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The credit card is the second key source of consumer liquidity, the first being jobs, the Oppenheimer & Co analyst noted.

“In other words, we expect available consumer liquidity in the form or credit-card lines to decline by 45 percent.”

Bank of America Corp, Citigroup Inc and JPMorgan Chase & Co represent over half of the estimated U.S. card outstandings as of September 30, and each company has discussed reducing card exposure or slowing growth, Whitney said.

A consolidated U.S. lending market that is pulling back on credit is also posing a risk to the overall consumer liquidity, Whitney said.

Mortgages and credit cards are now dominated by five players who are all pulling back liquidity, making reductions in consumer liquidity seem unavoidable, she said.

“…We are now beginning to see evidence of broad-based declines in overall consumer liquidity.”

“In a country that offers hundreds of cereal and soda pop choices, the banking industry has become one that offers very few choices,” Whitney wrote in a note dated November 30.

She also said credit lines to consumers through home equity and credit cards had been cut back from the second-quarter levels.

(Adds Audi production stops, BMW temporary job cuts)

FRANKFURT, Nov 25 (Reuters) – German carmakers made another move to cut output levels towards the end of the year to offset slumping demand as the global economic crisis prompts consumers and companies to closely monitor their finances.

Sports car maker Porsche halted production at its headquarters in the southern German town of Zuffenhausen, for one day on Nov. 21, and planned to stop assembly for another seven days until end-January.

The company said on Tuesday it no longer saw its financial year unit sales to end-July reaching the previous same period’s level of 98,652 vehicles.

The German car industry accounts for about one in eight jobs in the country, according to German auto industry association VDA. The downturn in car sales has also started having an impact on other sectors such as chemicals and electronics.

Volkswagen, in which Porsche holds 42.6 percent of the shares, earlier said it was also considering suspending production, eyeing a three-week halt at its main Wolfsburg plant from Dec. 18 until Jan. 11.

VW luxury vehicle unit Audi followed suit. A spokesman for the company said the carmaker’s orders have been stable, and the production halts were preventative measures.

Domestic peer BMW had suspended production at its factory in Leipzig for a week last month and is currently operating only one shift a day there.

The company now plans to cut 400 further temporary workers in Leipzig, in addition to previously announced plans to cut 8,100 full-time jobs around the world, a spokesman for the company told Reuters on Tuesday.

The AP is also reporting that Abbott Laboratories conducted its own in-house tests that detected trace levels of melamine in its formula products. Together, these infant formula manufacturers make about 90 percent of the infant formula sold in the United States.

Prior to these test results being made public, the FDA had published a document on its website that explained there was no safe level of melamine contamination in infant formula. Specifically, the FDA stated, “FDA is currently unable to establish any level of melamine and melamine-related compounds in infant formula that does not raise public health concerns.”

Once tests found melamine in U.S.-made formula products, however, the FDA changed its story. As of today, the FDA has now officially declared melamine to be safe in infant formula as long as the contamination level is less than one part per million (1 ppm).

Speaking on a French radio show, he said British politicians were considering the move because of the effects of the global credit crunch.

In the same interview, Mr Barroso also forecast that interest rates will drop in Europe.

However Downing Street said its position on the euro remained the same.

Mr Barroso acknowledged “the majority” of British people continued to oppose joining the eurozone.

But he said the recent economic uncertainty had made the currency a far more attractive option.

Confidential conversations

In the RTL radio/LCI television broadcast, the former prime minister of Portugal said: “We are now closer than ever before.

“I’m not going to break the confidentiality of certain conversations, but some British politicians have already told me, ‘If we had the euro, we would have been better off’. ”

He said that the current poor economic situation had emphasised the importance of the euro and the UK but added he believed a move would not take place in the immediate future.

“I know that the majority in Britain are still opposed, but there is a period of consideration under way and the people who matter in Britain are currently thinking about it”, he said.

The value of sterling compared with other currencies has fallen during the credit crunch, and the UK government has had to spend massively in recent months to try to support the economy.

‘Awaiting decisions’

During the interview, Mr Barroso highlighted the situation in Denmark – an EU state that voted against joining the eurozone in 2000, but is now considering holding a new referendum on the single currency.

A Downing Street spokesman said: “We have no comment on this. Our position on the euro is the same – it has not changed.”

Mr Barroso also said he expected the European Central Bank (ECB) to make a clear move to cut interest rates next week.

He said the conditions were right for a fall, but did not give further details adding: “I am awaiting decisions from the European Central Bank that go in this direction.”

Jean-Claude Trichet, president of the ECB, has said that the bank could cut rates in the coming week as long as there is evidence that inflation pressures have eased.

Finances as much as weather are the issue with regards to fertilization this fall. Crop prices have fallen to half of what they were, ammonia prices have dropped but ammonia suppliers here, receiving 75% of their supply from overseas, still have product in their storage tanks purchase at the historical highs last spring and summer.

When farmers plant they record the acreage and they purchase crop insurance – $20 to $40 an acre depending on the crop. If they have a failure they file a claim, an adjustor contacts them, and they get a check to cover the deficit. Some of this runs through the U.S. Department of Agriculture and some of it is through private insurers.

My conversations with farmers earlier this week lead me to believe that the largest private insurer, Des Moines Iowa’s Rain and Hail Agricultural Insurance may be insolvent. Flooding claims from this spring were filed and payments would have typically been received by the end of June or beginning of July. It’s now the end of November and payments are not being dispersed. Individual farmers are told there was something wrong with their paperwork, but this is nonsense – some of these guys have been farming thirty years and they all didn’t forget how to fill out a simple form all at the same time. Iowa did have its second five hundred year flood in a decade and a half this spring which certainly has something to do with the situation, but I suspect Wall Street’s sticky fingers got hold of Rain & Hail’s assets, just as they’ve done to every pension fund and state run municipal investment pool.

So, we’re already facing what Bryan Lutter calls “the mother of all fertilizer shortages” next spring and on top of that local banks won’t lend to farmers.

The local bank was quite willing to lend to a farmer on a crop despite the weather related risks just like they’d lend on a car despite the driving risks. So long as the asset was insured the risk was deemed manageable. There were sure to be losses here and there, but they’d be administrative hassles associated with well known risks. If the auto insurance companies were viewed as untrustworthy no one would be getting a car without 100% down at the dealership and the same rule is now in effect for farmers.

Farmers without financing can’t afford nitrogen fertilizer at $1,000 a ton, which translates to $100 an acre at current application rates. They won’t be paying $300 for a bag of 80,000 hybrid corn kernels, again a $100 per acre expense. The average farm size in Iowa is four hundred acres and planting to harvesting would run about $120,000.

In two filings with the Securities and Exchange Commission late Wednesday, the company said it will issue shares worth as much as $1 billion before fees and also registered 50 million shares worth at most $791 million for potential sale.

The technology can generate electricity in water flowing at a rate of less than one knot – about one mile an hour – meaning it could operate on most waterways and sea beds around the globe.

Existing technologies which use water power, relying on the action of waves, tides or faster currents created by dams, are far more limited in where they can be used, and also cause greater obstructions when they are built in rivers or the sea. Turbines and water mills need an average current of five or six knots to operate efficiently, while most of the earth’s currents are slower than three knots.

The new device, which has been inspired by the way fish swim, consists of a system of cylinders positioned horizontal to the water flow and attached to springs.

As water flows past, the cylinder creates vortices, which push and pull the cylinder up and down. The mechanical energy in the vibrations is then converted into electricity.

Cylinders arranged over a cubic metre of the sea or river bed in a flow of three knots can produce 51 watts. This is more efficient than similar-sized turbines or wave generators, and the amount of power produced can increase sharply if the flow is faster or if more cylinders are added.

A “field” of cylinders built on the sea bed over a 1km by 1.5km area, and the height of a two-storey house, with a flow of just three knots, could generate enough power for around 100,000 homes. Just a few of the cylinders, stacked in a short ladder, could power an anchored ship or a lighthouse.

Systems could be sited on river beds or suspended in the ocean. The scientists behind the technology, which has been developed in research funded by the US government, say that generating power in this way would potentially cost only around 3.5p per kilowatt hour, compared to about 4.5p for wind energy and between 10p and 31p for solar power. They say the technology would require up to 50 times less ocean acreage than wave power generation.

The system, conceived by scientists at the University of Michigan, is called Vivace, or “vortex-induced vibrations for aquatic clean energy”.

Michael Bernitsas, a professor of naval architecture at the university, said it was based on the changes in water speed that are caused when a current flows past an obstruction. Eddies or vortices, formed in the water flow, can move objects up and down or left and right.

“This is a totally new method of extracting energy from water flow,” said Mr Bernitsas. “Fish curve their bodies to glide between the vortices shed by the bodies of the fish in front of them. Their muscle power alone could not propel them through the water at the speed they go, so they ride in each other’s wake.”

Such vibrations, which were first observed 500 years ago by Leonardo DaVinci in the form of “Aeolian Tones”, can cause damage to structures built in water, like docks and oil rigs. But Mr Bernitsas added: “We enhance the vibrations and harness this powerful and destructive force in nature.

“If we could harness 0.1 per cent of the energy in the ocean, we could support the energy needs of 15 billion people. In the English Channel, for example, there is a very strong current, so you produce a lot of power.”

Because the parts only oscillate slowly, the technology is likely to be less harmful to aquatic wildlife than dams or water turbines. And as the installations can be positioned far below the surface of the sea, there would be less interference with shipping, recreational boat users, fishing and tourism.

More than 2 million prime mortgages, traditional loans for people with good credit, are now delinquent. That’s 624,000 more than this time last year, according to the mortgage bankers foundation, Tracy reports.

“We didn’t necessarily expect the distress levels that we are seeing at this point,” says economist Mark Fleming.

It used to be if you couldn’t afford your mortgage you could always try to refinance or sell your home and pay off your loan. But these days, for a lot of people, those options no longer exist.

That’s because 12 million households now owe more than their homes are worth, according to Moody’s.

Homeowners with risky adjustable rate mortgages are getting help from banks, but there are no programs to aid those who already have good loans but no jobs.

“I wake up in the middle of the night thinking about it,” says Terri Osier, a struggling homeowner.

Meanwhile, Judy Jones is hoping her bank will lower her payments until she finds work.

The Fed released a report Friday saying commercial banks averaged $93.6 billion in daily borrowing for the week ending Wednesday. That was up from an average of $91.6 billion for the week ending Nov. 19.

The report also said investment firms borrowed an average of $52.4 billion from the Fed’s emergency loan program over the week ending Wednesday, up from an average of $50.2 billion the previous week.

The Fed said its net holdings of business loans known as commercial paper over the week ending Wednesday averaged $282.2 billion, an increase of $16.5 billion from the previous week.

Financial firms are borrowing from the Fed because they are having trouble raising money through normal channels as the financial system endures its worst crisis since the Great Depression.