FOLLOW THE WEEK ON FACEBOOK
November 21, 2007
NEWS AT A GLANCE
Paulson, the Fed forecast, and the economy
Treasury Secretary Henry Paulson told The Wall Street Journal that U.S. home mortgage defaults “will be significantly bigger” next year. In a shift, he also “aggressively” encouraged the mortgage-service industry to help a broad group of struggling homeowners get better loans. (Reuters) Yesterday, the Federal Reserve cited the housing collapse in lowering its GDP growth forecast for 2008 to 1.5-2.6 percent, from 2.5-2.75 percent. The Fed also revealed that its decision to lower interest rates last month was “a close call.” (AP in Yahoo! Finance) But investors, ignoring warnings from Fed officials, are betting that the Fed will cut rates again in December. (Bloomberg)
DP World raises $5 billion in IPO
Dubai-owned international port operator DP World Ltd. will raise $4.96 billion in its initial public offering, making it the Middle East’s biggest-ever IPO. The $1.30-a-share sale price values DP World at $21.6 billion. The IPO was more than 15 times oversubscribed; only investors in six Persian Gulf states, foreigners living in the United Arab Emirates, and institutional investors worldwide were allowed to bid. (MarketWatch) DP World is the world’s fourth-largest marine-terminal operator, with 30,000 employees in 22 countries. “We are there where the growth is,” said DP World Chairman Sultan Ahmed Bin Sulayem. “We are big in China and we are big in India.” (Bloomberg)
More mortgage news
Mortgage giant Freddie Mac reported a $2.03 billion loss yesterday, sending its stock down 29 percent. The government hoped Freddie Mac and also-ailing Fannie Mae would prop up the housing market. (The Wall Street Journal) The Paris-based Organisation for Economic Cooperation and Development put a price tag on losses tied to U.S. mortgages: $300 bilion. (Reuters) In California, Countrywide and three other home lenders agreed to freeze interest rates on subprime mortgages, to prevent a wave of foreclosures in the state. (San Francisco Chronicle) And the U.S. Conference of Mayors is convening next week to discuss ways to prevent foreclosures and the associated neighborhood ills. (AP in BusinessWeek.com)
Do you know what’s in your turkey?
Your Thanksgiving turkey may be stuffed before you even bring it home. Additives commonly injected into birds today include preservatives and “flavor enhancers” like sodium phosphate, butylated hydroxytoluene, MSG, edible fats, and modified food starch. And that’s not counting the antibiotics and grain-ingested pesticides that critics say are in many store-bought birds. But if you don’t want to pay the 50 percent premium for organic foods this Thanksgiving, you’re probably safe as long as you handle the raw bird safely and cook it enough, food safety experts say. “You do not want your family or guests ho-ho-hoing in the bathroom,” notes Sam Beattie at Iowa State University. (MarketWatch)
of The Week magazine.