Economy (The Third Horseman – Rev. 6)

NEW YORK — Freddie Mac said Wednesday that it swung to a second-quarter loss that was more than three times larger than Wall Street expected as more homeowners fell behind on their mortgage loans. To preserve capital, the company said it expects to cut its dividend this quarter to 5 cents or less a from 25 cents a share and will sell at least $5.5 billion in stock.. Freddie and sister company Fannie Mae hold or guarantee nearly half of outstanding mortgage debt in the U.S. The government recently offered a temporary financial lifeline to keep the pair afloat.

WASHINGTON (AP) — Mortgage finance company Fannie Mae on Friday posted its fourth straight quarterly loss as home loan defaults increased and said it would slash its dividend more than 85% and take other steps to shore up its capital position. The company, the largest U.S. buyer and backer of home loans, said Friday it lost $2.3 billion, or $2.54 a share, for the quarter that ended June 30. The loss compares with profit of $1.95 billion, or $1.86 a share, in the period last year.

The number of people signing up for jobless benefits has climbed to its highest point in more than six years as companies cut back, adjusting to the faltering economy. The Labor Department said Thursday that new applications for unemployment insurance rose a seasonally adjusted 7,000 to 455,000 for the week ended Aug. 2. That is the highest level since March 2002. The number of people continuing to collect unemployment benefits rose 31,000 to 3.3 million the week ended July 26, most recent period for which that information is available. That was the highest since December 2003. Employers cut jobs every month so far this year, driving losses to 463,000.

USATODAY: — In an ominous sign for the back-to-school shopping season, retailers ranging from Abercrombie & Fitch to J.C. Penney reported dismal July sales Thursday as economic concerns trickled down even to once largely recession-proof young shoppers. Consumers ages 18 to 26 report being harder hit by gas prices and more reluctant to buy clothes because of high fuel costs than do adults 27 and older, according to data provided to USA TODAY by BIGresearch. Another alarming signal came from Wal-Mart which projected Thursday that sales will slow in August, partly because of the fading effect of tax-rebate checks that had helped lift store sales earlier this year.

NEW YORK (AP) — Stocks soared Friday, rounding out their best week in more than three months, as a surge in the dollar and a resulting drop in oil prices eased inflation concerns and boosted prospects for business and consumer spending. The Dow Jones industrial average jumped more than 300 points. The resurgent dollar and the drop in oil sent a wave of confidence through the stock market. Light, sweet crude fell $4.82 a barrel to settle at $115.20 on the New York Mercantile Exchange, bringing its decline over the past four weeks to more than $30.

WASHINGTON (AP) (AP) — Consumers — fortified by the government's rebate checks — increased their borrowing in June at the fastest pace in seven months. The Federal Reserve reported Thursday that consumer credit increased at a brisk annual rate of 6.7% in June. That was up from a 3.8% growth rate in May. It marked the biggest increase since November when consumer borrowing grew at a 8.2% pace. Debt rung up by consumers rose $14 billion in June from the previous month to a total of $2.59 trillion. That was more than the $6.4 billion over-the-month increase economists were forecasting. Demand for non-revolving credit used to finance cars, vacations, education and other things, went up at a rate of 6.6% in June, marking a sizable pickup from May's sluggish 1.5% pace. Meanwhile, consumers' appetite for revolving credit, which is primarily credit cards, increased at a rate of 6.8% in June, a moderation from a 7.6% growth rate logged in May. Consumers have been forced to charge more of their purchases on credit cards as banks have tightened lending standards on other types of loans.

· JJ Commentary: That’s just great. The rebate checks (more government debt) encourage consumers to go deeper in debt in a down economy. Short-term, that’s good for retail sales. Long-term, it’s all exacerbating already overloaded government and consumer liabilities. The gods of materialism and greed are smiling.