Archive for the ‘Consumer News’ Category

Sharp drop in new claims for unemployment: Dropped 29,000 last week …

Stock edge higher after unemployment claims fall
May 19, 2011, 10:25 a.m. EDT
Associated Press

Journal By Calvin Lee Ledsome Sr.,

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NEW YORK (AP) — Stocks opened slightly higher Thursday, extending Wednesday’s gains, after a government report showed a sharp drop in new claims for unemployment benefits. Weaker reports on home sales and economic expectations kept the gains in check.

Shares of social-networking company LinkedIn Corp. jumped 81 percent to $81.76 on their first day of trading. It is the largest U.S. Internet IPO since Google Inc.

The Dow Jones industrial average rose 26 points, or 0.2 percent, at 12,586 in early trading. The Standard & Poor’s 500 index gained 2, or 0.2 percent, to 1,343. The Nasdaq composite index added 4, or 0.1 percent, to 2,819.

The Department of Labor reported that applications for unemployment dropped 29,000 last week, more than expected, to 409,000.

Two other reports raised doubts about the strength of the housing recovery and the overall direction of U.S. growth.

The National Association of Realtors said fewer people purchased previously occupied homes in April. The number of homes sold in foreclosure also declined.

The Conference Board reported that expectations for future economic activity decreased, based on its index of leading indicators. The private research group said the index fell 0.3 percent in April, the first decline since June 2010.

In a sign that the U.S. consumer recovery remains uneven, Big Lots Inc. fell 9 percent to $34.31 after news reports that it decided not to sell itself. The Wall Street Journal said late Wednesday that the company received bids from two private-equity groups that were lower than it had hoped.

Sears Holding Corp. reported softer sales at its Kmart and Sears stores, causing a first-quarter loss of $1.58 per share, worse than analysts expected. The stock fell 3.2 percent to $73.31.


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Underwater mortgages rise as home prices fall

Underwater mortgages rise as home prices fall
March 8, 2011, 2:35 p.m. EST
Associated Press
Article Posted by Calvin Lee Ledsome Sr.,

WASHINGTON (AP) — The number of Americans who owe more on their mortgages than their homes are worth rose at the end of last year, preventing many people from selling their homes in an already weak housing market.

About 11.1 million households, or 23.1 percent of all mortgaged homes, were underwater in the October-December quarter, according to report released Tuesday by housing data firm CoreLogic. That’s up from 22.5 percent, or 10.8 million households, in the July-September quarter.

The number of underwater mortgages had fallen in the previous three quarters. But that was mostly because more homes had fallen into foreclosure.

Underwater mortgages typically rise when home prices fall. Home prices in December hit their lowest point since the housing bust in 11 of 20 major U.S. metro areas. In a healthy housing market, about 5 percent of homeowners are underwater.

Roughly two-thirds of homeowners in Nevada with a mortgage had negative home equity, the worst in the country. Arizona, Florida, Michigan and California were next, with up to 50 percent of homeowners with mortgages in those states underwater.

Oklahoma had the smallest percentage of underwater homeowners in the October-December quarter, at 5.8 percent. Only nine states recorded percentages less than 10 percent.

In addition to the more than 11 million households that are underwater, another 2.4 million homeowners are nearing that point.

When a mortgage is underwater, the homeowner often can’t qualify for mortgage refinancing and has little recourse but to continue making payments in hopes the property eventually regains its value.

The slide in home prices began stabilizing last year. But prices are expected to continue falling in many markets due to still-high levels of foreclosure and unemployment.

That means homes purchased at the height of the real estate boom are unlikely to recover lost value for years.

Underwater mortgages also dampen home sales. Homeowners who might otherwise sell their home refuse to take a loss or can’t get the bank to agree to a short sale — when a lender lets a borrower sell their property for less than the amount owed on the mortgage.

Home sales have been weaker in areas where there are a large number of homeowners with negative equity.

Many banks are also requiring homebuyers to put as much as 20 percent of a home’s value as down payment and the Obama administration is pushing for a 10 percent down payment requirement on all conventional loans guaranteed by the ailing mortgage giants Fannie Mae and Freddie Mac.

Few homeowners in states hit hard by foreclosures, including Colorado, Georgia and Nevada, have 20 percent or more equity in their homes. Higher down payments make it increasingly difficult for those people to sell their homes.

The total amount of negative equity increased to $751 billion nationwide, up from $744 billion in the previous quarter.

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State spending cuts slow US economic growth in Q4

State spending cuts slow US economic growth in Q4
Feb. 25, 2011, 10:28 a.m. EST
Article Published by Associated Press Writers
Article Posted Here by Calvin Lee Ledsome Sr.,

WASHINGTON (AP) — Deeper spending cuts by state and local governments weighed down U.S. economic growth in the final three months of last year.

The government’s new estimate for the October-December quarter illustrates how growing state budget crises could hold back the economic recovery.

The Commerce Department reported Friday that economic growth increased at an annual rate of 2.8 percent in the final quarter of last year. That was down from the initial estimate of 3.2 percent.

The weaker figure was disappointing and prompted some economists to lower their forecasts for economic growth in the current January-March quarter.

State and local governments, wrestling with budget shortfalls, cut spending at a 2.4 percent pace. That was much deeper than the 0.9 percent annualized cut first estimated and was the most since the start of 2010.

Consumers spent a little less than first thought. Their spending rose at a rate of 4.1 percent, slightly smaller than the initial estimate of 4.4 percent. Still, it was the best showing since 2006. And it suggests Americans will play a larger role this year in helping the economy grow, especially with more money from a Social Security tax cut.

One of the crucial questions is whether consumers can spend enough this year to help offset negative forces in the economy — notably struggling state and local governments and a wobbly housing market that has depressed homes values.

Rising energy prices also pose a danger. If oil prices were to rise to $150 or more a barrel and then stay there for months, another recession is possible, economists said. Gasoline prices would near $5 a gallon. Consumers and businesses would spend much less, and some employers might slash jobs.

“Consumers stumbled a bit to start the year, and while we expect them to pick up the pace some in coming months, the recent rise in energy prices poses a notable headwind,” said economist Michael Feroli at JP Morgan Chase Bank.

Overall economic growth in the October-December quarter was marginally better than the 2.6 percent pace logged in the prior quarter. The economy has steadily grown after hitting a difficult patch last spring. But rising oil prices and budget cuts by state and local government are creating headwinds.

Feroli and other analysts now predict the economy will grow at a pace around 3.5 percent in the January-March quarter. That’s down from earlier estimates in the 4 percent-plus range.

Government stimulus is fading and budget cuts at the federal level could further hamper economic growth.

The federal government trimmed spending at the end of the year, entirely reflecting cuts to defense spending. And a showdown over the U.S. budget is taking place on Capitol Hill between Democrats and Republicans, threatening a government shutdown.

For all of last year, the economy grew 2.8 percent, the most in five years, according to revised figures. That was down a bit from the 2.9 percent growth first estimated a month ago. However, it was an improvement from 2009 when the economy suffered its worst decline in more than 60 years.

Still, economic growth must be stronger to make a noticeable dent in unemployment, which was 9 percent last month. The economy would need to grow 5 percent for a whole year to significantly bring down the unemployment rate. Economic growth of just 3 percent a year would hold the unemployment steady and keep up with population growth.

Looking ahead the economy is expected to grow by 3.2 percent this year, according to an AP Economy Survey.

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Home prices are hitting new depths in most major U.S. cities – Feb. 22, 2011

Home prices plummet in most big US cities
Feb. 22, 2011, 6:17 p.m. EST
Article Published by Associated Press Writers
Article Posted Here by Public News Blog Posting Service Group

WASHINGTON (AP) — Home prices are hitting new depths in most major U.S. cities and are expected to fall further over the next six months.

In a majority of metro areas tracked by Standard & Poor’s/Case-Shiller, prices have fallen to their lowest points since the housing bubble burst.

High unemployment, stricter lending rules and fears that prices will continue to fall are among the reasons why few people are buying homes. A rising number of foreclosures are also weighing down prices. And as more people get stuck in depreciating homes, housing could slow the economy.

Across the country, the housing industry is recovering unevenly. Many of the cities now setting new lows have been struggling with high unemployment, more foreclosures and, in some cases, a delayed response to the housing bust in 2006 and 2007.

Homes in more established areas — those that had little room to build during the housing boom — are doing a better job holding their value. Coastal cities in California and Northeast are seeing much smaller price declines. In Washington and San Diego, home prices even rose over the past year.

Still, many people who want to buy can’t. Nearly 25 percent of households cannot move because they owe more on their mortgage than their home is worth, according to Capital Economics. An additional 25 percent can’t qualify for a new mortgage because selling their homes would leave them with too little money for a down payment.

“We’re likely to see new lows hit across most major markets at some point in 2011,” said Mark Vitner, a senior economist at Wells Fargo Securities. “We’re afraid of all this turning into another vicious cycle.”

Housing prices in all but one of the 20 cities tracked by Standard & Poor’s/Case Shiller fell in December from November. And the overall index declined for the sixth straight month. Washington was the only metro area where prices rose month to month.

Eleven of the markets hit their lowest point since the housing bubble burst in 2006 and 2007: Atlanta, Charlotte, N.C., Chicago, Detroit, Las Vegas, Miami, New York, Phoenix, Seattle, Tampa, Fla., and Portland, Ore.

The housing sector is struggling even while much of the economy is recovering slowly but steadily. The latest evidence of the divide came Tuesday when the Conference Board said its Consumer Confidence Index rose in February to its highest point in three years. The report suggested that many people are more hopeful about hiring and income gains over the next six months.

By contrast, the outlook for housing this year is dim. Construction of new homes is on pace for little more than half the million units a year that economists consider to be healthy. And the number of vacant homes is near a record high.

Some of the worst declines in home prices are in cities hit hardest by high unemployment and foreclosures. A home that sold for $250,000 in Detroit in 2000, for example, now sells for roughly $163,150, according to the housing report. The unemployment rate there was 11.1 percent.

One in 24 Detroit-area homes with a mortgage was at risk of foreclosure last year, according to foreclosure tracker RealtyTrac Inc. — the fifth highest rate among major cities.

Homes in Las Vegas, on average, have lost more than half their value since 2006. They now sell for less than they did in 2000. The city had a record-high 14.9 percent unemployment rate in December. It also led the nation in foreclosures last year.

Three out of every four sales in southern Nevada are foreclosures or “short sales.” These sales occur when a bank lets a homeowner sell a home for less than what’s owed on the mortgage.

“You can see how many people’s dreams just didn’t make it,” said Karin Wilson, a real estate agent with Century 21 in Las Vegas.

For many, the problem is getting worse. In Phoenix, about 70 percent of all homes with a mortgage were at risk of foreclosure in January, according to the Arizona Regional Multiple Listing Service.

The median home price has dropped by half since 2008, to roughly $110,000. Prices in one central Phoenix zip code have plunged 81 percent in the past three years.

In Tampa, foreclosures and short sales dominate the housing market. One in 20 households with a mortgage was at risk of foreclosure last year. Home buyers are mainly interested in distressed properties, real estate agents say.

“They all want to steal them,” said Stephanie LeFew, owner of Tampa Home Buy Realty. “I had someone call me from Australia the other day wanting an inexpensive property for $20,000.”

Tougher lending rules have scared away some potential home-buyers. Banks have been hesitant to extend new credit. Many are demanding that buyers put down a larger down payment. During the housing boom, people in many cases were able to buy homes with little or no money down.

In many depressed markets, a significant percentage of buyers are really investors and private equity firms looking to cash in on cheap real estate, Realtors say.

The federal government is trying to deter this practice, at least in cities hit hardest by foreclosures. In Detroit, the city is using money from the U.S. Department of Housing and Urban Development to offer suburban homes to police officers with only a $1,000 down payment.

But locals have yet to take advantage. The average home price in Detroit fell 7.5 percent in the October-December quarter, to $73,200, the lowest in the nation, according to

“People don’t qualify for loans anymore, and banks have continued to price homes lower and lower,” said Mike Shannon, a suburban Detroit real estate agent who specializes in foreclosures.

Millions of foreclosures are also expected to flood the market this year. That will force prices still lower. For many, the big question is, when will prices bottom? Some have tried to time their purchases to buy at the bottom. It often hasn’t worked.

Matthew Hartman, a 38-year-old sales manager in Chicago, thought he was getting a steal in 2009 when he bought a four-bedroom house for $395,000. He sold it last month for $370,000.

“We kind of thought that the market was toward the bottom, especially when we moved here in August of last year,” he said. “We thought we got a great deal on this house.”


AP Business Writer Alex Veiga in Los Angeles contributed to this report. Herron reported from New York.

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Economic News Blog

Don’t expect to find an easy answer in his new budget – Obama’s budget offers few clues on health overhaul

Obama‘s budget offers few clues on health overhaul
Feb. 22, 2011, 3:51 p.m. EST
Article Published by Associated Press Writers
Article Posted Here by Public Blog News Posting Service Group

WASHINGTON (AP) — How many federal bureaucrats does it take to carry out President Barack Obama’s health care overhaul? Don’t expect to find an easy answer in his new budget.

It has no line item for health care implementation, a task delegated to agencies in several government departments, each with its own procedures — and quirks — to account for spending and hiring.

Republicans suspect a dodge to make it harder for them to track the money as they strategize over how to block the law by shutting off the spigot of federal funds.

“They are absolutely hiding the ball with this budget,” complained Rep. Dave Camp, R-Mich., chairman of the House Ways and Means Committee, which oversees Medicare and tax laws. “We don’t know the cost of the health care bill or how many people they are going to hire. All of this needs to be flushed out.”

Administration officials say the $3.7 trillion budget may be hard to read, but it’s all in there. Somewhere.

“Nothing is being hidden,” said Richard Sorian, a spokesman for the Health and Human Services Department, which is leading the effort to expand health coverage to more than 30 million uninsured people by 2014.

It’s just that it may not be easy to see.

Part of the reason, the White House says, is that multi-tasking government workers are expected to carry out the health care law along with their other duties. “When you look at an agency, it’s very hard to say this person works only on that law,” explained Kenneth Baer, a spokesman for the president’s budget office.

“The Affordable Care Act is built on top and interwoven with existing statutes and authorities, and it would be extremely difficult to separate or disaggregate the impact of that on the budget,” said Baer.

Some agencies have been more helpful with details than others.

The Internal Revenue Service, for example, says it will need 58 revenue agents to enforce the law’s 10 percent sales tax on indoor tanning, which went into effect last year.

“As many as 25,000 businesses provide indoor tanning services,” says the agency’s budget. “These entities typically do not have experience filing federal excise tax returns.” It looks like that will soon change. The IRS expects to close 1,000 tanning tax cases annually by 2013.

Overall, Treasury’s budget includes $473 million and 1,270 employees to administer the health care law. A spokeswoman said most of them won’t be working on enforcement. Many will be helping with tax credits intended to make health insurance more affordable for small businesses and households. Others will be setting up new technology. The IRS will eventually be responsible for collecting fines from taxpayers who ignore a new requirement to carry insurance.

HHS, the hub of health care implementation, is providing less budget detail. The department says only 252 people will be working full-time on the new law, all of those in the Center for Consumer Information and Insurance Oversight. The new agency was part of Secretary Kathleen Sebelius‘ office last year and has been transferred to the HHS division that oversees Medicare.

Most of the rest of the work will be handled by multi-tasking employees, said spokesman Sorian.

Overall, HHS says it’s getting $465 million to carry out the law. About $120 million goes to the Administration on Aging, which is trying to salvage one of the law’s major new programs, a voluntary long-term care insurance fund intended to help elderly and disabled people avoid going into nursing homes. The Community Living Assistance Services and Support program would provide a benefit of at least $50 a day in cash to help with expenses such as paying a caregiver.

But Sebelius told lawmakers last week she’s concerned the program as written by Congress is financially unsustainable, while confident that premiums, eligibility rules and other factors can be tweaked to fix the problems. The law gave HHS authority to make significant changes in the long-term care plan.

Republicans want to repeal the whole law, but if they can’t succeed, they’ll try to pick off the long-term care plan. Last week, the GOP-led House voted to deny the administration any money to carry out Obama’s overhaul.



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Administration on Aging:

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Obama, Chamber of Commerce look for common ground

Feb. 7, 2011, 3:20 a.m. EST
Published by Associated Press
Posted by Public Blog News Posting Service

WASHINGTON (AP) — After two years of vociferous conflict over
health care and financial regulations, President Barack Obama and the
nation’s top business lobby — the U.S. Chamber of Commerce — have
entered into something of a detente.

Obama is scheduled to deliver a speech Monday at the Chamber,
a first for him. Not four months ago, he had attacked the huge,
Republican-leaning trade organization for failing to disclose donors to
its $32 million congressional political campaign. “Their lips are
sealed,” Obama said at the time, “but the floodgates are open.”

The White House and the Chamber now are highlighting areas of
common ground and expressing a joint commitment to creating jobs. Obama
has stressed his new economic agenda, featuring competitiveness,
innovation, energy and entrepreneurship.

Disagreements linger and are
no less vehement, but they no longer are the subject of loud
legislative battles and big-dollar advertising campaigns by the Chamber.

White House officials say Obama’s speech will not break new
policy ground, nor will he offer an olive branch. But in his radio and
Internet address Saturday, Obama said he planned to tell businesses
they have an obligation to stay in the United States, hire American
workers and invest in the nation’s future.

The speech — part nudge, part courtship — is a message to
business that is hardly limited to the Chamber of Commerce. Obama met
with some of the nation’s top 20 executives in December, gently
prodding them to get cash off their balance sheets and use it to create

Also in December, he negotiated a compromise with Republicans on
tax cuts that won him some grudging boardroom support.

It wasn’t always so. During his first two years as president,
Obama was known to play a populist hand, referring to bankers as “fat
cats,” rebuking corporate lobbyists and casting the insurance industry
as an antagonist in the health care debate.

So bitter were the fights,
they overshadowed areas of solid agreement, including the Chamber’s
support of Obama’s 2009 economic stimulus plan and the bailout of
automakers General Motors and Chrysler.

“What’s changed now? I would use four words,” U.S. Chamber of
Commerce President Thomas Donohue said in an interview with The
Associated Press. “The election has changed.”

The Republican wave in the November election wrested control
of the House of Representatives from the Democrats.

It created a need
for more compromise in the legislative process and for the type of
outreach Obama did not seek — and Republicans did not offer — when
Democrats were in total control.

Obama needs the centrist cloak that the business community
offers. The Chamber can benefit by softening the sharp edges it
developed fighting the health care overhaul and tighter financial rules.

Both sides need each other for policy, as well.

The Chamber
can help the Obama administration win congressional support of trade
deals, particularly a recently renegotiated pact with South Korea.

Both the White House and the Chamber face Republican opposition

to increased
spending on public works, from roads and bridges to wireless networks.

On trade, on infrastructure and — mostly — on regulations,
Donohue said, companies want certainty from the government.

“The reason the companies are sitting on $2 trillion worth of
cash is because of uncertainty,” he said.

Obama long has had allies in the private sector. He has given
corporate CEOs advisory roles, and throughout his first two years, he
held periodic lunches with executives at the White House.

But until
now, he had not brought them into his inner circle.

Last month, that changed. Obama named Bill Daley, a former
commerce secretary and JPMorgan Chase executive, as his chief of staff.
He promoted Gene Sperling, a known quantity to the business community,
as his new chief economic adviser.

He gave high-profile assignments to
General Electric CEO Jeff Immelt and AOL founder Steve Case.

In one of his first calls in his new post, Sperling called
Donohue, who welcomed him with characteristic bluntness: “Glad to have
someone over there I’m comfortable sparring with at 10 a.m. and sitting
down with at 2 p.m. to work on policy.”

The story, confirmed by White House and Chamber officials,
helps illustrate the 2011 version of this relationship.

Donohue also saw Daley’s appointment as a positive signal.

“Daley is a big-time Democrat, but he’s a sound guy,” Donohue
said. “He knows how the town works, he knows how business works. He
knows how the system works.”

Still, the Chamber can be a sharp-elbowed foe.

“The Chamber is an enormously sophisticated Washington insider
organization and is run by very conservative Republican operatives, for
the most part,” said Matt Bennett, a vice president at the centrist but
Democratic-leaning Third Way. “That relationship is always going to be
more difficult than the broader outreach to business.”

But the joint focus these days is jobs. In front of the 10
massive Corinthian columns that grace the front of the Chamber’s
building, Donohue has authorized the placement of giant banners that
spell out J-O-B-S.

The letters are visible from the White House through the bare
winter trees of Lafayette Square — offering both a sign of common
purpose and a reminder to the White House occupant of the 9 percent
unemployment rate that still bedevils him.


Warmest regards,
Owner Calvin L. Ledsome Sr.,

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The standoff in Egypt and uncertainty about where it will lead is causing global economic jitters

Egyptian turmoil helping to lift oil, food prices
Feb. 5, 2011, 7:09 a.m. EST
Article Published by Associated Press
Article Posted by Public Blog News Posting Service

WASHINGTON (AP) — The standoff in Egypt and uncertainty about where it will lead is causing global economic jitters. It’s already pushing up the price of oil and food, and there’s no telling how long the turmoil will last.

The big worry is that popular uprisings and revolution will spread to Egypt’s rich autocratic neighbors who control much of the world’s oil supply.

How far will anti-government movements go? Will oil supplies be disrupted? Will the U.S. see its influence in the region decline and that of Iran and other fundamental Islamic regimes surge?

Right now, these are open questions. But there’s no question that the crisis has created new risks for still shaky world economies and put a cloud over world financial markets.

Instability in the Middle East, if prolonged, could jeopardize fragile recoveries in the United States and Europe. It could limit job creation and fuel inflation.

“If the turmoil is contained largely to Egypt, then the broader economic fallout will be marginal,” said Mark Zandi, chief economist at Moody’s Analytics. “Now, obviously, if it spills out of Egypt to other parts of the Middle East, the concern goes to a whole other darker level.”

“It is certainly now on my radar screen,” he said.

The situation remains tense after more than 10 days of street demonstrations as protesters demanding President Hosni Mubarak‘s immediate resignation continue to skirmish with pro-Mubarak loyalists in the center of Cairo.

Such protests earlier brought down the government of Tunisia and have already spread in more modest ways to include Yemen and Jordan.

“The real worry, I think is if these protests continue indefinitely and there isn’t more reassurance about stability in Egypt and in the broader region,” said Shadi Hamid, a researcher on Gulf affairs at the Brookings Institution’s Doha Center in Qatar. “We’re going to see a continued decline in the regional economy and that will, of course, have an effect on the U.S. economy.”

Hamid suggested the Obama administration’s position of first supporting Mubarak and then upping the pressure on him to leave immediately was not helping the situation. “There is a real danger here that the Obama administration will be remembered as resisting change,” he said.

President Barack Obama said Friday he hoped Mubarak would focus on his legacy as Egypt’s leader for nearly three decades and “end up making the right decision” to step down. But Obama stopped short of calling on Mubarak to leave immediately.

Mubarak has said he will not run for re-election when his term expires in September, but that hasn’t satisfied protesters.

Although demonstrations at week’s end were more subdued than on Thursday, when the clashes were violent and hundreds were injured, the unrest already has had an impact on energy prices in the United States.

The average price for a gallon of regular gasoline in the U.S. was $3.12 on Friday — up 2.4 cents just in the past week. Analysts expect prices to stay above $3 a gallon — the highest since 2008 — and likely go even higher until the conflict in Egypt is resolved and tensions are eased in neighboring countries.

Oil prices have hovered at around $90 a barrel over the past week, with some analysts predicting the Egyptian crisis will lead to $100 per barrel prices sooner rather than later.

Traders worry the unrest might spread to oil-producing countries in the region and even affect shipments through the Suez Canal. Egypt is not a major oil producer, but it controls the canal and a nearby pipeline that together carry about 2 million barrels of oil a day from the Middle East to customers in Europe and the United States.

Several large Egyptian refineries near the canal have been the site of recent protests.

So far, traffic through the canal has been unimpeded. But it’s high on everybody’s worry list. It was blockaded by the Egyptian military for eight years after the 1967 war with Israel and shut briefly during the Suez crisis of 1956.

“I think the major fear regarding the Suez Canal revolves around the power vacuum that’s being created by this uprising,” said Jeff Sica, president of Sica Wealth Management in Morris town, N.J. “The prospect for the Suez Canal being controlled by an unfriendly regime would further devastate the economy.”

The likelihood of the canal being shut or blockaded seems remote. It is a huge source of revenue for Egypt that the government will not want to lose, no matter who is in charge. Still, just the possibility could spook financial markets if tensions escalate.

Meanwhile, rising food prices helped fuel the popular uprising in Egypt, where most of the population is poor. And the turmoil there and unrest in Somalia and other Arab nations now appears to be driving food prices even higher.

Some nations in the region, including Saudi Arabia and Algeria, have indicated they may begin increasing their stockpiles of wheat and other grains.

Hoarding can lead to more hoarding, and political strife can accelerate the process. Egypt is the world’s largest importer of wheat.

Iranian leaders have much to gain from the Egyptian turmoil. Not only is Mubarak the most anti-Iranian of American allies, but rising oil prices have clear economic benefits to Tehran.

“Hundred dollar-a-barrel oil for the Iranians does a lot to take down the pain of the sanctions that we’re putting on them, so they must be sitting there rubbing their hands with glee at the moment,” said Martin Indyk, a former U.S. ambassador to Israel.


AP Diplomatic Writer Barry Schweid contributed to this report.

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Calvin L. Ledsome Sr.,

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