New jobless claims rise unexpectedly to 627K

New jobless claims rise unexpectedly to 627K
New jobless claims jump unexpectedly to 627,000; continuing claims rise to 6.74 million

WASHINGTON (AP) -- The number of Americans filing new jobless claims jumped unexpectedly last week, and the total unemployment benefit rolls rose to more than 6.7 million.
The Labor Department data released Thursday show jobs remain scarce even as the economy shows some signs of recovering from the longest recession since World War II.

The department said initial claims for jobless benefits rose last week by 15,000 to a seasonally adjusted 627,000. Economists expected a drop to 600,000, according to Thomson Reuters.
Several states reported more claims than expected from teachers, cafeteria workers and other school employees, a department analyst said.
The number of people continuing to receive unemployment insurance rose by 29,000 to 6.74 million, slightly above analysts' estimates of 6.7 million.
The four-week average of claims, which smooths out fluctuations, was largely unchanged, at 616,750.
Economists expect the number of initial unemployment insurance claims, which reflects the level of layoffs, to slowly decline over the coming months as the economy bottoms out.

Stocks open lower after rise in jobless claims
Stocks open lower after surprise increase in last week's jobless claims

NEW YORK (AP) -- An unexpected rise in jobless claims is causing investors to sell again.
The government says new jobless claims rose by 15,000 to 627,000 last week. The market had been expecting a decline. Unemployment affects many drivers of the economy -- most importantly, consumer spending.

Uncertainty about when the economy will turn around, and how fast it will grow when it finally does, have weighed on the market this month. The Dow Jones industrial average remains up 26.8 percent from its 12-year low hit on March 9, but is down about 5.7 percent from a June 12 high.

In the first few minutes of trading, the Dow is down 19 to 8,280. The Standard & Poor's 500 index is down 2 to 898, while the Nasdaq composite index is down 8 to 1,783.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
http://finance.yahoo.com/news/Stocks-open-lower-after-rise-apf-15617326.html?x=1&sec=topStories&pos=1&asset=&ccode=

ECB Lends Record $622 Billion in Bid to Ease Crisis

ECB Lends Record $622 Billion in Bid to Ease Crisis

(Source WallStreet Journal) FRANKFURT -- The European Central Bank pumped a record €442 billion ($622 billion) into euro-zone money markets Wednesday in its first-ever offer of one-year funds as it battles the Continent's recession.
Euro-zone banks borrowed the one-year funds, the largest amount the central bank has ever dispersed in a single shot, at the ECB's current key rate of 1%. Much of the total likely substituted for amounts banks had been borrowing from the ECB for shorter periods, so the net stimulus to the economy is less than it appears at first sight.
The novelty lies more in the length of time over which the ECB is prepared to offer unlimited funding, reflecting a desire to bring longer-term money-market interest rates down. Although the risk premium that banks charge each other for funds has fallen since the dramatic days of September, it still appears big enough to strain the economy.

The ECB's move signals the central bank remains committed to bolstering the euro-zone economy even as policy makers world-wide discuss how best to unwind the welter of monetary and fiscal stimulus pumped into the global economy over the course of the crisis. The ECB believes the 16-nation euro-zone economy will start growing again by the middle of 2010.

The ECB said in May that it would begin offering banks funds for one year. Before Wednesday, the longest period banks could borrow from the central bank was six months.

Fears of big bank problems return

Fears of big bank problems return
A key market measure of credit risk is deteriorating again, as investors fret over the side effects of giant federal bailouts for the nation's largest banks.

NEW YORK (Fortune) -- Betting against the banks is back in fashion.

A key market measure of the health of the biggest global financial institutions has deteriorated this month, after showing sharp improvement in April and May.

The price of betting that big banks will default on their debt -- made via derivatives known as credit default swaps -- has risen 17% in June, according to data from New York-based Credit Derivatives Research.

The uptick in wagers against banks such as Bank of America (BAC, Fortune 500), Goldman Sachs (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500) comes as the spring's scorching stock market rally peters out and doubts about the health of the global economy and the banking sector re-emerge.

The blue-chip S&P 500 has dropped 6% over the past two weeks, with half of that loss coming this week. The KBW Bank index has slid 20% since hitting a recent high May 11.

Some selling is no doubt inevitable after a strong rally. But a World Bank report Monday that predicted the global economy will shrink 2.9% this year "touched a raw nerve," said Mauro Guillen, director of the Lauder Institute at the University of Pennsylvania's Wharton School.

"We have been too optimistic for too long, and we still haven't done the dirty work of fixing the financial system," he said.

Guillen said the U.S. will have to take action to restore the credit system before the economy can resume expanding in earnest.

That will mean actually implementing plans such as the one the government proposed this spring to attract private sector buyers of troubled bank assets, Guillen said. Regulators shelved one such program earlier this month.

Guillen also advocates pushing financial regulatory reform program through Congress.
But Robert Claassen, chair of the derivatives and structured products practice at international law firm Paul Hastings, said he senses the momentum for sweeping change has ebbed in recent weeks.
"There's a lot less public outrage right now," he said.
Guillen shares that view, and said it bodes ill for the long anticipated economic rebound. He notes that the economy must start growing again before unemployment -- rapidly approaching 10% -- comes down to a more moderate level.
"We have reached this period of apathy, and there's a real danger that the economy will languish with the underlying problems unaddressed," he said.

Fear of failure replaced by fear of weak earnings. Read on...
http://money.cnn.com/2009/06/24/news/companies/banks.bets.fortune/index.htm?postversion=2009062404

OECD Week: Where next for the world economy?

OECD Week: Where next for the world economy?

Debate at the OECD Forum and the forecasts and analysis in the latest edition of the OECD’s twice-yearly Economic Outlook will set the tone for recommendations and decisions at the OECD’s annual ministerial meeting.
Restoring stability, confidence and sustainable growth is the priority. The OECD is working with governments and international organisations to cut short the crisis and lay the foundations of a stronger, cleaner and fairer global economy.

OECD sees strongest outlook since 2007
The Organisation for Economic Co-operation and Development has revised its World Economic Outlook upwards for the first time in two years, as its latest review concludes that the global economic slide is nearing a bottom.
In its report, published on Wednesday, the OECD revised its growth forecast for 2009 to a decline of 4.1 per cent, down from a contraction of 4.3 per cent. It said that in 2010, it expects very modest growth where earlier it expected none.
Weak recovery in sight but damage from crisis likely to be long-lasting, says OECD
http://www.oecd.org/document/41/0,3343,en_2649_34109_43123241_1_1_1_37443,00.html

The OECD Forum on 23-24 June, and the OECD ministerial meeting on 24-25 June mark the annual high point in the Organisation’s calendar. Ministers from governments from around the world, as well as leading representatives of business, labour, NGOs, academia and the media, will thrash out ideas and seek solutions to global problems.
>> Read this Key Information brochure to find out more about the issues that will be debated.

The forecasts in the Economic Outlook, to be published at 10:30 on 24 June, and discussions at the Forum will feed directly into the ministerial meeting which will be chaired by Korean Prime Minister Han Seung-soo

Joaquín Almunia, EU Commissioner, on next steps in the crisis



OECD Annual Report 2009 Download http://www.oecd.org/dataoecd/38/39/43125523.pdf

22-Jun-2009
This Annual Report highlights some of the OECD's achievements in 2009 and describes how it is helping its member countries respond to new challenges ahead.
Also available:

* Rapport annuel de l'OCDE : 2009 , pdf, (French)

'Mogelijk 18.000 bedrijven in zwaar weer'

'Mogelijk 18.000 bedrijven in zwaar weer'

(Bron: de Telegraaf, DFT) ROTTERDAM (AFN) - Ongeveer 18.000 Nederlandse bedrijven zitten mogelijk in financiële problemen. Dit concludeert accountancy- en adviesbureau Deloitte op basis van onderzoek onder een doorsnee van het Nederlandse bedrijfsleven.
Voor de helft van de bedrijven hangt het voortbestaan van de onderneming het komende halfjaar af van toegang tot krediet. Maar van deze groep geeft bijna de helft aan dat het moeilijk wordt om nieuwe financiering rond te krijgen. Een derde van de ondernemingen verwacht de komende tijd tegen de grenzen van de afspraken met financiers aan te lopen. Deloitte noemt het opvallend dat van deze bedrijven 37 procent de situatie niet heeft besproken met de banken.

“Niets doen is geen optie”, stelt Oscar Snijders van Deloitte. “Bedrijven moeten met de banken om de tafel. Om het proces van het krijgen van krediet soepeler te laten verlopen, moeten bedrijven volledig en tijdig transparantie tonen.”

Barron's Editor Michael Santoli speaks about the slump in trading during the summer.

Eerie Calm of Summer Trading
6/22/2009
Barron's Editor Michael Santoli speaks about the slump in trading during the summer.

Forget About Iran, Canada a Bigger Risk to Oil Market, Energy Trader Says

Forget About Iran, Canada a Bigger Risk to Oil Market, Energy Trader Says

The eyes of the world are fixed on the election protests in Iran. Yet, while unrest reigns in one of the world’s largest oil producers, crude prices have actually fallen below $70 a barrel. Stephen Schork, editor of The Schork Report, says that’s because traders have already priced in the risk.

Get this: The big risk to prices, Schork says, comes from our friendly neighbors to the north. Canada is America’s biggest supplier of oil - most of it coming from tar sands. The problem, according to Schork, is that the Obama administration has taken “a rather belligerent stance” toward that supply because it’s not environmentally friendly. If the administration increased taxes on Canadian oil it “could be displaced...that will have an uplift to prices,” he goes on to say.

And, don’t forget the risk south of the border. Maturing oil fields, drug cartels and political instability in Mexico have the potential to drive up prices. If the U.S. doesn’t pay more attention to these risk factors, investment will continue to dry up and leave us paying more at the pump, Schork warns.

So while everyone is focused on geopolitical “hot-spots” like Iran, Nigeria and Venezuela, the real risk to crude prices may be much closer to home.

Sarkozy: niet bezuinigen, wel lenen

Sarkozy: niet bezuinigen, wel lenen

(Bron, De Telegraaf, DFT) PARIJS (AFN) - De Franse president Nicolas Sarkozy gaat op grote schaal geld lenen om met strategische investeringen de economische crisis te lijf te gaan. Hij zei dat maandag in een gezamenlijke bijeenkomst van de beide Kamers van het parlement. Bezuinigingen en belastingverhoging werken volgens Sarkozy averechts.
De omvang van de nieuwe staatsleningen wordt pas bekend als de regering haar nieuwe prioriteiten heeft gesteld. Sarkozy weet nog niet of hij het geld gaat lenen van het Franse volk of op de financiële markten.

Het Franse financieringstekort dreigt op te lopen naar meer dan 7 procent dit jaar en volgend jaar. Dat is meer dan twee keer de limiet die de Europese Unie daaraan stelt. Sarkozy heeft meermalen de vloer aangeveegd met wat hij noemde het “Angelsaksische kapitalisme”. Hij wil vasthouden aan de Franse traditie om flink te investeren in het publieke domein en aan relatief ruime sociale uitgaven. http://www.telegraaf.nl/dft/nieuws_dft/4224149/__Sarkozy__niet_bezuinigen__wel_lenen__.html?p=30,1

The Financial Crisis: Charting a Global Recovery

The Financial Crisis: Charting a Global Recovery

June 22, 2009—New World Bank analysis of the global economy paints an unprecedented picture: global output falling by 2.9 percent and world trade by nearly 10 percent; accompanied by plummeting private capital flows, likely to decline from $707 billion in 2008 to an anticipated $363 billion in 2009.

As the world enters what appears to be an era of markedly slower economic growth, the World Bank’s annual Global Development Finance (GDF) report, released today, updates the outlook for the global economy, and explores the broad approach that will be necessary to chart a worldwide recovery.

“Extraordinary measures by governments around the world have helped save the global financial system from complete collapse, but the economic recession in the real sectors persists,” said the World Bank’s Justin Lin, Chief Economist and Senior Vice President, Development Economics. “To break the cycle, we need bold policy measures, including restoration of domestic lending and global capital flows.”

Lin was speaking at the Annual Bank Conference on Development Economics, underway in Seoul, where experts have gathered to discuss the financial crisis. He emphasized the key role that developing countries—the engine of future global growth—can play in the global recovery, as well as the grave development emergency posed by the impact of the crisis on poor, vulnerable countries.

Deepening global recession

As capital became increasingly hard to come by, and uncertainty soared about future demand, there was a sharp decline in production of manufactured goods, and in global trade in these goods. The level of industrial production in rich countries has dropped by 15 percent since August 2008, and that in developing countries, excluding China, by 10 percent. Read news... Permanent URL for this page: http://go.worldbank.org/XNOU707YR0

Juniraming CPB: Historische krimp Nederlandse economie

Juniraming CPB: Historische krimp Nederlandse economie

http://www.cpb.nl/nl/news/2009_18.html
De Nederlandse economie krimpt dit jaar naar verwachting met 4¾%. Voor volgend jaar is een afname van het BBP voorzien van ½%. Met name de uitvoer krijgt dit jaar rake klappen, omdat de relevante wereldhandel in de raming met een niet eerder vertoonde 15¼% terugvalt. Maar ook consumenten geven beduidend minder uit dan vorig jaar. De scherp terugvallende productie gaat onherroepelijk gepaard met een fors oplopende werkloosheid. Deze komt volgens de huidige prognose uit op gemiddeld 5½% in 2009 en stijgt volgend jaar snel verder tot 9½%. De overheid schrijft dit en komend jaar dieprode cijfers, met begrotingstekorten van respectievelijk 4,1 en 6,7% BBP.

Dit zijn de belangrijkste ramingen uit de 'Koninginne-MEV' die jaarlijks in juni verschijnt als input voor de begrotingsvoorbereiding van het kabinet. De toelichting op deze ramingen is vandaag gepubliceerd in het juninummer van de CPB Nieuwsbrief. Het Centraal Planbureau (CPB) presenteert hierin prognoses voor de Nederlandse economie in de jaren 2009 en 2010. Andere artikelen in deze CPB Nieuwsbrief gaan vooral over de Europese Unie, zoals over de Lissabondoelstellingen, de voordelen van de interne markt en het belang van de 'oude' lidstaten bij de welvaart van de nieuwe lidstaten in Midden- en Oost-Europa.

Zware mondiale recessie
Sinds maart is de onrust op de financiële markten, ontstaan na het faillissement van de Amerikaanse investeringsbank Lehman Brothers, afgenomen dankzij de uitzonderlijke maatregelen van centrale banken en regeringen. Marktpartijen houden niet langer rekening met een totale ineenstorting van het financiële systeem. Van een normalisering is echter nog geen sprake. Veel deelmarkten functioneren nog steeds nauwelijks, schattingen van geleden bankverliezen zijn recentelijk weer opwaarts herzien en de daling van de huizenprijzen in de Verenigde Staten en veel eurolanden duurt voort.
Bekeken over het gehele jaar zal 2009 de sterkste productiedaling sinds de Grote Depressie van de jaren dertig laten zien. In het eurogebied daalt het BBP naar verwachting met maar liefst 5%. Door het expansieve macro-economische beleid en de veronderstelde verbetering op de financiële markten is de BBP-daling in het eurogebied in 2010 veel beperkter - naar verwachting ½%. De recessie drukt de inflatie. Werkloosheid en overheidstekorten zullen volgend jaar nog geen keer ten goede ondergaan. De wereldhandel zal in 2010 weer groeien, maar slechts minimaal.

Onzekerheden blijven groot
De onrust op financiële markten is verminderd, maar een volledige normalisering tijdens de projectieperiode is zeker niet gegarandeerd. Gezien de precaire situatie zijn nieuwe problemen in de financiële sector een reële mogelijkheid. Bovendien zijn veel bedrijven en gezinnen in moeilijkheden geraakt door de diepe recessie en de scherpere kredietvoorwaarden. De kredietcrisis en de wereldwijde recessie zouden dan ook langer kunnen aanhouden dan in de gepresenteerde projectie is voorzien. Ook bestaat het risico van dalende prijzen en lonen (deflatie) als gevolg van de zeer diepe recessie. Daar tegenover staat dat de forse overheidsmaatregelen effectiever kunnen zijn dan is voorzien, zodat het economisch herstel wat sterker kan zijn.

Recordkrimp Nederlandse economie
Al sinds het tweede kwartaal van 2008 krimpt de Nederlandse economie op kwartaalbasis. Naar verwachting ligt het dieptepunt, in termen van groei, in de eerste helft van 2009. Daarna trekt de economie geleidelijk weer aan, maar per saldo krimpt de economie zowel dit als volgend jaar. Dit jaar bedraagt de geraamde krimp 4¾%. Volgend jaar is de afname van het productievolume, met ½%, geringer.
Ervaringen van landen die eerder met een bankencrisis te maken hebben gehad laten zien dat het verschil tussen piek en dal gemiddeld 9% is, en dat het bijna twee jaar duurt om het dal te bereiken. Daarmee vergeleken vallen de gevolgen van de crisis volgens de huidige prognose nog mee. Echter, zonder kredietcrisis zou de Nederlandse economie na 2008 waarschijnlijk 'normaal' zijn doorgegroeid, zodat het BBP in 2010 ten opzichte van de oude trend ongeveer 10% lager is. Hoewel er grote variatie is tussen landen, is gemiddeld genomen een substantieel deel van deze misgelopen groei structureel, dat wil zeggen langdurig en misschien zelfs permanent. Dat is het geval wanneer bijvoorbeeld de werkloosheid blijvend hoger uitkomt en investeringen in kapitaal en innovatie zich minder gunstig ontwikkelen. Lees Bericht...

CPB Nieuwsbrief 2009/2, juni 2009

Deze Nieuwsbrief bevat de volgende artikelen:

• De interne markt: Europa's hoop in crisisdagen
• Lissabon 2010: EU is goed onderweg, maar we zijn er nog niet
• Historische krimp Nederlandse economie
• Investeringen en strategische belangen
• Arbeidsmarkt voor ouderen functioneert slecht
• Recente publicaties.
• Midden- en Oost-Europa telt mee - ook in tijden van crisis

Download de Nieuwsbrief in PDF-format.

De nieuwe ramingen kunnen worden gedownload als spreadsheetbestanden op de downloadsectie van deze site.

De volledige CPB Nieuwsbrief 2009/2, het artikel 'Historische krimp Nederlandse economie' en de kerngegevenstabel uit de CPB Nieuwsbrief 2009/2 zijn alle (gratis) beschikbaar als aparte PDF-bestanden op de website van het CPB (www.cpb.nl).

Is the recession over?

Is the recession over?
Some experts point to stabilization in the housing and job markets as signs the recession has ended. Others continue to see weeds - not green shoots.

NEW YORK (CNNMoney.com) -- The recession began in December 2007. Did it end sometime this spring?

It's a provocative question that's tough to answer. It's tempting to say the recession is over when that seems to be what the stock market is telling us.

But Wall Street hardly has a perfect track record: There were numerous bear market rallies during the Great Depression, for example.

Stocks also enjoyed a nice run last spring after Bear Stearns almost imploded, even though the collapses of Fannie Mae (FNM, Fortune 500), Freddie Mac (FRE, Fortune 500), Lehman Brothers and AIG (AIG, Fortune 500) were still yet to come.

"With all due respect to Mr. Market, it is highly fallible as a forward looking barometer," said David Rosenberg, chief economist & strategist at Gluskin Sheff + Associates, a Toronto-based wealth management firm.
The bear case: 'Less bad' does not equal good

The jump in stocks also poses another chicken-versus-egg question: Is the market rallying because people think the recession is over or do people think the recession is over because the stock market is rallying?

If it's the latter, that's not necessarily great news. Rosenberg said he thinks it's "beyond bizarre" to say the recession is over. The economy may have pulled out of the free fall that took place from September through February, he said, but that shouldn't be confused with a bottom.
http://money.cnn.com/2009/06/19/markets/thebuzz/index.htm?postversion=2009062008

Treasury Department Issues Emergency Recall Of All US Dollars

Treasury Department Issues Emergency Recall Of All US Dollars


Treasury Department Issues Emergency Recall Of All US Dollars

Nieuwe Europese bankenregels schieten tekort

'Nieuwe Europese bankenregels schieten tekort'

(Bron De Telegraaf, DFT)
BRUSSEL (AFN) - De Europese regeringsleiders trekken de teugels voor de financiële sector aan. Om een herhaling van de financiële crisis te voorkomen, moeten banken en verzekeraars zich vanaf volgend jaar onderwerpen aan strengere regels en strikter toezicht. Hoogleraar economie Sylvester Eijffinger is echter niet onder de indruk.
“Dit kan niet werken”, waarschuwde Eijffinger vrijdag vanaf een congres in Milaan, waar hij de nieuwe regels bediscussieerde met kopstukken uit de Europese financiële sector. “Men heeft de oren teveel laten hangen naar de politiek. Maar monetair toezicht is heel complex. Het is een vak apart, daar hebben politici maar weinig verstand van.”

Na lang onderhandelen werden de regeringsleiders van de EU het vrijdag eens over de nieuwe toezichtsstructuren voor de Europese financiële sector. Die zijn voor een groot deel gebaseerd op de aanbevelingen van de commissie van wijzen onder leiding van de Fransman Jacques de Larosière, waarin ook de Nederlandse ex-minister Onno Ruding zitting had.

Wensen
“Die commissie heeft teveel geluisterd naar de wensen van de Duitsers en de Britten, die waren tegen het overhevelen van verantwoordelijkheden naar Europees niveau. Er is te weinig lef getoond”, aldus Eijffinger. Eerder gaf Ruding zelf al toe dat de aanbeveling om een echte Europese toezichthouder in te stellen in politiek opzicht nog een brug te ver was.

Nationale toezichthouders moeten volgens de nieuwe regels in een aparte commissie gaan samenwerken bij het toezicht op banken en verzekeraars die in verschillende landen actief zijn. Daarnaast moeten twee andere commissies ervoor gaan zorgen dat het toezicht in de EU-lidstaten beter wordt en dat de regels in heel Europa worden gestandaardiseerd. Zie artikel...
http://www.telegraaf.nl/dft/nieuws_dft/4206802/___Nieuwe_Europese_bankenregels_schieten_tekort___.html?p=14,1

U.S. Numbers on Welfare See Sharp Increase

U.S. Numbers on Welfare See Sharp Increase

(Source Wall Street Journal)
Welfare rolls, which were slow to rise and actually fell in many states early in the recession, now are climbing across the country for the first time since President Bill Clinton signed legislation pledging "to end welfare as we know it" more than a decade ago.
Twenty-three of the 30 largest states, which account for more than 88% of the nation's total population, see welfare caseloads above year-ago levels, according to a survey conducted by The Wall Street Journal and the National Conference of State Legislatures. As more people run out of unemployment compensation, many are turning to welfare as a stopgap.

The biggest increases are in states with some of the worst jobless rates. Oregon's count was up 27% in May from a year earlier; South Carolina's climbed 23% and California's 10% between March 2009 and March 2008. A few big states that had seen declining welfare caseloads just a few months ago now are seeing increases: New York is up 1.2%, Illinois 3% and Wisconsin 3.9%. Welfare rolls in a few big states, Michigan and New Jersey among them, still are declining.

The recent rise in welfare families across the county is a sign that the welfare system is expanding at a time of added need, assuaging fears of some critics of Mr. Clinton's welfare overhaul who said the truly needy would be turned away. Read more... http://online.wsj.com/article/SB124562449457235503.html

Mythology of Bulls and Bears

Mythology of Bulls and Bears
5/21/2009 Barrons Video

As the bulls gain force, investors must avoid getting trampled in a stampede. Barron's Steven Sears comments.

ECB Official Faults New EU Regulation

ECB Official Faults New EU Regulation

(Source Wall Street Journal)The European Union approved a compromise plan Friday to create new financial regulators for the bloc, but a senior official at the European Central Bank that would head the new effort said the plan allowed too little power for the regulators to act.

The EU would set up a European Systemic Risk Council for the bloc, headed up by the president of the ECB. But, largely due to pressure from the United Kingdom, the body would only be advisory. Final decisions on financial-sector rescues would rest with the national governments called on to fund them.
The ECB should have "the possibility to act," Lorenzo Bini Smaghi, a member of the ECB's Executive Council, said Friday, addressing a conference in Milan.

Under the plan approved Friday by the bloc's 27 leaders at a summit in Brussels, the Risk Council would have "the powers to make recommendations but not to implement policies directly," he said.

French President Nicolas Sarkozy, who has pushed hard for greater regulation in response to the financial crisis, told reporters at the summit that he expected the proposed council to acquire greater powers over time.

"We've created a new EU institution from scratch. ... We could have gone further, but I believe that it will widen [its powers] through experience and practice, the way it's always happened," said Mr. Sarkozy. EU institutions and policies have often begun small and gathered powers over time. Read Article...
http://online.wsj.com/article/SB124541961471231443.html

Obama Poll Sees Doubt on Budget and Health Care

U.S. / Politics
Obama Poll Sees Doubt on Budget and Health Care (New York Times Permalink)
By JEFF ZELENY and DALIA SUSSMAN Published: June 18, 2009
The latest New York Times/CBS News poll found a distinct gulf between President Obama’s overall standing and how some of his key initiative are viewed.

Roubini: New Regulations "Go in the Right Direction," But Not Far Enough

Roubini: New Regulations "Go in the Right Direction," But Not Far Enough

The new Wall Street regulations announced by President Obama yesterday "go in the right direction" but only accomplish about "75% of what needs to be done," says Nouriel Roubini, professor at NYU's Stern School and chairman of RGE Monitor.

For example, making the Fed the systemic risk regulator makes sense from an institutional standpoint, "but have to have individuals committed to making sure the systemic risks are controlled," Roubini says, recalling the Greenspan Fed had the power -- but not the will -- to regulate mortgage lending during the housing boom.

"They allowed all this toxic underwriting because they did not believe in supervision," he says of the Greenspan Fed. "They were in favor of any kind of financial 'innovation'."
http://finance.yahoo.com/tech-ticker/article/266396/Roubini-New-Regulations-%22Go-in-the-Right-Direction%22-But-Not-Far-Enough?tickers=XLF,FAS,FAZ,SKF,AIG,BAC,JPM

Nouriel Roubini's Three Reasons Why Stocks Are Bound to Fall

Bailout Nation: Was TARP Just a Ruse to Protect Citigroup?

Bailout Nation: Was TARP Just a Ruse to Protect Citigroup?

http://finance.yahoo.com/tech-ticker/article/264931/Bailout-Nation-Was-TARP-Just-a-Ruse-to-Protect-Citigroup?tickers=MS,JPM,C,BAC,XLF,FAS,FAZ,

With JPMorgan, Morgan Stanley and other big banks reportedly set to start repaying TARP funds as early as tomorrow, many are ready to turn the page on this sordid chapter in our nation's financial history.

But Barry Ritholtz, CEO of Fusion IQ and author of Bailout Nation, is still trying to figure out why we went through the whole exercise in the first place.

In his new book Bailout Nation, Ritholtz discusses the possibility that TARP was all a giant ruse, "a Hank Paulson engineered scam to cover up the simple fact that Citigroup was teetering on the brink of implosion," has he writes in his popular blog The Big Picture. "A loan just to Citi alone would have been problematic, went this line of brilliant reasoning, so instead, we gave money to all the big banks."

We delve further into this theory in the accompanying video. While it can never be fully proven, Ritholtz's "just a ruse to protect Citi" idea seems plausible given:

* The reaction of many other banks forced to take TARP funds;
* The extraordinary level of bailouts and debt guarantees aimed specifically at Citi;
* Regulators' fears last fall about the "systemic risk" if a big bank were allowed to fail.

Standard & Poor's cuts ratings on 22 banks S&P cuts ratings on 22 banks amid concern over further weakening in financial sector

Standard & Poor's cuts ratings on 22 banks
S&P cuts ratings on 22 banks amid concern over further weakening in financial sector

NEW YORK (AP) -- Credit ratings agency Standard & Poor's on Wednesday cut ratings and revised outlooks on 22 banks amid concern about further weakening in the financial sector.
S&P said the changes reflected its assessment that volatility will remain in the financial sector and the industry is expected to face tighter regulatory oversight. S&P also said loan losses, which have plagued the industry for more than a year, are likely to continue to increase and could grow beyond expectations.

BB&T Corp., Capital One Financial Corp., PNC Financial Services Group Inc., Regions Financial Corp. and Wells Fargo & Co. were among the largest banks that saw their ratings cut by S&P.

Widescale changes to the industry because of the credit crisis and ongoing recession will dramatically alter the banking landscape, S&P credit analyst Rodrigo Quintanilla said in a release.

"We believe the banking industry is undergoing a structural transformation that may include radical changes with permanent repercussions," Quintanilla said. "Financial institutions are now shedding balance-sheet risk and altering funding profiles and strategies for the marketplace's new reality. Such a transition period justifies lower ratings as industry players implement changes."

S&P did note that recent capital raising efforts in the sector will help defray some of the losses banks are facing.

Lower credit ratings make it more expensive for companies to borrow money and can sometimes lead to difficulty accessing credit. Low ratings can also affect investments in a company's debt as some institutional investors are required to only hold debt rated at a certain level.

Ratings were also cut on Associated Banc Corp., Astoria Financial Corp., Carolina First Bank, Citizens Republic Bancorp Inc., Comerica Inc., Fifth Third Bancorp, First National Bank of Omaha, Huntington Bancshares Inc., KeyCorp, M&T Bank Corp., Susquehanna Bancshares Inc., Synovus Financial Corp., U.S. Bancorp, Valley National Bancorp, Webster Financial Corp., Whitney Holding Corp., and Wilmington Trust Corp.

The ratings of Carolina First Bank, Citizens Republic Bancorp, Huntington Bancshares, Synovus Financial and Whitney Holding were cut to junk status from investment-grade levels. The other banks all saw their ratings remain at investment-grade levels.