Sub-prime toll deepens: Economy round-up

Falls on US sharemarkets because of the sub-prime crisis now officially constitute a correction – a drop of more than 10% – after the US S&P500 closed at 1407.22 on Monday night, 10.1% down on the record highs reached as recently as October.

Broker predictions that giant US bank Citigroup will have to write off even more than the $US15 billion in losses already forecast because of its exposure to the sub-prime crisis were the trigger for the renewed falls.

The jitters are being felt in Australia, with the S&P/ASX200 down 1.1% on Tuesday’s close to 6359.6 at 12.45pm on Wednesday.

The Westfield Group, which owns many shopping centres in the US, has been one of the fastest fallers – down 2.5% to $20.28 at 12.45pm Wednesday – on predictions that consumer confidence there is set to fall.

Falling gold prices also sent shares in miners such as Newcrest Mining and Lihir Gold lower.

And new house sales were flat in October, increasing by a minimal 0.8%, according to new Housing Industry Association figures released today.

A 2% drop in new house sales was offset by a whopping 25% increase in more volatile apartment apartment sales market.

Results were also inconsistent across the states, with skyrocketing new home sales – up 28% – in Victoria compensating for fairly modest positive or negative results around the rest of the country.