Good morning! So, remember how yesterday I told you those wildfires in California were not so bad? Yeah, that’s changed. Strong winds have strengthened the fire, which has now scorched 2700 acres, destroyed or damaged 75 homes, and injured 10 firefighters. About 12,000 people have been forced out their homes by the blaze.
Results of the “stress tests” conducted on the nation’s banks by the Obama administration found that nine of the biggest received a clean bill of health, but that the rest could need as much as $75 billion in capital to survive the recession.
Banks in trouble include Bank of America, GMAC (the finance arm of General Motors, which isn’t doing too well itself), Citigroup, and Wells Fargo. The New York Times story linked here has a staggering sentence: “Under regulators’ worst-case assumptions, the 19 banks might suffer $600 billion in losses through 2010, on top of the hundreds of billions that have already vaporized in this financial crisis. About 9 percent of all loans might sour — a figure that is even higher than it was during the Great Depression. One in five credit card loans could go unpaid, more than double the typical loss rate. Approximately one in 10 mortgages could sour.”
The Obama administration announced the finer points of its budget yesterday as well, and it includes a whopping one half of one percent in spending cuts. Spending on defense and housing would rise.
And finally, students (and their parents) at Wesleyan University in Connecticut are breathing a little easier now that police arrested Stephen P. Morgan at a convenience store, after he saw his picture in the paper and asked the clerk to call police. Morgan is suspected of stalking and killing student Johanna Justin-Jinich while she worked at a campus bookstore. He wore a disguise during the shooting and thus was bale to evade police, even though the stopped and questioned him after the shooting. The university kept students indoors for two days and even delivered box lunches to dorms while the manhunt for Morgan continued.
