Economic Glance
This morning, the Labor Department released its employment data for December, showing that the U.S. economy ended the year by adding 113,000 private sector jobs, knocking the unemployment rate down sharply from 9.8 percent to 9.4 percent — its lowest rate since July 2009. The “surprising drop — which was far better than the modest step-down economists had forecast — was the steepest one-month fall since 1998.” October and November’s jobs numbers were also revised upward by almost 80,000 each. Still, 14.5 million Americans remain unemployed, and jobs will have to be created much faster in coming months for the country to pull itself out of the economic doldrums.
Obama Created More Jobs In One Year Than Bush Created In Eight
Federal Reserve works to strip a key mortgage protection for homeowners - Rescission
As Americans continue to lose their homes in record numbers, the Federal Reserve is considering making it much harder for homeowners to stop foreclosures and escape predatory home loans with onerous terms.
The Fed's proposal to amend a 42-year-old provision of the federal Truth in Lending Act has angered labor, civil rights and consumer advocacy groups along with a slew of foreclosure defense attorneys. They're not only asking the Fed to withdraw the proposal, they also want any future changes to the law to be handled by the new Consumer Financial Protection Bureau, which begins its work next year.
Former Obama Auto Industry Czar Steven Rattner Will Pay $10 Million in Restitution
Steven Rattner, the former principal of private equity firm Quadrangle Group LLC, will pay $10 million to settle a probe by New York Attorney General Andrew Cuomo of corruption at the state pension fund in a deal that largely ends a three-year investigation that has yielded eight guilty pleas.
Rattner's payment of restitution to the state of New York is less than half of the $26 million Cuomo sought. Rattner also agreed to be banned from appearing in any capacity before any public pension fund in the state for five years, the attorney general’s office said in an e-mailed statement. Cuomo, New York's governor -elect, sought a lifetime ban from the securities industry.
U.S. changes how it measures long-term unemployment
So many Americans have been jobless for so long that the government is changing how it records long-term unemployment. Citing what it calls "an unprecedented rise" in long-term unemployment, the federal Bureau of Labor Statistics (BLS), beginning Saturday, will raise from two years to five years the upper limit on how long someone can be listed as having been jobless.
The move could help economists better measure the severity of the nation's prolonged economic downturn.
AIG Gets $4.3 Billion of Credit; Seeks to Exit Bailout
American International Group Inc., the insurer bailed out by the U.S., garnered $4.3 billion in bank credit lines in another step toward repaying taxpayers and gaining independence. The credit, provided by more than 30 banks and administered by JPMorgan Chase & Co., includes two $1.5 billion facilities, one for three years and the other for 364 days, AIG said today in a regulatory filing.
AIG’s property-casualty division Chartis Inc. got $1.3 billion, the insurer said. The firm rose $2.01, or 3.7 percent, to $56.34 at 10:03 a.m. New York Stock Exchange composite trading.
Moody's bungled ratings on community bank bonds, too
Billions of dollars in top-rated bonds backed by community banks have gone bust, debunking the defense offered by credit-rating agencies that wildly inaccurate ratings were limited to risky mortgage bonds that imploded and then triggered the U.S. financial crisis.
Government regulators and lawyers across the country are examining how credit-rating agencies came to bless as "investment grade" the now-toxic bonds made up of special securities issued by community bank holding companies.
How the Fed let small banks take on too much debt, then fail
The Federal Reserve Board, chastised for regulatory inaction that contributed to the subprime mortgage meltdown, also missed a chance to prevent much of the financial chaos ravaging hundreds of small- and mid-sized banks.
In early 2005, at a time when the housing market was overheated and economic danger signs were in the air, the Fed had an opportunity to put a damper on risk taking among banks, especially those that had long been bedrocks of smaller cities and towns across the nation.
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