Items of interest:
Study: Minorities’ ’dream’ foreclosed -- The subprime-mortgage crisis will cost black and Hispanic homeowners up to $256 billion - the worst financial hit for minorities in modern U.S. history, a new study finds.
“The dream that Martin Luther King Jr. once spoke of has been foreclosed,” Boston-based United for a Fair Economy wrote in a report set for release to coincide with today’s 79th anniversary of King’s birth.
Analyzing previously released research on the subprime meltdown, the report projected blacks will lose $71.5 billion to $121.6 billion on high-cost mortgages taken out in the past eight years. Hispanics will forfeit another $75.8 billion to $128.9 billion.
That’s the “greatest loss of wealth for communities and individuals of color in modern U.S. history,” researchers wrote. [...]
U.S. Stocks Decline on Citigroup's Loss, Drop in Retail Sales -- The U.S. stock market resumed its January tumble after Citigroup Inc. reported a record loss, retail sales unexpectedly dropped and falling oil prices dragged down energy shares.
Citigroup, the largest U.S. bank, declined to a five-year low in New York Stock Exchange trading after cutting its dividend by 41 percent and writing off $18 billion for mortgage defaults. Chevron Corp., the second-biggest U.S. oil company, dropped the most in seven weeks. Apple Inc. slumped to the lowest in two months on the Nasdaq Stock Market after new products failed to impress investors.
The Standard & Poor's 500 Index lost 35.3, or 2.5 percent, to 1,380.95, marking its worst start since the first 10 trading days of 1978. The Dow Jones Industrial Average fell 277.04, or 2.2 percent, to 12,501.11, the fifth decline of more than 220 points this year. The Nasdaq Composite Index decreased 60.71, or 2.5 percent, to 2,417.59. More than seven stocks fell for every one that rose on the NYSE.
``Citigroup kept saying forever that they weren't going to have to cut the dividend,'' said Bill Knapp of MainStay Investments, a division of New York Life Investment Management, which manages $252 billion. ``With the writedown today, what's to come? We probably need to see the first quarter stuff pass before people are really going to believe what they hear.''
Lowest Since March
The declines added to three weeks of losses that wiped out more than $800 billion in value from U.S. shares and sent the S&P 500 to its lowest level since March. [...]
Death Bonds Drub Corporate Debt as Insurers Get Subprime Lift -- Betting against a pandemic paid off for Michael Stahel, who earned returns on so-called ``death bonds'' that were three times higher than those generated by corporate debt securities last year [...]
------Housing Bubble Blog:
Everything’s Pointing In The Same Direction In California --
“‘Sure, it’s a good time to buy if you don’t mind losing 10 to 15 percent of the sales price,’ said Thornberg. ‘There’s no recovery in 2008, no bottom in 2008. Prices are falling at a pretty rapid pace and will continue to fall through 2008 and into 2009, and that’s the most critical thing to keep in mind.’”
“Resale houses, representing 43.5 percent of all transactions in December, had a median price of $470,000, down $30,000 from November and $70,000 below December 2006. That was a record year-over-year drop on a dollar basis.” [...]
------Lots of folks are going belly up. Even the former rogue prosecutor, Mike Nifong, has filed for bankruptcy.
Nifong, Duke Lacrosse Prosecutor, Files Bankruptcy -- Michael Nifong, the ex-North Carolina prosecutor who lost his law license for mishandling rape charges against three Duke University lacrosse players, filed for bankruptcy and listed the students among his major creditors.
Nifong reported debt of $180.3 million and assets of $243,898 in documents filed today in U.S. Bankruptcy Court in Durham, North Carolina. He resigned from his post as Durham County District Attorney in July after being accused of withholding evidence in the rape case.
Three Duke lacrosse players were indicted after a Durham woman alleged she was raped at a March 2006 team party. The charges were later dropped, and the young men sued Nifong for prosecutorial misconduct. Collin Finnerty, David F. Evans and Reade Seligmann are listed as unsecured creditors, each owed $30 million, in Nifong's bankruptcy filing. Three other current and former players who sued Nifong are also listed as creditors.
``This looks like a smart move for Mr. Nifong,'' said Charles Tatelbaum, a Florida lawyer who has represented doctors who filed for bankruptcy to shield themselves from lawsuits. ``This stops all the cases against him so he doesn't have to pay legal fees if he doesn't have insurance.''
If a bankruptcy judge decides that Nifong's conduct in pressing the criminal case amounted to wrongdoing, any damages awarded in connection with the players' civil suits wouldn't be erased, lawyers say. [...]