Grand Theft Economics
Neil Irwin
The Washington Post
Fri, 06 Nov 2009 09:13 EST
© AP Photo/Paul Sakuma
Job recruiters wait at a booth at a holiday job fair at Skyline College in San Bruno, Calif.
More than one in 10 members of the American workforce were unable to get a job in October, the Labor Department said Friday, the first time in nearly three decades that the unemployment rate has soared into double digits.
The unemployment rate rose to 10.2 percent, department said, up from 9.8 percent in September, the highest level since 1983. Employers also continued slashing jobs, though at a slower rate than September, showing that even though the economy is expanding, the job market remains dismal.
The crossing of that symbolic 10 percent barrier is likely to weigh on both the psychology of American consumers and the urgency of efforts in Washington to prop up the job market.
The Associated Press
Thu, 05 Nov 2009 03:41 EST
Unemployed and desperate, a 19-year-old Sheboygan man is trying to sell one of the only things he owns - his name. Calvin Gosz has put the rights to give him a new name on eBay.
He said if people can have a name like Mercedes for free, "why wouldn't McDonald's pay for me to have Ronald McDonald as a name?" Gosz said he moved to Wisconsin from Florida in September. He's filled out more than a dozen job applications, but so far no luck.
Of his decision to go on eBay, he said, "I guess it just kind of goes to show the desperation of some people to try and get some money if they can't find work."
Al Yoon
Reuters
Thu, 05 Nov 2009 19:52 EST
© Reuters/Jessica Rinaldi
A woman takes a brochure detailing how homeowners can make their mortgage payments more affordable at the Fannie Mae booth set up at the Housing Rescue Fair, part of the National Urban League's Economic Empowerment Tour, in Dallas, Texas June 13, 2009.
New York - Fannie Mae, the largest provider of funding for U.S. home loans, said on Thursday bad mortgages and a federal foreclosure prevention program left it with a $18.9 billion loss, forcing it to tap the Treasury again to plug a hole in its net worth.
Fannie Mae (FNM.P) (FNM.N) , seized by the government last year, said the quarterly loss stemmed from $22 billion in credit-related expenses. These included charges on mortgages it bought out of securities as it modified loans under President Barack Obama's foreclosure prevention plan.
The company also boosted its provision for credit losses in future quarters, and said it expects those impairments to increase this quarter and through 2010.
The assessment is dire for the housing market that has appeared to post a fragile recovery over the past several months with a rebound in home sales and prices in some regions.
Matthew Goldstein and Jonathan Stempel
Reuters
Thu, 05 Nov 2009 19:47 EST
New York - Fourteen people were charged with fraud and conspiracy in a dramatic widening of an insider trading scandal that has ensnared hedge fund managers, top Silicon Valley executives and a bevy of white-shoe advisers.
In complaints that read like scripts for the TV series The Sopranos, investigators alleged suspects dropped off bags full of cash, used prepaid cellphones to dodge wiretaps, and used nicknames such as "the Greek" and "the Octopussy."
"Some of the defendants -- taking a page from the drug dealer's playbook -- deliberately used anonymous, hard-to-trace, prepaid cellphones in order to avoid detection," U.S. Attorney Preet Bharara told a news conference on Thursday.
"When sophisticated business people begin to adopt the methods of common criminals, we have no choice but to treat them as such," he added.
Nick Timiraos
The Wall Street Journal
Thu, 05 Nov 2009 16:44 EST
© Associated Press
Fannie Mae plans to allow homeowners facing foreclosure to stay in their homes and rent them for up to one year as part of the latest effort to help troubled borrowers while keeping a glut of foreclosed properties from hitting the housing market.
The Deed for Lease Program, which Fannie plans to roll out on Thursday, will offer borrowers who fail to complete or don't qualify for a loan modification or other workout to deed their property to the lender in exchange for a lease. Borrowers-turned-tenants will be able to sign leases of up to 12 months and will pay market rents, which in most cases are lower than the cost of mortgage payments.
Xinhua
Thu, 05 Nov 2009 00:00 EST
The Russian economy, which had been developing at high speed prior to the global financial turmoil and economic downturn, has suffered severe losses in the crisis. Nonetheless its prospect remains uncertain at present.
President Dmitry Medvedev estimated that Russia's 2009 Gross Domestic Product (GDP) may decline 7.5 percent compared with that of 2008.
Statistics showed that Russia's GDP contracted 10 percent in the first nine months this year. Though monthly GDP has continued to grow starting from June, none of the growth rates was higher than 0.5 percent.
Meanwhile Russia's industrial production declined 13.5 percent from January to September, with the process industry plunging 19.1percent.
One good news may be the high inflation that once bothered Russia has somewhat relieved. Prime Minister Vladimir Putin estimated that the inflation rate might be lowered to less than 9 percent this year.
However, lowering inflation rate turned out to have been followed by shrinking consumption.
Simon Clark and Caroline Binham
Bloomberg
Thu, 05 Nov 2009 12:10 EST
Barclays Plc Chief Executive Officer John Varley stood at the wooden lectern in St. Martin-in-the- Fields on London's Trafalgar Square last night and told the packed pews of the church that "profit is not satanic."
The 53-year-old head of Britain's second-biggest bank said banks are the "backbone" of the economy. Rewarding high- performing bankers with more pay doesn't conflict with Christian values, he said. Varley was paid 1.08 million pounds ($1.77 million) and no bonus in 2008.
"Talent is highly mobile," Varley, a Catholic, said. "If we fail to pay or are constrained from paying competitive rates then that talent will move to another employer."
Comment: Christianity is soooo flexible when needed to justify the actions of the controllers.
Greg Gordon
McClatchy
Tue, 03 Nov 2009 21:48 EST
New York - Inside the thick Goldman Sachs investment circular were the details of a secret, $2 billion deal channeled through a Caribbean tax haven.
The Sept. 26, 2006, document offered sophisticated U.S. and European investors an opportunity to buy into a pool of supposedly high-grade bonds backed by residential, commercial and student loans. The transaction was registered through a shell company in the Cayman Islands.
Few of the potential investors knew it, but the ratings of many of the mortgage securities hid their true risks and, in some cases, Goldman's descriptions exaggerated their quality.
Martin Z. Braun and William Selway
Bloomberg
Wed, 04 Nov 2009 20:01 EST
JPMorgan Chase & Co. agreed to a $722 million settlement with the U.S. Securities and Exchange Commission to end a probe into sales of derivatives that helped push Alabama's most populous county to the brink of bankruptcy.
JPMorgan will give Jefferson County, Alabama, $50 million, pay a $25 million penalty and cancel $647 million in fees the county faced to unwind the transactions, according to an SEC news release. In addition, the agency charged two former JPMorgan employees for their roles in an "unlawful payment scheme" that allowed them to win bond and interest-rate swap business with the county.
The settlement comes a week after Larry Langford, the former president of the Jefferson County Commission and Birmingham mayor, was convicted for accepting $235,000 in designer clothes, Rolex watches and cash from an Alabama banker who JPMorgan paid almost $3 million to help arrange the swaps associated with a refinancing of the county's sewer debt.
"It's a good day for us," said Jefferson County Commission President Bettye Fine Collins. "Finally, we're seeing some movement. We have been victimized by our creditors."
Kevin Kingsbury
CNNMoney.com
Tue, 03 Nov 2009 19:21 EST
Johnson & Johnson (JNJ) unveiled plans to generate up to $1.7 billion in pretax cost savings through job cuts and other means when planned moves are fully implemented in 2011. Up to 7% of the company's nearly 120,000-person work force will be eliminated through the streamlining. The health-products giant said job cuts will be only one aspect of the move.
A fourth-quarter restructuring charge of up to $1.3 billion will be recorded as the company reiterated its 2009 earnings target excluding items such as that charge.
This year has shaped up to be one of J&J's most difficult, with all three of its main business units showing signs of weakness. Heightened competition from generics has hurt its prescription-drug arm, while unfavorable currency-exchange rates have pulled down sales growth for consumer health care and medical devices.
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