Economy Watch: Shoppers Are Shopping Again
- Jul 08, 2010
July 8, 2010
By Dees Stribling, Contributing Editor
According to the International Council of Shopping Centers, U.S. retail sales expanded 4 percent each month in the five months since January 31, 2010, which is the beginning of the retail fiscal year. That’s the fastest rate of increase for that period since 2006, when lots of people were still gung-ho to stock their McMansions using their generous home equity lines of credit.
What’s going on? Perhaps consumers aren’t as nervous about rumbles in the international economy (Greece, et al.) as big-picture Wall Street investors. In the long run, Americans might have no appetite for austerity.
On Wednesday, Michael Niemera, the organization’s chief economist, told Bloomberg that the underlying growth rate in the economy suggests a “relatively healthy, moderate pace of spending” for the rest of 2010.
Wells Fargo Eliminates Subprime Business
Wells Fargo, one of the banking giants left standing by the crisis that began in subprime mortgages, said on Wednesday that it’s closing 638 subprime lending offices nationwide, which it calls its Wells Fargo Financial division. Perhaps the most remarkable thing about the announcement is the bank was still offering subprime mortgages at all, though reportedly they now constitute a rough 0.1 percent of all the mortgages Wells Fargo originates.
“The economics of a separate Wells Fargo Financial channel are no longer viable, especially now that our customers have access to the largest banking and mortgage store network in the United States,” David Kvamme, president of Wells Fargo Financial, said in a statement, referring to the 6,600 or so Wells Fargo and Wachovia locations operating since Wells Fargo acquired Wachovia in 2008.
About 2,800 jobs at the Wells Fargo Financial division will disappear shortly and 1,000 more will go by the end of the year. More than 10,000 employees of the division will be reassigned elsewhere in within the company.
Fannie, Freddie Trade Under New Symbols
From Thursday on, taxpayer-owned Fannie Mae and Freddie Mac will be traded under new ticker symbols as their delisting from the New York Stock Exchange becomes official. Perviously the GSEs were FNM and FRE.
Now Fannie will be FNMA on the OTC Bulletin Board and Freddie will be FMCC on the OTC Bulletin Board and the Pink Sheet Electronic Quotation Service. Arguably, the GSEs remain FUBAR no matter where they are listed.
Wall Street experienced a burst of optimism on Wednesday, perhaps because of the good retail numbers, but nevertheless something it hasn’t really experienced since the Greek debt crisis came to light in the spring. The Dow Jones Industrial Average shot up 274.66 points, or 2.82 percent, while the S&P 500 and the Nasdaq both advanced 3.13 percent.