Goldman Sachs announced last week that it will set aside $500 million for 10,000 Small Businesses.

Samuel Sherraden

Special to CNN

Goldman Sachs, the most profitable firm on Wall Street, announced last week that it will set aside $500 million for "10,000 Small Businesses," a charity co-sponsored by famed investor Warren Buffett and devoted to helping small American businesses survive the economic crisis.

While Goldman may see this as a generous move, its charity is an offense to struggling entrepreneurs and a symbol of failed government policy.

The $500 million allocated to fund the initiative is a small share of the massive profits Goldman has earned on the back of huge government subsidies it has received since the onset of the financial crisis.

When the financial system collapsed in fall 2008, the federal government supported "too big to fail" firms like Goldman Sachs with generous lending conditions, government guarantees, and outright subsidies.

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More Americans are expected to travel for the 2009 Thanksgiving holiday than they did last year, although air travel will decline.

Andrew Torgan
CNN Financial News Producer

When it comes to the financial crisis, there's been a lot of blame-shifting and finger-pointing. But in a surprise move, one of the nation's biggest banks is now admitting it played a part in the debacle.

Goldman Sachs CEO Lloyd Blankfein has apologized for taking part in the era of free and easy money.

"We participated in things that were clearly wrong and have reason to regret," Blankfein said at a corporate conference in New York. "We apologize."

Blankfein’s comments came the same day that Goldman announced it’s launching a $500 million initiative called "10,000 Small Businesses," aimed at unlocking the job creation and economic growth potential of America's small companies.

The project's advisory council features an array of business luminaries, including Warren Buffett, the bank’s largest shareholder

It’s worth pointing out that Goldman Sachs earned an eye-popping $3.2 billion in the third quarter, as revenue from trading rose fourfold from a year ago.

We have new signs today that the recovery in the housing market is tenuous at best.

Construction of new homes plunged by nearly 11% last month as builders waited on the sidelines to see whether Congress would extend the homebuyer tax credit.

Housing starts fell 10.6% in October to a seasonally adjusted annual rate of 529,000 - the lowest level in six months. And applications for building permits, a gauge of future activity, fell 4% to an annual rate of 552,000 units.

Both readings were below expectations.

Also on the economic front, consumer prices in October were essentially unchanged from a year ago as the rising cost of oil and gas offset price declines elsewhere.

The Consumer Price Index, the government's key inflation reading, is now down only 0.2% during the past 12 months compared to the same period a year ago. This is the smallest 12-month rate of decline since February.

The core CPI, which is more closely watched by economists because it strips out volatile food and energy prices, is up 1.7% over the past year.

If you thought this year’s graduating class faced a bleak job outlook, next year’s not going to look much better.

New college graduates had 40% fewer job prospects this year, according to a new report. And the outlook for 2010, while better, is still not very promising.

Jobs for graduates with bachelor's degrees, which account for most new graduate hires, will drop nearly 1% next year, according to Michigan State University's survey on recruiting trends.

Hiring of master's degree graduates will plummet by 11% based on a weaker labor market for accounting students, the study said.

Jobs for Ph.D.s will spike by 20% and those for MBA graduates will rise 11%.

Overall, hiring of grads with any degree will decline by 2% compared to 2009.

After a sharp drop last year, more Americans are expected to travel for the 2009 Thanksgiving holiday, although travel by air will decline.

According to the latest forecast from AAA, 38.4 million Americans will travel at least 50 miles from home for the Thanksgiving weekend, an increase of 1.4% from last year, when 37.8 million traveled.

Driving will account most of the increase, with 33.2 million Americans expected to travel by car, up 2.1% from the 2008 season, according to AAA. But flying will decrease 6.7% to 2.3 million travelers.

Travel by train, boat, bus and other means is expected to edge up 1.2% to 2.9 million Americans, AAA said.

Last year, Thanksgiving travel plunged 25.2% compared to 2007.

Finally, you’d better hoard your Eggos!

Grocery stores will be experiencing a shortage of the frozen waffles until mid-2010 due to problems at two bakeries, a Kellogg's says.

Flooding at an Atlanta bakery during heavy rains in October forced Kellogg, which makes Eggo products, to shut down production temporarily. Plus, equipment at Kellogg's largest waffle facility in Tennessee needs extensive repairs.

Remaining Eggo inventory will be rationed to stores across the country.

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General Motors recently showed reporters and select members of the public what it plans to build over the next two years.

Andrew Torgan
CNN Financial News Producer

Home prices rose in August and also suffered a smaller-than-expected annual drop, according to a report issued today.

Prices in the S&P Case-Shiller Home Price index of 20 cities rose a non-seasonally adjusted 1.2% in August. That’s the fourth consecutive monthly increase and followed a 1.6% gain in July.

And while prices were down more than 11% versus August 2008, that drop was less severe than expected.

On a city-by-city basis, Minneapolis had the biggest increase, with home prices rising 3.2% from July to August.

Home prices in California have recovered from depressed levels in recent months as well, with prices rising 2.8% in San Francisco during August, 2.5% in San Diego prices and 1.8% in Los Angeles.

But prices continued to slide in areas that have been hit hard by foreclosures. Prices dropped 0.5% in Cleveland and 0.3% in Las Vegas.

Key consumer confidence reading at 26-year low

On the other side of the coin, consumer confidence continued to slip in October, with a closely-watched gauge of the current economic situation falling to a 26-year low.

The Conference Board, a New York-based research group, said its Consumer Confidence Index fell to 47.7 in October from an upwardly revised 53.4 in September.

Economists were expecting the index to post a slight increase.

And the component of the index that evaluates consumers' judgment of their present situation dipped to 20.7 in October, the lowest since the 17.5 measured in February 1983.

Consumer confidence is closely watched by Wall Street as consumer spending accounts for two-thirds of all economic activity in the U.S.

Here come the “smart” meters

Some 18 million “smart” meters are set to make their way into American homes as part of the economic stimulus plan focusing on energy efficiency, Energy Dept. officials said today.

The meters, which are designed to communicate more effectively with utilities and appliances and help consumers manage their electricity more efficiently, are being distributed by utilities around the country with partial funding from the federal government that was allocated under the stimulus plan.

The 18 million meters represent roughly 13% of all electricity meters nationwide. Ultimately, the White House hopes to distribute 40 million “smart” meters over the next few years.

The smart meters are part of a wider government effort to upgrade the nation's aging utility grid. The government announced $3.4 billion in funding Tuesday to help move the country toward a so-called smart grid. Utilities are putting in another $4.7 billion in matching funds.

According to the White House, these investments could reduce U.S. electricity use by 4% a year.

Former GM plant set to make electric cars

Electric carmaker Fisker Automotive says it’s buying an old General Motors plant in Wilmington, DE and plans on making up to 100,000 vehicles a year at the recently shuttered facility.

Until July, the plant had employed over 1,000 workers making Pontiac, Saturn and Opel sports cars for General Motors. GM closed the facility as part of its corporate restructuring.

Fisker says its new plant will employ 2,000 factory workers and support another 3,000 vendor jobs by 2014. Production is set to begin in 2012.

IRS to rich tax cheats: Be afraid

The Internal Revenue Service detailed plans this week to weed out wealthy, international tax cheats with renewed urgency.

IRS Commissioner Douglas Shulman said the agency recently formed the “Global High Wealth Industry Task Force” to target investors with assets “in the neighborhood of $30 million.”

Shulman, as he addressed members of the American Institute of Certified Public Accountants in Washington, DC, said that a more “holistic” approach was necessary to find international tax cheats, given the growth in Americans investing overseas and the broad and complicated nature of modern financing.

Follow the money… on Twitter: @AndrewTorganCNN

Obama's Pay Czar Kenneth Feinberg is in charge of reviewing pay plans at biggest bailout firms.

David Ellis
CNNMoney.com

The Obama administration will soon order the nation's biggest bailed-out companies to drastically cut pay packages for their top executives, a senior administration official confirmed to CNN Wednesday.

Kenneth Feinberg, who was named the White House's pay czar in June, will demand that the seven largest bailout recipients lower the total compensation for their top 25 highest paid employees by 50%, on average, the official told CNN.

For the past two months, Feinberg has been reviewing pay plans at Citigroup (C, Fortune 500), AIG (AIG, Fortune 500), Bank of America (BAC, Fortune 500), General Motors, Chrysler, GMAC and Chrysler Financial in an effort to put these firms in a position to pay back bailout money as soon as possible.

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Products like Apple's iPhone have lifted the company's quarterly profit and beat Wall Street's forecasts.

Andrew Torgan
CNN Financial News Producer

Stocks on Wall Street struggled amid a deluge of corporate earnings reports. More than a third of the companies that trade on the Dow Jones Industrial Average are reporting this week. Today we heard from Caterpillar, Coca-Cola, Pfizer, DuPont and United Technologies.

And in the tech sector, we got solid results from Apple and Texas Instruments after the closing bell Monday night.

In fact, Apple said that record sales of Macintosh computers and iPhones lifted its quarterly profit and revenue, which trounced Wall Street's forecasts. Apple raked in nearly $10 billion in revenue and $1.5 billion in earnings in what the company says was its most profitable quarter ever.

Mac sales soared 17% from a year ago to 3.1 million units, a quarterly record. And iPhone sales climbed 7% to a record 7.4 million.

But iPod sales slumped 8% to 10.2 million for the quarter, despite slashed prices in September.

Housing starts miss expectations

Disappointing news about the housing market is also weighed on stocks, however.

Construction of new homes edged up slightly in September, helped by a rebound in single-family construction, although the increase was weaker than expected.

Applications for building permits, which are a gauge of future construction activity, also missed predictions. Permit applications fell 1.2%, a troubling sign for future housing projects.

Home prices are forecast to shrink

And if you thought home prices were bottoming out, you may be wrong. In fact, they're expected to head a lot lower.

Home values are predicted to drop in 342 out of 381 markets during the next year, according to a new forecast of real estate prices.

Overall, the national median home price is predicted to drop 11.3% by June 30, 2010, according to Fiserv, a financial information and analysis firm.

If Fiserv's forecast holds, Miami real median home price will tumble to $142,000 by June 2011.

In Orlando, Fla., the second-worst performing market, Fiserv anticipates a 27% price collapse by June 2010, followed by a less severe drop the following year. In Hanford, Calif., prices are estimated to drop 26.9% and continue falling 9.5% in 2011; in Naples, Fla., they're expected to fall 26.8% and then flatten out.

Other notable losers include Las Vegas, where prices have already fallen 54.6% and are expected to lose another 23.9% by June 2010. In Phoenix values have already collapsed by 54% and could fall another 23.4%. In both cities, Fiserv anticipates the losses to continue into 2011, but they will be less than 5%.

College: More expensive than ever

College costs are higher than ever, according to a new report, putting a degree even further out of reach for many Americans.

Tuition and fees at private 4-year schools rose 4.4% in the current school year to $26,273, according to a survey released by the College Board Tuesday.

Charges at public 4-year universities spiked over 6% for both in-state and out-of state students, to $7,020 and $18,548, respectively.

Tuition prices are going up at private schools at least in part because those schools have seen their endowments dwindle. Public schools are suffering from a dip in state funding, which declined 5.7% per student this year.

Holiday shoppers to spend less

Nearly two-thirds of holiday shoppers say the economy will affect their buying this year, with the average amount being spent dropping by about 3%, according to an industry report released today.

The National Retail Federation said 2009 will be the "holiday season of the serious bargain hunter."

Overall, the report said, consumers plan to spend an average of $682.74 on holiday-related shopping, down $22.27, or 3.2%, from $705.01 in 2008.

More than 65.3% of respondents said the recession has forced them to alter their holiday shopping plans in some way.

Follow the money… on Twitter: @AndrewTorganCNN

U.S. professors Elinor Ostrom and Oliver Williamson are joint recipients of the Nobel Prize for economics.

Andrew Torgan
CNN Financial News Producer

Two American scholars who are experts in how businesses and the economy are regulated have won the 2009 Nobel Prize in Economics.

Elinor Ostrom, a professor at Indiana University, is the first woman ever to win the Nobel in Economics.

Ostrom will share the $1.4 million prize with Oliver E. Williamson, a retired professor at the University of California-Berkeley.

The issue of government control of the economy has become a significant issue since last year's financial meltdown. The Obama Administration and governments of major developed economies around the globe are now working reform their regulatory oversight of businesses and markets.

Ostrom, a professor of political science, was recognized for her work demonstrating how common property, such as forests and lakes, can be successfully managed by those who use the resources, rather than government officials.

As for Williamson, the Nobel committee said his theories show that large private corporations exist primarily because they can be the most efficient way to complete some economic transactions, challenging the belief that markets are always the most rational and efficient way to conduct business.

Survey says… the recession is over

More than 80% of top economists believe that the recession that started almost two years ago is finally over. But most don't expect meaningful improvement in jobs, credit or housing for months to come.

That's according to a survey released Monday by the National Association for Business Economics. The group asked 43 top economists last month if they believe the battered economy has pulled out of the worst U.S. downturn since World War II.

Thirty-five respondents, or 81%, believe the recovery has begun. Only four, or 9%, believe the economy is still in a recession. The other four say they're uncertain.

Economists in the survey forecast that the economy grew at an annual rate of 3% in the three months that ended in September, though the official reading of gross domestic product won't be out for weeks.

And all of the economists surveyed expect the recovery to be slow and painful, leaving many people and businesses feeling the effects of the downturn for years to come.

The only organization that can officially declare the beginning or the end of a recession is the National Bureau of Economic Research. But that group doesn't make any sort of declaration until months after the fact, in order to take into account final readings of various economic measures such as employment, income and industrial production. For example, the NBER didn't declare that the recent recession had begun in December 2007 until a full year after the fact.

Big Week on Wall Street

The stalled-out stock-market rally got a reboot last week, pushing the Dow and S&P 500 to fresh one-year highs. But that resilience will be tested in the week ahead with the release of the first big batch of third-quarter financial results.

Dow components Bank of America, JPMorgan Chase, IBM, Intel, Johnson & Johnson and General Electric are all on tap. Google, Nokia, Citigroup and Goldman Sachs are among the other big names due to report.

Today, with no economic or major earnings news on the docket, stocks are making some fairly solid advances, with the Dow topping 9,900 for the first time in more than a year.

Senate considers benefits extension

The Senate may vote this week on whether to extend unemployment benefits to the millions of jobless workers across the country.

This after Senate Democrats reached a deal to give an additional 14 weeks to workers in all 50 states, and 6 weeks on top of that to workers in states with unemployment above 8.5%.

The measure differs significantly from the version passed in the House last month. That one grants 13 weeks of extended benefits only workers in high unemployment states.

All this wrangling over details comes as 400,000 people ran out of benefits in September and another 208,000 are set to lose them this month.

Follow the money… on Twitter: @AndrewTorganCNN

Gene Bloch
Managing Editor
CNN New York

We kick off this morning with one of those “green shoots” in the economy: better than expected retail sales; they surged 2.7 percent in August, as the Cash for Clunkers program provided a lift to auto sales. But even without auto sales and auto parts in the mix, retail sales rose a respectable 1.1 percent.

On the less positive side, wholesale inflation as measured by the Producer Price Index surged 1.7 percent last month. Most of that increase however was due to a surge in energy prices. If you strip out food & energy costs, the PPI’s “core rate” edged up just 0.2 percent.

President Obama is talking about the economy today as he addresses GM workers at a GM plant in Ohio; he then travels to Pittsburgh to address an AFL-CIO convention, before making his way to a fundraiser for Sen. Arlen Specter in Philly. Fed Chief Ben Bernanke today is out talking economy as well, going farther than before in saying the recession is “very likely over.” Of course, we know that only the National Bureau of Economic Research can conclude when recessions begin and end. And it doesn’t happen until after the fact.

How effective have the federal government’s efforts been to help consumers? In June, the President called for the creation of a new consumer protection agency to regulate mortgages, credit cards, and other financial products. But not much has happened since then— why not?

And what about the Administration’s efforts to help troubled borrowers stay in their homes? The Treasury Department says only 12 percent of eligible borrowers have had their loans modified under the President’s foreclosure prevention plan, which began in April. Why aren’t loan servicers moving faster? Alison Kosik takes a look in today’s Breakdown.

Is there a trade war shaping up with China? The Obama Administration is increasing tariffs on Chinese-made tires, which could put pressure on U.S. manufacturers overseas and cash-strapped consumers at home. China is calling for talks with the World Trade Organisation over the issue.

We continue our coverage marking the one-year anniversary of the financial crisis (note: Lehman filed for bankruptcy protection one year ago TODAY), and American Morning’s Carol Costello has a terrific interview with a former Lehman VP, Lawrence McDonald. He recently wrote a book about his experience titled "A Colossal Failure of Common Sense, The Inside Story of the Collapse of Lehman Brothers". McDonald sums it up in one phrase: "24,992 people striving hard, making money, and about eight guys losing it." McDonald talks about the corporate culture, how the firm's leaders ignored all the warnings and why he believes Lehman Brothers could have avoided bankruptcy.

And CNNMoney’s Poppy Harlow will interview Warren Buffett today on the recovery, what could go wrong, and what steps need to be taken to prevent a repeat of the calamity. The interview will take place this afternoon at the Fortune’s Most Powerful Women Summit in Aviara, CA. Poppy is there covering it. She’s available live after 230p.

And gas prices are down for a fourth straight day. AAA reports the average price of a gallon of regular unleaded is at $2.563 ($2.56 for grfx), down nine-tenths of a cent from the previous price.

On CNNMoney Today:

THE CRISIS: 1 YEAR AFTER LEHMAN

Ranking the rescues: Banks, autos, jobs. The collapse of Lehman led to a deeper recession and a litany of government programs to try and end the pain. We rate just how bold and effective the plans have been so far.

Judge rejects Merrill bonus settlement. Bank of America and the SEC are told that a proposed $33 million penalty over Merrill Lynch bonuses is 'neither fair, nor reasonable, nor adequate.'

Ex-Bear Stearns chief sees silver lining in Lehman collapse. Alan Schwartz said the firm's failure spurred policymakers around the world to finally cooperate.

HEALTH CARE

Rx for money woes: Doctors quit medicine. Some physicians, fed up with the costs of their practice, are ready to hang up their stethoscopes and shift careers.

HSAs remain rare, but small businesses have been among their biggest adopters. Advocates are waiting to see if they'll survive the health care reform battle.

Financier Bernard Madoff is serving a 150-year prison term for defrauding thousands of investors.

Gene Bloch
Managing Editor
CNN New York

How is President Obama’s health care address going over with Americans? Ali Velshi is aboard the CNN Express and will be live at noon in Scranton PA, where the Tea Party Express has a rally scheduled.

Meanwhile, the Census Bureau updated us today on the number of people without health insurance coverage – it stood 46.3 million in 2008, up 600-thousand from the 2007 level – but down from the 47 million reported in 2006. In the same report, the Census announced real median household income fell 3.6 percent to $50,303, and the poverty rate rose by 7-tenths of a percentage point to 13.2.

The jobs picture is still dire, but the latest weekly figures are “moving in the right direction” as economists like to say. The number of people filing first time jobless claims fell by 26-thousand last week to 550-thousand. The number of people continuing to collect unemployment is still above 6-million, but that number fell slightly as well.

Is the stimulus helping create jobs? This afternoon the Obama administration is releasing its first report to Congress about the stimulus, which is formally called the Recovery Act.

The banking bailout also is in the headlines today. Harvard professor Elizabeth Warren, head of the Congressional Oversight Panel, says she wants straight talk from Treasury Secretary Timothy Geithner – who is set to testify before her panel at 1p on Capitol Hill. Where has the money gone? What’s the government’s exit strategy? The panel’s latest report also asks for confidential memorandum from The Treasury Department and the Federal Reserve concerning investments in Bank of America and Citigroup. What is Professor Warren looking for?

When a phone conversation begins “Obviously, first of all, this conversation never took place, OKAY?” – you know that something’s not quite right. In audiotapes released yesterday by the Massachusetts Secretary of State’s office, Ponzi-schemer Bernard Madoff coached colleagues on how to evade questions from Securities and Exchange Commission investigators. "You know, you don't have to be too brilliant with these guys, because you don't have to be.”

At one point, Madoff interrupted the conversation to take another phone call. He returned and said, "I'm sorry. If I get any more solicitations for charity, I'm going to kill myself." The tapes offer a revealing look at the contempt Madoff had for the SEC, which missed years of red flags pointing to his massive fraud. There is also a Senate Banking Committee hearing today at 230p on how the SEC missed the Madoff scandal.

And gas prices are up but only a little. AAA reports a gallon of regular unleaded is averaging $2.576 ($2.58 for graphics purposes), up 3-tenths of a cent and breaking an 8-day streak of declines.

On CNNMoney today:

* The fight over doctor lawsuits. Obama on Wednesday night said he would accept health care reform provisions that reined in medical malpractice lawsuits. Story will look at the issue and the fight.

* Home repossessions: 'In the soup for at least a year.' The number of bank repossessions drops sharply in August, but it may be the calm before the storm.

* 10 a.m.: Census Bureau releases income, poverty and health insurance estimates for 2008

* Fortune's Most Powerful Women in Business – w/galleries, Q&A and video. Most powerful women in United States; most powerful globally. Plus the DC Power List.

Gene Bloch
Managing Editor
CNN New York

As President Obama prepares to outline his health care reform plan to a joint session of Congress tonight, we take a look at how the plan might be financed. The compromise proposal floated by Senate Finance Committee Chairman Max Baucus includes a new tax on insurance companies.

The 35% tax would be levied on any plan that costs more than $8-thousand for individual and $21-thousand for family coverage. Supporters say taxing the most expensive health care plans will raise revenue and curb overall health care costs. But critics say this tax could mean higher premiums for everyone, if insurers try to pass the cost on to consumers. Poppy Harlow reports today in The Breakdown.

The battle to shape health care reform has been bitter...and very expensive. Health care lobbying, advertising, political donations have cost about $375 million so far, the most expensive fight ever to hit Congress. Jennifer Liberto has this story on CNNMoney.

Expensive, but not as opulent as one might expect. That’s what many people are saying about Bernie Madoff’s homes and boats. In the latest video presentation courtesy of the U.S. Marshals Service, who have seized the homes from the convicted ponzi-schemer and are preparing them for sale. We get good views of his Manhattan penthouse, Palm Beach home, and his yacht and two smaller boats. The Palm Beach property may be worth about $7 million, even thought the house itself is valued at less than $800-thosuand. The value of the assets of course is enhanced by the fact that they belonged to Bernie Madoff – call it a “novelty premium” – as the marshal showing the property says when displaying a desk in the New York apartment, “This is where Bernard Madoff spent the last free days of his life.”

The Federal Reserve will weigh in on economic conditions around the country in its “beige book” report due out today at 2p.

Another day, another half cent decline in gas prices. Lower crude prices are pushing down gas for an eight straight day. A gallon of regular unleaded stands at $2.573 ($2.57 for graphics) according to AAA.

And bad news on the auto bailouts: taxpayers are expected to lose money on the billions of dollars put up to save GM and Chrysler according to a report today from a Congressional Oversight Panel. More than $60 has been pledged so far to the two companies.

On CNNMoney:

THE CRISIS: 1 YEAR AFTER LEHMAN

* Five lessons from the crash. One year ago a perfect storm on Wall Street nearly destroyed your portfolio – and our financial system. Now it's time to take stock.

* Is Anyone Going to Jail for This? Of all the potential perps on Wall Street, there are only two defendants so far. Why vengeance is so elusive.

* Wells Fargo: Good bank or bad bank? Ongoing worries about loans it inherited from Wachovia and capital questions leave Wall Street divided about the health of the West Coast banking giant.

Andrew Torgan
CNN Financial News Producer

Fed Chairman Ben Bernanke says that the economy is about to start growing again, although he cautioned it will be a slow recovery with continued high unemployment in the near term.

Speaking at an annual symposium in Jackson Hole, WY, Bernanke echoed a statement made by the Fed earlier this month, saying that "economic activity appears to be leveling out, both in the United States and abroad."

Bernanke went a step further though, indicating that "prospects for a return to growth in the near term appear good."

But the central bank chief warned that problems remain in financial markets around the globe, and that with banks facing "substantial" additional losses ahead, businesses and consumers will continue to have trouble accessing credit.

Home sales spike

Sales of previously-owned homes, the biggest portion of the housing market, soared more than 7% in July - the largest monthly increase in 10 years.

The National Association of Realtors says home sales rose 7.2% to a seasonally adjusted annual rate of 5.24 million last month, from a pace of 4.89 million in June. That’s the fourth-straight monthly increase and the highest level of sales since August 2007.

Of course, homes should be selling. Prices have fallen more than 32% from their peaks, set in the summer of 2006. Plus, mortgage rates that are near historic lows make the cost of purchasing a home lower than they've been in nearly 20 years.

State unemployment rates improve

The number of states posting a decrease in the unemployment rate in July more than tripled from the previous month.

The Labor Dept. says 17 states and the District of Columbia reported a drop in unemployment rates in July, compared with 5 states in June. Increases in unemployment rates were reported in 26 states, and 7 states posted no change from the previous month.

While the report showed improvement for the battered labor market, the changes in unemployment rates were very modest across the board: overall, unemployment rates didn't change much from June to July.

Michigan had the highest unemployment rate at 15%, but that was down 0.2 percentage point from June. Michigan has been especially hard hit by the collapse of the U.S. auto industry and the housing meltdown.

Rhode Island posted the second highest unemployment rate at 12.7% and Nevada rounded out the top three with a 12.5% rate.

The national unemployment rate fell to 9.4% from 9.5% in June, the first decline in that reading since April 2008.

Oil surges to 10-month high

Oil prices soared to their highest level since October today as investors grow hopeful that a recovery of the world economy is in sight.

Crude topped $74 per barrel. Oil hasn't traded that high since Oct. 20, 2008, when it reached an intra-day peak of $76.12.

All told, oil has surged by two-thirds this year after closing out 2008 at $44.60 per barrel.

Follow the money… on Twitter: @AndrewTorganCNN

Andrew Torgan
CNN Financial News Producer

As the health care debate rages among lawmakers, in town hall meetings across the country and on every broadcast and cable network, CNNMoney.com has drilled down into a report that found more than half of the $2.2 trillion the United States spends on health care each year is a waste of money.

According to the most recent data from accounting firm PricewaterhouseCoopers' Health Research Institute, there are 16 different areas in which health care dollars are squandered.

But in talking to doctors, nurses, hospital groups and patient advocacy groups, six areas totaling nearly $500 billion stood out as issues to be dealt with in the health care reform debate, including unnecessary tests, inefficient claims processing and medical errors.

GM teams with eBay

More than 225 General Motors dealers in California will begin selling cars and trucks through the eBay online auction site as part of a four-week trial.

Under the program, which begins Tuesday, consumers will be able to bargain with dealers for Chevrolet, Buick, GMC and Pontiac cars and trucks from model years 2008, 2009 and 2010. The program ends Sept. 8.

The new car shopping website, gm.ebay.com, will feature a selection of up to 20,000 new GM vehicles at what the companies promise are "competitive prices."

Shoppers will be able to buy cars outright at the advertised price using the site's "Buy It Now" option, or they can suggest a price under the "Best Offer" option, which may then be negotiated with the dealer.

http://gm.ebay.com

Stocks off to cautious start

Stocks on Wall Street opened lower as investors expressed caution following a rally that has pushed the Dow and the S&P 500 to 9-month highs.

No major economic reports are on tap today, giving investors time to digest the recent rally that’s been fueled by a spate of positive earnings surprises and economic news that showed stabilization.

Later in the week, Investors will be looking ahead to a two-day Fed meeting and earnings reports from big retailers like Wal-Mart and Macy's.

Gas climbs nearly 19 cents in 20 days

Gas prices continue to climb, with the national average up nearly 19 cents over the last 20 days.

According to AAA, the national average price for a gallon of regular gasoline edged up 0.2 cents overnight to $2.645. Prices have increased every day since July 21, when the national average stood at $2.458 a gallon. During that time, the national average has risen 18.7 cents, or 7.6%.

he highest gas prices are in Hawaii ($3.179).  The cheapest are in South Carolina ($2.424).

The spike comes as the price of crude oil has been pushed higher by signs of economic stabilization and the rally on Wall Street.

Follow the money… on Twitter: @AndrewTorganCNN

Andrew Torgan
CNN Financial News Producer

ExxonMobil posted a 66% decline in second-quarter earnings this morning due to weak energy demand and volatile oil prices.

The world's largest publicly-traded oil company said it earned just under $4 billion in the quarter, down from nearly $12 billion just one a year earlier.

Earnings at Exxon, which reported the largest annual profit in U.S. history last year, have declined this year as oil prices plummeted from 2008's record highs above $147 a barrel.

Oil prices averaged about $60 a barrel in the second quarter of this year, compared with roughly $124 a barrel in the same period in 2008.

Jobless claims increase but trend improves

The number of Americans filing new claims for jobless benefits rose last week, but remains below peak levels reached in the spring.

Initial claims rose by 25,000 to 584,000. But the four-week moving average for new claims, which considered a better gauge of underlying trends as it smoothes out week-to-week volatility, fell by 8,250 to 559,000.

This was the lowest level since late January. The moving average has also declined for five straight weeks.

And the tally of people who continue to get benefits for one week or more fell by 54,000 to 6,197,000 - the lowest level since early April.

Report shows foreclosures may be easing

Sun Belt cities dominated the list of metro areas with the biggest foreclosure problems during the first six months of 2009.

Cities in just four states - California, Florida, Arizona and Nevada - captured 29 of the top 30 places with the highest foreclosure rates, according to a report issued by RealtyTrac. Greeley, CO, was the only outsider, coming in at 29th.

The good news, however, is that some of the worst hit spots - such as the Central Valley cities in California - showed some improvement. Although there is concern that we may just be in a lull before a third wave of foreclosures hits.

It's official: You own a piece of Citigroup

Congratulations! You now own a big chunk of Citigroup.

Although a few housekeeping issues remain, Citigroup effectively completed its long-awaited plan to turn preferred shares owned by the government into common stock on Thursday. That gives U.S. taxpayers a 34% stake in one of the world's largest financial institutions.

But Citi has also earned a reputation as one of the nation's most-troubled financial institutions. From the time the credit markets began to unravel in late 2007 up until the end of last year, the company lost more than $28 billion.

That subsequently led the government to take a $45 billion stake in Citigroup to help stabilize the bank.

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Andrew Torgan
CNN Financial News Producer

Fed Chairman Ben Bernanke said on Sunday that the central bank took the controversial actions it did over the past year because he "was not going to be the Federal Reserve chairman who presided over The Second Great Depression."

Speaking in Kansas City at a town hall meeting to be shown on PBS this week, Bernanke pushed back against audience members’ suggestions he and other government officials were all too eager to help big financial institutions before small businesses and everyday Americans.

He also said that the lessons learned from the recession and the financial crisis will help make the economy stronger than it was before the crisis.

New homes sales soar

Sales of new single-family homes spiked 11% in June to an annualized rate of 384,000 homes.

The gain over May was much greater than expected, but sales are still 21% below the levels of a year ago, when new homes sold in June at an annualized rate of 488,000.

Still, the report was very positive, according to Peter Morici, an economics professor at the University of Maryland.

“Considering what's going on in existing home sales, with all the foreclosure activity sending down home prices, for new homes to jump like that is a good indicator that the economy is bottoming out, " Morici said.

In addition, the median price paid for a house sold in June was down about 3% to $206,200.

Stocks struggle after rally

Stocks on Wall Street dipped this afternoon as investors moved to the sidelines after a two-week rally, but strength in the banking and homebuilder sectors helped temper the losses.

In the last two weeks, the Dow and S&P 500 have both gained more than 11% as investors welcomed better-than-expected results.

This week brings earnings reports from 146 of the S&P 500 companies.

That list includes a number of Dow components, including oil giants Chevron and Exxon Mobil, as well as Travelers, Walt Disney and Verizon, which said this morning that its second-quarter profit fell 7% as rising costs outstripped an increase in sales.

Verizon also said it was cutting 8,000 jobs.

Gas Prices still rising

Gas prices climbed 8-tenths of a cent overnight to $2.500.

The average price of a gallon of gas is down $1.614 or 39.23% from the record high price of $4.114 that AAA reported on July 17, 2008.

The highest gas prices are in Hawaii ($3.123). The cheapest are in South Carolina ($2.264).

Warren Buffett gets animated

Legendary investor Warren Buffett will appear in a new, Web-only cartoon that aims to teach kids unique financial lessons.

The short episodes of “Secret Millionaire’s Club” staring Buffett - along with the likes of Martha Stewart and Gisele Bundchen - will begin airing on AOL’s Website this fall.

Buffett, known as the “Oracle of Omaha,” says the short episodes would aim to “entertain kids and deliver a message.”

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Andrew Torgan
CNN Financial News Producer

In these tough times, we’re all cutting back on everything from eating out to taking a vacation. But there’s one thing that millions of us seem to be able to afford: an iPhone.

We spent $1.7 billion dollars on iPhones in just the last three months.

Apple sold 5.2 million iPhones last quarter, including the new 3GS model. That’s more than seven times the number the company sold a year ago.

Sales are so strong that Apple’s having a hard time keeping up with iPhone demand. And even though iPod sales slipped from a year ago, they still topped 10 million players.

Heath care in the spotlight

President Obama holds a prime time press conference at the White House tonight amid his continued push for health care reform legislation.

So what does health care reform mean for you? More than 160 million Americans get their health insurance through work. 14 million Americans buy health insurance on their own. And 49 million Americans have no coverage at all.

How will the health care bills moving through Congress affect these groups? Will it lower premiums? CNNMoney.com has the breakdown.

Stocks churn on Wall Street

Stocks bounced in and out of positive territory this morning as investors took a breather from the recent run-up to sort through earnings reports from the likes of Morgan Stanley, Wells Fargo and Apple.

Stocks rallied Tuesday, with the Dow ending at its highest close in six months as better-than-expected quarterly results overshadowed Fed Chairman Ben Bernanke's testimony on the economy. Bernanke is back on the Hill today, testifying before the Senate Banking Committee.

Gas prices reverse course

After 30 consecutive days of declines, gas prices climbed 3- tenths of a cent overnight to $2.461.

Still, the average price of a gallon of gas is down $1.65 or 40.2 percent from the record high price of $4.114 that AAA reported on July 17, 2008.

The highest gas prices are in Hawaii ($3.169). The cheapest are in Missouri and South Carolina ($2.226 in both states).

Pay hikes on the way

Pay raises are expected to rebound next year after being severely stunted by the recession, according to a new survey.

Companies are planning median merit increases of 3% for 2010, according to human resources consulting firm Watson Wyatt, which polled 235 large U.S. employers in May.

While that's below the 3.5% raise workers received in both 2008 and 2007, it would be an improvement over the 2% salary increase employers plan to give out this year.

Follow the money… on Twitter: @AndrewTorganCNN

New claims for jobless benefits fell 52,000 last week.

Andrew Torgan
CNN Financial News Producer

The number of Americans filing new claims for unemployment benefits last week fell to lowest level since early January, while continuing claims jumped to a record-high.

New claims for jobless benefits tumbled by 52,000 to 565,000 - well below analysts' expectations.

However, analysts said last week's drop was distorted by a change in the pattern of seasonal layoffs in the automotive industry. Initial claims typically spike in July as automakers idle certain manufacturing plants, and the Labor Department adjusts its data for such seasonal factors.

Meanwhile, the number of people continuing to receive unemployment insurance for one week or more unexpectedly jumped by 159,000 to 6.88 million, an indication that the labor market remains weak.

Govt. watchdog: Stimulus spending short-sighted

Fiscally-stressed states trying to survive one of the worst economic downturns since the Great Depression are using their stimulus dollars to satisfy immediate needs rather than undertake longer-term reforms, according to a government report released Wednesday.

For example, states are spending education funds to prevent layoffs and maintain programs, a Government Accountability Office report found.

State and school district officials say they don't have the money to undertake projects such as building new schools and expanding early-childhood education.

Similarly, states are using nearly half their infrastructure funds for pavement improvements, which can be implemented quickly and don't require environmental clearances and in-depth design work.

Wall Street wavers

Stocks on Wall Street opened higher, boosted by Alcoa's smaller-than-expected quarterly loss that the aluminum giant posted after Wednesday’s closing bell.

But the blue chips soon began to struggle on weakness in biotechs and financials.

Stocks fought off losses to end mostly higher Wednesday, but the trend has remained downward since mid-June as investors have stepped back after a 40% rally off the March 9 lows.

Nine firms to run ‘toxic asset’ program

The government on Wednesday tapped nine financial firms to manage a scaled-down program aimed at helping the nation's banks shed their “toxic assets” and said it would invest up to $30 billion to get it started.

Among those selected to serve as asset managers of the so-called “Public-Private Investment Program” were BlackRock, AllianceBernstein, Oaktree Capital Management, Invesco, Angelo, Gordon & Co., Marathon Asset Management, RLJ Western Asset Management, The TCW Group and Wellington Management Company.

The firms, selected from a pool of more than 100 applicants, will have 12 weeks to raise $500 million of capital each from private investors willing to invest in toxic securities held on banks' books. Those investments will be matched by the Treasury Department and supplemented with debt financing from the agency.

Consumers trim borrowing

Consumer debt fell in May for the fourth straight month, a government report said Wednesday.

The reduced borrowing comes as job losses and pay cuts have limited consumer spending power. At the same time, banks have tightened lending standards due to growing concerns about default risks in a battered economy.

Total consumer borrowing fell by a seasonally-adjusted $3.22 billion, or a 1.5% annual rate, to $2.52 trillion in May, according to the Federal Reserve. The report measures how much debt consumers have outstanding.

Gas prices down for 18th straight day

Gas prices dropped 1.3 cents overnight to $2.580 - the 18th straight day of declines.

In the last 18 days, the average price has decreased 11.3 cents, or 4.1 percent. The average price of a gallon of gas is also down $1.534, or 37.2 percent, from the record high price of $4.114 that AAA reported on July 17, 2008.

The highest gas prices are in Hawaii ($3.299). The cheapest are in Missouri ($2.349).

Can't pay your doctor? Charge it

Finally, as medical bills pile up, more Americans are paying their doctors with plastic.

CNNMoney.com has the story of what consumer advocates warn is a dangerous trend, but industry watchers see a multi-billion dollar opportunity for lenders to offer specialized “medical” credit cards.

Americans spend an estimated $294 billion on annual out-of-pocket medical costs annually, to cover everything from doctor's office co-payments to surgeries and prescription medications.

About 25% of that - around $74 billion - is already being charged to regular standard credit cards. And one consulting firm expects that $150 billion worth of health care expenses will go on credit cards by 2015.

Goldman Sachs reportedly handing out massive bonuses this year

Suvro Banerji
AC360° Intern

Goldman Sachs, the investment bank has not only paid back the $10 billion in Troubled Asset Relief Program (TARP) money, but is also reportedly handing out massive bonuses this year. According to The Guardian, this is the largest bonus payouts in the company’s 140 year history.

In letters to Congress on June 16, Chief Executive Lloyd Blankfein made it clear that the company would ensure that “compensation reflects the true performance of the firm and motivates proper behavior.”

The big question…where did this money come from? The Wall Street Journal reported that a huge chunk of the company’s recent profit came from ‘its fixed-income business, a less-risky arena than the illiquid derivatives and others products it loaded up on amid the credit bubble and Goldman has reduced its overall leverage from a year ago.’ Also, insiders say the company has benefited because competitors like Lehman Brothers went bankrupt.

The Guardian also predicted that the company’s second-quarter earnings will see a ‘further jump in profits’. Warren Buffett who made a $5 billion investment in the firm, has reportedly made a $1 billion gain already.

Critics argue that big executive bonuses similar to this have destabilized the financial system in the first place. They fear if such actions continue in the financial industry, it may have a negative impact on the efforts of regulators trying to stabilize this economy and could potentially lead the markets into a ‘double-dip recession’- a slump followed by a brief recovery and then a renewed slump.

"The investment banks more than any other institutions created the culture of excessive leverage, excessive risk and excessive bonuses that led to the downfall of the financial system,” UK Liberal Democrat treasury spokesman Vince Cable told the The Guardian. “Now they are cashing in and the same bonus culture has returned. The result must be that we are being pushed to the edge of another crash.”

Can Goldman and other investment banks lead Wall Street back to long-term profitability, or are they already headed back to the same practices that put some of them and thousands of Americans out of business?

Andrew Torgan
CNN Financial News Producer

President Barack Obama this week will propose the most sweeping reorganization of financial-market supervision since the 1930s, a revamp that would touch nearly every corner of banking from how mortgages are underwritten to the way exotic financial instruments are traded.

In an Op-Ed piece published in today's Washington Post, Treasury Secretary Timothy Geithner and the Director of the National Economic Council, Lawrence Summers, said the proposal would grant the Federal Reserve increased power in the oversight and management of the largest financial companies in the market.

It would also create an agency like the Federal Deposit Insurance Corp., to oversee consumer-oriented financial products.

The President is expected to officially unveil the specific details of the proposal on Wednesday.

Oil falls below $70 per barrel

Crude oil prices sank more than $2 to below $70 per barrel today as the U.S. dollar rose, stocks fell and a slew of global events put downward pressure on prices.

Oil prices had been on a tear recently. On Thursday, crude settled at $72.68 - the highest since Oct. 20 - before giving back some gains Friday.

Stocks turn lower

Stocks on Wall Street tumbled out of the gate this morning as investors dumped a variety of shares, influenced by protests in Iran regarding the disputed presidential election and a slump in commodity prices and stocks.

Through the end of last week, Wall Street had been on a three-month run up. The Dow has risen in 12 of the past 14 weeks and was in positive territory for the year for the first time since January. And the S&P 500 is up 40% from its 12-year low in March.

Gas nearing $2.70

Gas prices rose 6-tenths of a cent overnight to $2.67. This is the 48th consecutive increase.

Since April 29th, the average price of gas has increased 62.1cents or 30.3%.

The average price of a gallon of gas is down $1.44 or 35.1% from the record high price of $4.114 that AAA reported on July 17, 2008.

The highest gas prices are in California ($3.006). The cheapest gas prices are in South Carolina ($2.463)

Andrew Torgan
CNN Financial News Producer

The Treasury Dept. said this morning that 10 of the largest financial institutions in the U.S. have met the requirements to repay their bailout money. If all these firms choose to do so, the Treasury says it will receive $68 billion in repayment proceeds.

And before the morning was out, all 10 - including American Express, Goldman Sachs, J.P. Morgan Chase and Morgan Stanley - announced plans to pay back their portions of the money they received from the $700 billion Troubled Asset Relief Program.

Financial firms have been eager to repay their loans - and cut the legal strings that come along with them - ever since Congress approved the program eight months ago.

Jamie Dimon, the CEO of J.P. Morgan, has referred to the TARP funds as a “scarlet letter” in reference to the public scrutiny banks have undergone. J.P. Morgan is slated to return $25 billions.

Experts say that allowing the banks to repay the money does show some stability has returned to the financial sector, but caution that the crisis isn't necessarily over yet.

Watchdog calls for ‘stress test’ do-over

In a related development, the major banks that were “stress tested” by the government earlier this year should undergo another round of examinations, a government watchdog group said today, amid signs that the economy may be deteriorating faster than first expected.

In its latest report to lawmakers, the Congressional Oversight Panel pointed to last week’s unemployment report for the month of May as a sign that the stress tests were not stressful enough.

Regulators tested 19 financial institutions back in February to determine which might need support in a severe recession.

All of the lenders that participated were deemed solvent when the results from the tests were announced last month. Ten of those 19, however, were said to face a nearly $75 billion capital shortfall and ordered to raise funds as a result.

Leading the group was Bank of America, which faced a $33.9 billion shortfall. Wells Fargo and Citigroup –which was removed from the Dow Jones Industrial Average on Monday - were deemed to need $13.7 billion and $5.5 billion respectively.

Court slams brakes on Chrysler-Fiat deal

The Supreme Court threw a wrench into the plans to have a quick bankruptcy process at Chrysler, delaying the company's combination with Italian automaker Fiat.

The bankruptcy judge overseeing the Chrysler case had given approval for the company's most valuable assets, such as plants, dealerships and contracts, to become part of a new company in which Fiat would hold a significant stake.

But Supreme Court Justice Ruth Bader Ginsburg, in an order issued late Monday, granted a request for a delay of that approval sought by Indiana state pension funds, which had argued that they and other lenders deserved better treatment by the bankruptcy court.

Survey shows hiring still sluggish

Employers are still jittery about hiring but the pace of job loss is stabilizing, according to a staffing firm survey released today.

67% of employers said they plan to hold staff levels steady for the third quarter of 2009, unchanged from the last two quarters, according to Manpower's quarterly employment outlook survey.

Of the 28,000 employers surveyed in the U.S., only 15% anticipated hiring during the third quarter, down from 26% last year. Another 13% expected to reduce their payrolls, up from 10% last year. 5% said they were undecided about their July to September hiring plans.

Of the industries that plan on hiring, leisure & hospitality had the most promising hiring outlook, followed by wholesale & retail trade, professional & business services, financial activities and construction.

Gas prices hold steady

Gasoline prices held steady overnight at $2.619, bringing a halt to 41 straight days of increases.

The average price of a gallon of gas is down $1.49, or 36.3 percent, from the record high price of $4.114 that AAA reported on July 17, 2008.

The highest gas prices are in California ($2.915), while the cheapest are in South Carolina ($2.403).

Ali Velshi | Bio
CNN Chief Business Correspondent

Despite the 4th biggest bankruptcy in US history, and the largest industrial bankruptcy ever, markets are up strongly.

The Dow started 2009 at 8776.39. It is close to that level now, nearly erasing ALL of this year's losses for the first time this year.

The S&P 500, which started the year at 903.25, is well above that level (although it has been on the plus side previously this year).

Andrew Torgan
CNN Financial News Producer

It’s coming down to the wire for General Motors.

With GM rapidly burning through its cash reserves due to hefty losses amid an historic slump in auto sales, President Obama said the Treasury Department would give the automaker the cash it needs to continue operations on the condition that GM restructure its debt or file for bankruptcy by June 1.

And the automaker a midnight deadline for its bondholders to reach a restructuring agreement.

GM’s chief executive officer Fritz Henderson has repeatedly said that the difficulty in inking a deal makes a bankruptcy filing for the automaker "probable."

A spokeswoman for GM last week said the company continues to plan for a bankruptcy, which is the likely next step if no agreement is reached.

Chrysler, dealers on edge

And Wednesday is judgment day for Chrysler and hundreds of auto dealers, when their fate could be decided in bankruptcy court. But some experts think it's already a done deal.

The federal judge in Chrysler Chapter 11 case could decide on May 27 whether the automaker can pull its choice assets - its best-performing factories and dealerships - out of bankruptcy and sell them to a newly-formed incarnation of itself, called Chrysler Group.

The new Chrysler Group would be controlled primarily by a trust fund used to pay future health care expenses for the UAW, which will own the majority share of 55%. Italian automaker Fiat will own 20%, at least initially, though it could eventually increase its share to 35%. Minority stakes would go to governments: 8% for the U.S. and 2% for Canada.

Home prices keep getting clobbered.

More troubling news on the housing front today. The S&P/Case-Shiller National Home Price Index shows a more than 19% decline in prices in the first quarter of 2009 compared with the first quarter of 2008. That’s the largest decline in the measure’s 21-year history.

Home prices have fallen more than 32% since peaking in the second quarter of 2006 and are at levels not seen since the end of 2002.

Sun-Belt cities still had the largest year-over-year declines in March, with Phoenix prices down 36%, Las Vegas off 31.2% and San Francisco dropping 30.1%.

Two cities have now have fallen more than 50% from their peak prices: Phoenix is down 53% since June 2006 and Las Vegas is off 50.4% from its August 2006 high. Dallas prices suffered the smallest loss from peak, just 11.1% since June 2007.

Gas prices keep climbing

The end of the long holiday weekend brings gasoline prices ever closer to $2.50 per gallon.

Gas rose 1-tenth of a cent to $2.425 overnight, the 28th straight increase. In the last 28 days, the average price of gas has increased 37.7 cents, or 18.4 percent.

But gas is still down $1.68, or 41.0%, from the record high price of $4.114 that AAA reported on July 17, 2008.

The highest gas prices are in Alaska ($2.737). The cheapest gas prices are in Missouri ($2.270).

Consumer Confidence sparks a rally on Wall Street

Stocks soared in the first hour of trading, following a choppy open, after an upbeat consumer confidence report raised hopes that the economy is stabilizing.

The gains came despite that dismal housing report, concerns about North Korea’s nuclear program and the fate of General Motors and Chrysler.

Stocks ended last week essentially flat, but economic worries continue to hang over investors, who are coming back from the long weekend.