California’s unemployment rate rose to 10.1% in January, its highest level in a quarter century, as recession tightened its grip on the most populous U.S. state.
Archive for February, 2009
Tags: California, economy, Employment, schwarzenegger, unemployment
Tags: credit, credit crisis, crisis
A visual video about our credit crisis. (Hat Tip, my wife)
Tags: economy, Employment, jobs, unemployment
For the week ended Feb. 21, 667,000 Americans filed initial jobless claims, up 36,000 from a revised 631,000 the previous week. That’s the highest figure since October 1982.
In a sign that more jobless Americans are having trouble finding work, 5,112,000 continued on unemployment for the week ended Feb. 14, the most recent data available. That’s the highest number since the Labor Department began keeping records since 1967.
Tags: budget, California, pot, schwarzenegger
Looks like California wants to stay in the news after our budget fiasco. Tom Ammiano introduced a bill on Monday to legalize pot in California.
A state legislator proposed legalizing the sale of marijuana in California, saying the plan would generate more than $1 billion annually for the cash-strapped state.
What are the economic benefits and costs of legalizing pot in California?
Tags: banking, economy, fdic, Fed
The following is a joint statement by the Treasury, FDIC, OCC, OTS and the Federal Reserve:
“A strong, resilient financial system is necessary to facilitate a broad and sustainable economic recovery. The U.S. government stands firmly behind the banking system during this period of financial strain to ensure it will be able to perform its key function of providing credit to households and businesses. The government will ensure that banks have the capital and liquidity they need to provide the credit necessary to restore economic growth. Moreover, we reiterate our determination to preserve the viability of systemically important financial institutions so that they are able to meet their commitments.
“We announced on February 10, 2009, a Capital Assistance Program to ensure that our banking institutions are appropriately capitalized, with high-quality capital. Under this program, which will be initiated on February 25, the capital needs of the major U.S. banking institutions will be evaluated under a more challenging economic environment. Should that assessment indicate that an additional capital buffer is warranted, institutions will have an opportunity to turn first to private sources of capital. Otherwise, the temporary capital buffer will be made available from the government. This additional capital does not imply a new capital standard and it is not expected to be maintained on an ongoing basis. Instead, it is available to provide a cushion against larger than expected future losses, should they occur due to a more severe economic environment, and to support lending to creditworthy borrowers. Any government capital will be in the form of mandatory convertible preferred shares, which would be converted into common equity shares only as needed over time to keep banks in a well-capitalized position and can be retired under improved financial conditions before the conversion becomes mandatory. Previous capital injections under the Troubled Asset Relief Program will also be eligible to be exchanged for the mandatory convertible preferred shares. The conversion feature will enable institutions to maintain or enhance the quality of their capital.
“Currently, the major U.S. banking institutions have capital in excess of the amounts required to be considered well capitalized. This program is designed to ensure that these major banking institutions have sufficient capital to perform their critical role in our financial system on an ongoing basis and can support economic recovery, even under an economic environment that is more challenging than is currently anticipated. The customers and the providers of capital and funding can be assured that as a result of this program participating banks will be able to move forward to provide the credit necessary for the stabilization and recovery of the U.S. economy. Because our economy functions better when financial institutions are well managed in the private sector, the strong presumption of the Capital Assistance Program is that banks should remain in private hands.”
Tags: economy, reich, trust
Robert Reich has a nice piece on trust. This is especially true:
The truth is that no one has any idea how long this crisis will last or exactly how to reverse it. Anyone who says differently cannot be trusted. And because restoring trust is so central to mending the economy, our leaders must be extremely careful not to indulge right now in the audacity of hope.
Tags: bankrupt, homes, housing market, obama, Real Estate
Here is a summary of the $75 billion homeowner aid plan:
- Helping borrowers who owe more than 80% of their home’s value to refinance and reduce their monthly payments.
- Creating a $75 billion homeowner stability initiative to reduce monthly payments for at-risk borrowers by subsidizing interest rates. The goal would be to bring payments to no more than 31% of a borrower’s income.
- Providing multiple incentives to servicers to modify loans and to proactively help at-risk borrowers while they are still current in their payments.
- Creating a $10 billion fund to protect investors and servicers against further home price declines.
- Requiring all financial institutions receiving government funds to participate in a standardized loan modification program, while seeking to have all federal agencies that own or guarantee loans also apply the guidelines.
- Allowing judges to modify mortgages during bankruptcy, a measure the financial industry has strongly opposed.
- Providing more Treasury Department backing of Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) and expanding the number of mortgages the agencies back.