The October employment report came in weaker than expected as the country lost 190,000 jobs, rather than the 175,000 expectation. It was, however, an improvement over the 219,000 lost in September, but worse than the 154,000 jobs lost in August. Both the September and August job losses were revised sharply lower. As of last month it was thought that we lost 263,000 jobs in September and 201,000 in August. So in that context, missing expectations for October by 15,000 does not seem that bad. Of course, it is bad if you happen to be one of those losing your job. Based on the establishment survey we have now lost 7.3 million jobs since the recession started.

In general though, the pace of job losses has been slowing, especially if you step back and look at the big picture. Over the last three months, the economy has been dropping an average of

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The U.S. Treasury on Thursday said that it wants the world’s banks to maintain stronger capital and liquidity standards by the end of next year to prevent a re-run of the global financial crisis from which the financial sector is gradually recovering. The Treasury would require banking institutions to focus more on higher-quality capital that will help them absorb big losses. Capital requirements for all banking institutions should be increased. Also, financial institutions, which are large enough to affect the overall financial system, should be required to hold more capital than smaller firms. The Treasury intends to reach a comprehensive agreement on new international capital and liquidity standards by December 31, 2010 and put into effect the new rules by 2012. According to the Treasury, banking institutions should be forced to stick to non-risk-based limits on leverage and conservative liquidity standards. As the financial institutions largely ...

The U.S. government has already retrieved about $4 billion in profits from 8 of the biggest banks that have fully repaid their obligations from the $700 billion Troubled Asset Relief Program (TARP). The government has recorded profits of about $1.4 billion from its investment in Goldman Sachs Group Inc. (GS), $1.3 billion from Morgan Stanley (MS) and $414 million from American Express Company (AXP). Furthermore, the government has also reaped profits in the range of $100 million to $334 million from its investments in each of the following five banks: Northern Trust Corporation (NTRS), The Bank of New York Mellon Corporation (BK), State Street Corp. (STT), US Bancorp (USB) and BB&T Corp. (BBT). It also collected about $35 million in profits from 14 smaller banks that have paid back their loans. TARP was introduced in October 2008 to ...

Man of the people Barney Frank is proving how difficult it is for elected officials to learn the lessons of history. In a move that goes beyond dumb, Frank has written a letter to government-backed mortgage lenders Fannie Mae and Freddie Mac asking them to relax recently tightened mortgage standards for condominiums.

What part of “subprime crisis” doesn’t blustering Barney get? In March, Fannie Mae said it would no longer guarantee mortgages on condos in buildings where fewer than 70% of the units have been sold, up from 51%. And Freddie Mac is due to implement similar policies next month.

But according to Frank this “may be too onerous” and could lead condo buyers to shun new developments, according to the paper.

Frank’s fingerprints are all over the subprime mess and the ensuing credit crunch. Yet he continues to pin the recent collapse on the private market.

The Wall

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Highlights include D.R. Horton, Inc. (DHI), The Ryland Group, Inc. (RYL), Bank of America Corp. (BAC), Fifth Third Bancorp (FITB) and Comerica Inc. (CMA).At last month's sales pace, it would take 13.3 months to sell all the new homes currently in inventory. This is by far an all-time record. So what happens? New housing starts jumped in February 22.2% to a seasonally adjusted annual rate (SAAR) of 583,000 from the 477,000 pace of January.While this is still down significantly (-47.3%) from the year-ago pace of 1,107,000 it is nothing short of economic insanity. The last thing the housing market needs right now is new supply. These numbers will help the look of the first quarter GDP, since the residential investment component will be much larger than anyone expected. However, this is, quite frankly, an unmitigated disaster in terms of the ...

U.S. stocks yesterday (Monday) staged their biggest rally since the Great Depression – with the Dow Jones Industrial Average soaring an all-time record 936 points – on a Federal Reserve-led push to flood the ailing global financial system with dollars and on a U.S. government plan to buy stakes in banks.

U.S. stocks yesterday (Monday) staged their biggest rally since the Great Depression – with the Dow Jones Industrial Average soaring an all-time record 936 points – on a Federal Reserve-led push to flood the ailing global financial system with dollars and on a U.S. government plan to buy stakes in banks. The rally was sparked by commitments from the major financial nations to cooperate in getting the credit markets functioning again, and by news that U.S. officials were putting the finishing touches on Washington’s version of a rescue plan under which the U.S. Treasury Department will invest an estimated $125 billion in nine major U.S. banks, and another $125 billion in smaller financial institutions, Bloomberg News reported early this morning (Tuesday). The White House announced that U.S. President George W. Bush would meet at 7:30 a.m. EDT today with members ...

The government takeover of Fannie Mae and Freddie Mac will have far-reaching economic effects.  For example, hedge funds that bet against the two companies have already seen windfall profits as the stock prices of both companies plummeted over the weekend, while the financial institutions that invested in the nearly $5 trillion in mortgages and mortgage-backed securities that FNM and FRE guarantee can breathe a sigh of relief.  The government bailout should help avoid a global financial crisis - but it might not help all of the Real Estate Investment Trusts (REITs) that depend on loans from Fannie and Freddie to finance their growth.

REITs are corporations that pool investor capital to purchase either income property or mortgage loans.  An example of the former is Simon Property Group (NYSE:SPG), which owns strip malls and shopping centers throughout the United States.  The latter group includes companies like Annaly Capital

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There is certainly a lot of commotion at the moment not least surrounding the rescue plan to shore up the two biggest US mortgage lenders Fannie and Freddie Mae, but also, and if we stay in the US we had the collapse of IndyMac, in Spain Martina-Fadesa is in the ropes and in Denmark we have Roskilde Bank. Especially, the last event prompted me into action as I decided to have a closer look at the Danish economy and where it might be heading. In many ways Denmark is similar to other credit crunch struck economies not least in the context of experiencing a severe unravelling of a housing boom. As we saw last week this is now beginning to have collateral damage. Yet, Denmark is also a bit different not least because the economy is going into this crisis with a positive balance both on the ...