Hewlett-Packard announced on Wednesday that Meg Whitman would replace Léo Apotheker as chief executive. Whitman is the former chief executive of eBay, who made a failed bid for the governorship of California last year. Hewlett-Packard's decision shocked many people in the business world.
Two major announcements hit Wall Street and Washington on Wednesday. The Federal Reserve unveiled its plan to invest $400 billion in Treasury securities in an effort to boost the economy, and Moody's downgraded the ratings of Bank of America, Citigroup, and Wells Fargo. How is all of this going to affect consumers and businesses? And how is divided Washington going to react?
The Greek Finance Ministry said talks resumed last night between the country and international leaders, on a way to loan cash to Greece by mid-October and save it from defaulting. U.S. and European markets have fallen as Greece's fate hangs in the balance, and many are wondering how a Greek default would impact the rest of the world. Yesterday, the IMF cut its projections for economic growth in America and Europe, largely because of uncertainty over the European debt crisis.
Bank of America confirmed on Monday that it plans to cut at least 30,000 jobs from the company, and eliminate $5 billion in costs annually by 2014. The banking behemoth currently employs 288,000 people. The first group of employees to be eliminated will be those working in consumer banking operations, and home loans, technology and support operations.
Congress received President Obama's jobs bill yesterday, giving them an up-close look at the details of it. Some Republicans are skeptical of the plan, but Obama is urging for a speedy passage of the bill, in order to get unemployed Americans back to work as soon as possible.
Economists are predicting yet another week of drama in the Global financial markets. European leaders continue to disagree on the best way to handle the sovereign debt crisis and bail out Greece and other countries needing financial assistance. Meanwhile in the U.S., President Obama hopes his new jobs act will set the economy on a path to recovery — if Congress passes it. All this uncertainty in the political arena does nothing to help steady the markets, which continue to be extremely erratic. The month of August saw stocks in the Standard & Poor’s 500 index lurching hundreds of points within individual days and making huge swings in the course of a week.
Most Americans are aware that the U.S. economy is in trouble and job numbers are stagnant, but could things be even worse than they seem? Some key economists are now saying the chances the economy will slip into a double dip recession are as high as 50 percent. Are Wall Street and the White House facing facts?
As the financial crisis in the euro zone has continued to spiral in recent months, Europe may be moving closer centralizing coordination of debt and spending policies. Some global financial officials are endorsing a central European financial authority, with powers to tax, issue bonds, and approve budgets, as a way to combat inefficiencies in dealing with economic strife. Such a change could make Europe's 17-nation economic union into a sort of United States of Europe.
Labor Day weekend got off to a rough start this year with some pretty dismal jobs numbers. The economy created a net gain of zero jobs last month. President Obama will surely use that troubling statistic to drive home his message in his jobs speech this Thursday evening. Many different solutions have been offered to help the economy recover. Could "buying American" be the fix we need to create jobs? Anders Lewendal, a general contractor in Bozeman, Montana, is trying just that as he constructs a home built mostly from "all American" materials.
No new jobs were added to the economy in August, far below forecasts expecting a net gain of 60,000 jobs. The unemployment rate remains at 9.1 percent. The jobs figures are the latest in a string of dismal economic news, including the downgrading of the U.S.'s tripple-A credit rating, volatility in the stock market, and the ongoing European debt crisis. Though economists believe the U.S. will avoid a double-dip recession, many point to the toxic atmosphere in Congress as a hindrance to economic growth.
Our partner, The New York Times, reported yesterday that Nevada's attorney general is asking a federal judge to throw out a settlement made between the state and Bank of America, claiming the bank violated the broad loan modification agreement it made with Nevada in 2008. If the judge throws the settlement out, Nevada would likely sue Bank of America.
President Obama announced his choice for the new head of the Council of Economic Advisers: Princeton University professor Alan B. Krueger. The 50-year-old most recently served as chief economist for the United States Treasury — those credentials might make for a quick Congressional approval.
It's Monday morning, which means it's time to take a look at what's on the agenda for the week ahead. President Obama will be preparing his Labor Day speech on the economy this week, and after after Hurricane Irene's chaotic visit to the East Coast, leaving billions of dollars in damage behind, he may have to rethink what he's going to say. Irene hit at a time when the U.S. economy is continuing to slump and millions are jobless. Unemployment figures will be out on Friday, and the Congressional Budget Office is predicting that employment will not return to normal levels until 2017. Meanwhile Greece, may not receive a bailout from the European Union, as Finland hesitates to approve it. All EU members must approve the bailout, for it to go into effect.
Since the beginning of the year, Bank of America has lost more than half of its stock market value. Earlier this month, AIG sued the bank behemoth for alleged mortgage securities fraud, and just this past week the company laid off 3,500 workers. With more in mortgage holdings than any other bank, its future success is essentially tied to the state of the faltering housing market. But yesterday, Warren Buffett announced he's investing $5 billion in Bank of America. What's in store for the beleaguered company?
This week we’ve been asking listeners to suggest big ideas on how to fix the economy, and you've given us a huge response. We’ve talked about raising inflation, boosting housing prices, capping total compensation for CEOs, taxing the rich, and the potential financial impact of legalizing pot. We received over 200 responses, and noticed some interesting trends. One in six of those who responded suggested reforming the tax code. The second most popular idea was to cut military spending.
As we learned last week the decisions of one rating agency can cause a lot of economic volatility. But according to an exclusive piece from our partner The New York Times this morning, the Justice Department is opening an investigation into Standard & Poor's to see if the agency improperly rated dozens of mortgage securities leading up to the financial crisis. The ratings being investigated came long before the downgrade of the U.S., but the probe does raise new questions about the credibility of the nation's largest credit agency and their secretive rating process.
Last April the Federal Reserve said that Gross Domestic Product numbers had inched up a respectable 1.8 percent. It was a bright spot in the midst of a bleak economy. The White House touted the news as encouraging, and stocks went up. Now, after a dizzying few weeks of bad news about the economy, the government has revised its numbers, saying the economy really only expanded by 0.4 percent. What happened, and what does this say about the government's understanding of the economy?
European Securities and Market Authority is considering recommending a temporary ban on negative bets against stocks. The ban would be temporary to ease this period of market volatility. This comes on the heels of escalating financial concerns in Europe. The European markets are down this morning in reaction to a report showing Greek unemployment at 16.6 percent and more bad news for French banks.
In the wake of Standard and Poor's decision to downgrade the U.S. credit rating, and an economy still struggling to keep its head above water, the Federal Reserve decided yesterday to keep the nation's interest rate close to zero through 2013. The rate has been static for the past two years. The response on Wall Street seemed mixed. At first stocks took a bit of a dive, but they recovered. The Dow closed up 429 points yesterday after a late rally.
Stock markets went into a free-fall yesterday, witnessing drops reminiscent of the great economic collapse of 2008 that the world has still yet to recover from. The S&P 500 saw all of its stock fall and the Dow Jones industrials fell 634.76 points, the sixth worst drop in over a century. How informative is the S&P downgrade? What can we take from their assessment of Washington?