Business this week

Hank Paulson, America's treasury secretary, gave his strongest warning yet that the slowdown in the housing market and concurrent crisis in the credit and mortgage markets posed a “significant” risk to America's economy. Mr Paulson pointed out that the problems did not stem only from the subprime-mortgage market, and that the number of homeowners finding it difficult to make their mortgage payments in the “prime” market was on the rise.

Mr Paulson spoke soon after the Treasury prompted Citigroup, Bank of America and JPMorgan Chase to set up a fund that will buy highly rated assets from structured investment vehicles, which own mortgage-backed securities and have had trouble raising cash during the credit squeeze. Worth up to $100 billion (but involving no government money), the fund is designed to boost liquidity and confidence in the money markets.

Rocky foundations

Underlining the woes besetting America's homebuilders, DR Horton, the biggest by sales, said almost half its orders had been cancelled in the three months to September 30th. Meanwhile, figures showed that the construction of new homes in September was the lowest, at an annual rate, for 14 years.

Big banks continued to report mixed quarterly earnings. Whereas Citigroup's net income fell by 57%, compared with a year earlier, JPMorgan Chase's net profit rose slightly thanks to revenue from private-equity deals, which offset $1.6 billion in write-downs on leveraged loans and collateralised-debt obligations.

Northern Rock's share price took another battering amid anxiety about the benefit to shareholders of a potential takeover. The British bank was bailed out last month when it could not raise cash in the credit markets. Several parties are pondering a bid, including a consortium led by Sir Richard Branson's Virgin Group that includes AIG, America's biggest insurer. See article

India's stockmarket briefly tumbled after regulators proposed restricting capital inflows from derivatives sold offshore, which would affect a sizeable chunk of foreign portfolio investment. The government blames a surge of cash from abroad for driving up the rupee. See article

A graceful exit

Mike Turner said he would retire as chief executive of BAE Systems next August, much sooner than had been expected. Rumours that Mr Turner was pushed by the board of Europe's biggest defence company were denied. BAE gets around half its business in the United States, where its dealings with Saudi Arabia are being scrutinised by the Justice Department. See article

After a delay of two years caused by assembly problems, Airbus finally delivered its first A380 super-jumbo, to Singapore Airlines. The jet was handed over at a ceremony in Toulouse, where Airbus is based. Its first commercial flight, between Singapore and Sydney, is due to take place at the end of this month.

Boeing replaced the head of its 787 Dreamliner project. The company recently admitted that the first deliveries of the new jet will be postponed because of production snags.

Oracle made a $6.7 billion offer for BEA Systems, a rival business-software company, which was promptly rejected by BEA's board as too low. Carl Icahn, a veteran activist investor with a stake in BEA, has been pushing for a sale. See article

It was a busy week for Mr Icahn. Biogen, a biotechnology company based in Cambridge, Massachusetts, announced that it was seeking a buyer and had received expressions of interest from several parties about a possible sale. Included is a proposal, rumoured to be worth $23 billion, from Mr Icahn.

Ericsson's share price plunged by 24% after the company issued a profit warning for the third quarter. The Swedish telecoms-equipment maker has seen sales fall because of a drop in demand for network upgrades in North America and Europe.

Following the joint venture between SABMiller and Molson Coors, there was further talk of consolidation in the beer industry after Carlsberg and Heineken said they were considering a joint bid for Scottish & Newcastle, Britain's biggest brewer.

Led Zeppelin agreed to make its lucrative back catalogue of songs available at online music stores. The legendary band had been one of only a handful of big acts still resisting digital sales of their work.