CNN Financial News Producer
Treasury Secretary Tim Geithner called for new rules today that would allow regulators to police the darkest corners of the financial markets, including hedge funds and derivatives trading.
The country also needs a single regulator to oversee the biggest financial firms, Geithner told the House Financial Services Committee.
"Our system failed in basic fundamental ways," Geithner said in written testimony. "The system proved too unstable and fragile, subject to significant crises every few years, periodic booms in real estate markets and in credit, followed by busts and contraction."
The comments came as Geithner testified before the congressional panel on the need for a sweeping overhaul of financial regulation in the wake of the worst financial crisis since the Great Depression.
The nation's Gross Domestic Product, the broadest measure of economic activity, fell at an annual rate of 6.3% during the final three months of 2008, the government confirmed today in its final reading.
That's slightly worse than the government's previous estimate of a 6.2% drop in the period. Still, as we’ve reported with the two prior GDP readings, the drop is the biggest one-quarter decline in this key measure in 26 years.
The report showed broad based declines across various measures of economic activity.
Spending by consumers fell at a 4.3% rate, with purchases of big ticket items plunging 22%. Investment in housing fell 23% from already depressed levels, completing three straight years of declines in that sector.
The number of Americans filing initial claims for jobless benefits rose slightly last week while the number of people continuing to claim benefits set a record for the 9th straight week.
First-time claims for unemployment insurance rose by 8,000 to 652,000 from the previous week revised figure of 644,000.
The number of people receiving benefits for one week or more, however, increased by 122,000 to 5.56 million. That’s the highest number on records dating back to 1967.
Meanwhile, the unemployment rate in Michigan, suffering under the near-collapse of the auto industry, hit 12% in February, according to data released by the state on Wednesday.
Michigan had the highest unemployment rate of any state in January, the most recent month for which there is national data.
Mass layoffs, pay cuts and the credit crunch have limited Americans' ability to buy cars and other big items. In turn, the suffering auto and manufacturing industries have battered Michigan.
Stocks on Wall Street opened to the upside, lifted by hopes that the economy may be starting to stabilize somewhat.
A late-session rally helped stocks finish in positive territory Wednesday with investors cheering better-than-expected readings on new home sales and durable goods orders, and a jump in financial stocks.
Gas prices are back above the $2 mark nationwide for the first time in four months.
The national average price for a gallon of regular unleaded gas rose 2.3 cents overnight to $2.009 a gallon. That’s the 9th consecutive increase.
Twenty-three states and the District of Columbia have regular unleaded gas prices of $2 and higher. 27 states have regular unleaded gas prices below $2.
The highest gas prices are in Alaska ($2.496). The cheapest gas prices are in Wyoming ($1.798).
Despite the recent run-up, gas prices are still more than 50% below the record high price of $4.114 that AAA reported on July 17, 2008.
Finally, do you remember the program called HOPE for Homeowners? The $300 billion foreclosure-prevention plan passed last summer?
Well CNNmoney.com has done a little digging and has discovered that in the five months since the program has been in effect, HOPE has helped exactly one homeowner to avoid foreclosure.
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