Wolf’s Finance World

Global stocks were weighed down again on Wednesday by worries that the U.S. could default on its debt or see its credit rating cut as lawmakers in the world’s largest economy appear no nearer to agreeing on raising the borrowing limit.

The United States has until Aug. 2 _ just a week away _ to reach a deal to increase its $14.3 trillion debt limit or face not being able to pay its bills. That has led to fears the country could default on its financial obligations, which could send shockwaves through financial markets, already stung by the debt crisis that has afflicted Europe for the past 18 months.

Republican leaders had promised a vote on Wednesday in the House of Representatives on a plan to increase the debt limit and avoid America’s first-ever default. But the vote was put off until at least Thursday.

Currently, about 40 cents of every dollar spent by the U.S. government is borrowed. Lawmakers are divided over how to get the U.S. government accounts into a healthier state in the longer term.

Even if a deal is reached, there are fears the U.S. could still lose its top credit rating. A downgrade could cost the federal government an extra $100 billion in interest payments a year.

Though most investors think a last-minute deal to raise the debt limit will eventually emerge, the difficulty of reaching an agreement may leave a lasting impact on investor sentiment. That was evident in the price of gold, which is widely used as a safe haven investment and hit a new nominal record high above $1,625 on Wednesday.

A big worry in the markets is that only a short-term deal will be agreed, with a promise to revisit the issue later. The problem is that next year is election year.

“Investors remain hopeful that a deal can be made in time, but the longer the delay goes on, the more entrenched investors fears become,” said Joshua Raymond, chief market strategist at City Index.

In Europe, the FTSE 100 index of leading British shares was down 0.3 percent at 5,913 while Germany’s DAX fell a similar rate to 7,328. The CAC-40 in France fared even worse, trading 0.8 percent lower at 3,759.

A raft of disappointing earnings in Europe did nothing to lift the mood. Spanish bank Banco Santander SA, French car company Peugeot SA and German pharmaceutical company Merck KGaA were all trading sharply lower after their latest earnings updates.

Wall Street was poised for very modest gains at the open _ Dow futures were up 0.1 percent at 12,440 while the broader Standard & Poor’s 500 futures were more or less flat at 1,326 payday loans no faxing.

Ben Critchley, a sales trader at IG Index, said investors will be keeping a close watch on the testimony of senior credit ratings agency staff to Congress later.

“This may offer further direction on the likelihood of a downgrade for the U.S.,” he said.

Monthly durable goods data may also attract some attention. The consensus in the markets is that the headline figure, which includes volatile aircraft and defense orders, increased by a monthly rate of 0.3 percent in July.

As in the stock markets, the prospect of a potential U.S. default remains the main consideration in currencies. Unsurprisingly, the dollar has drifted lower for most of the past few days.

However, the dollar managed to hold relatively steady Wednesday, particularly against the euro. By late morning London time, the euro was trading 0.2 percent lower at $1.4462 while the dollar was 0.3 percent lower at 77.70 yen.

The yen’s renewed strength has reignited talk that the Bank of Japan will intervene once again to stem the export-sapping rise in the currency. In March, after a devastating earthquake and tsunami, it, along with other major central banks around the world, intervened in the markets when the dollar was trading around the 76 yen mark.

The currency’s spike weighed on the country’s Nikkei 225 stock average as much of Japan’s economic well-being is dependent on the performance of its exporters. It closed 0.5 percent lower at 10,047.19

Elsewhere, South Korea’s Kospi edged up 0.3 percent to finish at 2,174.31 while Hong Kong’s Hang Seng Index fell 0.1 percent to close at 22,541.69.

Chinese shares gained strongly as investors snapped up bargains two days after a sell-off led by railway shares following a deadly train crash in the country’s east.

The Shanghai Composite Index gained 0.8 percent to close at 2,723.49 and the smaller Shenzhen Composite Index gained 1.7 percent to end at 1,190.83.

Oil prices dropped to near $99 a barrel after a report showed U.S. crude supplies unexpectedly jumped last week, suggesting demand may be weakening. The main New York oil contract was down 49 cents to $99.10 a barrel in electronic trading on the New York Mercantile Exchange.

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Kelvin Chan in Hong Kong contributed to this report.

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Fewer people bought new homes in June, evidence that the housing market remains weak.

Sales of new homes fell 1 percent last month to an annual rate of 312,000, the Commerce Department said Tuesday. That’s less than half the 700,000 homes sold per year that economists say is typical in healthy markets.

Last year was the worst for new-home sales on records dating back a half century. Through the first six months of this year, sales are lagging behind last year’s totals.

In June, new-home sales fell to record lows in the Northeast and West. The median price of a new home rose to $235,200 in June because of the influx of spring buyers. The median price is not adjusted for seasonal factors.

A separate report showed home prices in major U.S. cities rose for the second straight month in May. But after adjusting for seasonal buyers, prices fell in a majority of markets.

The Standard & Poor’s/Case-Shiller home-price index said prices increased in 16 of the 20 cities tracked. Over the last 12 months, prices have fallen in 19 of the 20 cities tracked.

Housing remains the weakest part of the U.S. economy. High unemployment, larger down payment requirements and tougher lending standards are preventing many people from buying homes. And some potential buyers who can clear those hurdles are holding off, worried that home prices have yet to bottom out.

And those who are buying have more incentive to buy previously occupied homes. That’s because foreclosures and short sales _ when the lender agrees to accept less than the mortgage is worth _ are forcing down home prices. That has made many re-sales a bargain compared with new homes.

Last year was the fifth straight year that new-home sales fell. That followed five straight years of record-high sales, when the housing market was booming.

Still, all home sales are weak. Sales of previously occupied homes fell for a third straight month in June and are lagging last year’s sales of 4.91 million homes sold last year, the fewest since 1997. In a healthy economy, people buy roughly 6 million existing homes annually.

While new homes represent less than one-fifth of the total housing market, they have an outsize impact on the economy. Each new home creates an average of three jobs and $90,000 in taxes, according to the National Association of Home Builders.

Renting has become a preferred option for Americans who lost their jobs during the recession and were forced to leave their rapidly depreciating homes. Since 1992, apartments had made up about 20 percent of home construction. Now, they make up closer to 30 percent of the market.

Foreclosure tracker RealtyTrac Inc. estimates that about 1.2 million homes will be foreclosed upon this year. An additional 1.7 million homes represent the nation’s “shadow inventory” of homes that are at risk of foreclosure, according to real estate data firm CoreLogic.

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Thousands of protesters angry about Spain’s brutal economic woes once again filled Madrid’s downtown Sol square Sunday after many spent weeks marching hundreds of kilometers (miles) from far-flung cities across Spain.

Seven columns of marchers converged on the city late Saturday and met at the square where thousands camped out for three weeks in May. They were joined by more who took public transport into the capital.

“Politicians don’t represent us! No! no! No!” the crowd chanted, with some waving handmade banners reading “It’s not a crisis, it’s the system that’s wrong.”

Some protesters began their march 34 days ago and walked 650 kilometers (404 miles) from the southwestern city of Cadiz.

Physiotherapists and masseurs accompanied demonstrators to treat them for aching legs and blistered feet.

Protesters say they are outraged with politicians for failing to solve Spain’s high unemployment and accuse them of being uncaring, corrupt and inept payday lenders.

“You will find highly qualified people in this demonstration because we can’t get a job,” said Amanda Sastre, 24. “All we want is the dignity of being able to earn a living.”

Two years of recession following a property boom that went bust left Spain with 21 percent unemployment _ the highest in the 17-nation eurozone. Joblessness for those aged 16 to 29 stands at about 35 percent.

Spain also has a swollen deficit and is battling to convince investors it can handle its debt and will not need financial help like Greece, Ireland and Portugal.

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It’s official. The red and yellow “Store Closing” and “Going out of Business” signs are up at the Borders stores around town.

The bookstore’s liquidation sales started this morning. I stopped in at the Brentwood location this morning, which had a steady stream of customers at 9 a.m. Signs in the store said everything is 10 to 40 percent off. But of course, the deals will get sweeter as the sale goes on.

The company has said that it expects the sales to continue through September.

If you have a Borders gift card, it will be honored throughout the sale, according to an email Mike Edwards, the chief executive of Borders, sent out to customers last night. Borders Rewards Plus members will also continue to get their discounts through August 5, he said.

In his sentimental email, Edwards blamed the company’s demise on the e-reader revolution and a turbulent economy.

“We put up a great fight, but regrettably, in the end, we weren’t able to overcome these external forces,” he wrote.

He didn’t mention some of the bad business decisions the company has made over the years, too, which analysts have pointed to as one of the reasons for its failure.

But he goes on to point out that Borders have not just been places to buy books, but also community meeting places.

“For decades, Borders stores have been destinations within communities — places where people have sought knowledge, entertainment and enlightenment and connected with other who share their passions,” he said. “I feel privileged to have had the opportunity to lead Borders and play a role in the true and noble cause of expanding access to books and promoting the joy of reading.”

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Banking regulators refused to commit to releasing details of their investigations into illegal foreclosure practices by the nation’s largest banks.

Appearing before a Senate panel Thursday, Federal Reserve Chairman Ben Bernanke and Acting Comptroller of the Currency John Walsh said they had not decided whether to release reports on illegal practices by individual banks

Sen. Robert Menendez, D-N.J, had pressed them to release the reports, banks’ individual action plans and agreements with the consultants that investigated the banks. Menendez cited a report by the Associated Press this week that said banks are continuing to foreclose without doing the necessary paperwork, eight months after they had promised to stop.

“We will have to evaluate the individual documents and see if there is anything that would be of a confidential, supervisory nature,” Walsh said, adding that his agency will release “some information.”

Bernanke said the Fed plans to release a report that “will explain what the findings were and what the proposals were and what the reactions were.” But he said he must consult with his legal team before releasing any information about individual banks.

Citing a legal opinion by his staff, Menendez said the regulators are permitted to release the information if doing so was in the public’s best interest.

“It is not acceptable to violate the law, and it is not acceptable to do robo-signings,” Menendez said.

County officials in at least three states say they have received thousands of mortgage documents with questionable signatures since last fall, suggesting that the practices, known collectively as “robo-signing,” remain widespread in the industry, the AP reported Monday.

Last fall, the nation’s largest banks and mortgage lenders, including JPMorgan Chase, Wells Fargo, Bank of America and an arm of Goldman Sachs, suspended foreclosures while they investigated how corners were cut to keep pace with the crush of foreclosure paperwork.

Since then, suspect paperwork has been filed not only with foreclosures, but also with new purchases and refinancings. Critics there is a systemic problem with the paperwork involved in home mortgages and titles. They say banks and mortgage processors haven’t acted aggressively enough to put an end to widespread document fraud in the mortgage industry.

Bernanke and Walsh were testifying before a hearing to mark the one-year anniversary of a sweeping overhaul of the rules governing the financial system.

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Looking out your window for the weather report has long been overtaken by up-to-minute cable television reports, web alerts and mobile phone apps.

And if technology evolves as expected, in-car or in-home weather forecasts on a dashboard or fridge will be commonplace.

Predicting the weather is big business, and growing.

Pelmorex Inc., which owns the Weather Network and M

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Rallies are planned for Monday as former IQT Solutions workers in Oshawa demand answers for why they

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A member of Egypt’s ruling military council has visited a protest tent camp in Cairo’s main square, but left after protesters heckled him.

Saturday’s visit by Maj. Gen. Tarek el-Mahdi marked the first time a senior military official visited hundreds of protesters who set up a tent camp in Tahrir Square more than a week ago.

The square was at the center of the uprising that ousted Hosni Mubarak in February. Demonstrators say they returned because the military council has been slow in prosecuting Mubarak-era officials faxless cash advances.

Protester Mahmoud Yehia says el-Mahdi was booed off a stage in the square and that some in the crowd raised their shoes in protest. He says protesters suspected the officer came to break up the gathering, not respond to their demands.

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Growth in China’s foreign direct investment slowed further in June as the government tried to cool its overheated economy, data showed Friday.

Foreign investment in factories and other assets rose 2.9 percent over a year ago to $12.8 billion, the Commerce Ministry reported. That was down from May’s 13.4 percent growth.

Growth in China’s FDI has declined sharply following repeated interest rate hikes and government-imposed investment curbs to tame surging inflation and cool an economy that grew 9 credit score.5 percent in the latest quarter.

FDI rose 32.9 percent in March and 15.2 percent in April.

China is a top investment destination and says FDI last year totaled $105.7 billion. FDI does not include investment in stocks and other financial assets.

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A federal judge has rejected most claims made in a shareholder lawsuit against Toyota Motor Corp. that accused the Japanese automaker of knowing about and hiding purported acceleration problems in some of its vehicles.

U.S. District Judge Dale Fisher said in her July 7 ruling that Japanese law takes precedence, especially since many of those who sued Toyota bought company stock on foreign exchanges.

“This respect for foreign law would be completely subverted if foreign claims were allowed to be piggybacked into virtually every American securities fraud case,” Fisher wrote in her 11-page decision.

Toyota spokeswoman Celeste Migliore said in a statement the company is pleased with the judge’s ruling.

“Although the court has given plaintiffs the opportunity to amend their complaint with respect to the claims under U.S. law only, we believe that any such attempt will result in allegations that remain unsupported by both the facts and law,” Migliore said.

The suit notes Toyota stock dropped about 20 percent in January and February 2010 when the company began recalling some of its models. The Japanese automaker has recalled about 14 million vehicles worldwide and it has paid the U.S. government a record $48.8 million in fines for its handling of three recalls.

Hundreds of lawsuits have been filed against Toyota, claiming economic loss and wrongful death due to sudden acceleration. Those suits are before a federal judge in Orange County and allege a design defect _ namely its electronic throttle control system _ is responsible for vehicles surging unexpectedly. Toyota has blamed driver error, faulty floor mats and sticky accelerator pedals for the unintended acceleration.

The automaker’s defense was buoyed earlier this year when U.S. regulators said electronic flaws weren’t to blame for unintended acceleration.

The first trials on the acceleration issue are expected to begin in 2013.

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