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April 2nd, 2009
01:29 PM ET

Financial Dispatch: 5.7 million on unemployment

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/US/04/02/japan.sweden/art.obama.g20.dinner.gi.jpg caption="President Obama is discussing the global economic crisis with other world leaders at the G-20 summit this week."]

Andrew Torgan
CNN Financial News Producer

More dreary news on the unemployment front today ahead of Friday’s big jobs report for March.

The number of Americans filing initial claims for jobless benefits rose unexpectedly last week while the number of people continuing to claim benefits set a record for the 10th straight week.

First-time claims for unemployment insurance rose by 12,000 to 669,000 from the previous week revised figure of 657,000.

The number of people receiving benefits for one week or more, meanwhile, rose by 161,000 to 5.73 million. That’s the highest number on records dating back to 1967.

The increasing number of people continuing to file for unemployment benefits suggests that Americans are struggling to re-enter the workforce.

Stocks on Wall Street roared out of the gate this morning, sending the Dow Industrials above the 8,000 level for the first time in seven weeks.

Today’s rally is being sparked by several factors, including the news out of the G20 Summit in London and a change in the accounting rules that affect how banks value some of the so-called “toxic” assets on their balance sheets.

More now on those “toxic” assets… the board that sets U.S. accounting standards is expected to give companies more leeway when valuing assets, providing a potential boost to banks’ balance sheets.

The Financial Accounting Standards Board - a private-sector body that sets the nation’s bookkeeping rules - is set to vote to adopt new guidelines under the so-called “mark-to-market” accounting rules, which require companies to value assets at prices reflecting current market conditions.

The changes would allow companies to use significant judgment in valuing assets to reduce write-downs on certain investments, including mortgage-backed securities.

The rule changes come just as the nation’s big banks are preparing to issue their first-quarter results, and analysts are expecting another rough ride for the likes of Bank of America, Citigroup, JPMorgan Chase and Wells Fargo.

The new FASB rules could help boost banks' earnings significantly by making it clear that institutions can account for mortgage-backed securities and other assets based on their internal estimates, rather than relying on sales prices.

Former AIG Chief Executive Maurice “Hank” Greenberg, blaming his successors for the mistakes that led to the company's failure, told Congress today that the government's plan to unwind the insurance giant is not working and threatens its ability to pay back the billions it has received in taxpayer funds.

In testimony before a House oversight committee hearing, Greenberg said AIG's problems stem from decisions that came after his 2005 departure. He said the company’s overseers must reverse their current strategy of selling off AIG's assets and maintaining an 80% ownership stake in the company.

Greenberg, 83, ran AIG for nearly four decades until he was ousted in 2005 over an accounting fraud scandal. He was never charged in a federal case that led to five convictions.

Treasury Secretary Tim Geithner says he would consider forcing out CEOs of banks that receive government bailouts if they were not managing their businesses properly.

In an interview with CBS on Wednesday, Geithner said economic recovery depends on a financial system that effectively provides credit, and the government would hold companies receiving public aid accountable.

When asked whether he left open the option to pressure a bank CEO to resign, Geithner responded, “Of course.”

Gas prices declined by 2-tenths of a cent overnight to $2.045 a gallon.

28 states and the District of Columbia have regular unleaded gas prices of $2 and higher. The highest gas prices are in Alaska ($2.520).

22 states have regular unleaded gas prices below $2. The cheapest gas prices are in Wyoming ($1.859).

The national housing slump is finally crashing on the shores of Manhattan, which had its worst quarter in years, according to several industry reports released on today.

The big hit was seen in sales volume, which plummeted 48% in the first quarter of 2009 compared to the previous quarter and year.

Meanwhile, the median sales price of all condo and co-op apartments sold rose 6%, to $907,500, in the first quarter of 2009 compared to the first quarter of 2008.

CNNMoney.com has an interactive map that let’s you see where home prices are headed all over the country.

Finally, even in death, people are cutting costs.

Industry insiders say more people are economizing on funerals by cutting back on elements such as limousines, wakes and embalming - and opting for cremations rather than burials.


Filed under: Andrew Torgan • Economy • Finance • Gas Prices • Oil • Wall St.
soundoff (13 Responses)
  1. Laid off IT Employee

    Why is it that no one is talking about the IT sector. These U.S. companys like HP off shore are jobs the exec get huge salary and no one is calling them out onto the carpet. Thousands of IT jobs outsourced overseas and are state and federal goverment continues to give them contracts. Another note the U.S. auto company's, who checking to see how many of are elected officials are driving american cars? Goverment contract should be given to u.s. company's priority over company's that off shore.

    Signed

    Just another unheard IT worker

    April 3, 2009 at 11:25 am |
  2. lampe

    If the News, doesn't report the truth then everyone is complaing that they are trying to "Sugar-Coat" things. I would really rather they just tell the truth. Good-Bad-or-Indifferent that is the only real way we can cope with this MESS!!!!

    April 2, 2009 at 8:01 pm |
  3. Tammy, Berwick, LA

    To all the doom and gloomers out there, I landed my dream job this week. So, it is still possible. I really wish the news would report on the positives. I know the negatives are out there. But still, I think people need to know some really awesome things can happen, too.

    April 2, 2009 at 5:39 pm |
  4. Mari

    I am old enough to remember the "Twin Recessions" of '81 & '82! We had the same number of unemployed. Guess who was the president?
    Ronald Reagan.

    @ Melissa....... I agree! The media is all about 'doom & gloom' they think that "bad news" sales. But actually, America needs to hear the good news!

    Here is some: my daughter, an architect, that was laid off has been called back to work!

    My husband's business just got a great new client!

    The Stock Market has been....... rocking! Its on SALE, and if you have some "mad money" its time to invest in America!

    Folks, we have been through tough recessions before and we will recover! I for one, think President Obama is doing all he can. If you read back to the Great Depression, FDR's spending and spending in BIG ways brought our Nation back on the road to prosperity.

    We CAN and we WILL recover! Hope wins every time!

    April 2, 2009 at 5:25 pm |
  5. Sherry, N. Calif.

    @ Larry
    "work as migrant farm workers."
    Sorry can't do that because the illegals have those jobs tied up in a nice neat, pretty package along with a bow from their supporters that want to disolve the E-Verify system.

    Former AIG, Greenberg- also told the commitee that he did not know how many CDO's were contracted while he was the big CEO. Told them he would get a figure for them. So how is it that he says he had nothing to do with them? Well, those that were done under his watch were profitable. Anyone know if it had something to do with the accounting fraud case he was involved in that made them look profitable at the time?

    April 2, 2009 at 5:00 pm |
  6. N, New York City

    Why is the govt talking to Greenberg from AIG if he had nothing to do with it's current status?

    B4 AIG or any of those corrupt people spend their undeserved billions they should look at a picture of a child and explain to them why they are taking money out of their parents pockets. And then book at room at the St. Regis. What happened to Morality?

    April 2, 2009 at 4:06 pm |
  7. Neo

    So sad. Has AIG laid (layed) off anyone? What companies are predominantly laying off workers? And do those companies have any offshore employees? What faction of commerce is laying off the most? I hope someone at CNN asks these questions.

    These are all *signs* that the stimulus isn't working. Some companies need to be taken over or merged with, that would retain jobs. To Melissa: The media is only staing the facts. Unemployment rose and now it has to stop rising, so thank you Media for the info.

    April 2, 2009 at 4:01 pm |
  8. Annie Kate

    So if AIG's bailout isn't working is any of the bailout working for any of the other institutions that received money? Seems like we may have thrown billions of dollars in a hole and we will never see it again – plus we have to repay the deficit. So very much for so very little.

    April 2, 2009 at 4:00 pm |
  9. Joe G. (Illinois)

    Them G 20 people.. Why don’t we send them all straight to the “Dancing with the Stars” already.. ? And would someone work on getting the economy down to its true low figures already so that we can get the economy unblocked and running again?! Enough with the standing ovations.. some work now!

    April 2, 2009 at 2:35 pm |
  10. Eugene

    I don't understand why are there more families paying dearly for what ultimately should be on the shoulders of the individuals responsible. Far too many on the top level are getting away with too much.

    April 2, 2009 at 2:26 pm |
  11. Michael "C" Lorton, Virginia

    If you believe that the economic picture is "grim" now-–wait-–GM and Chrysler will eventually bite the bread of bankruptcy--some of the financial institutions that were given bailout funding-–will begin to collapse again---making them unable to repay back the loans--and as far as the stock market--the initial bolus injection of almost a trillion dollars into the market place--that cause and effect is going to start to wear off--bottom line--will be back in the same place that we started-–but worse!

    April 2, 2009 at 1:52 pm |
  12. Melissa

    I think that the media needs to stop being alarmist and relax so people will stop panicing and things will settle down.

    April 2, 2009 at 1:37 pm |
  13. Larry

    Don't have a job? Do what folk in the 30s did, work as migrant farm workers.

    April 2, 2009 at 1:35 pm |