The bad news on the European economy continues. From Reuters:
Business confidence dropped in Germany, France and Italy in September, surveys showed on Wednesday, adding to fears the euro zone is sinking into recession as the effects of U.S. financial turmoil spread across the Atlantic...
The Ifo said its closely-watched business climate index, based on a monthly poll of around 7,000 firms, fell to 92.9 from 94.8 in August.
More worrying for the outlook was a sharp drop in the component of the index which measures corporate expectations for the next half year. That measure dipped to 86.5, its worst reading since Feb. 1993.
And it's a similar story in the US. From Bloomberg:
Sales of previously owned U.S. homes fell more than forecast in August and prices dropped the most on record as Federal Reserve Chairman Ben S. Bernanke suggested the housing market may get worse before it gets better.
Sales of existing homes dropped 2.2 percent to an annual rate of 4.91 million units from 5.02 million the prior month, the National Association of Realtors said today in Washington. The median price declined 9.5 percent from August 2007 and the number of properties fell from a record.
Bernanke told lawmakers that lenders will become "still more cautious," with terms on home loans tightening "significantly." The slide in property values threatens to hurt consumer spending, which Bernanke said today would be "sluggish at best" in coming months.
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