Unemployment – Page 25 – Infinite Unknown

Lehman posts $4 billion quarterly loss, plans sales

September 10, 2008 by Infinite

NEW YORK (Reuters) – Lehman Brothers Holdings Inc plans to sell a majority stake in its asset management unit and spin off commercial real estate holdings, hoping to restore investor confidence and ensure its survival after reporting a record quarterly loss of about $4 billion.

Shares failed to rebound on Wednesday morning after plunging 45 percent a day earlier, reflecting Wall Street disappointment that Lehman did not announce more concrete actions.

U.S. Companies Cut 33,000 Jobs in August

September 4, 2008 by Infinite

Sept. 4 (Bloomberg) — Companies in the U.S. cut an estimated 33,000 jobs in August, a private report based on payroll data showed today.

The decrease followed a revised gain of 1,000 for the prior month that was lower than previously estimated, ADP Employer Services said.

The extended housing slump, high raw material costs and weaker demand are prompting employers to cut staff. Economists forecast the Labor Department will report tomorrow that the U.S. lost jobs for an eighth straight month last month.

Lehmans puts another 1,500 jobs on the block

August 31, 2008 by Infinite

Lehman Brothers is planning to axe up to 1,500 more jobs, as part of its desperate struggle to reduce costs, raise money and rebuild its battered balance sheet.

The job losses, which are still being planned by executives at the company’s New York head office, are expected to be spread among its 26,000-strong global workforce, including at its European headquarters in London, where it employs more than 4,500 people.

Rumours of the cuts began circulating internally at Lehman late on Thursday, adding to the gloom at the company, which is engaged in a fire sale of assets in order to replace billions of dollars lost on mortgage investments since the credit crisis began.

Consumer prices rise at double the expected rate

August 15, 2008 by Infinite

WASHINGTON (AP) – Consumer prices shot up in July at twice the expected rate, pushed higher by surging energy and food costs. The latest surge left inflation running at the fastest pace in 17 years.

Jobless rate climbs as 51,000 jobs vanish

August 1, 2008 by Infinite

WASHINGTON – Stores, factories and other businesses large and small showed workers the door last month, sending unemployment to its highest rate in four years and adding to the evidence an economic recovery remains far off.

Employers clamped down on hiring and cut 51,000 jobs in July, the Labor Department said Friday. The economy has shed jobs each month this year – 463,000 in all.

The unemployment rate rose to 5.7 percent, up from 5.5 percent in June.

Wachovia Has Record $8.9 Billion Loss, Cuts Dividend

July 22, 2008 by Infinite

If Wachovia fails, then you can probably forget about the FDIC.

And remember that there are no more bailouts left:
– Fed: No more bailouts, except Fannie Mae and Freddie Mac.
_______________________________________________________________________________________

July 22 (Bloomberg) — Wachovia Corp., the U.S. bank that hired Treasury Undersecretary Robert Steel as chief executive officer two weeks ago, reported a record quarterly loss of $8.9 billion, slashed the dividend and announced 6,350 job cuts. The stock slumped as much as 10 percent in New York trading.

The second-quarter loss of $4.20 a share compared with net income of $2.3 billion, or $1.23, a year earlier, the Charlotte, North Carolina-based company said today in a statement. The loss included a $6.1 billion charge tied to declining asset values.

The writedown, job cuts and second dividend reduction in three months reflect Steel’s response to the worst housing market since the Great Depression, which cost former CEO Kennedy Thompson his job after eight years. Wachovia has dropped more than 75 percent since it spent $24 billion two years ago to buy Golden West Financial Corp. just as home prices were peaking.

Citigroup posts another big loss

July 18, 2008 by Infinite

Citigroup has reported another big loss, although it lost less money than had been expected.

The biggest US bank by assets lost $2.5bn (£1.3bn) in the three months to the end of June, weighed down by another $11.7bn of write-downs.

Citigroup said it had cut 11,000 jobs in the first six months of the year and planned to continue at the same rate.

Related article: US: Financial system is a house of cards

Ron Paul: This coming crisis is bigger than the world has ever experienced

July 3, 2008 by Infinite

The following statement is written by Congressman Paul about the pending financial disaster.

He will introduce this statement as a special order and insert it into the Congressional Record next week. Fortunately, we have the opportunity to debut it first on the Campaign for Liberty blog. It reads as follows:

I have, for the past 35 years, expressed my grave concern for the future of America. The course we have taken over the past century has threatened our liberties, security and prosperity. In spite of these long-held concerns, I have days-growing more frequent all the time-when I’m convinced the time is now upon us that some Big Events are about to occur. These fast-approaching events will not go unnoticed. They will affect all of us. They will not be limited to just some areas of our country. The world economy and political system will share in the chaos about to be unleashed.

Though the world has long suffered from the senselessness of wars that should have been avoided, my greatest fear is that the course on which we find ourselves will bring even greater conflict and economic suffering to the innocent people of the world-unless we quickly change our ways.

America, with her traditions of free markets and property rights, led the way toward great wealth and progress throughout the world as well as at home. Since we have lost our confidence in the principles of liberty, self reliance, hard work and frugality, and instead took on empire building, financed through inflation and debt, all this has changed. This is indeed frightening and an historic event.

The problem we face is not new in history. Authoritarianism has been around a long time. For centuries, inflation and debt have been used by tyrants to hold power, promote aggression, and provide “bread and circuses” for the people. The notion that a country can afford “guns and butter” with no significant penalty existed even before the 1960s when it became a popular slogan. It was then, though, we were told the Vietnam War and a massive expansion of the welfare state were not problems. The seventies proved that assumption wrong.

This Recession, It’s Just Beginning

June 27, 2008 by Infinite

Vincent Quinones works on the floor of the New York Stock Exchange Wednesday after the Federal Reserve issued a mixed assessment of the economy. Yesterday, the Dow Jones industrial average closed down 358 points. (By Andrew Harrer — Bloomberg News)

So much for that second-half rebound.

Truth be told, that was always more of a wish than a serious forecast, happy talk from the Fed and Wall Street desperate to get things back to normal.

It ain’t gonna happen. Not this summer. Not this fall. Not even next winter.

This thing’s going down, fast and hard. Corporate bankruptcies, bond defaults, bank failures, hedge fund meltdowns and 6 percent unemployment. We’re caught in one of those vicious, downward spirals that, once it gets going, is very hard to pull out of.

Only this will be a different kind of recession — a recession with an overlay of inflation. That combo puts the Federal Reserve in a Catch-22 — whatever it does to solve one problem only makes the other worse. Emerging from a two-day meeting this week, Fed officials signaled that further recession-fighting rate cuts are unlikely and that their next move will be to raise rates to contain inflationary expectations.

Since last June, we’ve seen a fairly consistent pattern to the economic mood swings. Every three months or so, there’s a round of bad news about housing, followed by warnings of more bank write-offs and then a string of disappointing corporate earnings reports. Eventually, things stabilize and there are hints that the worst may be behind us. Stocks regain some of their lost ground, bonds fall and then — bam — the whole cycle starts again.

It was only in November that the Dow had recovered from the panicked summer sell-off and hit a record, just above 14,000. By March, it had fallen below 12,000. By May, it climbed above 13,000. Now it’s heading for a new floor at 11,000. Officially, that’s bear market territory. We’ll be lucky if that’s the floor.

In explaining why that second-half rebound never occurred, the Fed and the Treasury and the Wall Street machers will say that nobody could have foreseen $140 a barrel oil. As excuses go, blaming it on an oil shock is a hardy perennial. That’s what Jimmy Carter and Fed Chairman Arthur Burns did in the late ’70s, and what George H.W. Bush and Alan Greenspan did in the early ’90s. Don’t believe it.

Truth is, there are always price or supply shocks of one sort or another. The real problem is that the underlying fundamentals had gotten badly out of whack, making the economy susceptible to a shock. The only way to make things better is to get those fundamentals back in balance. In this case, that means bringing what we consume in line with what we produce, letting the dollar fall to its natural level, wringing the excess capacity out of industries that overexpanded during the credit bubble and allowing real estate prices to fall in line with incomes.

The last hope for a second-half rebound began to fade earlier this month when Lehman Brothers reported that it wasn’t as immune to the credit-market downturn as it had led everyone to believe. Lehman scrambled to restore confidence by firing two top executives and raising billions in additional capital, but even that wasn’t enough to quiet speculation that it could be the next Bear Stearns.

Since then, there has been a steady drumbeat of worrisome news from nearly every sector of the economy.

American Express and Discover warn that customers are falling further behind on their debts. UPS and Federal Express report a noticeable slowdown in shipments, while fuel costs are soaring. According to the Case-Shiller index, home prices in the top 20 markets fell 15 percent in April from the year before, and Fannie Mae and Freddie Mac report that mortgage delinquency rates doubled over the same period — and that’s for conventional home loans, not subprime. United Airlines accelerates the race to cut costs and capacity by laying off 950 pilots — 15 percent of its total — as a number of airlines retire planes and hint that they may delay delivery or cancel orders of new jets from Boeing and Airbus. Goldman Sachs, which has already had to withdraw its rosy forecast for stocks, now admits it was also too optimistic about junk bond defaults, and analysts warn that Citigroup and Merrill Lynch will also be forced to take additional big write-downs on their mortgage portfolios.

America’s Aviation System About To Collapse

June 27, 2008 by Infinite

Industry officials and analysts urge Washington to act to avert a collapse.

New York – America’s aviation system could be at risk of collapsing by the beginning of next year.

That warning from aviation experts has prompted some industry leaders to call for re-regulation, something considered almost heresy until now. Others are urging Washington to do more to rein in the oil speculators pushing up fuel costs.

But there is agreement among airline officials and analysts that Washington and the two presidential candidates need to recognize the severity of the crisis and take some action now to avert an economically crippling collapse in the near future.

“Unless something is done to move toward some kind of fix, we’re going to see every one of our major airlines in bankruptcy,” says Robert Crandall, former chairman of American Airlines. “If that isn’t enough of a crisis to alert everybody, then I don’t know what it will take.”

As a result of the spike upward in oil prices, almost every major airline is now losing millions of dollars each quarter.

Unless the price of oil comes down, most are expected to run out of cash by the end of this year or the beginning of next. In a bid to stave off bankruptcy, they’re already retrenching. They plan to lay off an estimated 25,000 employees, park hundreds of planes, and cut the number of flights they offer.

In addition, a recent study by the Business Travel Coalition, which represents corporate travel managers, estimates that 100 regional and 50 major airports nationwide will lose some of or all their air service by the end of the year.

“I’ve been trying to turn on the emergency sirens to raise awareness in Washington and back home,” says Kevin Mitchell, chairman of the Business Travel Coalition in Radnor, Pa. “And I think people are finally beginning to [wake up].”

Airline officials visit Washington

Representatives of the major carriers were in Congress this week, urging action to discourage speculation in the oil markets. Some analysts blame that speculation for the almost doubling of the price of jet fuel in the past year.

American Express: The Economy is Worsening

June 26, 2008June 26, 2008 by Infinite

June 25 (Bloomberg) — American Express Co., the biggest U.S. credit-card company by purchases and cash advances, said customers are falling further behind on their debt, signaling the economy is worsening.

“Business conditions continue to weaken in the U.S. and so far this month we have seen credit indicators deteriorate beyond our expectations,” Chief Executive Officer Kenneth Chenault said in a statement today announcing the company would receive as much as $1.8 billion in a settlement with competitor MasterCard Inc.

American Express and rivals Capital One Financial Corp. and Discover Financial Services have fallen by more than a third in the past 12 months in New York trading as consumers absorb the housing slump, rising unemployment and higher food and fuel bills. New York-based American Express adopted a “cautious view” for the year in January after cardholder spending slowed and overdue payments rose in December.

“If you look at the employment situation, clearly that’s deteriorated, and consumer confidence is down as well,” said Sanjay Sakhrani, an analyst with KBW Inc. in New York who has a “market perform” rating on the stock. “Both play a key role in the credit-card industry.”

The Federal Reserve today left its benchmark interest rate at 2 percent, saying “uncertainty about the inflation outlook remains high.” Consumer prices rose 4.2 percent in the 12 months ended in May, the fastest pace since January, while the unemployment rate rose by the most in more than two decades.

Consumer Confidence

Confidence among Americans dropped to the lowest level in 16 years, the Conference Board said yesterday.

Tribune Co. Plans Sharp Cutbacks at Papers

June 8, 2008June 8, 2008 by Infinite

Tribune Company newspapers like The Los Angeles Times and The Chicago Tribune will quickly cut costs – by printing fewer papers and employing fewer journalists – top company executives said on Thursday.

Samuel Zell, the chairman and chief executive of Tribune, and Randy Michaels, the company’s chief operating officer, revealed the cuts during a conference call with Wall Street analysts.

They also said the struggling company has looked at the column inches of news produced by each reporter, and by each paper’s news staff. Finding wide variation, they said, they have concluded that it could do without a large number of news employees and not lose much content.

Mr. Michaels said of the changes, “This is going to happen quickly.”

Mr. Zell said, “I promise you he’s underestimating the level of aggressiveness with which we are attacking this whole challenge.”

They said the company would aim for a 50-50 split between ads and news across all the news pages (excluding classified ads and advertising supplements). Mr. Michaels said this would mean eliminating 500 pages of news a week across all of the company’s 12 papers.

“If we take, for instance, The Los Angeles Times to a 50-50 ratio, we will be eliminating about 82 pages a week,” Mr. Michaels said, leaving the smallest papers of the week at 56 news pages.

Since being taken over in an $8.2 billion deal that took the company private in December, Tribune has downsized newspapers that had already been trimmed under the previous regime. During the call and in a note from Mr. Zell to Tribune employees, the executives signaled that bigger cuts are coming.

Mr. Michaels said that, after measuring journalists’ output, “when you get into the individuals, you find out that you can eliminate a fair number of people while eliminating not very much content.” He added that he understood that some reporting jobs naturally produce less output than others.

Oil hits new high as Israel calls strike on Iran ‘unavoidable’

June 7, 2008 by Infinite

Oil prices leaped to record highs yesterday as Israel warned about Iranian nuclear sites and the dollar slumped on the biggest jump in American unemployment for 22 years.

The global crude price ended a run of lower prices earlier this week as it jumped by more than $9 a barrel to $136.79 (£69.44) – it has risen by over $14, or 10%, in just two days. The week before last saw an all-time high of $135.09 a barrel but, by Wednesday this week, prices had receded to as low as $122.

Already jittery oil markets were sent into spasms by remarks from Israel’s transport minister that an attack on Iranian nuclear sites looked “unavoidable”. Iran is a big Opec oil producer and any attack on the country would threaten oil supplies from the whole region.

Prices were also boosted by a prediction from investment bank Morgan Stanley that crude prices might reach $150 by July 4.

Earlier in the day the dollar – in which oil is priced – had fallen against the euro partly on speculation that the European Central Bank might consider raising interest rates to curb inflation.

But subsequently markets were rocked by a monthly report from the US showing that unemployment suffered its biggest monthly rise since February 1986.

Shares on Wall Street dived after the US unemployment rate unexpectedly??? jumped to 5.5%, intensifying fears that the world’s biggest economy is sliding into recession.

The Dow Jones industrial average lost nearly 300 points, or 2.2%, to around 12,320. In London the FTSE 100 closed the week down 1.5%, or 88 points, at 5,906.

Up to 25,000 on Wall St. face the axe, report says

June 5, 2008 by Infinite

NEW YORK-New York City’s financial sector might only slice 15,000 to 25,000 jobs in the current downturn, which could prove shorter than the mayor has predicted, the city comptroller said.

In contrast, the financial sector that is such a vital part of the city’s economy slashed 40,200 jobs in the previous 2000 to 2003 retreat that straddled the Sept. 11, 2001 air attacks, Comptroller William Thompson said in a report.

Battered by profit-gouging subprime mortgage loans, New York Stock Exchange member firms that do business with the public lost $7.3 billion (U.S.) last year, and the current job-losing cycle that began in August 2007 should run through March 2009, Thompson added.

Economist challenges government data

May 26, 2008 by Infinite

Oakland economist John Williams doesn’t seem like the kind of guy to pick fights with the government.

He’s slow moving and soft spoken, conservative in politics and personal habits, a pale and portly 59-year-old who favors Oxford shirts, Rep ties and sensible shoes. Williams is the sort who pays his taxes on time, waits when the signal says “Don’t Walk” and snaps to attention when the national anthem is played.

But don’t be fooled. The New Jersey native is leading a one-man crusade to expose official economic data as grossly misleading at best and, at worst, a pack of lies.

His Shadow Government Statistics Web site (shadowstats.com) has become a magnet for those convinced that official data put a happy-talk gloss on the nation’s economy. The growing popularity of the site, which costs subscribers $175 a year, is testimony to the deep suspicion many Americans harbor about government information as the economy falls into a swoon.

“There’s something wrong with the numbers,” said ShadowStats subscriber Harry Seitz, a retiree in Davie, Fla. “Over the years, (Williams) has essentially been proven correct.”

By Williams’ estimation, the government’s calculation that unemployment was 5 percent in April and that inflation was 4 percent and economic growth 2 percent over the last year, is fantasy. It might even be disinformation.

An update e-mailed to ShadowStats subscribers at the beginning of the month warned darkly that “GDP (gross domestic product) and Jobs Data Appear Rigged” and “Despite Manipulated Data, the Recession Deepens.”

By his reckoning, the economy shrank 2.5 percent in the year that ended in March, unemployment is really 13 percent and year-over-year inflation is 7.5 percent.

Government economic data are “out of touch with common experience. That’s why people used to believe the numbers but no longer do,” Williams said during an interview in his modest one-bedroom apartment near Lake Merritt.

Surging inflation will stoke riots and conflict between nations, says report

May 24, 2008May 24, 2008 by Infinite

Riots, protests and political unrest could multiply in the developing world as soaring inflation widens the gap between the “haves” and the “have nots”, an investment bank predicted yesterday.

Economists at Merrill Lynch view inflation as an “accident waiting to happen”. As prices for food and commodities surge, the bank expects global inflation to rise from 3.5% to 4.9% this year. In emerging markets, the average rate is to be 7.3%.

The cost of food and fuel has already been cited as a factor leading to violence in Haiti, protests by Argentinian farmers and riots in sub-Saharan Africa, including attacks on immigrants in South African townships.

Merrill’s chief international economist, Alex Patelis, said this could be the tip of the iceberg, warning of more trouble “between nations and within nations” as people struggle to pay for everyday goods. “Inflation has distributional effects. If everyone’s income moved by the same rate, you wouldn’t care – but it doesn’t,” said Patelis. “You have pensioners on fixed pensions. Some people produce rice that triples in price, while others consume it.”

A report by Merrill urges governments to crack down on inflation, describing the phenomenon as the primary driver of macroeconomic trends. The problem has emerged from poor food harvests, sluggish supplies of energy and soaring demand in rapidly industrialising countries such as China, where wage inflation has reached 18%.

Unless policymakers take action to dampen prices and wages, Merrill says sudden shortages could become more frequent. The bank cited power cuts in South Africa and a run on rice in Californian supermarkets as recent examples.

“You’re going to see tension between nations and within nations,” said Patelis.

The UN recently set up a taskforce to examine food shortages and price rises. It has expressed alarm that its world food programme is struggling to pay for food for those most at need.

Last month, the World Bank’s president, Robert Zoellick, suggested that 33 countries could erupt in social unrest following a rise of as much as 80% in food prices over three years.

Merrill’s report said the credit crunch has contributed to a global re-balancing, drawing to a close an era in which American consumers have been the primary drivers of the world’s economy.

In a gloomy set of forecasts, Merrill said it believes the US is in a recession – and that American house prices, which are among the root causes of the downturn, could fall by 15% over the next 18 months.

As Jobs Vanish, Food Stamp Use Is at Record Pace

March 31, 2008 by Infinite

Driven by a painful mix of layoffs and rising food and fuel prices, the number of Americans receiving food stamps is projected to reach 28 million in the coming year, the highest level since the aid program began in the 1960s.The number of recipients, who must have near-poverty incomes to qualify for benefits averaging $100 a month per family member, has fluctuated over the years along with economic conditions, eligibility rules, enlistment drives and natural disasters like Hurricane Katrina, which led to a spike in the South.

But recent rises in many states appear to be resulting mainly from the economic slowdown, officials and experts say, as well as inflation in prices of basic goods that leave more families feeling pinched. Citing expected growth in unemployment, the Congressional Budget Office this month projected a continued increase in the monthly number of recipients in the next fiscal year, starting Oct. 1 – to 28 million, up from 27.8 million in 2008, and 26.5 million in 2007.

The percentage of Americans receiving food stamps was higher after a recession in the 1990s, but actual numbers are expected to be higher this year.

Americans fear harder times

March 26, 2008 by Infinite

Public’s feelings about economy are bleakest since ’73, survey indicates Americans are bracing for rising unemployment and shrinking salaries, a gloomy outlook that could translate into a serious cutback in consumer spending, the primary engine of the economy.

A survey of about 2,500 households found that Americans feel worse about the economy’s prospects than at any time since 1973, when Americans struggled with soaring oil prices and runaway inflation.

Jobless Claims Jump by 22,000

March 22, 2008 by Infinite

WASHINGTON (AP) – The number of newly laid off workers filing for unemployment benefits rose last week to the highest level in nearly two months, providing more evidence that the weak economy is drying up jobs.The Labor Department said Thursday that applications for jobless benefits totaled 378,000 last week. That was an increase of 22,000 from the previous week and was a far bigger jump than had been expected.

The four-week average for new claims rose to 365,250, which was the highest level since a flood of claims caused by the 2005 Gulf Coast hurricanes.

The current economic slowdown, which many economists believe has already turned into a full-blown recession, is starting to show up in the labor market in terms of higher layoffs and weaker hiring numbers.

A worker prepares the walls for a new home at the Huntington Homes modular home factory in East Montpelier, Vt., Tuesday, March 11, 2008. The troubles in housing with falling sales and prices in many parts of the country have acted as a drag on the overall economy, contributing to a serious slowdown that many analysts are worried could push the country into a recession. (AP Photo/Toby Talbot)