Ratings of three banks cut by Moody’s
NEW YORK | Moody’s Investors Service has lowered some of the debt ratings for Bank of America Corp., Wells Fargo & Co. and Citigroup Inc., saying it is now less likely that the U.S. government would step in and prevent the lenders from failing in a crisis.
The ratings firm said Wednesday that it believes the government is likely to provide some level of support for financial institutions but is also more likely now than during the 2008 financial crisis to allow a large bank to fail should it become financially troubled.
Moody’s downgraded long-term debt ratings for Bank of America and Wells Fargo Bank N.A., and cut Bank of America’s short-term rating and Bank of America N.A.’s long-term deposit rating.
The firm confirmed Citigroup’s long-term rating but downgraded its short-term rating.
Group: Financial risks rising in U.S. and Europe
The International Monetary Fund says the global financial system is more vulnerable than at any point since the 2008 financial crisis.
Risks to banks and financial markets have increased in recent months, the global lending organization said in a report Wednesday. The European debt crisis is affecting its banking system to the point where banks may pull back on lending to conserve cash, which threatens to worsen growth in the region.
Meanwhile, there are growing doubts that the U.S. lawmakers can forge the political consensus needed to reduce its growing budget deficits. Rising deficits were a key reason Standard & Poor’s downgraded long-term U.S. debt last month.
European leaders should quickly implement an agreement reached in July that provides the region's bailout fund with more flexibility, while the U.S. and Japan must phase in steps to reduce their deficits, the IMF said.
Forecasts point to modest holiday growth
NEW YORK | Retailers just got an early Christmas gift: Americans are expected to spend more than they did last year during the holidays.
Retail sales in November and December are expected to be up 3 percent during what is traditionally the biggest shopping period of the year, research firm ShopperTrak said Tuesday.
The sales predication, which matches the outlook from the International Council of Shopping Centers on Friday, would be below last year’s 4.1 percent spike, and the 5-plus percent gains during boom economic times. But it’s still above the 2.6 percent average gain over the last 10 years and is considered respectable growth given the down economy.
The industry is still waiting for a widely watched forecast Oct. 6 from the National Retail Federation, the nation’s largest retail trade group. But the ShopperTrak and ICSC predictions are the first look at how retailers might fare during a period that can account for up to 40 percent of merchants’ annual revenue.
Home sales jump as foreclosures rise
The number of Americans who bought previously occupied homes rose in August. But sales were driven by an increase in foreclosures, a sign that home prices could fall further next year and slow a housing recovery.
The National Association of Realtors said Wednesday that home sales rose 7.7 percent last month to a seasonally adjusted annual rate of 5.03 million homes. That’s below the 6 million that economists say is consistent with a healthy housing market.
Last month’s pace was slightly ahead of the 4.91 million sold in 2010, the worst sales level in 13 years.
Homes at risk of foreclosure made up 31 percent of sales. That’s up from 29 percent in July. Many are being bought by investors.
At the same time, activity among first-time buyers, who are critical to reviving the housing market, didn’t budge. First-time buyers made up only 32 percent of sales, matching the July level. They normally make up 50 percent of home sales in healthy markets.
Bill Gates tops Forbes list of richest Americans
NEW YORK | Bill Gates tops this year’s Forbes list of the 400 richest Americans with a net worth calculated at $59 billion.
Forbes says the Microsoft co-founder saw his wealth increase by $5 billion from last year.
Investor Warren Buffett ranks second with a fortune of $39 billion, though Forbes says the Berkshire Hathaway Inc. chief executive’s wealth shrank by $6 billion from a year ago.
Oracle CEO Larry Ellison rounds out the top three with a net worth of $33 billion, a $6 billion increase from last year.
George Soros entered the top 10 list for the first time at seventh. Forbes estimates his wealth at $22 billion.
From wire dispatches and staff reports