Soft housing hits banks

Asian markets fell today and European stocks got off to a rough start as fears about the U.S. housing slump's effect on the broader economy spread. Financial services firms, which would be hit by mortgage problems early on, led the decline. (Reuters) Merrill Lynch this morning downgraded Citigroup, Bear Stearns, and Lehman Brothers because of their dependence on the debt markets. (MarketWatch) "Investor sentiment is quite poor and I think it will remain quite poor for some time," said Andrew Milligan at Standard Life Investment in Edinburgh. "This is not a problem with one institution. It's a financial sector problem." (Bloomberg)

Viva Macao

The $2.4 billion Venetian casino, resort, and convention complex opens in the southern Chinese city of Macao today, boosting the city's status as one of the world's most lucrative gambling spots. (The New York Times, free registration required) At 10.5 million square feet, the Venetian Macao is the second largest building in the world, after a Boeing plant in Washington state. The Venetian is the first of 14 interconnected casino hotels that Las Vegas Sands Corp. plans to build on Macao's "Cotai Strip," in a $12 billion gamble to broaden Macao's appeal. "The Venetian will get new customers who are right now not going to Macao at all," said J.P. Morgan analyst Billy Ng. (AP in Yahoo! Finance)

Housing problems breed others

Politicians in Washington, D.C., have launched a debate over whether the government should step in to help homeowners facing a wave of foreclosures expected to hit this fall. The foreclosures are causing problems for up to two million potential voters with adjustable-rate mortgages (The New York Times, free registration required). As foreclosures rise, Los Angeles officials are bracing for problems, such as mosquitoes breeding in stagnant swimming pools. Squatters are already moving into empty homes. "If you know what you're doing, you can get six months in a place with a kick-ass view," said Los Angeles police officer Chris Ragsdale. (Los Angeles Times, free registration required)

Flying closer to heaven

The Vatican yesterday launched a low-cost air service to shuttle religious pilgrims from Italy to popular Catholic sites around the globe. The inaugural flight was to Lourdes, France. The Vatican said the service would keep fares low, because pilgrims aren't typically wealthy, but it still had to compete with Europe's new rash of budget airlines -- like Ireland's Ryanair. "Ryanair already performs miracles that even the pope's boss can't rival, by delivering pilgrims to Santiago de Compostela for the heavenly price of 10 euros," the airline said. (The New York Times, free registration required)