Items of Interest:
Wave of layoffs here and in Europe reflects severity of the recession -- Household names such as Caterpillar, Home Depot and Sprint Nextel said Monday that they are laying off a combined 35,000 workers in moves that stressed the severity of the worldwide recession and kicked off what is likely to be a week of gloomy earnings announcements, further job cuts and dismal data.
The news ratchets up the pressure on the Obama administration and Congress as lawmakers debate an $825 billion stimulus package intended to save or create millions of jobs. Far more job cuts are likely as consumer and business spending tumbles amid what many economists say is the worst recession the USA has seen since the Great Depression.
"Some of the worst job losses are ahead of us, not behind us," says Wells Fargo senior economist Scott Anderson.
He expects 3 million Americans to lose their jobs in 2009 — up from the 2.6 million who were cut last year, which was the most since 1945, the final year of World War II...
|Here is a list of recently announced reductions in jobs. In some cases, totals include previously announced layoffs.|
|Date||Company||Layoffs||Pct. of workforce|
|Jan. 16||Circuit City||30,000||100%|
|Jan. 8||AK Steel||1,500||21%|
Editorial / Investor's Business Daily: Caterpillar's Preventable Job Cuts
Jack and Suzy Welch / Business Week: The Era of Do-or-Die Layoffs
Home prices fall at record pace -- Index of 20 U.S. cities shows 18.2% annual drop, to the lowest levels since 2004.
An index of home prices in 20 major metropolitan areas fell at a record annual pace in November, to levels not seen since 2004, according to a report released Tuesday.
The S&P Case-Shiller Home Price Index, a sampling of 20 cities from across the nation, fell a record 18.2% over the 12 months ended Nov. 30. That brought the index to its lowest point since February 2004. From its peak in mid-2006, the index has plunged a whopping 25.1%.
Eleven of the 20 cities showed record declines, and the 12-month price drop for 14 of the cities was a double-digit percentage...
Case-Shiller: House Prices Fall Sharply in November
Case-Shiller November: Grim but with a Germ of Good News -- Believe it or not there was a germ of good news in the report. The 10-city composite index fell at a year-over-year rate of 19.1% which was the same as the rate of decline in October. That’s the first time since prices started declining that we haven’t seen an increase in the rate of decline.
Soot & Ashes:
Home prices have crashed ANOTHER 18% nationwide -- But, but, but.. Lawrence Yun at the NAR said we hit bottom in December 2007! What gives? ...
Merrill Lynch Analyst Says Depression is the New Recession -- ML chief economist David Rosenberg has broken the D(epression)-word seal. In his most recent report "Some Inconvenient Truths" he says we are currently in a depression, and uncharacteristically doesn't mince his words:
Not your father’s recession, but maybe your grandfather’s
In our marketing tour through Europe last week, we brought along our new chart package entitled “Not your father’s recession, but maybe your grandfather’s”. Looking at the youthful demographics that characterize today’s money management industry, we should have probably gone with “great-grandfather’s” instead.
How is a depression defined?
It shouldn’t come as any big surprise that with such a provocative title, we would be saddled with questions as to how an economic depression is even defined. Of course, most portfolio managers still don’t know that a recession is not defined as back-to-back quarters of negative real GDP prints (which we had neither in 2002 nor 2008) but instead the timing of the peaks in real sales activity, employment, industrial production and organic personal income growth.
Citi says no to $45 million jet -- Treasury Department disapproves of Citigroup's plan to spend $45 million on a corporate jet after receiving TARP funds.
Citigroup reversed course Tuesday, a day after a Treasury Department official called the struggling company and "told them it was unacceptable" to accept delivery of a new $42 million corporate jet, a senior administration official said...
Paul Kedrosky / Infectious Greed:
Quote of the Day: But We Have 67% Less Jets!
Discussion:Greg Sargent / The Plum Line: Some In Labor Frustrated With Obama Administration For Not Sending Signals On Solisculturekitchen: Dear Bank of America,Brave New Films blog: SEIU Calls on Bank of America to Oust CEO Over Executive BonusesDday / Hullabaloo: Lack of Labor — So after huffing and puffing for weeks …Matthew Cooper / TPMDC: Private Equity and EFCA
Why dealing with the huge debt overhang is so hard -- How much debt is too much? Nobody knows. But the governments of highly indebted high-income economies – such as the US and UK – think they know the answer: more than today....
The Tarp is a fiscal straitjacket --The US debate over the fiscal stimulus is remarkable in its neglect of the medium term – that is, the budgetary challenges over a period of five to 10 years. Neither the White House nor Congress has offered the public a scenario of how the proposed mega-deficits will affect the budget and government programmes beyond the next 12 to 24 months. Without a sound medium-term fiscal framework, the stimulus package can easily do more harm than good, since the prospect of trillion-dollar-plus deficits as far as the eye can see will weigh heavily on the confidence of consumers and businesses, and thereby undermine even the short-term benefits of the stimulus package...
- Obama & Co.'s Unenviable List of Tasks - Marina Whitman, Wall St. Journal
- Saving Banks Despite The Bankers - P. Boone & S. Johnson, Financial Times
- Give Us Some Bang for our Bailout Bucks - Joseph Stiglitz, Times of London
- Central Bankers: From Heroes To Zeroes - John Lanchester, New Yorker
- In This Meltdown, Non-Experts Know Better - Melik Kaylan, Forbes
- Toxic Assets Might Make You a Chunk of Money - John Berry, Bloomberg
- Is This The End of Warren Buffett? - Doug Kass, TheStreet.com
- Ken Lewis: The Man Who Knew Too Little - Thomas Brown, Bankstocks
- Economic Cures Like Booze for An Alcoholic - Caroline Baum, Bloomberg
- Proposed Stimulus Isn't Big Enough - Robert Shiller, Wall Street Journal
- The Final Tab for Bank Bailout Could Be $4 Trillion - Colin Barr, Fortune
- Economic Slow Pace Can't Continue - Brian Wesbury & Robert Stein, Forbes
- 'Boomsday' Is America's #1 Economic Problem - Paul Farrell, MarketWatch
- Reconstructing the Past Year for Madoff - Brooke Masters, Financial Times
- Barack Obama's Wounded Treasury Man - Larry Kudlow, RealClearPolitics
- Tim Geithner's China Bashing Bodes Ill for Stocks - John Tamny, RCM
- Masters of Universe Take It On the Chin - Andrew Ross Sorkin, NY Times
- A Dark Age of Macroeconomics - Paul Krugman, Conscience of a Liberal
- 10 Reasons to Whack Obama's Stimulus Plan - Capital Commerce
- Have World Economies Entered a Frugal Consumer Era? - BloggingStocks
- Fannie And Freddie: Mission Accomplished! - John Carney, Clusterstock
- Ten Takeaways from the Greenspan Years - David Merkel, Aleph Blog
- 25 People at the Heart of the Meltdown - Julia Finch, The Guardian