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Jack Lott's Blog – October 2008 Archive (22)

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JDfn Daily Digest - October 31, 2008

The Commerce Department reported that personal spending fell by 0.3 percent last month, the biggest decline since June of 2004. That followed flat readings in both July and August, contributing to the worst quarterly performance in 28 years. Incomes showed a 0.2 percent rise in September, just half of the August increase, a slowdown that partly reflected the adverse effects of Hurricane Ike along the Gulf Coast.



The Labor Department reported that employment costs for civilian workers… Continue

Added by Jack Lott on October 31, 2008 at 10:57am — No Comments

JDfn Daily Digest - October 30, 2008

Gross Domestic Product, shrank at a 0.3 percent annual rate in the July-September quarter, the Commerce Department reported Thursday. It marked the worst showing since the economy contracted at a 1.4 percent pace in the third quarter of 2001, when the nation was suffering through its last recession.



New applications for state unemployment benefits were unchanged at 479,000 in the week ended Oct. 25th. About 7,500 new claims stemmed from Hurricane Ike, but the effect on the data is… Continue

Added by Jack Lott on October 30, 2008 at 10:00am — No Comments

JDfn Daily Digest - October 28, 2008

The Federal Reserve has announced it cut the Fed Funds Rate a half point to one percent. The FOMC said the state of the US economy has “slowed markedly.” The decision was unanimous.



China's central bank said it is cutting key one-year interest rates. The People's Bank of China said that it was reducing the benchmark one-year deposit rate by 27 basis points to 3.60% from 3.87%.



The Commerce Department reported that orders for durable goods rose by 0.8 percent, surprising… Continue

Added by Jack Lott on October 29, 2008 at 10:30am — No Comments

JDfn Daily Digest - October 28, 2008

Fed Chairman Ben Bernanke and his colleagues will open a two-day meeting starting today -- the last before the November elections -- to make a fresh assessment of economic and financial conditions and decide their next move on interest rates. Their decision will be announced Wednesday at 2:15 pm (Eastern Time).



Former Federal Reserve Chairman Paul Volcker said there "can't be any doubt we're in a recession" and that, while he did not know how deep the economic downturn would be, he… Continue

Added by Jack Lott on October 28, 2008 at 10:20am — No Comments

JDfn Daily Digest - October 27, 2008

As a result of the current volatile economic situation, the Federal Reserve is reportedly prepared to cut interest rates -- perhaps to their lowest point in more than four years -- with the hope of relieving some of the pain felt by many Americans. The FOMC will announce their decision after their two day meeting, Wednesday afternoon at 2:15 pm (Eastern Time).



The government will begin doling out $125 billion to nine major banks this week as part of its effort to contain a growing… Continue

Added by Jack Lott on October 27, 2008 at 10:30am — No Comments

JDfn Daily Digest - October 24, 2008

The National Association of Realtors said that sales of existing homes rose by 5.5 percent in September compared to August, the best showing since a 5.6 percent increase in July 2003, during the five-year housing boom.



The chief economist of the American Federation of Labor and Congress of Industrial Organizations said Congress moved quickly on the $700 billion financial rescue package and now working families throughout the country deserve the same attention. Ron Blackwell said as… Continue

Added by Jack Lott on October 24, 2008 at 1:00pm — No Comments

JDfn Daily Digest - October 23, 2008

Former Federal Reserve Chairman Alan Greenspan said financial companies and markets should be more heavily regulated to prevent a repeat of a "once-in-a-century credit tsunami." Greenspan, testifying at the House Oversight Committee, said he reluctantly supports requiring securities firms that structure new investments to maintain some ownership of those securities to put their own capital at risk. He also said he was "in a state of shocked disbelief" over the failure of banks and other… Continue

Added by Jack Lott on October 23, 2008 at 10:25am — No Comments

JDfn Daily Digest - October 22, 2008

The White House has announced that World leaders will meet Nov. 15th in Washington to address the global financial crisis -- the first in a series of summits to ease what economists predict could be a long and deep downturn.



U.S. Treasury Undersecretary David McCormick said the U.S. economy is in for a challenging few quarters but could start to recover late next year. McCormick told a lunch in Hong Kong, "The coming quarters will be very challenging." He also said that it is his… Continue

Added by Jack Lott on October 22, 2008 at 10:30am — No Comments

JDfn Daily Digest - October 21, 2008

The Federal Reserve has created a new facility to ease the stress in the short-term debt market. Under the new program, called the Money Market Investor Funding Facility, the Fed will provide funds to a private-sector controlled effort to purchase assets from U.S. money market mutual funds.



The Bank of Canada lowered its target interest rate by a quarter of a percentage point to 2.25%. Policy makers noted "severe strains in financial markets" and lower commodity prices, likely to… Continue

Added by Jack Lott on October 21, 2008 at 10:23am — No Comments

JDfn Daily Digest - October 20, 2008

Fed Chairman Ben Bernanke told the House Budget Committee the country's economic weakness could last for a while and it was the right time for Congress to consider a new package. Earlier this year, most individuals and couples received tax rebate checks of $600-$1,200 through the $168 billion stimulus package enacted in February.



Treasury Secretary Henry Paulson said government purchases of stock in banks represent an investment that should eventually make money for the taxpayer.… Continue

Added by Jack Lott on October 20, 2008 at 1:48pm — No Comments

JDfn Daily Digest - October 17, 2008

President Bush said U.S. steps to ease the financial crisis will take "more time," to work but said he was confident they would be effective. It's going to "take awhile" for the credit crunch to ease. In a speech to the U.S. Chamber of Commerce, the President outlined actions the government has taken including supporting commercial paper and expanding insurance for bank accounts.



Housing starts fell 6.3% in September to a seasonally adjusted annual rate of 817,000, the lowest since… Continue

Added by Jack Lott on October 17, 2008 at 3:36pm — No Comments

JDfn Daily Digest - October 16, 2008

There's good news on the inflation front, as the Labor Department reported that consumer prices were unchanged in September, with energy prices declining and food prices rising. Energy prices dropped 1.9% after seasonal adjustments, the September data showed. For the second consecutive month, food prices rose by 0.6%.



The Labor Department reported that initial claims for unemployment insurance last week fell 16,000 to a seasonally adjusted level of 461,000. That was below analysts'… Continue

Added by Jack Lott on October 16, 2008 at 12:01pm — No Comments

JDfn Daily Digest - October 15, 2008

Federal Reserve Board Chairman Ben Bernanke believes more difficulties lie ahead for the U.S. economy, but the U.S. is in better position to get through them now that the government has new powers to strengthen the banking sector. He said the Fed is committed to using "all the tools at our disposal" to improve market functioning, reduce stress in credit markets and complement the work of the Bush administration and foreign governments to strengthen the financial system.



The Commerce… Continue

Added by Jack Lott on October 15, 2008 at 11:30am — No Comments

JDfn Daily Digest - October 14, 2008

President Bush announced a $250 billion plan by the government to directly buy shares in the nation's leading banks, saying the drastic steps were "not intended to take over the free market but to preserve it." Nine major banks will initially participate including all of the country's largest institutions.



Treasury Secretary Henry Paulson urged banks receiving $250 billion in capital injections from the government to use the funds to spur economic growth. The U.S. initiative followed… Continue

Added by Jack Lott on October 14, 2008 at 10:00am — No Comments

JDfn Daily Digest - October 13, 2008

The U.S. Treasury plans to buy equity in "healthy" financial institutions as part of a multibillion-dollar program designed to kick-start the flow of credit for consumers. Speaking to a group of international bankers, Interim Assistant Secretary for Financial Stability Neel Kashkari said the U.S. is working "around the clock" on the program and detailed the steps Treasury is taking to put it in place.



The Bush administration said it is moving quickly to implement a $700 billion… Continue

Added by Jack Lott on October 13, 2008 at 11:19am — No Comments

JDfn Daily Digest - October 10, 2008

President Bush said the government's financial rescue plan was aggressive enough and big enough to work, but would take time to fully kick in. Bush spoke as leaders of the world's leading economies gathered in Washington amid frozen credit markets, panic selling in stock markets and a looming global recession. The president noted that major Western economies were working together in an attempt to stabilize markets and end the spreading panic.



U.S. authorities are now considering… Continue

Added by Jack Lott on October 10, 2008 at 11:00am — No Comments

JDfn Daily Digest - October 9, 2008

Initial claims for jobless benefits dropped 20,000 to a seasonally adjusted 478,000, in line with Wall Street economists. The department said Hurricanes Ike and Gustav were responsible for adding about 20,000 claims on a seasonally adjusted basis. That's down from approximately 45,000 the previous week.



Inventories at U.S. wholesalers rose 0.8 percent in August, higher than what analysts had expected, while sales suffered their largest drop in more than a year and a half. Wall Street… Continue

Added by Jack Lott on October 9, 2008 at 11:39am — No Comments

JDfn Daily Digest - October 8, 2008

Treasury Secretary Henry Paulson said patience is needed because the ongoing financial market turmoil will not end quickly despite Congress approving a $700 billion bank rescue package. At the start of a press conference, Paulson said that the bailout plan and coordinated central bank interest rates could not end the crisis overnight. More banks are likely to fail in coming months and he stressed that Treasury now has the power to inject capital into banks, a step advocated by many… Continue

Added by Jack Lott on October 8, 2008 at 10:00am — No Comments

JDfn Daily Digest - October 6, 2008

In The News



The Federal Reserve says it will begin paying interest on commercial banks' reserves and will expand its loan program to squeezed banks, fresh steps to help ease a painful credit crisis. Congress in the $700 billion bailout bill President Bush signed on Friday gave the Fed the power to pay interest on those reserves for the first time. The law accelerated the effective date to Oct. 1st of this year versus 2011.



Bank of America Corp. (BAC) and a number of U.S.… Continue

Added by Jack Lott on October 6, 2008 at 10:55am — No Comments

JDfn Daily Digest - October 3, 2008

The House of Representatives voted to approve a revised $700 billion bailout plan for the financial markets. The House's vote follows the Senate's approval and clears the way for President Bush's signature. Passage came over the objections of some members who balked at tax provisions in the bill and giving the Treasury secretary extraordinary power to buy bad assets. The bill now goes to the President for signature.



Employers made deeper cuts in their payrolls in September as the… Continue

Added by Jack Lott on October 3, 2008 at 10:00am — No Comments

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