From the Wall Street Journal….

It used to be that credit-card companies lured customers with cash rewards. Now American Express Co. is paying to get rid of them. The card issuer is offering selected customers a $300 AmEx prepaid gift card if they pay off their balances and close their accounts.

The unusual move underscores how quickly conditions have deteriorated in the credit-card market. The current economic morass was provoked by spiking mortgage defaults. But as the economic crisis widens and unemployment climbs, there is growing concern that credit-card defaults will soar into the stratosphere as well.

From Reuters…..

The main irrigation system for California farmers, the Central Valley Project, expects to halt water deliveries to most of its growers this year due to one of the worst droughts in state history, federal managers said on Friday.

The zero-water allocation for most CVP users was declared by the U.S. Bureau of Reclamation as California water officials repeated their plans to cut amounts supplied from a separate state-run water project to 15 percent of normal allotments.

The cutbacks are a huge blow to farmers in the Central Valley, which produces over half of the fruit, vegetables and nuts grown in the United States, and will undoubtedly lead to higher prices for a wide variety of crops.

From the Times….

US prices rise despite disappearing inflation

A question for an irrational world: For most of my adult life, asset prices have soared faster then GDP growth while at the same time inflation was mild. Why then is everyone so convinced that a sharp fall in assets prices will protect us from inflation?