BREAKING
Non-farm payrolls fall 80,000 in March, biggest drop in five years
Wall Street Journal Apr 4, 08 8:00 AM CDT
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Unemployment surged in March to 5.1%, the worst it’s been since September 2005, reports the Wall Street Journal. The country lost 80,000 non-farm jobs last month after dropping 76,000 jobs in both January and February. The third sharp drop fuels fears that the US has slipped into a recession and may prompt another interest rate cut by the Fed.
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Collapse would have spread throughout economy, they argue
New York Times Apr 3, 08 12:10 PM CDT
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Bear Stearns was just hours from collapse, and letting it go down would have been disastrous, executives and regulators argued on Capital Hill today while defending the controversial bailout, the New York Times reports. Without the takeover, “we would all be facing a far more dire set of challenges,” said JPMorgan CEO James Dimon, citing the possibility of a mass run on other investment banks.
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But admits economy could contract, possibility of recession
Wall Street Journal Apr 2, 08 10:24 AM CDT
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Ben Bernanke for the first time acknowledged the possibility of a US recession, but he also voiced optimism that “much” of the adjustment period was over, the Wall Street Journal reports. His testimony before Congress seemed to suggest an end to aggressive stimulus measures—noting that rates had already been cut “substantially” and inflation was still a “source of concern.”
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Questions will likely focus on timing and intensity of Fed's actions in brokering deal
New York Times Apr 2, 08 8:40 AM CDT
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Federal Reserve Chairman Ben Bernanke steps onto a tightrope today for two days of Congressional testimony focusing on the central bank’s starring role in the Bear Stearns bailout. Bernanke likely will be taken to task for not stepping in earlier, and more forcefully, to avert economic chaos, reports the New York Times .
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Critics deride plan as that of 'a bunch of guys from Wall Street'
Wall Street Journal Apr 1, 08 9:18 AM CDT
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Small banks, credit unions, states, and assorted politicians wasted no time ripping into the Bush administration’s plans to rework federal regulation of the financial industry, calling it an amateurish attempt by a “bunch of guys from Wall Street,” reports the Wall Street Journal. “It’s because none of those guys ever worked in a regulated, chartered bank," said one lobbyist for small banks.
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OPINION
Bush denies need for regulations, Krugman writes in NYT
New York Times Mar 31, 08 5:08 PM CDT
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The Treasury plan unveiled today will never rein in free-wheeling markets because it isn't intended to, Paul Krugman writes in the New York Times . President Bush, who for 7 years has slashed at regulations, ignores how well they harness deposit-taking banks. And he denies that "non-depository" banks like Bear Stearns need them too.
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MARKETS
Markets gain for the first time in four days
Bloomberg Mar 31, 08 3:48 PM CDT
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Stocks closed up today as the year's dismal first quarter came to an end. Lower oil prices, improved business activity and a favorable reaction to Treasury Secretary Henry Paulson's new regulation plan helped to boost the markets, Bloomberg reports. The Dow ended up 46.49 to 12,262.89, the Nasdaq rose 17.92 to 2,279.10, and the S&P 7.48 to 1,322.70.
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Focus of plan including new oversight for Fed extends beyond current woes
Wall Street Journal Mar 31, 08 9:53 AM CDT
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The "transformative" changes Henry Paulson has in mind for the regulation of the US economy will take years to implement, the Treasury Secretary said today. The plan would greatly increase the Fed's oversight powers, regulate the insurance industry for the first time, and add federal oversight of the mortgage business, the Wall Street Journal reports. “We need to begin the serious work of modernizing and reforming the structure,” Paulson said.
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Plan would merge agencies, allow Fed to swoop in on threats
New York Times Mar 28, 08 10:14 PM CDT
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The Treasury wants a newly empowered Federal Reserve to monitor market stability and swoop in on institutions that threaten it, the New York Times reports. If approved by lawmakers, the Treasury plan would merge a jumble of regulatory agencies and combine the SEC with the Commodity Futures Trading Commission. But the plan also reduces or maintains current regulation in many cases—elements sure to provoke battles with Democratic lawmakers.
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Democrat blasts lax Bush oversight, McCain's laissez-faire approach
Wall Street Journal Mar 27, 08 2:29 PM CDT
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Barack Obama called today for stricter financial regulations and laid out a $30 billion stimulus plan, the Wall Street Journal reports, including measures aimed at the foreclosure crisis. The Democratic candidate said President Bush had “a generally scornful attitude toward oversight and enforcement,” and proposed expanding Fed powers and upping banks’ capital requirements.
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Says buying mortgages might be necessary to avoid prolonged skid
Wall Street Journal Mar 27, 08 11:15 AM CDT
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The government should step into the mortgage mess on a broader scale, Hillary Clinton told the Wall Street Journal yesterday, suggesting monetary policy alone can’t ignite a recovery and warning that procrastination could lead to stagnation similar to Japan’s weary economy. Clinton said the Federal Housing Administration should buy troubled mortgages in combination with a program to auction defaulted loans.
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