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June 15th, 2009
12:54 PM ET

Financial Dispatch: Obama to propose sweeping market overhaul

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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.

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Filed under: Andrew Torgan • Economy • Finance • Gas Prices • Oil • Wall St.
June 10th, 2009
01:24 PM ET

Financial Dispatch: Chrysler and Fiat tie the knot

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Andrew Torgan
CNN Financial News Producer

Chrysler and Italian automaker Fiat today officially signed a strategic alliance brokered by the U.S. Government - one day after the Supreme Court cleared the path for the deal.

The new company formed by the deal - called Chrysler Group – is mostly owned by the United Auto Workers union (a 55% stake) and will give minority stakes to the U.S. and Canadian governments.

Fiat will initially take a 20% stake in the company, which can go up to 35% if it reaches certain fuel-efficiency goals.

The Supreme Court delayed the sale Monday, pending review of the merits of a case brought by the Indiana State Pension funds, which argued that they and other lenders deserved better treatment by the bankruptcy court.

Chrysler's asset sale was approved by a bankruptcy judge on May 31, just hours before the bankruptcy filing of General Motors.

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Filed under: Andrew Torgan • Economy • Finance • Gas Prices
June 9th, 2009
02:44 PM ET

Financial Dispatch: Ten banks repaying bailout money

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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).


Filed under: 360° Radar • Economy • Finance • Gas Prices • Unemployment • Wall St.
June 5th, 2009
12:41 PM ET

Financial Dispatch: Job losses slow dramatically

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Andrew Torgan
CNN Financial News Producer

Today’s crucial monthly employment report is an outright shocker and the best piece of economic news we’ve seen in this recession. Job losses slowed dramatically in May - even though the unemployment rate rose to a more than 25-year high.

The Labor Dept. says employers cut 345,000 jobs from their payrolls last month, down from the revised decline of 504,000 jobs in April and well below estimates for a loss of 520,000. This was the fewest jobs lost in a month since September, when the bankruptcy of Lehman Brothers caused a crisis in U.S. financial markets and choked off credit for many businesses.

Still, the unemployment rate rose to 9.4% from 8.9% in April - the highest level since August of 1983. This is a bit of a paradox, but the numbers do come from different surveys.

And oddly enough, economists said the rise in unemployment is partly a sign of an improved jobs outlook. That's because people who had stopped looking for work started looking once again, and as such were classified as unemployed rather than “not in the labor force” - which is how the Labor Department counts most discouraged workers.

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Filed under: Andrew Torgan • Economy • Finance • Gas Prices • Unemployment
June 4th, 2009
01:38 PM ET

Financial Dispatch: Gas Prices up 25%

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Andrew Torgan
CNN Financial News Producer

Gasoline prices rose 2.4-cents to $2.572 overnight, the 37th straight increase.

In the last 37 days, the average price of gas has increased 52.4 cents, or 25%.

Prices are still below the all-time high of $4.114 that AAA reported on July 17, 2008, but the seemingly relentless march back toward $3 a gallon gas is starting to make drivers nervous.

The highest gas prices are in Hawaii ($2.856), while the highest prices in the contiguous U.S. are in Michigan ($2.840). The cheapest gas prices are in South Carolina ($2.375).

Crude oil spikes

Crude oil prices are rising above $68, boosted by forecasts of higher oil prices from Goldman Sachs.

Goldman raised its end of 2009 oil price forecast to $85 a barrel from $65 and introduced a new end of 2010 forecast of $95.

The all-time for high for crude was $147.27 a barrel, hit back in July 2008.

Ongoing claims for jobless benefits decline

We’ve got a break today in a key measure of the jobs picture. The number of people on the unemployment insurance rolls fell slightly last week for the first time since January, while the tally of new jobless claims also dipped.

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Filed under: Andrew Torgan • Economy • Finance • Gas Prices • Oil • Unemployment
June 3rd, 2009
03:07 PM ET

Financial Dispatch: Jobs picture brightens somewhat

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Andrew Torgan
CNN Financial News Producer

The job market is showing signs of improvement. Two reports out this morning indicate that the pace of job losses - while still fairly strong - may be letting up.

Payroll-processing firm ADP said private-sector employers cut 532,000 jobs in May, a 2.4% improvement from the revised 545,000 drop in April.

Separately, outplacement firm Challenger, Gray & Christmas reported that the number of job cuts announced in May fell for the fourth straight month. Challenger said job cut announcements by U.S. employers totaled 111,182 in May, an improvement of 16% from April's 132,590 cuts.

We’ll get the government’s official take on the job situation on Friday when the Labor Dept. releases the employment report for May.

Bernanke: Recovery will be slow

Federal Reserve Chairman Ben Bernanke says the economic contraction may be slowing, but the economy is hardly out of the woods.

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Filed under: 360° Radar • Economy • Finance • Gas Prices • Unemployment
June 2nd, 2009
12:33 PM ET

Financial Dispatch: Banks plan to repay bailout money

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Andrew Torgan
CNN Financial News Producer

Financial giant’s American Express, J.P. Morgan Chase and Morgan Stanley have all announced plans to issue common stock in the hopes of quickly paying back taxpayer bailout money.

J.P. Morgan and American Express disclosed plans late Monday to sell $5 billion and $500 million worth of stock respectively. Morgan Stanley followed that up this morning with its own plans for a $2.2 billion offering.

J.P. Morgan was one of the first major banks to get government money when it accepted $25 billion from the Treasury Department's $700 billion Troubled Asset Relief Program back in October.

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Filed under: Andrew Torgan • auto bailout • Economy • Finance • Gas Prices • Housing Market
May 27th, 2009
01:33 PM ET

Financial Dispatch: GM one step closer to bankruptcy

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Andrew Torgan
CNN Financial News Producer

Big developments today for two of Detroit’s Big Three.

General Motors says it’s fallen far short of the bondholder support it needed for its proposed debt-for-stock offer, virtually guaranteeing that the nation's largest automaker will be forced to file for bankruptcy court protection within the next five days.

And in a sign that a bankruptcy filing could come as early as Friday, GM moved up the pay date for its employees this week.

Hourly employees represented by the UAW were paid today and salaried employees will be paid on Thursday. Both normally would have been paid on Friday.

Chrysler in court

It’s is judgment day for Chrysler and hundreds of auto dealers. A federal judge in Chrysler’s Chapter 11 case could decide today whether to give the automaker permission to sell the bulk of its assets to a group headed by Italy's Fiat in the hope of saving itself from liquidation.

Lawyers for Chrysler say the Fiat deal is the company's only hope to avoid being sold off in pieces, but more than 300 objections to the sale have been filed by the carmaker's dealers, bondholders and former employees.

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Filed under: Andrew Torgan • Economy • Finance • Gas Prices • Housing Market • Oil
May 26th, 2009
10:00 AM ET

Financial Dispatch: Deadlines loom for GM & Chrysler

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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.

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Filed under: Andrew Torgan • auto bailout • Economy • Finance • Gas Prices • Housing Market • stocks • Wall St.
May 18th, 2009
10:44 AM ET

Financial Dispatch: Pain at the Pump redux

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Gene Bloch
Managing Editor
CNN New York

The upward creep in gas prices is not letting up. AAA reports the national average price for a gallon of regular unleaded gasoline increased to $2.311, up 3 tenths of a cent from the previous day’s price. This is the twentieth consecutive increase. In the last twenty days the average price of gas has increased 26 cents or 12.8 percent. The average price however is down $1.80 or 43.8% from the record high price of $4.114 that AAA reported on July 17, 2008.

All 50 states and the District of Columbia have regular unleaded gas prices of $2 and higher.

The monthly Lundberg Survey reports that gas prices are up 25 cents in two weeks, biggest jump in more than a year, but Lundberg says the trend likely won’t continue.

Newsweek Editor Jon Meacham interviews Treasury Secretary Tim Geithner on "Recession and Recovery: The Road Ahead."

The 1p event at the National Press Club will be coming in live.

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