Consumer News & Alerts

September 29, 2008

COLLAPSE AVERTED? BAILOUT PLAN APPROVED
Congressional leaders were skeptical that the sky would fall Monday morning if they didn't approve the Wall Street bailout plan so feverishly promoted by the Bush Administration. But in the end, no one was willing to take the chance, and so a compromise measure was hammered out early Sunday morning, in time to reassure jittery Asian markets. Read more ...

Some Consumers React Angrily to Bailout Plan Democrats managed to insert provisions setting some limits on executive pay and providing very modest help for troubled homeowners but to many taxpayers, the plan seemed like little more than Congress caving in once again to the lobbyists whose free-market rhetoric is liberally laced with bigtime campaign donations and, ahem, emoluments that don't show up on official disclosure forms. One such angry citizen is Ivan Fail, a Missouri activist who probably thinks everyone in Washington should be tarred and feathered but instead politely suggests they all be sued into dust. Read Ivan's op-ed here.

• Wachovia Looks for Buyers of Troubled Assets Like WaMu, Wachovia's exposure to subprime mortgages weakens its position.

• WaMu Seized, JPMorgan Chase Buys the Remains Deal creates the largest U.S. bank.

WHAT IT MEANS
To be quite honest, no one really knows what the end results of the bailout will be. One thing's fairly certain: it will be good for the ink and paper business, as government printing presses go to work to crank out the hundreds of billions of dollars needed to finance the rescue. Before the final deal was worked out, our Mark Huffman also explained that, while everyone hopes it staves off a major recession, the plan is more than a little bit likely to usher in a new era of inflation. Read more ...

Oh, and speaking of inflation ...

Feds Probe Food Prices Skyrocketing prices of eggs, tomatoes and milk are being studied. The food industry blames the rapid increases on the cost of fuel, credit, etc., but some anti-trust investigators aren't so sure. Consumers aren't widely aware of this but the food business is generally considered a "dirty" business -- meaning that there are a lot of unsavory players, shady connections and backroom deals involved in the production and distribution of milk, eggs, grain and meat. If you look back at major political scandals over the years, many involved the agriculture and food industry. Read more ...

In other financial crisis news ...

• FDIC May Need Additional Funds if Banks Keep Failing Remaining pool to cover insured deposits may go quickly.

• Home Sales Continue Their Slide in August Tightened lending standards blamed for fewer mortgages.

• Wall Street Becomes Main Street: Is It 1929 Again? Rules changes could have prevented financial crisis.

• House Passes Credit Cardholder's Bill of Rights Decisive majority endorses consumer protections.

MELAMINE SCARE SPREADS
The deadly chemical blamed for the deaths of infants and pets has now been found in instant coffee and tea milk products. The U.S. Food and Drug Administration (FDA) warned consumers not to drink the Taiwanese-made Mr. Brown instant coffee and milk tea products because of possible melamine contamination. Read more ...

So far the contaminant has not been found in human food products intended for sale in the U.S. but those who shop in ethnic food markets should be careful.

How bad is it? Well, it's bad enough that even two gorillas -- not exactly delicate little creatures -- have been sickened by milk powder suspected of containing melamine.

FORMALDEHYDE IN BABY FURNITURE
It's not just infant formula that could contain dangerous substances. California Attorney General Edmund G. Brown charges that dangerous levels of formaldehyde have been found in cribs, changing tables and other infant furniture. "Increasingly, the wood and other materials in consumer products are produced globally, and the lack of tough safeguards and strict enforcement can lead to dangerous levels of exposure,” Brown said. Read more ...

BIGGEST CHEVY DEALER COLLAPSES
The credit crunch and declining sales of gas-hungry light trucks are have many car dealers wondering if they'll be able to keep the shiny side up. Bill Heard, said to be the world's largest Chevrolet dealer, bit the dust last week, closing its 13 stores as sales slumped and inventory financing from GMAC dried up. As carmakers and their financial arms start hoarding cash, many more dealers could follow Heard to the off-ramp, although the auto industry is maneuvering to push Wall Street away from the trough and get its hands on a huge bundle of taxpayers' money. Read more ...

In other news of an automotive bent ...

• Nemet Chevrolet Plans Appeal in Consumer Site Suit NYC auto dealer claims judge wrongfully dismissed its defamation complaint against ConsumerAffairs.com.

• Gas Price Declines for 9 Days Gulf recovers from Hurricane Ike; Shortages persist in South.

• 1.6 Million Ford Windstars Investigated for Fire Hazard Complaints charge minivan burns without warning.

• Is Your Vehicle Child-Proof? Top tips for keeping your car and your kids safe.

• Chrysler Begins Production on Electric Car New plug-in hybrid versions of conventional vehicles coming soon.

DUKE STUDY NOT SWEET ON SPLENDA
In one of the longest-running debates on record, Duke researchers have no weighed in on the subject of artificial sweeteners, with a study that finds Splenda contributes to weight gain and may cause other health problems. There's a sour after-taste to the study, though: it was financed by the sugar industry. Of course, all concerned avow that the sugar swashbucklers had no idea what the outcome would be. Read more ...

In other health news ...

• CSPI Raps Nickelodeon Food Ads Nonprofit says kids' channel supports advertising for unhealthy snacks.

• Headaches Need to Be Watched Many different types of migraines, even more causes.

• Sitting Around Can Make You Hungry Even low-level physical activity blunts appetite.

• Caffeine Experts Want Warning Labels for Energy Drinks More information on amounts of caffeine would help buyers.

• Sinus Pains Similar to Arthritis, Depression Effects Symptoms resemble afflictions of the elderly.

THE WEEK'S RECALLS

SCAMS & OUTRAGES

• FTC Targets Foreclosure Scams Con artists prey on desperate homeowners.

• Advance Fee Card Scheme Fined $1 Million FTC says company charged people to use fake credit cards for its own Web site.

• Indiana Targets "Foreclosure Consultant" Attorney General wants deceptive claims stopped.

• Hispanic-Americans Pay More For Used Car Loans Interest rates 1.5 percent higher than national average.

• New Malware Targets Careerbuilder.com Users "Security certificate" email is a hoax.

HOUSEKEEPING NOTES

• Butch & Sundance We bid farewell this week not only to Paul Newman but also our treasured swashbucklers Joe Benton and Joseph S. Enoch, who are saddling up and heading out. We are pulling the wagons into a tighter circle in their wake.

• Yahoo! A Discovery! We have known for the last few months that something was afflicting our readers with Yahoo email addresses but couldn't figure out just what it was. We have now discovered that an otherwise innocuous typographical character was causing the links in our text-based newsletters to malfunction when displayed in Yahoo's email reader. This has now been fixed and we eagerly await the next esoteric email snafu.

• Martin H. Bosworth, whose firm hand usually guides this treatise, is away this weekend, allowing our grizzled founder, one James Hood, to try his hand at this chore once again. He raises a toast to those who wish us well. Those who don't ... well, you know.

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