Jack Lott's Blog – February 2009 Archive (18)

The Obama administration is getting ready to conduct "stress tests" on the nation's biggest banks to judge whether they can hold up if the recession were to worsen. Banking regulators plan to scrutinize the financial conditions of Citigroup, Bank of America and more than a dozen other financial institutions that have received billions from the Treasury Department's $700 billion bailout bill.



The National Association of Realtors said that existing home sales dropped 5.3%, to a… Continue

President Obama is ready to offer a detailed sketch of the first year of his presidency, casting the nation's bleeding economy as a tangle of tough, neglected problems. In a prime-time speech from the House of Representatives, Obama will make his case this evening that much more has to be done to turn around the economy — a message he knows he must explain. The speech comes two days before he delivers a budget blueprint to Congress.



Fed Chairman Bernanke said that restoring financial… Continue

President Obama is bringing together dozens of advisers and adversaries to discuss how to curb a burgeoning federal deficit laden with Social Security, Medicare and Medicaid obligations. Obama's summit at the White House is the first meeting toward a strategy to address the long-term fiscal health of the nation. The gathering also comes as Obama prepares ambitious plans to cut the federal deficit by half within four years.



Federal regulators are pledging to do all they can to support… Continue

The Labor Department reported that consumer prices rose by 0.3 percent last month, the biggest monthly increase since a 0.7 percent rise in July. Core inflation, which excludes energy and food, showed a modest increase of 0.2 percent, slightly higher than the 0.1 percent gain economists expected. Over the past 12 months, core inflation rose 1.7 percent, the lowest reading since a similar increase for the 12 months ending in August 2004.



Bank of America Corp. (BAC) Chief Executive Ken… Continue

The Labor Department reported that the number of people receiving regular unemployment benefits rose 170,000 to 4.99 million for the week ending Feb. 7th, marking the fourth straight week those receiving benefits have been at a record level on data going back to 1967.



The Labor Department reported that wholesale prices increased by 0.8 percent last month, the biggest gain since last July and well above the 0.2 percent increase that economists had expected. The increase was led by a… Continue

The White House unveiled a plan to help 9 million "at risk" homeowners modify their mortgages, committing $75 billion of taxpayer money to back the initiative. The plan contains two separate programs. One program is aimed at 4 million to 5 million homeowners struggling with loans owned or guaranteed by Fannie Mae and Freddie Mac to help them refinance their mortgages through the two institutions.



A separate program would potentially help 3 million to 4 million additional homeowners… Continue

President Barack Obama signed a $787 billion stimulus bill into law, enacting a measure he says will create 3.5 million jobs and re-energizes the suffering U.S. economy. The stimulus will put the economy on a "firmer foundation," Obama said before signing the bill in Denver, Colorado. It passed both houses of Congress on Friday.



In its latest effort to stem the financial crisis, the Obama administration plans to announce details about a $50 billion program to modify mortgages for… Continue

The stock market is closed today in observance of President’s Day.



Finance chiefs from the Group of Seven nations joined the chorus of U.S. investors and lawmakers pushing Treasury Secretary Timothy Geithner to move faster to fix the banking system. Stung by domestic criticism for failing to provide details last week on just how he plans to clean up banks’ toxic assets and revive lending; Geithner was told by foreign policy makers at weekend talks in Rome that speed was of the… Continue

The stock market will be closed on Monday, February 16, 2009, in observance of President’s Day.



The House of Representatives approved a sprawling, $787 billion stimulus package backed by President Obama, handing the new president a key victory on his top economic priority that he says will create 3.5 million jobs and help lift the economy from recession. The huge package contains billions of dollars in infrastructure spending and assistance to states and the unemployed, and a $400… Continue

Economic stimulus legislation at the heart of President Obama's recovery plan is on track for final votes in the House and Senate after a dizzying final round of bargaining that yielded agreement on tax cuts and spending totaling $789 billion.



The Labor Department said initial claims for state unemployment insurance benefits dropped 8,000 to a seasonally adjusted 623,000 in the week ending February 7th. Analysts were expecting 610,000 claims.



The Commerce Department said… Continue

In The News



Facing a disgusted public and Congress, bank CEOs agreed with demands for greater accountability in the first testimony on how they're spending money from the taxpayer-funded $700 billion bailout. The eight top bankers appearing before a Congressional panel were contrite and conceded they have work to do to win over a bitter public and an exasperated Congress.



House and Senate negotiators agreed to pare economic stimulus legislation below $800 billion and… Continue

Senators approved an $800 billion-plus stimulus bill, handing President Barack Obama a legislative victory on his chief economic priority. The bill is a mixture of tax cuts, targeted spending on infrastructure projects and money to cash-strapped states. The measure must now be reconciled with a House version before being sent to Obama for signature.



Treasury Secretary Timothy Geithner said the new administration will wage an aggressive two-front battle against the worst financial… Continue

President Obama went on the campaign trail to push his economic stimulus plan, while a crucial procedural vote looms in the Senate. Obama traveled to one of the hardest-hit cities in the United States -- Elkhart, Indiana -- to rally support for an $800 billion plan to boost the flagging U.S. economy and prevent what he's called a "catastrophe" for America. Obama will return to Washington for a prime-time news conference to pitch his economic plan to the nation.



General Motors Corp.… Continue

The Labor Department reported the effects of the recession intensified in January, as the unemployment rate jumped to 7.6%, and non-farm payrolls fell by the largest amount in 34 years. Non-farm payrolls fell by a seasonally adjusted 598,000 in January after a revised loss of 577,000 in December- the largest payroll loss since December 1974.



Canada lost 129,000 jobs last month as the unemployment rate surged more than half a point to 7.2 percent. It marks the worst monthly employment… Continue

President Obama warned that failure to act on an economic recovery package could plunge the nation into a long-lasting recession that might prove irreversible, a fresh call to a recalcitrant Congress to move quickly. In an op-ed in today’s Washington Post, the president argued that each day without his stimulus package, now exceeding $900 billion in the Senate, Americans lose more jobs, savings and homes. He painted a bleak picture if lawmakers do nothing.



The Labor Department… Continue

Responding to concerns about Wall Street excesses, President Obama introduced rules limiting to $500,000 compensation paid to executives at financial institutions receiving "exceptional assistance" from the government. Any additional compensation would be made in restricted stock that won't vest until taxpayers are repaid. Banks getting help as part of the bailout program would face new prohibitions on "golden parachutes." The rules also give shareholders of banks receiving capital infusions… Continue

The National Association of Realtors reported that the number of new sales contracts on existing homes increased a seasonally adjusted 6.3% in December as buyers took advantage of lower mortgage rates and falling prices.



Chrysler LLC says U.S. industry sales could drop as much as 35 percent in January to the lowest rate in 25 years. The annualized sales rate for the month could drop below 10 million for the first time in a quarter century, led by a large drop in fleet… Continue

President Obama promised to establish a review board to oversee the government's $700 billion rescue package aimed at averting a financial meltdown, declaring that some of the nation's banks would have to write down bad debts, while other banks may fail. The president said he was taking full responsibility for rescuing the U.S. economy, in its worst downturn in 80 years.



The Institute for Supply Management’s manufacturing index rose to 35.6 in January from an upwardly revised 32.9 in… Continue