A government investigator overseeing the $700 billion bailout reported on Thursday that outsiders, including some lawmakers, lobbied regulators on behalf of banks seeking money.
"I am writing on behalf of one of my constituents to express my support of their application for assistance and support under the Troubled Asset Relief Program," one lawmaker wrote, according to audit report by Neil Barofsky, the special inspector general for the Troubled Asset Relief Program.
Barofsky found 56 instances in which outside parties contacted regulators. Of those 56 firms, 16 got bailouts. And three of those 16 companies did not meet standard bailout criteria, but received money after regulators found "mitigating factors" justifying help, according to Barofsky.
The inspector general’s report did not disclose the names of the banks examined or the people, including lawmakers, who lobbied on their behalf.
Barofsky said he found no evidence that bailouts were granted because of outside lobbying.
"SIGTARP did not identify any instances of external pressure having undue influence during the application review process," Barofsky wrote free 3-in-1 credit report.
Still, the report calls on regulators to do more to shine a light on the issue.
Treasury Department staffers told the IG’s office that they had received calls from those lobbying for bailout applicants but they didn’t document the calls.
The report recommends that Treasury provide a more detailed and cleaner accounting of how each bailout decision maker votes. It also said Treasury and other regulators must maintain better records of talks they have with outside parties trying to lobby about bailouts.
Earlier this year, several news reports said that Reps. Barney Frank, D-Mass., and Maxine Waters, D-Calif., reached out to regulators about bailouts for banks.
Extended unemployment benefits may be available for Americans who exhaust their standard jobless insurance — but the programs, as well as who’s included in government data, can be confusing.
Because programs and eligibility standards change frequently, the best thing to do is contact your state’s labor division. But here are answers to some common questions.
1. Who is included in the unemployment rate?
Only people who have actively looked for work in the past four weeks are included — regardless of whether they file for unemployment benefits. The Labor Department conducts a monthly population survey, asking simply if you’ve sought work in the past four weeks.
2. What is the difference between initial and continuing claims?
The government’s initial claims number identifies those people filing for their first week of unemployment benefits. Continuing claims reflect those people filing each week after their initial claim, up to their 26th week. After that, they are no longer counted in that total.
3. How many weeks of unemployment do I get?
A maximum of 26 weeks to start. (Well, except in Montana, which offers up to 28 weeks, and Massachusetts, which has a max of 30 weeks) 100% approval payday loans.
Eligibility depends on how long you worked and how much you made prior to becoming unemployed. Not every filer receives the maximum number of weeks available.
4. What if I run out?
You can get at least another 20 weeks in most instances.
In June 2008, Congress passed the Emergency Unemployment Compensation program, which extended the number of weeks available in those states that opted to be a part of the program. All did.
On top of that, those states with an insured unemployment of 4% or higher, or a total unemployment rate higher than 6% can offer another 13 weeks for a total of 33 weeks under EUC.
5. Is there anything after that?
Possibly another 20 weeks.
For those states whose insured unemployment is at 5% or higher, or total unemployment rate is above 6.5%, the federal government will pay for another 13 weeks of benefits. When the total unemployment tops 8%, states may enact a voluntary program to receive federal money for another 7 weeks of benefits.
StormHarbour Partners LP, a firm founded by former Citigroup Inc bond trading executives Antonio Cacorino and Fredrick Chapey, has hired 50 traders and bankers from larger financial firms, the Wall Street Journal said.
The hires include about 20 from Citigroup, as well as others from JPMorgan Chase & Co, Goldman Sachs Group Inc, Bank of America Corp and Carlyle Capital Corp, the paper cited StormHarbour as saying.
StormHarbour has also hired Robert Cummings and Sohail Khan from Citigroup, John Stomber from Carlyle and Chris O’Connor, who used to work at Bear Stearns Cos, according to the paper free business card.
“What we’re looking to do is to build a global markets firm,” Chapey told the paper.
The firm started advising clients on bond trades in June and aims to help investors and bond issuers buy and sell bonds that are hard-to-value, according to the paper.
StormHarbour could not be immediately reached for comment by Reuters.
(Reporting by Ajay Kamalakaran in Bangalore, Editing by Ian Geoghegan)
The highest home loan rates in more than two months drained demand for refinancing last week, dragging total U.S. mortgage applications to the lowest level since early March, the Mortgage Bankers Association said on Wednesday.
Refinancing has been the lifeblood of a renewed push for mortgage funding much of this year, and even that has lost steam despite borrowing costs staying relatively low, according to the industry group’s data.
The average 30-year mortgage rate rose 0.12% point to 4.81%, above a low of 4.61% two months ago though down more than a percentage point from a year ago.
Many homeowners are waiting for kinks to be worked out of refinance programs from the government as well as government-controlled Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500).
The hope is that once the hurdles in the refinance process are surmounted, consumers can return to slicing monthly housing costs and stimulating the recessionary economy by spending some of those savings.
Total U.S. mortgage applications fell 14.2% in the week ended May 22 to 786.0 on a seasonally adjusted basis, 37% below its recent peak of 1,250.6 in early April.
Many consumers are holding out for even lower rates and prices. Caution about making such a big purchase if jobs are at risk has also kept many buyers sidelined.
"People are calling but not necessarily willing to act," said Brad Sherman, vice president of residential lending at Nationwide Mortgage Services in Rockville, Maryland. "We keep hearing stories that housing prices are continuing to fall and people are nervous to commit new money" to buy when it could soon cost less.
The Mortgage Bankers Association’s measure of demand for loans to buy homes rose by 1% to 256.6 last week, but has shown scant momentum during the keenly watched spring sales season.
In the meantime, those waiting for lower rates likely also saw home values slide versus the size of their loan, possibly to levels that kept lenders from approving a refinancing payday loans for bad credit.
"As far as refinancing goes, people are counting on some of these Fannie Mae and Freddie Mac programs to fully kick in, and there are some problems with them that they haven’t yet ironed out," Sherman said.
Requests for loans to refinance slumped 18.9% last week to 3,890.4, about 43% below the 6,813.5 peak in early April. Refinancings accounted for just over 69% of all applications, after hovering closer to 75% in recent weeks.
Affordability remains at record highs, but some key obstacles remain before the housing crisis becomes history.
Fixed mortgage rates still remain near record lows. The average home price nationwide has been slashed by more than 32% from the 2006 highs, according to the Standard & Poor’s/Case-Shiller indexes.
The market may be on the doorstep of stabilization, according to some housing analysts, but a recovery won’t be forthcoming with unemployment rising and foreclosures still setting records.
"We’ve seen traffic on our site grow every single month since the beginning of the year so there’s a huge amount of pent-up demand, particularly from first-time home buyers," said Pete Flint, San Francisco-based chief executive of Trulia, a real estate Web site.
But there will be bargains for the next few years, curbing the urgency to purchase immediately, he said.
"The housing market is not going to recover until foreclosures stabilize and reduce," which is unlikely in the short run, Flint said. "I would feel a lot more hopeful for the housing market when I see some positive signs in the employment statistics."
The U.S. unemployment rate of 8.9% in April was the highest in more than a quarter century and is widely expected to climb.
Lehman Brothers Holdings Inc’s U.S. estate administrators will ask a federal judge on Tuesday to approve a framework for coordinating bankruptcy proceedings for the bank’s subsidiaries worldwide, putting them at odds with its administrators in the UK, the Wall Street Journal said.
Lehman’s UK estate administrator PricewaterhouseCoopers (PwC), who represents the bank’s main European arm, maintains the estate is governed by local rules and the interests of its own creditors, according to the paper.
A global protocol is “unnecessary, insufficiently tailored and unacceptably burdensome,” the paper quoted Tony Lomas, a PwC partner, as saying payday loan.
Lehman’s London-based estate held about a third of the firm’s estimated $630 billion in assets before it filed for bankruptcy in September 2008, the paper said, adding that the estate holds data essential to insolvency proceedings among other smaller European subsidiaries.
Lehman’s U.S. administrators and PwC could not be reached for comment.
(Reporting by Ajay Kamalakaran in Bangalore; editing by John Stonestreet)
European Central Bank council member Axel Weber said the bank will lower interest rates again and may extend the maturities of its loans to banks to push down long-term borrowing costs.
The ECB still has “room to maneuver” on interest rates “which we will use,” Weber, who heads Germany’s Bundesbank, said in a speech in Berlin today. In addition, offering banks loans for longer periods may “contribute to a desired flattening of the interbank yield curve” and “could help to guarantee financing security,” he said.
Weber’s comments suggest he favors expanding the ECB’s existing policy of lending banks as much cash as they want rather than following the U.S. Federal Reserve and the Bank of England and buying government or corporate debt to revive the economy. The Frankfurt-based ECB is under increasing pressure to outline a strategy for how it will counter the worst recession since World War II once it runs out of room to lower interest rates.
“The urgency of delivering further stimulus in the near term implies that the Council is ready to ease on April 2,” said Julian Callow, chief European economist at Barclays Capital. Before Weber’s speech he had expected the ECB to wait until May before cutting its key rate to 1 percent from 1.5 percent.
The bank this month lowered its benchmark lending rate to 1.5 percent, a record low. That’s still the highest among the Group of Seven nations. The Fed and the Bank of Japan have lowered their key rates to close to zero and the Bank of England’s is at 0.5 percent.
‘Different Animal’
All three of those central banks have said they will purchase government bonds in an effort to reduce long-term interest rates and revive economic growth, a policy known as quantitative easing cash advance.
“The ECB is a totally different animal to the Fed and the other central banks,” said Laurent Bilke, an economist at Nomura International in London and a former ECB forecaster. “The furthest it may push out the boat at this point in time is to enhance what it already has.”
The ECB currently offers banks loans at its prevailing benchmark rate for up to six months. Banks can borrow as much money as they want against eligible collateral.
“We’re not yet at a point where we would have to say that the provision of loans to the economy is no longer functioning,” Weber said.
The bank, which sets interest rates for the 16-nation euro region, is hemmed in by European Union rules that forbid it from buying bonds directly from governments. Any decision to buy debt in the open market may spark a dispute over which country’s securities to purchase.
French President Nicolas Sarkozy today urged the ECB to boost the euro-area economy by broadening the collateral it accepts when making loans and buying commercial paper.
“The central bank must widen the quality of paper it accepts,” Sarkozy told reporters after a meeting of European Union leaders in Brussels.
Xerox Corp, the world’s top supplier of digital printer and document management services, warned first-quarter earnings will fall far short of its earlier forecast as a slowdown in technology spending undercuts revenue.
Hurt by falling sales of equipment and printer-based supplies, the company said on Friday that revenue in January and February was 18 percent below year-ago levels. It also blamed poor results from its venture with Fuji, which handles sales for the Xerox group in Asia.
The Xerox outlook comes on the heels of downbeat comments this week by two other household names, FedEx Corp and Nike Inc. These warnings suggest many corporations are still in the thick of the recession and it could be some time before they are able to turn around earnings.
Earlier this month, hopes about a recovery had been lifted by optimistic comments by Bank of America Corp, JP Morgan Chase & Co and others in the troubled banking sector.
With technology spending staggering, Xerox forecast first-quarter earnings of 3 cents to 5 cents per share, compared with an earlier outlook of 16 cents to 20 cents. Analysts looked for 17 cents per share, according to Reuters Estimates.
Spurred by solid profits and improved market share, the Norwalk, Connecticut-based company, whose rivals include Oce NV, Canon and Ricoh, had rebounded from severe financial troubles earlier this decade.
However, efforts to boost revenue have been derailed by the recession fast cash now. In recent months, some large clients have been hesitant about purchasing higher-end technology, analysts have said. Increased sales of lower-priced products have hurt Xerox’s gross margins.
Shares of the company, down about 33 percent for the year through Thursday, dropped a further 10.6 percent to $4.77 in premarket trade.
Chief Executive Anne Mulcahy, who was an economic adviser to Barack Obama during the U.S. presidential transition, said Xerox would continue to increase market share yet cautioned in a statement that “enterprise spending on technology will continue to decline this year.”
As a result, Xerox said it would seek to cut some $300 million in costs, on top of the $250 million in savings it previously planned. It did not say where the additional savings would come from, but its restructuring late last year included about 3,000 job cuts.
Xerox also said it would cut total debt during the first quarter and would continue to do so throughout the year. It said it has a $2 billion line of credit and would tap credit markets only on an “opportunistic” basis.
Xerox is due to release first-quarter earnings on April 24.
(Reporting by Paul Thomasch; editing by Jeffrey Benkoe and Steve Orlofsky)
OTTAWA–A new study says Canada lost nearly 322,000 manufacturing jobs from 2004 to 2008, or more than one in seven.
Statistics Canada reports more than 1.5 million jobs were created in the rest of the economy during the same period.
The agency says the share of manufacturing jobs in the economy fell to 11.5 per cent in 2008 from 14.4 per cent in 2004.
The reports says employment has fallen in almost all manufacturing industries since 2004, with only a few reporting increases – notably manufacturing of transportation equipment (excluding motor vehicles and parts), petroleum and coal products, and computer and electronic products.
Almost half the jobs in textiles and clothing, long one of the largest manufacturing employers in the country, disappeared empire payday loans.
The automotive industry was also hit hard, with one in five motor vehicle and more than one in four motor vehicle parts manufacturing jobs lost from 2004 to 2008.
Ontario was hit hardest of the provinces, losing 198,600 or 18.1 per cent of manufacturing jobs.
Newfoundland and Labrador, New Brunswick, Quebec, British Columbia and Nova Scotia also lost more than 10 per cent.
StatsCan says the trends are not unique to Canada, with manufacturing declining in most Organization for Economic Co-operation and Development countries.
The Canadian Press
The Federal Reserve may have cut its key short-term interest rate to the lowest level on record, but that doesn’t mean credit will be any easier to get.
The move to lower the fed funds target rate to a range between 0% and 0.25%marked the tenth time the Fed has cut rates in the past 15 months in an attempt to jumpstart the economy.
Generally, the Fed lowers rates when it is concerned about the economy slowing because consumers tend to spend more when the cost of borrowing is cheap. But economists say the problem for consumers and businesses right now is not the cost of borrowing, but the availability of credit.
"Consumers might see lower rates but it’s still hard to get a loan," said Gus Faucher, director of macroeconomics at Moody’s Economy.com. "Banks are taking big hits, and they’re still trying to preserve capital. So they’ll only make loans if you’re a good credit risk."
The federal funds rate is an overnight lending rate that is used as a benchmark to determine the price of a variety of loans, including credit cards, home equity loans, lines of credit and car loans.
Most types of consumer loans are pegged to the prime rate, which is directly influenced by the federal funds rate. Typically, the prime rate is 3 percentage points higher than the federal funds rate. It was 4% before Tuesday’s rate cut; just after the decision, several banks announced they were lowering their prime rate to 3.25%.
In turn, all credit cards with variable interest rates will automatically reset to reflect the lower rate. That is good news for card holders, but expect issuers to counter it by setting rate floors in order to preserve their margins, as well as scaling back consumer credit lines and closing old accounts.
"Banks are trying to mitigate losses," said Robert McKinley, CEO of CardWeb.com, a credit card tracking Web site.
"New credit is going to be a problem," McKinley added. "If you have shaky credit you’re going to be very challenged to find money instant payday loan no telecheck…even people with good credit are going to find it’s not as easy to get credit," he said.
And the same goes for consumers shopping for home equity lines of credit. "Lenders are not jumping up and down to be a second lien holder at a time when home prices are falling and foreclosures are rising," said Greg McBride, senior financial analyst at Bankrate.com.
Those in the market for a new car will certainly find deals, but that’s mostly thanks to slashed sticker prices, not lower interest rates. That’s because auto loans are not overly rate sensitive. For example, despite the Fed rate cuts, the average five-year note for a new car loan is at 7.05%, down from 7.60% a year ago.
"Rates have not gotten significantly lower, but even if they did it wouldn’t have a significant impact on affordability," said McBride.
Plus, even if borrowers can get financing, the difference of a percentage point doesn’t seriously impact affordability. "Nobody is upgrading to a Hummer based on lower interest rates," McBride added.
For many mortgage holders, the cumulative Fed rate cuts will result in lower payments when their variable-rate loans reset in 2009. But there is also a diluted effect: While this is a good time to refinance your existing mortgage, those in the market for a new home will need excellent credit to get a low rate.
"To obtain today’s low interest rates, you need to have a down payment - or equity position in your home in the case of a refi - of at least 10% and fully document your income and your assets," said Keith Gumbinger, vice president of mortgage-rate tracking firm HSH Associates. "If you don’t have good credit, you’re going to have trouble getting financing."
"It used to be, you had to prove you were alive to get a mortgage," he added.
Sears.com was inaccessible to U.S. shoppers for two hours Friday in what was the most notable Web hiccup of the holiday gift-buying season’s official start.
Other sites, including Amazon.com Inc (AMZN, Fortune 500)., experienced minor slowdowns, according to Shawn White, director of external operations at Keynote Systems Inc., a San Mateo, Calif.-based research group.
Starting a week and a half ago, Keynote began tracking the performance of about 30 big online retailers, logging the time it took to find a product and start checking out.
Keynote’s list includes Wal-Mart Stores Inc (WMT, Fortune 500)., Macy’s Inc (M, Fortune 500)., Circuit City and others; the system takes measurements every 15 minutes from computers in 10 major U.S. cities.
Sears Holdings Corp. (SHLD, Fortune 500)’s site started to crawl at around 9:30 a.m. ET when loading a page on the site topped one minute need cash. From about 10:30 to 12:30, Sears posted a message asking shoppers to try again in a few minutes.
White said Sears was among the retailers that stumbled last year on Black Friday.
But while Sears’ problems returned this year, others including Neiman Marcus seem to have resolved past issues.
Amazon and Target Inc (TGT, Fortune 500)., which uses Amazon’s e-commerce technology, were slower Friday than in recent days, but not unbearably so, White said. At the slowest point, a transaction that took 25 seconds last week required about 40 seconds Friday morning.
Kohl’s Corp. (KSS, Fortune 500) and Saks Inc. (SKS) also had performance problems, according to Keynote data.
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