Financial Update

Stocks falter as credit woes weigh

· TSX -36.19pts continues its downwards spiral, closing 8 of the 9 last weeks lower than it opened them, mostly because of tumbling oil prices as well as weakness in gold and materials.
· Dow -139.88pts JPMorgan Chase said it has accumulated $1.5 billion of losses so far this quarter on mortgage-related assets. The news stoked concerns of more pain yet to come.
· Dollar +.57c to $94.09US
· Oil -1.44 to $113.01US per barrel. To a new 3 month low on more evidence that developed countries such as the United States are cutting back on their energy use· Gold plummets -$5.35 to $815.50US per ounce – to an 8 month low as a strong US dollar triggered a massive sell off


U.S. banks tighten credit

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August 12, 2008 The Associated Press WASHINGTON

More U.S. banks are tightening lending standards on home mortgages and other consumer and business loans as a deepening credit crisis exerts a heavier toll on the American economy.

The U.S. Federal Reserve said yesterday the percentage of banks reporting tighter lending standards rose across various loan types in its July survey. In April, the central bank had found that the percentage of banks reporting tighter lending standards was already near historic highs.

The new survey, conducted in early July, found that about 75 per cent of the banks surveyed indicated they had tightened their lending standards for prime mortgages. That was up from about 60 per cent of banks who said they were tightening lending standards for prime mortgages in the previous survey.

The Fed's July survey covered 50 banks which hold about 80 per cent of the residential mortgages on the books of all commercial banks.

Out of this group of 50 banks, 32 said they were still originating so-called non-traditional home mortgages. Among these 32 banks, about 85 per cent said they had tightened their lending standards, up from 75 per cent who said they were tightening lending standards for non-traditional mortgages in April.

The Fed survey found that only seven of the 50 banks said they were still participating in subprime mortgages, loans made to borrowers with weak credit histories.