food Bank, a charity which provides food to needy people, organisers report an upsurge in appeals for help.
"This is ground zero when it comes to poverty," Augie Fernandez says. "Here we are in the capital of manufacturing and we're just seeing it dissipate away."
A significant trend is now apparent to the Gleaners staff: a marked increase in the number of professional workers who are seeking food assistance. <http://news.bbc.co.uk/2/hi/business/7097585.stm>

US vote rivals in 'scandal' spat

By Justin Webb, BBC News, Washington

Hillary Clinton and Barack Obama debate in Las Vegas on 15 November

The two candidates clashed at a debate last week

A bitter dispute has broken out between the two main candidates for the Democratic Party nomination in next year's American presidential election.
A prominent newspaper columnist claims Hillary Clinton supporters told him her campaign has scandalous information about principal rival, Barack Obama.
Mr Obama has reacted with outrage, but the Clinton team say they know nothing about the reports.
They say he is showing his inexperience getting so worked up about them.

Daggers drawn

This is more than the normal cut and thrust of election politics.
The two campaign teams, who have been at daggers drawn for some time, are now engaged in a bizarre and furious argument which could badly damage either or both of the candidates.
It began with a respected right-wing columnist suggesting that Clinton staff had told him they had unspecified scandalous information about Barack Obama which they had decided not to use.

Instead of ignoring the report, Mr Obama, the young and charismatic black senator from Illinois, personally intervened to call on Mrs Clinton to make the information public immediately or concede that it did not exist. <>

Sorting out the sub-prime problem

By Steve Schifferes
Economics reporter, BBC News, Washington DC
   

Foreclosure notice

Foreclosure wave sweeps US

On 31 August, President George W Bush appeared in the White House Rose Garden to urge action to deal with a serious crisis in the US economy.

He was flanked by two of the most powerful players in the global economy: US Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke.

The sub-prime crisis - which is threatening millions of families in the US with eviction, has created turmoil in the financial markets, and lead to serious disruption to the US economy and housing market - had moved to the top of the political agenda.

Action was required, so the Fed intervened by providing massive short-term liquidity to preserve the banking system and cut interest rates twice, the first time by half a percentage point.

This was followed, perhaps belatedly, by new and tougher regulation of the mortgage industry, with new limits on sub-prime "balloon" mortgages, whose payments are fixed for 2 years and then rise sharply to a much higher variable rate.
   

President George W Bush

Recent disturbances in the sub-prime mortgage industry are modest in relation to the size of our economy

Bush moves to ease lending crisis

Both the Bush administration and the Democrats, which control both Houses of Congress, have been searching for bipartisan solutions that will solve the crisis and provide help to the millions of people - including many victims of predatory lending - now facing eviction.

But deep ideological divisions between the two sides - with the Democrats favouring much tighter regulation of the industry, and the Bush administration looking to private sector solutions - is hampering attempts to reach an early resolution of the problem.

And the two sides also disagree on how severe an impact the crisis will have on the US economy. <http://news.bbc.co.uk/2/hi/business/7097682.stm>

Solid start to Black Friday deals

People carry purchases in New York's Times Square on Black Friday

A number of negative economic effects may hit spending

The US Christmas shopping season got under way on Friday, with shoppers braving the cold to look for bargains.

On what is traditionally known as "Black Friday", many shops open their doors at midnight or before dawn.

Laptops, televisions, toys and clothes are among the most popular items, as shoppers hunted out discounts.
And despite a gloomy prognosis many big name stories reported bigger crowds for the early morning bargains than they did a year ago.
The National Retail Federation predicts combined November and December holiday sales will grow by 4%, the slowest since 2001, when sales were up 1.3%.
The cautious outlook has been caused by a falling US housing market, a credit crunch, and rising food and fuel costs.

"Retailers knew they had to offer promotions enticing enough to get shoppers out of bed on a chilly day, and they delivered," said Tracy Mullin, chief executive of the National Retail Federation.

"Though retailers are anticipating a challenging holiday season, they are encouraged by the enthusiasm that their Black Friday sales generated." <http://news.bbc.co.uk/2/hi/business/7108071.stm>

What next for US economy?

    * Evan Davis | Stars and strife |
    * 26 Nov 07, 10:22 AM

Where will the American economy go next year?

Perhaps it'll help you answer this if I tell you that last year it grew 2.9%; this year it is set to grow 2.1%.

Rather than get caught up in the decimal points of forecasts for next year, think about three scenarios.

a) next year's growth number is significantly below this year's;
b) next year's number is about the same as this year's; and
c) next year's number is larger.

The argument about the economy's prospects at the moment is between those three options: there are those who think there's downward momentum; those that think the slowdown currently occurring will be contained and those who think it will be a small temporary phase before the economy reverts to the norm. <http://www.bbc.co.uk/blogs/thereporters/evandavis/2007/11/what_next_for_us_economy.html>

Made in America

    * Evan Davis | Stars and strife |
    * 25 Nov 07, 09:30 AM

Having arrived here a couple of days ago full of thoughts about the falling dollar and the improving state of American trade, it is fascinating to observe at first hand that perceptions of low quality in Chinese products are the issue that seems to be driving consumers away from imports.

Recent recalls of badly designed toys and toxic toothpaste seem to have driven a surge of interest in the "Made in America" label. Websites such as usmadetoys.com offer lists of US products that don't
bite or poison you. This site offers an eco-friendly four tips on buying lead-free toys made in the US. Or look at the poll on Chinese goods on the website of Duncan Hunter, a presidential candidate.

The mass media is talking the issue up. I was surprised to hear advice offered this morning that one advantage of buying goods online is that if they are recalled, you will automatically get an e-mail telling you, without you having had to register your purchase.

Does that really happen so often?

It's fascinating that fear of foreign goods is taking hold just as the trade position of the US has turned a long-awaited corner. In September, for example, the trade deficit in goods and services was $57 billion, (or "a lot" as we say in English).

But it was still 12% smaller than the September before.

Something is changing. Imports were up by 5%. But exports were up by 14%.

This is of course exactly what the US economy needs. If the country is going to avoid recession while hard-pressed consumers save more now their houses are not increasing in value any more, exports have to be part of the answer. And reduced imports will help as well.

What is good for the US may not feel good to the rest of the world of course. In many respects we have become more used to the US as a customer not a competitor. Suddenly the US bites back, lets its
currency fall and starts improving its trade balance, by worsening everyone else's. But it is only fair - the US needs to improve its position more than anyone else. Its deficit last year was over 5% of its whole GDP.<http://www.bbc.co.uk/blogs/thereporters/evandavis/2007/11/made_in_america.html>

Black Friday

    * Evan Davis | Stars and strife |
    * 23 Nov 07, 04:47 PM

I've arrived in the US for a 10-day look at some of the economic jitters here. And guess what: I find I have arrived in New York on Black Friday.

That term is apt to mis-interpretation. Black Friday is not another bad hair day in Wall Street. It's the term used by American retailers to describe the day after the Thanksgiving Holiday, seen as the semi-official start of Christmas shopping season. (It isn't really the start, by the way: the decorations do go up earlier.)

The name Black Friday is reported to derive from the 1970s, and comes from either the bad traffic conditions prevalent, or from the fact that retailers expect this day to mark the season of the year, in which they expect to go into the black.

It is a bit of a tradition. To my amazement, the shops open at about 5am; some in fact are beginning to open on Thanksgiving itself. Queues build up round the block, the shops offer so-called "doorbuster" deals. It's all great fun.

Now, the shops will look busy today, and there is already a lot of hype around the great deals on offer. But the big question is whether this year's Black Friday will really be black for retailers. Can they possibly enjoy strong trading in the frazzled economic conditions of the time?

It's a question of importance to the whole world.

For years, we've grown dependant on American consumers as the world's spenders of last resort. They've kept Europe out of recession, allowed China to industrialise, and prevented global deflation.

But at the same time, they've not been looking after their own futures. The savings ratio in the US (the proportion of households' disposable income that is not consumed) has been in a long-term decline since the early 1980s. In the most recent data, it has dipped negative ? yes negative. It means they are "running on empty" as they say. It can't go on. <http://www.bbc.co.uk/blogs/thereporters/evandavis/2007/11/title_1.html>

    *  3.
    * At 11:12 PM on 23 Nov 2007,
    * Mark wrote:

Here are the numbers. The US economy is about 13 trillion dollars GDP. Two thirds of it is driven by consumer spending, that's nearly 9 trillion dollars. Much of this drives the world's economy as spending causes a cascade of manufacturing to meet demand creating jobs and wealth around the world. The US has an enormous trade deficit every month which means it buys more from the rest of the world than it sells to it. Therefore, even small changes in American consumer demand can have a profound effect overseas. There's an old saying, when the US catches cold, the rest of the world catches pneumonia. That's what it means. Changes in the American economy or trade policy can make or break the economies of other nations, even inadvertently. One example is Cuba whose economy has been crushed by a trade embargo lasting over 45 years.

Americans are generally optimistic usually have a very positive outlook often spending more than they can afford hoping things will get better. They frequently run up big credit card debt which they pay off over time. When times are tough because they see people losing their jobs and are afraid they will lose theirs too, they tend to tighten the reins. The Federal Reserve Bank can nudge the consumer and industry one way or the other by raising or lowering the "prime rate" the short term rate it charges the best banks. This affects short term interest rates to speed up or slow down the entire economy by making it easier or harder to get credit. They can also adjust the money supply. This is the fine tuning performed between a growing and inflating economy and a recession or contracting economy. The goal is to grow the economy for the longest time at the highest sustainable rate, the so called Goldilocks economy, not too hot, not too cold. However, it takes months for any change in the federal rates to be reflected in the economy as a whole as the change ripples through it. They cannot affect long term interest rates. It's been described as being like pushing on a string. Right now there is worry over inflation in the cost of energy. It will cost Americans more to drive their cars and heat their homes this winter leaving less for discretionary spending. The increased cost of fuel is an inflationary factor. On the other hand, the credit crunch caused by among other things the drop in the value of houses and the sub prime lending debacle is a contracting factor. The board of the Federal Reserve Bank meets regularly to assess the conditions around the country in different regions and in different sectors of the economy to come up with one number for interest rates that they feel works best. They use vast quantities of data, very complex mathematical models, and often reassess data from prior months as further updates to them generate revisions. They've gotten pretty good at it. The last recession was in 2000 and was shallow and mild compared to others. European economists said Europe would be immune to its effects as they saw it coming. In fact, except for Great Britain, all of the European economies were affected and they did not recover until long after it was over in the US. It will be interesting to see the effect of a recession in the US on the rest of the world if we have one. I think the EU economies are far more fragile than they were 7 years ago. I think China's is too.  <http://www.bbc.co.uk/blogs/thereporters/evandavis/2007/11/title_1.html>

    *  9.
    * At 12:23 PM on 24 Nov 2007,
    * Don Robertson, The American Philosopher wrote:


For decades Europe has been out in front of the U.S. in a consensus about the environment. The U.S. is now catching up but in a way likely unanticipated by anyone in Europe.

Americans hold their government largely to blame for failures (Iraq, economic, cultural perception, loss of esteem worldwide and largely plain idiotic leadership).

What is coming into view for many Americans is the extent to which economic growth has come at the expense of a pummeling and bludgeoning debasement of the American experience.

Here are some examples:

The rise in home prices has bestowed upon American who owns home, something of a windfall. But this "windfall" has at the same time made home ownership for all Americans a massively more expensive enterprise. Expenses of all types related to home ownership do not rise exactly as do the sticker price of homes. They rise roughly three times faster due to higher costs paid in interest on larger loans, higher insurance costs paid on more highly valued policies, higher property taxes due to higher property evaluations, and higher maintenance and improvement costs due to the GoldRush real estate mentality.

And these higher costs are not retreating as the real estate GoldRush is coming to an abrupt end and housing prices fall. The continue to rise. The costs of foreclosure and empty-building blight are passed all around and paid by everyone. When a property is foreclosed on in the U.S., these properties must then be sold through a licensed realtor, who of course makes their standard commission. These properties must be inspected, adding that fee. The must be appraised to apply for a loan. They must be mortgaged again including those fees and new costs. And of course, as long as homeowners are spending all that money trying to rehabilitate a previously foreclosed home that was generally trashed by the evicted previous occupant, the municipality will step in again, reassess the property and raise property taxes yet again.

And meanwhile, wages in the U.S., have not risen at a pace even remotely connected with all this hidden inflation. Our government economists seem to now measure inflation based solely upon what must be paid to a worker to drive his rusty old automobile to work every day and nothing else. This makes every American poorer by quantum leaps. It also makes every citizen of the world poorer by quantum leaps because American wages are the standard by which the world of wages is measured.

What we are witnessing in the U.S. is clearly a race to the bottom, and, we're getting there too.

And interestingly Americans are blaming politicians of every ilk at every turn of the apparently inexorable screw.

Many economists here in the U.S. are raising the alarm about a growing call for isolationism from within the U.S. electorate. "Keep out the immigrants!" "Put up trade barriers and bring U.S. jobs home!"

And the popular opinion of our purportedly civic-minded, friendly, and scientific economists in the U.S. is now not much more favorable than would have been that of a tax collector in Sherwood Forest.

Some free-thinkers are even calling for a negative growth economy in order to save some of the quality of life and standard of living escaping Americans at a pace quickening, away from the much more comfortable past.

What Americans are most concerned for is best described by the five year old test for measuring progress.

The five year old test goes like this:

You were five years old. I was five years old. Five years old is a precious age.

Can any of us say that since we were five years old, the quality of life and the standard of living for each years' successive crops of five year olds has improved?

If we cannot answer in the affirmative here, saying, Oh, yes! On average every year life for five year olds has improved over previous years, then despite all the good economies, despite all the so-called economic progress, despite all the new inventions and shiny new objects created by empirical curiosity, and especially despite all the promises of these damned lying politicians to deliver the electorate to a better place, there is no real progress occurring.

Don Robertson, The American Philosopher <http://www.bbc.co.uk/blogs/thereporters/evandavis/2007/11/title_1.html>

    *  10.
    * At 12:52 PM on 24 Nov 2007,
    * David Greenhalgh wrote:

Dear Evan
You poor Englishman....you really don't know middle class Americans, do you...they are largely 'jam today' people...so while those of us in the rest of the world may be affected by their declining dollar and the credit crunch (thanks to dumb bankers relying on the equivalent of used car salesmen posing as mortgage brokers), I don't think we have too much to worry about from them turning much more than 5 degrees from their current lack of savings proclivities...retirement is just too far away to have them imposing that kind of serious discipline on themselves...and after all besides there's always Uncle Sam to bail them out, haha...good luck finding any exceptions while you're there....<http://www.bbc.co.uk/blogs/thereporters/evandavis/2007/11/title_1.html>

    *  15.
    * At 05:53 PM on 24 Nov 2007,
    * Hugh wrote:

As we look at American consumer spending, or lack of it, in late 2007 and its possible effects on the world economy, we might just be making a mistake about the model we are employing. The epicentre of the world's consumerism has moved East, China and India, with almost half the world's population between them, are hungry for consumer goods and goods that they actually manufacture themselves. It is not surprising that both countries seem to be shaking off the current crisis, could this be the end of USA inc.? <http://www.bbc.co.uk/blogs/thereporters/evandavis/2007/11/title_1.html>

    *  20.
    * At 04:56 AM on 25 Nov 2007,
    * beekerman wrote:

Americans are indoctrinated early and often to believe in two important things: 1) That they are at their best when they consume the most and 2) That they participate in the direction of the country. What is amazing is the awesome, coordinated pull on the middle and lower classes to spend for the good of the economy, the country and now (it seems) the world. For example, after 9/11 we were encouraged to get out there to spend and travel, lubricating the gears of the economy and keeping the bad guys from winning. It was the patriotic thing to do. Now each economic quarter has its own nervous tension, "Are we doing our part? Will the economy continue to grow? Couldn't we use another plasma TV in the bedroom?" The creaking and groaning of a overstressed system is all around us. Better get out there and spend some more!
<http://www.bbc.co.uk/blogs/thereporters/evandavis/2007/11/title_1.html>



    * 22.
    * At 10:46 PM on 25 Nov 2007,
    * Elaine wrote:

With no intention whatsoever of being disrespectful to Professor Stiglitz this sounds like a nobrainer. It seems strange to hear most economists applying old world maxims of trade and currency movements to hold out a glimmer of hope on the horizon due to rebalancing of trade deficits. There has been a paradigm shift mostly in the US but not very far behind in the rest of the world. Manufacturing output is on an uninterrupted downward slope , software and certain services are already oligopolistic , service outsourcing to India is a torrent and following the manufacturing story and the internet and telecommunication revolution enable most of the remaining services jobs to vanish virtually overnight. The political backlash has been remarkable in its absence but the dam my well be about to burst. Can global warming and the consequent opportunities to grow more food in North America really help the US? Does the mighty industrial American economy really have to look at agriculture for survival? But all that is in the long term. In the short term maybe a hard recession is really good for us Americans. It will help us to consume less , focus on education rather than on the 50 inch LC TV, create the willingness for our voters to demand to be protected the same way European laws protect their citizens and force our politicians to be servants of the people than being the handmaiden of corporations big or small as they are today. Maybe it will force our people to realize that we are in an undeclared war where the American consumer is the one left holding the bag when the music stops. Enough!
<http://www.bbc.co.uk/blogs/thereporters/evandavis/2007/11/title_1.html>

    *  24.
    * At 05:05 AM on 26 Nov 2007,
    * Randy Lockdall wrote:

Being a middle aged American I find it difficult to believe that Americans are going to change their spending habits by choice, but instead by necessity. The Credit Crunch is indeed real. Banks will continue to get heavy losses, which will cause them to play games to get the most for their money and cut their losses.

This will create a recession like scenario because consumers will spend less. The cycle of higher oil prices and few alternatives is abruptly changing consumer behavior while American incomes are not keeping pace.

Ironically, the only real way to stop the downtrend in the short term is to lower interest rates to bailout bad home loans, but greedy bankers can't see the light at the end of the tunnel and will cause more homeowners to foreclose for fear of more losses.

Savings --Not Survival --yes

As a person who could possibly lose my own home, I'm extremely unhappy with the attitude of Banks and Politicians. We purchased our home for 77K with some improvements and is now mortgaged for 400K less than 15 years later.<http://www.bbc.co.uk/blogs/thereporters/evandavis/2007/11/title_1.html>

Sparks fly in Republican debate

By Jane Little, BBC News, Washington

Republican presidential candidates listen to questions posed by a YouTube user during a debate in St Petersburg, Florida
Issues raised included abortion, guns and taxes
The Republican presidential candidates have had heated exchanges in another televised debate, their first to feature questions submitted via video-sharing website YouTube.

Among other topics, they clashed over immigration and the troop timetable in Iraq.

They stood in matching dark suits and white shirts on the stage in St Petersburg, Florida - eight candidates who were so reluctant to engage the youthful, online generation that they had turned down an earlier invitation from YouTube.

But now they were here, apparently determined to make the most of it. And they turned what could have been another dull stage show into the most animated and entertaining GOP debate so far. <http://news.bbc.co.uk/2/hi/americas/7118397.stm>