Total U.S. credit card debt is exploding as credit-starved consumers, no longer able to count on refinancing their homes, increasingly rely on revolving debt just to pay their daily living expenses. The U.S. Federal Reserve reported that Americans’ revolving debt, which primarily consists of credit card loans, surged 6 percent in February to $952 billion – the highest number since recordkeeping began in 1968. The February increase followed on the heels of a 7 percent increase in January. “Consumers are funneling all available monies toward that mortgage payment,” says Gail Cunningham, a spokeswoman for the National Foundation for Credit Counseling.
Steadily and alarmingly, shoplifting seems to be rising at many retail chains, and experts are pointing at a prime cause: the sputtering economy. Retail and law enforcement experts agree that they've seen an increase in store theft during the current slowdown — and not only from customers. "It's clear that both employee theft and shoplifting are up," says Richard Hollinger, professor of criminology at the University of Florida who compiles the annual National Retail Security Survey. "The most recent rise is being driven by the economy. A lot of people are on the financial edge." All told, retail theft is estimated to cost about $40.5 billion a year. And the rest of us, already squeezed by higher gas and food prices, end up paying for it: Stores pass on much of their losses to customers in the form of higher prices.
More than 400 real estate industry players have been indicted since March -- including dozens over the last two days -- in a Justice Department crackdown on incidents of mortgage fraud nationwide that have contributed to the country's housing crisis. The FBI put the losses to homeowners and other borrowers who were victims in the schemes at over $1 billion. Since March 1, 406 people have been arrested in the sting dubbed "Operation Malicious Mortgage" that saw 144 cases across the country. Sixty people were arrested on Wednesday alone, including in Chicago, Miami, Houston and a dozen other regions policed by the FBI. Across the country, reports of mortgage fraud have soared over the past year as the subprime mortgage market collapsed and defaults and foreclosures soared. Banks reported nearly 53,000 cases of suspected mortgage fraud last year, up from more than 37,000 a year earlier and about 10 times the level of reports in 2001 and 2002, according to the Treasury Department's Financial Crimes Enforcement Network.
Under pressure from falling home values, high oil prices and rising unemployment, the economy in California and the nation will perform anemically in the coming months -- but there still won't be an actual recession, UCLA forecasters say. The predictions, however, call for somewhat more pain in the months ahead than previously forecast, with little improvement this year or next. Not good, but not a recession, which is commonly defined as two consecutive quarters of negative growth in gross domestic product.
The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks. "A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist. A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion spreading across Europe and emerging markets. Such a slide on world bourses would amount to one of the worst bear markets over the last century.
BRUSSELS (AP) — Hundreds of farmers, truckers and taxi drivers blocked roads in and around Brussels on the eve of an EU summit to push leaders for help coping with skyrocketing fuel prices. Convoys of taxis farm tractors and truckers blocked parts of Brussels' inner ring road Wednesday, wreaking traffic havoc. Police said they expected some 1,000 protesting vehicles in central Brussels. The protesters — echoing recent demonstrations elsewhere in Europe and around the world — argue that the high fuel prices threaten their livelihoods. They are demanding that EU governments step in with subsidies to ease the sting of higher prices.
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