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August 27, 2007
Attorney General Alberto
R. Gonzales, whose tenure has been marred by controversy and accusations
of perjury before Congress, has resigned, the
face='Times New Roman' size='3'>New York Times
size='3'>reported today. Gonzales, who had rebuffed calls for his
resignation, submitted his to President Bush on Friday. Bush has
not yet chosen a replacement, but will likely not leave the position
open for long. Gonzales faced increasing scrutiny for his leadership of
the Justice Department over issues including his role in the dismissals
of nine U.S. attorneys late last year and
whether he testified truthfully about the National Security
Agency’s surveillance programs.
href='http://www.nytimes.com/2007/08/27/washington/27cnd-gonzales.html?hp=&pagewanted=print'>Read
more.
name='2'>Church Abuse Trials Ordered in
size='3'>
Diego
Bankruptcy Judge
Louise DeCarl Adler
on Friday ordered immediate jury trials in more than 40
sex-abuse lawsuits against the Roman Catholic Diocese of San Diego, the
Associated Press reported on Saturday. Trials scheduled in state court
in
size='3'>San Diego for five
cases had been suspended in February when the diocese abruptly filed for
bankruptcy protection the night before the first trial was slated to
begin. Lawyers of the abuse victims told the judge Thursday that
reactivating those trials was the only way to get the diocese into a
settlement after more than three years of fruitless negotiations in
state and federal courts. The
w:st='on'>San
Diego
about $94 million to settle the claims as part of its bankruptcy
reorganization plan. Plaintiffs' attorneys are seeking a settlement of
about $200 million.
href='http://www.washingtonpost.com/wp-dyn/content/article/2007/08/24/AR2007082402106_pf.html'>Read
more.
name='3'>Rising Reliance on Credit Cards Reflects Subprime
Fallout
Rising credit card
borrowing may be a sign of consumer distress spreading from the subprime
mortgage market to other types of lending, Investor’s Business Daily
size='3'>reported on Friday. While defaults among home buyers have
spiked, the number of credit card loans in delinquency has been running
steady. One possible reason, analysts say, is that troubled first-time
homebuyers have been choosing to stay current on credit card payments
while walking away from homes on which they put down little upfront
money. However, trouble may be brewing in the credit card industry, says
Merrill Lynch. It says balances on consumer credit cards jumped at an
annual rate of 11 percent in May and June. With two exceptions, that's
the highest rate since the last recession in 2001-02.
Merrill Lynch says some distressed
homeowners are now turning to credit cards before being forced into
foreclosure. It says a run-up in credit card delinquencies is likely in
six to 12 months.
href='http://money.cnn.com/news/newsfeeds/articles/newstex/IBD-0001-19134316.htm'>Read
more.
name='4'>Commentary: Colleges Should Do More to Protect Students
from Credit Debt
Colleges, which often
allow solicitation on campus, need to do more to protect their students
from taking on credit card debt that can severely damage their economic
prospects once they graduate from school and join the world of work,
according to an editorial in today’s New York Times. College
students should be told more about the dangers associated with the cards
that the companies are going to throw at them once school starts.
Colleges that allow credit card companies to solicit on campus should
scrutinize the offers carefully to make sure that vulnerable and often
impoverished students are not trapped in deceptive deals that cast
shadows over their lives once they leave school. Beyond that, Congress,
when it convenes next week, should move forward with planned legislation
that would tighten federal supervision over the credit card industry
while improving disclosure laws and outlawing deceptive practices.
href='http://www.nytimes.com/2007/08/27/opinion/27mon2.html?pagewanted=print'>Read
href='http://www.nytimes.com/2007/08/27/opinion/27mon2.html?pagewanted=print'>
name='5'>Public Pension Managers Rethink Moves to Acquire Hedge Fund
Shares
Public pension fund
managers are saying that they may slow their push into hedge funds after
the recent losses suffered at big funds, such as Goldman Sachs Group
Inc. and AQR Capital Management, the
size='3'>Wall Street Journal reported today.
Less than a year ago, more than 42 percent of public pension funds said
they were planning 'significant increases' to their existing hedge-fund
investments, according to the consulting firm Greenwich Associates. At
least 20 public pension funds are taking steps toward investing in hedge
funds for the first time, based on research prepared by Financial
Investment News. It may be too early to see any pension funds redeeming
their hedge-fund holdings, and some of the hardest-hit hedge funds have
already shown signs of rebounding. However, pension managers
say that the erratic moves in recent weeks
are reason enough to worry most pension fund boards.
href='http://online.wsj.com/article/SB118817290004309347.html?mod=hpp_us_whats_news'>Read
more. (Registration required.)
Debt
Issues Top Economists' Fears
A National Association
for Business Economics’ survey to be released today said that the
combined risk of mortgage defaults and heavy debt loads has overtaken
terrorism as the biggest short-term threat to the
w:st='on'>
size='3'>U.S.
size='3'>economy, the
size='3'>Wall Street Journal reported today.
The group said that almost a third of its survey respondents listed
debt-related problems as their top worry: About 18 percent cited the
effects of subprime-loan defaults and 14 percent listed excessive
household or corporate debt. About 20 percent of the 258 members
responding put defense concerns and the possible economic disruption of
a terror attack at the top of their list, down from 35 percent in the
group's March survey. Energy prices were the top-cited risk among 13
percent of the group, which largely includes economists working
at
face='Times New Roman'
size='3'>U.S.
size='3'>corporations or with think tanks and universities.
href='http://online.wsj.com/article/SB118817716621209442.html?mod=hpp_us_whats_news'>Read
more. (Registration required.)
w:st='on'>
name='7'>Florida
face='Times



New
Roman' size='3'>Mortgage Broker Faces Involuntary Chapter
11
TransLand Financial
Services Inc., a
face='Times New Roman' size='3'>Florida
mortgage brokerage, is the subject of an involuntary
chapter 11 petition filed by three banking companies in which it was
accused of failing to remit at least $22.9 million of loan payoffs and
other payments, Reuters reported on Friday. The petition was filed
Thursday with the U.S. District Court for the Middle District of Florida
by TierOne Corp., Federal Trust Bank and MidCountry Bank, court records
show. TierOne said that it is owed at least $12.9 million, MidCountry at
least $7.6 million, and Federal Trust at least $2.4 million. In a U.S.
Securities and Exchange Commission filing, Lincoln, Neb.-based TierOne
said it replaced TransLand as the servicer of some residential
construction loans, and in effecting the transfer, it 'uncovered
evidence of the alleged fraud.' TierOne said it is insured up to $7.5
million against fraudulent losses by loan servicers, and that its
insurance carrier has been notified of a potential claim.
href='http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-08-24T131349Z_01_WEN0680_RTRIDST_0_TIERONE-TRANSLAND-BANKRUPTCY-URGENT.XML'>Read
more.
International
name='8'>Mortgage Crisis Forces
w:st='on'>
German Bank
The eastern German state
of Saxony was forced to sell a troubled state-run bank Sunday as the
global liquidity crisis set off by U.S. subprime mortgage problems
claimed its first major European victim, the New York Times reported
today. Landesbank Sachsen Girozentrale, which received an emergency 17.3
billion euro ($23.6 billion) line of credit from a group of regional
savings banks on Aug. 17, is being sold to a larger rival, Landesbank
Baden-Württemberg, said the state premier of
w:st='on'>Saxony
Milbradt. The state government controls 51 percent of the bank, known as
Sachsen LB, which is based in
w:st='on'>
size='3'>Leipzig
sale of Sachsen LB was the most significant sign yet of just how hard it
has become for many European lenders to obtain access to short-term
financing amid widespread uncertainty over the extent of banks’
investments in the souring mortgage-backed securities market.
href='http://www.nytimes.com/2007/08/27/business/worldbusiness/27german.html?ref=business&pagewanted=print'>Read
more.
name='9'>Subprime Crisis Hits Indian Outsourcers
Indian companies that
process
face='Times New Roman'
size='3'>U.S.
size='3'>mortgages are reporting fewer work orders and diminishing
revenue because of the subprime loan fallout overseas, the Associated
Press reported today. Several companies have moved employees once
assigned to mortgage documentation and related services to other areas.
As
face='Times New Roman'
size='3'>U.S.
size='3'>lenders tighten credit or close down, the volume of paperwork
done by Indian outsourcing companies declines because of fewer
applicants and fewer loans. Mumbai-based WNS Holdings is in the process
of redeploying 500 of its staff after one of its top 10 clients -- First
Magnus Financial Corp. -- filed for bankruptcy in the United
States. Bangalore-based Infosys Technologies Ltd. and iGate Global
Solutions Ltd. have also redeployed about 50 and 100 staff respectively
due to the winding up of their business with GreenPoint.
href='http://biz.yahoo.com/ap/070827/india_subprime_woes.html?.v=1'>Read
more.
name='10'>Historic Polish Shipyard Struggles
The
w:st='on'>Gdansk
shipyard in
w:st='on'>
size='3'>Poland
size='3'>could go bankrupt if it is forced to pay back millions in
disputed state subsidies deemed illegal by European officials,
the New York
Times reported on Sunday. The troubles at the
shipyard, and the reaction to them, reveal the larger contradictions in
the Polish economy and society, where there is a widening gulf between
those in modern businesses and those who are left behind, anchored in
older industries such as shipbuilding. The European Union may
be threatening the shipyard, but it comes bearing much larger gifts
for
face='Times New Roman'
size='3'>Poland
size='3'>as a whole. From 2007-13,
w:st='on'>
size='3'>Poland
receive $91.4 billion in aid from
w:st='on'>
size='3'>Brussels
shipyard, which once employed about 17,000 people, now provides jobs for
a more modest 3,000. Andrzej Buczkowski, vice president of Stocznia
Gdansk, the state-run shipbuilding company, defends the shipyard’s
long-term viability, pointing to a profit of about $3.5 million for the
first six months of the year.
href='http://www.nytimes.com/2007/08/26/world/europe/26gdansk.html?_r=1&oref=slogin&pagewanted=print'>Read
more.
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