” American workers will rebuild the nation’s roads and bridges, modernize its schools and create more sources of alternative energy, creating 2.5 million jobs by 2011, Obama said in the weekly Democratic address, posted on his Web site. “These aren’t just steps to pull ourselves out of this immediate crisis,” he said. “These are the long-term investments in our economic future that have been ignored for far too long.”" [Link]
Economy Pictures + News
“The auto club forecasts about 41 million people in the United States will travel 50 miles or more for the Thanksgiving holiday, a drop of 600,000 travelers — or 1.4 percent — from the 41.6 million travelers in 2007.” [Link]
“All three CEOs - Rick Wagoner of GM, Alan Mulally of Ford, and Robert Nardelli of Chrysler - exercised their perks Tuesday by flying in corporate jets to DC. Wagoner flew in GM’s $36 million luxury aircraft to tell members of Congress that the company is burning through cash, asking for $10-12 billion for GM alone. ‘We want to continue the vital role we’ve played for Americans for the past 100 years, but we can’t do it alone,’ Wagoner told the Senate Banking Committee. While Wagoner testified, his G4 private jet was parked at Dulles airport. It is just one of a fleet of luxury jets owned by GM that continues to ferry executives around the world despite the company’s dire financial straits.” [Link]
“Cuts already have come at some shops, and more could lose jobs in the weeks ahead. While the total number of layoffs is hard to pinpoint, estimates run from 500 to 1,000 or more. As NASCAR gained prominence and was heralded as America’s fastest-growing sport, the Charlotte region proudly touted its strong racing ties. More than 400 motorsports-related companies are based in the area, business recruiters say.” [Link]
“Home values fell 9.7 percent year-over-year in the third quarter to a Zillow Home Value Index of $202,966, according to the third quarter Zillow Real Estate Market Reports, which encompass 163 metropolitan areas. Home values have dropped a total 12.8 percent since the market peaked in 2006. ” [Link]
“The latest bad news to hit was word that blogging software developer Six Apart has laid off about 8 percent of its 200-plus staff. In a post on the company’s public blog, CEO Chris Alden announced the cuts, writing, ‘We are reducing the size of our full-time staff by around 8 percent and are making some organizational changes as we prepare for 2009.’” [Link]
“JellyCloud, a Redwood City, Calif.-based targeted ad network, closed its doors this month after raising $11.5 million in venture-capital funding earlier this year. Adzilla, a similar network in San Francisco, also ceased operations. San Francisco-based AdBrite, which was founded in 2002 by Internet entrepreneurs Philip Kaplan and Gidon Wise and has raised a total of $35 million in funding, recently cut 40% of its work force to make itself profitable.” [Link]
“A widely watched survey by the private Conference Board, which dates back decades, plunged to its lowest point on record in October as Americans complained about fewer jobs and smaller incomes and ratcheted back plans for major purchases like cars and appliances. Americans also say they believe the economy will worsen before it improves — a sign of deep pessimism that reflects a year of painful declines in stocks, jobs and home values. ” [Link]
“News that world leaders will hold a crisis summit shortly after the US presidential election next month did little to stem apparent panic selling, spurred by worries that the worldwide economic slowdown will only get worse.” [Link]
“Merck also said that it will cut 7,200 jobs by the end of 2011 to lower costs, with 40% of the reductions coming from the U.S. Merck also will cut its number of senior and mid-level executives by about 25%. As of Sept. 30, Merck had about 56,700 employees.” [Link]
“Sanford C. Bernstein & Co. analyst Craig Moffett tells the The Wall Street Journal that amidst economic turmoil, sales of HDTVs seems to be suffering. While there are no specific stats for HDTVs, Moffett points out overall sales in electronics were down 14 percent year-over-year in September. Best Buy revealed a 2 percent drop in same-store sales in September, after it had been predicting 4 percent growth during that period.” [Link]
“The Treasury Department’s decision to take equity stakes in banks represents a significant reversal, coming just weeks after Treasury Secretary Henry M. Paulson Jr. had opposed the idea. In a momentous meeting yesterday afternoon in Washington, Paulson, flanked by top financial regulators, told the executives of nine leading banks that they needed to participate in the program for the good of the national economy, two industry sources said on condition of anonymity because they were not authorized to speak publicly. ” [Link]
Karima Adebibe in Union Jack
“The British government will on Monday announce plans to take controlling shares in HBOS and Royal Bank of Scotland (RBS), two of the banks worst affected by the global financial crisis, media reports said. Government representatives could be installed on their boards in a move so unprecedented that trading in banks on the London stock market could be suspended to allow traders to digest the news, newspapers reported.” [Link]
“The plunging Dow Jones and panicky investors are hardly a problem for the world’s oldest profession, where business is still brisk. ‘The market is down, business is down, but we feel it less,’ said Dylan, 24, a promotional model-turned-Manhattan prostitute. ‘We’re still busy.’ The long-haired, long-legged hooker then explained why the red-light district remains a blue-chip commodity: ‘If men are horny, they’re going to come in here.’” [Link]
Wynn Las Vegas picture
“Vegas barreled through previous U.S. economic recessions with no problem, but the current slowdown — marked by home foreclosures and then high gasoline prices — has had a much bigger impact on the gambling mecca than economists expected. And while free rooms and room discounts have kept hotels relatively full — occupancy is down just 1 percent in the year to July — gambling revenue is down 6.5 percent.” [Link]
“The New York Times, citing unidentified people familiar with the matter, said an auction of the bank was already under way, and The Wall Street Journal reported Wells Fargo & Co. and Citigroup Inc. expressed interest in a takeover.” [Link]
“Weak revenue growth and accelerated spending — including an economic stimulus package that returned billions to taxpayers — will drive the federal deficit to $407 billion in the fiscal year that ends this month, more than double last year’s $161 billion, congressional budget analysts reported today. With the economy expected to remain sluggish for at least the next several months, the next president will take office facing a projected deficit of $438 billion, budget analysts predict — the largest in dollar terms in American history, exceeding the previous record of $413 billion in 2004. And that number could easily climb above $500 billion if Congress acts, as expected, in the coming months to restrain the growth of the alternative minimum tax, budget analysts said.” [Link]
CNBC Rebecca Jarvis
“The latest plunge came after reports that Lehman’s efforts to secure a strategic investment from Korea Development Bank, a deal Lehman has been pursuing for months, had failed. Worries about Lehman renewed concerns on Wall Street about the financial sector, pushing the overall markets lower. The Dow Jones industrials were down more 280 points or 2.4 percent just before the close. The broader Standard & Poor’s 5000-stock index was down 43.27 points, or 3.4 percent, and the Nasdaq composite index fell 59.95 points, or 2.6 percent. Bond prices jumped as investors sought safety.” [Link]
“Banks and lenders are in the business of making loans rather than managing property, so many have little or no staff to oversee the homes’ upkeep. Yet with foreclosures mounting, they have more property than ever before to manage. That’s why ‘board-up’ guys like Norton have no lack of work. ‘The business has picked up quite a bit,’ says Norton, who began taking on ‘board-up’ jobs in 2006 and now handles five to 10 jobs a week. ‘Banks can’t just let the properties sit there.’” [Link]
Fannie Mae
“‘Under no circumstances should the executives of these institutions earn a windfall at a time when the U.S. Treasury has taken unprecedented steps to rescue these companies with taxpayer resources,’ Obama said in a letter to Treasury Secretary Henry Paulson and Federal Housing Finance Agency Director James Lockhart. ‘I urge you immediately to clarify that the agreement with Fannie Mae and Freddie Mac voids any such inappropriate windfall payments to outgoing CEOs and senior management.’ ” [Link]
“The move to take control of the two companies, which may be announced Sunday, could amount to the largest financial bailout in the nation’s history, and is a bid to ward off further damage to the U.S. housing market which is in its deepest downturn since the Great Depression. ‘I think all shareholders will be disadvantaged,’ Rep. Barney Frank, chairman of the U.S. House of Representatives Financial Services Committee, told Reuters.” [Link]
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