Consumer News & Views
August, 2008

Consumer Prices Continue to Jump. The Consumer Price Index, a key inflation gauge, rose 1.1 percent in June after increasing 0.6 percent in May. The index for all items less food and energy increased 0.3 percent, following an increase of 0.2 percent in May.

Foreclosures and Tax Consequences. Banking industry reports show the second quarter of 2008 is shaping up as the worst year ever for foreclosures. In the second quarter of this year, more than 730,000 homes nationwide went into foreclosure. That's an increase of 121 percent over the April – June period of 2007. With more banks in cash flow troubles because of bad mortgage lending practices, the ripple effect of the Sub-Prime Loan debacle is reaching disturbing levels as Freddie Mac and Fannie Mae will require more cash from the Fed to avoid serious financial problems of their own. Over 150 banks are on a “federal watch list” because of their precarious status, and bankruptcy filings are up dramatically. Can America’s financial woes get any worse? According to a sampling of ACC members the answer is “yes.” Stocks have taken a serious hit and local communities will be next to feel the negative affects of the foreclosure cycle as tax revenues decline, neighborhood home values fall, and more families are forced to relocate. Abandoned homes are already causing vandalism problems for some areas.

Housing Rescue Plan: The Senate has overwhelmingly passed a landmark housing bill that will offer up to $300 billion in loans for troubled homeowners and establish a government rescue plan for mortgage finance giants Fannie Mae and Freddie Mac. The House passed the bill just hours after President Bush reversed his long-standing vow to veto the bill. Mr. Bush is expected to sign it soon. The legislation, one of the most far-reaching on housing in decades, marks the centerpiece of Washington's efforts to address the nation's housing meltdown.

Oil Prices. Oil prices have tumbled more than $25 a barrel since trading at a high of $147.27 on July 11. Oil prices are at their lowest level in seven weeks as a stronger dollar and beliefs that record prices are eroding the world’s thirst for energy sparked another dramatic sell-off.

Election Interest is Mild. Despite the overkill by the media, Americans remain mildly interested in the McCain vs. Obama 2008 presidential election. Economic worries including food and gasoline costs as well as mortgage payment concerns continue to dominate kitchen table conversations according a sampling of members of the American Consumer Council.

ACC Offers Green Certification Program. The American Consumer Council launched its Green Certification program for companies that want to be certified for their Green practices and environmental compliance practices. For more information, visit our homepage at: www.americanconsumercouncil.org/green.

For more information, please visit ACC and other news sources that provided this information including: www.consumeraffairs.com