Layoffs, Layoffs, and more Layoffs
November, 12 at 7:17 pm
From CNBC:
Applied Materials, the No. 1 computer chip-equipment maker, posted a smaller-than-expected drop in quarterly profit and said it will slash 1,800 jobs, or 12 percent of its workforce to cut costs, boosting its shares more than 5 percent.
The company said on Wednesday it expects the job cuts, which will begin in the fiscal 2009 first quarter and be completed at the end of that year, to generate annual savings of $400 million.
From USA Today:
Morgan Stanley unveils job cuts
NEW YORK — Morgan Stanley (MS) on Wednesday announced plans to cut 10% of the staff in its biggest business, which covers everything from investment banking to stock trading.
The nation’s No. 2 securities firm, which converted into a bank holding company in September, plans to scale back its most capital-intensive businesses before the end of the year. The layoffs inside the institutional securities group follow a 10% cut made earlier this year to the same group.
Morgan Stanley also plans to restructure its money management business by cutting 9% of the staff there.
It was not immediately clear how many positions will ultimately be eliminated from the company’s total ranks of about 44,000.
From CNNMoney:
NEW YORK (CNNMoney.com) — Global delivery company DHL announced Monday that it was cutting 9,500 jobs as it discontinues air and ground operations within the United States.
DHL’s 9,500 job cuts are on top of 5,400 job reductions announced earlier this year. After these layoffs, between 3,000 and 4,000 employees will remain at DHL’s U.S. operations, the company said.
Posted in The Economy | 1 Comment »
Bailouts, Lies, and Rock and Roll
November, 12 at 12:40 pm
We just learned that Hank Paulson decided not use any of the 700 billion bailout money to purchase toxic mortgages but instead he wants to keep using the money to inject more money in financial institutions. A couple of months ago, Congress passed the bailout plan based on the assumption that the Treasury Department was going to set up a reverse auction to buy mortgages.
We basically gave Paulson a blank check and he is now doing whatever he wants with it.
This is how USA Today is reporting the news:
WASHINGTON (AP) — Treasury Secretary Henry Paulson said Wednesday the $700 billion government rescue program will not be used to purchase troubled assets as originally planned.
Paulson said the administration will continue to use $250 billion of the program to purchase stock in banks as a way to bolster their balance sheets and encourage them to resume more normal lending.
He also announced a new goal for the program to support financial markets, which supply consumer credit in such areas as credit card debt, auto loans and student loans.
Paulson said that 40% of U.S. consumer credit is provided through selling securities that are backed by pools of auto loans and other such debt. He said these markets need support.
Posted in Politics, Bailout News, The Economy, Real Estate | 2 Comments »
The housing bailouts keep coming and the stock market keeps sinking
November, 11 at 7:50 pm
Another day, another bailout plan and Wall Street? Well, Wall Street didn’t like it. The Dow down 176 points. Is the Federal government ever going to learn that bailouts won’t fix the housing problem?
The Federal Housing Finance Agency (FHFA) came up with this bailout plan today:
ANSWERS ON THE STREAMLINED MODIFICATION PROGRAM
Q: What is a modification?
A: A modification is a change to the original mortgage terms. It may include a change to the product (an ARM to a fixed rate mortgage), interest rate, amortization term and maturity date, and/or unpaid principal balance. The change/s is made to create a more affordable payment for the borrower.
Q: What is a streamlined modification?
A: A streamlined modification is a modification that requires less documentation and less processing. In this case, the streamlined modification seeks to create a monthly mortgage payment that is sustainable for troubled borrowers by targeting a benchmark ratio of housing payment to monthly gross household income.
Posted in Bailout News, The Economy, Real Estate | No Comments »
No free lunch
November, 11 at 12:41 pm
As I’ve said before, there is a price to pay for all these bailouts. This from CNBC:
US May Lose Its ‘AAA’ Rating
The United States may be on course to lose its ‘AAA’ rating due to the large amount of debt it has accumulated, according to Martin Hennecke, senior manager of private clients at Tyche.
“The U.S. might really have to look at a default on the bankruptcy reorganization of the present financial system” and the bankruptcy of the government is not out of the realm of possibility, Hennecke said.
“In the United States there is already a funding crisis, and they will have to sell a lot more bonds next year to fund the bailout packages that have already been signed off,” Hennecke told CNBC.
In order to solve or stem the economic slowdown, Hennecke suggested the US would have to radically reduce spending across all sectors and recall all its troops from around the world.
Posted in Politics, Bailout News, The Economy | No Comments »
Why Paulson’s Plan Won’t Work
November, 10 at 7:11 pm
Posted in Politics, Bailout News, The Economy, Real Estate | No Comments »
U.S. Response to the Financial Crisis
November, 10 at 7:09 pm
Posted in Politics, Bailout News, The Economy, Real Estate | No Comments »
The economy lost 240,000 jobs in October - Unemployment rate at 6.5%
November, 7 at 11:24 am
More bad news for the economy and the housing market. Bloomberg reports the following:
Nov. 7 (Bloomberg) — The U.S. unemployment rate rose to the highest level since 1994 as companies slashed payrolls, setting the stage for the steepest economic decline in decades and a tough start for Barack Obama’s presidency.
The jobless rate rose to 6.5 percent in October from 6.1 percent the previous month, the Labor Department reported today in Washington. Employers fired 240,000 workers after a loss of 284,000 in September, the biggest two-month slide since 2001.
The total number of unemployed Americans jumped to 10.08 million last month, the highest level in a quarter-century, today’s report showed.
Economists had anticipated a 200,000 drop in payrolls after a previously estimated 159,000 decline in September, according to the median of 78 estimates in a Bloomberg News survey. The median forecast for the unemployment rate was 6.3 percent.
“We’re heading for a deep recession — banish the word mild from your vocabulary — it’s big, it’s bad and it’s broad-based,” said Nariman Behravesh, chief economist at IHS Global Insight in Lexington, Massachusetts.
Posted in Politics, The Economy, Real Estate | 3 Comments »
Did Gavin Newsom help defeat Proposition 8 in California?
November, 6 at 12:08 am
Posted in Politics | 1 Comment »
No “Hope for Homeowners” so far
November, 4 at 4:15 pm
More signs that all these bailout plans our government is implementing are not working. The San Francisco Chronicle reports the following:
The $300 billion “Hope for Homeowners” program was begun Oct. 1. Designed by lawmakers eager to respond to the mortgage crisis, the Congressional Budget Office had projected it would let 400,000 troubled homeowners swap risky loans for conventional 30-year fixed rate loans with lower rates.
But the early results are discouraging: The government received only 42 applications in the program’s first two weeks, according to the Federal Housing Administration. Since the applications take about 60 days to process, no loans have been approved.
Steve O’Halloran, spokesman for the Department of Housing and Urban Development, called the projection of nearly 20,000 borrowers “an extremely preliminary estimate of early applications for a program that is barely a month old. Borrowers and lenders are continuing to sign up.”
Since the program requires lenders to reduce the value of a loan and take a loss, it’s unclear how many lenders will participate. In addition, the program may be unattractive to some borrowers because those who sell their properties must agree to share some of their profit with the government.
Posted in Bailout News, Politics, California Housing Crash, Florida Housing Crash, The Economy, Real Estate | No Comments »
More bailouts? GM? Chrysler? How about Credit Card Debt?
November, 2 at 1:06 pm
The stupidity of the our government never fails to amaze me. Now, we’re hearing that some groups our pushing for a bailout of irresponsible people to own thousands of dollars in credit card debt.
CNNMoney reported the following:
Groups seek credit-card debt forgiveness
WASHINGTON (AP) — An alliance of financial industry interests and consumer advocates on Wednesday asked federal regulators to allow lenders to reduce by as much as 40 percent the amount of credit card debt owed by deeply indebted consumers in a special program.
As the economic crisis has deepened and consumers increasingly are defaulting on their credit card debts, write-offs on the loans have mounted for banks and other lenders.
The unusual joint request from the Financial Services Roundtable and the Consumer Federation of America highlighted the urgency of the situation: consumers - even those with strong credit records - defaulting at high levels on their credit cards, while banks battered by the credit crisis bleed tens of billions in red ink from the losses.
“In this case we have a clear common interest,” Travis Plunkett, legislative director for Consumer Federation, said in a telephone interview.
Posted in Politics, Bailout News, The Economy | No Comments »
