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In the Mexican town of Tarimbaro, construction has stopped on new homes, so sales at a hardware store are half last year's total. A butcher who slaughtered a head of cattle a day now slays two a week. And Rocio Rangel feeds her son and daughter bread and coffee for dinner.

Rural Mexican towns are suffering as money transfers from relatives working north of the border dry up, the result of a weak U.S. economy. Remittances equaled 2.7 percent of gross domestic product last year and are Mexico's second-biggest source of dollar flows after oil exports.

“My children need more than this, but we don't have anything,'' said Rangel, 36, whose husband hasn't sent funds home from Florida in nine months.

Shrinking transfers, inflation at a three-year high and a peso that has appreciated 10 percent this year are eroding the purchasing power of Mexico's poor, the 35 percent of the population that can't afford basics such as clothing, housing and health care. Residents who depend on funds from abroad are cutting back on spending because of weakness in U.S. industries such as construction, the biggest employer of Mexico's migrants.

In the first half of this year, remittances fell 2.2 percent to $11.6 billion, the first decline for the period since Mexico's central bank began tracking the data in 1995. For the entire year, the bank forecasts they will drop as much as 3 percent.

Remittances grew only 1 percent in 2007 to $24 billion after a record 39 percent expansion in 2003.

Danger for Calderon

The dwindling flow of cash this year may shift support from President Felipe Calderon to the opposition Party of the Democratic Revolution, which attracts lower-income voters.

“The worse the economy is, the better'' the PRD will do, said Daniel Lund, president of consulting group Mund Americas in Mexico City. The party's former presidential candidate Andres Manuel Lopez Obrador refused to recognize a razor-thin defeat to Calderon in the 2006 election and set up his own quasi- government that opposes the president's initiatives.

Lopez Obrador, whose campaign pledge was “the poor come first,'' promised to reduce privileges for the business elite. Calderon is backed by the business community, who endorse his efforts to promote free trade and boost private investment.

An increase in popularity for Lopez Obrador “is the great danger'' for Calderon, said Gabriel Casillas, an economist at Banco UBS Pactual in Mexico City. “It's a priority for the presidency to try to prevent him from gaining more support.''

Diversified Exports

So far, the economy is benefiting from diversified exports and Calderon's plan to spend 2.5 trillion pesos ($250.7 billion) in public and private funds on infrastructure projects during his six-year term, creating construction jobs, building ports and expanding roads payday loans. The government estimates GDP expanded 3 percent in the second quarter.

In May, Calderon announced a program to boost aid to more than 5 million of Mexico's poorest families by 22 percent to 655 pesos a month. His goal is to shrink extreme poverty, defined as families unable to pay for a basket of basic foodstuffs, by 30 percent in the next five years. In 2006, 10.6 percent of the population was in the lowest income group.

Tarimbaro Mayor Baltazar Gaona Sanchez said Calderon's anti-poverty program benefits only about 6 percent of the townspeople and isn't having a significant effect. Residents work mainly in agriculture, growing corn, tomatoes and onions.

“There's still a lot lacking,'' he said. The economy of the municipality, which is 200 kilometers (124 miles) west of Mexico City, “has sunk,'' he said. “There are a lot of people who come to ask for help to eat.''

`No Work'

Maria Sebastiana, 50, who lives about an hour away in the town of Zinapecuaro, said her husband was fired from his construction job in Oregon and hasn't sent money to her since November. Still, her pregnant daughter's boyfriend has left for the U.S. in search of employment to support the couple and their child. “Here, there's no work,'' Sebastiana said.

In the San Fernando Valley of Los Angeles, Mexicans who once had full-time construction jobs are now looking for day employment on street corners, said Antonio Bernabe, day-laborer organizer at the city's Coalition for Humane Immigrant Rights.

“They are living in very poor conditions, eating noodle soups at 25 cents each,'' Bernabe said.

Only half of Latin American immigrants in the U.S. said they sent money home in February, down from 73 percent two years ago, according to a survey released in April by the Inter- American Development Bank.

Agustin Garduno, wearing a paint-stained sweatshirt, said he sleeps in cars and on floors at friends' houses because he can't afford rent. As noon approaches and no contractors have pulled up to the corner of Van Nuys Boulevard and Oxnard Street looking to hire, it will be the fifteenth day he has gone without work.

“If you gave me a ticket, I'll go back to Mexico because here, there's nothing,'' said Garduno, 48, who used to make $1,300 a month and now makes about $500.

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The Senate on Saturday overwhelmingly passed a landmark housing bill that will offer up to $300 billion in loans for troubled homeowners and establish a government rescue plan for mortgage finance giants Fannie Mae and Freddie Mac.

The House passed the bill on Wednesday just hours after President Bush reversed his long-standing vow to veto the bill. Bush is expected to sign it soon.

The legislation, one of the most far-reaching on housing in decades, marks the centerpiece of Washington’s efforts to address the nation’s housing meltdown.

"This legislation won’t perform miracles. But as others have said, it’s a step - and I hope an important step - to putting our nation on the road to economic recovery," said Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking Committee and a principal author of the bill.

Following the vote, Dodd said he will meet on Tuesday with representatives from the Treasury, the Federal Reserve, the FDIC and the Department of Housing and Urban Development to discuss how the legislation can be implemented as quickly as possible. "I’m not going to tolerate a slow walk," he said.

Though the Senate vote was 72 to 13, the bill was not without its staunch opponents.

Sen. Charles Grassley, R-Iowa, the leading Republican taxwriter, had supported earlier versions of the legislation but objected to the rescue plan for Fannie and Freddie. "This bill has fallen prey to the special interests on Wall Street and K Street at an unjustifiable expense to taxpayers and homeowners on Main Street," Grassley said.

The White House also objected to parts of the bill, including aid to states to buy foreclosed properties. But White House Press Secretary Tony Fratto said the measures concerning Fannie and Freddie are "urgently needed now … President Bush will sign this bill when he receives it, despite our concerns with some provisions."

The bill has two principal objectives: to offer affordable government-backed mortgages to homeowners at risk of foreclosure, and to bolster Fannie and Freddie with a temporary rescue plan and a new, more stringent regulator.

Provisions in the 700-page bill that would most directly affect consumers and communities include:

Increase the Federal Housing Administration’s role. The FHA will be allowed to insure up to $300 billion in new 30-year fixed-rate mortgages for at-risk borrowers in owner-occupied homes if their lenders agree to write down loan balances to 90% of the homes’ current appraised value.

The cost of the new FHA program - which would begin on Oct. 1 and be in place for just a few years - would be funded by fees from Fannie and Freddie, along with fees paid by both lenders and borrowers.

While the bill authorizes the FHA to insure up to $300 billion in loans, the CBO estimates that the agency is only likely to insure up to $68 billion and help keep roughly 325,000 people in their homes. Those estimates were based on the CBO’s assessment of who is likely to qualify under the program and accounts for a certain number likely to default anyway.

(Here are more details on this provision.)

Establish a stronger regulator for the GSEs. The new regulator will have a greater say over how well funded the two government sponsered enterprises (GSEs) are - a major concern in the markets that has sent stocks in both companies plunging.

Permanently increase "conforming loan" limits pay day loans. The bill would permanently increase the cap on the size of mortgages guaranteed by Fannie and Freddie to a maximum of $625,500 from $417,000.

The FHA maximum loan limits for high-cost areas would also increase to $625,500. Higher loan limits will make it easier for borrowers to get mortgages, because they’re more likely to be traded if they are considered conforming.

Create home-buyer credit. The bill includes a tax refund for first-time home buyers worth up to 10% of a home’s purchase price but no more than $7,500.

The refund, however, serves more as an interest-free loan, since it would have to be paid back over 15 years in equal installments.

Bar down-payment assistance for FHA loans. The bill eliminates a program that has allowed sellers to provide down payment assistance.

The bill would also increase to 3.5% from 3% the down payment requirement for borrowers getting FHA loans.

Create an affordable housing trust fund. The bill establishes a permanent fund to promote affordable housing. The fund would be paid for by fees from Fannie and Freddie.

Give grants to states to buy foreclosed properties. The bill would grant $4 billion to states to buy up and rehabilitate foreclosed properties. The funding had been opposed by the White House, which said it would benefit lenders and not homeowners.

Concerns over whether Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) will have enough money to weather future losses in the housing market sent shares plummeting in recent weeks. Since the beginning of June, Fannie’s stock price has dropped 57% and Freddie’s plummeted 66%. For the past year, they’re both down roughly 85% as of the end of trade on Friday.

Fannie and Freddie guarantee the purchase and trade of mortgages and own or back $5.2 trillion in mortgages.

To help stabilize markets, Treasury Secretary Henry Paulson asked Congress to temporarily empower Treasury to offer the companies a backstop if needed. Consequently the housing bill now includes provisions that let Treasury over the next 18 months offer Fannie and Freddie an unlimited line of credit and the authority to buy stock in the companies.

Both critics and supporters of the Paulson plan have expressed concern that loaning or investing money in the companies could leave taxpayers with a fat bill to pay.

The Congressional Budget Office on Tuesday estimated the potential cost of a rescue could be $25 billion. CBO said there is probably a better than 50% chance that Treasury would not need to step in. It also said there is a 5% chance that Freddie’s and Fannie’s losses could cost the government $100 billion. 

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Washington’s plan to rescue the housing market may help shore up the U.S. economy as it copes with the worst slump in the housing market since the Great Depression, but don’t look for a swift recovery.

Investor confidence has been bolstered by the government’s recent proposals, driving stock price higher since last week, and economists agree the move to provide extra funding for mortgage giants Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz) is vital.

One unintended consequence, however, has been rising interest rates as the bond market has sold off sharply since the plan was unveiled last week. That risks muting, at least in part, the broader benefit of supporting the two mortgage finance firms.

The U.S. House of Representatives approved the housing plan on Wednesday afternoon, with the Senate expected to vote on it later.

Policy-makers and economists see the government sponsored enterprises as crucial to keeping the housing market open for business since they own or have guaranteed almost half of the $12 trillion in U.S payday advance. mortgage debt outstanding.

Financial markets’ recent loss of confidence in the GSEs led many economists to contemplate the consequences if they were to collapse, convincing many that measures being taken by Congress were necessary.

“It’s necessary and it will have positive benefits to the U.S. economy for a period while we’re in such difficult straits,” Brian Fabbri, managing director of economic research at BNP Paribas, said about the rescue package, which has also been supported by the U.S. Treasury.

“If there is no GSE Treasury help, the housing market wouldn’t just be in recession or declining, it would plunge. We wouldn’t begin to estimate how low it might go if GSEs were not able to fulfill their mission.”  

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Drug developer Merck says its second-quarter profit rose 5% as cost-cutting efforts offset a drop in sales of its asthma treatment Singulair and cholesterol drugs Zetia and Vytorin.

Whitehouse Station, N.J.-based Merck & Co (MRK, Fortune 500). says profit rose to $1.77 billion, or 82 cents per share, from $1.68 billion, or 77 cents per share, during the prior-year period. Sales fell 1% to $6.05 billion from $6.11 billion.

Excluding restructuring charges, Merck says it earned 86 cents per share faxless payday loans.

Analysts polled by Thomson Financial expected profit of 83 cents per share on revenue of $6.05 billion.

Merck shares fell 23 cents to $35.10 in after-hours trading after falling $2.35, or 6.2%, to close at $35.33. 

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The Federal Reserve unanimously approved new mortgage lending rules Monday in a crackdown on shady practices - particularly those involving subprime loans made to borrowers with weak credit.

The agency made several substantial revisions to the proposed regulations it unveiled in December. Many of the changes acknowledged consumer advocates’ concerns that the rules still contained too many loopholes that would allow shady lending practices to continue.

But the Fed also made some concessions to industry executives, who feared increasing oversight would lead to less lending.

The new rules will apply to all mortgage lenders, not just those supervised and examined by the Fed. All but one requirement will take effect Oct. 1, 2009. However, board members said they will continue to work on further oversight of the mortgage industry.

"The proposed final rules are intended to protect consumers from unfair or deceptive acts and practices in mortgage lending, while keeping credit available to qualified borrowers and supporting sustainable homeownership," said Fed Chairman Ben Bernanke. "Besides offering broader protection for consumers, a uniform set of rules will level the playing field for lenders and increase competition in the mortgage market, to the ultimate benefit of borrowers."

The proposals won’t help the millions of homeowners who’ve already fallen behind in their mortgages, but the Fed is aiming to prevent another such crisis by tightening lending standards, particularly for subprime mortgages.

Many critics have charged that under former Fed Chairman Alan Greenspan, there were few restraints during the real estate boom. They say the agency should have flexed its muscles several years ago, clamping down on unscrupulous lenders and protecting borrowers.

Consumer advocates said they were pleased with the changes, but stressed that the Fed’s action is just one in a series of steps needed to better protect borrowers from shady lenders. Industry executives, meanwhile, applauded the Fed for attempting to protect consumers while keeping in mind the need for low-cost mortgage loans.

The rules

The new rules governing "higher-priced," or subprime, loans will:

• Prohibit creditors from extending credit without regard to a consumer’s ability to repay the loan from income and assets other than the home’s value. The lender complies, in part, by assessing repayment ability based on the highest scheduled payment in the first seven years of the loan.
• Require creditors to verify income and assets they rely upon to determine repayment ability
• Ban any prepayment penalty if the payment can change in the initial four years. For other higher-priced loans, a prepayment penalty period cannot last for more than two years.
• Require creditors to establish escrow account for property taxes and homeowner’s insurance. This rule will be phased in during 2010.

The Fed changed the definition of higher-priced loans to first mortgages with rates at least 1.5 percentage points above the average mortgage rate published by Freddie Mac. Also, second mortgages with rates at least 3.5 percentage points above the Freddie Mac rate will fall into this category.

With this change, the Fed is hoping to address industry complaints that the previous definition would capture non-subprime loans as well.

Additional rules will apply to all mortgages, regardless of rate.

• Creditors and mortgage brokers cannot coerce a real estate appraiser to misstate a home’s value.
• Companies that service mortgage loans are prohibited from engaging in certain practices, such as pyramiding late fees no fax payday loans. Also, they must credit consumers’ loan payments as of the date of receipt and provide a payoff statement within a reasonable time of request.
• Creditors must provide a good faith estimate of the loan costs, including a schedule of payments, within three days after a consumer applies for any mortgage loan, including home improvement loans or refinancings. Currently, these estimates are only required for home-purchase loans. Consumers cannot be charged any fee until after they receive the early disclosures, except a reasonable fee for obtaining the consumer’s credit history.
• In advertisements, companies must include additional information about rates, monthly payments and loan features. The rule also bans seven deceptive practices, such as saying a rate is fixed when it can change.

In a nod to the brokerage industry, the Fed withdrew a proposal requiring additional disclosure of the "yield-spread premium," which allows banks to pay brokers for steering homeowners into higher-priced loans. After testing consumers, the agency found that the rule would likely not be effective. But the Fed said it would continue reviewing the issue.

Advocates for consumers and industry generally pleased

Both consumer advocates and industry executives put a full-court press on the Fed in recent months, trying to get the agency to revise its proposed rules. More than 4,500 comments were filed since the agency announced its plan in late December.

After reviewing the final rules, advocates said they felt the changes did provide additional protections for the consumers. In particular, it’s important that the Fed eliminated the requirement that borrowers prove lenders engaged in a "pattern or practice" of originating unaffordable loans since that’s very hard to do, said Brenda Muniz, legislative director of Acorn, a housing advocacy group.

Still, the Fed could have done better by completely banning prepayment penalties, as several states have done, said Deborah Goldstein, executive vice president of the Center for Responsible Lending, a consumer rights organization. She noted that people in subprime fixed-rate loans are still subject to hefty fees if they try to refinance their loans within two years.

Also, some advocates wondered why the rules won’t take effect for 15 months, and why subprime borrowers can opt out of escrowing their property taxes and homeowner’s insurance after the first year.

"It’s the first step toward better protecting consumers in the mortgage market, but not the last step," said Jim Carr, chief operating officer of the National Community Reinvestment Coalition, an advocacy group.

Industry executives, meanwhile, endorsed the changes overall, but said there still may be some areas of concern in the 419-page document. For instance, the Mortgage Bankers Association said it plans to ask its members about the elimination of the "pattern or practice" rule.

Still, the new rules will help consumers, without placing such a burden on lenders that they will have to curtail credit, industry insiders said.

"This is just the right amount of regulation," said Marc Savitt, president of the National Association of Mortgage Brokers. 

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New Zealand consumer confidence has fallen to a record low as the economy faces a recession and unemployment rises, according to a survey.

Forty nine percent of 1,119 people surveyed in the two weeks ended June 29 said it was a bad time to a major household item buy, up from 45 percent in a poll completed two weeks earlier, research group Roy Morgan said in a statement on its Web site. Thirty five percent said it was a good time to buy.

New Zealand's economy contracted in the three months ended March 31 and eight of 13 economists surveyed by Bloomberg News expect a contraction in the second quarter, putting the economy in its first recession since 1998. Record-high interest rates are crimping confidence and spending, say retailers.

“The deterioration in confidence bodes ill for retail spending,'' said Shamubeel Eaqub, economist at Goldman Sachs JBWere Ltd. in Auckland. “Current confidence levels match the lows seen in the early 1990s' recession.''

Sixty four percent of consumers expect the economy will deteriorate over the next year and 58 percent said they are financially worse off than a year earlier, Roy Morgan said. A record-high 33 percent of people expect to be worse off in a year instant payday loan.

Roy Morgan's overall confidence rating fell to 82 from 87.6 in mid-June.

Profit Outlook

Employment fell by the most in 19 years in the three months ended March 31, while the jobless rate increases to 3.6 percent from 3.4 percent. The central bank expects the jobless rate will rise to 4.6 percent by the first quarter next year.

Warehouse Group Ltd., New Zealand's biggest discount retailer, last month cut its profit forecast 10 percent, citing a slump in spending as food and fuel costs soar.

“I don't think there's a household in the country that's not under pressure financially from the burden of these higher food and petrol costs,'' Chief Executive Officer Ian Morrice said in a June 27 interview.

Reserve Bank Governor Alan Bollard said last month that slow growth means it is “likely'' he will cut the official cash rate from a record 8.25 percent this year. Twelve of 13 economists surveyed by Bloomberg News predict a rate reduction by September.

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Manhattan apartment sales dropped the most for a second quarter since 1998 and unsold inventory approached an eight-year record, two signs prices may be poised to drop in the nation's most expensive urban housing market.

Sales fell 22 percent from a year earlier and inventory rose 31 percent to 6,869 units, New York-based real estate appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said in a report today. The median price of a co-operative or condominium apartment increased almost 15 percent to a record $1.03 million, lifted by new developments.

Transactions are declining as financial firms have announced plans to cut almost 90,000 jobs after taking more than $400 billion in mortgage-related losses and writedowns. Those companies may lose as many as 175,000 employees by next June, according to executive recruiters such as New York's Gerson Group, casting a pall on a property market driven by Wall Street compensation.

“People are asking: `Am I going to have a job?''' said Pamela Liebman, chief executive officer of the Corcoran Group, a Manhattan-based real estate brokerage that also issued a price report today. “There is a lot of uncertainty and uncertainty puts people on the sidelines.''

The U.S. housing slump started in mid-2005 when sales of new and existing homes began to drop, bringing a five-year boom to a close. Prices for existing homes started falling last July and finished the year below 2006 levels, the first annual decline since the Great Depression, according to the National Association of Realtors in Chicago.

Longer Selling Time

While prices in New York City are holding up for now, buyers remain wary and apartments are taking longer to sell. The average time spent on the market rose 15 percent to 135 days, according to Miller Samuel. At the end of May, there were 7,320 housing units for sale in Manhattan, the second-highest number for the month since Miller began keeping records in 2001.

“There is sort of the anticipation, the expectation that the other shoe is going to drop,'' Miller Samuel President Jonathan Miller said. “I think for this quarter, it hasn't.''

All four reports issued today show price increases. Corcoran, owned by Apollo Management LP, and the New York-based brokers Brown Harris Stevens and Halstead Property LLC, owned by Terra Holdings LLC, produced reports in addition to Miller's. The figures vary in part because the brokers include some of their own sales that have yet to show up in the city's public records database.

Manhattan apartment prices rose 3.6 percent in 2007, according to Miller Samuel.

Luxury Sales

About a third of second-quarter closings were new condominiums, some of which went into contract before turmoil hit the credit markets last August and September, said Gregory Heym, chief economist for Terra Holdings us fast cash.

Many of the units closing now are multimillion dollar condominiums at the recently converted Plaza and at architect Robert A.M. Stern's 15 Central Park West.

Those properties helped drive the median condominium price up almost 22 percent to $1.3 million in the three months ended in June and contributed more than three percentage points to the city's overall increase in median price, according to Miller. Without them, the median rose 11.2 percent, Miller said.

Goldman Sachs Group Inc. Chairman Lloyd Blankfein, former Citigroup Inc. Chairman Sanford Weill and rock star Sting have bought units at 15 Central Park West, where the apartments have heated bathroom floors, Vermont marble countertops and six-burner Thermador ranges.

Future Bonuses

Other buyers there include Nascar Inc. Chairman Brian France, who paid $10.7 million, and Mitchell Julis, co-founder of the asset management firm Canyon Partners LLC, who paid $10.2 million, according to city records.

Once the remaining units in Stern's building and the Plaza close, average prices may drop as much as $200,000, Heym said.

“I don't expect to see any dramatic price change before the end of the year,'' Heym said. “The real telling thing will be Wall Street bonuses and how the city looks going into 2009.''

Prices of two-bedroom apartments rose 18 percent to $1.65 million, the biggest increase for any size category. Studios rose almost 12 percent to $480,000, one bedrooms increased 11 percent to $778,961, three bedrooms by 3 percent to $3.7 million and apartments with four or more bedrooms climbed 11 percent to a median of $7.35 million, Miller's data show.

`Kiss the Ground'

The top end of the residential market remained the strongest as wealthy buyers bought condominiums with amenities such as gym and spa services, hotel-style room service and swimming pools.

The median price of a luxury apartment rose almost 38 percent to $4.95 million in the Miller Samuel survey and 35 percent to $4.88 million, according to Corcoran. Both companies consider apartments of more than $3.1 million as luxury.

“Real estate markets go up and down, and when it comes to New York City, it's an island. There's not a lot of land, and it'll survive,'' said Dottie Herman, chief executive officer of Prudential Douglas Elliman. “I think we need to kiss the ground because we live in New York.''

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World energy use is expected to surge 50% from 2005 to 2030, largely due to an expanding population and rapid economic growth, according to a government report Wednesday.

Without any new laws restricting greenhouse gases, carbon dioxide emissions will see a similar jump, the Energy Information Administration said in its annual report on global energy markets.

Demand for new energy is led by the developing world, EIA said.

While developed countries are expected to see a 19% rise in energy use, demand for energy in the developing world is expected to surge 85%.

Oil prices are expected to range from $113 to $186 a barrel, under different price scenarios the agency modeled.

"Given current market conditions, it appears that world oil prices are on a path that more closely resembles the projection in the high price case than in the reference case," the report said.

Under the high price case, world oil use is expected to grow to 99 million barrels a day in 2030, from about 85 million barrels a day currently, as high prices limit demand.

In the medium price case, worldwide oil use is expected to jump to 113 million barrels a day, EIA said, as oil prices ease to about $70 in the next few years and new supplies come online.

The projections in the report were based on 2007 oil prices. Oil has nearly doubled in price since then.

Although the government and the oil companies say producing 113 million barrels of oil a day is possible, market skepticism has kept oil prices high over the last few years.

The International Energy Agency, a sister organization to EIA established by developed countries to counter the influence of OPEC, recently said it is revising its assumptions about oil supply. That agency said it’s likely the world will not be able to produce more than 100 million barrels of oil a day by 2030.

Others in the industry, like the oilman T. Boone Pickens, feel the world is pretty much maxed out at 85 million barrels a day.

"The key here is going to be supply," said Paul Horsnell, head of commodities research at Barclays Capital in London http://us-no-fax-payday-loans.com. "And we’re thinking closer to 100 [million barrels a day] as opposed to 115."

The report also said that rising prices are expected to decrease the use of oil and biofuels as a fuel, going from 37% of the world’s energy use in 2005 to 33% in 2030, although liquids will remain the largest single source of energy.

Production of so called non-conventional liquid fuels - things like ethanol, coal-to-liquid, heavy oil and oil from tar sands - is expected to see a big increase.

Under the medium price scenario, these unconventional fuels go from 2.5 million barrels a day in 2005 to nearly 10 million barrels a day in 2030. Under the high price scenario, these numbers could be much higher, the report said.

Without any new greenhouse gas restrictions, coal use is expected to soar - increasing 64% by 2030.

China - which the report said has doubled its coal use since 2000 - is leading the way, accounting for over 70% of new coal consumption.

China, along with India and the U.S., has huge amounts of coal, which is a cheap but dirty fuel.

Electricity generation under the medium prices scenario is expected to nearly double by 2030, the report said, fueled mainly by coal and natural gas.

But future legislation could curb those predictions. The agency noted that "the outlook for fossil-fuel-fired generation could be altered substantially by international agreements to reduce greenhouse gas emissions."

Nuclear power is expected to increase by nearly 50%, the report said, mostly in India and China.

Use of renewable energy is expected to increase nearly 70% by 2030. But much of that is due to large hydropower projects, and under current policies, renewables’ overall contribution to global energy supply remains small.  

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Orders for manufactured goods posted a surprisingly strong increase in April as demand rose across a number of industries.

The Commerce Department reported that orders were up 1.1% in April following a 1.5% increase in March. Orders had fallen in January and March as a spreading slowdown in the overall economy depressed activity in manufacturing.

The April increase came as a surprise. Analysts had been forecasting a small decline faxless cash advance. Orders in the battered auto industry and in the volatile commercial aircraft sector did fall sharply but other areas showed strength, from rising demand for iron and steel to appliances and heavy machinery. Demand for petroleum was also up sharply, reflecting sharply higher prices. 

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Bank of Montreal profits dropped to $642 million in the second quarter as the bank booked $151 million in provisions for credit losses, but gave a mildly optimistic outlook on the state of credit markets.

Earnings for the period ended April 30 were worth $1.26 per share, down from $671 million or $1.31 per share a year ago.

The bank's revenue improved four per cent year-over-year, to $2.62 billion.

In the capital markets division, net income dropped 7.5 per cent to $182 million, including a recovery of $42 million pre-tax, or about six cents per share, from writedowns logged in previous quarters.

Part of the reversal of previous charges was tied to the troubled Apex and Sitka asset-backed commercial paper trusts. Apex underwent a restructuring that completed on May 13, after the quarter ended, and the bank says it expects to recover more of its writedowns in the third quarter.

"Results in BMO Capital Markets reflect current market conditions as activity in the investment banking business was slow in the quarter," said BMO president and CEO Bill Downe.

But, he added, the bank has seen "indications that concerns are easing in credit markets as credit spreads are trending towards more normal levels and we are encouraged by these developments."

BMO's earnings per share (TSX: BMO) were below expectations, excluding the recoveries and an unusually low tax rate of 16.3 per cent, according to John Aiken of Dundee Capital Markets quick payday loan. He said core EPS was between $1.10 and $1.14 per share, compared with a Thomson Financial consensus expectation of $1.19.

"Further, with BMO, traditionally the low-provision bank, increasing its provision guidance, we believe that the other banks will face earnings headwinds in the coming quarters related to deteriorating credit and higher provisions," Aiken added.

BMO shares opened with a gain of one per cent after the quarterly release, but by midmorning were down 16 cents at $48.84 – compared with over $70 a year ago.

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