European and US stocks surge on news that world banks will flood markets – but Lagarde warns of 'dangerous' new phase
Fears of a deepening of Europe's debt crisis have prompted the world's leading central banks to pump US dollars into the financial system, in a co-ordinated action designed to boost market confidence.
The Bank of England joined the US Federal Reserve, the European Central Bank, the Swiss National Bank and the Bank of Japan on Thursday to announce that they would flood money markets with dollars over the coming months.
The move, on the third anniversary of the collapse of the US investment bank Lehman Brothers, sent shares soaring in banks heavily exposed to debt default by Greece and the other struggling members of the 17-nation eurozone. The euro, which had been falling in recent days, rebounded, rising roughly 1% in European trading on Thursday.
Speaking in Washington, Christine Lagarde, the president of the International Monetary Fund, said: "They [the banks] are getting together and acting together. To me, that is the most important message."
Lagarde warned that more action was needed.
"We have entered into a dangerous phase of the crisis," she said. There is still a path to recovery, Lagarde said, but it is a "narrow" one. Read More
Report: Mortgage default warnings spiked in August, signaling potential new foreclosure wave
Alex Veiga, AP Real Estate Writer, On Thursday September 15, 2011, 12:29 am EDT
LOS ANGELES (AP) -- Banks have stepped up their actions against homeowners who have fallen behind on their mortgage payments, setting the stage for a fresh wave of foreclosures.
The number of U.S. homes that received an initial default notice -- the first step in the foreclosure process -- jumped 33 percent in August from July, foreclosure listing firm RealtyTrac Inc. said Thursday.
The increase represents a nine-month high and the biggest monthly gain in four years. The spike signals banks are starting to take swifter action against homeowners, nearly a year after processing issues led to a sharp slowdown in foreclosures. Read More
Published: Thursday, 15 Sep 2011 | 8:37 AM ET By: CNBC.com staff and wire
Applications for unemployment benefits continued to rise in the past week, while inflation pushed higher and a key manufacturing index weakened. Read More
Consumers paid more for gas, food, rent and other items in August, raising inflation
Christopher S. Rugaber, AP Economics Writer, On Thursday September 15, 2011, 9:28 am EDT
WASHINGTON (AP) -- Consumers paid more for a range of goods and services last month, pushing up inflation and squeezing Americans' purchasing power.
The Consumer Price Index rose 0.4 percent in August after jumping 0.5 percent in July. The core index, which excludes volatile food and energy prices, rose 0.2 percent.
For the 12 months that ended in August, the core index surged 2 percent, the biggest year-over-year increase in nearly three years. That's at the high end of the Federal Reserve's informal inflation target. It could limit the central bank's ability to take further steps to try to revive the economy.