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January 12th, 2010
02:20 PM ET

Financial Dispatch: Federal Reserve posts record profit

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Andrew Torgan
CNN Financial News Producer

The Federal Reserve’s efforts to stabilize the financial system paid off handsomely last year as the central bank raked in a record-setting profit of more than $52 billion.

That reflects the highest earnings in the Fed’s nearly 100-year history.

Let’s put that into perspective: In 2008, oil giant ExxonMobil reported the largest annual profit in U.S. history, making $45.22 billion on the back of record-high oil prices.

And unlike most government agencies, the Fed funds itself from its own operations, and its member banks are required to return all profits to the U.S. Treasury after certain deductions. That means Ben Bernanke and Co. returned about $46 billion to taxpayers. Not too shabby an accomplishment for Time’s “Person of the Year 2009.”

The Fed's 2009 profit marks a 47% increase over 2008. It comes as the central bank took in interest payments on an expanding portfolio of securities issued by the Treasury and by the government-sponsored mortgage agencies Fannie Mae and Freddie Mac.

FULL POST


Filed under: Andrew Torgan • Economy • Finance • U.S. Federal Reserve • Unemployment • Wall St.
January 8th, 2010
05:14 PM ET

Financial Dispatch: Jobs are back! Oh, wait a minute…

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Andrew Torgan
CNN Financial News Producer

Is the glass half empty? Or half full?

We lost far more jobs than we expected last month. But at the same time, the government now says we actually added jobs in November - snapping a streak of losses that goes back nearly two years to the start of the recession.

Employers cut 85,000 jobs in December, but the Labor Dept. revised its numbers for November to a net gain of 4,000 jobs from a loss of 11,000.

The unemployment rate stayed at 10% in the December, which was in-line with forecasts.

Construction and manufacturing, two sectors of the economy particularly hard hit during the recession, again suffered large job losses in December. Temporary help services and health care continued to add jobs.

The economy has lost 7.2 million jobs since the start of 2008. Losses for 2009 alone came to 4.2 million jobs, the most in one year since the government started tracking payrolls in 1939.

FULL POST


Filed under: Andrew Torgan • Economy • Finance • Job Market
January 6th, 2010
01:54 PM ET

Financial Dispatch: New year… same old issues

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Andrew Torgan
CNN Financial News Producer

The jobs picture is at least a little brighter today as two reports say the pace of job losses eased in December.

Payroll-processor ADP said private-sector employers cut 84,000 jobs last month, the fewest since March 2008. It was the ninth straight month that job losses narrowed from the previous month.

In a separate report, outplacement firm Challenger, Gray & Christmas said that 45,094 job cuts were announced in December, 10% less than November's 50,349 cuts. It was the lowest total since December 2007, when 44,416 cuts were announced.

All this comes ahead of Friday’s official employment report for December from the Labor Dept. Estimates there are all over the map, and experts are forecasting everything from a loss of 25,000 jobs, to our first job gains since December of 2007.

From job losses to billion-dollar government bailouts…

GMAC, the troubled finance company that just last week received its third government bailout, said Tuesday it expects to post a record fourth-quarter loss of $5 billion.

FULL POST


Filed under: Andrew Torgan • auto bailout • Economy • Finance • Wall St.
December 30th, 2009
06:29 PM ET

Financial Dispatch: Another bailout before the ball drops

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/12/30/t1main.gmac.gi.jpg caption="GMAC Financial Services will get a new $3.8 billion bailout from the Treasury."]

Andrew Torgan
CNN Financial News Producer

Just when it seemed like all the government bailouts were over and done with for 2009, we’ve got word that GMAC Financial Services is getting a third round of bailout money from the Treasury Dept.

The troubled auto and mortgage lender will collect $3.8 billion of additional aid on top of the nearly $13.5 billion already received since December 2008, the Treasury said in a statement late today.

The fresh lifeline is intended to return Detroit-based GMAC to profitability in the first quarter of 2010 and will likely allow GMAC to avoid placing its home lending unit, Residential Capital, into bankruptcy.

This new infusion will also increase the Treasury's stake in GMAC from 35% to 56%, and the government will have the right to appoint two additional directors to the company's board.

As the federal government shovels out billions of dollars, state and local tax revenues fell nearly 7% in the third quarter of 2009 from a year ago. That’s according to a report from the Census Bureau that highlights just how hard the recession has hit states’ coffers.

Sales taxes declined 9% to $70 billion in the third quarter compared with the year-ago period, the Census Bureau said. Income taxes plunged nearly 12% to about $58 billion. Combined, sales taxes and income taxes make up roughly half of state and local tax revenues.

FULL POST


Filed under: Andrew Torgan • auto bailout • Bailout Turmoil • Economy
December 29th, 2009
04:04 PM ET

Financial Dispatch: Home prices flatten

[cnn-photo-caption image=http://i.cdn.turner.com/cnn/2009/POLITICS/12/22/economy.poll/story.jobfair.afp.gi.jpg caption="Job-seekers attend a job fair in Los Angeles, California, in early December." width=300 height=169]

Andrew Torgan

CNN Financial News Producer

Bad news on the housing front: home price gains of the past few months flattened out in October, compared to the month before.

The S&P/Case Shiller Home Price Index covering 20 of the largest metropolitan areas in the nation was unchanged in October, after four consecutive months of gains. The index is also down 7.3% from a year ago.

Analysts had been expecting a slight month-over-month increase in October and a year-over-year loss of 7.1%.

An executive at Standard & Poor's says today’s numbers are likely to spark worries that home prices are about to take a second dip.

Separately, a key measure of consumer confidence rose for a second straight month in December, with the outlook for the next few months hitting a 2-year high.

The Conference Board, a New York-based research group, said its Consumer Confidence Index rose to 52.9 in December from an upwardly revised 50.6 in November.

The figure, which is based on a survey of 5,000 U.S. households, is closely watched because consumer spending makes up two-thirds of the nation's economic activity. Still, the overall index remains at historically low levels and is lower than it was in August.

Job hunters may get a reprieve in the New Year.

A new study found that 20% of employers plan to increase their number of full-time, permanent employees in 2010. That’s up from 14% in 2009, according to CareerBuilder's 2010 Job Forecast.

FULL POST


Filed under: Andrew Torgan • Economy • Housing Market
December 28th, 2009
05:16 PM ET

Financial Dispatch: Wall Street icing the champagne

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Andrew Torgan
CNN Financial News Producer

Stocks on Wall Street kicked off the last week of 2009 on a positive note Monday, with the Dow, Nasdaq and S&P 500 all edging up to close at record highs for the year in an otherwise lackluster session.

It’s likely to be an unpredictable week amid light trading volume, with many market participants on vacation and traders focused on 2010.

Stocks have now risen for 6 straight sessions, including the 3-1/2 days of last week's holiday-shortened trading week. All financial markets closed early on Christmas Eve and were closed for Christmas.

The market will be closed again Friday for New Year's Day and many traders are taking the entire week off.

Giving stocks a boost today was an initial report on the holiday shopping season that showed a solid year-over-year gain, both in stores and online.

The report from MasterCard Advisors' SpendingPulse data service showed a 3.6% increase in retail sales in the period from Nov. 1 to Dec. 24. That compared with a 2.3% drop in last year's report, which was based on charges rung up on MasterCard credit cards as well as a survey of sales made by cash or check.

FULL POST


Filed under: Andrew Torgan • Economy • Finance • Wall St.
December 10th, 2009
02:24 PM ET

Financial Dispatch: Home foreclosures down, net worth up

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/BUSINESS/10/15/goldman.sachs.profits.ft/art.goldmansachs.afp.gi.jpg caption="Top executives at Goldman Sachs will receive no cash bonuses this year."]

Andrew Torgan
CNN Financial News Producer

Foreclosure filings fell by 8% in November, making it the fourth consecutive month of improvement in the housing market.

There were 306,627 filings last month, according to RealtyTrac, an online marketer of foreclosed properties. That decline follows a 3% drop in October, 4% in September and 1% in August.

However, while there are signs of improvement, the industry has yet to turn around: Foreclosure filings were still a lofty 18% above November 2008's levels.

Household net worth in the United States rose for the second quarter in a row, growing 5% to an estimated $53.4 trillion in the third quarter, according to the Federal Reserve.

The $2.7 trillion rebound in net worth, which is the difference between a household's assets and liabilities, comes as stock prices have rallied this year, boosting the value of Americans' investment portfolios.

Stock holdings rose by nearly 17% to $7.4 trillion, according to the central bank's quarterly flow of funds report.

Net worth was also supported by improvements in the housing market. Real estate values increased by 2% to $16.5 trillion in the third quarter, after rising in the second quarter for the first time since late 2006.

On the jobs front, the number of Americans filing initial claims for unemployment insurance jumped unexpectedly by 17,000 to 474,000 in the week ended Dec. 5 - the first increase in five weeks.

But the numbers are a little inflated, because state offices were closed for thanksgiving two weeks ago, delaying some claims.

And the number of people who continue to receive benefits for one week or more dropped by 303,000 to 5,157,000.

Speaking of jobs, are you out of work and looking for a new profession? You might want to consider becoming a computer systems designer or home health care aid.

Even with unemployment at 10%, some industries like professional service and health care will grow in the years ahead, according to a report from the Labor Dept.’s Bureau of Labor Statistics.

Professional and business services and health care and social assistance are expected to have the largest employment growth from 2008 to 2018, the Labor Dept. said.

Professional and business services will add 4.2 million jobs over that 10-year period while health care will increase its employment by 4 million.

Within professional and business services, consulting, computer systems design and employment services will have the most growth.

In the health care and social assistance industry, the top gainers are home health care, services for the elderly and those with disabilities, nursing care facilities and employment in offices of physicians.

Top executives at Goldman Sachs will receive no cash bonuses this year. Instead, the 30 members of Goldman’s management committee will be paid in a special form of company stock that would be subject to certain restrictions, the company says.

The changes, which will impact CEO Lloyd Blankfein among others, are part of a larger plan to revamp the company's compensation practices which was announced last spring.

Goldman Sachs, which has come under fire in recent months amid speculation that it’s on track to pay some of its biggest bonuses since the financial crisis erupted, also says it will give stockholders a “say on pay” vote for top executives at next year's shareholder meeting.

And Citigroup is reportedly working to reach an agreement with federal officials to return a portion of its bailout funds, which would free the company from the government's most restrictive limits on executive pay.

Citigroup, which received $45 billion in taxpayer funds, will seek to repay $20 billion raised at least in part through a stock offering, according to various reports.

This follows news yesterday that Bank of America has cut a check to the government for the $45 billon in bailout money it received from the TARP.

Follow the money… on Twitter: @AndrewTorganCNN


Filed under: Andrew Torgan • Economy • Finance
December 9th, 2009
04:17 PM ET

Financial Dispatch: Homeowners out $500 billion

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Andrew Torgan
CNN Financial News Producer

Despite recent, encouraging signs of life in the battered housing market, here’s a sobering reminder of just how much damage has been done: American homeowners will have lost nearly $500 billion in home value by year's end.

Still, that's a huge improvement over 2008, when values fell by a mind-boggling $3.6 trillion, according to a report released today by real estate Website Zillow.com.

The Los Angeles market suffered the largest total loss in home value at $60.8 billion. Metro Chicago values fell $49.6 billion and New York dropped $49 billion.

But some housing markets actually recorded gains for the year. In the Boston metropolitan area, home values increased by an average of 1.5%, lifting total market value by $23.3 billion there. Nearby Providence, RI, gained $12.4 billion; and Denver increased $10.7 billion.

FULL POST


Filed under: Andrew Torgan • Economy • Housing Market
December 4th, 2009
12:26 PM ET

Financial Dispatch: Glimmers of hope despite high unemployment

[cnn-photo-caption image=http://i.l.cnn.net/cnn/2009/LIVING/wayoflife/03/04/aa.speeding.ticket/art.aa.sppeding.ticket.jpg caption="Speeders doing more than 85mph in Georgia will soon pay an additional $200 in fines."]

Andrew Torgan
CNN Financial News Producer

Today we received the best news on the jobs front that we’ve had in about two years.

The job market showed signs of stabilizing in November as employers trimmed the fewest jobs of any month since the start of the recession, and the unemployment rate posted the biggest one-month decline in more than three years.

Still, today’s number brings job losses since the start of 2008 to 7.2 million. Additionally, 15.4 million Americans are now unemployed and seeking work. Another 6 million want jobs, but are not counted as part of the labor force because they have stopped looking. FULL POST


Filed under: Andrew Torgan • Economy • Finance
December 3rd, 2009
03:40 PM ET

Financial Dispatch: White House opens job summit

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/09/29/art.bankofamerica.gi.jpg caption="Bank of America said late Wednesday it planned to return the entire $45 billion in bailout money it received from the government over the past year."]

Andrew Torgan
CNN Financial News Producer

President Obama called on business leaders this afternoon to help his administration kick-start hiring as policymakers contend with rising unemployment that’s weighing down the economy.

Some 130 executives, economists, small business owners and non-profit officials are gathering for the jobs summit at the White House on the eve of the government's November unemployment report. The nation is expected to have lost another 114,000 jobs, with unemployment remaining at 10.2%, the highest in 26 years, according to an economists' survey.

"I'm not interested in taking a wait and see approach when it comes to creating jobs," Obama said. FULL POST


Filed under: Andrew Torgan • Economy • Finance
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