Rep. Barney Frank says JPMorgan's $2 billion loss proves big banks need to be regulated for their own protection.
After JPMorgan Chase lost $2 billion, many question if big banks learned any lessons from the 2008 financial crisis.
Assignment Editor CNN New York
The number of Americans filing for initial claims for unemployment benefits dropped by 21,000 last week to 454,000 according to the Labor Department, more than economists expected. People coming to the end of their unemployment benefits are waiting for the Senate to vote on an extension. The Senate, currently on its weeklong summer break, will be back in session July 12th. More than 2.1 million people are expected to have lost their unemployment benefits by that time.
The unemployed in America’s small towns are getting opportunities for new “onshored” jobs. Companies looking for skilled low cost labor are forgetting about India and taking a look at job hungry areas around the country for work traditionally outsourced overseas. The practice called “ruralsourcing” or “onshoring” has sparked new startups in places like Joplin, Mo., and Eveleth, Minn., where hundreds of employees crank out software code or offer IT support for large corporate clients.
Companies however are still shedding jobs. Wells Fargo announced yesterday that it will cut 3,800 employees and close over 600 branches of its financial division. The cuts come after the closing of Wells Fargo Financial, the company’s consumer finance division that was no longer needed after its 2008 merger with Wachovia.
Also on the economic front, June sales numbers for chain retailers across the country were reported today with mixed results. Most major chains however like Macy’s and J.C. Penney, posted better than expected gains.
American Eagle is hoping to jump start its back to school promotions, giving every customer who tries on a pair of jeans a free smartphone. The caveat–in order to get the free phone you must sign up for a new two year service plan from July 21st to August 3rd. Customers can choose from over 40 phones from a variety of brands including BlackBerry and Android.
Later today the government will release its report on consumer credit for May. Credit is expected to have fallen by $3 billion after rising by $1 billion in April.
And looking at the bigger picture, the International Monetary Fund warns that while the global economy grew at a stronger-than-expected pace so far this year, the risks to recovery have greatly increased. In an update of its World Economic Outlook, released Wednesday, the IMF raised its growth forecast for 2010 to 4.6% from the 4.2% estimate it made in April. However, the international organization warned that the risks to recovery have "risen sharply" due to renewed financial turbulence.
CNN Business News Producer
Get ready to fly the friendly skies of “Uni-tal”…
United Airlines announced today it will merge with Continental Airlines in a deal worth $3.2 billion, creating the world's largest airline.
The combined carrier, which will fly under the United name and Continental logo, would be larger than Delta Air Lines, which became the country's largest airline when it merged with Northwest in 2008. It’s expected to serve nearly 150 million passengers per year and fly to 370 destinations in 59 countries.
So what does all this mean for consumers? Will flights be cut because of the consolidation? Will ticket prices go up?
United and Continental aren't really commenting on much of that at the moment, but generally, flights do get cut when airlines merge.
And of course, it could also lead to higher fares, since decreased competition typically means higher prices. Industry analysts say fares probably won't be affected between major cities, but they could increase for some international flights and for flights into and out of smaller cities, where the carrier would have more pricing control.
Assuming the deal clears antitrust hurdles, the new airline would be based in Chicago, United's home, and its largest hub will be Houston, Continental's base.
United and Continental discussed merging back in 2008, but Continental backed out of the deal. This time around though, United is in a much stronger financial position.
Editor's Note: This article continues our series excerpted from AC360°'s contributor David Gewirtz's book, How To Save Jobs, which is available now. AC360° viewers can download it for free at HowToSaveJobs.org. To learn more about the book, follow David on Twitter @DavidGewirtz.
David Gewirtz | BIO
Director, U.S. Strategic Perspective Institute
This article is a continuation of Jobs and population: Controlling population.
With all the hubbub coming from Arizona this week about the state's new immigration policies, I thought it might be interesting to share the results of some research I did last year on the subject.
While I was writing How To Save Jobs, I built a computer model to analyze the logistics of tracking down illegal immigrants and sending them home. The bottom line was simple: it would simply cost far too much and be logistically impractical to gather all 13 million people and send them home.
Let me be clear. Illegal immigrants are here illegally. They're violating the law.
What my analysis showed, however, is that it would cost America billions of dollars simply to move illegal immigrants back home - and that's after they were located, apprehended, and processed through the legal system.
Let's put the illegal immigration problem into perspective
There are about 13 million illegal immigrants living in the United States today. Thirteen million people is a lot of people. That's pretty much the population of the state of Illinois, or the population of New York City and Los Angeles combined. That's almost 5 percent of the population of the United States.
Assuming you could gather all the illegal immigrants, it would take 166,666 buses, more than 13 billion gallons of fuel, and about 48 million pounds of food (around 195 million meals) simply to transport them to the nearest border.
Program Note: Don't miss our report on the hearing tonight on AC360° at 10 p.m. ET.
Top Goldman Sachs execs maintained their innocence even as they endured lawmakers' blistering cross-examination on the financial crisis.
Lloyd Blankfein, Fabrice Tourre and five other Goldman Sachs managers defended the company's mortgage market moves on Capitol Hill.
Go to the interactive above to read profiles of the key Goldman Sachs power players.
Top representatives from Goldman Sachs maintained Tuesday that the company did not engage in any questionable business deals leading up to the financial crisis.
Don't miss our analysis of the hearing tonight on AC360° at 10 p.m. ET.
And if you didn't have time to watch the hearing, you can read the testimonies here:
The e-mail messages Fabrice Tourre sent to a girlfriend in late 2007 make it clear that the glib and sometimes arrogant 28-year-old trader was fully aware that the financial "monstruosities" he helped create at Goldman Sachs were entirely bunk.
But the highly personal messages, written in confidence and released over the weekend by Goldman, also suggest that Tourre had some misgivings about the toxic trades he engineered over two years ago, which are now the subject of fraud charges brought by the Securities and Exchange Commission.
In an e-mail dated Jan. 23, 2007, Tourre described himself as "the only potential survivor" of a collapsing market for complex deals based on mortgage-backed securities. As the only Goldman employee named in the SEC's complaint, Tourre appears to have been wrong on that point.
CNN Business News Producer
Sales of new homes shot through the roof last month at the fastest single-month rate in nearly 50 years as buyers snatched up properties before the expiration of an $8,000 tax credit.
New-home sales soared 26.9% in March, snapping a four-month streak of declines, the Census Bureau said.
And on a year-over-year basis, sales jumped 23.8% from March 2009.
New-home sales rose in every region of the U.S. The South saw the biggest jump - up 43.5%, while the Northeast saw sales climb 35.7%. The West and Midwest regions both saw single-digit percentage growth, with the West up 6% and the Midwest up 4%.
This follows a report on Thursday from the National Association of Realtors that showed sales of previously-owned homes - known as “existing home sales” - increased by nearly 7% in March as new home buyers looked to cash in before that tax credit expires on April 30.
John C. Coffee, Jr.
Special to CNN
The SEC's enforcement action against Goldman Sachs highlights the widening fissures that underlie Wall Street and raises important issues on three levels:
First (and least important) will be the litigation outcome. Can the SEC convince a court that a strong bias in the portfolio selection process is material to investors, even though the portfolio's contents have been adequately disclosed and approved by an independent portfolio manager?
Second, because the exposure of Goldman's conflicting interests will likely result in some reputational damage to Goldman, investment banks may need to rethink their "Black Box" business model that often places them on all sides of a transaction that they actively structure and market.