Retail Sales Down, Freddie Mac Losing Billions, and Other Economic Difficulties
In more signs of an ailing economy, reports today show that retail sales experienced the biggest drop on record in October. They slumped by 2.8 percent—surpassing even the post-9/11 plunge of 2.65 percent in November 2001. It was a worse decline than analysts predicted. Many news account called it a "record drop," which isn't correct; it is a record only in terms of the current Commerce Department data set, which began in 1992. (Earlier statistics going back to 1954 aren't directly comparable, officials said.) Even so, the sales figures don't bode well for retailers who were hoping the holidays would bring better sales. Meanwhile, mortgage giant Freddie Mac reported huge losses today, saying it lost $25 billion from July through September. Now essentially broke, it asked the Treasury for its first infusion of money that was promised in the bailout. (Fannie Mae reported a $29 billion loss on Monday). Meanwhile, the still-struggling auto industry is attempting to whip up votes for its own bailout, but it's seeming less and less likely. It definitely won't happen until President-elect Barack Obama enters office, by which point, experts worry, one of the Big Three automakers already will have gone under.
Gaza Violence Escalates; U.N. Warns Israeli Blockade May Worsen Situation
A five-month-old truce between Palestinian militants in the Gaza Strip and Israel all but crumbled this week, and today's violence—a rocket barrage on Ashkelon in southern Israel—pushed peace away even further. Nobody was hurt. But the rocket fire, which follows Israeli aircraft strikes on militants in northern Gaza that wounded two, marks a worrying escalation. Fighting began again last week when Israeli forces went into Gaza to destroy a tunnel that, the military said, was dug to carry out a raid into Israel. Several border clashes followed. In response to the attacks, Israel closed its border crossings into Gaza 10 days ago. The United Nations says the closure will cause even more problems. The blockade halts cross-border food and fuel shipments, meaning that U.N. warehouses can't be restocked with food. As a result, the United Nations has had to shut down the food distribution program that feeds 750,000 Gaza Strip Palestinians. In addition, the area's main power plant has run out of fuel. Officials warn that problems will only increase, and Palestinians become angrier, if the blockade continues.
U.N. Feeds Hungry and Homeless in Congo
The United Nations handed out food deep behind rebel lines in the Congo, where fighting that broke out in late October has left thousands destitute, hungry, and homeless. It's the first large-scale delivery the organization has made there since fighting began. At least 250,000 people have been displaced by the fighting, even though the largest U.N. peacekeeping force in the world—17,000 troops—is keeping guard. Meanwhile, the conflict between rebel troops led by Laurent Nkunda and the government threatens to send the country sliding into civil war.