It was a close vote, but splitting the CEO and Chairman of the Board positions passed, 50.3%-49.7%, and the new Chairman is Walter Massey.
I do not think that this makes much of a difference in day to day operations, but the fact that shareholders went against Lewis and the board on this is significant.
It’s also a big win for AFSME, who campaigned for this, because of Lewis’ aggressive campaign against labor unions.
Too funny!
What starts with “f,” ends with “k,” and means “screw your workers”? That’s right—401(k).
James Ridgeway
It’s a breadboard in the lab for a robotic product in development.
Look at the last line:
Well, we have the new jobless claims out, and again, they are grim, with initial claims raising from 613K to 640K, though the 4 week moving average, which is a better indicator, dropped to 646,750 from 651,000.
Continuing claims hit another record, up 93K to 6.137 million, worse than the forecast.
The fact that mass layoffs, more than 50 people, hit a record, with 2,933 in March, probably had something to do with this.
In world finance, we have Moody’s downgrading the debt of the Baltic Republics Lithuania and Latvia, indicating a bumpy way ahead.
In real estate March existing home sales fell, and with mortgage rates inching up, I would not expect a significant improvement in the situation.
Meanwhile, oil is up, and the dollar is down, for reasons not clear to me.
SecDef Gates is looking to insource acquisition expertise into the Pentagon, hiring 4,100 people in this area by 2010, and 9,000 by 2015.
This is a good idea, but the mindset in this article shows why it will be hard, starting with the title, Top Talent Won’t Pick Pentagon for Pay.
The first assumption is that junior hires, “they won’t know enough to make much of a difference for at least six or seven years,” is simply wrong.
A good person can be online and doing good work in under 6 months, one who is merely competent can do the same in 18.
What’s more, with the expansion of internal positions at the Pentagon, the job prospects for outside consultants shrink accordingly, which will both bring new people in, and dissuade people who have done a few years in there from moving into outside positions.
It’s not going to be easy, but it will be much better than what we have now.
The new jobless claims number is out, and they are better, but they are still the suck, with initial claims falling 20,000 to 5.84 million.
Posted via mobile phone.
Peterr at Firedoglake was looking at job postings on the FDIC website, and saw something that was probably not intended for the general public, specifically some job postings by the FDIC that may indicate that there will be some very big fish on a path to be caught in the FDIC’s net.
First, there is a posting for a Deputy Chief Accountant (announcement number 2009-EM-0096) who is responsible for, “identifying emerging accounting, auditing, and taxation issues, particularly those raising systemic concerns, for which the timely development of policy guidance for FDIC -supervised and -insured institutions and the Division’s examination staff is critical” (emphasis mine).
“Raising systemic concerns?” Sound like anyone we know? As Peterr notes, it looks like part of their duties will be teasing out responsibilities amongst other financial regulators, which may involve putting a finger in the eye of Timothy “Too Big to Allow to Fail” Geithner’s Treasury Department.
Additionally, there are two openings for two Senior Large Financial Institution Specialist (announcement number 2009-HQD-B1089) located in New York, NY and Charlotte, NC, which are where the HQ’s of Citi and BoA are located, though obviously there are many financial institutions with headquarters in the New York City area, as well as a Chief, Examination Support and Risk Analysis Section (announcement number 2009-HQDEU-1113), who seems to be in charge of “Formulates, refines, and updates supervisory expectations relative to Basel II implementation efforts,” which means risk evaluation of banks.
Additionally, we have Treasury announcing a delay in the reporting the results of the stress tests, “until after the first-quarter earnings season.”
People do not delay good news.
I wouldn’t expect anything this Friday on one of the big 20 financial institutions, but it could get interesting in a few weeks.
Scare Pic of the day courtesy of Calculated RiskToday’s lede has to be the unemployment numbers with non farm payrolls dropping 663,000 in March and unemployment (U-3) hitting 8.5%.
It should be noted that if you use the broader U-6 metric, then unemployment is 15.6% up 6.3% from last March’s 9.3%.
We also have the number of involuntary part-time workers increasing from climbed by 423,000, to 9.0 million, and the contraction of service industries is accelerating.
The best metric of the employment situation may be the employment-population ration, and it fell to 59.9%, the lowest level since 1985.
BTW, remember when I posted about UK house prices going up for the first time since 2007 in March? Not sop much, alternate data shows another fall in prices.
The dollar rose on a flight to safety after the crappy jobs report, and oil fell for the same reason.
In an interview with Katie Couric, Tim Geithner said that firing bank CEOs is an option if they are not properly managing their firms.
Bank of America CEO Ken Lewis is not properly managing his firm.
Even if you ignore the disaster that is Merrill Lynch, the purchase of the toxic waste dump known as Countrywide Mortgage was his doing, and an unmitigated disaster, what’s more, he’s been calling you, and the whole Obama administration a bunch of C%&$suckers, saying that he will repay the TARP money to be done with you…Only not right now, because BoA is a bit short on folding green at the moment:
In his latest media appearances, including an interview on CNBC, Lewis said that BofA would repay taxpayers for the $45 billion in TARP proceeds his bank received. Eventually. (Lewis also said he ”regrets” having taken that much, saying the bank took more than it needed, describing the total as ”his mistake.” From this vantage, seems like the government’s … but po-tay-to, po-tah-to, right?)
But he quickly added that the economy will have to rebound. And then several quarters will have to pass.
Seriously, it’s like that bit in Bull Durham, when Crash is ejected from the game for calling the ump a c%&$sucker.
You call the ump a c%&$sucker, and you are ejected.
Eject Ken Lewis, the self-important, pampered, anti-union, incompetent prima donna from the game, or ask for the full $45 billion back tomorrow, and initiate an investigation of how AIG unwound their swaps at 100%.
Video of interview here.
We have the weekly unemployment claims report, and it is not pretty, with 669,000 new claims, an increase of 12,000, the 4 week moving average was up 6,500 to 656,750, and the continuing claims hit 5,728,000, up 161,000.
Note that the initial claims number constitutes a 26½ year high, and continuing claims are at the 9th all time record level in 9 weeks.
Meanwhile, the credit news is not good, with Calculated Risk’s Credit Crisis Indicators somewhat improved, though still at pretty awful levels, but Moody’s downgraded $1.76 trillion in corporate debt in the first quarter of 2009, and both credit card charge-offs and home equity loan delinquencies have climbed to record levels.
In real estate commercial real estate defaults hit a new record, and the formerly unassailable real estate of Manhattan is sales volume falling 48%, though house prices rose in the UK for the first time since 2007.
Additionally, the Feds efforts to lower mortgage rates appear to be working, with the 30 year fixed mortgage rate hitting a new low.
In the meantime, auto industry analysts are doing handsprings over the March auto sales figures, because annualized sales figures rose to 9.86 million up from February’s rate of 9.12 million, though dealer incentives also rose 5%.
Your call as to whether an 8% increase of awful, the normal annual sales runs at about 16 million, is something to crow about.
In either case, other manufacturing had an uptick, with Chinese manufacturing increasing for the first time in 4 months, and US factory orders rising for the first time in 7 months.
In Yurp, the European Central Bank cut its rates by only 25 basis points (¼%), less than expected, and as a result the Euro strengthened vs the US dollar, though the ECB President has said that more rates might be forthcoming
In energy, the rising stock market (Dow above 8k for the first time in about 7 weeks) has driven oil higher.
Well, the job loss report from payroll processor ADP is out, and according to them, there were 742,00 job losses in March, well above the 655K forecast.
Part of this is driven by continued declines in construction spending, as Calculated Risk notes and graphs (see graph pr0n).
As he notes, non-residential construction spending is following residential spending off a cliff.
There was also an increase in the NAR’s pending home sales index, though it remains firmly in the horrible range, at 82.1, up from 80.4, with 100 being the average level of pending home sales in 2001.
Still, mortgage applications are up again, though this is largely still refi activity.
The Institute for Supply Management’s Manufacturing Index mirrors the pending home sales index, in that it is up, to 36.3 from 35.8, but still in a firmly contracting posture, as 50 is neutral.
On the other side of the Pacific, we are seeing Japanese business confidence numbers fall to record lows.
The news in the auto industry, whether foreign or domestic is grim, with sales numbers for GM, Toyota, Ford, Chrysler, Honda, and Nissan all falling significantly.
We also see the Fed printing money to buy $6 billion in Treasuries, so as to keep the interest rates down.
In currency, the dollar is up on risk aversion again. Investors are concerned about the G-20 meeting, though I’m not sure if the concern is about nothing being done, or something being done….Maybe it’s a bit of both.
In energy, oil fell on strong inventory reports.
So, the US economy contracted at a revised 6.3% annual rate in the 4th quarter of 2008 and initial jobless claims rose to 652,000 from 640,000 last week, with continuing claims jumped to 5.56 million, another record.
Additionally, we saw New York City’s jobless rate jump by 1.2% in February, from 6.9% to 8.1%.
On the other hand, truck tonnage rose in February, which implies that the requirements for goods and services increased, and the 30 year fixed mortgage rates dropped again.
Meanwhile, in energy, retail gasoline broke $2/gal for the first time this year, and oil hit a 4 month high of $54.34/bbl.
In currency, the dollar rose today.
Captured on my cell phone camera from work:
Thursday is new jobless day, and the numbers suck with new claims falling to a still very high 646,000 and continuing claims hitting a new record of 5.47 million, which is a new record….Again.
This implies that people are still unable to find jobs, but, for a while, at least, employers have run out of people to lay off….Delightful.
We also had the Leading Economic Indicators falling, though not as badly as the consensus prediction, and the Philadelphia Fed Business Outlook Survey for March remained awful, from -41.3 in February to -35.0 this month, so we are still seeing a contraction.
In the auto industry, the bailout has been extended to parts suppliers, to the tune of %5 billion.
In real estate, it looks like Moody’s might cut the ratings on some $241 billion of debt for jumbo mortgages, which means that it must suck to live in a high cost real estate area right now.
In the world of the here and now, Moody’s did downgrade insurance company Prudential, and I’m wondering how long before the rest of the insurance industry looks like AIG.
In any case, it appears that the Fed’s decision to start quantitative easing (printing money) is having an effect, with the cost of borrowing falling, with 30-year fixed mortgages falling to 4.98%.
The Fed has also driven the US dollar lower, with the dollar hitting $1.36:€1.00 for the first time since January.
We are also hearing rumors that Citi is considering a reverse stock split, my guess is that this is how they want to address the worry that they might become a penny stock.
In energy, oil broke $50/bbl for the first time this year, on the falling dollar and reports that OPEC members are more-or-less keeping to their quotas.
Credit card defaults have hit a 20 year high, which implies to me that the unemployment numbers when they come out are going to show further contraction.
Housing Starts were up 22% from January in February, though the headline on the link, “U.S. Housing Starts Rebound,” is simply nonsensical, as Barry Ritholtz notes, single family building remained flat, it was people building multi-residential properties, and even with the gain, the number is down 50% year over year.
Calculated Risk’s Credit Crisis Indicators are showing modest improvement, though they all remain at troubling levels.
In energy, oil hit a new high for the year, approaching nearly $50/bbl, and in currency, they dollar was down only marginally.
So, today is the day for new jobless claims, and U.S. jobless claims rose by 9000 to 654,000, which is not a new record, though the continuing claims number of 5.317 million, which was a new record.
Well, we are seeing more in the way of rate cuts world wide, with the European Central Bank approaching 0% interest rates by stealth, using their deposit rate now at ½%, as opposed to their benchmark rate, now at 1½%, by lending like a madman, and the the Swiss central bank cut its benchmark rate to ¼% in an effort to keep the Franc from appreciating against other currencies, so the zero interest rate contagion is spreading.
And the consumer is still on vacation with retail sales falling by 0.1% in February, and it’s seen as a sign of progress, because the experts were expecting a fall of 0.5%.
It’s no wonder that retail sales are falling, as U.S. household net worth fell at a record pace in 4Q 2008, $5.1 trillion for the quarter and $11.2 trillion for the year, and this was accompanied by the first drop, at a 2% annual rate, in household debt ever.
These numbers are not surprising. With house prices down, and a foreclosures rising 30% year over year, and 6% month to month in February, it just makes sense to economize.
Interestingly enough, even though foreclosures continue to increase, mortgage rates fell this week, largely on the expectation of little in the way of inflationary pressures because of the weak economy.
We also have two bits of WTF today, with yet another bank, this time Bank of America saying that it made a profit in the first two months of the year, while not counting its losses in the big sh&^pile.
Additionally, S&P has downgraded General Electric from AAA to AA+, which, until the last year or so, I always thought was a sign of the economic apocalypse.
In energy, oil is up. largely on the retail sales report.
In currency, the dollar is up, largely on the aforementioned Swiss rate cuts.
The Manpower hiring survey has fallen to its lowest level in its history, and the survey started in 1962.
Meanwhile, a survey of economists say that the U.S. economy set should start to recover in the 2nd half of the 2009:
“Consumer spending and residential investment are expected to turn positive and begin boosting GDP growth in the third quarter of this year,” the newsletter Blue Chip Economic Indicators said, summarizing its survey of private economists.
I want what the economists are smoking, because we are seeing no signs of either right now.
The fact the even previously overheated China saw deflation in January indicates to me that this will be longer and deeper than they think.
Additionally, while wholesale inventories fell in January, wholesale sales fell faster, and house prices fell 3.5% in January, according to the Integrated Asset Services index, indicating that the contraction is accelerating.
There is also the fact that the meltdown of the US megabanks has gotten worse, with us regulators looking at more bailout money for Citi, and the notification that the Federal Home Loan Bank of Seattle said it has fallen short of one of its capital requirements.
Note that the FHLBs are where the mortgages are being written right now, so this means that things are going pear shaped in the mortgage market.
With all this going on, it’s no wonder that the 3-month LIBOR spread is up, indicating a tightening credit environment.
Some good news, though it means short term pain, which is that the Securities and Exchange Commission remains committed to reality based accounting, and so it will not abandon mark-to-market.
We also have oil rising on reports of OPEC production cuts, and the dollar falling on US bank worries.
Scary Pix Courtesy of Barron’s Econoday
So the unemployment rate jumped ½% in February, from 7.6% to 8.1%. and 651,000 jobs were lost.
Additionally, U6, the broadest measure of un and under employment is at 14.8%, and note that U6 is the statistic closest to the 20+% unemployment rates recorded in the great depression.
….
Delightful.
If that weren’t bad enough, 20% of all mortgaged properties are under water, and something around 1 in 9 mortgages are either in foreclosure or delinquent, so any turn around in residential real estate is are greatly exaggerated.
It also looks like the FDIC is asking Congress to lend it $500 billion, because its insurance fund is depleted.
We do have Baltic Dry Index, a measure of the demand for cargo shipping, one piece of good news, in that the just hit its highest level this year, which indicates more international trade.
Meanwhile, the jump in unemployment has driven the dollar down, and oil up.
I got to print some parts off on the 3-D printer…..Sweet.
It should finish about when I come in for work Friday.
Busy day, so let’s start with the central banks: The Bank of England cuts rates by 50 basis points (½%), and is engaging in quantitative easing (printing money) in the form of buying £75 billion ($US 106 B), and the European cut its benchmark rate by 50 basis points to 1.5%, and is also looking at “further non-standard measures” (see quantitative easing).
Considering that the ECB has no charge except to manage inflation, this is extraordinary.
Unsurprisingly, the rates cuts have driven the dollar up.
In employment, first time jobless claims fell to 639,000, but the less volatile 4 week moving average rose to 641,750, the “highest since October 1982,” and productivity dropped 0.4% in Q4 of 2008.
Bumpy ride, folks.
On the brighter side Bonddad’s credit indicators show a thaw in lending over the past few months, and February retail sales beat expectations, though the numbers are still pretty bad.
In autos, GM is saying that there is “substantial doubt” about whether it can survive in an SEC filing, not a surprise, and implies Chapter 11, which further implies liquidation for Chrysler.
Mortgage rates rose last week.
Oil, meanwhile fell in response to the generally anemic economic news.
