Category: Markets (Page 3 of 4)

The pro-business recovery

August 8, 2010 / Staff

U.S. President Barack Obama speaks to a worker as he tours Gelberg Signs during a visit to highlight the administrations initiatives to create jobs in Washington on August 6, 2010. UPI/Kristoffer Tripplaar/Pool Photo via Newscom

Ezra Klein takes on the ridiculous notion that the Obama administration.

This White House has “vilified industries,” complains the Chamber of Commerce. America is burdened with “an anti-business president,” moans The Weekly Standard.
Would that all presidents were this anti-business: according to the St. Louis Federal Reserve, corporate profits hit $1.37 trillion in the first quarter—an all-time high. Businesses are sitting on about $2 trillion in cash reserves. Business spending jumped 20 percent last quarter, and is up by 13 percent against 2009. The Obama administration has dropped taxes for small businesses and big ones alike. Maybe the president could be anti-me for a while. I could use the money.
The reality is that America’s supposedly anti-business president has led an extremely pro-business recovery. The corporate community has recovered first, and best.

He goes on to explain how deep recessions take time to recover. Read it for a dose of reality.

We shouldn’t be surprised, but less than a year after the largest bailout of Wall Street in history, somehow the government is anti-business. What a joke.

Economy, General Business, Markets

anti-business Chamber of Commerce Ezra Klein Obama administration Wall Street

In stunning move, HP dumps CEO Hurd

August 7, 2010 / Staff

This was a real shocker. Mark Hurd is known for the operational discipline he brought to HP, but now he’s been ousted for fudging his expense reports to cover up a personal relationship.

Mark V. Hurd, who turned Hewlett-Packard into the world’s largest technology company on the back of fierce fiscal discipline, has been ousted from his post for the lowliest of corporate offenses — fudging his expenses.
H.P.’s board stunned Silicon Valley and Wall Street late Friday by announcing Mr. Hurd’s resignation as chairman and chief executive of the computing and printing giant, involving what it said was a “close personal relationship” with a contractor who helped with the company’s marketing.
The woman’s lawyer contacted the company in late June, charging sexual harassment. While the directors were investigating that charge, they found inaccurate expense reports that covered payments made to the woman. The directors said, however, that the sexual harassment charge was unsubstantiated.
The board charged that Mr. Hurd, 53, failed to disclose his use of company funds. It urged Mr. Hurd to resign, but he balked and offered to compensate the company for the disputed funds, said to range from $1,000 to $20,000, according to a person close to Mr. Hurd who was briefed on the situation but was not authorized to speak publicly.
The board, however, insisted. “This was a necessary decision,” said Marc L. Andreessen, a venture capitalist and a director.

This seems like an extreme reaction, to say the least. It’s interesting that Hurd fought to keep his job – at least the story makes more sense now. It’s hard to imagine someone like him voluntarily quitting his CEO post over such an offense.

That said, the guy was pretty stupid.

Hurd helped to save HP after the mess left by Carly Fiorina, so it has to hurt letting such an operational genius go. But, it may have come at a good time for HP, as the company has squeezed out quite a bit of efficiency, and in the long run innovation and strategy matter as well.

General Business, Markets, Technology

business strategy fiscal discipline Hewlett-Packard HP innovation Marc Andreessen Mark Hurd Mark Hurd resigns operational discipline sexual harassment Silicon Valley Wall Street

Christina Romer leaves the Obama administration

August 6, 2010 / Staff

Vice President Joe Biden and Chair of the Council of Economic Advisers Christina Romer unveil the Council of Economic Advisers latest quarterly report on the economic impact of the Recovery Act in the Eisenhower Executive Office Building adjacent to the White House in Washington on July 14, 2010. UPI/Roger L. Wollenberg Photo via Newscom

Christina Romer is leaving the Obama administration.

Romer, who chairs the Council of Economic Advisers, announced Thursday night that she is returning to her previous job as economics professor at the University of California at Berkeley.
Her resignation follows that of budget director Peter Orszag.
In a statement, Romer called the her White House service the “honor of a lifetime.”

It will be interesting to see whether we’ll see any policy changes. Romer is an expert in the Great Depression and was instrumental in the stimulus package. In many ways she has served her purpose, and now the administration can shift to sustained growth as opposed to the crisis management of the past 18 months.

Economy, Finance, General Business, Markets

Christina Romer Council of Economic Advisers Obama administration Peter Orszag Recovery Act stimulus package

Unemployment rate stays at 9.5%

August 6, 2010 / Staff

OAKLAND, CA - AUGUST 05: John Heckert (L) and Heron Puebla use a computer to apply for unemployment insurance at Eastbay Works Oakland One-Stop Career Center August 5, 2010 in Oakland, California. U.S. jobless claims unexpectedly rose by 19,000 new claims for the week ending on July 31. (Photo by Justin Sullivan/Getty Images)

The new employment numbers were not very encouraging.

Private employers added new workers at a weak pace for the third straight month, making it more likely economic growth will slow in the coming months. The jobless rate was unchanged at 9.5 percent.
The Labor Department said Friday that companies added a net total of 71,000 jobs in July, far below the roughly 200,000 needed each month to reduce the unemployment rate.
Overall, the economy lost a net total of 131,000 jobs last month, as 143,000 temporary census jobs ended.

The census numbers need to be factored in, and it also looks like state and local governments are shedding jobs. In many ways that’s a good sign for long-term fiscal health, but in the short term the job losses hurt. Perhaps the recent jobs pill passed by the Senate this week to help save jobs for teachers and cops will have a positive impact in the coming months.

Economy, General Business, Markets

government jobs teacher jobs U.S. jobless claims unemployment insurance unemployment rate

The health of U.S. banks

August 5, 2010 / Staff

Where do things stand now with U.S. banks? It’s been quite a roller coaster ride for the past 3 years, and now we may be heading into a new phase with the passage of financial reform.

In many ways it’s too early to gauge how FinReg will impact the banks in the long run, let alone the U.S. economy and ordinary Americans. But it looks like the consumer protection agency may be a game-changer. Banks have relied on hidden fees for a long time to prop up their profits, so that easy money will likely be reduced in the future.

Meredith Whitney was on CNBC the other day, and she remains skeptical of bank profits with the passage of the new law, and the disturbing fact that the banks still need time to remove toxic assets from their books.

Economy, Finance, Markets, Personal Finance

banking industry CNBC financial reform FinReg Meredith Whitney U.S. banks