Winter is approaching and the US economy is getting chilly. The Philadelphia Inquirer leads with Treasury secretary Hank Paulson's comments that the tanking housing market is the most significant risk facing the economy, while the LA Times reports that Southern California house sales are the worst for 20 years.
The doom and gloom is spreading. As oil prices hit record levels, the Baltimore Sun worries about how people will keep warm this winter. It quotes one local fuel oil supplier: ""People are going to be faced with 'Do I pay my mortgage this month, or do I buy 200 gallons of oil?' It's going to be tough out there."
The housing market is going to get worse before it gets better. TheStreet.com reports that 160 mortgage lenders have either gone bust or severely retrenched in the last two years. Countrywide, the largest US lender, is paying $150m to sack a fifth of its workforce, while MGIC, the largest US mortgage insurer, announced today it was writing off $300m as a result of the sub-prime meltdown, and a total loss of $370m.
