financial crisis

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Brooks: Want Real Economic Stimulus? Fix the Roads

A National Mobility Project would create jobs, leaving lasting impact: Brooks

(Newser) - Panic is afoot, so of course, Congress is bearing down on another stimulus package, though the last one seems to have missed the mark. These “politically designed, ad hoc” measures “amount to an economic sugar rush,” David Brooks writes in the New York Times. If he’s...

'Consumers Have Thrown In the Towel': Report

Weary from a long fight, consumers are retrenching, cutting purchases across the board

(Newser) - The punches are coming from all directions and consumers, beaten down and out of breath, are clearly ceding the fight through decreased spending, Bloomberg reports. The scorecard released today says it all: consumer purchases were down 0.3% in September, the biggest drop in 4 years, capping the weakest quarter...

How Hank Paulson Blew $125B
 How Hank Paulson Blew $125B 
OPINION
Oct 31, 2008 9:15 AM CDT

How Hank Paulson Blew $125B

The banks have the cash, but why is everyone surprised they're not lending?

(Newser) - Not too long ago, critics from left and right were clamoring for Hank Paulson to abandon his plan buy up toxic mortgage-backed securities at auction to unlock credit markets. Instead, they argued, the government should give money directly to banks for them to lend. Too bad Paulson listened, writes Steven...

Banks Owe Execs Billions— in Previous Years' Pay

Under bailout rules, banks can honor past obligations to execs with federal cash

(Newser) - The financial titans receiving huge portions of federal bailout cash are sitting on some massive IOUs, but they aren’t to taxpayers or shareholders—the banks owe billions to their own executives for previous years' pay and pensions. Under the rules of the bailout, they can be paid with taxpayer...

Rescue Plan Rankles Prudent Homeowners

Those who can pay mortgages feel cheated as neighbors get aid

(Newser) - As the feds move ahead with a plan to help homeowners on the brink of foreclosure, others are questioning the scheme's fairness and wondering if it's ripe for abuse, the New York Times reports. “I am beginning to think I would have rocks in my head if I keep...

Wall Street Execs Ponder Slashing Their Own Pay

Bailed-out finance firms may cut compensation to silence critics

(Newser) - Top Wall Street execs are considering heading off public outrage by cutting their own pay, insiders tell the Wall Street Journal. The big financial firms pay out billions in bonuses to their execs every year. They now fear a public relations disaster is looming as critics charge that the $125...

As Debit Cards Catch Credit, Banks Cash In

Consumers see way to limit spending; banks adjust fee tactics

(Newser) - Credit is no longer the king of cards, Business Week reports. As banks get stingy with credit and consumers look for ways to reel in their "charge it" ways, more and more are turning to debit cards—so many, in fact, that Visa projects debit spending could exceed credit...

AmEx Will Lay Off 7K
 AmEx Will Lay Off 7K 
Oct 30, 2008 12:26 PM CDT

AmEx Will Lay Off 7K

Pay increases, hiring halted to prop up credit-card giant's savings

(Newser) - Noting that even wealthy Americans are struggling financially, American Express announced today it will cut 10% of its workforce, halt executive pay increases, and freeze new hires. The creditor to the elite will charge $440 million against fourth-quarter results to cover restructuring after 7,000 jobs are cut across all...

Russia Bails Out Its Richest Man
Russia Bails Out Its Richest Man
Oct 30, 2008 12:20 PM CDT

Russia Bails Out Its Richest Man

Metal mogul Deripaska gets $4.5B handout to help pay loans from Western banks

(Newser) - The Russian government has agreed to loan $4.5 billion to metals magnate Oleg Deripaska to help him pay off a loan to a group of Western banks. While the state bank overseeing the bailout would not confirm the news, three newspapers have reported that Deripaska, who is considered Russia's...

Reports of US Decline Greatly Exaggerated

Crises of confidence, finance haven't dimmed great-power status

(Newser) - Don’t believe the “faddish declinism” of naysayers arguing that America’s best days are behind her, Robert Kagan writes in the Washington Post. Francis Fukuyama and his ilk praise Barack Obama’s “realism” in facing the “post-American world,” but in reality, Obama’s rhetoric remains...

Think 1% Is Low? He Could Go to Zero

Analysts predict Japan-style cuts in interest rates

(Newser) - Yesterday Ben Bernanke cut the federal funds rate to an ectomorphic 1%—but the Fed might not be done yet. More and more analysts are predicting that the central bank will have to cut rates all the way to zero if it wants to get the economy moving again. But...

Dow Surges Despite GDP Dip
 Dow Surges Despite GDP Dip 
MARKETS
Oct 30, 2008 9:07 AM CDT

Dow Surges Despite GDP Dip

Drop isn't as bad as feared, and rate cuts abroad cheer US traders

(Newser) - Stocks jumped at the opening bell, as international rallies helped offset a shrinking US economy, the Wall Street Journal reports. Gross domestic product shrank at a seasonally adjusted 0.3% annual rate from July to September; the not-as-bad-as-feared figure sent the Dow up 201 points at the open before dipping...

Spending Dive Sends GDP Down

Economists fear prolonged recession inevitable as numbers erode

(Newser) - The US economy shrank less than expected in the third quarter but still suffered the biggest contraction since the 2001 recession, reports Bloomberg. The gross domestic product fell 0.3%, led by the first fall off of consumer spending in two decades. The figure, out from the Commerce Department this...

Rate Cut Sparks Global Market Rally

Investors pour back into markets looking for bargains with cheap money

(Newser) - World markets rode the back of yesterday’s Fed rate cut to huge gains as investors began looking for bargains and flooded the exchanges with cash, reports the Guardian. Hong Kong was up 12.8%, Seoul rose 11.95%, and Tokyo saw a jump of 9.6%, its fourth largest...

Banks to Use Half Their Bailout Bucks to Pay Dividends

Critics: Cash was meant to spark lending

(Newser) - At least half the $163 billion banks are getting from the Treasury Department to shore up balance sheets and spur lending will be paid to shareholders as dividends over the next 3 years, reports the Washington Post. That’s raised the ire of members of Congress and some economists, who...

Feds Near $50B Plan to Guarantee 3M Mortgages

Treasury, FDIC working on measure to help avoid more foreclosures

(Newser) - The Treasury Department and the FDIC are working on a plan to guarantee the mortgages of 3 million struggling homeowners, the Washington Post reports. Under the plan, lenders would reduce monthly payments so owners could avoid foreclosure. If the homeowners defaulted anyway on the reconfigured loan, the government would repay...

Dow Down 74 After Volatile Day
 Dow Down 74 After Volatile Day 
MARKETS
Oct 29, 2008 3:19 PM CDT

Dow Down 74 After Volatile Day

Late rally evaporates after Fed confirms cut, but most of Tuesday's gains are preserved

(Newser) - Volatility ruled Wall Street today as investors waffled in their response to the expected Fed rate cut, MarketWatch reports. Though the session’s final hour saw the Dow rocket to a 250-point gain in light trading, that evaporated and the Dow closed down 74.16 at 8,990.96. The...

Fed Cuts Rate Half-Point to 1%
 Fed Cuts Rate Half-Point to 1% 
Oct 29, 2008 1:29 PM CDT

Fed Cuts Rate Half-Point to 1%

1% is lowest mark since 2004 as Bernanke tries to combat slowdown

(Newser) - The Federal Reserve surprised no one today, cutting interest rates by half a point, to 1%—as investors widely predicted he would, AP reports. “The pace of economic activity appears to have slowed markedly, owing importantly to a decline in consumer expenditures,” the Fed said in a statement,...

Web Eats Hollywood's Hedge Against Recession

Free online content elbows out movies, TV as consumers trim expenses

(Newser) - The rise of free online content threatens to tarnish Hollywood's long-held belief that it is recession-proof, the Los Angeles Times reports. Tinseltown thrived in previous downturns, but with escapism now just a click of the mouse away, thrifty consumers are cutting cable subscriptions and movie tickets from their budgets.

Fed Rate Cut to 1% Expected
 Fed Rate Cut to 1% Expected 
Oct 29, 2008 8:44 AM CDT

Fed Rate Cut to 1% Expected

With Inflation fears fading, 'the issue now is how bad the recession will be'

(Newser) - Worries about inflation are taking a backseat to recession fears as the Federal Reserve today is likely to lower its benchmark rate another half-point to 1%, with the possibility it could go to zero by June if the economy doesn’t rebound, reports Bloomberg. “The issue now is how...

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