cryptogon.com

In a big blow to the government, which claims Britain is well-placed to withstand the global economic downturn, the RICS paints a bleak picture, in which the number of estate agents saying house prices rose, rather than fell, has dropped to the lowest point since the survey began in 1978.

The latest monthly snapshot of the housing market shows that 78.5% more surveyors reported a fall than a rise in house prices. The gulf has widened since February and easily eclipses the previous low of 64.5% in June 1990, when the economy was heading into recession.

The survey comes amid growing government frustration with banks and mortgage lenders. Gordon Brown has summoned the heads of Britain’s top banks for breakfast meetings today, and while ministers still believe the housing situation is not as severe as the 1990s slump, they are concerned that some lenders are exploiting the global financial crisis.

Wachovia is raising the funds through public offerings of common and convertible preference stock after incurring a surprise $350m loss in the first quarter of 2008 compared with $2.3bn in profit a year earlier.

The news came today as two of the biggest names in Wall Street – Citigroup and Merrill Lynch – were poised to report huge write-downs because of the continuing credit crisis. Analysts are bracing themselves for total write-downs of $17bn when the two banks report their quarterly results later this week.

At North Carolina-based Wachovia, the loss was caused by a rise in provisions against loans which had turned sour, particularly mortgages hit in the housing downturn. These option adjustable rate mortgages begin with a low interest rate, which is then replaced by a heftier charge.

Since last fall, eight mostly midsize chains — as diverse as the furniture store Levitz and the electronics seller Sharper Image — have filed for bankruptcy protection as they staggered under mounting debt and declining sales.

But the troubles are quickly spreading to bigger national companies, like Linens ‘n Things, the bedding and furniture retailer with 500 stores in 47 states. It may file for bankruptcy as early as this week, according to people briefed on the matter.

Even retailers that can avoid bankruptcy are shutting down stores to preserve cash through what could be a long economic downturn. Over the next year, Foot Locker said it would close 140 stores, Ann Taylor will start to shutter 117 and the jeweler Zales will close 100.

The surging cost of necessities has led to a national belt-tightening among consumers. Figures released on Monday showed that spending on food and gasoline is crowding out other purchases, leaving people with less to spend on furniture, clothing and electronics. Consequently, chains specializing in those goods are proving vulnerable.

Retailing is a business with big ups and downs during the year, and retailers rely heavily on borrowed money to finance their purchases of merchandise and even to meet payrolls during slow periods. Yet the nation’s banks, struggling with the growing mortgage crisis, have started to balk at extending new loans, effectively cutting up the retail industry’s collective credit cards.

“You have the makings of a wave of significant bankruptcies,” said Al Koch, who helped bring Kmart out of bankruptcy in 2003 as the company’s interim chief financial officer and works at a corporate turnaround firm called AlixPartners.

The cost of the rice has risen by more than three-quarters in two months and the price of wheat has more than doubled in the same time.

The desperation in dozens of countries has turned deadly of late. In the past week alone there have been violent, food-related riots in Haiti, Indonesia, the Philippines and Cameroon.

World Vision Australia head Tim Costello says the situation is desperate and chronic.

“It is an apocalyptic warning,” he said. “Until recently we had plenty of food. The question was distribution.

This synchronized global slowdown, which has become increasingly stark in recent months, is hobbling economic growth worldwide, affecting not just homes, but also jobs.

People in Anniston find themselves in this fix today largely because of the way Monsanto disposed of PCB waste for decades. Excess PCBs were dumped in a nearby open-pit landfill or allowed to flow off the property with storm water. Some waste was poured directly into Snow Creek, which runs alongside the plant and empties into a larger stream, Choccolocco Creek. PCBs also turned up in private lawns after the company invited Anniston residents to use soil from the plant for their lawns, according to The Anniston Star.

So for decades the people of Anniston breathed air, planted gardens, drank from wells, fished in rivers, and swam in creeks contaminated with PCBs—without knowing anything about the danger. It wasn’t until the 1990s—20 years after Monsanto stopped making PCBs in Anniston—that widespread public awareness of the problem there took hold.

The latest example of this is in the mass freezing of home equity lines of credit going on across the United States. Reeling from losses on their wretched loan decisions of recent years, lenders are preventing borrowers with pristine credit and significant equity in their homes from tapping into credit lines that they paid dearly to secure.

In the past 30 days, lenders have sent several hundred thousand letters advising borrowers that their home equity lines of credit are frozen, estimated Michael Kratzer, president of FeeDisclosure.com, a Web site intended to help consumers reduce fees on home loans.

Major lenders – including Washington Mutual, IndyMac Bank and the Greenpoint Mortgage Unit of Capital One – say that declining property values are prompting the decisions to cut off credit.

Banks have the right, of course, to rescind these credit lines at any time under the terms of the contracts they struck with borrowers. And as home prices have tumbled in many parts of the United States, banks are undoubtedly trying to protect themselves from exposure to additional losses.

But these actions are being taken even in areas where property prices are rising, Kratzer said. What’s worse, the letters provide no explanation for how the lenders determined that the property values underlying the equity lines had fallen.