THE FIRST (hardest) DAYS FOR OBAMA
After the big and hard campaign he has to run as president against, after the emotion to be president supported by millions of people around the country and after big paraphernalia for the inauguration as president now he has to work really hard.
These days are going to be so important for him the first 100 day, he can be judged for the people, so now he has to work as never in his life. Barack Obama takes part in one of the nation’s oldest rituals Tuesday, changes will come in the First 100 Minutes – in policy, politics and personalities – that will set a course for a presidency already rich in history and expectations.
He has to pay careful attention to the economy, we know he has been doing some meetings and discuses about this topic, but now, he has to make it real. The problem in Iraq is also important. About infrastructure discuss he has to work on, some experts said, he put this in the agenda with big bets on this.
Also forex market can be affected thanks to this, people puts their hopes in this new president, so that confidence can be reflected with some gains in the market, but let be honest, until Obama get a solution, the market is not going to change.
Far from the pageantry, another ritual takes place with equal precision – the transformation of the White House residence from one president to the next, so quickly that in Bush’s case, pictures of his own inauguration were already on the walls within hours of the ceremony in 2001.
He has for now, less days than yesterday, an the time is running against to him, but after too much hope, what do you think he can or he can not?
More fear feelings for banks.
This Thursday banks get scary thanks to the new economic recovery package, an expansive combination of spending and tax cuts that aims to put millions of unemployed Americans back to work and begin fulfilling President-elect Barack Obama’s ambitious agenda. So there`s not room for banks, but it doesn’t mean they don’t need the help of the government.
Bank shares tumbled on both sides of the Atlantic on Thursday amid intensifying fears that Bank of America and Citigroup, two of the world’s biggest financial institutions, will need further US government support and about the authorities’ ability to stabilize the banking system
Some of the largest components include $87 billion for a temporary increase in aid to states for Medicaid costs; $79 billion in aid to local school districts and public colleges to prevent cutbacks; $90 billion in infrastructure spending; and $54 billion to encourage energy production from renewable sources
Obama´s tax cut
Obama´s team is thinking in a new plan to cut taxes with the help of congressional Democrats. This plan offer about $300 billion of tax cuts to individuals and businesses, a move aimed at attracting Republican support for an economic-stimulus package and prodding companies to create jobs. Although some tax cuts were always expected to be included in Mr. Obama’s economic package, his team disclosed the scope and some details of the plans Sunday at a time when Republicans have begun voicing criticism of what they describe as an open-checkbook approach to spending. By focusing more attention on the tax cuts in the plan, Obama aides hope to frame it as a balanced, pragmatic approach.
The size of the proposed tax cuts — which would account for about 40% of a stimulus package that could reach $775 billion over two years — is greater than many on both sides of the aisle in Congress had anticipated. It may make it easier to win over Republicans who have stressed that any initiative should rely more heavily on tax cuts rather than spending. The package will also include more than $100 billion in tax incentives for businesses to create jobs and invest in equipment or factories.
But the delays to the timetable also stem from debate within the Obama team about the composition of legislation designed to achieve multiple goals. The team has yet to circulate a draft bill.
FED CONSIDERING ISSUING ITS OWN DEBT
The Federal Reserve is considering issuing its own debt for the first time, a move that would give the central bank additional flexibility as it tries to stabilize rocky financial markets.
Government debt issuance is largely the province of the Treasury Department, and the Fed already can print as much money as it wants. But as the credit crisis drags on and the economy suffers from recession, Fed officials are looking broadly for new financial tools.
The Fed stepped in with emergency credit for the investment bank, Bear Stearns, in March and the insurer American International Group, in September, and threw open its direct loan window to Wall Street firms this year in a bid to stabilize financial markets amid a credit freeze.
But with the credit crisis showing no signs of abating, and the narrow scope for further interest rate cuts from the present levels of 1 percent, economists expect the Fed to look at new ways to bolster the supply and circulation of money to avoid a deflationary slump
More unemployment
In a desperate effort to press the congress to give 12 billions in loans, General Motors cut jobs, factories, brands and executive pays.
This 12 can be use like this, 4 billion in immediate loans to stay in business after December, and another 8 billion to carry it through the first part of next year.
Without this help this biggest automaker could topple into insolvency within weeks and drag down the other two members of Detroit’s troubled Big Three.
But the depths of GM problems were greater than thought, as the company laid out a dire situation if it is unable to secure government assistance. While Ford said it could survive for now without federal aid, it asked for up to 9 billion in loans should the United States vehicle market continue to deteriorate. G.M., on the other hand, is rapidly running out of time.
Black Friday?
No matter how many news you can see in TV or Newspaper, the costumers got out of their houses so early in the morning and start to buy everything cheap they saw in the store.
The “black Friday” wasn’t to black for big department stores because they got the same thousand people in one day, of course, with the same sales for this day after thanksgiving. Even in long island, thanks to the big wave of people in Walt-Mart an employee died.
I mean, has to be so difficult to go out of your bed at 3in the morning to buy some stuff because they are on sale, and the big store departments can get a good increase on their gains because people don’t have money for this Christmas.
I think after so many bad days, this can be a very good day for big companies. I don’t know if this can affect the market, but this really affect in costumers pocket
Citi has been rescued
Federal regulators announced late Sunday night that the government had approved a radical plan to stabilize Citigroup in an arrangement in which the government could soak up billions of dollars in losses at the struggling bank. President Bush said on Monday that more such rescues could be arranged if they became necessary.
Just before midnight on Sunday, calls for Citi to absorb the first $29bn in losses it sustains from its portfolio of risky assets – from residential mortgages to commercial real estate and leveraged loans, collateralised debt obligations and auction rate securities. Federal government entities will stand behind 90 per cent of the remaining losses, which could amount to $249bn.
The cost of insuring Citi’s debt almost halved on Monday as the rescue package was seen to lessen the risk of default. Its five-year credit default swap tightened from close to 500 basis points on Friday to 255bp, or $255,000 a year to protect $10m of debt.
Under the terms of the arrangement, the US Treasury will invest $20bn in Citi preferred stock under the federal government’s troubled asset relief programme (Tarp) and receive dividends at a rate of 8 per cent annually. On top of that amount, Citi is receiving an additional $7bn in return for preferred shares issued to both the Treasury and the Federal Deposit Insurance Corporation for their roles in guaranteeing the risky assets.
Next one, Citigroup
This is another big company coming down thanks to the financial crisis. The bank has lost half its value in just four days. The chief executive, Vikram S. Pandit, will hold a meeting for senior managers Friday to update them on the bank’s condition.
While a few also say the company should consider selling itself outright, there is no certainty that any change would happen soon. Senior executives say the company is financially strong and has ample financing options. Moreover, there are few buyers who would be willing to pay a price that Citigroup would want for its most valuable assets.
Mr Pandit spent the morning trying to shore up his own position as he held a conference call with employees in which he reminded them of the company’s strengths and vowed not to break up the group.
Another company goes down
There is another company that is coming down for the turmoil thanks to the financial crisis. Sun mycrosystems can lose 6.000 employees and of course, they can lose their jobs as well.
The company, already dealing with layoffs announced in May, expects to save $700 million to $800 million a year as a result of the moves, while also taking up to $600 million in charges in the next 12 months.
“The focus here is to eliminate some of the inefficiencies that have made it hard to do business with Sun,” said Jonathan I. Schwartz, chief executive at Sun, adding that a “new economic reality” had taken hold in the market. Sun shares were up about 3.9 percent in afternoon trading.
Last week, Cisco Systems, the largest provider of network equipment, warned that sales in its current quarter could drop 10 percent. Intel, the world’s largest producer of chips used in PCs and servers, added to the gloom this week saying its sales for the current quarter could plummet as much as 19 percent as both consumer and corporate customers had pulled back on technology spending.
These are just 3 of a list of companies affected by the crisis, this is no a good situation at all, we be aware.
Employment
Employers in US were eliminated 240,000 jobs last month after shedding 284,000 positions in September, the Labor Department reported today in Washington. The median forecast of 78 economists surveyed by Bloomberg News was for a decline of 200,000 in October. The unemployment rate increased to 6.5 percent from 6.1 percent in the previous month. This is far worse than economists expected and stark proof the economy is deteriorating at an alarmingly rapid pace.
Unemployment has now surpassed the high seen after the last recession in 2001. The jobless rate peaked at 6.3 percent in June 2003.
In a sign the U.S. housing market remains weak, the National Association of Realtors said today in Washington that its index of signed home purchase agreements, or pending home resales, fell 4.6 percent in September.
Although the unemployment report was worse than expected, and Ford Motor Co. reported dismal third-quarter results and announced plans to cut more than 2,000 additional white-collar jobs, Wall Street investors appeared to take it all in stride. The Dow Jones industrial average was up more than 190 points in morning trading.
Have been bad year for everybody, now getting a job is more hard than before, I don’t know, 5 years ago you could get you job´s dreams almost quick, but now it´s hard to leave a job.
