| House Of Cards: The Mortgage Mess
It sounds like a shell game or Ponzi scheme; in some ways, it was a house of cards rife with corruption, greed, and negligence.
And as correspondent Steve Kroft reports, it started in places like Stockton, Calif.
Stockton is a city of 280,000 people in the Central Valley; 80 miles east of San Francisco and 80 miles north of San Jose. In many ways, this is ground zero for the current financial crisis and a microcosm of everything that went wrong.
A few years ago, it was one of the hottest real estate markets in the country; today it is the foreclosure capital of America.
Real estate agent Kevin Moran represents 102 properties and says all of them are in foreclosure.
Moran gave Kroft a tour of the wreckage in one subdivision called "Weston Ranch," with block after block of vacant and abandoned houses.
Stocks: More Bricks in the Wall of Worry
The gloomy clouds that have gathered over the U.S. economy -- and the stock market -- appeared to grow darker and thicker this week. For one thing, there were signs the U.S. consumer is finally feeling the heat from the credit crisis. A brace of reports from companies in the consumer segment showed that Americans are cutting back on things like restaurant outings and everyday staples. That has more people convinced that a recession is on the way. Then there is the uncertainty surrounding the financial sector, amid speculation of a flood of red ink for major financial institutions, including talk of a bigger-than-expected loss at Merrill Lynch & Co. (MER). These factors helped the stock market close out a miserable week with another big sell-off.
MBIA posts fourth quarter loss
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Indian sharemarket chokes on foreign restrictions
Indian shares plunged more than 9 percent and the rupee tumbled to its lowest in almost a month today after the stock market regulator proposed curbs on foreign portfolio inflows to jam the brakes on record-breaking markets. Trading in shares was suspended for an hour immediately after opening as the main indexes' slide triggered circuit breakers and rupee retreated after a run up to 9-year highs against the dollar in recent weeks. Finance Minister Palaniappan Chidambaram said the proposals were part of a series to stem capital, which has been flooding into India's markets via indirect instruments known as participatory notes, and they were not a ban, just a cap on the amount of money coming in. "Investors through participatory notes are certainly welcome to invest in India, but for the present it is important to moderate these capital inflows,'' he told a news conference.
Sofa so bad for Land of Leather
Land of Leather has seen no respite from its post-Christmas sales slump, with trading throughout January proving just as disappointing. The sofa retailer announced this morning that trading was "unchanged" since January 4, when it reported that sales were significantly below expectations – a warning that sparked alarm across the furniture sector. This month is a key time for the company, as it makes a quarter of its sales between Boxing Day and January 31. Shares in the company fell 6% in early trading, to 60p, and analysts warned investors to be cautious even though the stock has fallen 80% over the last year. "Land of Leather continues to disappoint," said Kevin Lapwood of Seymour Pierce. "Any hopes of a pick-up over the sale period were not realised." On January 4, Land of Leather said that underlying sales over the first nine days of the post-Christmas sales had fallen by a quarter, a decline it blamed partly on the credit crunch.
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