Free Internet Press Newsletter - Saturday January 12 2008 - (813)

Saturday January 12 2008 edition
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Fears About U.S. Economy Worsen 2008-01-12 03:48:26 Major banks and mortgage companies Friday sharply accelerated an industry consolidation that is set to change the landscape of American lending, while a convergence of events exposed fresh worries about the U.S. economy. New indications emerged Friday that the spiraling subprime mortgage crisis is spreading from home loans to credit cards, potentially engulfing a far broader segment of Americans. At the same time, the U.S. trade deficit soared to a 14-month high, fueled by soaring oil prices. And rising concern that U.S. investment houses, particularly Merrill Lynch, may yet suffer far greater losses, helped set up a wide market sell-off. Echoing the heightened concern, Treasury Secretary Henry M. Paulson, Jr., said Friday that the U.S. economy had slowed "rather materially" at the end of 2007 and that "time is of the essence" in launching an economic stimulus package to stave off a recession. Meanwhile, a broad shake-up of the U.S. lending industry is speeding up. Bank of America agreed Friday to buy the troubled Countrywide Financial $4 billion, a bargain-basement price for the nation's largest mortgage lender, which, analysts said, could have even more substantial mortgage-related losses ahead. Read The Full Story A.P. Poll: Economy Ties War As Top U.S. Worry 2008-01-12 03:47:56 The faltering U.S. economy has caught the Iraq war as people's top worry, a national poll suggests, with the rapid turnabout already showing up on the presidential campaign trail and in maneuvering between President Bush and Congress. Twenty percent named the economy as the foremost problem in an Associated Press-Ipsos poll released Friday, virtually tying the 21 percent who cited the war. In October, the last time the survey posed the open-ended question about the country's top issue, the war came out on top by a 2-1 majority. About equal proportions of Republicans, Democrats and independents in the new poll said the economy was their major worry, suggesting the issue looms as a potent one in both parties' presidential contests. It was also cited evenly across all levels of income, underscoring the variety of economic problems the country faces. Amid increasing trade, job, housing, stock market and gasoline price woes, candidates from each party have started talking about how they would bolster the economy. The issue looms as the dominant one in the next presidential contest: Tuesday's Republican primary in Michigan, which had a 7.4 percent unemployment rate in November that is the nation's worst. Read The Full Story	New U.S. Embassy In Iraq Called Fire Risk 2008-01-12 03:48:09 The firefighting system in the massive $736 million embassy complex in Baghdad has potential safety problems that top U.S. officials dismissed in their rush to declare construction largely completed by the end of last year, according to internal State Department documents, e-mails and interviews. Some officials assert that in the push to complete the long-delayed project, potentially life-threatening problems have been left untouched. "This is serious enough to get someone killed," said a State Department official, who spoke on the condition of anonymity because he feared retaliation. "The fire systems are the tip of the iceberg. That is the most visible. But no one has ever inspected the electrical system, the power plant" and other parts of the embassy complex, which will house more than 1,000 people and is vulnerable to mortar attacks. Other sources involved in the project, also requesting anonymity, insist that disputes involve technical paperwork issues, largely because the contractor had never built an embassy and did not realize that under State Department rules it needed approval for substituting certain materials. Now, much of that work needs to be reexamined and checked, they said, substantially delaying the project's completion. The finger-pointing over fire safety is a microcosm of the suspicion that hangs over the troubled project, which is built on acreage almost four times the size of the Pentagon. Originally expected to be completed by July 1, 2007, at a cost of $592 million, the largest U.S. diplomatic mission in the world has been plagued by poor planning, shoddy workmanship and design changes that have added to the cost. The Justice Department is conducting a criminal investigation of the contract and related subcontracts, said sources. Read The Full Story
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