Economic News - September 8, 2008

The big economic news for Monday September 8, 2008 was not in any of the economic indicators. It wasn't even in the markets, though they did react well to the real news.
The big news was the seizure of Fannie Mae and Freddie Mac by the federal government. The dollar responded well to the news which helped markets from stocks to commodities in the US and worldwide.
The action leaves the Federal Reserve less likely to raise interest rates at its upcoming meeting and may affect OPEC's decision on whether to cut production as oil prices fall near $100 a barrel.

Employment Trends Index - August 2008

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• Employment Trends Index: 110.8


• Monthly Change: Down 0.5%

Consumer Credit - July 2008

• Total outstanding consumer credit: $2572.3 billion


• Total rate of change: 2%

Government Seizes Mortgage Giants

The government seized Fannie Mae and Freddie Mac in its most
dramatic market intervention in decades. Treasury plans to replace the
companies' CEOs and provide up to $200 billion as part of the rescue.

Fed Expected to Hold Rates Steady

The Federal Reserve is not likely to change its current course for
interest-rate policy amid the takeover of Fannie Mae and Freddie Mac.

Consumer Credit Inches Higher

Americans increased their borrowing at the lowest rate in seven months during
July, a sign of growing financial stress in the U.S.

McCain May Privatize Fannie, Freddie; Obama Sees Federal Role in Housing

John McCain and Barack Obama agree
the Treasury needed to step in to rescue Fannie Mae and Freddie
Mac. They disagree over how much the U.S. government should be
involved in the housing market once the immediate crisis is past.

Fannie, Freddie `House of Cards' Accounting Prompted Government Takeover

Fannie Mae and Freddie Mac used
accounting rules that created a ``house of cards'' as the
housing market descended into its worst slump since the Great
Depression.

Pending U.S. Home Resales Probably Fell in July as Mortgage Rates Climbed

Fewer Americans signed contracts in
July to purchase previously owned homes, a sign that falling
home prices aren't enough to bring buyers back into the market,
economists said before a private report today.

Hiring Plans at U.S. Employers Fall to Five-Year Low as Retailers Retrench

Fewer U.S. employers plan to hire in
the fourth quarter, according to a private survey that shows the
worst holiday-season job prospects on record at retailers.

Mantega sees Brazil real weakening against dollar

BRASILIA, Sept 8 (Reuters) - Finance Minister Guido Mantega
said on Monday the Brazilian real would likely continue to
weaken against the dollar due to the country's shrinking trade
surplus, a growing current-account deficit and tightening of
credit on the international market.

Mexico cuts 2008 growth estimate, sees better 2009

MEXICO CITY, Sept 8 (Reuters) - Mexico cut its forecast for
economic growth this year to 2.4 percent from 2.8 percent,
citing the slowdown in the United States, its main trading
partner, the finance ministry said on Monday.