February 19, 2008

By Madlen Read (View author info)

Soaring oil prices could bring more problems for consumers, having already made many Americans shy about spending in recent months. Consumer spending, a key driver of U.S. economic growth, has also been shaken by falling home prices and the volatile stock market. Beyond inflation, investors also continued to be worried about the financial sector. So far, global banks have written down more than $150 billion from bad bets on mortgage-backed securities -- and more losses are expected to the first quarter. British bank Barclays Group PLC revealed credit-related losses totaling $3.13 billion, up from a smaller write-down in November, while Credit Suisse, Switzerland's second-largest bank, said it has suspended "a handful" of traders in connection with the overvaluation of asset-backed securities by $2.85 billion.

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