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Datatrac RateDex

	SAVINGS
	Regular Savings	0.72	0.5		CUs by 22 bp
	Interest Checking	0.51	0.42		CUs by 9 bp
	Money Market	1.62	1.16		CUs by 46 bp
	1 Year CD	3.06	2.7		CUs by 36 bp
	CONSUMER LOANS
	Reg Credit Card	11.67	13.05		CUs by 138 bp
	48 Mo New Car	5.43	6.91		CUs by 148 bp
	48 Mo Used Car	5.68	7.51		CUs by 183 bp
	36 Mo Unsecured	10.6	12.4		CUs by 180 bp
	MORTGAGE LOANS
	Home EQ LOC	5.15	5.38		CUs by 23 bp
	1 Yr ARM	4.97	5.75		CUs by 78 bp
	30 Yr Fixed	6.24	6.3		CUs by 6 bp
	All Data Current as of 10/09/2008. Based on 17807 institutions. Note: Average rates are listed; individual rates will vary. (See Datatrac Research Standards)				bp=Basis points (100 bp=1%)

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Market News

MADISON, Wis. (10/10/08)

• Almost one in six U.S. homeowners are "under water" with their mortgages--meaning they owe more on the mortgage than their home is worth. That indicates more foreclosures ahead, and fewer consumers willing to spend at the mall. With declining home prices, about 12 million households--or 16%--owe more than their homes are worth, according to a study by Moody's Economy.com. That compares with 6% last year and 4% in 2006, said Mark Zandi, chief economist at the research firm. "It is very possible that there will ultimately be more homeowners under water in this period than any time in our history," added Zandi. Mortgage delinquencies have soared as home prices plunged. According to the Mortgage Bankers Association, 9.16% of mortgages on one- to four-family homes were one month or more overdue or in foreclosure during the second quarter--the highest level since the trade association began the survey 39 years ago. On the upside, declining home prices have made homes in many regions more affordable--bringing prices closer to their long-term relationship to income (The Wall Street Journal Online Oct. 8) ...

• Americans' retirement accounts have lost as much as $2 trillion in value--or 20%--during the last 15 months, said Congressional Budget Office head Peter Orszag. In testimony to the House Education and Labor Committee, Orszag said people are delaying major purchases and putting off their retirements to cope with the plunging value of their retirement funds. Americans increasingly are depending on retirement accounts like 401(k)s as firms eliminate traditional pensions. "Unlike Wall Street executives, America's families don't have a golden parachute to fall back on," said Committee Chairman George Miller, D-Calif. "It's clear that their retirement security may be one of the greatest casualties of this financial crisis," added Miller (Associated Press via Yahoo! News Oct. 8) ...

• Americans coping with declining home values and retirement assets also are struggling with soaring household costs. All types of homeowner expenses rose faster than incomes between 1996 and 2006, according to a report by the Center for Housing Policy. Mortgage payments jumped 46% over the 10-year period, while utilities surged 43%, property taxes soared 66%, and property insurance jumped 83%. In comparison, homeowner incomes rose only 36%. Overall, these household expenses jumped by 65% over the period. In addition, food costs soared 30%, transportation costs rose 33%, and health-care costs soared 56%--placing more pressure on household budgets. Household finances during the last two years are even more stretched, noted the report, because costs for energy, food and health care have increased further in that period (MarketWatch Oct. 9) ...

• Export growth--one of the few strong areas in the weak U.S. economy--is expected to plunge in coming months as the credit crunch spreads worldwide, dampening demand. Real goods exports jumped 12% over the past year--making up almost 13.5% of the nation's gross domestic product, the highest share since World War II. Rising commodity prices fueled much of this year's export boom. Prices now are retreating as the global economy weakens. In addition, the value of the U.S. dollar has increased, making U.S. exports less competitive. "Export-oriented manufacturers are going from being a real source of growth to just barely hanging on," said Mark Zandi, chief economist at Moody's Economy.com (The Wall Street Journal Online Oct.8) ...

• Unemployment claims retreated last week but remained at recessionary levels. First-time claims for unemployment benefits declined by 20,000 during the week ending Oct. 4 to 478,000, the Labor Department reported Thursday. The effects of Hurricane Gustav in Louisiana and Hurricane Ike in Texas added an estimated 17,000 claims to the total. The four-week moving average, which smoothes out weekly volatility, rose by 8,250 to 482,500. Continuing claims, the number of people still on the benefit rolls after an initial week of aid, jumped by 56,000 during the week ended Sept. 27 to 3.659 million. That's the highest level in more than five years (Associated Press via Yahoo! News Oct. 9). Companies have eliminated 760,000 jobs so far this year. The unemployment rate was 6.1% in September, up from 4.7% a year earlier ...

• Consumer sales plunged in September as shoppers worried by the credit crisis, high food and energy costs, and declining retirement accounts dampened spending, according to a report by MasterCard Advisors' SpendingPulse. Sales fell in all categories. Apparel sales dropped 5.5%, compared with a year earlier, while furniture sales were down 13.3%, and electronics and appliance sales were off 13.8%. "The turmoil on Wall Street had an immediate impact on consumer confidence," said SpendingPulse Research Director Kamalesh Rao. "Uncertainty around the financial markets naturally forces people to scale back their own spending," added Rao (Reuters via The New York Times Oct. 7) ...

• Chain-store sales edged up 0.1% during the week ending Oct. 4, following four consecutive weekly declines, according to the International Council of Shopping Centers. Year-over-year growth was up a modest 1.3%. Cooler weather and declining gasoline prices helped lift sales modestly in the latest week. However, tight credit, rising job losses, sluggish growth in wage income, and falling home prices and wealth will continue to dampen spending going forward (Economy.com Oct. 7) ...

News of the Competition

MADISON, Wis. (10/10/08)

• The Treasury Department is considering methods to inject capital directly into banks--perhaps by taking equity stakes--as the financial crisis depends (The Wall Street Journal Online Oct. 9). In a big shift in tone, Treasury Secretary Henry Paulson talked about the new authority to "inject capital into financial institutions." Previously, he had focused on the department's plan to purchase toxic securities. His statements came after Britain moved to pour funds into troubled banks there in exchange for stakes in them--a partial nationalization (Associated Press via The New York Times Oct. 9). Governments are rushing towards a number of alternatives to address the rapidly expanding credit crisis. In an unprecedented coordinated move, five central banks--including the Federal Reserve--cut interest rates on Wednesday. And on Thursday, South Korea, Taiwan, and Hong Kong all followed suit ...

• The Federal Reserve on Wednesday agreed to provide insurer American International Group (AIG) a $37.8 billion loan (Associated Press via The New York Times Oct. 9). The new loan comes after AIG said last week it already had spent $61 billion of its first federal loan. Under the new arrangement, the Federal Reserve Bank of New York will borrow up to $37.8 billion in investment-grade, fixed-income securities from AIG in return for cash collateral. In other news, AIG said Thursday that it is scrapping plans to hold another retreat for brokers (USATODAY.com Oct. 9). AIG came under intense criticism this week after congressional investigators found that the firm had spent almost $500,000 on a trendy retreat only days after the government agreed to spend billions of dollars to bail the insurer out. "In light of new circumstances we reevaluated cost of operations ... and the need to repay the fed while still serving the needs of out policyholders," said AIG Spokesman Joe Norton in announcing the cancellation ...

• Four of the nation's top mutual-fund companies--Fidelity Investments, Vanguard, T. Rowe Price, and Oppenheimer--said Wednesday that they have joined the new federal program that insures that the value of fund shares won't decline below a dollar. Last week, Charles Schwab, Federated, Morgan Stanley, Putnam Investments, BlackRock, and JPMorgan Chase announced their enrollment in the plan. The new program has helped stem the rush away from money-market funds. Fund assets steadied at $3.38 trillion during the week ending Oct. 7--following several weeks of decline, according to iMoneyNet (The New York Times Oct. 9) ...

• Iceland moved to nationalize a second large bank on Wednesday. Prime Minister Geir Haarde also is considering obtaining a loan from Russia and is meeting with the International Monetary Fund. Sweden said it will lend as much as $703 million to Iceland's Kaupthing Bank--the only large bank remaining in private hands. Britain and the Netherlands sought to shore up Icelandic bank accounts yesterday. Attracted by high interest rates, many people in those two countries have deposited money in Icelandic banks in recent years (The Wall Street Journal Online Oct. 9) ...

• Canada has the soundest banking system in the world--following closely by Sweden, Luxembourg, and Australia, according to a report by the World Economic Forum. The U.S. rates only 40, just behind Germany, at 39. Britain--which once ranked among the top 5--fell to 44th place. At the bottom of the list are Algeria, Libya, Lesotho, the Kyrgyz Republic, Argentina, and East Timor (Reuters via Yahoo! News Oct. 9) ...