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Grand Theft Economics
Marcia Kramer
CBS 2 News
Tue, 10 Nov 2009 08:28 EST
Delivers Scary News To Legislature, Says Only Way To Fix Problem Is To Have Immediate Cuts To Education, Hospitals
Albany Gov. David Paterson called an unusual joint session of the Legislature Monday to implore recalcitrant lawmakers to close the state's huge budget gap before New York runs out of money.
To some lawmakers it's nothing more than a photo op to help Paterson get re-elected. But the governor is dead serious. He said if the Legislature doesn't cut the budget now the state could run out of money by next month.
"We're going to run out of cash in four and a half weeks. We are going to run out of money. Unless we do something about it, (it will) threaten generations," Paterson said.
And so began what is turning out to be a tense tug of war between Gov. Paterson and the Legislature.
Michael J. Moore and Ian Katz
Bloomberg
Tue, 10 Nov 2009 08:22 EST
Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co.'s investment bank, survivors of the worst financial crisis since the Great Depression, are set to pay record bonuses this year.
The firms -- the three biggest banks to exit the Troubled Asset Relief Program -- will hand out $29.7 billion in bonuses, according to analysts' estimates. That's up 60 percent from last year and more than the previous high of $26.8 billion in 2007. The money, split among 119,000 employees, equals $250,400 each, almost five times the $50,303 median household income in the U.S. last year, data compiled by Bloomberg show.
The three will award more in stock and defer more cash payments under pressure from regulators to tie pay to long-term results, compensation experts said. They may still face public wrath over the size of bonuses after the government injected capital into all the major financial institutions following Lehman Brothers Holdings Inc.'s collapse in September 2008.
Nadine B. Hack
Blog Critics
Sat, 07 Nov 2009 21:41 EST
The 2002 Congress passed the Sarbanes-Oxley Act, which required public companies not just to have internal controls against fraud - something by law they had to do since 1977 - but through its Section 404 also mandated them to report on whether they maintained these controls.
As a board member who often chairs governance sub-committees, I have used Sarbanes-Oxley as the gold standard not just to guide procedures of for-profit but also of not-for-profit organizations. While the latter were not covered under Sarbanes-Oxley, I have advocated that non-profits who followed its guidelines would be at the cutting edge of best practices in good governance. A
New York Times article by Floyd Norris "Goodbye to Reforms of 2002" describes how congress already has substantially gutted Sarbanes-Oxley over the years and now plans to further remove most of its teeth.
David Knowles
Sphere.com
Fri, 06 Nov 2009 15:09 EST
Apparently, times aren't so tough all over.
According to a new study compiled by the Center for Responsive Politics, *237 members of the U.S. Congress, or 44 percent, are millionaires*.
"What's easy to see is that the economic reality of our elected officials is not reflective of the general population," said Dave Levinthal, who helped compile the study's findings.
Nationwide, only 1 percent of U.S. citizens qualify as millionaires.
Among the wealthiest members of Congress are Darrell Issa, R-Calif., whose net worth is estimated at $251 million, and Jane Harman, D-Calif., who boasts a net worth of around $244.7 million.
A slight majority of those elected to Congress are not millionaires. And some of the least well-off members include Alcee Hastings, D-Fla., and Jeff Fortenberry, R-Neb., both of whose net worth is less than zero, according to the RCP database.
Reuters
Mon, 09 Nov 2009 11:10 EST
© Unknown
Lloyd Blankfein
The chief executive of Goldman Sachs, which has attracted widespread media attention over the size of its staff bonuses, believes banks serve a social purpose and are doing "God's work".
In an interview with London's
Sunday Times newspaper, Lloyd Blankfein also said he believed big profits and bonuses at banks were a sign that the world economy was recovering.
"We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. We have a social purpose," the head of Goldman Sachs [GS 175.00 3.22 (+1.87%) ] told the paper.
Comment: Evidently loaning money at 'lofty' interest rates is Goldmans idea of being nearer to their god.
Tavia Grant
The Globe and Mail
Sat, 07 Nov 2009 21:38 EST
© The GLobe amd Mail
Self employed consultant Tracey White working in her home office.
The jobs market is frozen.
More than 43,000 Canadian jobs vanished in October, suggesting that after two consecutive months of gains, companies are waiting for more signs of a sustained recovery before they begin hiring again.
Canada's unemployment rate rose to 8.6 per cent, up from 8.4 per cent a month earlier, and a continued trend to self-employment shows the cold job market is forcing many to create their own work.
But behind the bleak headline number that was released by Statistics Canada Friday, there is a subtle shift in the wind.
The economy has now added full-time jobs for two months in a row as part-time work receded, suggesting there are at least some signs of optimism. Also, higher-paying jobs were created in October in areas such as construction, while positions were shed in the lower-paying retail sector.
Megan Woolhouse
The Boston Globe
Fri, 06 Nov 2009 02:35 EST
Credit card companies are rushing to increase interest rates to historic highs of more than 30 percent, cut credit limits, and add new fees, even for customers who pay their bills on time.
Lenders are making the moves in advance of tougher federal regulations for credit cards scheduled to take effect on Feb. 22. The new rules will limit how companies can modify credit card agreements, specifically prohibiting them from retroactively raising interest rates and fees on existing balances.
US Representative Barney Frank, the Massachusetts Democrat who chairs the Financial Services Committee and is a leader in the effort to revamp credit card policies, said banks have "abused'' the nine-month period granted them to re-tool their practices.
MarketWatch
Sat, 07 Nov 2009 02:12 EST
A California-based bank that focused on the Chinese-American market was the largest of five failures on Friday that cost U.S. taxpayers more than $1.5 billion.
United Commercial Bank of San Francisco, whose parent company was UCBH Holdings Inc., was shut down by federal banking regulators late Friday, along with four other banks. The shutdown of the five banks brings the number of bank failures for 2009 to 120.
The 63 U.S. branches of United Commercial were set to reopen Saturday under the ownership of Pasadena, Calif.-based East West Bancorp Inc. United Commercial, which specialized in serving the Chinese community throughout the U.S. and American companies doing business in China, had assets of $11.2 billion and deposits of $7.5 billion as of Oct. 23.
Lucia Mutikani
ABC News
Sat, 07 Nov 2009 01:38 EST
The U.S. jobless rate unexpectedly jumped to 10.2 percent last month, a 26-1/2-year high, adding to pressure on the Obama administration to do more to tackle unemployment even as signs of recovery mount.
The Labor Department said on Friday that employers cut 190,000 jobs in October, more than the 175,000 markets had expected but fewer than the 219,000 jobs lost in September. Job losses for August and September were revised to show 91,000 fewer jobs were lost than previously reported, taking some of the sting out of the report.
While the revisions hinted at some improvement, economists had expected the jobless rate to rise to 9.9 percent from September's 9.8 percent. A wider gauge of labor-market slack that includes unemployed Americans who have given up looking for work hit a record 17.5 percent.
Comment: Note that this 10.2 percent unemployment rate is obtained after much distortion to make it look better.The alternative and more reliable figure at
Shadow Government Statistics is currently about 22 percent.
Ben Webster
Times of London
Sat, 07 Nov 2009 07:05 EST
A world treaty on climate change will be delayed by up to a year and is likely to be watered down because countries with the highest greenhouse gas emissions are refusing to commit to legally binding reductions.
British officials preparing for next month's UN summit in Copenhagen said the best that could be hoped for was that national leaders would make "political agreements" on emission cuts and payments to help poor countries to adapt to climate change. These agreements would be non-binding, however, and could later be revised or rescinded by national parliaments.
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