Market Digest

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The Conference Board announced today that the leading index for Germany declined 0.2 percent and the coincident index increased 0.5 percent in August.

• The leading index declined for the tenth consecutive month in August, as negative contributions from consumer confidence and interest rate spread offset small increases in the remaining components. Since February, the leading index has declined by 4.3 percent (about a -8.5 percent annual rate), well below the 3.0 percent decrease (about a -5.9 percent annual rate) for the period between August 2007 and February 2008. Additionally, the weaknesses among the leading indicators have remained very widespread in recent months.

• The coincident index, a measure of current economic activity, increased in August as both industrial production and retail trade rose substantially. Over the past six months, the coincident index increased by 0.2 percent (about a 0.4 percent annual rate), well below the 1.3 percent rate (about a 2.6 percent annual rate) which prevailed during the previous six months. In addition, the weaknesses among the coincident indicators have been more widespread than the strengths in recent months.

• The leading index has been falling since July 2007 and its decline has become steeper so far in 2008. After growing steadily throughout 2006 and 2007, the coincident index has been fluctuating around an essentially flat trend since the beginning of 2008. At the same time, real GDP grew at a 1.5 percent average annual rate for the first two quarters of 2008 (including a -2.0 percent annual rate during the second quarter), slightly below the 1.9 percent average annual rate for the last two quarters of 2007. Taken together, the recent behavior of the composite indexes suggests that risks for further economic weakness remain elevated.

LEADING INDICATORS. Five of the seven components in the leading index increased in August. The positive contributors to the leading index– in order from the largest positive contributor to the smallest– are new residential construction orders*, stock prices, inventory change series*, gross enterprises and properties income*, and new orders in investment goods industries. Negative contributors–in order from largest to smallest– are consumer confidence, and yield spread.

With the 0.2 percent decrease in August, the leading index now stands at 92.6 (1990=100). Based on revised data, this index declined 1.1 percent in July and declined 1.0 percent in June. During the six-month span through August, the leading index decreased 4.3 percent, with two of the eight components increasing (diffusion index, six-month span equals 28.6 percent).

*See notes under data availability

COINCIDENT INDICATORS. Three of the four components that make up the coincident index increased in August. The positive contributors to the coincident index were industrial production, retail trade, and employed persons. Manufacturing sales declined in August.

With the 0.5 percent increase in August, the coincident index now stands at 111.3 (1990=100). Based on revised data, this index decreased 0.2 percent in July and increased 0.1 percent in June. During the six-month period through August, the coincident index increased 0.2 percent, with one of the four components increasing (diffusion index, six-month span equals 25.0 percent).

* See notes under data availability.

Source: The Conference Board

Executives Support Recent Moves by Treasury and Fed, but Agree Recession Here

Financial professionals believe that government action over the past three weeks have stabilized the credit markets. Over 1,000 attendees at the Annual Conference of the Association for Financial Professionals (AFP) indicated that various government action, including the U.S. Treasury plan to purchase an equity stake in key financial institutions and guarantee money market funds, along with the Federal Reserve’s plan to purchase Commercial Paper, has improved the outlook for credit availability.

“While the economy appears to be shaken, credit looks to be stabilizing,” said Jim Kaitz, President and CEO of AFP. “More than three weeks ago, we said that the most pressing issue for business is access to credit. Actions by policymakers have in recent days brought some measure of confidence back to the markets.”

Survey respondents indicate overwhelmingly (97%) they think the U.S. economy is in recession. One-third (34%) believe that the recent turmoil in the credit markets precipitated the recession, while nearly two-thirds (63%) believe that the U.S. was already in recession prior to September’s events.

Despite belief that access to credit has stabilized in the last two weeks (75%), many companies are still experiencing difficulties. More than one quarter (25%) report that their access to new or additional short-term credit is very limited. A nearly similar percentage of survey respondents (22%) report that the tight credit markets over the past month have stalled growth opportunities.

Overall, financial professionals are more positive about the outlook for short-term credit.

• 69% indicate that the Treasury’s purchase of preferred shares in U.S. financial institutions will improve corporate access to short-term credit.

• 81% cite the Federal Reserve’s plan to purchase Commercial Paper and guarantee money market funds as improving access.

The recent government actions have led some organizations to be more comfortable in investing outside of ultra-safe Treasury securities. Thirty-one percent of survey respondents indicate that they are more comfortable with re-allocating at least some of their short-term investment portfolio into other high-quality investment vehicles that offer higher yields.

On Monday October 20th, AFP surveyed attendees at its Annual Conference on the current state of the short-term credit market. The survey generated 1,060 responses from survey respondents who are senior finance and treasury executives from a broad range of companies with annual revenues over $500 million. Tables of the survey results are available by request.

Source: Association for Financial Professionals

Weak Economy Ahead; Recovery May Be a Year Away

The Conference Board reports today that the Composite Index of Leading Economic Indicators edged up 0.3 percent in September, following a 0.9 percent decline in August, and a 0.7 percent decline in July.

Says Ken Goldstein, Labor Economist at The Conference Board: “This summer, before the financial market turmoil intensified, the overall economy was entering a period of decline. The extreme volatility in the financial market, and the near freeze-up of credit, will no doubt weaken the economy further. But latest data suggest that conditions in the non-financial economy are not falling apart. Data on hand reflect a contracting economy, but not one in free fall. More likely, what’s going on in the financial market is a stretching of the recovery process - which could take a full year to develop.”

The Conference Board reports that the Coincident Index fell by 0.5 percent in September, following no change in August, and a 0.2 percent decrease in July. The Lagging Index fell by 0.2 percent in September, following a 0.2 percent rise in August.

• The leading index increased in September, the first increase in the last five months. Real money supply, consumer expectations, the interest rate spread, and the index of supplier deliveries all made large positive contributions to the index in September, more than offsetting the negative contributions from building permits, stock prices, initial claims for unemployment insurance (inverted) and the average workweek in manufacturing. From March to September, the leading index decreased 1.3 percent (a -2.5 percent annual rate), declining modestly slower than the 1.7 percent decrease (a -3.4 percent annual rate) that prevailed in the previous six months. However, the weaknesses among the leading indicators have remained widespread over the past six months.

• The coincident index decreased sharply in September and it has declined or held steady since October 2007. Industrial production fell steeply this month, while employment continued to decline. The six-month decline in the coincident index has picked up to 0.8 percent (a -1.7 percent annual rate), from a decrease of 0.3 percent (a -0.6 percent annual rate) in the previous six months, while the weaknesses among the coincident indicators remained very widespread. In September, the coincident index decreased more than the lagging index, and the coincident-to-lagging ratio continued to decline as a result.

• With consistently widespread weakness among its components, the leading index has been falling since July 2007. Following the leading index, the coincident index, a monthly measure of current economic conditions, has also been decreasing, and its rate of decline has accelerated in recent months. Meanwhile, real GDP growth slowed to a 1.8 percent average annual rate in the first half of the year, down from an average annual rate of 2.3 percent in the second half of 2007. Taken together, the behavior of the composite indexes suggests that the economy is unlikely to improve in the near term.

LEADING INDICATORS

Six of the ten indicators that make up the leading index increased in September. The positive contributors - beginning with the largest positive contributor - were real money supply*, index of consumer expectations, interest rate spread, index of supplier deliveries (vendor performance), manufacturers’ new orders for nondefense capital goods*, and manufacturers’ new orders for consumer goods and materials*. The negative contributors - beginning with the largest negative contributor - were building permits, average weekly initial claims for unemployment insurance (inverted), stock prices, and average weekly manufacturing hours.

The leading index now stands at 100.6 (2004=100). Based on revised data, this index decreased 0.9 percent in August and decreased 0.7 percent in July. During the six-month span through September, the leading index decreased 1.3 percent, with two out of ten components advancing (diffusion index, six-month span equals 20 percent).

COINCIDENT INDICATORS

Two of the four indicators that make up the coincident index increased in September. The positive contributors to the index - beginning with the larger positive contributor - were personal income less transfer payments* and manufacturing and trade sales*. The negative contributors were industrial production and employees on nonagricultural payrolls.

The coincident index now stands at 106 (2004=100). This index remained unchanged in August and decreased 0.2 percent in July. During the six-month period through September, the coincident index decreased 0.8 percent, with one out of four components advancing (diffusion index, six-month span equals 25 percent).

LAGGING INDICATORS

The lagging index stands at 112.2 (2004=100) in September, with two of the seven components advancing. The positive contributors to the index - beginning with the larger positive contributor - were commercial and industrial loans outstanding* and the ratio of manufacturing and trade inventories to sales*. The negative contributors - beginning with the largest negative contributor - were average duration of unemployment (inverted), change in CPI for services, and change in labor cost per unit of output*. The average prime rate charged by banks, and ratio of consumer installment credit to personal income* held steady in September. Based on revised data, the lagging index increased 0.2 percent in August and increased 0.5 percent in July.

DATA AVAILABILITY AND NOTES

Some series are estimated as noted below.

* Series in the leading index that are based on The Conference Board estimates are manufacturers’ new orders for consumer goods and materials, manufacturers’ new orders for nondefense capital goods, and the personal consumption expenditure used to deflate the money supply. Series in the coincident index that are based on The Conference Board estimates are personal income less transfer payments and manufacturing and trade sales. Series in the lagging index that are based on The Conference Board estimates are inventories to sales ratio, consumer installment credit to income ratio, change in labor cost per unit of output, the consumer price index, and the personal consumption expenditure used to deflate commercial and industrial loans outstanding.

The procedure used to estimate the current month’s personal consumption expenditure deflator (used in the calculation of real money supply and commercial and industrial loans outstanding) now incorporates the current month’s consumer price index when it is available before the release of the U.S. Leading Economic Indicators.

The Conference Board

For over 90 years, The Conference Board has created and disseminated knowledge about management and the marketplace to help businesses strengthen their performance and better serve society. The Conference Board operates as a global independent membership organization working in the public interest. It publishes information and analysis, makes economics-based forecasts and assesses trends, and facilitates learning by creating dynamic communities of interest that bring together senior executives from around the world. The Conference Board is a not-for-profit organization and holds 501(c)(3) tax-exempt status in the United States. For additional information about The Conference Board and how it can meet your needs, visit our website at www.conference-board.org.

Source: The Conference Board

Five Manufacturing Units Are Due to be Completed by End of 2008

Dubai Industrial City, a member of Tatweer, today announced that 19 companies are currently investing more than AED 650 million in the construction of their manufacturing units within the industrial township in the base metal, mineral, transport, equipment and parts, as well as the food and beverage zones, marking total investment in the city in excess of AED 650 million.

Rashed Al Ansari, Vice President of Dubai Industrial City, explained that the construction activity is another sign of the growth and development of the township, which is the third largest non-real estate project in Dubai spanning across 560 million square feet.

“We are achieving rapid occupancy, an indication of the high demand and fast track development of the City. The on-going construction within the city means that we will maintain our leading role in driving the emirate’s status as the region’s hub for the industrial sector,” he pointed out.

Rashed further noted that five of the 19 factories that are currently being built are estimated to be complete by 2008, while the remaining are scheduled to start operations by 2009.

“The new wave of construction will further expand the city and mark a milestone in our development with an increasing number of industrial units expected to be operational before the end of this year,” he said.

Al Ansari further pointed out that more than 500 factories and manufacturing units for light and medium industries are set to be built across the various six industrial zones of the city until 2015.

“This is the start of massive and wide spread construction across our industrial zones as we have more than 450 investors who plan to have an industrial presence in the city with some of the investors planning to build multiple manufacturing units in the city”, he pointed out.

Rashed also noted that the Dubai Centre for Industrial Standards, Maqayees, which is in charge of managing and implementing all Quality, Health, Safety and Environment (QHSE) issues across the industrial hub, is currently working to approve more than 140 construction applications for factories by the city’s industrial tenants.

With construction activities at the City in full swing, two factories built by Conmix became operational earlier this year, for pre-mixed plaster and concrete with a total capacity of 300,000 tonnes per year.

Additionally, facilities are being added within the City in quick succession with new milestones being notched such as warehouses, logistic services and the Dubai Industrial Academy, as Dubai Industrial City continues to sign up fresh investors keen to set up base in the township.

In close proximity to Jebel Ali Port and Free Zone, with easy accessibility to major highways such as Sheikh Zayed Road, Emirates Road and the Dubai Ring Road, the 560 million square feet Dubai Industrial City is a dedicated industrial destination comprising six industrial clusters for food and beverage, base metal, mineral products, chemicals, transport equipment and parts, and machinery and mechanical equipment.

Complementary facilities for logistics, warehousing, labour villages, industrial training, in addition to commercial, residential and entertainment zones, position Dubai Industrial City as a comprehensive one stop-shop destination. DI provides tenants with a critical competitive advantage in human resources, logistics and business operations.

Dubai Industrial City

Dubai Industrial City (DI), a member of Tatweer, is set up on 560 million sq ft of prime land, with the aim of catalysing the growth and expansion of the industrial sector in the United Arab Emirates - especially in high value added manufacturing and production in the sectors of Machinery & Mechanical equipment, Transport Equipment and parts, Base Metal, Chemicals, Food and Beverage and Mineral Products.

Dubai Industrial City provides one of the region’s finest business environments and is a one-stop facility for industry and related sectors such as logistics, assembly and warehousing, vocational training and labor residences.

DI City’s strategic location near (Dubai World Central) the new Jebel Ali Airport City, the Jebel Ali Free Zone and Port; trans-Emirates highways, including Sheikh Zayed Road and Emirates Road, provides easy and convenient access to global transportation points via road, air and sea.

Source: Dubai Industrial City

China Sourcing Fair: Gifts & Home Products opens today in Hong Kong at AsiaWorld-Expo with over 3,200 booths

Research conducted last week by Global Sources has revealed that price increases and a decrease in consumer spending are the two biggest challenges facing buyers in the next 12 months. To address these issues, buyers are looking to consolidate existing suppliers; enter new markets; and look for more competitively-priced products. However, the research also revealed that 77 percent of the 300 buyers who responded plan to increase or keep their sourcing volume the same in the next 12 months, and will continue to source most of their gifts and home products from China.

The objective of the survey was to discover international buyers’ sourcing plans for the next 12 months. Findings include:

• 38 percent of buyers stated that they plan to increase their sourcing in the next 12 months

• 39 percent said their sourcing is expected to remain the same

• 30 percent of buyers stated that they plan to increase their sourcing volume from China

• 31 percent of buyers plan to keep their imports from China the same as last year

• 69 percent of buyers surveyed said that they expect over 50 percent of their sourcing spend to be used to buy products from China

• 71 percent of buyers said that looking for new markets, other than China, was critical over the coming year with Vietnam (60 percent) and India (53 percent) the most popular new markets for buyers

Global Sources’ Executive Director, Sarah Benecke said: “Greater China remains the key sourcing location for international buyers of gifts and home products. But our research also shows that to maintain this position, manufacturers must react to international buyers’ needs by improving quality and providing more competitively-priced products. More innovation, a wider product range, decreasing development and production time and improving customer service are all deemed critical to buyers too.”

The survey was completed a week before the China Sourcing Fair: Gifts & Home Products opens in Hong Kong. The show starts today at AsiaWorld-Expo and runs until Oct. 23. As well as over 3,000 booths from Greater China, buyers can find over 100 booths from popular new sourcing locations, India and Vietnam. In total, the Fair will showcase over 3,200 booths. Other countries exhibiting include the Philippines, Singapore, Thailand, South Korea, Australia, France, Israel and the United Kingdom.

Buyers at the show can source products from easy-to-find pavilions including arts & crafts; garden & outdoor; gifts & premiums; glassware & tableware; home d¨¦cor & home textiles; kitchen & household; stationery & paper products and sports & leisure.

The show will also feature the largest number of Private Buyer Meetings ever held at a China Sourcing Fair. These meetings involve buyers holding private sessions with pre-selected suppliers on-site. Participants scheduled to take part in this October include A.S. Watson, Auchan, Carlsberg, Creata, Dairy Farm, Dollar General, Lidl, Oneida, Playtex, Sears, Sobond, Spotlight, Staples, Target Australia and Woolworths UK.

Co-located China Sourcing Fair: Baby & Children’s Products keeps growing

Today’s show is co-located with China Sourcing Fair: Baby & Children’s Products. This is the second time that the Baby & Children’s Products show is being held in Hong Kong. It will feature over 180 booths, nearly 36% more than the first show in April. Buyers will find new suppliers of garments, bedding, accessories, toys, and care and bath products at this event.

The next China Sourcing Fair: Baby & Children’s Products is scheduled for Dec. 3-5, 2008 at the Shanghai New International Expo Centre, Shanghai.

Buyers and suppliers can find more information about the upcoming China Sourcing Fairs at http://www.chinasourcingfair.com/ .

Source: Global Sources

New Business Owners … Make it in Today’s Economy

An industry first communication model helps small business start-ups position themselves early for success — rescuing thousands from unnecessary monetary loss.

Entrepreneurship is no longer an unfamiliar term. Business start-ups are increasing daily and so is the need for sound business advice to those who are putting their necks on the line. Enter in The Tax Club, a small business tax advisory company stepping up to offer a helping hand to a struggling sector of the economy. With free tax help offered daily from their pool of small business advisors, The Tax Club is reducing fear and creating confidence in the marketplace.

As individuals are sensing the unrest in corporate and blue collar America, they are seeking to take control of their lives by investing in online or home-based businesses — and the choices are plentiful. Everything from real estate systems to stock programs, unproven franchises to online affiliate ventures, everywhere one turns nowadays, someone is selling a surefire way to make a fortune — and Americans are seizing the opportunity.

On average, these various “biz-n-box” strategies cost thousands of dollars and although they do their best to prepare these individuals for success, it is often not enough. The Tax Club, seeing this wave of impulse buyers with little or no business experience has created a crash-course consulting program that offers a customized tax plan and sound business strategies for those who are blindly thrust into the world of payroll, deductions and unfamiliar profit and loss statements.

By catering to small business owners and entrepreneurs, The Tax Club has specialized its approach in an effort to accelerate real-time learning and position start-ups early on to be competitive. Without this valuable insight many frustrated business owners give up early, losing their initial investment and harboring discontent with the system that they feel put them there.

In August of 2008, the Wall Street Journal, in an article touting the power of mentoring stated, “A better approach is to create and cultivate a developmental network — a small group of people to whom you can turn for regular mentoring support.” The Tax Club’s advisory model epitomizes this concept by providing every client with a team of advisors to work with on a ongoing basis, helping to create confidence and stability.

Source: The Tax Club

Mortgage rates soared this week, with the average 30-year fixed mortgage rate jumping more than one-half percentage point to 6.74 percent. According to Bankrate.com’s weekly national survey, the average 30-year fixed mortgage has an average of 0.42 discount and origination points.

The average 15-year fixed rate mortgage climbed to 6.40 percent, while the average jumbo 30-year fixed rate rose to 7.87 percent. Adjustable mortgage rates were sharply higher also, with the average 1-year ARM now 6.32 percent and the average 5/1 ARM skyrocketing to 6.61 percent.

Mortgage rates posted the biggest one week increase since April 1987, soaring as credit fears reached a fever pitch. In addition, yields on benchmark 10-year Treasury notes climbed as investors worried about the additional supply of government debt resulting from billions of dollars in various rescue packages. Mortgage rates move in relation to Treasury yields, but at a spread — or markup — over the risk-free government debt. The intensifying credit crunch and the government guarantees on bank debt drove up the spread between mortgage bonds and benchmark Treasuries. But since Treasury yields climbed from 3.5 percent to over 4 percent over the previous week, mortgage borrowers had two factors working against them.

This sharp increase in mortgage rates over the past week has a direct impact on a homebuyer’s affordability. At last week’s rate of 6.20 percent, a $200,000 loan carried a monthly payment of $1,224.94. This week, with the average rate at 6.74 percent, the monthly payment on a $200,000 loan is $1,295.87.

SURVEY RESULTS
30-year fixed: 6.74% — up from 6.20% last week (avg. points: 0.42)
15-year fixed: 6.40% — up from 5.95% last week (avg. points: 0.60)
5/1 ARM: 6.61% — up from 6.21% last week (avg. points: 0.40)
Bankrate’s national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

For a full analysis of this week’s move in mortgage rates, go to http://www.bankrate.com/mortgagerates

The survey is complemented by Bankrate’s weekly forward-looking Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next 30 to 45 days. More than half of respondents, 53 percent, expect rates to pull back in the coming weeks. Meanwhile, 27 percent predict a further increase in mortgage rates, and the remaining 20 percent forecast that mortgage rates will remain more or less unchanged in the next 30 to 45 days.

For the full mortgage Rate Trend Index, go to http://www.bankrate.com/RTI

Source: Bankrate, Inc.

4 Financing Tips for Today’s Auto Shoppers

While the credit crunch has created an uncertainty about Wall Street and an economic slowdown on Main Street, financing remains available so auto shoppers should continue to do their homework before heading to the dealer, according to AWARE, a nonprofit auto financing education group.

“There are still plenty of finance sources that can help consumers finance the car or truck they need,” said Eric Hoffman, spokesperson for AWARE. “For today’s auto shopper that means keep doing what you’re doing to be prepared. Approaching creditors with a solid credit track record and shopping for financing among different sources are still two of the most important rules to follow when considering financing.”

Auto shoppers should not deviate from their proven approach to financing preparation. “If you’re considering financing a car today or within the next year, auto shoppers should keep their foot on the education gas pedal,” Hoffman said. “It’s a competitive marketplace, and creditors will continue to vie for borrowers’ business. Consumers who are educated and informed about the auto financing process will continue to be the most satisfied with their auto financing decisions.”

In today’s environment, AWARE says the most important steps consumers should take to prepare for vehicle financing are:

• Understand your credit history — When credit is tighter, consumers with a strong credit history will still obtain the most attractive rates possible, but those with sub-optimal credit may find fewer financing options. Check your credit rating by obtaining your credit report from www.annualcreditreport.com. Immediately contest any errors, settle outstanding debts, and build your rationale for anything negative.

• Evaluate your financial situation — Determine how much you can afford to put down and pay on a monthly basis. A list of online autofinancing calculators and interactive budget worksheets can be  found at www.AutoFinancing101.org/LearningSuite. Once you settle on a budget, make sure you stick to it.

• Shop around for financing — Given today’s market place this has never been more important. Shop around for financing from a variety of sources including, banks, credit unions, financing companies, and auto dealers. It’s in your best interest to use the competitive market to your advantage by considering all of the financing options available to you, and choosing the one that best fits your individual needs.

• Past is prologue — Late or missed payments incur late fees and can even cause your vehicle to be repossessed. A bad payment record will also appear on your credit report, damaging your ability to get credit in the future.

American Financial Services Association
National Automobile Dealers Association
National Association of Minority Automobile Dealers
American International Automobile Dealers Association
American Honda Finance Corporation
American Suzuki Financial Services
AutoNation
Ford Motor Credit Company
GMAC
Group 1 Automotive, Inc.
Jaguar Credit
Land Rover Capital Group
Lithia Motors
Mazda American Credit
National Auto Finance Company
Nissan Motor Acceptance Corporation
Nuvell Financial Services
Saab Financial Services Corp.
Sonic Automotive, Inc.
Toyota Financial Services
United Auto Group, Inc.
Volvo Car Finance North America
Wells Fargo Auto Finance

Source: AWARE

Congress Banking Committees Asked to Hold Oversight Hearings

Washington Mutual, Wachovia, Fannie Mae and Freddie Mac all disappeared without public input; the nation’s two remaining investment banks have become bank holding companies also without public scrutiny; and Bank of America has been allowed to break the bank monopoly barrier with more than 10 percent of the country’s deposits. In the desperation of the economic crisis, Americans have lost a say in the future of their finances, and the few remaining banks have been allowed to grow too big.

In response, the California Reinvestment Coalition (CRC) today asked the chairpersons of the Senate Banking Committee and the House Financial Services Committee to hold oversight hearings on the massive changes in the financial system and their potential to negatively impact neighborhoods, small businesses and home owners.

Corporate greed and deregulation caused the current economic crisis. But continuing deregulation is being condoned in an attempt to solve the crisis. What little regulation of the financial services industry that was left is being ignored in the name of an emergency, leaving American tax payers — who must pay the price for this crisis — with no guarantee that the remaining big banks will fulfill their obligation to meet the credit needs of all communities.

CRC members, who have worked for more than two decades to increase access to fair credit and equal investments in low-income communities and communities of color, are concerned. In their letter to the Congressional Banking Committees, they stated that unregulated bank consolidation will decrease already limited access to credit for minority- and women-owned businesses and nonprofit affordable housing developers in under-served neighborhoods. They also cited concern that the neighborhoods they advocate for, which were once redlined, then called emerging markets, are now being called declining markets and seen as too risky for credit.

The letter asks Congressman Barney Frank and Senator Christopher Dodd to hold oversight hearings immediately after the November elections.

The California Reinvestment Coalition advocates for the right of low-income communities and communities of color to have fair and equal access to banking and other financial services. CRC has a membership of more than 250 nonprofit organizations and public agencies across the State.

Source: California Reinvestment Coalition

Guarantor backs 10 percent increase in funding for higher education

USA Funds(R), the nation’s leading education loan guarantor, announces that it supported $17.2 billion in loans to help students and parents pay for college during the fiscal year that ended Sept. 30, 2008. The figure represents an increase of more than 10 percent in college financing supported by USA Funds compared with the previous fiscal year.

USA Funds guaranteed more than $15 billion in Federal Stafford loans for students, a 15 percent increase over fiscal 2007, and more than $2 billion in Federal PLUS loans to graduate and professional students and to parents of dependent undergraduate students.

“Despite this year’s unprecedented turmoil in the financial markets, USA Funds continued to work with participating lenders, postsecondary institutions and the U.S. Department of Education to ensure eligible students were able to obtain financing through the Federal Family Education Loan Program,” said Carl C. Dalstrom, USA Funds president and CEO. “In the unlikely event eligible students are unable to find a lender willing to make FFELP loans to them, the Education Department has approved USA Funds’ plans to serve as the lender of last resort in the states where USA Funds is the designated student loan guarantor.”

USA Funds is designated by the U.S. secretary of education as the guarantor for Arizona, Hawaii and the Pacific Islands, Indiana, Kansas, Maryland, Mississippi, Nevada and Wyoming.

As a federal student loan guarantor, USA Funds insures private lenders against default. As part of this role, USA Funds supports extensive systems, services and staff who ensure requested loans are delivered to eligible students attending eligible postsecondary institutions; serves schools, lenders, students and parents with answers to their questions about their education loans and supports their compliance with loan program guidelines; helps student- and parent-borrowers successfully repay their loans; provides assistance to borrowers who face difficulties repaying their loans; and recovers on behalf of U.S. taxpayers amounts owed by borrowers who defaulted on their student loans.

Headquartered in Indianapolis, USA Funds is a nonprofit corporation that works to enhance postsecondary education preparedness, access and success by providing and supporting financial and other valued services. For more information about USA Funds, visit www.usafunds.org .

Source: USA Funds