| Wells Fargo CEO says housing worst since Great Depression
Wells Fargo CEO John Stumpf said Thursday that housing is in the worst shape since the economic devastation of the 1930s. "We have not seen a nationwide decline in housing like this since the Great Depression," Stumpf told those attending a Merrill Lynch & Co. (NYSE: MER) investment conference. He anticipates hard times ahead for home owners in financial straits -- and their bankers. "I don't think we're in the ninth inning of winding this," Stumpf said. "If we are, it's an extra-inning game. "The losses have turned out to be greater than expected because home prices have declined faster and deeper than expected," said Stumpf, who took the reins at the nation's fifth-largest bank earlier in June. California's Central Valley and the Midwest's auto-manufacturing states (namely, Michigan and Ohio) are creating significant mortgage losses for Wells Fargo (NYSE: WFC) and other lenders.
Corzine Willing To Lose Re-Election To Fix N.J.'s Financial Woes
New Jersey Gov. Jon S. Corzine on Thursday said he's willing to risk losing re-election by increasing highway tolls to try to resolve state fiscal woes. The governor didn't detail how much he wants tolls to increase, but said he plans to present a formal plan in January as part of his State of the State address. Speaking at a League of Municipalities convention, Corzine, as he has throughout the year, detailed fiscal woes he claims bar the state from investing in key needs. .
Goldman sees $2tn subprime shock as recession fears rise
LONDON/NEW YORK: The slump in global credit markets will force banks, brokerages and hedge funds to cut lending by $2tn, triggering the risk of a �substantial recession� in the US, according to Goldman Sachs Group Inc.
Losses related to record US home foreclosures using a �back-of-the-envelope'' calculation may be as high as $400bn for financial companies, Jan Hatzius, chief economist at Goldman in New York wrote in a report on Thursday.
The effects may be amplified tenfold as companies that borrowed to finance their investments scale back lending, the report said.
�The likely mortgage credit losses pose a significantly bigger macroeconomic risk than generally recognised,'' Hatzius wrote. �It is easy to see how such a shock could produce a substantial recession� or �a long period of very sluggish growth,� he wrote.
Ont. appeal court clears way for lawsuit over credit card charges
The Ontario Court of Appeal has overturned a lower court decision and certified a class action against TD Bank over fees charged to credit card holders on foreign purchases. The $150-million suit alleges the bank charged undisclosed and unauthorized fees to its Visa cardholders on purchases made in foreign currencies from 1986 to 2003. "This decision is of fundamental importance to TD Visa cardholders as class members and to the public," plaintiff lawyer Harvey Strosberg said in a statement issued Friday. The allegations have yet to be proven in court. In 2004, CIBC settled a similar class action suit. The bank said it would pay $13.85 million to its cardholders, $1 million to the United Way and $1.65 million to the Ontario law society's class-action fund.
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